Page 19 - HurstFY23AnnualBudget

APPROVED BUDGET FISCAL YEAR 2022-2023

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 the Enterprise Fund’s operations 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 4%. The FY 2022-2023 budget
includes a 3% increase in rates largely to offset increases in wholesale cost, absorb inflationary
increases, and support the market-based wage adjustment discussed above. Additionally, the
rate smoothing policy helps ensure continued investment in our critical water and wastewater

infrastructure while supporting the overall financial position of the Enterprise Fund. The budget
also includes savings related to declining debt service and a decrease in capital spending which
can fluctuate from year to year.

Community Services Half-Cent Sales Tax Fund
This fund supports the operations of our community services departments and any associated
projects that are eligible under Texas law. Unlike the General Fund, this fund has a single revenue
source and cannot rely upon another revenue to mitigate volatility in sales tax revenues. This

fund’s operating budget was reduced by 14.5 percent in FY 2021 to balance the budget during
the economic uncertainty of the pandemic and resulted in reduced service levels. The adopted
budget for FY 2022 restored most service levels with the goal of resuming normal operations.

The FY 2022-2023 budget includes a budget increase of just over 4% and supports full restoration
of maintenance dollars for parks and other public spaces, the wage adjustments discussed above,
the addition of a dedicated capital maintenance account of $125,000 annually, and $300,000 for
new projects. If the Community Services special revenue sales tax were not available, the city’s
property tax rate would need to be raised by approximately 13.5 cents to provide the same
service levels funded in this budget.

Anti-Crime Half-Cent Sales Tax Fund
This fund is dedicated to supporting the Hurst Police Department through voter approval of the
Hurst Crime Control and Prevention District. In 2010, voters authorized a 20-year continuance
of this ½ percent sales tax to support the Police Department operations. Voters will again decide
on the continuation of the sales tax in 2030. If this sales tax were not renewed, the property tax
rate would need to increase approximately 14 cents to ensure continued programs and service
levels from the Police Department.

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