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CITY COUNCIL <br />AGENDA ITEM 1F <br />STAFF ORIGINATOR: Hannah Lynch, Finance Director <br />MEETING DATE: February 14, 2022 <br />TOPIC: Consider Adopting Capital Asset Policy <br />VOTE REQUIRED: 3/5 <br />BACKGROUND <br />The City has previously followed an informal Capital Asset Policy. A Capital Asset Policy <br />does not affect the budgeting or purchasing of capital assets, it is strictly used for financial <br />reporting purposes. <br />The attached Capital Asset Policy provides guidance to meet financial reporting requirements. <br />When preparing for the annual audit, staff is guided by the policy in regards to what is <br />considered a capital asset, the cost that should be assigned to it, and the useful life in which the <br />asset is depreciated. <br />Previously, the City used a $2,500 capitalization threshold for all asset classes. The Capital <br />Asset Policy assigns a capitalization threshold to each asset class. This practice is widely used <br />by other local government units. <br />RECOMMENDATION <br />Staff recommends adopting the Capital Asset Policy. <br />ATTACHMENTS <br />Capital Asset Policy <br />