Page 66 - Southlake FY23 Budget

BUDGET OvERvIEw

BUILDInG THE BUDGET
Building the Budget

current cost of doing business. Any expenses that are service enhancements or unfunded legislative mandates are
not included in this self-imposed limit. The CPI used in the FY 2023 budget is shown in Figure 6. These are just some
of the strategies that are used to manage expenses.

mAintAining oPtimum Fund BAlAnceS

Another important financial goal is ensuring the maintenance of optimum fund balances in operating funds, in
accordance with City policy, which can be found in the Appendix. Maintaining proper reserves increases the
organization’s ability to absorb or respond to temporary changes in the environment or circumstances, such as an
unanticipated event or changes related to operating revenues. Per the Fund Balance Policy, the undesignated fund
balance in the General Fund should range between 15% and 25% of operating expenses. For FY 2023, 25.39% of
General Fund operating expenses are reserved for unanticipated or emergency needs.

ForecASt exPenditureS
The City of Southlake conducts a five year forecast for the General Fund, Utility Fund, Hotel Occupancy Tax Fund, and
sales tax funds. These forecasts reflect the annual projected expenditures required to sustain the current adopted
level of service, meet debt obligations, and the obligations of the adopted Capital Improvements Program. In
addition to forecasting using the assumptions shown in this section, the financial model conducts several scenarios
to understand the health of the fund in the event of an impact on revenues. The forecast for the General Fund is
shown in the chart below.

general Fund FiVe year Financial Forecast*
Fy 2023 - Fy 2027

Fy 2023
reVenue ProPosed Fy 2024 Fy 2025 Fy 2026 Fy 2027
budget* Forecast Forecast Forecast Forecast
Revenues $53,954,094 $54,308,170 $55,143,011 $55,850,507 $56,060,037

Expenses $48,266,972 $50,357,555 $52,537,745 $54,343,128 $56,212,873

Surplus/ 5,687,122 3,786,504 2,605,266 1,507,379 (152,836)
(Deficit)

Net Transfers ($3,298,760) ($3,786,504) ($2,524,186) ($11,807) $634

Reserves $12,257,247 $12,421,358 $12,502,437 $13,998,009 $13,845,807

Reserves as a %
of Operating 25.39% 24.67% 23.80% 25.76% 24.63%
Expenses
*Forecast is not a budget, but is a preliminary estimate of FY 2023 to FY 2027 financial results.

ForecASt reSultS
The FY 2023 to FY 2027 five year financial forecast indicates a structurally balanced budget, while aligning with
the City’s financial principles. Under this forecast, the City of Southlake does not anticipate the need for service
reductions to meet the needs of today’s service levels. This forecast is continually updated throughout the fiscal year
to ensure continued accuracy of these projections.

BUDGET BOOK | FY 2023 City of Southlake 65
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