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than three year intervals, the city staff shall evaluate the amount of all capital charges and <br /> recommend necessary changes to the City Council and the Utilities Commission. <br /> The city will maintain an equipment acquisition and replacement program. The city will annually <br /> update the plan to provide funding for all equipment purchases over $25,000 to be made in the next <br /> five fiscal years. The city shall attempt to fund the program without the use of debt. It is <br /> recognized that State imposed levy limits may create the need incur debt for equipment acquisition. <br /> The city will establish and maintain a program for the construction and maintenance of the <br /> municipal storm water management system. Financial projections for the storm water management <br /> system shall be updated annually. <br /> The city will establish and maintain a program for the maintenance of the municipal street system. <br /> The initial sealcoating in new subdivisions will be financed with monies collected for this purpose at <br /> the time of original development. Other sealcoating and other maintenance activities will be <br /> financed through the General fund. <br /> The city will prepare an on-going plan for the reconstruction of all city streets. The city will provide <br /> a sustainable source of funding for the street reconstruction program. The city will annually <br /> prepare cash flow projections for street reconstruction projects to ensure adequate and ongoing <br /> funding. <br /> Capital Assets and Capitalization Thresholds <br /> A capital asset is a tangible asset that has a life expectancy of more than one year. For financial <br /> statement reporting purposes,the city reports capital assets in the following categories and has <br /> established a capitalization threshold for each category: <br /> Capitalization <br /> Category Threshold <br /> Land $10,000 <br /> Buildings $25,000 <br /> Other Improvements $25,000 <br /> Machinery and equipment $10,000 <br /> Vehicles $10,000 <br /> Infrastructure $100,000 <br /> Construction in progress Accumulate all costs and capitalize <br /> if over$100,000 when completed <br /> Other assets $10,000 <br /> Another criterion for recording capital assets is capital-related debt. Capital assets purchased with <br /> debt proceeds should be capitalized and depreciated over their estimated useful life. <br /> The amount to record for a capital asset is any cost incurred to put the asset into its usable <br /> condition. Donated capital assets should be reported at fair value at the time of acquisition. <br /> Financial Management Policies Page 15 <br />