Page 321 - Hurst Adopted FY22 Budget

Capital improvement program

CAPITAL IMPROVEMENTS PROGRAM SUMMARY

The City of Hurst Capital Improvements Program (CIP) is a process by which the City develops a
plan for major capital expenditures that matches available resources and satisfies City tax rate
objectives. The CIP attempts to identify and plan for all major capital needs. Generally, the CIP
includes improvements costing $100,000 or more, that are debt funded, that are non-recurring
and have a multi-year useful life resulting in fixed assets. These include the construction and
acquisition of new buildings, additions or renovations of existing buildings, construction and
reconstruction of streets, water and sanitary sewer improvements, drainage improvements,
land purchases and major equipment purchases. Projects are identified for funding through staff
analysis, citizen input and meetings with City Council and Boards and Commissions. The lists
herein are categorized by funding source and project type.

THE CITY’S GENERAL APPROACH AND OPERATING IMPACT OVERVIEW

The CIP for the City of Hurst is focused on adding value and extending life of City infrastructure
with minimal increase in current operating costs. Funds in the Street Bond Fund are expended
for reconstruction work on major streets and the resurfacing of roads with no anticipated
operating costs. The Drainage Improvements Program also has a positive impact on
maintenance costs for the General Fund with the addition of concrete lined drainage channels
in place of “natural” channels, which typically require a more substantial amount of landscape
maintenance. For the Enterprise Fund, the replacement of water and wastewater mains and
lines will also help remove costs in the operating budget. A positive impact to future operating
costs are realized upon the completion of street, drainage, and water and wastewater
improvements due to the upgrade or replacement of aged and sometimes malfunctioning
infrastructure with newer more functional infrastructure.
In prior years, major debt-related CIP projects have been timed so that debt issuance would not
increase the property tax rate. In other words, debt service costs are scheduled to have as little
impact annually as possible on taxpayers. Operations and maintenance revenue is also stabilized
as a result of not having to shift tax revenues to the City’s interest and sinking funds to cover
debt service payments. Again, CIP projects financed through property tax supported debt
indirectly impact the operating budget through the payment of principal and interest on the
incurred debt. Funding sources other than debt are utilized when possible to minimize debt-
related operating impact.

Operating costs of projects such as additional utilities, maintenance costs, and additional
staffing are given consideration in establishing project priorities. The City's financial policy for
new programs prevails for all CIP projects as follows: "New projects/programs will not be
budgeted (funded) and implemented until the full annual costs and financial impact of the
programs are known." The projects most likely to have an operating impact are those completed
with Section 4B, half-cent sales tax revenue, as explained below.

The approval of an additional half percent sales tax on taxable goods and services within the
City by voter referendum on January 16, 1993, provided a funding source restricted to
Community Services' CIP projects. These projects would have otherwise been financed by
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