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
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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
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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
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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
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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
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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
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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
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