Chapter 3.28
CAPITAL EQUIPMENT DEPRECIATION SYSTEM
Sections:
3.28.020 Capital equipment defined.
3.28.035 Capital equipment replacement fund.
3.28.040 Budgeting and accounting procedures generally.
3.28.050 Determination of amount of money to be budgeted for depreciation.
3.28.010 Purpose.
In order to replace major pieces of existing capital equipment in a timely manner without placing an undue burden on the annual budget in the fiscal year of replacement, there is established for the City a capital equipment depreciation system, and a capital equipment replacement fund. [Ord. 1011 § 1, 1984; Ord. 836 § 1, 1975.]
3.28.020 Capital equipment defined.
For purposes of this chapter, “capital equipment” is defined as tangible property of a more or less permanent nature with an estimated replacement cost of $5,000 and an operating life of two-plus years. “Capital equipment” includes, but is not limited to, motorized vehicles, nonvehicular motorized equipment and machinery, and other equipment and machinery. “Capital equipment” shall not include capital improvements such as land, buildings, and other attachments or annexations to land which are intended to remain so attached or annexed such as bridges, curbs and gutters, retaining walls, sanitary sewer systems, sidewalks, storm drainage systems, streets and other pavements, trees, water systems, and other permanent improvements which add value to land. [Ord. 1011 § 2, 1984; Ord. 836 § 2, 1975.]
3.28.030 Initial funding.
To establish the depreciation system, a sufficient amount of money shall be transferred to specific reserve accounts for capital equipment depreciation from the fund balance of the appropriate operating fund to cover depreciation on existing capital equipment through the fiscal year 1973-74. [Ord. 836 § 3, 1975.]
3.28.035 Capital equipment replacement fund.
There is created a capital equipment replacement fund into which shall be transferred all balances accumulated in specific reserve accounts for capital equipment depreciation in each and every operating fund. [Ord. 1011 § 3, 1984.]
3.28.040 Budgeting and accounting procedures generally.
Commencing in fiscal year 1974-75, and every fiscal year thereafter, the preliminary budget shall allocate moneys for depreciation on specific pieces of equipment in the appropriate operating funds of the City for approval by the Council. Annually, the budgeted moneys approved by the Council for capital equipment depreciation shall be recorded as expenditures against the appropriate budgetary depreciation accounts in the various operating funds and transferred to the specific reserve account for each piece of equipment in the capital equipment replacement fund. In the fiscal year of replacement, the piece of equipment shall be clearly shown in the preliminary budget as a proposed appropriation from the capital equipment replacement fund. If the Council approves the proposed replacement, the expenditure shall be charged against the specific reserve account for the piece of equipment in the capital equipment replacement fund. In the event there are not sufficient moneys in the reserve account to cover the total expenditure for replacement, an additional appropriation shall be required in the appropriate budgetary account in the applicable operating fund and transferred to the specific reserve account for the piece of equipment to cover the expenditure for replacement. In the event there is a surplus of moneys in the reserve account after charging the expenditures for replacement, these moneys shall remain in the reserve account. In the event it is decided not to replace a piece of equipment that has been depreciated with any other piece of equipment, moneys in the reserve account shall be distributed, allocated and/or transferred as determined by resolution of the City Council. In the event it is determined the estimated replacement cost for a piece of equipment that has not been depreciated exceeds $5,000, depreciation shall commence on that piece of equipment in the fiscal year following that determination. [Ord. 1011 § 4, 1984; Ord. 836 § 4, 1975.]
3.28.050 Determination of amount of money to be budgeted for depreciation.
The amount of money to be budgeted for depreciation shall be determined in the following manner. During budget preparations, the fiscal year of replacement for each piece of equipment shall be reevaluated and changed if necessary. A revised estimated replacement cost shall be determined. The amount to be budgeted for depreciation shall be calculated by subtracting the amount that will be accumulated in the specific reserve account for the piece of equipment on July 1st of the budget year from the revised estimated replacement cost. Based on the revised fiscal year of replacement, this figure shall be divided by the remaining years of depreciation. If the resulting budget figure for depreciation results in cents, any odd figure shall be included in the depreciation for the budget year. [Ord. 836 § 5, 1975.]