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HomeMy Public PortalAboutRES-CC-2001-18Resolution 18-2001 A RESOLUTION ADOPTING THE MOAB CITY ASSET CAPITALIZATION POLICY WHEREAS, the Moab City owns assets and has a need to track and depreciate them, and WHEREAS, Moab City is desirous of developing an Asset Capitalization Policy NOW, THEREFORE, we, the Governing Body of the City of Moab do hereby adopt the Moab City Asset Capitalization Policy as follows See attached policy Passed and adopted by action of the Governing Body of the City of Moab in open session this 28ih day of August, 2001 CITY OF MOAB BY*4/ij)eal4) f ,1-7Flf J Karla R Hancock Mayor Attest Rachel Ellison City Recorder Resolution ifl{ 2001 Page I of 1 MOAB CITY ASSET CAPITALIZATION POLICY 1 PURPOSE To define city policy for Management of city property and government property for which the City is responsible 11 DEFINITIONS A Property - Equipment, material, supplies, land improvements or building improvements purchased with any funds administered by the City (excluding land and buildings which will be administered under a separate policy) Government Property - Property owned or furnished by the federal government or acquired by the City with federal funds under the terms of a contract or grant for which the federal government retains title C City Property - That property to which title is vested in the City whether purchased with city funds or acquired by bequest or gift D. Surplus Government Property - Property determined to be excess by the state or federal government, which is made available to the City for purchase or as a gift E Surplus City Property - city property that is unusable or no longer required by the City and is declared surplus by the City Council F. Real Property - Land, buildings and related improvements purchased with city funds, bequeathed or donated to the City G City Funds - Funds administered by the City without regard to source of such funds H. I Hazardous Materials - Property containing substances that are identified as hazardous by federal and/or state laws and regulations and/or by city policies and procedures Salvage Report form - An official city document that is used to transfer property/equipment from one department to another and/or to retire property/equipment from a department's inventory records The R 120011Assetslasset capitalization policy doc Resolution *18-2001 Page 1 of 7 Salvage Report form may be obtained from the Recorder's Office J Capital Equipment - Equipment having an acquisition or donated value of at least $1,000 and a useful life in excess of two years K Accountable Equipment — Equipment having an acquisition or donated value of less than $1,000 Including but not limited to office equipment, office furniture, office machinery, cellular phones, miscellaneous office electronics, power tools, hand tools, etc III POLICY A Inventory Records - The City will maintain inventory records on all on all capital and accountable equipment and property - including real property which is one of the following 1 City property 2 Government property 3 Loaned property that is borrowed by the City from another city or from another government entity 4 City or government property for which the City of Moab is accountable, which is on loan to another city or another entity B. Reporting Requirements of City Acquired Property 1 It is the responsibility of each department or entity which acquires, holds, or disposes of city and government property to ensure that such property is (a) Properly reported when acquired (b) Properly inventoned and safeguarded (c) Properly reported at the time of disposal 2 When expenditures for city equipment/property are recorded in the accounting system, the Recorder's Office shall prepare and send inventory tags to the appropnate departments Departments shall attach the inventory tag to the property, record the location on a form provided by the Recorder' Office, and return the form to Recorder's Office within 30 days 3 Historical cost shall be the basis for valuing city and government property Historical cost is the cash or cash equivalent pnce of R \2001\Assets\asset capitalization policy doc Resolution #18-2001 Page 2 of 7 obtaining the property and prepanng it for its intended use, including freight charges, installation costs, etc For land and buildings it includes purchase pnce, closing costs and all fees and other costs to prepare the land and/or building for its intended use 4 Property donated to the City shall be recorded at its fair market value at the time of donation 5 Property received in an exchange (trade-in) shall be recorded at its fair market value C Additions to Existing Equipment 1 In order to have uniformity in accounting for additions to capital and insurable equipment, the following guidelines shall be followed (a) "Repair" or "maintenance" expenditures shall be recorded as a current expense regardless of the amount A repair or maintenance expenditure is one that maintains the property at its existing level or existing service life, such as painting, repair, miscellaneous pacts, and normal servicing (b) In general, additions to equipment costing less than $500 shall not be recorded as equipment An exception occurs when the onginal equipment and the addition are purchased within a 12-month penod, the addition becomes an integral part of the onginal purchase (to produce a single functional unit), and the addition significantly extends the useful life or substantially increases the value or capability of the equipment D Computer Systems and Software 1 Computer systems (i e ,CPU , monitor, pnnter, software and accessones) purchased as a package shall be recorded as capital equipment if the system costs more than $1,000 Software packages purchased separately or developed internally shall not be recorded as equipment regardless of cost E. Transfers of Property 1 City property may be transferred from one city department to another, with the agreement of both departments H Disposal of Property 1 Any property to be disposed of, sold, or transferred outside of the City R \2001\Assets\asset capitalization policy doc Resolution #18-2001 Page 3 of 7 must first be declared surplus by the City Council 2 It is the policy of the City to dispose of excess city property in a manner that will maximize the return or benefit to the City, consistent with laws governing state property 3 Sale of city property, except to another government agency, is prohibited unless auctioned 4 The City Recorder is responsible for the disposal of excess city property I Property Location, Maintenance and Use 1 Departments shall maintain records identifying the current location of each item of capital equipment to allow any item to be located within a reasonable time 2 An individual who removes property from its city location without proper authonzation is responsible for replacing such property if it is lost, stolen or damaged 3 It is the responsibility of the department head to properly maintain government or city property, which has been entrusted to him/her The department head shall, if requested, appnse the City Recorder of the condition of any government property in his/her possession 4 It is the responsibility of the department head to ensure that government property is utilized as authonzed J Security and Losses 1 The department head is responsible to adequately provide for physical secunty of property in their custody Special precautions shall be taken to safeguard portable and high pilferage property 2 Loss, theft or destruction of city or government property must be reported within twenty-four (24) hours of discovery to the City Recorder's Office The report must include applicable inventory numbers, and in the case of theft, the City of Moab Police case number 3 Only city or government property, which is recorded by the City Recorder's Office, is insured subject to a deductible amount In case of loss, the deductible amount is charged to the applicable department R t2001Wsse!slasset capitalization policy doc Resolution #18-2001 Page 4 of 7 IV PROCEDURES A Verification of Inventory Records 1 At least annually, the City Recorder's Office will send each department a list of the capital equipment for which it is accountable The department shall venfy the existence, condition and location of each item in accordance with instructions provided by the City Recorder's Office The department head must approve the completed inventory, which must be returned to the City Recorder's Office within sixty (60) days, unless an extension is requested and granted Inventones not returned on a timely basis will be brought to the attention of the City Manager for review and appropnate follow-up 2 Departments shall not be relieved of accountability for un-located property in the absence of diligent effort and review and approval by responsible administrators If an item cannot be located, the head of the department shall certify that a thorough investigation has been made before approving the inventory listing Approval from the City Manager must be obtained to remove un-located items from the records B Obtaining Approval to Transfer/Sell City Property to Another Government Entity Department Head 1 Prepares and forwards a letter to the City Manager requesting the transfer of the property The letter must contain signature approval of the department head as well as a detailed property listing from the Recorder's Office showing (a) The onginal purchase pnce (b) A descnption of the property, including make, model number and year of purchase (c) Number of the account from which the property was purchased (d) Purchase order number (e) City inventory number (f) Location of the property R \2001Ussets\asset capitalization policy doc Resolution #18-2001 Page 5 of 7 2 Verifies the fair market value of the property being transferred and sold to the new institution 3 Presents a properly completed salvage report form to the City Recorder's Office along with the approval of the City Manager City Recorder's Office 1 Obtains a sales agreement from the institution purchasing the equipment stating that it will purchase the property and assume financial responsibility for packing and shipping 2 Inspects the property items to be sold before packaging and authonzes shipping if description of the property to be shipped matches approved list 3 Presents the Salvage Report Form along with approval documents to City Council for declaration of surplus city property 4 Executes the transaction C. Transfer of Property Between Departments 1 Department head submits a properly completed and approved salvage report form to the Recorder's Office within 5 days of the transfer 2 If a transfer is temporary (less than 3 months), submittal of a transfer form is not required D. Cannibalization of Property 1 When property is cannibalized or disassembled, the appropnate department must submit within five (5) days a properly completed and approved salvage report form to the City Recorder's Office E. Disposal of Excess City Property (declared as City Surplus Property) 1 When excess city property needs to be declared as surplus, the appropnate department shall prepare a properly completed and approved Salvage Report Form to be available at the time the property is removed from service The form must include applicable inventory numbers Departments cannot be relieved of accountability for items unless inventory numbers are correctly identified on the form The excess items are then presented to the Moab City Council to be declared as Surplus City Property R \20014kssets\asset capitalization policy doc Resolution 818-2001 Page 6 of 7 2 The City Recorder's Office shall dispose of excess city property in the following manner (a) Property shall first be offered to city departments (b) Property shall next be offered to other state schools or governmental agencies at a cost determined by the City Recorder's Office and approved by the City Manager (as outlined in Section V B[3]) (c) Property shall next be offered to the general public at auction Applicable sales taxes will be collected (d) If property has not been sold within 60 days, items will be dismantled for useful components, sold for salvage value, scrapped or otherwise discarded F. Trade-in Offers on Purchase of New Property 1 If a written trade-in offer is made to the City on the purchase of new equipment, the Department Head will notify the City Recorder's Office of such offer The City Recorder's Office will determine if the offer appears fair and reasonable 2 The department head will complete a salvage report form prior to the trade-in of any equipment R \2001Ussets asset capitalization policy doc Resolution i t2-2001 Page 7 of 7