Page 34 - CityofSouthlakeFY26AdoptedBudget

generate $2,600,000, a 10.8% increase ($252,750) over the prior year adopted budget, attributable to
Southlake’s strong hotel market that maintains, on average, a 73% occupancy rate with an Average Daily
Rate (ADR) of $180.31 and a Revenue per Available Room (RevPAR) of $131.37.

Figure 11 shows historical and projected hotel occupancy tax revenue. Revenues have grown from
$980,863 in 2015 to a projected $2,600,000 million in 2026, a 165% 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
Budget Overview
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 their expenditure, many of the City’s fees are accounted for in separate funds.

As part of the City’s annual budget preparation, departments have reviewed current fees to ensure
they are set at the optimum rate to achieve desired cost recovery. This review also included identifying
where fees are needed. These efforts have resulted in some changes to the City’s fee schedule which
will be considered by City Council in September 2025.

The largest source of fee revenue comes from the provision of water, wastewater and solid waste
collection services. These revenues and associated expenditures are accounted for in the City’s Utility
Fund (see later section of this overview for fund details). These revenues are projected to be $41,830,300,
an increase of $2,387,950 or 6.1% from the prior year adopted budget. Revenue has been adjusted to

Figure 10
Sales Tax Collection Trend

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34 FY 2026 City of Southlake | Budget Book FY 2026 City of Southlake | Budget Book 35