Page 301 - Southlake FY24 Budget

Capital Budget vs. Operating Budget
Despite being adopted in different cycles throughout the fiscal year, the Capital Budget and annual
operating budget are interconnected, most notably demonstrated by the division in the City’s tax rate
0.319 between funding for operations 0.264 and debt service 0.055. As property valuations fluctuate
and the tax rate is adjusted, funding capability for both operating and capital expenditures are impacted.
Additionally, the City is always mindful that as capital projects are completed, their ongoing maintenance
and operation will have an impact on the operating budget.

Annual operating costs can include personnel, scheduled repair and maintenance, and utilities in the case
of buildings. These operating cost estimates are developed by the project managers during the project
development process and estimates are included on each project information sheet that is used during Capital Improvement Projects
the prioritization process. To prepare for the future and avoid shortfalls, the City uses the annual operating
cost estimates to plan and develop future budgets.

The full operating impact of the capital projects is factored into the City’s forecasting and multi-year
financial plans and will be integrated into future budgets once those projects are completed and in
operation. A detailed table is provided in the CIP that is considered by the City Council each February and
this information is also included in the project status forms.

CIP Guiding Principles

Figure 4

FY 2024 City of Southlake | Budget Book 301