The proposed FY 2021 Budget has been submitted by City Manager Shana Yelverton to the City Council for consideration.
The proposed budget totals $105.2 million and includes a ½ cent debt tax rate decrease, reducing the total rate to $0.405. The tax rate reduction means a revenue reduction to the City of $388,500.
Southlake’s 20% homestead exemption continues for FY 2021, the highest amount allowed by law. The 20% homestead exemption means homeowners of an average-valued home in Southlake will receive the equivalent of an 8.1 cent tax rate reduction.
“Several years ago, the Council set tax cuts for our citizens as a goal,” Mayor Laura Hill said. “At the end of the day, our taxpayers expect us to manage tax dollars responsibly and it is important that the City is a good steward and using the funds for the betterment of the community.”
The City Council has been working strategically for meaningful tax relief for homeowners, managed with the consideration that Southlake continues to grow, and infrastructure will need to be created and maintained. View a timeline of tax relief initiatives.
How did the City come up with this budget?
Chief Financial Officer Sharen Jackson presented the FY 2021 Budget Guiding Principles at the August 4 City Council meeting, sharing the strategy map to deliver on six focus areas: Safety and Security, Mobility, Infrastructure, Quality Development, Partnership and Volunteerism and Performance Management and Service Delivery. Watch the presentation.
“In preparation for the budget, I look at several data sources to help project revenue,” Jackson said. “Using data from the residential and commercial sectors, employment numbers, consumer spending, and the impact from COVID-19, I analyze various economic scenarios to determine what we can expect in the future and make financial projection decisions accordingly.”
Using a modified zero-based budget process, department directors prepare plans to fund the services the city will offer. Proposed expenses are carefully vetted before they are included in the budget proposal.
The budget includes project recommendations from the comprehensive plan and prioritizes CIP projects according to the Master Plans and the City’s ability to fund them. Cash will be used to pay for most of the important capital improvement projects. The City will issue short-term bonds to supplement cash payments.
The amount budgeted for capital projects is $13.7 million. Planned capital improvement projects include improvements for drainage, parks projects like the Southlake Sports Complex improvements, as well as traffic and intersection safety initiatives.
The conservative budget sets up Southlake with an eye towards the future given the COVID-19 pandemic while maintaining essential services like streets, water and sewer, as well as envisioning other projects to make Southlake the ideal place to live, work and play.
What about reducing debt?
The total debt fluctuates depending on projects funded during the year. Since 2010, the City’s property tax-supported debt has been reduced by 69%. The remainder of the current property tax debt obligations will be paid off in less than ten years.
“This is an important gauge of the City’s fiscal health and an important indicator that bond rating agencies review when determining the rating they will assign to city debt,” Jackson said.
The debt reduction prepares the City to handle projects that will require bonds in the future, such as a new library, a potential open space program, CIP projects, and updating the aging infrastructure.
How is the City managing expense growth?
As a practice, the City limits operation budget growth to a benchmark reflective of the consumer price index. This means the cost of existing services shouldn’t exceed the cost growth of services in DFW. For FY 2021, the proposed General Fund budget growth is 1.5%.
Structural balance is a guiding principle to budget creation in Southlake. The City does not draw down from its reserves to pay for operating expenses and projected revenue must cover all planned expenses. Through this mindset, the City has paved the way to achieving optimum reserves and exceed the optimum fund balance to create an opportunity to pay cash for large projects.
What about providing quality services?
The outlined budget aims to continue the Southlake tradition of quality services not only with projects but with hiring and keeping quality public servants. Even with an estimated revenue reduction, the City of Southlake does not anticipate pay cuts or layoffs.
The proposed budget ensures the City of Southlake retains and recruits world-class employees. Under the General Fund accounts, about 70% goes toward labor-related costs. This includes compensation and benefits that are market competitive but holds the line on costs. In 2021, the City proposes a cost of living adjustment of 1.5% consistent with the City’s policy on compensation.
What’s the financial plan during so much economic uncertainty?
Most importantly, the budget presented is sustainable into the future.
Following the financial guiding principles positions the City for budget stability, even during difficult economic times.
“The decisions we make today affect our financial situation in the future,” Yelverton said. “We must provide outstanding service to the community while balancing our ability to pay in the coming years.”
Learn more about the FY 2021 budget at www.CityofSouthlake.com/FY2021.
City Manager Shana Yelverton has filed the proposed FY 2018 Budget for City Council consideration.
The proposed budget includes an already approved 20% homestead exemption for homeowners, a steady tax rate, significant investments into safety and security, improved roads and road capacity, and operating dollars for the new recreation center, The Marq Southlake, Champions Club.
Homeowner Tax Payer Relief and Reducing Debt
Seven homestead exemption initiatives have been approved by the City Council since 2009, including the 20% homestead exemption adopted for FY2018.
This 20% homestead exemption is an increase from the 16% exemption adopted in 2017 and marks the highest homestead exemption allowed by law.
“Tax relief for the homeowner has been a priority of the City Council since 2009,” said Chief Financial Officer Sharen Jackson. “The 20% homestead exemption will provide a reduction in value of $132,400 for an average-valued home in Southlake; this is equal to a 9.25 cent tax rate reduction and is part of the City’s commitment to targeted tax relief.”
The city of Southlake has also been able to manage debt so that 93% of the City’s current tax-supported debt will be retired in 10 years. Through the City’s use of cash and aggressive pay-back schedules when debt is issued, the City has reduced the property tax supported debt by 52% since 2010. The FY 2018 budget provides cads funding for General Fund capital projects.
Safety and Security
For FY 2018, numerous investments will be made into Safety and Security.
“Recruiting, and retaining our police officers and firefighters is the best investment that we can make into Southlake’s continued safety and security,” said City Manager Shana Yelverton. “We will also focus on equipment needs such as protective headgear and ballistic vests to better equip our public safety personnel with what they need to do their jobs.”
The proposed budget includes funding for police and fire cost of living and merit pay increases, as well as dollars to support the competitiveness of their pay plan in the City’s labor market.
Additionally, City Council will consider budgeting the resources necessary to adjust the pay plan for stronger entry pay during budget deliberations in September.
“The DFW labor market for police officers and firefighters is extremely competitive,” said Yelverton. “Should Council choose to take the extra steps of improving our public safety compensation framework, we believe we will be in a better position to recruit high quality personnel and keep them longer.”
Other safety investments will include improvements to school zones and the City’s cybersecurity as well as enhancing treatments for areas that have seen significant mosquito activity.
This year’s Capital Improvement Program (CIP) prioritizes better mobility around Southlake. Projects include the expansion of North White Chapel, from Emerald to State Highway 114, continued improvements to FM 1938/Randol Mill Road and improvements to State Highway 114. There are also planned improvements to Kirkwood Boulevard and the City’s continued commitment to maintaining the roadway improvements.
“These key cash-funded investments into our roads are important to help keeping everyone moving,” said Yelverton. “But we are also focusing funds on better signal timing on Southlake Boulevard and laying the ground work for intelligent transportation systems which, by using current and emerging technology, will help people get to where they need to go.”
The Marq Southlake
The Marq Southlake Champions Club will be a primary focus in FY 2018. The recreational facility will open the fall of 2018 with an aquatic center, fitness area, gymnasium, jog/walk track, indoor playground and an indoor and outdoor turf area. The proposed budget includes funding for necessary staff and operating needs to provide the services that will be offered.
“The Marq Southlake Champions Club will open in the fall of 2018 and it’s going to be an exciting time,” said Yelverton. “As the building is going up, staff will be getting the word out about memberships, hiring instructors and other important information so that we’re ready when the doors open.”
For a complete look at the proposed FY 2018 budget please visit CityofSouthlake.com/FY2018.
“For FY 2014, the City will make deliberate and strategic investments into projects and infrastructure which will result in improved mobility, better emergency response, and strong support of our local businesses, said City Manager Shana Yelverton. “These investments are designed to be long-term and will serve the Southlake community for years to come.”
This new budget year will see the opening of DPS North. The facility will serve as a much needed training facility for the fire department and the police department. It will also provide another layer of safety to the residents who live in the northern part of the City by reducing emergency response times as well as offer some possible insurance cost relief for Southlake residents.
FY 2014 will also mark the first year that a school resource officer will be present in every Carroll ISD campus. The officers were added after a Mayor’s task force made up of elected leaders from the City, Carroll ISD as well as citizen leaders made a joint recommendation to the City.
“The addition of the school resource officers is a service enhancement this year,” said Assistant City Manager Ben Thatcher. “This program is unique to our area and we are looking forward to working with CISD, as well as the parents and children of Southlake to ensure a positive and safe learning environment.”
For the eleventh straight year, the City Manager is proposing a tax-rate of .462¢ per $100 valuation. The City Manager is also proposing to the Council an ongoing, annual homestead exemption for all homeowners. This will equate to approximately $15,000 of ad valorem tax relief for the average valued home.
“For nearly a decade the City has pursued a steady decrease in the City’s debt as a percentage of assessed value which is now 1.19%,” said Chief Financial Officer Sharen Jackson. “This coupled with the fact that approximately 70% of Southlake’s debt is self-supporting, and re-payment comes from sources other than property taxes helps support Southlake’s two AAA bond ratings.”
In late FY 2014, residents will likely see construction begin on the Community Recreation Center. In early August, City Council approved funding for Phase 1 design which includes a new senior center space, a community events hall, and an outdoor amphitheater.
The City has also created a new fund for FY 2014 to further support the City’s commitment to Economic Development and business retention.
“The Economic Development Fund will be an important tool in the years to come as the City focuses on some key areas of business development,” said Assistant City Manager and Interim Economic Development Director, Alison Ortowski. “Working with the Council, we want to attract and retain businesses which will complement the City now and in the years to come.”
Other considerations being submitted to the City Council include a two-percent (2%) pay adjustment for employees as well as implementation of a new employee compensation plan which will help establish pay expectations for City employees.
The Council will conducted its first budget work session on August 20th starting at 5:30 p.m. First reading is scheduled to take place on September 3rd with second reading and the public hearing scheduled to take place September 17th.
Please visit www.CityofSouthlake.com/FY2014 for budget updates and to review the proposed budget online.