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investments for the short (1-3 year), medium (4-9 years), and long term (10+ years). It will <br />also take into account related borrowing and repayment costs. <br /> <br /> Capital Replacements should be considered using the following priority rankings (in <br />order): <br />1. Projects necessary for public health and safety, or to meet legal mandates. <br />2. Projects that responsibly maintain existing assets to either extend remaining <br />service life or to create efficiency. <br />3. Projects that expand existing assets or services in order to benefit the Public <br />Good. <br />4. Projects that purchase new assets or services in order to benefit the Public Good. <br />Definitions <br /> <br />Capital assets – Assets which cost $5,000 or more and have a useful life of two or more years. <br /> <br />Capital Improvement Plan – A comprehensive 20 year outlook itemizing all capital assets and <br />their replacement funding requirements. The plan will take into account useful asset lives and <br />salvage values. <br /> <br />Replacement Cost– In today’s dollars, the cost to replace the asset. If it is expected the retired <br />asset will have a salvage value, the estimated salvage value should be deducted from the <br />expected replacement cost. <br /> <br />Asset Life – The number of years which is the asset is in use, also known as the useful life of <br />a capital asset. <br /> <br />Bonding – The amount of debt incurred to obtain capital assets. <br /> <br />Capital Asset Maintenance – Expenditures which protect the City’s investment in capital assets <br />and provide for ongoing upkeep. <br /> <br />Equipment – A tangible capital asset which does not qualify as a vehicle, building, street, or <br />park asset. Examples are mowers, tools, etc. <br /> <br />MSA Capital Allocation – Municipal State Aid is money the City receives from the State to <br />help pay for maintenance of MSA-designated streets. MSA streets are collector or arterial <br />streets that interconnect to other cities or major thoroughfares. <br /> <br />Enterprise Fund – A separate accounting and financial reporting mechanism for municipal <br />services for which is 100% fee supported. Examples are Water, Sewer, and Golf Course. <br /> <br />General Governmental Fund – A separate accounting and financial reporting mechanism for <br />spending in which a property tax is generally levied. Examples are police, fire, streets, parks <br />and recreation. <br />Item #4: Attachment A