4.8 SR 10-21-2024 - Laserfiche WebLink

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Financial Management Policies Page 15 intervals, city staff shall evaluate the amount of all capital charges and recommend necessary changes to the City Council and the Utilities Commission. The city will maintain an equipment acquisition and replacement program and will annually update the plan to provide funding for all equipment purchases over $25,000 to be made in the next five fiscal years. The city shall attempt to fund the program without the use of debt. It is recognized that state-imposed levy limits may create the need incur debt for equipment acquisition. The city will establish and maintain a program for the construction and maintenance of the municipal storm water management system. Financial projections for the storm water management system shall be updated annually. The city will establish and maintain a program for the maintenance of the municipal street system. The initial sealcoating in new subdivisions will be financed with monies collected for this purpose at the time of original development. Other sealcoating will be financed through the Pavement Management Fund and other maintenance activities will be financed through the General Fund. The city will prepare an on-going plan for the reconstruction of all city streets and will provide a sustainable source of funding for the street reconstruction program. The city will annually prepare cash flow projections for street reconstruction projects to ensure adequate and ongoing funding. Capital Assets and Capitalization Thresholds A capital asset is a tangible asset that has a life expectancy of more than one year. For financial statement reporting purposes, the city reports capital assets in the following categories and has established a capitalization threshold for each category: Capitalization Category Threshold__ Land $10,000 Buildings $25,000 Other Improvements $25,000 Machinery and equipment $10,000 Vehicles $10,000 Infrastructure $100,000 Construction in progress - Accumulate costs and capitalize if over $100,000 when completed Other assets $10,000 Another criterion for recording capital assets is capital-related debt. Capital assets purchased with debt proceeds should be capitalized and depreciated over their estimated useful life. The amount to record for a capital asset is any cost incurred to put the asset into its usable condition. Donated capital assets should be reported at fair value at the time of acquisition. Risk Management The city will maintain a Risk Management Program to minimize the impact of legal liabilities, natural disasters or other emergencies through the following activies: ▪Loss Prevention. Prevent negative occurrences. ▪Loss Control. Reduce or mitigate expenses of a negative occurrence. ▪Loss Financing. Provide a means to finance losses. ▪Loss Information Management. Collect and analyze relevant data to make prudent loss prevention, Page 66 of 294