Page 234 - CityofSouthlakeFY25AdoptedBudget

In FY 2025, we are continuing the 20% homestead exemption
and propose reducing the tax operating rate by $0.014,
continuing to keep the adopted tax rate below the no new
revenue tax rate.

Capital Improvement Program (CIP). In 2006, the City had
identified over $22 million in General Fund capital projects
that needed to be addressed, but were unfunded for the five-
year planning period. Given that the City’s annual General
Fund bond program was $3 million, it was difficult to see
how the City would be able address the critical infrastructure
projects in a timely manner. The SIF presented a way for the
City to infuse cash into its CIP. For FY 2006, almost $750,000
was transferred from the SIF to the CIP, allowing the City to
address more projects than initially thought possible.

Since that time, the City has been able to increase its cash
Strategic Initiative Fund
funding for the CIP, lessening the debt the City has to take
on to make appropriate investments into needed street, Figure 2
sidewalk, drainage, facility, and other improvements. About sixty-five percent of the SIF allocations since
2006 have been used as cash funding for CIP projects, which ultimately means the City avoids borrowing
costs for addressing those projects.

The City has also used the SIF to purchase expensive, but necessary equipment, such as fire apparatus and
ambulances, make improvements to City facilities such as the Senior Activity Center, improve the City’s
technology infrastructure, and establish a much needed facility maintenance reserve fund. The chart on the
previous page details SIF projects funded since 2006.

Like many other municipalities, the City was impacted by the 2008 economic recession and had to make
decisions during those years to freeze pay, leave certain positions unfilled, and defer the purchase of
needed equipment in order to achieve structural balance with its budget. But the impact of the recession
was minimized by the SIF. The SIF has been an important tool for the City of Southlake to use to weather
economic events like the recession by allowing the City to move forward with capital projects without
compromising the City’s fund balance, raising taxes, or increasing the City’s debt load.

The City’s budget is sustainable and healthy, and able to withstand the effects of unforeseeable economic
impacts. This is due, in part, to the City’s use of innovative financial practices, such as the SIF.

Current Considerations
The use of the SIF as a budget technique for future years depends on several factors:

• The City’s ability to meet its operational expenses with a structurally balanced budget for the current
budget year and in a multi-year context;
• The City’s ability to maintain a fund balance within policy parameters;
• The City’s capital needs and its ability to fund those in a timely manner to ensure infrastructure needs
are addressed appropriately; and,
• Tax rate management.

234 FY 2025 City of Southlake | Budget Book