Resolution 4704 - Amends Resolution 4452 - Establishing Policy for Infrastructure Assets and Fixes AssetsRESOLUTION NO. 4704
A RESOLUTION AMENDING RESOLUTION NO. 4452 BY ESTABLISHING A POLICY
FOR THE RECORDING OF INFRASTRUCTURE ASSETS AND CAPITALIZATION OF
FIXED ASSETS.
WHEREAS, on March 15, 1999, Council passed Resolution No. 4452
which established a policy for the capitalization of
fixed assets,, and
WHEREAS, the Governmental Accounting Standards Board has adopted
Statement 34, which now requires capitalization of
infrastructure assets.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL, MONTANA, AS FOLLOWS:
SECTION I. Resolution No. 4452 is hereby amended by
adding the following:
Fixed Assets shall be capitalized in accordance with the
following:
All purchased fixed assets are valued at cost where historical
records are available and at estimated historical cost where
no historical records exist. Donated fixed assets are valued
at their estimated fair market value on the date received. The
costs of normal maintenance and repairs that do not add to the
value of the assets or extend asset lives are not capitalized.
Improvements are capitalized and, in the proprietary funds,
depreciated over the remaining useful lives of the related
assets.
General fixed assets are not capitalized in the funds used to
acquire or construct them. Instead, capital acquisition and
construction are reflected as expenditures in governmental
funds, and the related assets are reported in the general
fixed assets account group. GASB 34 governmental reporting
requirements will blend General Fixed Assets with the
governmental funds for reporting purposes.
Public domain or infrastructure fixed assets will now be
included in the general fixed assets account group following
the recommended practices of the Government Finance Officer's
Association and GASB 34 reporting requirements. Public domain
or infra -structure assets include roads, bridges, curbs and
gutters, streets and sidewalks, lighting systems and similar
assets that are immovable and of value only to the
governmental unit.
Fixed assets purchased or acquired by proprietary fund types
are recorded in the individual fund making the purchase. Any
fixed assets donated specifically for an enterprise fund are
also recorded in that individual fund. Depreciation has been
provided for the property, plant and equipment of the
proprietary funds using the straight line method. The useful
lives of these assets follow industry standards.
Tangible capital -type items should only be capitalized only if
they have an estimated useful life of at least five years
following the date of acquisition. Capitalization thresholds
are best applied to individual items rather than to groups of
similar items (e.g., desks and tables).
The capitalization threshold of $5,000 for any individual
item is recommended by the GFOA (Government Finance Officer's
Association) and is adopted here. $5,000 is the capitalization
threshold for federal projects and reimbursements.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL, MONTANA, THIS 3RD DAY OF JUNE, 2002.
Pamela B. Kenb(edy
Mayor
ATTEST:
WZti,_
Theresa White
City Clerk