Loading...
HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/15/2000 - RESOLUTION NO. 27 REVISING THE POLICY REGARDING TH AGENDA ITEM SUMMARY ITEM NUMBER: 7 DATE: February 15, 2000 FORT COLLINS CITY COUNCIL STAFF: Julie Love f SUBJECT: Resolution No. 27 Revising the Policy Regarding the Capitalization of Assets. RECOMMENDATION: Staff recommends adoption of the Resolution. FINANCIAL IMPACT: The financial impact of this revision is minimal and will conform to Generally Accepted Accounting j Principles. f EXECUTIVE SUMMARY: The existing Policy Regarding the Capitalization of Assests states that all items having a value above $100 and a useful life of more than three years be capitalized. During the audit of the 1998 fiscal year,the auditors,Bondi and Associates,recommended that the capitalization threshold be changed to $5,000 in order to conform with Generally Accepted Accounting Principles (GAAP). The Resolution approves that change in policy and also lowers the useful life threshold to one year. RESOLUTION NO. 27 OF THE BOARD OF COMMISSIONERS OF THE FORT COLLINS HOUSING AUTHORITY ADOPTING A REVISED POLICY REGARDING THE CAPITALIZATION OF ASSETS OF THE FORT COLLINS HOUSING AUTHORITY WHEREAS, on July 24, 1992, the Board of Commissioners of the Fort Collins Housing Authority (the"Authority")adopted a policy statement pertaining to the capitalization of assets for the purpose of determining,distinguishing and recording materials and non-expendable equipment and personal property purchased or acquired in connection with the development,management and maintenance of public housing development owned or operated by the Authority; and WHEREAS, a portion of said policy states that if the initial cost of a piece of equipment and/or other personal property is$100 or more,and the estimated useful life exceed three years,the same shall be capitalized and recorded as non-expendable equipment and charged as a capital expenditure; and WHEREAS,during the audit of the 1998 fiscal year,the Authority's auditors recommended that the capitalization threshold in the policy be changed to $5,000 in order to conform with generally accepted accounting principles; and WHEREAS, the Executive Director has presented and recommended for adoption by the Board a revised Policy Regarding the Capitalization of Assets, pursuant to the auditors' recommendation; and WHEREAS, the Board believes it to be in the best interests of the Authority to adopt the proposed revisions to said policy as recommended by the Executive Director. NOW,THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE FORT COLLINS HOUSING AUTHORITY that the Policy Regarding the Capitalization of Assets, attached hereto as Exhibit"A" and incorporated herein by this reference, is hereby adopted by the Board and shall supersede the previous policy statement regarding capitalization, attached hereto as Exhibit "B" and incorporated herein by this reference. Passed and adopted at an adjourned meeting of the Council of the City of Fort Collins, Ex officio the Board of Commissioners of the Fort Collins Housing Authority, held this 15th day of February, A.D. 2000. Mayor, Ex officio Chairperson ATTEST: • Secretary EXHIBIT "A" POLICY REGARDING THE CAPITALIZATION OF ASSETS The FORT COLLINS Housing Authority adopts the following capitalization policy for the purpose of determining,distinguishing and recording materials and non-expendable equipment and personal property purchased or acquired in connection with the development, management, and maintenance of public housing developments owned or operated by this Authority. A. Ifthe initial cost of a piece of equipment and/or other personal property is Five Thousand Dollars ($5000.00)or more and the anticipated life or useful value of said equipment or property is more than one(1)year,the same shall be capitalized and recorded as non-expendable equipment and charged as a capital expenditure. B. If the initial cost of the piece of equipment and/or personal property is less than Five Thousand Dollars($5000.00)or its usefiil life is less than one(1)year regardless of cost,the same shall be treated and recorded as materials or inventory and charged to maintenance, administration, or tenant service expense. • C. The Executive Director, or the Executive Director's designee, is authorized and directed to determine whether each piece of equipment or other personal property that is acquired by the Housing Authority in connection with the development, management and maintenance of the properties owned or operated by the Housing Authority, shall be classified as material or non- expendable,as defined in the preceding sections. The Executive Director is further directed to ensure that the determination is documented in the appropriate records of the Housing Authority and retained for the information and guidance of its personnel and for audit purposes.