Page 70 - Southlake FY22 Budget

BUDGET OVErVIEW

BUILDInG THE BUDGET

CITY rEVEnUES AnD rESOUrCES

The City relies on many sources of revenues and the strategic use of reserves to fund services to the community at a
stable and sustainable level. The largest revenue categories are ad valorem (property) and sales taxes, followed by
franchise fees, charges for services, and usage fees.

Taxes
Taxes, both property and sales, imposed by a government for the purpose of raising revenue to support governmental
activities, are distinct from fees in that a tax does not need to be levied in proportion to the specific benefit received
by a person or property. The majority of the City’s tax revenues are received by the General Fund, the primary general
purpose fund of the City. Taxes account for nearly 87% of revenues in the General Fund supporting many of the City’s
most essential services such as police, fire, road maintenance, library and parks. In addition to funding the General
Fund, a portion of the sales tax goes to funding the Crime Control Prevention District, Southlake Parks Development
Corporation, and Community Enhancement Development Corporation as allowed by state law. More about each of
these funds can be found in the Special Revenue Fund section of this book.

Fees
Service fees are another source of the revenue for the City. A diverse set of fees are charged to recover all or a
portion of the City’s costs for providing a service or access to public property, or for mitigating the impacts of the
fee payer’s activities on the community. Intended for cost recovery, a fee may not exceed the estimated reasonable
cost of providing the service or facility for which the fee is charged. Due to this requirement and legal restrictions
related to their expenditure, many City’s fees are accounted for in separate funds. By far, the largest source of fee
revenue comes from the provision of water, wastewater and solid waste collection services. Other significant service
fees include development related fees and impact fees. Impact fees are especially volatile as they are driven by
specific requirements from development to mitigate the impact of new development on city infrastructure. As they
are paid and received by developments, they express volatility. This is not a year over year issue however as they are
restricted to the construction of new facilities or renovation and upgrade of existing facilities and not used for ongoing
expenditures.

OTHER REVENUE SOURCES
WATER SALES-COMMERCIAL - 4.0%
CHARGES FOR SERVICE - 3.4%
FRANCHISE FEES - 2.3%
SANITATION SALES - 2.1%
PERMITS/FEES - 1.1%
MISCELLANEOUS - 0.8%
HOTEL TAX - 0.8%
FINES - 0.8%
STORM WATER-RESIDENTIAL - 0.8%
SALES TAX
27.07% STORM WATER-COMMERCIAL - 0.5%
OTHER UTILITY CHARGES - 0.3%
INTEREST INCOME - 0.2%
WASTE WATER SALES RENTAL INCOME - 0.1%
6.99%
TIF DISTRICT
8.38%

WATER SALES-RESIDENTIAL
AD VALOREM TAXES 13.62%
26.66%

Figure 5: All funds revenue by Source
BUDGET BOOK | FY 2022 City of Southlake 69
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