2012 Budget - South Suburban Parks and Recreation

South Suburban Park and Recreation District
Summary of Significant Financial Policies
Capitalization Policy (continued)
Buildings and Improvements - Buildings and improvements includes the direct cost
of acquisition, engineering fees and structural elements including shells and
components such as heating, air conditioning and elevators.
Major structural remodeling and other improvements which increase the useful life of
the building, costing in excess of $50,000 per project and which are completed
subsequent to the original building construction are capital expenditures. Structural
remodeling and other improvements which cost less than $50,000 per project are
considered services and other charges.
Improvements Other than Buildings - Improvements other than buildings include the
direct cost of acquisition and engineering fees associated with the initial construction
of pools, parking lots, park facilities, utility lines, streets and sidewalks.
Major structural improvements, additions and replacements, not including routine
maintenance and repairs (such as chip and seal programs), costing in excess of
$50,000 per project are considered capital expenditures. Structural improvements,
additions and replacements which cost less than $50,000 per project are considered
services and other charges expenditures.
Equipment - Equipment includes tangible property which is not permanently built
into a building, does not lose its identity through incorporation into a more complex
unit has a unit cost in excess of $5,000 and an estimated useful life of three or more
years. Equipment includes machinery, office furniture, computers, vehicles and
miscellaneous fixtures. Items which cost less than $5,000 per unit and/or whose
estimated useful life is less than three years are considered supplies and materials.
Allocation of Administrative Expenditures
The District’s practice is to allocate 67% of its administrative expenditures from the General
Fund to the Enterprise fund. These include Administration, Finance, and Information
Technology expenditures that are all originally charged to the General Fund. The percentage
allocated to the Enterprise Fund represents an estimate of that fund’s administration
expenditures.
Transfers
Annually the District transfers funds from the General Fund to the Enterprise Fund. This is
to help offset administrative expenditures. The amount is generally around $2,000,000.
However the amount can change annually to meet the needs of the District and the separate
funds. Also, the Debt Service Fund transfers any interest earning to the General Fund on an
annual basis.
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