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PRESS RELEASE RUSSELL CONSULTING helps the Town of Ipswich, MA to establish a Fixed Asset Accounting System for its Water and Sewer Utilities as required by Statement #34 of the Government Accounting Standards Board (GASB). RUSSELL CONSULTING was responsible for the entire project. The first phase was to identify, document, and determine the ages of all tangible assets of the Town’s water and sewer systems with a current value greater than $1,000. In the second phase, the original cost, net of depreciation value, of the system and each of its components was estimated. Lastly (third phase), a Fixed Asset Accounting System was established to keep track of current assets, assets purchased in the future, and the annual depreciation associated with these assets. In its value added approach to GASB-34 implementation, RUSSELL CONSULTING inventories and appraises all system assets that have not been fully depreciated, not just those installed after 1980. This adds a very sizable number of assets and value to the utility’s total value and annual depreciation expenses. Furthermore, the determination of useful lives and remaining useful lives are based on engineering assessments and field inspections. This provides utility management with not only a comprehensive listing of assets and values, but also a listing of critical facilities that should be renewed and replaced as part of a prioritized set of capital improvement projects. Statement (No. 34), issued by GASB in June of 1999, has far reaching impacts on the way communities account for and manage their fixed assets. GASB Chairman Tom L. Allen called this Statement, “The most significant change in the history of government accounting. It represents a dramatic shift in the way state and local governments present financial information to the public.” Over the next few years, cities and towns, will as a result of this Statement, be required to improve and expand their financial reporting (and record keeping), including a statement of Net Assets (including all infrastructure assets) and a statement of Activities (all revenues and expenses including depreciation) for each Fund and the Aggregate Government. These new requirements apply directly to municipally owned utilities and the accounting of their infrastructure assets (Fixed Asset Accounting System) and the physical maintenance of those assets. As soon as 2001 all prospective infrastructure assets will have to be accounted for annually and depreciated. In essence, the new requirements call for the establishment and maintenance of a system of Continuing Property Records (CPRs) for all municipal assets, including utilities and roadway systems. While some communities have such systems in place, most do not. RUSSELL CONSULTING is a management consulting firm specializing in providing management, engineering, and economic expertise to publicly owned utilities, related government agencies, and companies that are large consumers of utility services (electricity, natural gas, water, wastewater, and solid waste). The firm’s founder and president — Mr. David F. Russell, P.E. — is both a Registered Professional Engineer and an Economist and has over 30 years of professional experience as a Utility Manager, Senior Engineer, and Principal Consultant. For more information on this consulting practice, visit their website at www.russellconsulting.org. |