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CAPITALIZATION/CIP POLICY 06/01/03 Effective Fiscal Year 2003 2/10/2004 1 of 5 1. EQUIPMENT (Defined as having a useful life of 3 years or longer) A. Equipment replacement program. This program will include all equipment with a value of more than $5,000. The program will be incorporated into the CIP plan as a separate sub-set. Coordination of this plan will be the responsibility of the Motor Vehicle Maintenance Manager. B. Individual items of equipment valued at $4,999 or less will be budgeted by individual departments and charged to the correct O & M accounts within the accounting system. These items must be specifically approved in the annual budget. They will not be included in the City’s CIP plan. Items needed but not specifically budgeted will be purchased only with the approval of the City Administrator. Items will be inventoried at the department level. Included in the inventory will be office furniture & equipment, electronic equipment, tools and other items that are deemed to be susceptible to disappearing. Department Heads will be responsible for designating those items in their departments that will be inventoried so long as the intent of this policy is met. That intent is to provide for accountability and control of City assets. The inventory will be updated annually and a copy forwarded to the Finance Department. 2. Capital Improvement Projects A. Projects whose total cost is expected to exceed $25,000 will be budgeted through the City’s Capital Improvement Planning process. The Capital Improvement Planning Team will be responsible for the process. Any project in this category which is not included in the City’s 5 – year CIP will be undertaken only with the approval of the City Administrator. B. Projects whose cost is expected to be less than $25,000 will be budgeted through the annual budgeting process and must be specifically budgeted or approved by the City Administrator. Exceptions 1. Special Improvement District projects that are initiated by developers or citizens and are to be fully funded through Special Assessments on the benefited properties, subject to City Council approval of the Improvement District(s). ---PAGE BREAK--- CAPITALIZATION/CIP POLICY 06/01/03 Effective Fiscal Year 2003 2/10/2004 2 of 5 2. The annual Chip and Seal Program will be budgeted in a lump sum and the Public Works Department will present the annual project list to the City Council for approval at the time the projects are bid. The annual lump sum amount will be included in the CIP program. 3. Professional costs incurred for evaluation of possible future projects or to assist developer projects. 4. Annual water and sewer line replacements and annual street overlay projects will be budgeted in the CIP program in lump sums with an attached detailed project list. Capitalization Limits 1. Equipment/Vehicles will be capitalized with a value of $5,000 or greater. 2. Construction projects including non-building, building and infrastructure will be capitalized at a value of $25,000 or greater. It is recognized that there will be some “gray” areas that will need to be discussed. Some “projects” will be on or near the line that places them in the CIP. Questions regarding those projects should be directed to the CIP team for a determination. Some purchases will be questionable as to whether or not they are to be considered Capital items. Questions regarding these items should be directed to the Finance Division for discussion and resolution. ---PAGE BREAK--- CAPITALIZATION/CIP POLICY 06/01/03 Effective Fiscal Year 2003 2/10/2004 3 of 5 Following is the table for depreciating all City assets: Comm. Useful Code Equipment Class Life Source Autos - General Use 10 Equipment replace 76 Police Patrol Cars 5 Equipment replace 70 Pickups and Light trucks 7 Equipment replace SUVs 7 Equipment replace Trucks over 1 ton 10 Equipment replace Dump trucks 10 Equipment replace 79 Trucks Refuse 7 Equipment replace Trucks Sewer Jet 7 Equipment replace Trucks Ariel Bucket 7 Equipment replace Trucks Sander/Dump 10 Equipment replace Trucks Fire Aerial ladder 15 Equipment replace Trucks Fire/Pumper 15 Equipment replace Trucks Fire/Rescue 15 Equipment replace Bus MET 12 Equipment replace Bus Paratransit 5 Equipment replace Bus Misc 10 Equipment replace Dozers 3 Equipment replace Tractors 10 Equipment replace Loaders 10 Equipment replace Backhoes 7 Equipment replace Compactor Landfill 3 Equipment replace Graders 10 Equipment replace 755 Rollers 10 Equipment replace 755 Pavers 15 Equipment replace Misc Const Equipment 10 Equipment replace Small Equipment 3 Equipment replace Non Powered Equipment 7 Equipment replace 560 Forklifts 15 Equipment replace Cushman scooters 10 Equipment replace 515 Snow Blowers 10 Equipment replace Snow Plows 10 Equipment replace Street Sweepers 7 Equipment replace Pumps/generators 7 Equipment replace 25 Air Compressors 10 Equipment replace Mowers/Riding 5 Equipment replace Attachments/accessories 5 Equipment replace Electronic equipment 3 Equipment replace ---PAGE BREAK--- CAPITALIZATION/CIP POLICY 06/01/03 Effective Fiscal Year 2003 2/10/2004 4 of 5 Comm. Useful Code Equipment Class Life Source Computer equipment (personal) 3 Equipment replace 425 Furniture/office equipment 3 Equipment replace Shop equipment/machines 3 Equipment replace Athletic equipment non-electric 10 Gov. focus Athletic equipment electric 5 City Audio visual equipment 7 Gov. focus Business Machines 7 Gov. focus Communications equipment (radio) 10 Gov. focus Computer equipment (mainframe) 6 IRS. 920 Computer software (mainframe) 7 IRS. containers (misc) 15 City Fire dept equipment 12 Gov. focus Defib units 7 City radio 800mhz 10 Gov.focus Thermal imaging 5 City Exhaust removal system 7 City 424 Furniture 20 Gov. focus Lowering device 10 City Law enforcement equipment 10 Gov. focus Outdoors recreational equipment 15 Gov. focus Stage and auditorium equip. 20 Gov. focus Custodial equipment 15 Gov. focus 600 Photocopiers 5 Gov. focus Trailers 20 Equipment replace Extraction tools 12 Equipment replace lawn equipment 11 City ---PAGE BREAK--- CAPITALIZATION/CIP POLICY 06/01/03 Effective Fiscal Year 2003 2/10/2004 5 of 5 Comm. Useful Code Building Class Life Source 155 Permanent structures 50 Gov. focus Portable structures 25 Gov. focus 360 Floor covering 15 Gov. focus 360 Carpeting 5 Gov. focus Computer flooring 10 Gov. focus Exterior walls 50 Gov. focus 770 Roof cover 10 Gov. focus 910 Interior construction 15 Gov. focus 910 Interior renovation 10 Gov. focus Plumbing 20 Gov. focus 31 HAVC (air conditioner/furnace) 20 Gov. focus Electrical 20 Gov. focus Comm. Useful Code Building Class Life Source 340 Fire systems 25 Gov. focus 295 Elevators 20 Gov. focus 440 Windows/glass 10 City Comm. Useful Code Land Improvements Class Life Source 330 Fencing, gates 20 Gov. focus 670 Outside sprinkler systems (pumps) 25 Gov. focus Swimming pools 20 Gov. focus Outdoor lighting 20 Gov. focus Park improvement playgrounds 25 Parks dept. Retaining wall 20 Gov. focus 960 Parking lots (asphalt) 15 Gov. focus Roadway (concrete) 30 Gov. focus Roadway (asphaltic concrete) 20 Gov. focus Underground fuel tanks 15 Gov. focus Storm drains 30 Gov. focus