Comprehensive Annual Financial Report - St. Tammany Parish ...

ST. TAMMANY PARISH GOVERNMENT
Notes to the Financial Statements 2010
estimated useful lives for concrete, asphalt, and gravel roads are 40, 30, and 50 years, respectively. The mid-year
convention is used for infrastructure.
All capital assets, other than land, are depreciated using the straight-line method. The costs of normal maintenance
and repairs that do not add to the value of the asset or materially extend the asset’s life are not capitalized. Bridges
were valued using estimated historical cost. The Louisiana Department of Transportation and Development
maintains a listing of Parish Bridges that includes the construction date and estimated replacement cost. Using this
list, along with the Consumer Price Index, historical cost was estimated.
The Parish began the majority of the reconstruction of Parish roads after the voters of St. Tammany Parish passed a
two percent (2%) sales tax used specifically for this purpose in 1986. The actual records of these capital projects
were obtained for projects completed from 1988 to the present and were used to determine historical cost.
Roads taken into inventory by donation from a developer of a new subdivision prior to 1988 were valued at estimated
historical cost. The estimated historical cost was determined by using current construction costs, as determined by
the St. Tammany Parish Department of Engineering, and the Consumer Price Index.
The value of the land underneath the roads was valued at estimated fair value at the time of donation. This estimate
was determined by using the average assessed value of unimproved land in the Parish. The assessed value closely
approximates 10% of the fair value, which was $11,410/acre for 2010. The actual length and width of the road was
known, and the width of the land generally includes an additional 4 feet each side for shoulder and ditch. The square
feet of the land, including shoulder and ditch, was used to determine value.
The following table states the Parish’s thresholds for capitalizing these assets and the estimated useful lives of capital
assets:
Description
Capitalization
Threshold Estimated Useful Lives
Land & Building Improvements $ 25,000 20 years
Buildings 25,000 40 years
Water System 25,000 25 years
Office Equipment & Vehicles 5,000 5 years
Telephone System 5,000 10 years
Other Equipment & Heavy Equipment 5,000 7 years
Infrastructure:
Roads 25,000 30-50 years
Bridges 25,000 30-70 years
Other 25,000 25-30 years
Component units of St. Tammany Parish Government have a capitalization threshold of $50 to $2,500. The Library
capitalizes all books except periodicals and has an increased threshold for improvements of $12,500. The following
is the estimated useful lives used by the component units:
Description
Buildings and improvements
Sewer/Water improvements
Machinery and equipment
Aircraft and related equipment
Vehicles
Furniture and equipment
Infrastructure
Books
Estimated Useful lives
10-50 years
10-40 years
4-40 years
10-15 years
5-20 years
5-12 years
10-30 years
5 years
All of the component units use straight-line depreciation with one exception. Sewer District No. 2 uses the
accelerated method for sewer line improvements. For additional information on the capital asset policy of an
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