(a) A fund entitled Equipment Replacement Fund is created. The fund shall be an internal service fund as defined by generally accepted accounting principles. The purpose of the fund is to provide financing for equipment which is anticipated to cost in excess of fifty thousand dollars ($50,000.00) and which would otherwise be financed by the General Fund.

(b) The Equipment Replacement Fund is not required to have an annual budget; however, any cash outlay for equipment purchases from the Equipment Replacement Fund shall be approved by resolution of the City Council.

(c) The Equipment Replacement Fund shall be allocated interest earnings on all cash balances in the fund. Proceeds from the sale of surplus equipment will be deposited in the Equipment Replacement Fund if the fund will be financing the replacement of the equipment, or if the equipment was purchased with fund assets. Any transfer of Equipment Replacement Fund assets to another fund shall be accomplished by ordinance.

(d) The City Manager will maintain a schedule of all equipment owned by the Equipment Replacement Fund and shall make recommendations to the City Council when equipment is to be purchased by the fund.