Page 98 - Hurst FY20 Approved Budget

Legislature passed several bills which reduced telephone, other telecom, and other video
Services to decrease by (47.76%).

As a group, General Property Taxes, Consumer Taxes, and Franchise Taxes account for
71% of the General Fund revenues for fiscal year 2019-2020. They are projected to increase
by approximately 3.08% from the previous year's budget. The effect of the sales tax sharing
agreement for North East Mall and the early payoff of the Shops of North East Mall
Agreement has been factored into the projections. Local and national economic indicators,
such as the Consumer Price Index and unemployment data, are considered in making
forecasting decisions, but collection trends are analyzed monthly and serve as the basis for
the 2019-2020 projections for revenues, which have demonstrated more reliability.
Extrapolation is used when there is no apparent trend or seasonal fluctuation.

LICENSES AND PERMITS

License and permit revenues include fees charged by the City for business licenses and permits
for general construction. Fees are charged for City inspection of electrical, plumbing, and
mechanical installations. This category accounts for 1% of General Fund revenues. The Building
Inspections/Neighborhood Services division continues to focus on code enforcement and
inspections of redevelopment projects within the City. Overall Licenses and Permits increased
4.48% in 2019-2020.

CHARGES FOR SERVICES

Service Charges include the fees charged by the City for the public use of services and facilities.
Charges to developers for rezoning and plat review activities are included in this category as are
revenues from the sale of maps and codes. Fee structured programs in community services are
also included in this category. The budgeted revenues in most categories are close in comparison
to the previous year. Ambulance Services is projected to increase slightly from the previous year.
The Senior Citizen Center is seeing increased memberships and have implemented new
programs to attract senior citizens. For 2019-2020, total charges for services are projected to
increase by $19,772 and account for 5% of General Fund revenues.

FINES

Fines are revenues received by the city mainly from Municipal Court for Class "C" misdemeanor
violations occurring within the corporate City limits. They also represent library fines that are
collected during the year. Fines account for 3% of total General Fund revenues. Projections are
based on a level adequate to make traffic enforcement effective. Municipal Court fine collections
are projected to decrease by (23.9%) in fiscal year 2019-2020.

MISCELLANEOUS REVENUES

Miscellaneous revenues account for 1% of revenues and consist primarily of interest earnings
from the investment of city funds. All funds of the city are constantly 100% invested in certificates
of deposit, obligations of the U.S. Treasury, discount notes, interest bearing money market
accounts, savings accounts, or in investment pools. Interest rates declined in 2001 to 2004 as
the economy entered a shallow but lingering recession in March 2001. In response to the
recession, the Federal Reserve lowered the Federal Funds Rate thirteen times, bringing rates
down from 6.5% to a 40 year low at 1.00%. This fundamental shift in the Treasury market caused
a dramatic decrease in interest earnings. Interest rates subsequently rose with the Federal Funds
Rate ending Fiscal Year 2007 at 4.75%. However, the Nation entered the Great Recession and
the Fed cut rates several times. The current Federal Funds rate is in a target range of 0.00% to
0.25%. Maturing investments continue to be reinvested in lower yielding instruments. Staff will
continue to monitor economic conditions on an ongoing basis throughout the year.

82