Page 280 - CityofSouthlakeFY26AdoptedBudget

Strategic Initiative Fund (SIF) History

Figure 1

Strategic Initiative Fund Expeditures by type,
FY 2006 - 2026

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The SIF concept was first used with the FY 2006 budget. The concept was simple: the City would strive
to maintain its optimal General Fund undesignated fund balance of 25% of operating expenses, and
sweep any excess funds that had accumulated in the fund balance over time into the SIF to be used for
one-time, high impact projects.
The following sections describe Southlake’s budgeting goals, helping to provide context for the
development and use of the SIF.

Structural Balance. Good budgeting practices require a city to achieve structural balance; that is, to
have enough annual revenue to cover planned expenses for any given year. Balancing a city’s operating
budget by dipping into reserves is considered a poor budgeting practice for a city, in the same way that
borrowing money from a personal retirement account to pay for monthly household expenses would be
considered unwise. Using reserves to balance the annual budget can mean that the revenue base is not
strong enough to support current service levels and could result in an unsustainable budget over time.

The City of Southlake is committed to maintaining a budget with structural balance, not only with its
current year budget, but also for future years. Staff uses multi-year budgeting to determine if revenues
are strong enough to support the services of the City for future years.

Fund Balance. City policy originally adopted in August 1993 and amended in 2011 sets a fund balance
range of 15-25% of operating expenses for the General Fund. Fifteen percent is considered the minimum
fund balance to achieve. The policy defines 25% as the optimal reserve level for the General Fund. Council
and staff are committed to having a structurally balanced budget while maintaining the optimum fund
balance of 25%.

280 FY 2026 City of Southlake | Budget Book FY 2026 City of Southlake | Budget Book 281