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Home My Public Portal AboutResolution 16-08 Capital Asset Management PolicyCity of McCall RESOLUTION 16-08 Capital Asset Management Policy A RESOLUTION OF THE CITY OF MCCALL, IDAHO, PROVIDING FOR A CAPITAL ASSET MANAGEMENT POLICY RELATING TO CAPITAL IMPROVEMENT PLANNING; CAPITAL BUDGETING; CAPITAL PROJECT MANAGEMENT; CAPITAL ASSET MAINTENANCE; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the assets of the City of McCall are property owned in common by the citizens of our community; and WHEREAS, the City of McCall recognizes that capital assets are major expenditures that require considerable planning; and WHEREAS, the City of McCall recognizes that without a long-term capital plan officials may not be able to gather the funding to make necessary improvements; and WHEREAS, the City of McCall recognizes that a good capital improvement plan provides officials with a tool to prioritize current and future capital needs and obtain necessary funding from a variety of sources; and WHEREAS, the City of McCall recognizes that capital improvement planning provides a mechanism for decision making, provides coordination with the comprehensive plan, provides a financial management tool, improves credit rating, improves intergovernmental and regional cooperation, and improves municipal administration; and WHEREAS, on September 25, 2015 McCall City Council conducted a work session and received information from the City Treasurer on Capital Improvement Planning Policy Implementation; and WHEREAS, on November 19, 2015 McCall City Council conducted an additional work session and received information from the City Treasurer on Capital Budgeting, Capital Project Management, and Capital Asset Maintenance; and WHEREAS, the City Council of McCall directed staff to bring forth a capital asset management policy. NOW, THEREFORE, it is resolved by the Mayor and City Council of the City of McCall, Valley County, Idaho, that: Page 1 of 2 Resolution 16-08 Capital Asset Management Policy March 10, 2016 Section 1: The McCall City Council hereby adopts The City of McCall Capital Asset Management Policy, a copy of which is attached as Attachment A, and incorporated herein by this reference. Section 2: This resolution shall be in full force and effective immediately upon its adoption and approval. Passed and approved this 10 day of March, 2016. CITY OF MCCALL Valley County, Idaho A 1"1'EST: BessieJo ag 'er, City Resolution 16-08 Capital Asset Management Policy March 10, 2016 Page 2 of 2 Attachment A City of McCall Capital Asset Management Policy The capital assets of the City of McCall are property owned in common by the citizens of our community. The management of these capital assets shall be governed by this policy, which has four major components: Capital Improvement Planning, Capital Budgeting, Capital Project Management and Capital Asset Maintenance. Definitions Capital Asset — Land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in operations that have an initial useful life in excess of one year, and have an initial, individual cost of more than $10,000. Capital Improvement Plan — The Capital Improvement Plan (CIP) is a tool used to establish, forecast and review the City's major capital projects needs over a period of several years for the systematic improvement, maintenance and replacement of the City's infrastructure. Additionally, the CIP is used to identify potential funding sources, prioritize projects and set forth a timeline for funding and completing those projects. Capital Improvement Project — A project that includes the acquisition or construction of a capital asset or group of capital assets that meets the $25,000 threshold for Capital Improvement Projects and has an estimated useful life of greater than five years. Capital Outlay — The total of all capital asset acquisitions during a period of time. Capital outlay for a particular fiscal year would include all Capital Improvement Project expenditures plus all Operating Capital expenditures during the fiscal year. Operating Capital — Capital assets that are purchased to facilitate the ongoing operations of the City. Operating Capital includes all capital purchases, less than $25,000, that are not classified as Capital Improvement Projects. 1) Capital Improvement Planning — The Capital Improvement Plan (CIP) is a tool used to establish, forecast and review the City's major capital projects needs over a period of several years for the systematic improvement, maintenance and replacement of the City's infrastructure. Additionally, the CIP is used to identify potential funding sources, prioritize projects and set forth a timeline for funding and completing those projects. a. The City Manager will annually submit a financially balanced, multi -year CIP for review, approval and adoption by the City Council. b. A CIP Committee will exist to identify capital improvement projects, identify funding sources for those projects, and review project details utilizing a standardized set of prioritization criteria. The City Manager or his/her designee will chair the committee. The committee will be a staff committee consisting of a cross representation of City employees appointed by the City Manager, and when available, a citizen liaison from the community and/or a member of an established City committee. Capital Asset Management Policy Page 1 of 3 Attachment A c. The CIP will cover a minimum of a five (5) year prospective period, and will be a cohesive representation of the City's overall current and future capital improvement project needs, taking into account the City's Comprehensive Plan, CIP Committee analyses and recommendations, and the needs and desires of the citizens of the community. d. The CIP will include at least the following essential components: i. Statement of the general objectives of the CIP and the relationship to the City's Comprehensive Plan, department master plans, and annual budget. ii. A schedule or listing of each capital improvement project, estimated total cost and cost per fiscal year, funding status, expected funding source(s), project description and justification and estimated start and completion dates. No capital project shall be funded unless operating impacts have been assessed and the necessary funds can be reasonably anticipated to be available when needed. e. To be considered for inclusion in the CIP, a Capital Improvement Project's estimated aggregate cost must exceed a threshold of $25,000. f. Deferring essential maintenance and/or asset replacement can negatively impact service delivery and increase long term costs. The City will periodically assess the condition of assets and infrastructure and appropriately plan for required major maintenance and replacement needs. Efforts will be made to allocate sufficient funds in the multi -year capital plan and operating budgets for condition assessments, preventative and major maintenance, and repair and replacement of critical infrastructure assets. g• The City will match programs and activities identified in the CIP with associated funding sources. h. The City's objective is to incorporate "Pay -As -You -Go" funding (using available cash resources) to supplement other funding sources such as bonds and grants in the annual CIP. i. The City's objective is to allocate one-time revenue sources to one-time expenditures. j• When current revenues or resources are available for capital improvements projects, consideration will be given first to those with the shortest useful life and/or to those capital assets whose nature makes them comparatively more difficult to finance with bonds. Using cash for projects with shorter lives and bonds for projects with longer lives facilitates "intergenerational equity" 2) Capital Budgeting — Capital Budgeting is the process used by the City to arrive at the Capital Outlay figures in the adopted budget each fiscal year. There are two components of Capital Outlay: Capital Improvement Projects and Operating Capital. a. Capital Improvement Projects are projects that include the acquisition or construction of a capital asset or group of capital assets that meet the dollar threshold for Capital Improvement Projects and have an estimated useful life of greater than five years. Capital Asset Management Policy Page 2 of 3 Attachment A i. The first year of the adopted CIP plus operating capital will be the total capital budget for that fiscal year. ii. The CIP will be updated annually as a multi -departmental effort. b. Operating Capital — Land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in operations, that have initial an useful life in excess of one year, and have an initial, individual cost of more than $10,000 and less than $25,000, but are not classified as Capital Improvement Projects. i. Budgeting for Operating Capital is not subject to the formalized process that Capital Improvement Projects are, however the operating capital budget should implement principles similar to those used in budgeting for CIP. An inter- departmental approach should be utilized, taking into consideration the overall needs of the City in terms of asset acquisition, replacement and maintenance. 3) Capital Project Management a. Every CIP project will have a project manager who will prepare the project proposal, ensure that required phases are completed on schedule, authorize all project expenditures, ensure that all regulations and laws are observed, and periodically report project status. b. Within 90 days of the completion of a capital project any remaining appropriated funds for the project will revert to the fund balance of the funding source to be re -allocated to eligible CIP projects. 4) Capital Asset Maintenance a. The Finance Department will maintain a complete listing of capital assets, including original acquisition date and cost. b. Adequate insurance will be maintained on all capital assets. c. City of McCall assets will not be degraded, given away or allowed to deteriorate except by action of the Council. Capital Asset Management Policy Page 3 of 3