Page 321 - Southlake FY22 Budget

DEBT SErVICE FUnDS EXPEnDITUrES

deBT managemenT

The City takes it debt obligation very seriously. Several years ago, the City Council working with City staff set goals to
reduce the debt as percentage of assessed valuation over the total long term. As you can see in Figure 3 (below), we
have reduced the percentage from 3.01% in 2003 to 0.22% in 2022, during a time of growth for the city. The line that
you see on this chart is a graphic illustration of one of the reasons why two bond agencies have rated Southlake AAA.
It should be noted that although the total debt issued has fluctuated based on the timing of important projects, the
City has generally reduced its property tax supported obligations since 2003.

The City of Southlake is fortunate to have been rated as a AAA credit by both Fitch Ratings and Standard & Poor’s. This
is the highest possible rating given to a credit. Not only does it reinforce that the City has strong financial management
tools, it also allows for favorable borrowing conditions when the time is right.

The City has been able to effectively manage its debt during a period of growth using cash to partially offset borrowing
needs. Additionally, managing debt amortization has been a tool used to reduce borrowing costs.

LONG-TERM DEBT DEBT AS % OF ASSESSED VALUATION
3.50% $120,000,000

Desired Range
3.00%
3.01% $100,000,000

2.79%
2.50% $80,000,000
PERCENTAGE OF VALUATION 2.00% 2.36% 2.07% 2.00%

1.71% $60,000,000 DOLLARS
1.50%
1.49% 1.51% 1.49%
1.46%
1.37%
$40,000,000
1.19%
1.00% 1.12%
0.92%
0.72% $20,000,000
0.50% 0.58%
0.44%
0.34%
0.27%
0.22%
0.00% $-
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
FISCAL YEAR

Figure 3: Long-term Debt as a Percentage of Assessed Valuation

320 FY 2022 City of Southlake | BUDGET BOOK
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