Page 350 - Hurst FY20 Approved Budget

COMMUNITY SERVICES
HALF CENT SALES TAX FUND

The Community Services Half Cent Sales Tax Fund is a Special Revenue Fund established to
record receipts collected by the State for a one-half percent sales tax on taxable items sold within
Hurst. The tax was authorized by voter referendum on January 16, 1993 by a three to one margin.

Previously, in 1991, the State Legislature had approved an amendment to the Development
Corporation Act of 1979 (Article 5190.6, Vernon Civil Statutes) to allow qualifying cities to impose,
with voter approval, an additional one-half cent sales tax for projects as defined by 4B of the Act,
primarily Parks and Recreation projects, if their sales tax rate at the time of the election does not
exceed 7.25%. Commonly known as the "Arlington Stadium Bill," the legislation was a special law
that only applied to cities in counties with a minimum population of 750,000 - Tarrant, Harris, Dallas,
and Bexar. The legislation was important to Hurst because the city had over $14 million of deferred
parks and recreation projects that were unfunded. Of primary significance, the tax was viewed by
the City Council and City Staff as an opportunity to ensure property tax relief to Hurst citizens. Due
to voter approval of the legislation, the new Community Services Half Cent Sales Tax provides
facilities and infrastructure improvements that would normally be funded by the General Fund or not
financed at all. Revenues from the sales tax will also pay for debt principal and interest cost for
Revenue Bonds issued under Section 4B of the legislation. The capital budget for the Hurst
Community Development Corporation Bond Fund is located on page 387 - 391 in the CIP Section.

A major consideration was the impact of the new tax on the City's current General Fund operation's
budget with the addition of new facilities and programs. Since there are two main components of
any large capital project, the construction costs and the ongoing maintenance and operation costs,
there was concern that provision for maintenance and operation costs were left out of the original
legislation. During the Seventy-Third State Legislature session, the City of Hurst Mayor, City
Council, and Staff were instrumental in working for the passage of H.B. 2297 (originally H.B. 1177)
that allows the expenditure of Section 4B sales tax on the maintenance and operations costs of
publicly owned and operated projects that are purchased or constructed with the proceeds of the
sales tax. This amendment to Section 4B of Article 5190.6 provides significant benefits for all cities
in the State that have enacted the tax or will enact the tax in the future.

After passage of the tax, the Hurst Community Development Corporation was formed and is
comprised of four City Council members and two citizen members. By-laws for the Corporation
were written and structured within the framework of the Development Corporation Act of 1979,
Section 4B (2). A Multi-Year Financial Plan was developed by the City Council as a guide for the
Corporation's charge of carrying out the issuance of debt and the funding of approved projects.
From 1993 to 1999, $9.625 million in Half Cent Sales Tax Revenue Bonds were issued for major
capital projects. In 2008, an additional $6 million in Certificates of Obligation were issued to support
the construction of Hurst Town Center’s proposed meeting facility. In fiscal year 2013-2014, $7.5
million in Certificates of Obligation were issued to replace the pool at Chisholm Park. $4 million was
issued during fiscal year 2015-2016 to renovate the pool at Central Park as well as $1.4 to repair
the roof at the Recreation Center. Also, in fiscal year 2015-2016, 5.2 million in 2008 CO’s were
refunded providing $963,870 in savings. As shown on the following page, the current year’s sales
tax collections are allocated to three categories of expenditures: debt service for the Sales Tax
Revenue Bonds and Certificates of Obligation, ongoing operations and maintenance of facilities and
amenities constructed by this funding source, and pay-as-you-go projects.

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