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36 | Page <br /> <br />Capital Purchases <br /> <br />Fixed Asset (Capital Outlay) <br />An item is considered a fixed asset or capital outlay item if: <br />• It is a tangible asset <br />• It has a useful life of at least one year <br />• It has a donated value of at least $2,500.00, with the following exceptions: <br />o Costs and services related to new structure construction or additions to existing <br />structures <br />o Costs related to improving or repairing an existing asset, thereby increasing the life <br />of the asst <br />o Costs related to acquire land (example: taxes) <br />o Meet the threshold of Capital Asset and Grants policy <br /> <br />Fixed asset records are maintained for financial reporting as well as general accountability to our <br />taxpayers. Therefore, any item meeting all of the three criteria identified will be coded as a capital <br />outlay when purchased. <br /> <br />Real Estate/ Land <br />Real Estate refers to the purchase of land and buildings. All purchases of real property must follow <br />State Statutory guidelines and be approved by the City Council. The purchase or sale of real <br />property is generally not subject to competitive bidding. <br /> <br />Purchase of city vehicles <br />All costs associated with getting the vehicle out on the road shall be considered part of the total cost. <br />For fixed asset purposes, licenses, radios, customizing (light bars, squad car build ups, special <br />shelving in vans, etc), truck boxes and plows are all considered part of the total cost. <br />The sales tax and licensing of vehicles is not done at the point of purchase, but rather through a Deputy <br />Registrar Internal Transfer. <br /> <br />Leases and Lease Purchases <br />All lease agreements need approval through the Finance and City Attorney prior to initiating lease. <br />The responsibility lies with each department to obtain at least two quotes to ensure the best financing <br />rates. Lease Performance Bonds are sometimes prudent for Lease Purchases; if you are unsure <br />whether a Lease Performance Bond will be required, ask your department head to contact the City <br />Attorney. <br /> <br />Purchase or Lease of Used Public Safety Equipment <br />In 2011, the Minnesota Legislature granted cities and other local governments authority to lease or <br />purchase used public safety without bidding in certain specified circumstances. The new statute <br />provides that a city may acquire by purchase or lease used public safety equipment without <br />competitive bidding or proposals “if the equipment is clearly and legitimately limited to a single source <br />of supply, and the contract price may be best established by direct negotiation.”15 <br /> <br />The term “public safety equipment” is defined to mean “vehicles and specialized equipment used by <br />a fire department . . . in firefighting, ambulance and emergency medical treatment services, rescue, <br />and hazardous materials response.”16