Debt management is a key financial principle that guides the development of Southlake’s budget every year. This approach supports a financial strategy that will allow the City to retire 94% of the current tax-supported debt in 10 years.
“The City uses several different methods to reduce debt, including careful budget management, use of voter-approved special revenue funds, aggressive amortization schedules, paying attention to refunding opportunities, and using cash when possible for major projects,” said Southlake’s Chief Financial Officer, Sharen Jackson. “Our approach has allowed for a reduction in the City’s property tax-supported debt by 60% since 2003 in spite of ongoing infrastructure development.”
“Debt as a percent of assessed value (property tax) has decreased from over 3% in 2002 to a projected 0.44% in 2019,” Jackson notes. “For the fifth straight year, there will be no new property tax-supported debt. The City will use cash to pay for general fund capital needs.”
Special Funds Debt
The City has several special funds that are responsible for paying principal and interest on outstanding debt. These include the Southlake Parks Development Corporation (SPDC) for park-related projects, the Crime-Control and Prevention District (CCPD) for safety and security initiatives, and the Community Enhancement and Development Corporation (CEDC) for projects like Champions Club at The Marq Southlake.
“SPDC, CCPD, and CEDC are voter-approved corporations or districts that help support many services that the Council and our residents have told us are important,” said Southlake City Manager Shana Yelverton. “These funds are supported by a percentage of sales tax and any time we take on capital projects supported by these funds or the general fund, the City pays for them either in cash or with Council-approved low-interest bonds that maximize the City’s AAA and AA+ bond ratings.”
The city also has several revenue bonds that pay for City’s water and sewer system improvements. Debt payment on these bonds is supported by Southlake Water Utilities ratepayers.
Paying It Off
At $0.447 cents for every one hundred dollars of valuation, the City of Southlake’s property tax rate supports basic city services such as public safety, street maintenance, library, and community services. It also helps pay off the debt that’s been incurred projects such as new roadway construction. The rate will apply $.0357 for general operations and $0.09 for the debt service fund.
Total debt service fund expenditures for FY 2019 are projected to be $6,186,261 for annual principal and interest payments, as well as related administrative costs. The projected debt service balance for FY 2019 is $5,826,015.
Special funds are paid off through their own debt funds. Currently, there are no debt obligations for the Crime Control Prevention District. For FY 2019, the SPDC Debt Service Fund will cover total expenditures of $2,886,537, and the CEDC Debt Service Fund will cover total expenditures of $2,451,406.
“The City takes it debt obligation very seriously, said Yelverton. “Several years ago, we worked with the City Council to establish a strategy to reduce the debt as a percentage of assessed valuation over the long term. It’s good to see that percentage decrease year after year.”
At the March 4, 2014 City Council meeting the Council was briefed by Assistant City Manager Ben Thatcher on the options of funding the proposed phase II of Southlake’s Community Recreation Center. Thatcher’s presentation and the discussion by the Council that immediately followed can be viewed below.
For more information about the Community Recreation Center, please visit www.SouthlakeCRC.com
The economy was cited as the number one issue in the 2012 presidential election by more than 60 percent of voters. Regardless of location, age or profession, it seems everyone is concerned about the country’s skyrocketing debt and their personal financial well-being.
To address these issues locally, the Southlake Chamber of Commerce hosted its “State of the Economy” luncheon January 31 with Thomas Siems, PhD, senior economist and economic outreach officer for the Federal Reserve Bank of Dallas. Siems stated the nation is progressing from recovery to expansion as a result of the Great Recession that began in 2008, but overall growth will be slow in 2013.
His presentation also compared Texas to other parts of the country and the world:
One of the best indicators of the local economy is sales tax revenue, which increased 7.2 percent during 2012 in Southlake for a total of $20.3 million. During November 2012, the kick-off to the holiday shopping season, Southlake collected $1.66 million, up 5.75 percent from 2011.
Southlake’s current sales tax rate is 8.25 percent, of which 6.25 percent goes to the state, one percent goes to the city’s general fund, and 0.5 percent is dedicated to each of two special revenue funds: Crime Control and Prevention District and Southlake Parks Development Corporation.
Greg Last, Director of Economic Development and Tourism for the City of Southlake, partially attributes this growth to new businesses and expanded services.
“We have several programs to help existing businesses as well as added services to highlight new businesses,” said Last, noting the department sends out a New Biz List each month to more than 650 email addresses. The list includes businesses that opened in the prior month as well as those that are ‘coming soon.’ He added “anyone can subscribe to the Biz List by contacting the Economic Development Department at email@example.com.
Of the 87 new businesses that opened in Southlake during 2012, many did fill retail, restaurant and office spaces previously left vacant as a result of the recession:
Also of note are two businesses that opened in 2012 in newly constructed buildings:
Looking ahead to 2013, Last expects continued growth with new businesses scheduled to open, including the 140,000 square foot Forest Park Medical Center in June, as well as several projects in the permitting or approval phase.
“Southlake’s economy is recovering stronger and faster than other areas. It is a regional destination for retail and restaurants and I expect that to continue.”
For more information and access to all Southlake businesses, visit the City of Southlake Economic Development website at www.SouthlakeBusinesses.com.