Page 29 - CityofSouthlakeFY25AdoptedBudget

For FY 2025, sales tax revenues for all funds (General Fund, SPDC, CEDC and CCPD) are projected to be
$43,739,684, which is $4.086 million, or 10.3% more than the FY 2024 adopted budget. This growth as
calculated can be attributed to conservative budget projections in FY 2024 due to flat collection trends at
the time of budget preparation. Additionally, the City received some large, one-time audit adjustments late
in FY 2024 that impact final collected amounts. However, when compared to actual, estimated collections
in FY 2024, the FY 2025 projection for sales tax revenue growth is approximately 2%.

Figure 10 shows the sales tax collection trend since 2019.

Hotel Occupancy Tax Revenues Budget Overview
The Hotel Occupancy Tax is authorized under the Texas Tax Code, Chapter 351. The City of Southlake
adopted Ordinance No. 769 in February 2000, levying a 7% tax on room receipts. The tax on hotel rooms
is providing the revenues to the city in this category. For FY 2025, the tax is anticipated to generate
$2,347,250, a 12.3% increase ($256,750) over FY 2024 adopted budget, attributable to Southlake’s strong
hotel market that maintains, on average, a 71% occupancy rate with an Average Daily Rate (ADR) of $190
and a Revenue per Available Room (RevPAR) of $135.

Figure 11 shows historical and FY 2025 projected hotel occupancy tax revenue. Revenues have grown from
$980,863 in 2015 to a projected $2.4 million in 2025, a 152% increase over a ten-year period, primarily driven
by the addition of three hotels during that time period.

Fees and Charges for Services Revenues
Other major revenue sources for the City include revenues generated from service fees. 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. Intended for cost recovery, fees
are set to align with providing the service or facility. Due to this requirement and legal restrictions related to

Figure 11
Hotel Occupancy Tax Collection Trend

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Hotel Opening Dates:
June 2007: Hilton Southlake Town Square November 2020 - Delta Hotel Dallas - Southlake
December 2016 - Cambria Hotel Southlake DFW North November 2021 - The Westin Dallas - Southlake
FY 2025 City of Southlake | Budget Book 29