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investments for the short(1-3 year),medium(4-9 years), and long term (10+years). It will also take into account related borrowing and repayment costs. ■ Capital Replacements should be considered using the following priority guidelines (in order): 1) Projects necessary for the public's health and safety, or to meet legal mandates. 2) Projects that responsibly preserve or replace existing assets to either extend remaining service life or to create efficiency. 3) Projects that expand existing assets or services in order to benefit the Public Good. 4) Projects that purchase new assets or services in order to benefit the Public Good. ■ Higher-cost capital asset additions or replacement of existing assets that feature substantial changes from their original size, functionality, or purpose should be considered using the guidelines included in Exhibit A. For these same assets, a fiscal look-back exercise should also be utilized using the guidelines included in Exhibit B. 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 requirements. The plan will take into account useful 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 useful 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 upkeep. Equipment —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.