Page 378 - CityofSouthlakeFY26AdoptedBudget

districts, public improvement districts, or industrial development issuers.

Debt Management-Ratio Targets
- The ratio of net debt (total outstanding tax-supported general obligation debt less debt service fund
balance) to total taxable assessed valuation shall not exceed 2.0%. This excludes debt of overlapping
jurisdictions. The City shall structure its bond issuance to achieve and maintain a debt-to-assessed value
of 2.0% or less.

- The ratio of debt service expenditures to total expenditures (General Fund operating expenditures and
Appendix
debt service combined) shall not exceed 20%.

- The Finance Department shall prepare an analysis of the impact of adopted tax-supported debt prior to
the issuance of the additional debt. The analysis shall project the debt ratios described above as well as
any other applicable debt ratios.

Debt Management-Certificates of Obligations
It is the City’s priority to fund capital expenditures with cash or voter approved debt. However, non-voter
approved debt may be used for capital expenditures as an alternative to lease/purchase or other financing
options if the capital expenditure is:
- Urgent;

- Necessary to prevent an economic loss to the City;

- Revenue generating and expected to cover debt service out of the revenue source; and,

- Non-voter approved debt is the most cost effective financing option available.

- The average maturity of non-voter approved debt shall not exceed the average life of the capital
items financed.

- Capital items financed with non-voter approved debt shall have an expected economic life of at
least three years.

378 FY 2026 City of Southlake | Budget Book