HomeMy WebLinkAboutResolution 065-2007 RESOLUTION NO. 65-07
CAPITAL ASSET POLICY
Whereas,the City of Brookings is committed to maintaining accountability of all
property under its control, and
Whereas, it is therefore necessary to provide a standard method of maintaining
records for capital assets of the City and to insure that all City departments comply.
NOW THEREFORE, BE IT RESOLVED by the City of Brookings, South
Dakota that the following Capital Assets Policy be adopted to provide control and
accountability over all capital assets of the City.
CITY OF BROOKINGS CAPITAL ASSET POLICY
The purpose of this capital asset policy to 1)to provide control and accountability
over capital assets, 2)to provide uniform procedures for furnishing information needed
for effective analysis and control of capital expenditures, and 3)to provide a data base of
inventory information to meet the reporting needs for the preparation of the Cities
financial statements.
The Benefits of Inventory System:
1. Property control and accountability through a comprehensive citywide
inventory system.
2. Improved equipment utilization through control and identification of
capital assets.
3. Database to meet the GAAP, Federal grants and City of Brookings
requirements.
4. Data base to meet requirements of proper risk management and provide
basis for identifying equipment for the City's insurance.
5. Basis for management to project and budget future capital replacement
requirements.
The Finance Department is required to:
1. Establish a Generally Accepted Accounting Principles (GAAP)based
accounting system and procedures to ensure the cities assets, including
capital assets, are properly accounted for.
2. To provide a standard method of maintaining records for the cities owned
equipment that city departments must follow.
3. To provide for the maintenance of an inventory of city owned or
controlled land resources by the City.
Policies differ in cases of absolute title and residual title.
1. When an external entity, such as the federal government retains residual
title to a capital asset it will be included in the capital asset inventory(title
remains at the disposal of the governmental authority after a delegation).
1
2. This includes capital on lease or long-term loan.
3. Temporary custodial responsibility or title shall not be considered absolute
and should not be included as the cities capital asset.
Component units of the city must designate, in writing, one or more persons to be
responsible for maintaining and safeguarding the component unit's capital assets. The
component unit is responsible for developing internal policies and procedures to protect
and control the use of all capital assets.
Capital projects will be tracked within a work in progress number assigned by the
Finance Department. At the completion of the project the department in charge will:
a) Break down the project into the proper categories to be added into the capital
assets inventory.
b) The Finance Office enters the above information in the Capital Assets
Management System.
1) General Guidelines/Applicable Policies
The City of Brookings requires all departments to be accountable for all property under
its control.
a) In accordance with state and federal guidelines, the current threshold for which an
inventory of capital assets is maintained is $5,000 unless conditions of a grant
require a lower threshold or assets of less value are subject to high rate of theft.
b) The enterprise funds will continue to depreciate equipment purchased prior to
2003 in the same manner as previous to this policy until the equipment is fully
depreciated.
c) The City's Departments responsibilities are to be accountable for all property
under its control.
2) Department Responsibilities
The departments have an important role in the maintenance of an accurate, up-to-date
inventory system. Adherence to the following guidelines helps to ensure that
departmental inventory records are as accurate and complete as possible.
a) Entering correct information on purchases through the Accounts Payable (AP)
system. Most of the data recorded on the Capital Assets system is taken directly
from the vouchers. Correct coding by departments avoids the need for later
corrections.
b) Proper coding of capital assets expenditures. Equipment purchases must be coded
with a"5" and "900" expenditure object. Use of an object code outside the 5-900
ranges increases the possibility that the asset will be omitted from the CAP
system.
c) Entering correct asset location, serial numbers, make, etc on voucher saves
considerable time and effort.
3) Capital Assets-Additions
2
This statement explains the procedures for the addition of assets to the Capital Assets
Management System.
b) All capital equipment, regardless of whether the items are loaned to or owned by
the City, must be included on the Capital Assets Management System. Additions
of capital assets are generated by accounts payable, donations to the City, or
equipment loans or private sources.
c) The Finance Office is provided with copies and documents relating to the
equipment purchases. (i.e. cost, fair market value, serial numbers, model numbers,
building/room location of assets)
d) The Finance Office enters the above information in the Capital Assets
Management System.
4) Capital Assets-Retirement
a) Property unfit for use by reason of age, wear, tear, or otherwise and is beyond
repair will be determined by City Manager and City Council. A note shall be
given to the Finance Office to be entered into the Capital Assets Management
System for that year of the condemnation of such property.
b) Auctions or sealed bids for sale of unfit property is required. The property
described on page 2 in 4 a) shall be sold only for cash at public auction or upon
opening of sealed bids
(1) The notice of the sale shall be published in the newspaper stating the
following:
✓ A day on which the sale is to be made (at least fifteen days after
first publication)
✓ Location where such auction will be held, or a place where offers
or bids will be received (which day shall be at least fifteen days
from the first publication of the notice).
✓ The right to reject any or all bids shall be reserved.
c) All money derived from the sale of public personal property shall be deposited to
the City.
d) Record retention. Departments should retain copies of surplus property forms,
assets transfer form, stolen property reports and any other documentation
regarding equipment dispositions. The information must be retained by the
department for verification purposes until the Finance Office removes the item
from the department's inventory. Lost or destroyed property is to be noted in the
inventory. An item is considered stolen when it has been illegally removed from
its designated location. Send the Finance Office a copy of the stolen property
report.
5) Capital Assets-Transfers
This statement explains the procedures for the transfer of assets in the Capital Assets
Management System. Transfers are recorded on the City's inventory when there is a
permanent change in asset location or physical custody. (i.e. from one department to
another). If the equipment is temporarily loaned or relocated and the intention is to
reclaim the item in the near future, the asset record need not be changed
3
a) The physical custody of equipment is the responsibility of the department. All
transfer data submitted to Finance Office must be accurate in order to ensure the
reliability of the City's inventory.
b) Fill out the Equipment Transfer Disposition Request Form showing the old
location and the new location. The form must be signed and dated by department
head for the new location.
6) Capital Assets-Home Use of Equipment
This statement explains the procedures for notifying the Finance Office of equipment
being used at home by management and staff. City management and staff may use
equipment that is the property of the City at home, provided the following criteria are
met:
a) Use of the equipment at home will not interfere with the operational needs of the
department.
b) The appropriate department head approves home use.
c) The equipment is used for City business only.
d) Individuals who receive approval to remove equipment from the City for use at
home for a period greater than 30 days should complete the Equipment Tracking
Home Use Authorization Form. This form must be completed on any piece of
equipment that is taken home regardless of the cost of the equipment or whether
the asset is tagged.
e) The first half of the form should be filled out when an employee is approved to
use City equipment in his or her home for a period greater than 30 days. The
original should be kept in the department's files and a copy should be given to the
employee. Once the equipment has returned to the City, the department should
complete the bottom half of the original form that was retained in the
departmental files.
f) If the use of City equipment is less than 30days, then department should keep an
internal record of equipment that has been approved for use off city property. The
list should include a description of the equipment, the asset number, serial
number, and the individuals name using the equipment, where the equipment is
being used and the expected return date.
7) Capital Assets-Storage of Equipment on Privately Owned/Leased Premises
This statement explains the procedures for requesting storage of assets at off-city
locations that are privately owned or leased to the City.
a) In order to maintain accurate inventory records and comply with asset control
procedures, the Finance Office must be aware of approved storage of equipment
at off-city locations. City personnel should anticipate storage needs in advance in
order to obtain the proper approvals before removing the assets from the City.
b) Fill out a request storage of assets at locations that are privately owned or leased
to the City. The form must be signed by the City Manager and the Department
Head and forwarded to the Finance Office.
8) Capital Assets-Gifts-in-kind
4
This statement explains the procedures for reporting equipment and other assets donated
to the City.
a) All capital assets that are donated to the City must be included in the Capital
Assets System inventory. It is the responsibility of each department head to
notify the Finance Office when equipment and other assets are donated to the
City.
b) When donated items are received by departments, the pertinent sections of the
Notification of Gift For must be completed and forwarded to the Finance Office.
The Finance Office will record the information on its Capital Assets System.
9) Capital Assets-Annual Equipment Inventory
This statement provides policies and procedures relating to the annual physical inventory
of capital assets conducted by departments.
a) State regulations require the City to take an annual equipment inventory. Each
department is responsible for verifying information about its own inventory and
making all changes and corrections and forwarding them to the Finance Office.
b) The Finance Office distributes annual inventory reports and instructions to
departments in December of each year. All inventory reports are due back to
Finance by January 11tH
c) All changes and corrections should be made directly on the inventory printout.
The department should keep a copy and send the original of the completed
printout to the Finance Department.
d) Use the departmental inventory printout to conduct a room-by-room equipment
verification. Please verify all information on the report.
10)Capital Assets-Useful lives
a) Depreciation is the systematic and rational allocation of the historical cost of a
capital asset over its estimated useful service life.
(1) Buildings/Permanent structures 50 years
(2) Buildings/Portable structures 25 years
(3) Buildings/Excavation 50 years
(4) Buildings/Foundation 50 years
(5) Buildings/Frame 50 years
(6) Buildings/Floor structure 50 years
(7) Buildings/Floor covering 15 years
(8) Buildings/Carpeting 10 years
(9) Buildings/Computer flooring 10 years
(10) Buildings/Exterior walls 50 years
(11) Buildings/Roof cover 10 years
(12) Buildings/Interior construction 15 years
(13) Buildings/Interior renovation 10 years
(14) Buildings/Ceiling finish 10 years
(15) Buildings/Plumbing 20 years
(16) Buildings/HVAC 20 years
(17) Buildings/Electrical 20 years
(18) Buildings/Fire system 25 years
5
(19) Buildings/Elevator 20 years
(20) Land Improvements
(i) Fencing, gates 35 years
(ii) Landscaping 10 years
(iii) Outside sprinkler system 25 years
(iv) Athletic fields 40 years
(v) Soccer Fields 40 years
(vi) Golf Courses 40 years
(vii) Septic systems 15 years
(viii) Underground tanks 30 years
(ix) Stadiums 45 years
(x) Swimming Pools 40 years
(xi) Tennis Courts 20 years
(xii) Fountains 20 years
(xiii) Retaining walls 20 years
(xiv) Bleachers 20 years
(xv) Sports lighting 30 years
(xvi) Running track 30 years
(xvii) Playground equipment 20 years
(21) Outdoor lighting 20 years
(22) Roadways/Dirt 10 years
(23) Roadways/Gravel 15 years
(24) Roadways/Concrete 40 years
(25) Roadways/Asphaltic Concrete 30 years
(26) Roadways/Brick or Stone 50 years
(27) Alleys/Concrete 40 years
(28) Alleys/Asphaltic Concrete 25 years
(29) Alleys/Dirt 10 years
(30) Alleys/Gravel 15 years
(31) Alleys/Brick or Stone 50 years
(32) Road Signage 10 years
(33) Electronic Street Signals 15 years
(34) Bike-Jogging Paths/Dirt 10 years
(35) Bike-Jogging Paths/Gravel 15 years
(36) Bike-Jogging Paths/Concrete 30 years
(37) Bike-Jogging Paths/Asphalt 20 years
(38) Bike-Jogging Paths/Composite rubber 7 years
(39) Bike-Jogging Paths/Brick or stone 50 years
(40) Sidewalks/Concrete 30 years
(41) Sidewalks/Asphalt 25 years
(42) Sidewalks/Gravel 10 years
(43) Sidewalks/Brick or Stone 45 years
(44) Parking Lots/Concrete 35 years
(45) Parking Lots/Asphalt 20 years
(46) Parking Lots/Gravel 10 years
(47) Parking Lots/Brick or Stone 45 years
6
(48) Airport Runways 30 years
(49) Bridges/Continuous Concrete 50 years
(50) Bridges/Prestressed Concrete 45 years
(51) Bridges/Steel with Truss 50 years
(52) Bridges/Steel Without Truss 45 years
(53) Bridges/Timber/wood 30 years
(54) Bridges/Pedestrian/Steel 30 years
(55) Bridges/Pedestrian/Concrete 30 years
(56) Bridges/Pedestrian/Wood 25 years
(57) Major Culverts/Concrete 40 years
(i) Precast box,precast elliptical
Cast in place
(58) Major Culverts/Concrete pre stress 40 years
(59) Major Culverts/Timber log treated 30 years
(60) Major Culverts/Steel 30 years
(i) Corrugated round, Corrugated
Bottomless arch
(61) Small Culverts/Plastic 25 years
(62) Small Culverts/Cast Iron 30 years
(63) Small Culverts/Metal corrugated 30 years
(64) Small Culverts/Concrete 50 years
(65) Storm Drains/Plastic 25 years
(66) Storm Drains/Cast Iron 30 years
(67) Storm Drains/Metal Corrugated 30 years
(68) Storm Drains/Concrete 40 years
(69) Storm Drains/Ditch/Trench 100 years
(70) Moveable Equipment
(i) Athletic equipment 10 years
(ii) Appliances/food service equipment 10 years
(iii) Audio visual equipment 7 years
(iv) Books 7 years
(v) Multi-media materials 7 years
(vi) Business machines 7 years
(vii) Communications equipment 10 years
(viii) Computer software 5 years
(ix) Contractors/construction equipment 12 years
a. Sweepers 10 years
b. Garbage truck—rear loader 10 years
c. Garbage truck—automated loader 8 years
d. Landfill crawler loader 5 years
e. Landfill compactor 5 years
f. Landfill wheel loader 5 years
(x) Computer equipment 5 years
(xi) Fire department equipment 12 years
(xii) Furniture 20 years
(xiii) Grounds/equipment 10 years
7
(xiv) Law enforcement equipment 5 years
(xv) Licensed vehicles 10 years
(xvi) Police Patrol vehicles 3 years or 100,000 miles
(xvii) Police vehicles 4 years
(xviii) Machinery and tools 15 years
(xix) Outdoors recreational equipment 15 years
(xx) Stage and auditorium equipment 20 years
(xxi) Custodial equipment 15 years
(xxii) Photocopiers 5 years
(xxiii) Sculptures/Wood 20 years
(xxiv) Sculptures/Stone 30 years
(71) Landfill—Excavation of Cells (estimated# of years to fill excavation)
(72) Landfill—Leachate System (estimated life of landfill)
(73) Landfill—Liners (estimated life of landfill)
(74) Landfill—Test Wells (estimated life of landfill plus 30 years)
11)Forms
a) Capital Asset Purchases
b) Equipment Transfer Disposition Request
c) Storage of Equipment on Privately owned/Leased Premises
d) Equipment tracking home use authorization
8
Cala- T (PLEASE attach a copy of the invoice to this form)
DATE DEPARTMENT
VENDOR NAME &NO.
INVOICE DATE
ACCOUNT NO.
AMOUNT $
RESPONSIBLE PARTY
(Job Title)
LOCATION
SERIAL #
*LIFE OF ASSET
*Refer to the Capital Asset Policy — use Article 10 —Identify category
and useful life per policy
COMPLETE DESCRIPTION
9
List only ONE Capital Asset per form please.
CITY OF BROOKINGS
Capital Asset System
Equipment Transfer Disposition Request
Asset Number: Date:
Equipment Description:
Department:
Name of Person Submitting Request:
I. TRANSFER SECTION: To transfer asset to another department(requires dual
signatures)
II. DISPOSITION SECTION: To permanently remove assets from Capital
Asset System
Please provide a brief narrative describing when and under what circumstances the
asset was removed from inventory.If the equipment is returned or located in the
future, the Finance Office must be notified as soon as possible to add the item(s)
back into the inventory.
Disposal Method(please check box and give explanation)
El Lost ❑ Destroyed
❑ Altered ❑ Hazardous
Other
Explanation:
Both signatures below are required certifying the asset has been transferred to another
department, or permanently removed from City Property by some other means.
10
CITY OF BROOKINGS
Capital Asset System
Storage of Equipment on Privately owned/Leased Premises
OFF-SITE STORAGE FACILITY
Building Name:
Address:
Length of time equipment will be store at this facility:
Reason for off-site storage:
Description of Equipment: Asset Numbers:
Department Head
City Manager
Please forward completed form to Finance Office
11
CITY OF BROOKINGS
Equipment Tracking
Home Use Authorization
Department:
Name of User:
Description of Equipment:
Asset#:
Justification for Home Use:
Equipment condition: E—excellent G—good F—fair P—poor
To Be Returned: Annual Review Date: Other
User's Signature
Department Head
COMPLETE UPON RETURN OF EQUIPMENT
The equipment listed above has been returned.
User's Signature Date
Department Head Date
Equipment condition: E—excellent G—good F—fair P—poor U—unusable
L—lost S—Stolen X—Surplus
Instructions for Initial Authorization: Complete and send original to Finance Office. Retain a copy for your files.
Instructions for return: Use retained copy,complete bottom portion of form and send to Finance Office. Update
Passed and approved this 25th day of September, 2007. oft
I - -`-E-___,____L_______
,�, -: • an, Mayor
1,
; : ,...4 1 ;40 , ,"',V,P
;' s, City Clerk
13