County staff propose capital asset management policy and narrower general-fund reserve target, seek public input

Mariposa County’s Board of Supervisors discussed a new capital asset-management policy and proposed changes to the county’s reserve-policy calculations during the Jan. 21 meeting.

Assistant County Administrative Officer Lee Westerlund said the county has not taken a countywide, disciplined approach to capital budgeting and asset replacement and recommended three categories for asset planning: (1) roads, (2) inventory replacement (for repeatable replacements such as computers), and (3) prioritized capital projects for buildings, equipment and facilities. She presented minimum capitalization thresholds and sample prioritization criteria drawn from peer counties and the Government Finance Officers Association.

Westerlund said the proposal borrows capitalization thresholds from a Sonoma County template and would raise the county’s minimum dollar thresholds for capitalizing assets (examples were in staff materials). She urged the board to require recurring, modest annual contributions to a capital placeholder fund so the county could smooth replacements and avoid sudden spikes in single-year expenditures.

Reserve policy proposal Westerlund also proposed changing the reserve-policy base and the recommended minimum target. Her draft would exclude grant-funded departments (notably Health & Human Services and Child Support) from the general-fund-expenditure base used to calculate the reserve target. That reduced the sample calculation in staff materials from an average base near $66 million to about $46 million and — using GFOA guidance — produced a lower illustrative reserve target: roughly $7.7 million under the proposed method versus about $15 million under the county’s existing calculation. She told the board the change would free some fiscal capacity to seed a capital placeholder fund while still maintaining a prudent general-fund reserve.

Fiscal context Westerlund reminded the board the FY25 adopted budget drew $4.6 million from general-fund reserves and that $1.1 million has been restored so far; she said the county would be obligated under the current reserve policy to replace the withdrawn amount over the coming years unless policy changes are adopted.

Board reaction and direction Supervisors and staff discussed implementation details and timing. Auditor Luis Mercado asked that any change to the capitalization threshold be effective at the start of a fiscal year so asset accounting remains consistent; county staff agreed and suggested a July 1, 2025 effective date for any new capital-asset thresholds. Several supervisors stressed the need for a transparent public-engagement process and stronger guidance on how departmental asset lists and road-prioritization decisions would be developed and presented to the board.

Consensus and next steps Supervisors gave direction to staff — including the CAO and audit teams — to flesh out the policy and a related process for prioritization, public engagement and annual budgeting. Staff said they will return with a formal policy and a multi-year capital forecast, with July 1, 2025 set as the target implementation date for any changes to capitalization thresholds if the board approves those changes.