Page 151 - CityofSouthlakeFY25AdoptedBudget

Revenues

The City relies on many sources of revenue and the strategic use of reserves to fund services to the
community at a stable and sustainable level. The largest revenue categories are ad valorem (property) and
sales taxes, followed by franchise fees, charges for services, and usage fees.

Taxes. Taxes, both property and sales, imposed by a government for the purpose of raising revenue to
support governmental activities, are distinct from fees in that a tax does not need to be levied in proportion
to the specific benefit received by a person or property. The majority of the City’s tax revenues are received
by the General Fund, the primary general purpose fund of the City. Taxes account for nearly 86% of
revenues in the General Fund supporting many of the City’s most essential services such as police, fire, road
maintenance, library and parks. In addition to funding the General Fund, a portion of the sales tax goes to
funding the Crime Control Prevention District, Southlake Parks Development Corporation, and Community Multiyear Operating Plan
Enhancement Development Corporation as allowed by state law. More about each of these funds can be
found in the Special Revenue Fund section of this book.

Fees. Service fees are another source of revenue for the City. A diverse set of fees are charged to recover
all or a portion of the City’s costs for providing a service or access to public property, or for mitigating
the impacts of the fee payer’s activities on the community. Fees are established to support the estimated
reasonable cost of providing the service or facility for which the fee is charged. Due to this guideline and
legal restrictions related to their expenditure, many of the City’s fees are accounted for in separate funds.
By far, the largest source of fee revenue comes from the provision of water, wastewater and solid waste
collection services. Other significant service fees include development related fees and impact fees. Impact
fees are especially volatile as they are driven by specific requirements from development to mitigate the
impact of new development on city infrastructure. As they are paid and received by developments, they
express volatility. This is not a year over year issue, however, as they are restricted to the construction of new
facilities or renovation and upgrade of existing facilities and not used for ongoing expenditures.

Forecasting key revenues correctly and conservatively is critical to ensuring the budget is balanced for
the coming fiscal year and for the health of future budgets. In addition to preparing a forecast prior to the

Figure 3

Economic Information Used for City Financial Projections

Economic Labor & Housing and Consumer
Commercial
Indicators Employment Growth Spending

Interest rates Wages Building Permits Retail sales
GDB Growth Unemployment Home values Projections
Fuel Costs Healthcare Costs Top Taxpayer
Meetings

FY 2025 City of Southlake | Budget Book 151