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Capital Assets Practices Capital assets are valued at historical cost or estimated historical cost if actual historical cost was not available. Donated capital assets are valued at their estimated fair market value on the date donated. City policy has set the capitalization threshold for reporting capital assets at $7,500. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets as follows: Buildings: 50 years Improvements Other Than Buildings: 20 years Machinery and Equipment: 5-15 years Licensed Vehicles: 3-15 years Infrastructure: 20-50 years In June 1999, the GASB issued Statement No. 34 which requires the inclusion of infrastructure capital assets in local governments’ basic nancial statements. In accordance with GASB Statement No. 34, the City included all infrastructures into the 2015-16 Basic Financial Statements. The City denes infrastructure as the basic physical assets that allow the City to function. The assets include streets, sewer, and park lands. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, landscaping, and land. These subsystems were not delineated in the basic nancial statements. The appropriate operating department maintains information regarding the subsystems. Interest accrued during capital assets construction, if any, is capitalized for the business-type and proprietary funds as part of the asset cost. For all infrastructure systems, the City elected to use the Basic Approach as dened by GASB Statement No. 34 for infrastructure reporting. Original costs were developed in one of three ways: (1) historical records; (2) standard unit costs appropriate for the construction/acquisition date; or (3) present cost indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current date. The accumulated depreciation, dened as the total depreciation from the date of construction/acquisition to the current date on a straight line, un-recovered cost method was computed using industry-accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the original cost. City of San Leandro | Proposed Biennial Budget FY24-25 Page 40