Page 244 - Southlake FY24 Budget

Debt Management

The City takes it debt obligation very seriously. Several years ago, the City Council working with City
staff set goals to reduce the debt as percentage of assessed valuation over the total long term. As you
can see in Figure 3 (below), we have reduced the percentage from 3.01% in 2003 to 0.28% in 2024, during
a time of growth for the city. The line that you see on this chart is a graphic illustration of one of the
reasons why three bond agencies have rated Southlake AAA. It should be noted that although the total
debt issued has fluctuated based on the timing of important projects, the City has generally reduced its
property tax supported obligations since 2003.

The City of Southlake is fortunate to have been rated as a AAA credit by Fitch Ratings, Moody’s, and
Standard & Poor’s. This is the highest possible rating given to a credit. Not only does it reinforce that the
Debt Service
City has strong financial management tools, it also allows for favorable borrowing conditions when the
time is right.

The City has been able to effectively manage its debt during a period of growth using cash to partially
offset borrowing needs. Additionally, managing debt amortization has been a tool used to reduce
borrowing costs.

Figure 3

Long-term Debt as a Percentage of Assessed Valuation

LONG-TERM DEBT DEBT AS % OF ASSESSED VALUATION
3.50% $120,000,000
DesireD range
3.00% 2.79% $100,000,000

3.01%

2.50% 2.36%
2.07% 2.00% 1.71% $80,000,000

PERCENTAGE OF VALUATION 1.50% 1.46% 1.49% 1.51% 1.49% 1.37% 1.19% 1.12% $60,000,000 DOLLARS
2.00%

0.92%
1.00%
0.72% 0.58% $40,000,000

0.50% 0.44% 0.34% 0.27% 0.22% 0.24% 0.28% $20,000,000

0.00% $-
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

FISCAL YEAR
244 FY 2024 City of Southlake | Budget Book