Town of Madison, ME
Somerset County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Board of Selectmen of the Town of Madison 12-10-1984. Amendments noted where applicable.]
Whereas: The auditor qualifies his opinion, places us in competitive disadvantage in the credit market; and
Whereas: Management information is needed to locate and transfer equipment from one department to another. Idle assets will be identified and sold. Unexplained disappearances of fixed assets will be reduced. Fixed assets will be identified for insurance purposes. Plans for acquisition and retirement of assets will be based upon the system of fixed asset account; and
Whereas: Stewardship needs provide for an accountability for Town government capital expenditures over the years.
Now therefore, be it resolved: That the Board of Selectmen hereby outlines a policy regarding fixed assets as follows:
All fixed assets belonging to the Town with a unit reproduction cost of $300 or more will be included and will be grouped by following major asset classifications:
Buildings and structures; or
Movable equipment.
The following assets will not be included in the system:
Spare parts;
Improvements other than buildings;
Records, reports, studies, plans, etc.;
Discarded equipment with no monetary value;
Supplies and expendables;
Streets, sidewalks and bridges considered as part of rights-of-way;
Storm drains and sewers;
Art work and antiques, except for in-use value;
Easements; or
Assets with unit reproduction cost of less than $300.
The following information shall be collected for each individual fixed asset:
Asset class — building and structures or equipment;
Function and activity — department;
Acquisition source — general fund purchase, capital purchase, gift, lease, etc.;
Acquisition date;
Name and address of vendor;
Short description of asset with serial number;
Department with custody;
Estimated useful life;
Estimated salvage value; and
Date, method and authorization for disposition.
Historical costs can be found or estimated from a number of sources: vendor invoices, purchase orders, cancelled checks, vouchers, contracts, Town Meeting or Selectmen's minutes, ledgers, inventory cards, maintenance records, general and capital budgets, offering circulars, insurance policies, price list and independent appraisers. If historical costs are still lacking, then current replacement costs may be relevant price levels at the acquisition date to estimate original cost. Donated fixed assets should be recorded at their estimated fair market value at the time received. All interest costs incurred during construction shall be included in cost of fixed asset as shall other ancillary costs such as freight and transportation charges, site preparation expenditures and professional fees.
Replacement costs information may be obtained from current vendors' price lists, independent appraisers, and published price-trend data for various asset classes.
Depreciation rates for each class of asset will be based upon past experience for normal useful life. This will serve as a schedule for replacement. Examples of this would be a fire truck has a thirty-year life. It would be depreciated 1/30 each year and scheduled for replacement 30 years after purchased.
Upon disposal or retirement, the fixed asset is removed from accounting records by reversal of original entry and any salvage proceeds are recorded as revenues in the general fund.
Beginning January 1, 1985, all departments will maintain a record of fixed assets under its custody. Annually, in December, each department head will update the inventory of fixed assets and notify the Town Clerk of changes by December 31.