Page 265 - Saginaw FY22 Adopted Annual Budget

CITY OF SAGINAW, TEXAS
FINANCIAL MANAGEMENT POLICIES

IX. Fixed Assets and Capitalization
A. A fixed asset of the city shall be defined as a purchased or otherwise
acquired piece of equipment, vehicle, furniture, fixture, improvement, addition to

an existing capital asset, land, or building that meets all of the following
requirements:
1. It is owned by the City
2. It has a value of$ 5, 000 or more
3. It has an economic useful life of one or more years
4. It is intended to provide productive benefit to the City during its useful life
B. The City' s assets shall be reasonably safeguarded, properly accounted for,
and sufficiently insured.

C. Additions to existing assets may be capitalized if the asset' s productive
capacity is significantly improved or the assets economic useful life is extended by
three or more years.
D. For various reasons, assets may have a reduction in productive benefit not
accounted for by normal depreciation. Such assets, if not fully depreciated, will be
removed from City asset accounts or reduced in value, and written off to expense,
to the extent that future benefit to the City has been reduced.

X. Debt Management

A. Uses of Debt
Long term debt shall not be used for operating purposes. The life of issued bonds
shall not exceed the useful life of the projects funded by the bonds.
B. Financing Alternatives
The City shall explore funding alternatives in addition to long term debt including
leasing, grants and other aid, developer contributions, and unrestricted fund
balances.
C. Types of Debt

1. General Obligation Bonds ( GO' s) — Original issue General Obligation bonds
must be authorized by a vote of the citizens of Saginaw. They are used only to
fund capital assets of the general government and are not to be used to fund
operating needs of the City. The full faith and credit of the City as well as the City's
ad valorem taxing authority back general obligation bonds within the limits of state
law for taxing authority.

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