(A) Replacement costs shall be established for each inventory item at the time of purchase. This cost shall be the estimated purchase cost of an equivalent item as determined at the appropriate end of its estimated period of use. The basis for determining an equivalent unit shall not include allowances for extras or upgrading. As a supplemental budget, the using department should request items during the budgetary process to upgrade a system unit or add to its capability.
(B) Included in the replacement costs shall be make-ready costs, which include such items as current technology standardized operating systems, business application software (word processing software, etc.), updated client access licenses, and the like. These costs will be borne by the fund if the unit was so equipped.
(C) It is recognized that some degree of speculation is involved in estimating future replacement costs. Factors such as software developments, technology changes and advances and technology cost fluctuation must be considered.
(D) To achieve some degree of consistency in projecting costs, projections will be made on the basis of a three-year moving average of the cumulative purchase cost.
(E) The three-year moving average allows for more gradual adjustments in replacement rates. The county manager shall be responsible for reviewing and updating replacement costs annually.
(Ord. 2403, passed 9-2-03)