Page 15 - Hurst Adopted FY22 Budget

APPROVED FISCAL YEAR 2022 BUDGET

level funding in this fund. For FY 2022, sales tax revenues have rebounded and we will not need
to rely upon reserves to maintain consistent programs and services associated with the CCPD.

Enterprise Fund

This fund operates as a stand-alone business enterprise providing water and sewer services to
Hurst residents and commercial customers. The City of Hurst does not own or operate its own
water or wastewater plant. As such, the city contracts with Fort Worth and the Trinity River
Authority (TRA) for wholesale water and wastewater services. Unfortunately, the City of Hurst
has limited ability to control wholesale costs, which have increased by over 30 percent over the
past 10 years while consumption has been relatively flat over that same period. Wholesale costs,
which represent approximately 43 percent of this fund’s budget, continue to be a challenge;
however, securing our own water rights and building our own treatment plants is not

economically feasible. We continue to actively manage the costs which we can control to ensure
we provide reasonable utility rates consistent with our neighboring cities.

Under the city’s rate smoothing policy, the Council considers small incremental rate increases
each year rather than more significant and infrequent rate increases. Each year the city conducts
a review of our operation and maintenance costs, debt service, and capital needs and compares
the required resources to our projected revenues. Utility revenue is heavily affected by weather
patterns and can cause large budget surpluses or deficits year over year. The rate smoothing
policy is intended to help mitigate similar changes in rate over time. Over the last 20 years the
average rate increase has been less than four percent. During FY 2021, Council approved no rate
increase; however, with increasing wholesale costs, Council approved a modest increase of two

percent for FY 2022. This was recommended to Council based upon increasing wholesale costs
and ensuring the fund remains in a strong financial position. This will ensure continued
maintenance and investment in our critical water and waste water infrastructure.

SUMMARY

The City’s long-term focus on financial sustainability through the Hurst Way and Council’s
continued strategic leadership and annual strategic planning process has resulted in the City

establishing and maintaining a strong financial position across all funds. Staff presented a
conservative budget to City Council that includes restoration of programs and services to pre-
pandemic levels and furthers our goal to recruit and retain top talent across the organization
through a comprehensive total rewards program. While the budget was increased 4.24 percent
the tax rate remains flat and is only an increase of about one percent when compared to the last
pre-pandemic budget.

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