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<br /> <br />REQUEST FOR COUNCIL ACTION <br />Date: 4/7/2025 <br />Item No.: 7.c. <br />Department Approval City Manager Approval <br /> <br /> <br />Item Description: Consider adopting a revised Capital Investment Policy <br />1 <br />2 Background <br />3 The City’s Capital Investment Policy was last reviewed and updated in 2022. Best <br />4 practices state that financial policies should be periodically reviewed and updated. At the <br />5 March 4, 2025, meeting, members of the Finance Commission reviewed and approved a <br />6 revised Capital Investment Policy. <br />7 <br />8 The updates that staff are recommending can be found in the definition section of the policy <br />9 and are as follows: <br />10 The capital asset unit value was increased to $25,000 and an aggregate amount of <br />11 over $100,000, with an individual item value of $5,000, was added. <br />12 Asset Life now includes the useful life by asset type. <br />13 <br />14 The increase in value is consistent with other cities’ policies. Adding the aggregate <br />15 amount is being done as a result of new interpretations of the accounting standard that <br />16 addresses capital assets. Example: new chairs purchased with an individual value of $250 <br />17 each, but the aggregate amount comes to $50,000. From a practical standpoint, it does not <br />18 make sense to depreciate the chairs and there is no intent to replace them as a group in <br />19 the future. Replacements would be done on an individual-as-needed basis and would be <br />20 part of operating costs. <br />21 <br />22 The Council is asked to adopt the revised Capital Investment Policy by resolution. The <br />23 resolution and policy is included with the new language highlighted (Attachment 1). <br />24 <br />25 Policy Objectives <br />26 The City’s financial policies are consistent with governmental finance best practices as well <br />27 as previously-adopted Council actions. <br />28 <br />29 Equity Impact Summary <br />30 While the policy revision is technical, an equitably applied Capital Investment Policy helps <br />31 ensure infrastructure and equipment are replaced fairly across the community. Future use <br />32 of the policy will align with the values and goals of the strategic plan and will consider and <br />33 address disparities in access, condition, and service levels across all neighborhoods. <br />34 <br />Page 1 of 2 <br />Qbhf!48!pg!231 <br /> <br />