Page 279 - CityofSouthlakeFY25AdoptedBudget

Introduction

The City of Southlake has 54 funds with specific purposes which are defined by federal, state, or local laws.
They include the General Fund which is used for general city operations, the Utility Fund which is used to
support the City’s water, sewer, drainage, and solid waste service, and a multitude of Special Revenue and
Capital Project Funds. Simply stated, funds are set up like separate companies which must operate under
specific parameters.

For example, the City receives $0.02 of sales tax for every dollar spent in our city limits. One of those pennies
goes to the General Fund and can be spent on general operating costs, like supplies, salaries, and general
maintenance. The other penny is split between our Crime Control and Prevention District, the Southlake Special Revenue Funds
Parks Development Corporation and the Community Enhancement and Development Corporation. These
three units of the City of Southlake were voted on by the residents, but state law determines how that
money is spent. We can only use it for the purposes outlined in the original referendum presented to the
voters, so we set up separate funds to account for the revenues and expenditures of each unit.

In another example the City receives proceeds from bonds issued for various projects. The Official Statement
for a bond issue outlines how much money the City will receive, how that money will be repaid, and on what
the money can be spent. This document is legally binding on City officials and is enforced by federal, state,
and local laws. If the Official Statement says we received $12,000,000 for roadway improvements, City
Council and management may not opt to spend it on equipment or supplies. The money is recorded in a
Capital Project Fund for roadway improvements and can only be spent on roadway improvements.

Although these examples are for three very specific funds, the same concept of expense restrictions applies
to all special revenue funds. As a result, reporting revenues and expenses for the City of Southlake includes
54 miniature financial statements in addition to a Citywide financial statement. It may appear that money is
available to spend when in fact the majority of the money is restricted by law. The chart at left shows the
structure of all of the City of Southlake’s funds. This section of the budget document will focus on those
special revenue funds that are highlighted.

FY 2025 City of Southlake | Budget Book 279