Page 37 - Hurst FY19 Approved Budget

LONG TERM FOCUS

Multi-Year Financial Overview

The Overview is an essential component of each year’s budget process. Expenditures
are projected at an estimated growth rate, and funding strategies are developed to
provide for this growth. Potential revenue sources, cost-saving strategies and any debt
issuance are considered before any changes to property tax rates and utility rates are
factored into the plan to balance the projected budgets. Excerpts from the Multi-Year
Financial Overview, and the five-year summary of the long-term plan, are located in
the Long Term Strategic Planning Section of this document. The Multi-Year Financial
Overview is presented to the City Council in July or August prior to budget workshops
held each year.

Capital Improvements Program

An important long term planning document is the Capital Improvements Program (CIP).
The CIP identifies existing and future needs, funding sources and project maintenance
and operation costs. The goal of the CIP is to identify and plan for future capital programs
and to estimate financial impacts. The plan is comprised of a complete listing of funded
and unfunded capital project needs that are identified by each operating department.
The projects are prioritized and ranked, taking into consideration the timing and
immediate needs of the projects. A separate CIP document has been prepared as of
October 1, 2018, and is summarized as part of the 2018-2019 budget document.

A funding source that addresses long-term capital project needs for the General Fund
is the Debt Service Fund, which pays principal and interest payments on General
Obligation bonds and Certificates of Obligation. From 1987 to 1994, the city chose not
to issue bonds because any new issue would require an increase in the debt component
of the property tax rate. For the ten years prior to 2006, the city was able to issue
additional debt without raising the tax rate because of increasing property values and
FY 1995 marked the beginning of declining payments for debt issued prior to 1987. The
community-based need for capital project funding changed the philosophy of no debt
increases. The debt component of the property tax rate increased from $0.0886 in 2005-
2006 to $0.129897 for the 2008-2009 fiscal year primarily due to voter-approved general
obligation debt. The additional debt provided for fire station # 2 as well as library, senior
center, drainage improvements, and Bellaire Drive reconstruction. For the 2009-2010
fiscal year, the debt component decreased to $0.1252092 due to the refunding of prior
bond issuances. In addition, for fiscal year 2010-2011 the debt component increased
to $0.1327157 to make up ground for the 6% decline in taxable values and to ensure
the city met its debt obligations. The debt component of the tax rate for 2011-2012
decreased slightly to $0.132631 due to the June 2011 refunding of debt. The approved
debt rate for 2012-2013 was increased by approximately 3 cents to $0.1631288 to fund

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