Page 218 - Southlake FY24 Budget

For FY 2014, a 3% exemption was adopted on a permanent basis, and for FY 2015, a 10% exemption was
adopted. For FY 2016, a 12% exemption was included, for FY 2017, the exemption was increased to 16%,
and in FY 2018, City Council approved increasing the exemption to 20% which is the maximum allowed
by State law. For FY 2019, City Council approved the 20% homestead exemption and reduced the tax
rate by $0.015. For FY 2020, City Council approved the 20% homestead exemption and reduced the
tax rate by $0.037, bringing the adopted tax rate below the no new revenue tax rate. For FY 2021, City
Council approved the 20% homestead exemption and reduce the tax debt rate by $0.005, continuing to
keep the adopted tax rate below the no new revenue tax rate. For FY 2022, City Council continued the
20% homestead exemption and reduced the tax operating rate by $0.005 and the tax debt rate by $0.01,
continuing to keep the adopted tax rate below the no new revenue tax rate. For FY 2023, City Council
continued the 20% homestead exemption and reduced the tax operating rate by $0.03, continuing to
keep the adopted tax rate below the no new revenue tax rate. For FY 2024, we are continuing the 20%
homestead exemption and reducing the tax operating rate by $0.04, continuing to keep the adopted tax
rate below the no new revenue tax rate.
Strategic Initiative Fund
Capital Improvement Program (CIP). In 2006, the City had identified over $22 million in General Fund
capital projects that needed to be addressed, but were unfunded for the five-year planning period. Given
that the City’s annual General Fund bond program was $3 million, it was difficult to see how the City
would be able address the critical infrastructure projects in a timely manner. The SIF presented a way for
the City to infuse cash into its CIP. For FY 2006, almost $750,000 was transferred from the SIF to the CIP,
allowing the City to address more projects than initially thought possible.
Since that time, the City has been able to increase its cash funding for the CIP, lessening the debt the City
has to take on to make appropriate investments into needed street, sidewalk, drainage, facility, and other
improvements. About sixty-five percent of the SIF allocations since 2006 have been used as cash funding
for CIP projects, which ultimately means the City avoids borrowing costs for addressing those projects.

The City has also used the SIF to purchase expensive, but necessary equipment, such as fire apparatus
and ambulances, make improvements to City facilities such as the Senior Activity Center, improve the
City’s technology infrastructure, and establish a much needed facility maintenance reserve fund. The chart
on the previous page details SIF projects funded since 2006.

Like many other municipalities, the City was impacted by the 2008 economic recession and had to make
decisions during those years to freeze pay, leave certain positions unfilled, and defer the purchase of
needed equipment in order to achieve structural balance with its budget. But the impact of the recession
was minimized by the SIF. The SIF has been an important tool for the City of Southlake to use to weather
economic events like the recession by allowing the City to move forward with capital projects without
compromising the City’s fund balance, raising taxes, or increasing the City’s debt load.

The City’s budget is sustainable and healthy, and able to withstand the effects of unforeseeable economic
impacts. This is due, in part, to the City’s use of innovative financial practices, such as the SIF.

218 FY 2024 City of Southlake | Budget Book