Page 27 - CityofSouthlakeFY27Budget

TABLE OF CONTENTS

As a result of that discussion, this budget includes a property tax rate of $0.290, a half-cent reduction
from the FY 2026 rate of $0.295 and $0.011616 (1.1616 cents) below the no-new-revenue rate. It marks
the City’s sixteenth consecutive tax relief measure since 2009 and brings the cumulative reduction to
2.9 cents since FY 2024, a 9.1% decrease over that period. Continuing relief on this scale in a year when
appraised value fell, rather than grew, reflects the disciplined expenditure management that lets the City
keep returning value to taxpayers even as new-development revenue moderates.

In keeping with the City’s longstanding commitment to tax relief, the budget retains the maximum Budget Overview
allowable 20% homestead exemption, which complements the existing $75,000 exemptions for
homeowners over 65 and for disabled residents, as well as the over-65 tax freeze. Together, these
provisions continue to reduce the amount of taxable value subject to the City’s property tax rate,
delivering meaningful savings to Southlake homeowners.

For an average-valued home ($1,085,031), the 20% exemption lowers taxable value by $217,006,
producing an effective tax rate savings of roughly 5.9 cents per $100 of valuation. After accounting for
both the exemption and the tax-rate reduction, the equivalent residential rate on an average-valued
home is $0.231.

Together, these exemptions reduce revenue in FY 2027 by $6,925,789.

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 the City’s other financial management
standards, will be a central focus of 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, defining the
City’s labor market, market-position targets, and pay structure while recognizing the need for internal
equity and long-term 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 the City intentionally exceeds standard cost-of-living drivers, such as inflation or
regional benchmarks, in order to attract and retain top-tier talent in a competitive environment. 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.

Southlake’s standing as an employer of choice is not an aspiration but a measured result. In the most
recent Gallup engagement survey, Southlake scored a Grand Mean of 4.15, placing the organization in
the 72nd percentile among the state and local governments surveyed, with 57% of employees actively
engaged compared to a 32% public-sector average. That culture translates into retention and readiness:

FY 2027 City of Southlake | Budget Book 27