Page 263 - Southlake FY24 Budget

Introduction

The City of Southlake has 54 funds with specific purposes which are defined by federal, state, or local
laws. They include the General Fund which is used for general city operations, the Utility Fund which
is used to support the City’s water, sewer, drainage, and solid waste service, and a multitude of Special
Revenue and Capital Project Funds. Simply stated, funds are set up like separate companies which must
operate under specific parameters.

For example, the City receives $0.02 of sales tax for every dollar spent in our city limits. One of those
pennies goes to the General Fund and can be spent on general operating costs, like supplies, salaries,
and general maintenance. The other penny is split between our Crime Control and Prevention District, Special Revenue Funds
the Southlake Parks Development Corporation and the Community Enhancement and Development
Corporation. These three units of the City of Southlake were voted on by the residents, but state
law determines how that money is spent. We can only use it for the purposes outlined in the original
referendum presented to the voters, so we set up separate funds to account for the revenues and
expenditures of each unit.

In another example the City receives proceeds from bonds issued for various projects. The Official
Statement for a bond issue outlines how much money the City will receive, how that money will be
repaid, and on what the money can be spent. This document is legally binding on City officials and is
enforced by federal, state, and local laws. If the Official Statement says we received $12,000,000 for
roadway improvements, City Council and management may not opt to spend it on equipment or supplies.
The money is recorded in a Capital Project Fund for roadway improvements and can only be spent on
roadway improvements.

Although these examples are for three very specific funds, the same concept of expense restrictions
applies to all special revenue funds. As a result, reporting revenues and expenses for the City of Southlake
includes 54 miniature financial statements in addition to a Citywide financial statement. It may appear that
money is available to spend when in fact the majority of the money is restricted by law. The chart at left
shows the structure of all of the City of Southlake’s funds. This section of the budget document will focus
on those special revenue funds that are highlighted.

FY 2024 City of Southlake | Budget Book 263