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HomeMy WebLinkAbout03-253 t6py -to; PI) . . V1~. M-fi3 ~ RESOLUTION NO. 03 - 253 A RESOLUTION AMENDING THE ST. LUCIE COUNTY MANUAL OF PURCHASING REGULATIONS BY CHANGING SECTION 18 (FIXED ASSETS) TO SECTION 18 (CAPITAL ASSETS) IN ORDER TO COMPLY WITH THE REQUEST OF THE AUDITORS TO INCLUDE LAND, BUILDING AND IMPROVEMENTS IN THE PURCHASING MANUAL UNDER CAPITAL ASSETS WHEREAS, the Board of County Commissioners of St. Lucie County, Florida, has made the following determinations: 1. On October 7,1985, the Board of County Commissioners for St. Lucie County (the "Board") adopted Resolution No. 85-212 which established the purchasing regulations and procedures for St. Lucie County, Florida, as set forth in the St. Lucie County Manual of Purchasing Regulations and Procedures (the "Purchasing Manual") and since that date the Purchasing Manual has been amended from time to time, most recently by Resolution No. 02- 08. 2. In order to comply with the request of the County's external Auditors, it is necessary to amend the Purchasing Manual by changing Section 18 (Fixed Assets) to include Land, Building and Improvements in the Purchasing Manual under a newly titled Section 18 (Capital Assets). NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of St. Lucie County, Florida: 1. The St. Lucie County Manual of Purchasing Regulations and Procedures is hereby amended as shown in the attached Exhibit "A". 2. This resolution shall become effective upon adoption. After motion and second the vote on this resolution was as follows: Chairman Cliff Barnes ABSENT Vice-Chairman Paula A. Lewis AYE Commissioner Frannie Hutchinson AYE Commissioner Doug Coward AYE Commissioner John D. Bruhn ABSENT PASSED AND DULY ADOPTED this 23rd day of September, 2003. ATTEST: BOARD OF COUNTY COMMISSIONE~S ST. LUCIE COUNTY, FLORIDA BY: yt~/ ~~- . f/le€- CHAI MA '. ~ APPROVED AS TO LEGAL FORM AND ORRECTNESS: EXHIBIT "A" SECTION 18 -R*E9 CAPITAL ASSETS 18.1 COUNTY OWNED PERSONAL PROPERTY All equipment not incorporated into a facility and in excess of the threshold $750.00 (established by Section 274.02, Florida Statutes) is considered tangible personal property. All land. buildinQ, and improvements are considered real property. All purcnases of Both Tangible Personal Property and real property are considered capital assets and purchases of these types of items will be approved by the Board of County Commissioners. 18.2 PROCEDURE FOR ACQUISITION OF rCRSONAL rROrCRTY CAPITAL ASSETS All purchases will follow the procedures outlined: A. After a department determines a need for a piece of equipffient tnat is considered Tangible r'ersofl81 r'roperty capital asset, they will obtain approval to purchase the item during the annual budget preparation or at a Board of County Commissioners public meeting. The Requesting Department shall request the assistance of the Purchasing Department to establish a budget for the item. 1. Information Technology may purchase Tangible Personal Property as approved by the Board of County Commissioners. B. After Board approval is obtained, the Requesting Department will enter a requisition into the computer system and forward a hard copy to the Purchasing Department with the required authorization. The requisition shall contain a detailed description of the item, Equipment Request number assigned by OMB (if applicable) and the date of Board approval. C. If a piece of equipffient the capital asset increases in cost after budgeting approval by the Board, the Department may purchase the piece of eejuipffient asset with County Administrator approval provided that the equipffient cost does not exceed the Department's equipment capital asset budget. In addition. =f!he Purchasing Director shall provide quarterly reports (Equipment only) to the Board and the County Administrator if any equipment is purchased over the budgeted amount. The purchase of.E. new equipment capital asset over $750.00 that has not received Board budgetary approval shall require Board approval before purchase. D. After receiving the a personal property item, the Requesting Department will send the invoice (with payment authorization), receiving copy of the Purchase Order, Property Acquisition/Disposition/Transfer Form and a copy of Board approval to the Finance Department (Equipment only). The Rxed Capital Assets Custodian (PurchasinQ Department) will place an inventory tag on all Tangible Personal Property. E. Annually the Rxed Capital Assets Custodian (Purchasinq Department) will physically inventory all Tangible Personal Property, update the inventory (transfers and purchases) and dispose of surplus property in accordance with current state and local laws. Real property will be inventoried as outlined in procedures established by the Finance Department. F. Donated property with a value in excess of $750.00 will be included in the requirements of this Section. 18.3 PROCEDURE FOR THE TRANSFER OF rCRSONAL rROrCRTY CAPITAL ASSETS All transfers of Tangible r'ersonal r'roperty capital assets between departments must be approved by the County Administrator or his designee. Transfers within a department must be approved by the Department Director. Sttuck t1110ugh passages are deleted. Underlined passages are added. A. All transfers of tanqible personal property must be submitted to the Purchasing Department and all transfers of real property must be submitted to the Office of Manaqement and Budqet (OMB). on a Property Acquisition/DispositionlTransfer Form with the proper authorization. . 18.4 PROCEDURE FOR THE DISPOSITION OF rCRSONAL rROrCRTY CAPITAL ASSETS Before an item of tangible personal property is removed from service, the Purchasing Department must be notified of the Department's desire to dispose of the item. Purchasing will instruct the Requesting Department on where to deliver the equipment. Before a real property item is removed from service. OMB must be notified of the Department's desire to dispose of the item. At that time. OMB will provide further instructions to the requestinq department. All dispositions of rersoflal rroperty capital assets must be approved by the Department Director. A. All dispositions of tangible personal property must be submitted to the Purchasing Department and all dispositions of real property must be submitted to OMB. on a Property Acquisition/DispositionlTransfer Form with the proper authorization. B. The Purchasing Department and/or OMB will attempt to find another department with a need for the items to be disposed of prior to removing the item from the ~ Capital Asset Inventory. C. The Purchasing Department and/or OMB will seek approval from the Board of County Commissioners to remove the item from the ~ Capital Asset Inventory if the item cannot be utilized elsewhere in the County. D. The item will be disposed of in accordance with Section 274.06, Florida Statutes. E. Tangible personal property and real propertv paid for by a grant must require special treatment for transfers and disposition. The user department is responsible to insure that these items are handled in the proper manner. 18.5 PROPERTY LESS THAN $750.00 It is the duty and responsibility for all departments to retain a record of all items purchased that cost between $50.00 and $750.00. A copy of this record is to be sent to the Purchasing Department. At the end of each Fiscal Year, the list is to be physically verified and the additions, deletions, or missing items are to be recorded. A copy of this physical inventory, along with an explanation of any discrepancy is to be sent to the Purchasing Department. 18.6 ASSET CAPITALIZATION GUIDELINES These guidelines are being provided to assist management when making the determination between which asset related expenditures are/are not recommended to be capitalized in accordance with governing laws, rules and regulations. The following guidelines, except where noted, apply equally to both Governmental Funds (funds that start with the #001, 1, 2, 3 or 6) and Proprietary Funds (funds that start with the #4 or 5). Definitions are provided as needed. A. New Assets - Consistent with the threshold limit set forth in Chapter 274.02(1) F.S. and addressed in Section 18.1 of this Purchasing Manual, costs of $750.00 or more incurred to acquire assets or to make assets ready for their intended use should be capitalized. B. Additions - Non-transitory additions to previously capitalized assets that meet the capitalization requirements of 18.6 (A) above, should be capitalized as add-on's to the existing asset/property record. However, transitory additions to previous capitalized assets that meet the capitalization Stmck tluongh passages are deleted. Underlined passages are added. requirements of 18.6(A) above, should be capitalized as a separate asset/property record. C. Replacements - The cost to replace an entire asset in a Proprietary Fund should be capitalized if it meets the capitalization requirements of 18.6(A) above, old costs are removed and new costs are capitalized. The replacement cost of add-ons or major components, for Proprietary Funds, are recommended for capitalization if they meet the capitalization requirements above and at least one of the following criteria: 1. Extend the useful life of an asset 2. Increase the quantity of services provided by an asset 3. Increase the quality of services provided by an asset. Two methods are recommended to recognize these costs: 1. Substitution Method - remove the old costs and associated accumulated depreciation and replace with the new. 2. Capitalization of New Cost Method - The new costs are capitalized to the original asset account without removing the old costs. This method may be appropriate when it is reasonable to assume that the original cost has been reduced to an insignificant amount through depreciation charges. In practice, this method is used when original component costs are indeterminable. The cost to replace an entire asset in a Governmental Fund should be capitalized if it meets the capitalization requirements above, old costs are removed and new costs are capitalized. However, replacement costs for add-on's or major components should be treated as non-capital expenditures, unless the costs significantly impacts the carrying value of the asset. In this case, remove the old cost associated with the add-on or major component being replaced and capitalize the new cost provided the new cost meets the capitalization requirements above. D. Repairs & Maintenance - Costs that are associated with repairs and maintenance (i.e. lubrication, cleaning replacement of miFlOr part3, I'ainting, etc) dredqinq, resurfacinq, beach renourishment, utilities fieldwork) are not recommended for capitalization. However, major repairs that provide additional service benefits for future periods are recommended for capitalization in Proprietary Funds, if they meet the capitalization requirements of 18.6 (A) above. E. OVERVIEW OF CAPITALIZATION GUIDELINES: Govt. Fund Accts. Proprietary Fund Accts. 56XXXX New Asset Costs (If $750.00 or more) 56XXXXX 56XXXX Cost of Additions (If $750.00 or more) Perm. - Add-on Non-Perm - Sep. Asset 56XXXX 5XXXXX Replacement cost of Add-on Non - Cap. # or Major Component (If $750.00 or more) 56XXXX 56XXXX Cost to Replacement Asset 56XXXX StlUck thtongh passages are deleted. Underlined passages are added. Note: Acct. #s that start with 56 are capital expenditures. If the 2nd digit is anything other than a 6, the expenditure is non-capital. 18.7 MODULAR FURNITURE This section has been added to provide additional guidance as it specifically relates to modular furniture. However, the guidelines established in Section 18.6 (Asset Capitalization) of this Purchasing Manual also apply. A. In accordance with Auditor General recommendations, it is recommended that modular furniture be capitalized as part of the building when it is management's intent to have it permanently installed. B. When this is not the case, it should be capitalized as equipment and furniture, by Individual unit or by lot. 18.8 HARDWARE COSTS Capitalization guidelines are set forth in Section 18.6 (Asset Capitalization) of this Purchasing Manual. A. This section has been added to provide additional guidance as it specifically relates to computer hardware. COMPUTER HARDWARE CAPITALIZATION: Govt. Fund Accts. 564000 New Equipment (If $750.00 or more) Proprietary Fund Accts. 564000 564000 Cost of Additions/Upgrades (If $750.00 or more) Perm. - Add-on Non-Perm - Sep. Asset 564000 551501 Cost of Additions (If Less than $750.00) 551501 551501 Replacement/Upgrade of Add-on or Major Component (If $750.00 or more) 564000 564000 Cost to Replacement Asset 564000 B. Disposition of Computer Hardware - The procedures for the disposition of County property are addressed and should be followed as outlined in Section 18.4 of this Purchasing Manual. Struck tll10ugh passages are deleted. Underlined passages are added.