Chapter 3.28 — CAPITAL EQUIPMENT REPLACEMENT AND PROPERTY DAMAGE FUND

In order to replace major pieces of existing capital equipment in a timely manner without placing an undue financial burden on the town in the fiscal year of acceptance of a piece of equipment, and to provide a self- leave insurance mechanism to fund property damage, there is established for the town of Corte Madera a capital equipment replacement and property damage fund, hereinafter referred to as equipment fund.

(Ord. 670 § 1, 1978)

For purposes of this chapter the following definitions are given:

(1)

"Capital equipment" means tangible property of a more or less permanent nature with an estimated replacement cost in excess of twenty thousand dollars. "Capital equipment" includes, but is not limited to, motorized vehicles, nonvehicular motorized equipment and machinery, and other equipment and machinery.

(2)

"Property damage" means the damage, destruction, theft or loss of any type and kind of municipal property from any cause. "Property damage" includes, but is not limited to, physical damage to or complete loss of motor vehicles by collision, fire, flood or other occurrence; physical damage to or complete loss of buildings and contents by earthquake, fire, flood or other occurrence; deliberate theft of any municipal property; and accidental loss of any municipal property.

(Ord. 670 § 2, 1978)

To provide initial funding to the equipment fund, a sufficient amount of money shall be transferred by resolution from the fund balance of each operating fund providing for the maintenance and operation of such equipment to the equipment fund to cover budgetary depreciation on existing capital equipment through June 30, 1979.

(Ord. 670 § 3, 1978)

Commencing in fiscal year 1979-80, and every fiscal year thereafter, the preliminary budget shall allocate moneys for budgetary depreciation on such equipment in the appropriate town operating funds. On June 30, 1980, and every June 30th thereafter, budgeted moneys for capital equipment replacement shall be recorded as expenditures against appropriate budgetary depreciation accounts in the various operating funds and transferred to reserve accounts in the equipment fund. In the fiscal year of ordering equipment, the equipment shall be budgeted in the equipment fund. If there are not sufficient moneys in the reserve account to cover the expenditure for replacement on June 30th of the fiscal year of acceptance of the equipment, sufficient moneys shall be recorded as an expenditure against the appropriate budgetary depreciation account in the applicable operating fund and transferred to the reserve account in the equipment fund for the piece of equipment. In the event there are surplus moneys in the reserve account

after charging the expenditure for replacement, these moneys shall remain in the reserve account. If it is determined not to replace equipment that has been budgetarily depreciated due to obsolescence, property damage or any other reason during the budgetary depreciation term, moneys in the reserve account may be transferred to: other depreciation reserve accounts having their funding source in the same budget activity; or back to the appropriate operating fund. During the annual budget preparation, if it is determined the estimated replacement cost for a piece of equipment that has not been budgetarily depreciated exceeds twenty thousand dollars budgetary depreciation shall commence on that piece of equipment in the following fiscal year.

(Ord. 670 § 4, 1978)

The amount of money to be budgeted for budgetary depreciation shall be determined in the following manner:

During budget preparations, the fiscal year of replacement for each piece of equipment and the estimated replacement cost for same shall be reevaluated and changed as necessary. The amount budgeted for budgetary depreciation shall be calculated by subtracting from the estimated replacement cost the amount that will be accumulated in the equipment fund's reserve account for the piece of equipment on July 1st of the budget year. Based on the fiscal year of acceptance of a piece of equipment, this figure shall be divided by the remaining years of budgetary depreciation which shall include the fiscal year of acceptance. The resulting amount is the budget figure.

(Ord. 670 § 5, 1978)

There shall be no permanent expenditures of equipment fund moneys for purposes other than those specified in this chapter. Moneys of the equipment fund may be loaned by resolution to other funds of the town providing that the moneys shall be returned to the equipment fund in time to meet the equipment replacement schedule. Interest earnings on moneys of the equipment fund shall be recorded as revenue to the property damage reserve account.

(Ord. 670 § 6, 1978)