Southlake City Council approved the proposed FY 2020 Budget at the September 17 Council meeting. The FY 2020 budget is a plan that reflects the City’s commitment to strong financial principles. It’s a strategic budget that aligns resources with organizational goals and aspirations.
Not only was the budget developed with a clear set of goals to guide decision making and promote long-term financial sustainability, it also has several notable accomplishments.
Tax Rate Reduction
The FY 2020 Budget includes a 3.7 cent property tax rate reduction, the largest in more than 25 years. The City has not increased its tax rate in 16 consecutive years. The budget also offers homeowners a 20% homestead exemption, the maximum allowed by law. The exemption is equivalent to an 8.2 cent tax rate reduction.
Structurally Balanced Budget with Optimal Reserves
The newly adopted budget goes beyond the State’s balanced budget requirements by ensuring the City has adequate reserves and optimal fund balances. The FY 2020 budget calls for $83.5 million in total reserves across all funds.
Although we hope there won’t be a time we will have to use the reserve funds, carrying a solid reserve amount allows the City to be prepared for unanticipated or emergency events. For example, weather can wreak havoc on infrastructure and these funds help ensure the City can repair roads, clean up parks or respond to any other issue that may arise.
This new budget sets aside more than $10 million in reserves to be used without restrictions and more than $72 million can be used under certain guidelines and restrictions. Those guidelines include funding for water and wastewater utilities, parks and the Library just to name a few.
Ensuring the safety and security of all those who live, work or visit Southlake is a top priority for the City and these reserve funds help us keep everyone protected.
Debt management was also a key financial principle that guided the development of the City’s budget. The City of Southlake has been able to manage debt so that 96% of the City’s current tax-supported debt will be retired in 10 years.
Methods used to reduce the City’s debt obligation include careful budgetary management, the use of voter-approved special revenue funds, aggressive amortization schedules, ongoing attention to refunding opportunities and the use of cash for projects when possible.
These techniques and strong bond ratings have allowed for a reduction in the City’s property tax-supported debt by 61% since 2010 in spite of ongoing infrastructure development.
The FY 2020 budget proposes the use of cash to fund all General Fund Capital Improvement Projects. These projects will add to the City’s roadway and sidewalk infrastructure, improving travel throughout town. The City has extensive infrastructure that needs to be both built and maintained, this cash funding strategy has allowed for the City to balance the payment and timing of expensive CIP projects. For FY 2020, $8.3 million in cash will be used to pay for these capital projects.
Funding that Meets Resident Needs
The FY 2020 budget was designed to meet residents’ needs and ultimately make their lives in Southlake better. A part of the reason the City is able to consistently keep the property tax rate low is thanks to sales tax revenue remaining strong.
The City is able to leverage the monies received from not only the sales taxes but also the monies received from the special taxing districts such as the Community Enhancement Development Corporation and the Southlake Parks Development Corporation. The revenue collected from these special sales taxes allows for the funding of amenities such as The Marq Southlake, which features both Legends Hall and the newly opened Champions Club, and the construction and maintenance of the City’s 1197 acres of parks.
The new budget also provides for the City to continue to offer the highest levels of safety and security. Sales tax dollars from the Crime Control and Prevention District coupled with other budgeted dollars will provide new equipment to the police and fire departments to keep them at the top of their fields, providing our residents and businesses with quality, professional public safety services. Projects managed by our Public Works team will also be funded to help improve drainage, water and wastewater systems and our Parks team will use budgeted dollars to ensure our Parks are maintained with an eye toward quality. Funding all of these areas was done with our residents and customers in mind.
Interested in learning more about the FY 2020 budget and how it will make your life better in Southlake? Visit www.CityofSouthlake.com/FY2020