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Kittitas County Department of Public Works <br />Equipment Rental and Replacement Fund <br />Rate Setting Business Practice <br />Anticipated Effective Date: May 28, 2018 <br />Fund Administration: Finance Division of Public Works <br />Equipment Rental Rates: Prepared annually by the finance department. Equipment <br />rental rates are authorized for Board of County Commission consideration for adoption <br />by: Finance Manager, County Engineer and the Public Works Director. <br />Expense tracking and new equipment: All equipment is tracked for expense within <br />the department's CAYENTA software program and assigned individual numbers within <br />the 4000 range. The 4000 range is an indicator that the item is a capital purchase not <br />yet put into service. Once all costs related to the new equipment asset are verified as <br />complete, the new equipment asset is transferred into a newly established equipment <br />number and is PLACED INTO SERVICE. New equipment purchases are added to the <br />counties ASSETS by resolution. <br />Equipment Disposal: On an ongoing basis decisions are made by the public works <br />management as to the need to either replace or dispose of equipment. Information as to <br />the cost of any specific piece of equipment is accumulated and reviewed on an annual <br />basis at a minimum. A list of equipment to be disposed of or replaced is then <br />authorized by resolution. <br />Depreciation: As a new piece of equipment is placed into service, its life cycle is <br />started. For smaller vehicles such as pickups, the life cycle is set at 5 to 7 years; larger <br />pieces of equipment are set at 10 to 15 years. Equipment under the purchase price of <br />$5000 is expensed in the year of purchase. <br />Replacement Factor: The replacement factor is the amount of currency needed above <br />the amount of the original purchase price to purchase the same piece of equipment in <br />the future. This total amount (depreciation plus replacement factor) would be considered <br />the future value (price) of a current (new) asset. This replacement factor should be set <br />annually and should be based on the inflation factor as it relates to the specific type of <br />equipment. <br />Rates for equipment rental: Rates for the rental of equipment owned by the fund shall <br />be set to cover all costs of maintenance and repair, material and supplies consumed in <br />operating or maintaining the equipment, and the future replacement thereof. The rates <br />shall be determined by the county engineer or other appointee of the county legislative <br />body and shall be subject to annual review by the legislative body. This section does not <br />restrict the ability of the county road administration board to directly inquire into the <br />Page 1 of 4 <br />