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HomeMy WebLinkAbout2026-1 ASSET MANAGEMENT2022600003115 RECOKIED AS PRESENTED IN GIBSON COUNTY, INI€IRtdr TIM SCHURMEIEf, RECORDER 071`v4.12026 08.26 AM GIBSON COUNTY COMMISSIONERS 0.00 ORDINANCE NO. 2026-1 PAGES: ° AN ORDINANCE OF THE GIBSON COUNTY COMMISSIONERS AMENDING AND RESTATING ORDINANCE NO. 2022-10 CONCERNING ASSET MANAGEMENT AND PROVIDING PROCEDURE FOR DISPOSITION OF CERTAIN PROPERTY WHEREAS, Indiana Code 36-1-3, which is commonly known as the "home rule", provides that local governments (such as counties, cities and towns) have the authority to pass legislation not specifically prohibited by federal or state rules and regulations; WHEREAS, on December 29, 2022, the Gibson County Commissioners passed and adopted Ordinance No. 2022-10, An Ordinance of the Gibson County Commissioners Concerning Asset Management and Providing Procedure for Disposition of Certain Property, which was recorded in the Office of the Gibson County Recorder on December 30, 2022, as Instrument No. 202200005691; WHEREAS, at the recommendation of the auditors of the Indiana State Board of Accounts, the Board desires to amend Ordinance No. 2022-10 to: (1) provide that periodic physical inventories of capital assets be conducted every two (2) years rather than annually, and that each Department Head sign and date the inventory sheet indicating that it is correct; (2) require that Department Heads enter any new capital asset or inventory item into the Data Pitstop Asset Management program when it is placed in service, and record in the Data Pitstop Asset Management program any capital asset or inventory item that is disposed of, sold, or transferred to another department at the time it is taken out of inventory; and (3) require that the disposition or sale of any capital asset with a cost of $5,000 or more be brought before the Commissioners at a public meeting for approval; WHEREAS, for clarity and ease of reference, the Board desires to amend and restate Ordinance No. 2022-10 in its entirety as set forth herein; WHEREAS, this Ordinance supersedes all prior Ordinances, Resolutions, or approved Motions previously passed by the Gibson County Commissioners that conflict with this Ordinance; however, all prior legislation (approved Motions, Resolutions, and Ordinances) not conflicted by this Ordinance shall remain in full force and effect; WHEREAS, this legislation was passed at a meeting conducted by the Gibson County Commissioners; said meeting was in compliance with the public meetings law, which is codified at Indiana Code 5-14-1.5; WHEREAS, the Board desires to maintain the asset capitalization policy for the County and its various departments, in order to provide a higher degree of control over its considerable investment in capital assets, and to be able to demonstrate accountability to its various constituencies: citizens, rate -payers, oversight bodies and regulators; and WHEREAS, the Gibson County Asset Capitalization Policy shall comply with the requirements of the Governmental Accounting Standards Board Statement 34; and 6in�Quiini��7 WHEREAS, the Gibson County Asset Capitalization Policy shall apply to all officeholders and Department Heads in Gibson County. NOW, THEREFORE, BE IT ORDAINED BY THE GIBSON COUNTY COMMISSIONERS THAT Ordinance No. 2022-10 is hereby amended and restated in its entirety to read as follows: SECTION 1- GENERAL INFORMATION Gibson County has implemented a capital asset policy, effective January 1, 2023, known as the "Capital Asset Policy". This policy is to include capital assets, as well as infrastructure assets, which are to be accounted for at the department level. Assets that do not meet the specified threshold will be expensed in the year of purchase. An inventory of capital assets will always be maintained by the County and verified every two (2) years through confirmations by each Department Head as provided in Section 5 of this Ordinance. Capital assets thresholds will be configured to account for 80-90% of the total cost of all County assets. Gibson County is making this policy effective to enhance financial and operational accountability to the citizens of Gibson County and to all other concerned constituents. The purpose of establishing a Capital Asset Policy is to: (1) maintain accurate records of all capital assets that are capitalized, including infrastructure, (2) increase accuracy and transparency of financial reporting, and (3) to better serve the citizens of Gibson County. This policy will only serve to classify all capital assets, including capital and infrastructure, for accuracy in financial reporting through the Indiana State Board of Accounts. SECTION 1.1. - DEFINITIONS AND PROVISIONS A. CAPITAL ASSET Capital asset is an asset having a useful life of more than one year and an actual or historical cost of $5,000 or more. The cost of the asset will include all expenses necessary to make the asset fully operational. These costs may include: (1) legal and title fees, (2) closing costs, (3) appraisals, (4) demolition costs, (5) architectural services, (6) engineering services, (7) accounting fees, (8) insurance premiums during construction, and (9) transportation charges. Assets acquired through lease purchase agreements that meet the specifications are to be capitalized. This cost will be determined as the present value or discounted value of the future stream of lease payments, and not the total lease. Items that do not meet this definition of capital assets are to be expensed in the year the asset is used. A separate database or inventory is to be established for assets with a unit or network cost not above the thresholds. All capital assets are to be recorded at cost. Capital assets include land, easements, right-of-ways, land improvements, building, building improvements, construction in progress, machinery, and equipment, vehicles, infrastructure, works of art and monuments, and all other tangible assets used in operations with useful lives extending beyond one year. Exceptions: 1. Office equipment, which is custom fit to the needs of a particular office, will be capitalized as a portion of the cost of the building or area in which the equipment is located. All other office supplies and equipment will be capitalized if it meets the specified requirements (as discussed elsewhere in this document) for capitalization. 2. Inexhaustible assets such as land, improvements, artwork, statues, etc. will be reported at cost. 3. Separate thresholds will be established for tracking purposes and for capitalization purposes. 4. Certain items that do not individually meet the assigned threshold may be aggregated for capitalization purposes. S. Excludes properties and improvements reverted to Gibson County through Commissioner Tax Sales. 6. Excludes properties and improvements reverted to Gibson County through flood mitigation. 7. Excludes items held in inventory for the County auction. 8. All after -market add-ons for County vehicles and equipment will be inventoried if the costs of those individual items are greater than $5,000. B. VALUING CAPITAL ASSETS Capital assets should be recorded at actual cost. Normally, the cost recorded is the purchase price or construction costs of the asset but also included are any reasonable and necessary costs incurred to place the asset in its intended location and intended use that can be directly related to the asset. Such costs could include the following: legal and title fees; appraisal and negotiation fees, surveying fees; damage payments; land preparation costs, demolition costs; architect and accounting fees; insurance premiums during construction; transportation charges; and interest costs during construction. Donated or contributed assets should be recorded at their fair market value on the date donated or acquired. C. FIXED ASSET Tangible assets of a durable nature employed in the operating activities of the unit and that are relatively permanent and are needed for the production or sale of goods or services are termed property, plant and equipment, or fixed assets. These assets are not held for sale in the ordinary course of business. This broad group is usually separated into classes according to the physical characteristics of the items (such as, land, building, improvements other than buildings, machinery and equipment.) D. CAPITAL OUTLAYS Expenditures that benefit both current and future fiscal periods. This includes costs of acquiring land or structures, construction or improvement of buildings, structures, or other fixed assets, and equipment purchases having an appreciable and calculable period of usefulness. These are expenditures resulting in the acquisition of or addition to the government's general fixed assets. SECTION 2 - ASSET DEFINITIONS BY MAJOR CATEGORY It is important for the maintenance of accurate records that each asset category be precisely defined and that all persons responsible for maintenance of records be fully aware of the categorization system. This section further clarifies the asset definition by major category. The County will capitalize all land purchases or land donations. All land purchases shall be capitalized with the actual cost of purchase or if unavailable, the estimated historical cost. This includes all specified land, easements, right- of-ways, lots, parcels owned by the governmental unit or its various departments, boards, or authorities, regardless of the method of acquisition. This includes land purchased outright as an easement or right-of-way to infrastructures. All costs of legal services incidental to the acquisition of land, costs relating to the razing for the structure, and other charges incurred in preparing the land for use are capitalized and carried in the land account. Donated land will be capitalized at the fair market value at the time of the donation. 2. All properties obtained through tax sale including but not limited to land, buildings, land improvements, and building improvements shall be considered to have no dollar value and will be excluded from reporting as they are considered property that is being held for resale. B. BUILDINGS The County will capitalize all buildings at the purchase price or construction cost. Buildings are all structures designed and erected to house equipment, services or functions. This includes systems, services, and fixtures within the buildings, and attachments such as porches, stairs, fire escapes, canopies, areaways, lighting fixtures, flagpoles, and all such units that serve the building. Plumbing systems, lighting systems, heating, cooling, ventilating and air handling systems, alarm systems, sound systems, surveillance systems, passenger and freight elevators, escalators, built-in casework, walk-in coolers and freezers, fixed shelving, and other fixed equipment are included with the building. Communication antennas and/or towers are not included as buildings. These are parts of the equipment units they serve. 2. Additions, improvements, and leasehold improvements to the building as well as the cost of the heating and ventilating system or other permanently attached fixtures should be capitalized when these costs are considered betterments. These improvements or renovations to the buildings will be capitalized in the County if the total cost is $5,000 or greater. Replacement of a building roof or heating and cooling system will be capitalized when the cost of the item is $5,000 or greater. 3. Donated buildings will be capitalized using the market value of the building at the time of the donation. Building purchases made using the federal or state funding shall follow the appropriate funding source guidelines and the County capital asset policy. C. REAL PROPERTY IMPROVEMENTS OTHER THAN BUILDINGS The County will capitalize improvements other than buildings in the following manner: 1. Improvements such as excavation, non -infrastructure utility installation, driveways, parking lots, flagpoles, sidewalks, retaining walls, and fencing shall be capitalized when the cost of the item is $5,000 or greater. 2. Milling and paving of an existing parking lot shall be considered maintenance rather than a capital asset. 3. Improvements other than buildings will be capitalized at the actual cost of the improvement. If the actual cost is unavailable, the improvement will be capitalized using its current replacement cost, estimated date of purchase, and the Indiana Board of Accounts factoring table to determine the estimated historical cost. 4. The County Department Heads shall report to the County Auditor any improvements other than buildings which their respective departments authorized that cost of $5,000 or greater. 5. Improvements donated to the County, other than buildings, will be capitalized at the fair market value of the property at the time that the County received the donation. D. CONSTRUCTION WORK IN PROGRESS The County will capitalize actual amounts expended on an uncompleted building or other capital construction project. Once the project is completed, the cumulative costs are transferred to the appropriate permanent fixed asset account. E. MACHINERY AND EQUIPMENT 1. The County will capitalize all machinery and equipment at the purchase price or actual cost. The cost of the asset acquired if the payment includes both cash and a trade-in, is the sum of the cash paid plus the fair market value of the asset traded in. If the fair market value of the asset being traded in is not readily determinable, cost may be recorded as the cash paid plus the book value (asset cost minus accumulated depreciation) of the asset traded in. 2. Equipment includes all types of physical property within the scope of the capital asset policy for the County not previously classified. Included in this category are office mechanical equipment, office furniture, appliances, furnishings, machinery items, maintenance equipment, communication equipment, police, fire, sanitation, Park Department equipment, laboratory equipment, vehicles, road and highway equipment, aircraft, EMS and emergency equipment, earth moving equipment, text equipment, civil defense and emergency equipment, and data processing equipment. All supplies are excluded. 3. The County shall capitalize all machinery and equipment items with an actual cost or estimated cost of $5,000 or greater. Attachments to machinery and equipment will be capitalized if purchased at the same time as the equipment item. Attachments that are purchased separately from a given equipment item will be capitalized separately from the item if they are purchased at a time other than when the original item was purchased and have a cost of $5,000 or greater. 4. Items which extend the useful life of the equipment shall be capitalized. Department Heads should report to the County Auditor the description, year completed, funding source and dollar amount. An example would be the purchase of a motor for a vehicle. This does not include the normal maintenance costs or supplies. 5. Donated machinery and equipment will be capitalized at the fair market value at the time the County receives the donation. F. VEHICLES Vehicles are a classification and shall be inventoried. G. INFRASTRUCTURE The County will capitalize all County -owned roads and bridges. All County roads and bridges will be capitalized at original cost or historical estimated cost. Infrastructure assets are long-lived capital assets that normally can be preserved for significantly greater number of years than most capital assets and that are normally stationary in nature. Infrastructure assets include roads, bridges, streetlights, traffic signals, drainage systems and water systems. Maintenance and repairs will be considered as necessary to maintain the existing asset and therefore are not capitalized. Examples such as patching, resurfacing, milling, chip sealing, and snow removal shall be considered maintenance activities and will be expensed. Additionally, normal department operating activities such as feasibility studies, and primary engineering and design will be expensed and not capitalized as an element of the infrastructure assets. Gravel roads that are paved shall be considered a capital asset. County roads that are redesigned or re -engineered beyond maintenance activities such as paving, milling, or chip sealing shall be considered a capital asset. Roads that are accepted by the Board of Commissioners and the Highway Department from developers or owners shall be capitalized at the market value at the time of the donation. SECTION 3 - RECORDING AND ACCOUNTING A. The County Auditor shall ensure that accounting for capital assets is being exercised by establishing a capital asset inventory, both initially and periodically in subsequent years. The County Auditor will further ensure that the capital asset report shall be updated annually to reflect additions, retirements, and transfers and to reflect the new, annual capital asset balance for financial reporting purposes and the annual and accumulated depreciation calculation. The County Auditor shall be responsible for maintaining the records and accounts of all capital assets that have an actual cost or estimated historical costs of $5,000 or greater. B. The County Auditor will depreciate the capital assets of the County by using the straight- line method or the composite/group method of depreciation. Land is not depreciated according to general accepted accounting principles. Depreciable property must meet the following qualifications: the asset must have a useful life of more than one year and the asset must wear out or lose value over time. C. Useful life is defined for each asset class as follows: Land: Not depreciated Buildings: 50 years Improvements other than buildings: 15 years Construction work in progress Not depreciated Machinery and equipment unless specified elsewhere 10 years Distributer trucks and motor graders 25 years Wheel loaders, dirt loaders, asphalt compactor rollers, snowplows, 20 years sanders, and chain saws Sanitation trucks 15 years Dump trucks, pickups, and excavators 10 years Boom mower and tractors 8 years Law enforcement vehicles 5 years Roads 50 years Bridges 75 years D. INFRASTRUCTURE RECORD KEEPING AND RECONCILIATION 1. The County Highway Engineer with the assistance of the County Highway Superintendent shall be responsible for maintaining accurate records regarding all County infrastructures. If roads or bridges are permanently closed, or new roads are accepted into the County road system by the Commissioners, such changes shall be recorded by the County Auditor in the year that such changes occur. If a gravel road is paved or if a road is totally redone beyond milling and paving or chip sealing, such improvement shall be considered a capital asset if the cost is $5,000 or greater. 2. Normal department operating activities regarding infrastructures, such as feasibility studies, preliminary engineering, and design, will be expensed rather than capitalized. SECTION 4 - MAINTENANCE OF ASSETS For the maintenance of the capital asset accounting report, the Department Heads have the responsibility to report additions, retirements, and transfers in detail to the County Auditor. Detail includes such data elements as asset description, location, make, model, serial number, date of acquisition, cost, life, and other information deemed relevant. Department Heads shall enter any new capital asset or inventory item into the Data Pitstop Asset Management program at the time the asset or item is placed in service. Likewise, if any capital asset or inventory item is disposed of, sold, or transferred to another department, the Department Head shall record such disposition, sale, or transfer in the Data Pitstop Asset Management program at the time the asset or item is taken out of inventory. Reports shall be made in a timely manner, as the capital asset record must be updated annually. Property should not be transferred, turned in for auction, or disposed of without the approval of the Commissioners. The disposition or sale of any capital asset having an actual or estimated cost of $5,000 or more shall be brought before the Board of Commissioners at a public meeting for approval prior to such disposition or sale. Department Heads shall report all disposed items to the County Auditor, who shall remove the item from the County capital asset inventory. All lost or stolen items shall be reported to the County Auditor by the Department Heads. SECTION 5 - PERIODIC INVENTORIES A physical inventory of capital assets will be conducted by each department every two (2) years, as near as practical to year-end. The County Auditor will provide a list of the inventory on file, which will be sent to each Department Head before the end of each inventory year. The Department Heads will then compare physical observations of assets to the listing noting whether the assets exists, the location if not apparent otherwise, and relevant factors. If the condition of an asset has deteriorated to the point its useful life has been impaired, the fact should be noted, and the reasons for such omissions should be documented to the extent possible. Department Heads shall be accountable for the capital asset inventory charged to their department. Upon completion of the physical inventory, the Department Head shall sign and date the physical capital asset inventory sheet indicating that the inventory is correct. The signed and dated physical capital asset inventory sheet and related documentation shall be forwarded to both the County Auditor and the Board of Commissioners. The County Auditor will compare the results of the physical inventory to the capital asset records and make necessary adjustments to the capital assets. SECTION 6 - DISPOSITION OF CERTAIN PROPERTY Pursuant to Indiana Code 5-22-22-6, the County can, via the applicable purchasing agent, dispose of personal property through: (1) a public sale (2) private sale or (3) transfer of the property; if the personal property has either: (1) been left in the custody of an officer or employee of a governmental body and has remained unclaimed for more than one (1) year; or (2) belongs to the governmental body but is no longer needed or is unfit for the purpose for which it was intended. For purposes of this Ordinance, all of the following are considered "purchasing agents": (1) the Department Heads of said Department Head's departments, (2) the County Commissioners, or (3) the County attorney. Notwithstanding the foregoing, the disposition or sale of any capital asset having an actual or estimated cost of $5,000 or more shall first be brought before the Board of Commissioners at a public meeting for approval, as provided in Section 4 of this Ordinance. SECTION 7 - PRIOR ORDINANCES This Ordinance amends, restates, and supersedes Ordinance No. 2022-10 in its entirety. All ordinances and/or parts of ordinances in conflict herewith, are hereby repealed. SECTION 8 - SEVERABILITY If any section, subsection, sentence, clause, phrase or portion of this Ordinance shall for any reason be held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portions thereunder. SECTION 9 - EFFECTIVE DATE This Ordinance shall be in full force and effect from and after its passage by the Commissioners of Gibson County. PASSED AND ADOPTED by the Gibson County Commissioners on July 21, 2026. GIBSON COUN Y COMMISSIONERS Q1, a rY\,,, Nicholas Burns, President ATTEST: ^ 7rG� Mike Watkins, Gibson County Auditor