Page 64 - Southlake FY23 Budget

BUDGET OvERvIEw

BUILDInG THE BUDGET
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 of the 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 - 3.7%
FRANCHISE FEES - 2.3%
SANITATION SALES - 2.0%
HOTEL TAX - 1.3%
PERMITS/FEES - 1.2%
MISCELLANEOUS - 0.8%
FINES - 0.8%
STORM WATER-RESIDENTIAL - 0.7%
STORM WATER-COMMERCIAL - 0.5%
SALES TAX
30.13% OTHER UTILITY CHARGES - 0.3%
RENTAL INCOME - 0.1%
WASTE WATER SALES INTEREST INCOME - 0.1%
7.02%

TIF DISTRICT
7.20%

WATER SALES-RESIDENTIAL
12.86%
AD VALOREM TAXES
25.03%

Figure 5: All funds revenue by Source

BUDGET BOOK | FY 2023 City of Southlake 63
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