§ 106.217. Reserve Replacement reserve fund/replacement pool.

There is hereby created a Vehicle Replacement Reserve Fund, hereafter known as replacement pool. Financial management, accounting and record keeping of the replacement pool shall be the responsibility of the Department of Finance and Administration. The purpose of the replacement pool is to provide cash resources to be used to provide funding exclusively for the future replacement of essential vehicles (capital asset). The elements of the replacement pool shall be as follows:

(1)

Cash resources are to be provided monthly through a direct billing charge to the agency using the vehicle. This billing charge will be equal to the capital asset's estimated replacement value over its estimated economic useful life from the date placed in service, computed on a monthly basis. For vehicles, the monthly amount calculation shall be adjusted annually in anticipation of, and for inclusion in, the upcoming annual budget as described below. The adjusted monthly amount shall be sufficient to provide for replacement of the subject vehicle based on replacement prices obtained through a dealer survey. Between January and March, the Fleet Management Division, Equipment Control Section shall survey vehicle dealers providing new vehicles to the City in the current year, to determine the expected cost of replacing vehicles in the upcoming fiscal year and to determine the percentage increase by vehicle type necessary to replace the vehicles at the end of the vehicle's useful life. Such annual adjustment shall be included in the vehicle user charge in the upcoming budget for the next fiscal year.

(2)

All vehicles originally budgeted in fiscal year beginning October 1, 2005 which are purchased by the Department of Finance and Administration from the Replacement Fund Reserves and placed in service during that fiscal year and subsequent fiscal years are required to be included in and subject to the provisions of this replacement pool.

(3)

The cash resources so accumulated are to be specifically accounted for and separately classified and identified with the individual capital asset for which funding is provided. The cash resources so accumulated for the future replacement of a capital asset are specifically earmarked for and restricted to that capital asset's future replacement and cannot be used for any other purpose. No transfers shall be made without Council approval.

(4)

The economic useful life of the capital asset for purposes of calculating the billing charge shall be determined by the Chief of Fleet Management Fund Division Chief and approved by the Director of Finance and Administration.

(5)

Investment earnings of the accumulated cash balance resources of the replacement pool shall be specifically identified to the capital asset for which funding is being provided. Such investment earnings shall be allocated to the specific capital asset of the pool at the end of each month based upon the percentage of cash resources so accumulated for the capital asset's replacement, to the total cash resources accumulated for the replacement of all the capital assets in the replacement pool.

(6)

If excess cash resources are available after replacement of a capital asset where the replacement cost of the capital asset is less than the cash resources so accumulated over the economic useful life of the capital asset, such excess cash resources may be allocated to the replacement cost of a capital asset that exceeds its available reserve in the replacement pool. The Mayor shall determine the priority of such replacement and the Council shall approve the transfers within the replacement pool.

(7)

If replacement of a capital asset becomes necessary prior to the end of its economic useful life, the cash resources accumulated for that capital asset may be used for early replacement. If the capital asset's replacement cost exceeds the cash resources accumulated in the replacement pool, the user agency shall be responsible for providing the additional funding necessary to acquire the new replacement capital asset.

(8)

Initial funding for new capital assets (not formerly in the replacement pool) shall be provided by the requesting agency or fund and/or the Budget Stabilization Account.

(Ord. 2005-807-E, § 10.11.A; Ord. 2011-732-E; Ord. 2016-140-E , § 16)

Editor's note

Ordinance 2007-839-E, § 18, authorized updated department/division names pursuant to reorganization.