Page 20 - Hurst Budget FY21

East Mall as well as other smaller shopping centers in Hurst. We continue to work in partnership
with the private market to find retailers that will thrive in Hurst. We are pleased that Hobby Lobby
and Tuesday Morning have successfully opened and occupied the retail space vacated after Toys
‘R’ Us and Babies ‘R’ Us closed. Success in this area will take public-private partnerships as the
Council and staff deploy our available resources in tandem with private sector investment. That
partnership is evident in the success of prior redevelopment efforts at North East Mall and our
partnership with Simon Property Group. The mall is currently challenged as it moves into the next
stage of its life cycle. Economic incentives for Simon Property Group expire in 2023 and we
anticipate continuing our partnership as they work to reinvent space recently vacated by Sears and
Nordstrom. All redevelopment and infrastructure projects help ensure that the city of Hurst remains
a sustainable, safe, and dynamic place for all individuals to live, work, and play. These projects will
also help accomplish part of the city’s mission to ensure Hurst remains a vibrant community.

 Identify areas of financial risk that impact the budget. The city maintains a fiscal contingency
plan to provide a framework for responding to economic challenges unforeseen in the budget. The
pandemic underscores the importance of following and reviewing/updating the plan after enduring
economic challenges. The fiscal contingency plan’s framework provides a response to economic
realities beyond our control; however, the city recognizes that we must also manage the
expenditures under our control. As is common for municipal service providers, our single greatest
cost center is personnel services (compensation and benefits) and represents one of the largest
financial impacts that we can manage. However, our employees are our also our most important
asset. We want to balance costs against providing competitive benefits to attract and retain top
talent. In this way, our employee investment is similar to our infrastructure investment. Neglecting
this asset will result in more expensive challenges in the future. In evaluating our risks, we have
identified healthcare, retirements, and public safety wages as areas we need to continually monitor.

Healthcare: One of the primary financial risks continues to be employee and retiree health care
costs. The city is self-insured and pays actual claims as well as fees to a third party administrator
(CIGNA) that manages the program. Costs have outpaced they city’s health care budget over the
past several years due to increasing medical costs and increasing claims activity and the city has
been able to manage increases through cost containment strategies, wellness efforts, and operat-
ing budget adjustments. Recently the city made a substantial change by introducing and incentiv-
izing a healthcare plan providing coverage for only in-network providers. In 2019-2020 we moved
all plans to in-network only providers, eliminated our most expensive plan, adjusted employee pre-
miums, and implemented a modest spousal surcharge which only affected those employees with
a spouse eligible for benefits through their employer. Staff utilizes consulting services to review its
plan and participant charges each year. The city continues to use CIGNA given their competitive
fixed fee structure and their offering of greater medical discounts within its network of physicians
and other services. It is also important to note that the city adjusted our “stop-loss” coverage that
transfers claims costs to CIGNA. Specific stop-loss coverage is carried at $150,000 with aggregate
stop-loss carried at $6.12 million and the city carries a $1.5 million emergency reserve in the Loss
Reserve Fund. We maintain the emergency reserve and aggregate stop-loss coverage in the event
actual claims exceed the expected claims of $5.1 million for FY 2020-2021.

Retirements: City of Hurst staff are loyal to the organization, and often enjoy long-term careers with
the city. This means a substantial portion of the city’s employees are eligible for retirement.
Financial exposure associated with retirements includes the payment of accrued but unused sick
and vacation benefits, hiring and training costs, and associated reorganizations. The city caps the
amount of sick and vacation time that is eligible for payment to retirees. To ensure operations
continue smoothly in the face of increasing retirements, the city has successfully utilized leadership
development programs and the “right fit” new hire process that matches candidates with the
organization’s Code of Ideals. The city has successfully filled several management-level positions

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