The following procedures and guidelines are
to account for the fixed assets of the City of Fairfax. This policy
is for accounting purposes only and does not supersede any other policies
which address assessments.
As used in this chapter, the following terms
shall have the meanings indicated:
ASSET LIFE
This is the standard estimated useful life of an item. To
be considered a fixed asset, an item must have a useful life greater
than one year.
ASSET VALUE
This is the value of an item. The value will be based on
the invoice plus additional costs of preparing the asset for use.
To be considered a fixed asset, an item must have a value of greater
than $1,000.
BUILDINGS AND STRUCTURES
A building or structure is a roofed and/or walled structure
that is City-owned. For example, a picnic pavilion would be considered
a structure although it may have no walls.
COMPUTERS
A separate class of asset set up to specifically account
for all computer equipment owned by the City. This category includes
personal computers, printers, modems and any other computer-related
item.
FIREARMS
A weapon from which a shot is discharged using gunpowder.
This category is used to account for all firearms belonging to the
Police Department.
FIXED ASSET
An item obtained by the City with a value of greater than
$1,000 and an estimated useful life of greater than one year.
FORFEITED PROPERTY
Property seized by the Police Department that will be used
by the City. The City policy on forfeited property should be followed.
FURNITURE AND FIXTURES
Assets that are used by people in any City facility that
are considered furniture or fixtures. This category includes desks,
chairs, credenzas, modular work stations, drinking fountains, etc.
INVESTING SOURCE
Fund type originally payable for general fixed asset or donation.
Assets acquired before January 1, 2004, will not have a designated
investing source.
LAND
Any parcel of land that is City of Fairfax owned, whether
developed or undeveloped.
LAND EQUIPMENT
Grading, roads and parking lots on City-owned property that
will be capitalized.
MACHINERY AND EQUIPMENT
Includes motorized and nonmotorized equipment that has a
primary function of the City of Fairfax street, park or utility maintenance.
It includes items such as tractors, mowers, snow blowers, etc.
OFFICE EQUIPMENT
An item used by employees to perform a mechanized task in
an office environment. For example, typewriters, telephones and adding
machines. However, cameras, VCR's, cellular phones, refrigerators,
microwaves, etc., are also included in this category. This category
does not include computer equipment as there is a separate distinct
category for computer equipment.
PARK IMPROVEMENTS
Improvements made to a City park that will be capitalized.
This category would include items such as playground equipment, back
stops, bleachers, flagpoles, etc.
TOOLS AND OTHER EQUIPMENT
This category includes all small tools and equipment such
as chain saws, battery chargers, post drives and so on. Vehicle equipment
as defined below is excluded from this category.
VEHICLE EQUIPMENT
Equipment that is installed in/on a motor vehicle such as
radios, wing plows, sanders, lighting packages, radar units and tool
boxes.
VEHICLES
Motorized vehicles owned by the City of Fairfax such as squad
cars and trucks.
No asset owned by the City shall be sold to
an officer or employee of the City unless the sale conforms to Minnesota
State Statute 15.054, as amended from time to time. Property, except
real property, may be sold to an employee after reasonable public
notice at a public auction or by sealed bid, if the employee is the
highest bidder and is not directly involved in the auction sealed
bid process.
Depreciation will be calculated using the straight-line
method over the estimated useful life of assets. One-half year depreciation
will be taken for the year of acquisition and 1/2 year of depreciation
will be taken in the year of disposition (unless the asset is fully
depreciated). Standard estimated useful lives are as follows:
|
Years
|
---|
Lift stations
|
50
|
Sanitary sewer mains
|
40
|
Water mains
|
40
|
Storm sewer mains
|
40
|
Sump pump lines
|
40
|
Buildings
|
40
|
Concrete curb and gutter
|
30
|
Sidewalks
|
30
|
Wells and pump houses
|
25
|
Water meters
|
20
|
Office equipment
|
10
|
Computer equipment and software
|
5
|
Vehicles
|
5
|
Machinery, equipment, radios, phones
|
10
|
Land
|
Not depreciated
|