Page 156 - CityofSouthlakeFY25AdoptedBudget

Strategic Reserves

Another important financial goal is ensuring the maintenance of optimum fund balances in operating funds,
in accordance with City policy, which can be found in the Appendix. Maintaining proper reserves increases
the organization’s ability to absorb or respond to temporary changes in the environment or circumstances,
such as an unanticipated event or changes related to operating revenues. The following table shows reserves
and fund balances for the General Fund, Utility Fund, HOT fund and the sales tax funds.

Per the Fund Balance Policy, the undesignated fund balance in the General Fund should range between 15%
and 25% of operating expenses. For FY 2025, 25.64% of General Fund operating expenses are reserved for
unanticipated or emergency needs. Additionally, the fund balance policy for the Utility Fund establishes
a target of 60-90 days of working capital. The FY 2025 Utility Fund balance as well as future projections
anticipate a balance that is beyond the target in anticipation of infrastructure maintenance and replacement
projects as the City’s water and wastewater infrastructure ages. The other funds’ balances are determined by
multiple factors ranging from future anticipated needs, capital construction costs, equipment maintenance
and replacement, and debt service requirements.

Southlake Reserves and Projected Fund Balances - Major Funds
FY 2025 - FY 2029
Multiyear Operating Plan
FY 2025
FY 2027
FY 2028
Fund Adopted FY 2026 Forecast Forecast FY 2029
Forecast
Forecast
Budget
$13,969,152
$14,085,986 $14,549,038 $15,342,724 $15,661,549
25.64%
General Fund
fund balance as
% of operating
expenditures 25.10% 25.17% 25.77% 25.54%
$22,345,171 $21,796,158 $20,847,205 $19,958,057
$22,653,172
Utility Fund
279 days working 263 days working 247 days working 227days working 212 days working
capital capital capital capital capital
Hotel
Occupancy Tax $4,052,671 $3,908,510 $4,137,801 $4,340,603 $4,450,668
Fund

Southlake Parks
Development $13,069,866 $10,728,798 $9,423,639 $8,928,830 $10,530,878
Corporation

Crime Control
& Prevention $5,461,384 $5,262,968 $4,980,172 $4,607,669 $4,139,852
District Fund
Community
Enhancement
& Development $22,156,066 $24,819,890 $27,288,757 $31,745,249 $33,761,355
Corporation
Fund

156 FY 2025 City of Southlake | Budget Book