Page 324 - Southlake FY22 Budget

DEBT SErVICE FUnDS EXPEnDITUrES

strategies 2.89% If all taxing entities hold their tax rates steady for
FY 2022, 2.89% of the total tax bill for an average
Debt
residential property will go to support the City’s
annual debt payments. This is equivalent to $413
annually or about $34 per month.

Cash Funding
$64M

Since 2006, the City
has used the Strategic
Initiative Fund to pay
cash for capital projects. What you shoulD knoW about the City’s Debt management
Over $64.8 million has
been allocated for this
purpose. This means less
borrowing. Additionally, $24.3m
this use of cash funding
when combined with To continue our debt strategy
aggressive amortization to reduce our long-term debt
as a percent of assessed
schedules has allowed valuation, the City pays for
the City to reduce Some debt is necessary a portion of capital projects Voter-approved special
tax levies have been
and appropriate to
its total outstanding ensure intergenerational in cash. In FY 2022, the City pledged to pay for
property tax supported equity. In other words, will pay for 74% of the capital bonds used to construct
debt by 78% since 2010. paying cash for 100% of budget in cash, for a total of facilities identified in the
capital projects would $24,256,880. City’s parks and trails
front-load the cost of master plans, as well as
20-year assets on today’s public safety facilities.
taxpayer.

Three highlights about FY 2022 debt

1. City’s debt tax rate reduced for fourth consecutive year
Aggressive The City’s conservative approach to managing debt, aggressive amortization, consistent
Amortization monitoring of favorable market conditions, and refinancing existing debt all contributed
to reducing the debt portion of the City’s tax rate by 25% since FY 2018, bringing the
100% adopted debt rate for FY 2022 to $0.065 per $100 valuation.

The City uses aggressive 2. Property tax supported debt per capita reduced
Through the City’s use of cash and aggressive amortization schedules when debt is
amortization schedules. issued, the City has reduced the property tax supported debt per capita from $3,506 in
As such, initial debt 2010 to $768 in 2022.
payments may be higher,
but borrowing costs are 3. Ongoing Southlake 2030/2035 Master Plan implementation
lower and debt is paid Through the City’s use of cash and aggressive amortization schedules when debt is
off more quickly. All of issued, the City has built capacity for future needs that may require the issuance of new
the existing property tax debt to implement the Southlake 2030/2035 Master Plan recommendations. In FY 2022,
supported debt will be 100% of the projects in the Capital Improvements Program are linked to a master plan.
paid off in less than 10
years.

BUDGET BOOK | FY 2022 City of Southlake 323
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