Page 57 - Southlake FY23 Budget

BUDGET OvERvIEw

GUIDE TO THE BUDGET DOCUmEnT

What follows is an explanation of the funds themselves and how they contribute to the overall budget.

General Fund:
The City’s principal operating fund, which is supported by taxes, fees, and other revenues that may be used for
any lawful purpose. This fund accounts for all activity not specifically accounted for in other funds. It includes
such operations as police, fire, engineering, planning, finance and administration. It is City policy to maintain an
undesignated fund balance (reserves) for emergencies or unforeseen circumstances equivalent to 15-25% of planned
expenses.

Strategic Initiative Fund:
This fund was created in 2006 for the purpose of taking General Fund balance reserves in excess of the City identified
optimal fund balance level and using them for one-time expenditures for high-impact projects such as infrastructure
maintenance, community enhancement, technology and capital acquisition.

Economic Development Investment Fund:
The Southlake 2035 Economic Development & Tourism Strategic Plan includes the following as recommendation
4.3: “Southlake should establish a fund to use to attract and retain employers, as well as to help retain and expand
existing businesses.” This fund was created in 2013 for that purpose and its use is governed by a City Council-
adopted policy.

Facility Maintenance Reserve
The purpose of this fund is to build capacity for future maintenance projects as we will have many needs to address
as our facilities age. The Strategic Initiative Fund (SIF) has provided regular transfers for this fund, an important
element of our budget given the size and complexity of the City’s facility infrastructure. For the upcoming fiscal year,
we will continue our practice of transferring SIF money into this fund, but we are also budgeting expenses in the
operating budget for facility projects.

Technology Infrastructure & Security Fund
The Technology Infrastructure & Security Fund was created in 2017 to build capacity for current and future
technology needs. Expenditures in this fund are used to maintain, enhance and replace technology infrastructure
and enterprise software to ensure the City receives the most reliable and best value with technology investments. In
order to keep up with the increasing number and complexity of security threats, this fund also supports technology
security projects and programs.

Utility Fund:
The Utility Fund is an enterprise or business fund. This means that the direct beneficiaries of the “business” pay for
all costs through fees or rates. Water, sewer service, and solid waste service revenues generated through our rates,
as well as the expenses for providing these services are accounted for in the Utility Fund. As with the General Fund,
prudent financial management and bond requirements make it necessary to have healthy reserves. Rather than
stating the reserves as a percentage of operating expenses, it is stated as days of working capital. It is our goal to
have no less than 60 to 90 days of working capital on hand.

Vehicle Replacement Fund:
This fund accounts for the resources needed to manage the purchase of vehicles for the City’s fleet. The
establishment and funding of the vehicle replacement program was designed to even out expenses for the City’s
fleet from year to year and provide a logical method for purchasing and retiring vehicles.

Debt Service Fund:
Although the Strategic Initiative Fund provides cash for pay-as-you-go capital projects, the City still must borrow to build
needed infrastructure. As mentioned, a portion of the revenue generated by the property tax rate is allocated to support

56 FY 2023 City of Southlake | BUDGET BOOK
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