Chapter 5.45
ASSET CAPITALIZATION AND INVENTORY
Sections:
Article I. Capital Assets
5.45.030 Comprehensive and capital facilities plans.
5.45.040 Deteriorated and obsolete assets.
5.45.041 Vehicle replacement policy.
5.45.060 Capital asset inventory tracking.
Article II. Small and Attractive Assets
5.45.070 Small and attractive asset inventory tracking.
Article I. Capital Assets
5.45.010 Threshold.
The threshold for capital assets on new purchases is $5,000, unless determined as an expense item. Replacement of current assets may be capitalized if they lengthen the life of the asset or expand its capability or usable capability. [Res. 726, 2005; Res. 468 § 1, 1984.]
5.45.020 Criteria.
The following criteria shall be considered in determining whether an item or work will be capitalized:
(1) Whether the item or work is a repair to or replacement of an existing asset;
(2) Whether the item or work extends the life of the individual asset or the system of which it is a part;
(3) Whether the item or work expands the capability or capacity for improved and/or additional services of the system of which it is a part, or for the District in general;
(4) Whether the item or work is part of a rehabilitation to extend the life of an existing asset;
(5) Whether the item or work is funded in part or in its entirety by a Federal or State grant and/or loan and therefore qualifies as a donated facility;
(6) Whether the item or work is included as part of the capital facilities plan of the District’s comprehensive plan;
(7) Whether the item or work is identified on the District’s expense or capital budget guideline;
(8) Whether the item or work is of such a nature that it should or would be included in the annual computations of the general connection charges of the District;
(9) Whether the item or work was planned as part of the future connection fee of the District in the economic element of the District’s capital facilities plan. [Res. 617 § 1, 1996.]
5.45.030 Comprehensive and capital facilities plans.
The comprehensive plan of the District, associated studies, and capital facilities plan inclusions or revisions as done from time to time shall be capitalized as assets of the District and depreciated over a 10-year period from adoption of such work. [Res. 617 § 2, 1996.]
5.45.040 Deteriorated and obsolete assets.
Any asset which previously has been capitalized, but which is determined to be physically deteriorated or obsolete, shall be disposed of as follows: Any physically deteriorated or obsolete asset with no remaining or salvageable value, which is determined by the Board of Sewer Commissioners to be in complete physical deterioration, shall be destroyed, and an adjusted journal entry in the District’s records shall be made whereby accumulated depreciation shall be debited and the asset account credited for the original value of the asset. [Res. 468 § 2, 1984.]
5.45.041 Vehicle replacement policy.
(1) The Board of Commissioners approves the vehicle replacement policy as a guide and intended to be used for budgetary and strategic planning purposes. Many factors will affect the timing a vehicle is replaced; for example, economic restrictions may require the division to retain vehicles longer than anticipated or high-operating-cost existing vehicles may accelerate the replacement of a vehicle. The following is a decision tree utilized by the division to determine when a vehicle is replaced and what type of vehicle is purchased as the replacement vehicle: age, condition, vehicle mileage, type (gas, electric, hybrid), historical satisfaction, economic value, acquisition cost, fuel economy, reliability rating, warranty, depreciation expense, and image.
(2) The Board of Commissioners of the Lake Stevens Sewer District hereby authorizes the General Manager to abide by the vehicle replacement policy as outlined above and to include in the annual budget as needed. [Res. 972 §§ 1, 2, 2019.]
5.45.050 Unneeded assets.
Any asset with remaining value that previously has been capitalized, but which is determined not to be needed for District purposes, shall be disposed of in accordance with the provisions of RCW 56.08.080 and 56.08.090, as amended. [Res. 468 § 3, 1984.]
5.45.060 Capital asset inventory tracking.
(1) Purpose and Definitions. It is the policy of the Lake Stevens Sewer District to maintain accountability over the District’s capital assets. Capital assets include: land of any value; buildings, their furnishings and fixtures; equipment, machinery, vehicles and tools with a value of $5,000 or more and having a useful life exceeding one year from the date of acquisition. The purpose of this policy is to provide adequate stewardship over assets and maintain control and accountability through a standardized inventory process. The District will maintain records and do verification through physical inventory at least once every calendar year. All completed inventory records will be maintained in accounting department and compared to previous year’s records.
(2) Responsibility for Inventory Tracking. The Deputy Manager of Administration, the Deputy Manager of Operations and the Deputy Manager of the Treatment Plant will oversee the collection of capital asset inventory data at least once a year. This can be done by hiring an insured, qualified third party or by delegation of another employee. Using the inventory spreadsheet for record keeping, each Deputy Manager will sign off that the items are still in their designated locations and have not disappeared or been destroyed. Inventory will take place at each lift station, waste water treatment plant, administration office, and any other physical property owned by the District. This completed inventory spreadsheet will then be provided to the Accounting Department for data entry and record keeping as well as for accuracy of records. Any missing items or changes will be supported by written documentation by the Manager, who will note the reason or means of disposal/missing items.
(3) Updating Inventory Spreadsheet. Whenever any item is purchased within the dollar value range of a capital asset, the Deputy Manager(s) or District Manager will provide the information to the Accounting Department as to enter it into the active spreadsheet and include it in any further accountability of recording. Any items previously acquired and accounted for in the spreadsheet that are being disposed of will be deleted from the spreadsheet maintained by the Accounting Department. Deletion will only be completed based on written documentation from the District Manager, Deputy Manager, or their designee.
(4) Lost or Stolen Assets. Whenever an item has disappeared mysteriously and all efforts have failed to recover it, the controlling Deputy Manager will notify the Accounting Department in writing, which will make documentation on spreadsheet. The District Manager and the Deputy Manager will together determine if any action needs to be taken for further investigation.
(5) Donated Items. Occasionally, assets may be donated to the District. If the donated item falls in the stated dollar value range, it will be added to the spreadsheet for tracking and included in the annual account. [Res. 868 §§ 1 – 5, 2012.]
Article II. Small and Attractive Assets
5.45.070 Small and attractive asset inventory tracking.
(1) Purpose and Definitions. It is the policy of the Lake Stevens Sewer District to maintain accountability over tangible items that may have the likelihood of disappearing without being noticed. The purpose of this policy is to provide adequate stewardship over assets and maintain control and accountability through a standardized inventory process. A “small and attractive asset” is any item that is valued at no less than $500.00 and no more than $5,000 with a life expectancy greater than one year. These items are likely not to be missed immediately and they could be replaced without suspicion. Examples include but are not limited to: cameras, tools, equipment, computers, and cell phones; anything of value purchased with District funds that is within the stated dollar value range. The District will maintain records and do verification through physical inventory at least twice every calendar year. All completed inventory records will be maintained in accounting department and compared to previous year’s records.
(2) Responsibility for Inventory Tracking. Both the Deputy Manager of Administration and Deputy Manager of Operations will oversee the collection of small and attractive asset inventory data at least twice a year. This can be done by hiring an insured, qualified third party or by delegation of another employee. Using the inventory spreadsheet for record keeping, each Deputy Manager will sign off that the items are still in their designated locations and have not disappeared or been destroyed. Inventory will take place at each lift station, waste water treatment plant, administration office, and any other physical property owned by the District. This completed inventory spreadsheet will then be provided to the Accounting Department for data entry and record keeping as well as for accuracy of records. Any missing items or changes will be supported by written documentation by the Deputy Manager, who will note the reason or means of disposal/missing items.
(3) Updating Inventory Spreadsheet. Whenever any item is purchased within the dollar value range of “small and attractive assets,” the Deputy Manager(s) or District Manager will provide the information to the Accounting Department as to enter it into the active spreadsheet and include it in any further accountability of recording. Any items previously acquired and accounted for in the spreadsheet that are being disposed of will be deleted from the spreadsheet maintained by the Accounting Department. Deletion will only be completed based on written documentation from the District Manager, Deputy Manager or their designee.
(4) Lost or Stolen Assets. Whenever an item has disappeared mysteriously and all efforts have failed to recover it, the controlling Deputy Manager will notify the Accounting Department in writing, which will make documentation on spreadsheet. The District Manager and the Deputy Manager will together determine if any action needs to be taken for further investigation.
(5) Donated Items. Occasionally assets may be donated to the District. If the donated item falls in the stated dollar value range, it will be added to the spreadsheet for tracking and included in the biannual account. [Res. 829 §§ 1 – 5, 2010.]