FINANCE AND ADMINISTRATION COMMITTEE
ITEM:		ACTION ITEM
3.	DELETION/DISPOSAL OF DISTRICT ASSETS FROM ITS FINANCIAL ASSET SCHEDULE
Meeting Date:			January 21, 2025	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Nishil Bali	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: The Finance and Administration Committee reviewed this item on January 21, 2025 and recommended ________________.
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines Section 15378.

SUMMARY: The District maintains a schedule of assets in its financial system of record (Tyler ERP Pro) that tracks the asset cost, asset life, and depreciated amounts by fiscal year. Assets that are fully depreciated, but not deleted are stated in the District’s Annual Comprehensive Financial Report (ACFR) under Note 5 for Fiscal Year 2024-25. As shown in the listing of assets (Exhibit 3-A), the District has about six hundred recorded assets with a large percentage that are fully depreciated, but not yet disposed on the asset schedule. Staff, in consultation with the District’s auditors, recommend deletion/disposal of fully depreciated assets that are not in use and/or have been scrapped. This will provide a more accurate representation of District assets in the ACFR for the following years.

RECOMMENDATION: The Finance and Administration Committee should recommend that the Board approve the deletion/disposal of all fully depreciated District assets that are not in use from the Asset Schedule as indicated in Exhibit 3-A.

BACKGROUND: Staff began the exercise of identifying assets that were not in use by contacting District divisions and soliciting inputs on the Asset Schedule shown in Exhibit 3-A. Divisions provided comments regarding assets not currently in use under column I of the asset schedule. However, a large number of fully depreciated assets, especially those older than fifteen years, were not assigned a response either due to a lack of information regarding their availability or their use. In the absence of a response, Staff used the following criteria to recommend the deletion/disposal of assets in the provided schedule:

1. Fully depreciated movable assets with an original cost of less than $5,000. This criterion aligns with the District’s updated internal policy to treat purchases less than $5,000 as expenses.

2. Intangible assets such as software licenses not in use or fully depreciated construction plans/drawings that were capitalized.

3. Depreciated building assets such as the replacement of carpets/finishes that do not increase the useful life of a building and can be treated as a maintenance item.

4. Fully depreciated movable assets such as various types of work and technology equipment or software, generally older than fifteen years with no assigned division response and with no available information regarding their current use. This criterion aligns with the typical useful life of furniture, fixtures, and equipment which is assigned as seven to ten years.

The above exercise led to the proposed deletion of 473 assets (79%) out of a total of 600 assets in the schedule, totaling approximately $1.46 million. A summary of these deletions is provided below.

Category	Assets Deleted (#)	Assets Deleted ($)
ASR	None	None
Bldg. Improvements	3	2,837
Computer Equipment	166	813,787
Fish Rearing Facility	47	138,814
Harris Court	38	87,232
Monitoring Stations	51	45,214
Office Equipment	56	92,718
Operating Equipment	10	21,416
Project Equipment	89	243,016
Reserve Water	None	None
Telephone System	2	610
Vehicle & Equipment	11	12,259
Grand Total	473	$1,458,402

Staff will review its asset schedule periodically (every three to five years) and recommend disposals/deletions to more accurately represent the District’s capital assets in its annual reports.

EXHIBIT

3-A Schedule of Assets

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