Page 16 - CityofSouthlakeFY26AdoptedBudget

August 15, 2025

Honorable Mayor and
Members of the City Council
1400 Main Street, Suite 270
Southlake, Texas 76092

Dear Mayor and Members of the City Council,

In accordance with the Texas Local Government Code and the Charter of the City of Southlake, it is my
privilege to present you with the adopted annual operating budget for the fiscal year beginning October
1, 2025, and ending September 30, 2026. Guided by the City’s financial principles, strategic priorities,
Budget Overview
and a firm commitment to service excellence, this year’s budget builds on the progress of FY 2025 while
adapting to the challenges and future opportunities. It maintains a focus on responsible stewardship,
long-term sustainability, and delivering measurable value to the people of Southlake.

In developing the FY 2026 budget, we considered not only our strategic alignment and established
financial guiding principles, but also the broader fiscal realities that are shaping Southlake’s next chapter.
As the City approaches full build-out, annual increases in taxable value are moderating, naturally
tempering the growth of property-tax revenue. Sales-tax collections, still a vital and healthy source, are
likewise rising at a more measured pace as revenue now reflects the performance of mature commercial
districts rather than the addition of new retail development. These two sources fund the bulk of our core
services, including police, fire, and streets. Ensuring that every dollar is deployed to its highest purpose,
therefore, becomes paramount.

This new revenue environment coincides with Southlake’s transition from an era of expansion to one
of reinvestment. Our focus is shifting toward the systematic replacement and rehabilitation of aging
infrastructure, targeted commercial redevelopment, and thoughtful build-out of the few remaining infill
properties. Simultaneously, lingering supply-chain volatility and evolving trade conditions continue to
introduce cost uncertainty for labor, materials, and contracted services, even as headline inflation has
eased from recent highs.

Together, these dynamics signal moderating resource growth just as the costs of sustaining high
service standards and meeting life-cycle obligations edge upward. This budget therefore reaffirms our
commitment to disciplined spending, operational efficiency, and multi-year planning—ensuring we meet
community expectations today while safeguarding financial flexibility for tomorrow.

This budget proposal reflects these considerations within the framework of our continued effort to
align day-to-day operations with the Strategic Management System and ensure that funding decisions
support the outcomes our community values. It was developed through collaborative planning, data-
informed forecasting, and in alignment with our high standards for financial discipline and performance. I
want to thank our department leaders and their teams for their thoughtful preparation and collaboration
throughout this process—their commitment to excellence is evident in every aspect of this proposal.

Southlake’s strong fiscal position—and its standing as a community of choice—are the outcome
of decades of disciplined strategic and financial stewardship. This enduring strength is grounded in
16 FY 2026 City of Southlake | Budget Book FY 2026 City of Southlake | Budget Book 17