Page 258 - CityofSouthlakeFY25AdoptedBudget

Debt Service

The City issues general obligation bonds, certificates of obligation, combination tax and revenue certificates
of obligation and tax notes to provide for the acquisition and construction of major capital facilities and
infrastructure. Certificates of obligation are used to fund construction of city facilities such as buildings,
roads and sidewalks. Revenue bonds are used to fund construction of city infrastructure such as water and
sewer system improvements as well as park improvements.

We want to help you understand the City’s use of debt by explaining the types of projects that we fund
by borrowing money, and what kind of bonds we use. This section will also help you understand the
obligations the City currently has, and how we balance the need to implement the City’s master plans with
fiscal responsibility.

Debt Service
It is important to note that our debt management strategies receive a rigorous annual review from bond
rating agencies tasked with letting potential borrowers know how credit-worthy the city is. Right now the
City has three AAA ratings — a strong external endorsement of the City’s financial management.

Tax Supported vs. Self-Supporting Debt
As you can see in Figure 1 (below), less than half of the City’s debt service (45%) for FY 2025 will be
funded through bonds tied to the City’s property taxes. For FY 2025, property tax supported debt
service is about $7.0 million. Property tax supported debt is primarily used for the construction of local
roads and sidewalks.

So, what does this mean for Southlake property owners? Figure 2 (next page) shows the total tax bill for
an average residential property in Southlake, reflecting an annual cost of $482 for property tax supported
debt. For this, the City is able to provide necessary infrastructure.

Figure 1
FY 2025 Total Debt Service

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258 FY 2025 City of Southlake | Budget Book