Page 270 - Southlake FY23 Budget

SPECIAL REVENUE FUNDS

IntroductIon
The City of Southlake has 54 funds with specific purposes which are defined by federal, state, or local laws. They
include the General Fund which is used for general city operations, the Utility Fund which is used to support the
City’s water, sewer, drainage, and solid waste service, and a multitude of Special Revenue and Capital Project Funds.
Simply stated, funds are set up like separate companies which must operate under specific parameters.

For example, the City receives $0.02 of sales tax for every dollar spent in our city limits. One of those pennies goes
to the General Fund and can be spent on general operating costs, like supplies, salaries, and general maintenance.
The other penny is split between our Crime Control and Prevention District, the Southlake Parks Development
Corporation and the Community Enhancement and Development Corporation. These three units of the City of
Southlake were voted on by the residents, but state law determines how that money is spent. We can only use it for
the purposes outlined in the original referendum presented to the voters, so we set up separate funds to account for
the revenues and expenditures of each unit.

In another example the City receives proceeds from bonds issued for various projects. The Official Statement for a
bond issue outlines how much money the City will receive, how that money will be repaid, and on what the money
can be spent. This document is legally binding on City officials and is enforced by federal, state, and local laws. If
the Official Statement says we received $12,000,000 for roadway improvements, City Council and management
may not opt to spend it on equipment or supplies. The money is recorded in a Capital Project Fund for roadway
improvements and can only be spent on roadway improvements.

Although these examples are for three very specific funds, the same concept of expense restrictions applies to all
special revenue funds. As a result, reporting revenues and expenses for the City of Southlake includes 54 miniature
financial statements in addition to a Citywide financial statement. It may appear that money is available to spend
when in fact the majority of the money is restricted by law. The chart at left shows the structure of all of the City
of Southlake’s funds. This section of the budget document will focus on those special revenue funds that are
highlighted.

What are SPeCial revenue fundS?
Special revenue funds are general government funds where the source of revenue is dedicated to a specific purpose
as described below:

• Commercial Vehicle Enforcement
This fund accounts for fines collected from commercial vehicle violations. Use of these funds is restricted
for commercial vehicle enforcement, per State law.

• Community Enhancement and Development Corporation (CEDC)
The Community Enhancement and Development Corporation was formed when Southlake voters
approved the special levy of a 3/8 cent sales tax in 2015. The funds are dedicated toward the construction
of Champions Club at The Marq Southlake, a community events and recreation facility. Funds are used to
support operational expenses related to The Marq as well as special economic development projects.

• Community Enhancement and Development Corporation - Replacement Fund
The Community Enhancement and Development Corporation - Replacement Fund accounts for the
resources needed to manage the purchase of replacement equipment and capital outlay at The
Marq Southlake. The establishment and funding of the Community Enhancement and Development
Corporation - Replacement Fund was designed to even out expenses for the Community Enhancement
and Development Corporation from year to year and provide a logical method for purchasing and retiring
needed equipment and capital outlay.

BUDGET BOOK | FY 2023 City of Southlake 269
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