Page 33 - Hurst FY19 Approved Budget

In 2018-2019, staff will continue to closely monitor the national, state and local
economies. Some remain fearful that reductions in federal government spending
and uncertainty regarding trade and implementation of recent changes to the
tax code could have negative affects upon the national economy through rising
inflation or other key factors. Some are warning that U.S. economy will slow
significantly in the second half of next year as the Federal Reserve continues to
raise interest rates and the effects of the tax cut fade. Furthermore, many argue
that interest rates must remain low given the U.S. debt position. Finally, recent
events, such as natural disasters and the events in California and Illinois remind us
all that the economy can shift with the nation’s policies to recover from disasters
and defend against terroristic threats around the world. The city is currently
facing economic uncertainty of our sales tax revenue. If trends in the retail sector
continue and economic conditions worsen, the city may be affected through
shrinking property and sales tax bases and other side effects, similar to those felt
during the most recent recession. The approved budget is balanced conservatively
with economic contingencies existing in both revenues and expenditures. Fiscal
Management Strategies are located in the Long Term Strategic Plans and Budget
Summary sections of this document.

Hurst is a mature community and is landlocked with limited opportunities for
new development. Redevelopment and other programs that will help maintain
the quality of residential and commercial properties in Hurst is paramount.
Redevelopment plans are discussed throughout this document and consist of
new city facilities and other infrastructure improvements being made in strategic
areas of the city. Private developers are being encouraged to move forward with
projects adjacent to and surrounding new city facilities. Council and staff continue
to discuss future development opportunities and work with development partners
to implement our vision and strategic plan.

BUDGET ISSUES

Conservative Budgeting Approach

Each year, the continuation of conservative financial and operational policies guides the
development of annual budget. This conservative approach is critical for the 2018-2019
budget due to uncertain economic conditions in the retail sector and State of Texas
continued legislative efforts to minimize revenue opportunities and local control. The
city’s two primary revenue sources, property tax and sales tax, are facing challenges in
two different aspects; changing economic conditions for retailers and state legislative
changes. Court revenue has been in decline in recent years due to state legislative
changes, philosophical changes in criminal justice, and national perception regarding

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