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ITEM: AUTHORIZATION OF DISPOSITION OF SURPLUS TANGIBLE PERSONAL PROPERTY
REQUEST: Authorization to approve FY 2015 disposition of surplus tangible personal property and removal of assets per the Village’s new capitalization threshold.
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EXPLANATION: The following is a summary of thirty-eight (38) surplus items of tangible personal property (TPP) or fixed assets meeting disposition criteria per the Village’s Purchasing and Procurement Policy Chapter 13, Section D (Exhibit A attached). The initial total purchase cost of these items was $608,746.07 with an accumulated total depreciation of $530,795.32, resulting in a current value of $77,950.75.
Twenty-five (25) fixed assets (vehicles and equipment) will be sold through GovDeals, the Village’s approved public auction vendor. All computer equipment will be recycled, utilizing a state certified recycling vendor.
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|
METHOD OF DISPOSAL |
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By Selling |
By Recycling |
By Scrapping |
By Insurance |
Total Surplus |
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Acquisition Cost of Items To Be Disposed |
$496,433.71 |
$56,493.61 |
$23,500.75 |
$32,318.00 |
$608,746.07 |
|
Accumulated Depreciation |
$449,527.28 |
$56,493.61 |
$23,500.75 |
$1,273.68 |
$530,795.32 |
|
TOTAL NET VALUE |
$46,906.43 |
$0 |
$0 |
$31,044.32 (Received $34,068.90 from Insurance) |
$77,950.75 |
Surplus TPP or fixed assets are identified annually as part of a Village-wide departmental inventory and condition assessment. A master list of these fixed assets, verified by OFMB, is categorized as no longer useful or to be exchanged for a new purchase/replacement.
The Public Works Department (Fleet Maintenance) evaluated the vehicles and heavy equipment proposed for disposition, and determined that due to their age, condition and high cost of maintenance, they need to be replaced. This process, including the various methods of disposition, is pursuant to the Village’s Purchasing and Procurement Policy and is consistent with Florida Statutes.
In addition, The Village increased its capitalization threshold from $1,000 to $5,000 as recommended by the Government Finance Officers Association best practices and approved by Council as part of the audit presentation at the March 24, 2015 Council meeting. The Village’s external auditor Grau & Associates also recommended the Village perform a comprehensive inventory listing of all assets and remove those items that are no longer in use.
These changes and activities resulted in the reduction of approximately 1,900 inventory listings totaling over $4.4 million (Exhibit B is attached). The removal of these items from the asset inventory listing does not mean that the assets were disposed of; only that they will no longer be included as capital assets on the annual financial statements and included as part of the annual inventory. Many of these assets include laptops and other small computer devices. These items are still maintained on an internal inventory listing and tracked by the Technology Services department, separately.
In addition, the capital asset listing was reviewed and any fully depreciated assets that were considered not capitalizable (i.e. roadway overlay, shellrock and repairs), replaced, retired or unidentifiable were removed from the listing. Many of these items are very old and had vague asset descriptions that did not identify the asset. This review resulted in the removal of 216 items with a cost of $11.8 million (Exhibit C attached). These assets have been fully depreciated and the book value for most of these assets is $0 so there is no fiscal impact to the fund financial statements.
BUDGET AMENDMENT REQUIRED: NO
PUBLIC HEARING: NO QUASI-JUDICIAL:
FIRST READING: SECOND READING:
LEGAL SUFFICIENCY: YES
FISCAL IMPACT: Revenues are anticipated as result of surplus tangible personal property sold. Proceeds are posted as Miscellaneous Revenue.
WELLINGTON FUNDAMENTAL: Protecting our Investment
RECOMMENDATION: Authorization to approve FY 2015 disposition of surplus tangible personal property and removal of assets per the Village’s new capitalization threshold.