Page 23 - CityofSouthlakeFY26AdoptedBudget

Tax relief and strategic rate management remain
guiding principles of Southlake’s financial
framework. As the City matures and new-
development revenues moderate, maintaining
this balance—protecting taxpayers while funding
essential services and adhering to other financial
management standards—will be a central focus of Budget Overview
the multi-year sustainability strategy.

Goal: Employer of Choice

The City Council has established, as part of
Southlake’s overall strategy, that the organization
will be an employer of choice. Central to that
commitment is an adopted compensation
philosophy, originally approved on August 6, 2013, and updated mid-year in FY 2022. The adopted
system provides a fair and predictable method for career progression for employees at every stage
of their careers, supporting our strategic approach by defining our labor market, market-position
targets, and pay structure while also recognizing the need for internal equity and ultimately, financial
sustainability.

Under this framework, Southlake strives to pay above the midpoint of the market—targeting, on average,
the 70th percentile for general government positions and the 85th percentile for sworn public safety
personnel. This means that, on average, the City endeavors to pay better than 70% of the designated
labor market for general government employees and better than 85% of the market for sworn public
safety personnel.

Striving to pay above the market midpoint means that Southlake’s compensation strategy intentionally
exceeds standard cost-of-living drivers, such as inflation or regional CPI benchmarks. This approach
reflects the City’s commitment to leading the market in order to attract and retain top-tier talent in a
highly competitive environment. It also reinforces the importance of aligning pay with the expectations
and performance standards required to deliver high-quality services to the community. As a service
organization, personnel costs account for more than 70% of General Fund spending, so careful
stewardship of total compensation is essential to both fiscal health and talent retention.

FY 2026 Compensation Adjustments.
• Merit Pay: The FY 2026 budget funds a 2 – 4 percent merit-based increase for all eligible employees,
consistent with performance management guidelines.
• Market Alignment for Public Safety: The latest market analysis showed sworn public safety pay
trailing the 85th-percentile target by 5.5%; targeted adjustments are therefore included to restore
the desired market position.
• Budget Impact: These compensation changes total $1.6 million in the General Fund and $326,359
across all other funds.

Benefit Program and Cost Management. Benefits are another cornerstone of competitiveness. For FY
2026, the City renewed its medical and dental contracts with Cigna under very favorable terms, despite
FY 2026 City of Southlake | Budget Book 23