Under local bond law, what qualifies as a capital improvement?

The definition of a capital improvement, particularly under local bond law, is tied to the useful life of the asset in question. An item that qualifies as a capital improvement must have a useful life of at least five years. This relates to the idea that capital improvements are significant investments intended to enhance or extend the life of a facility or infrastructure, thus providing long-term benefits.

In this context, a threshold of five years ensures that the investment made is substantial enough to warrant being funded through bonds, which are typically used for larger-scale projects that can be depreciated over time. This timeframe helps to filter out smaller, short-term purchases that do not contribute to long-term asset value or improvement.

While other options mention varying criteria for capital improvement—like useful life of one year, immediate funding requirements, or a value threshold of $50,000—they do not align with the accepted and legal definition used in local bond law. Focusing on the minimum useful life of five years clearly corresponds with the intention of distinguishing between capital improvements and regular operational expenditures.