Page 519 - Hurst FY19 Approved Budget

infrastructure with minimal increase in current operating costs. Funds in the Street
Bond Fund are expended for reconstruction work on major streets and the resurfacing
of roads with no anticipated operating costs. In fact, street improvements typically
reduce maintenance costs for the City. The Drainage Improvements Program also has
a positive impact on maintenance costs for the General Fund with the addition of
concrete lined drainage channels in place of “natural” channels, which typically require
a more substantial amount of landscape maintenance. For the Enterprise Fund, the
replacement of water and wastewater mains and lines will also help remove costs in
the operating budget. A positive impact to future operating costs are realized upon
the completion of street, drainage, and water and wastewater improvements due to
the upgrade or replacement of aged and sometimes malfunctioning infrastructure with
newer more functional infrastructure. In fact, the upgrade and replacement of aging
infrastructure lowers maintenance costs. Even so, windfall savings are not expected
as infrastructure yet to be repaired or replaced continues to age creating a balance
between new maintenance requirements and new infrastructure requiring little or no
maintenance.

In prior years, major debt-related CIP projects have been timed so that debt issuance
would not increase the property tax rate. In other words, debt service costs are
scheduled to have as little impact annually as possible on taxpayers. Operations and
maintenance revenue is also stabilized as a result of not having to shift tax revenues
to the City’s interest and sinking funds to cover debt service payments. A total of $4.7
million of Streets and $162,000 of Drainage unfunded projects are identified in the City
of Hurst’s CIP. These unfunded projects, as well as others, are prioritized by needs and
compared against future debt levels and revenue projections to determine the timing
of debt issuance and construction. Again, CIP projects financed through property
tax supported debt indirectly impact the operating budget through the payment of
principal and interest on the incurred debt. Funding sources other than debt are utilized
when possible to minimize debt-related operating impact.

Operating costs of projects such as additional utilities, maintenance costs, and
additional staffing are given consideration in establishing project priorities. The City’s
financial policy for new programs prevails for all CIP projects as follows: “New projects/
programs will not be budgeted (funded) and implemented until the full annual costs
and financial impact of the programs are known.” The projects most likely to have an
operating impact are those completed with Section 4B, half-cent sales tax revenue, as
explained below.

The approval of an additional half percent sales tax on taxable goods and services
within the City by voter referendum on January 16, 1993, provided a funding source
restricted to Community Services’ CIP projects. These projects would have otherwise
been financed by property tax supported bonds or, if approved through the General
Fund budget. A corporation was formed to issue revenue bonds and authorize

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