Page 27 - Southlake FY22 Budget

TrAnSMITTAL LETTEr

are also proposing funding for the addition of a community event to celebrate the reconstruction of the Bob
Jones Nature Center barn.

Operational Increases. There are several requests that maintain the City’s current service levels, but require
additional funding to do so. These include moving funding for city-wide tree trimming and the street tree
program from the Reforestation Fund to the General Fund, proactive cleaning for city facilities for employee
and visitor wellness, and increasing the library materials to align with industry benchmarks. The full list of
expenditure highlights can be found in the General Fund expenditure highlight tables.

Fund balance. The City of Southlake Fund Balance Policy, adopted in 1993, states that the “goal shall be
to maintain a fund balance in the General Fund equal to a minimum of 15% of General Fund-budgeted
operating expenditures, with the optimum goal of 25%.”

The adopted budget reflects an undesignated General Fund balance of 25.41% of expenditures, which
represents $11,062,268, and follows the optimum balance defined in the City’s policy.

Excess revenue and unspent appropriation above the 25% level are set aside for critical, high-impact projects
as a transfer to the Strategic Initiative Fund (SIF). Details about the transfer into the SIF and the use of these
dollars can be found later in this letter.

Maintaining a fund balance at the optimum level identified in the City’s policy addresses
the focus area of Performance Management & Service Delivery and the strategic
corporate objective of “Achieve fiscal wellness standards.”

deBT serviCe fund

For FY 2022, revenues are estimated at $5,401,575 with $5,395,275 coming from ad valorem taxes,
reduced by the proposal of a one cent rate decrease, and $6,300 from interest income. Transfers into the
fund are budgeted at $173,859 to pay the debt service for the bonds issued on behalf of special districts.
Total expenditures are adopted at $5,346,132 for annual principal and interest payments, as well as related
administrative costs.

The Debt Service Fund is projected to end the 2022 fiscal year with reserves of $3,284,337. The fund balance
allows us to meet our fund balance policy which states that the City of Southlake “…shall also maintain
Reserve Funds for all statutorily required reserve funds to guarantee debt service.”

The capital projects funded through the City’s bond program address the focus areas of
Infrastructure and Mobility, and the strategic corporate objective of “Invest to provide
and maintain high quality public assets.”

uTiliTy fund

The Utility Fund, also known as the Water and Sewer Enterprise Fund, is used to account for the acquisition,
operation, and maintenance of Southlake’s municipal water and sewer utility, supported primarily by user
charges to utility customers. The fund accounts for operational costs as well as debt service for utility system
improvement bonds. The intent of this fund is for the direct beneficiaries to pay for all costs of the fund –

26 FY 2022 City of Southlake | BUDGET BOOK
WWW.CITYOFSOUTHLAKE.COM