Page 402 - Hurst FY20 Approved Budget

Capital Improvements Program continued

Fund budget. A corporation was formed to issue revenue bonds and authorize principal and interest payments from
the Half-Cent Sales Tax proceeds. Importantly, the completed CIP projects will not impact General Fund
operational costs. Maintenance and operation costs for the new facilities and improvements will instead be paid
from sales tax proceeds as authorized by the State Legislature effective September 1, 1993. City of Hurst Officials
were instrumental in communicating the need for an amendment to the Industrial Development Act of 1979, Article
5190.6, Section 4B, which now allows sales tax proceeds to not only construct major facilities and improvements
but pay costs necessary to operate them. The City maintains a multi-year financial plan for the Half-Cent
Community Services Fund to ensure all operating costs created by projects can continue to be absorbed by this
special revenue fund.

The CIP is a dynamic process, with projects being added and deleted from funded and unfunded lists on an
ongoing basis. Projects make their way to the unfunded list as identified by staff. The unfunded list literally contains
all projects identified as viable by staff. Projects move from unfunded to funded only after the following additional
consideration is given by staff, Council, Boards and Commissions and/or citizens:

¨ Fiscal impacts
¨ Health and safety effects
¨ Community economic effects
¨ Environmental, aesthetic, and social effects
¨ Amount of disruption and inconvenience caused
¨ Local minimum standards
¨ Distributional effects
¨ Feasibility, including public support and project readiness
¨ Implications of deferring the project
¨ Advantages accruing from relation to other capital projects
¨ Responds to an urgent need or opportunity

CAPITAL IMPROVEMENTS PROGRAM FUNDING

Due to the nature and total cost of approved projects, General Obligation Bonds, Certificates of Obligation and
Revenue Bonds are major sources of funding. In an effort to reduce the issuance of future debt, for reasons
previously discussed, the City pursues other sources of capital funding. This includes State & Federal grants,
interlocal agreements, sales taxes, donations, and the use of excess operating revenues to finance projects on a
pay-as-you-go basis. The following information provides a summary of past and future debt issuance and identifies
the types of projects funded primarily through debt. Alternative sources of funding for capital projects are also
discussed.

2005 Bond Election (General Obligation)

In June 2005, a Citizen Bond Committee met to review the City’s short and intermediate term capital improvement
needs. Staff introduced and explained the City’s CIP document. The dynamic nature of the CIP was discussed in
regards to projects being added and deleted from future unfunded needs based upon updated Council strategies,
ongoing staff evaluation and ranking of projects, citizen surveys, and economic conditions. The Committee also
considered other self-identified issues while developing its project recommendation. After extensive review and
discussion, the Bond Committee recommended presenting nine projects totaling $11.8 million to voters. In
November 2005, voters approved eight of the projects totaling $11.7 million. The approved projects will encourage
redevelopment efforts in the City while also improving the condition of the City’s infrastructure. As shown in the
table below, the City issued its first $4.5 million of voter-approved debt in 2006. In 2007, the City issued $4.1
million. The final phase of $3.1 million is scheduled to be issued in 2025 or later. Please note that the $3,100,000
are drainage projects that will more than likely be funded with Storm Drain Utility funds in the future.

386