Page 72 - Hurst Budget FY21

North East Mall. Under this agreement, the developer receives a rebate for a portion of sales taxes earned above
the rates prior to the expansion of North East Mall and the construction of Shops at North East Mall. The
developer’s rebate is capped in both time and total dollars. The shops portion of the agreement reached maximum
value during the 2008-2009 year allowing the City to begin collecting 100% of associated sales tax earnings in
2009-2010. A reduction in the Mall rebate sharing percentage from 80% to 75% in 2010-2011 will generate an
estimated $300,000 and $100,000 of one-time revenue for the General and Half-Cent Sales Tax Funds in
subsequent years respectively.

Utility Rates

The City will adopt annual utility rates that will generate revenues adequate to cover operating expenses and meet
the legal requirements of bond covenants. Depreciation is also budgeted to plan for adequate capital replacement
in water distribution and sewage collection systems. There will be no increase in water and wastewater rates for
2020-2021 budget year. Additional financial policies in the Enterprise Fund section of this document.

Investment Policies

The City’s investment policy is more restrictive than the State’s Public Funds Investment Act. The stated goals of
the investment policy, in order of importance, are safety of principal, liquidity, yield, and public trust. Investments
made by the City will be in conformance to policies contained in the City of Hurst Investment Policy, adopted August
25, 2020. Interest earnings are distributed to accounting funds according to ownership of the invested dollars. This
revenue is budgeted for each fund in the annual budget. Each month, the Finance and Investment Committee
meets to review investment activity and monitor the investment policies and procedures of the City.

Other Revenue Policies

The City continually strives to obtain additional major revenue sources as a means to balance the budget. In
January 1993, voters adopted an additional 1/2 percent sales tax for Community Services purposes. In September
of 1995, voters overwhelmingly approved an additional 1/2 percent sales tax for crime control and prevention
purposes and voted to extend the tax for an additional twenty years in May 2010. In fiscal year 2008-2009, Council
approved a new Storm Water Management fee that will provide for drainage improvements throughout the City
while providing expenditure relief to the General and Debt Service Funds. User fees and charges are reviewed
annually to ensure they are comparable to the cost of providing services.

Debt Management Policies

The City’s debt management policy is conservative. It is summarized below. This policy can also be found in the
Other Funds Section of this document.

1. The City will diligently monitor its compliance with bond covenants.
2. The City will maintain good communications with bond rating agencies regarding its financial condition. The
City’s present ratings are (Moody’s) Aa2 and (Standard & Poors) AA.
3. An analysis will be prepared for each long term financing activity that shows the impact on current and
future budgets for debt service and General Fund Operations.
4. Debt capacity will be calculated annually. New debt will be issued only when sufficient capacity exists under
existing tax rates or when voters or the City Council approve an increase in the tax rate to service new debt.

This policy and planned debt issuances will continue to be addressed in the City Council’s annual Strategic
Planning meeting typically held in March each year.