Page 242 - Southlake FY24 Budget

The City issues general obligation bonds, certificates of obligation, combination tax and revenue
certificates of obligation and tax notes to provide for the acquisition and construction of major capital
facilities and infrastructure. Certificates of obligation are used to fund construction of city facilities such
as buildings, roads and sidewalks. Revenue bonds are used to fund construction of city infrastructure
such as water and sewer system improvements as well as park improvements.

We want to help you understand the City’s use of debt by explaining the types of projects that we fund
by borrowing money, and what kind of bonds we use. This section will also help you understand the
obligations the City currently has, and how we balance the need to implement the City’s master plans
with fiscal responsibility.

It is important to note that our debt management strategies receive a rigorous annual review from bond
Debt Service
rating agencies tasked with letting potential borrowers know how credit-worthy the city is. Right now the
City has three AAA ratings — a strong external endorsement of the City’s financial management.

Tax Supported vs. Self-Supporting Debt

As you can see in Figure 1 (below), less than half of the City’s debt service for FY 2024 will be funded
through bonds tied to the City’s property taxes. For FY 2024, property tax supported debt service is
about $6.7 million. Property tax supported debt is primarily used for the construction of local roads and
sidewalks.

So, what does this mean for Southlake property owners? Figure 2 (next page) shows the total tax bill for
an average residential property in Southlake, reflecting a annual cost of $443 for property tax supported
debt. For this, the City is able to provide necessary infrastructure.

Figure 1
FY 2024 Total Debt Service

PROPERTY TAX SUPPORTED
DEBT
44%

SELF-SUPPORTING DEBT
56%

242 FY 2024 City of Southlake | Budget Book