Page 343 - HurstFY23AnnualBudget

APPROVED BUDGET FISCAL YEAR 2022-2023

community expectations. Reserves will be evaluated first and any projects utilizing funds
dedicated to parks and recreation will also be recommended by the Park Board or the Half Center
Community Development Board. Projects with limited impact upon future operating budgets
will first be considered for reserves. Debt financing will be evaluated upon financial policies,
economic conditions, reserve levels, Council’s priorities, and outstanding debt.

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 associated with CIP projects is that new projects/programs will not be budgeted
(funded) and implemented until the full annual costs and financial impact of the programs are
known." The CIP projects most likely to have an operating impact are those completed with
Section 4B, half-cent sales tax revenue.

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 property tax
supported bonds or, if approved, through the General Fund budget. A corporation was formed
to issue revenue bonds and authorize principal and interest payments from the Half-Cent Sales
Tax proceeds. Importantly, the completed CIP projects will not impact General Fund operational
costs. Maintenance and operation costs for the new facilities and improvements will instead be
paid from sales tax proceeds as authorized by the State Legislature effective September 1, 1993.
City of Hurst Officials were instrumental in communicating the need for an amendment to the
Industrial Development Act of 1979, Article 5190.6, Section 4B, which now allows sales tax
proceeds to not only construct major facilities and improvements but pay costs necessary to
operate them. The City maintains a multi-year financial plan for the Half-Cent Community
Services Fund to ensure all operating costs created by projects can continue to be absorbed by
this special revenue fund.

For all funded projects budgeted for FY 23 we anticipate that there will be no operating impact
upon the budget. Each project is focused on maintenance, rehab, replacement, or improvement
of existing infrastructure. Future projects in the planning stages are also focused on our existing
infrastructure; however, certain future projects do contemplate expansion of existing facilities.
If these projects move forward they will include an analysis of operating impact to the budget.
For example, a future project listed in the summary includes expansion of the recreation center.
This would have an operating impact dependent upon the programs offered and facilities added
to the center. These types of projects will only be funded with a corresponding plan to
incorporate the impact to the operating budget.

CAPITAL IMPROVEMENTS PROGRAM FUNDING

Due to the nature and total cost of approved projects, General Obligation Bonds, Certificates of
Obligation and Revenue Bonds are major sources of funding. In an effort to reduce the issuance
of future debt, for reasons previously discussed, the City pursues other sources of capital funding.

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