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Definitions Capital assets — Assets which cost $5,000 or more and have a useful life of two or more years. Capital Improvement Plan — A comprehensive 20 year outlook itemizing all capital assets and their replacement funding requireinents. The plan will take into account usefiil asset lives and salvage values. Replacement Cost— In today's dollars, the cost to replace the asset. If it is expected the retired asset will have a salvage value, the estimated salvage value should be deducted from the expected replacement cost. Asset Life — The number of years which is the asset is in use, also known as the usefiil life of a capital asset. Bonding — The amount of debt incurred to obtain capital assets. Capital Asset Maintenance — Expenditures which protect the City's investment in capital assets and provide for ongoing uplceep. Equipinent — A tangible capital asset which does not qualify as a vehicle, building, street, or park asset. Examples are mowers,` tools, etc. MSA Capital Allocation — Municipal State Aid is money the City receives from the State to help pay for maintenance of MSA-designated streets. MSA streets are collector or arterial streets that interconnect to other cities or major thoroughfares. Enterprise Fund — A separate accounting and financial reporting mechanism for municipal services for which is 100% fee supported. Examples are Water; Sewer, and Golf Course. General Governmental Fund — A separate accounting and financial reporting mechanism for spending in which a property tax is generally levied. Examples are police, fire, streets, parks and recreation. Enterprise Fund System Asset — Assets which support enterprise services such as water, sewer, and golf course. Park System Asset — All assets within city parks excluding buildings. Examples would be trails, equipment, and courts. Implementation The City shall use replacement funds to assist in the replacement of equipment, vehicles, and capital building maintenance. New equipment or buildings are to be funded from new dollars, unless they are designated to replace currently owned assets. Funds may be used up to the amount of the replacement funds set aside for that particular asset. Any additional funding shall be from new sources.