Page 138 - Hurst Adopted FY22 Budget

community 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 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 also pay for debt principal
and interest cost for Revenue Bonds issued under Section 4B of the legislation.

A major consideration was the impact of the tax on the City's current General
Fund operating 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
Legislative 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 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. In fiscal year 2013-2014, $7.5 million in Certificates of Obligation
were issued to replace the pool at Chisholm Park. Four million was issued during fiscal
year 2015-2016 to renovate the pool at Central Park as well as $1.4 million 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.

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