South West Transit Association
$5000 Threshold on Capital Equipment - Selling Transit Assets
SWTA members have been requesting a higher than $5000 disposition threshold for Federally funded assets (i.e. vehicles and equipment) that have reached their useful life. $5,000 is currently allowed by the OMB Common Rule and has been the rule since 1973.
SWTA’s Statement on Selling Transit Assets: A transit asset that has served its full life should be sold when possible at full market value, with the funds reverting back to the transit agency for reinvestment in the community’s transportation needs. Currently, that is not the case according to Circular 5010.1D regarding rolling stock. it actually saves in administration costs used currently to process small amounts of money that do not expand or benefit any program significantly.
In summary, SWTA requests that the cap of $5000 on rolling stock, that has served its useful life, be removed.
Update provided by Cindy Terwilliger, Deputy Regional Administrator, Federal Transit Administration, Region VII
Cindy reports: I checked the new Super Circular and unfortunately it maintains that threshold. Here is an excerpt from the Federal Register on the subject:
Commenters advocated for a higher threshold for equipment than $5,000. Comments suggested that particularly for large state governments with high amounts of Federal awards, and with state policies of higher capitalization thresholds in place, a higher threshold, possibly in line with the non-Federal entity’s own capitalization threshold, would be more appropriate. The COFAR considered and determined that even though entities may view higher thresholds as appropriate for their own purposes, maintaining the threshold at $5,000 is important to protect the assets purchased with taxpayer dollars under Federal awards. The COFAR did not recommend raising the threshold.
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