Page 254 - Southlake FY23 Budget

DEBT SERVICE FUnDS ExPEnDITURES

strategies 2.43% If all taxing entities hold their tax rates steady for FY
2023, 2.43% of the total tax bill for an average residential
Debt
property will go to support the City’s annual debt
payments. This is equivalent to $459 annually or about
$38 per month.

Cash Funding
$81M

Since 2006, the City has
used the Strategic Initiative
Fund to pay cash for capital
projects. Over $81.5 million What you shoulD knoW about the City’s Debt management
has been allocated for this
purpose. This means less
borrowing. Additionally, this aaa
use of cash funding when
combined with aggressive
amortization schedules has Our debt management strategies
allowed the City to reduce its receive a rigorous annual review
total outstanding property from bond rating agencies tasked
with letting potential borrowers
Some debt is necessary
tax supported debt by 74% and appropriate to ensure know how credit-worthy the city Voter-approved special tax
levies have been pledged
since 2010. intergenerational equity. In is. Right now the City has three to pay for bonds used to
other words, paying cash AAA ratings — a strong external construct facilities identified
for 100% of capital projects endorsement of the City’s financial in the City’s parks and trails
would front-load the cost management. master plans, as well as
of 20-year assets on today’s public safety facilities.
taxpayer.

Three highlights about FY 2023 debt

1. Continued cash funding of capital projects
Aggressive To continue our debt strategy to reduce our long-term debt as a percent of assessed valuation, the
Amortization City pays for a portion of capital projects in cash. In FY 2023, the City will pay for 70% of the capital
budget in cash, for a total of $30,973,000.
100% 2. Property tax supported debt per capita reduced

The City uses aggressive Through the City’s use of cash and aggressive amortization schedules when debt is issued, the City
has reduced the property tax supported debt per capita from $3,506 in 2010 to $913 in 2023.
amortization schedules. As
such, initial debt payments 3. Ongoing Southlake 2030/2035 Master Plan implementation
may be higher, but Through the City’s use of cash and aggressive amortization schedules when debt is issued, the City
borrowing costs are lower has built capacity for future needs that may require the issuance of new debt to implement the
and debt is paid off more Southlake 2030/2035 Master Plan recommendations. In FY 2023, nearly 90% of the projects in the
quickly. All of the existing Capital Improvements Program are linked to a master plan.
property tax supported debt
will be paid off in less than
10 years.

BUDGET BOOK | FY 2023 City of Southlake 253
WWW.CITYOFSOUTHLAKE.COM