Fiscal Responsibility

Hurst Obligation Bonds  1977-2014 (Click to enlarge)

Up until 1994 we borrowed very little. After that, things changed. Little is known as to why the decision was made to begin borrowing. But the fact is, it began and it hasn't stopped. However, we can slow down and eventually halt it. The goal is to arrive at an equilibrium. A financial situation where in we spend a little bit less than we take in. We put aside the surplus in a fund for the future. Plan on maintenance, obsolescence, and replacement. If we have to borrow, we borrow short term because the payback is much smaller.

As of 2014, the city of Hurst, us taxpayers, issued Obligation Bonds for $143.3 million dollars. As of now, we will pay back a total of $200.6 million dollars. This means we will pay back $1.40 for every one of those borrowed dollars. Looking at it another way we could have spent $57.3 million more dollars on things we want only we wouldn't have had them as soon. (The borrowed amount is known, the payback is estimated. Could be more, probably not less.)

It would be a $200.6 million payback if we stopped borrowing today. But we cannot stop borrowing today because we have made commitments to purchase goods and services in the future. This is why I use the phrase “…slow down and eventually stop”.

Don’t get me wrong. We have, and will have, a lot of stuff ; large, pretty buildings, a nice library that has been remodeled 5 times, newly built fire stations, a new police station , swimming pools, workout centers, senior centers, tennis courts, many parks big and small, channelized (concrete sided) creeks and street drainage that makes us a regional model of flood control, and a sound, efficient city infrastructure (streets, sewer, water, etc.), plus the workforce to operate and maintain it all.

But I believe we could still have all that we have now, only one or two years in the future, by delaying some purchases until we had the money on hand, stretching out the construction timelines to more closely match our revenue stream, issuing only short term bonds, and never issuing long term bonds because they require the biggest payback.

Call me old fashioned but I believe debt should be kept to a minimum just to get out of paying the interest. Paying interest is simply throwing money in the trash in most cases.