Item 4C - MemoCITY OF
SOUTHLAKE
MEMORANDUM
March 11, 2024
To: Alison Ortowski, City Manager
From: Sharen Jackson, Chief Financial Officer
Item 4C
Subject: Approve the 2023 Annual Comprehensive Financial Report
Action
Requested: Approval of the September 30, 2023, Annual Comprehensive
Financial Report
Background
Information: The purpose of this item is to seek City Council approval of the
2023 Annual Comprehensive Financial Report.
• The City Charter requires the City, at the close of each fiscal
year, have an independent audit performed by a Certified
Public Accountant. Weaver L.L.P., Certified Public
Accountants, performed the audit for fiscal year 2023.
• The City received an unmodified ("clean") opinion on the
City's financial statements for the year ended September
30, 2023.
• Jennifer Ripka, Partner, will present the Annual
Comprehensive Financial Report along with the Single
Audit Report which includes reporting on internal controls to
the Audit Committee on Tuesday during the committee
meeting scheduled at 5:00 p.m. prior to the City Council
meeting.
Financial
Considerations: None required
Strategic Link: F1 — Safeguarding the public trust through a commitment to
thoughtful planning and responsible, conservative financial
management.
Citizen Input/
Board Review: None required.
Legal Review: None required.
Alternatives: None required.
Supporting
Documents: 2023 Annual Comprehensive Financial Report
Staff
Recommendation: Approval of the 2023 Annual Comprehensive Financial Report
Will include final FY 2023 ACFR file when received from the auditors.
CITY OF
S4UTHLAKE
TEXAS
19
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
For the Fiscal Year Ended
September 3 , 2 2,�
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CITYOFSOUTHL AKE.00M
City of Southlake, Texas
Annual Comprehensive Financial Report
For the Fiscal Year Ended September 30, 2023
As Prepared by
Sharen Jackson, CPA
Chief Financial Officer
City of Southlake
Annual Comprehensive Financial Report
For the Fiscal Year Ended September 30, 2023
Table of Contents
Exhibit Page
INTRODUCTORY SECTION
Letter of Transmittal v
Certificate of Achievement xi
Organizational Chart A
List of Principal Officials xiii
FINANCIAL SECTION
Independent Auditor's Report
Management's Discussion and Analysis
Basic Financial Statements
Government -Wide Financial Statements
Statement of Net Position
1
23
Statement of Activities
2
24
Fund Financial Statements
Governmental Funds Financial Statements
Balance Sheet
3
28
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
4
30
Statement of Revenues, Expenditures, and Changes in Fund Balance
5
32
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures
and Changes in Fund Balance to the Statement of Activities
6
34
Proprietary Funds Financial Statements
Statement of Net Position
7
37
Statement of Revenues, Expenses, and Changes in Net Position
8
38
Statement of Cash Flows
9
39
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position
10
43
Statement of Changes in Fiduciary Net Position
11
44
Notes to the Basic Financial Statements
47
Required Supplementary Information
Budgetary Comparison Schedule - General Fund
A-1
92
BudgetaryComparison Schedule - Southlake Parks Development Corporation
Operating Fund
A-2
93
BudgetaryComparison Schedule - Community Enhancement Development
Corporation Special Revenue Fund
A-3
94
Notes to Budgetary Comparison Schedules
95
Schedule of Changes in Net Pension Liability and Related Ratios - TMRS
A-4
98
Schedule of Pension Contributions - TMRS
A-5
100
Schedule of Changes in Net OPEB Liability (Asset) and Related Ratios -
Southlake Net OPEB (Asset) Liability for Health Insurance
A-6
101
Schedule of Contributions - Southlake Net OPEB Liability (Asset) for Health Insurance
A-7
102
Schedule of Changes in the Total OPEB Liability and Related Ratios - TMRS -
Supplemental Death Benefits
A-8
103
Schedule of OPEB Contributions - TMRS - Supplemental Death Benefits
A-9
104
Condition Rating of Street System
A-10
105
City of Southlake
Annual Comprehensive Financial Report
For the Fiscal Year Ended September 30, 2023
Table of Contents - Continued
Exhibit
Page
Combining and Individual Fund Financial Statements and Schedules
Major Governmental Funds
Budgetary Comparison Schedule - General Obligation Debt Service Fund
B-1
109
Nonmajor Governmental Funds
Combining Balance Sheet - Nonmajor Governmental Funds
C-1
112
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance -
Nonmajor Governmental Funds
C-2
116
Budgetary Comparison Schedule - Police Special Revenue Fund
C-3
120
Budgetary Comparison Schedule - Parks and Recreation Special Revenue Fund
C-4
121
Budgetary Comparison Schedule - Parks Dedication
Special Revenue Fund
C-5
122
Budgetary Comparison Schedule - Crime Control District Special Revenue Fund
C-6
123
Budgetary Comparison Schedule - Hotel Occupancy Special Revenue Fund
C-7
124
Budgetary Comparison Schedule - Storm Water Utility Special Revenue Fund
C-8
125
Budgetary Comparison Schedule - Court Security Special Revenue Fund
C-9
126
Budgetary Comparison Schedule - Court Technology
Special Revenue Fund
C-10
127
Budgetary Comparison Schedule - Library
Special Revenue Fund
C-11
128
Budgetary Comparison Schedule -Red Light Camera
Special Revenue Fund
C-12
129
Budgetary Comparison Schedule - Commercial Vehicle Enforcement
C-13
130
Budgetary Comparison Schedule - Tax Increment Financing District Special Revenue Fu
C-14
131
Budgetary Comparison Schedule - Southlake Parks Development Corporation
Debt Service Fund
C-15
132
Budgetary Comparison Schedule - Community Enhancement
Development Corporation Debt Service Fund
C-16
133
Table
Page
Stastical Section
Net Position By Component
1
138
Changes in Net Position
2
140
Fund Balances, Governmental Funds
3
142
Changes in Fund Balances, Governmental Funds
4
143
Assessed Value and Estimated Actual Value of Taxable Property
5
144
Direct and Overlapping Property Tax Rates
6
145
Principal Property Tax Payers
7
146
Ad Valorem Tax Levies and Collections
8
147
Ratio of Outstanding Debt By Type
9
148
Ratio of General Bonded Debt Outstanding
10
149
Direct and Overlapping Governmental Activities Debt
11
150
Pledged -Revenue Coverage - Southlake Parks Development Corporation
12
151
Pledged -Revenue Coverage - Southlake Community Enhancement and
Development Corporation
13
152
Demographic and Economic Statistics
14
153
Principal Employers
15
154
Full -Time Equivalent City Government Employees By Function/Program
16
155
Operating Indicators By Function/Program
17
156
Capital Asset Statistics By Function/Program
18
157
Introductory Section
IVA
CITY OF
SOUTHLAKE
ig
Finance Department
March 14, 2024
To the Honorable Mayor, Councilmembers and Citizens of the City of Southlake, Texas:
It is with pleasure that we submit to you the Annual Comprehensive Financial Report (ACFR) of the City of
Southlake for the fiscal year ended September 30, 2023. This report was prepared by the Finance
Department in accordance with the Southlake Charter, Statutes and generally accepted accounting
principles for governments. In addition to meeting legal requirements, this report reflects the City's
commitment to full financial disclosure. We encourage you to thoroughly read this report and take the
opportunity to discuss some of the important items it addresses.
In developing and evaluating the City's accounting system, consideration is given to the adequacy of
internal accounting controls. These controls are designed to provide reasonable, but not absolute,
assurance regarding the safeguarding of assets against loss from unauthorized use or disposition, and the
reliability of financial records for preparing financial statements and maintaining accountability for assets.
The concept of reasonable assurance recognizes that the cost of a control should not exceed the
benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments
by management. We believe that the City's current system of internal controls adequately safeguards
assets and provides reasonable assurance of proper recording of financial transactions.
Responsibility for both the accuracy of the presented data and the completeness and fairness of the
presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the
data, as presented, is accurate in all material respects and is reported in a manner designed to present
fairly the financial position and results of operations. All disclosures necessary to enable the reader to gain
an understanding of the City's financial activities have been included.
Weaver & Tidwell, LLP, Certified Public Accountants, has issued an unmodified ("clean") opinion on the
City's financial statements for the fiscal year ended September 30, 2023. The Independent Auditor's
Report is located at the front of the financial section of this report.
Management's discussion and analysis (MD&A) immediately follows the Independent Auditor's Report
and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A
complements this letter of transmittal and the two should be read in conjunction with each other.
PROFILE OF THE GOVERNMENT
General Information
Although Southlake has been a high -growth community for years, when the first settlers arrived in 1845
they found only a vast area of land and trees where the grand prairie and cross timbers merged. As the
site of the first permanent settlement in Tarrant County, a portion of present-day Southlake was
homesteaded in 1866, which consisted of 360 acres. Keeping with the time, the primary industry was
agriculture. Farmers grew peanuts, grains and cotton, and families raised their own livestock.
1400 Main Street, Suite 420, Southlake, TX 76092 (817) 748-8345
Innovation 0 Integrity 0 Accountability 0 Commitment to Excellence 0 Teamwork
v
The area that would become Southlake remained a rural farming community for more than 100 years
until the U.S. Army Corps of Engineers built Lake Grapevine in 1952. The lake spurred much of the
area's early growth and was the beginning of dramatic change. The town officially incorporated on
September 25, 1956, by a public vote of 30 in favor and 24 against. The original town contained
1.62 square miles and had a population of just over 100. The residents chose to call this new town
Southlake because it was... south of Lake Grapevine! The Southlake Fire Department was launched
in 1965 and the first piece of fire equipment was a 1950 Diamond T-Military unit with a tank capacity of
1,000 gallons and an auxiliary pump. The first chief of police was hired in 1966, and the City purchased its
first patrol car in 1967.
The opening of the Dallas -Fort Worth International Airport in 1974 served as the next catalyst of growth in
the area and Southlake residents adopted a home -rule charter in April 1987, which created the current
council-manager form of government with six Council Members and a Mayor who are elected at large
on a non -partisan basis for staggered three-year terms. But the single most important event in bringing
residential subdivision development to Southlake was the completion of water and sewer lines in the
southern portion of the City in the early 1990s.
By the 2000s, Southlake had become a boom-burb with the population tripling to almost 22,000 and was
well known for its picturesque countryside, exemplary school district and luxury neighborhoods. Today,
the City's population stands at just under 31,300 and is estimated to reach 34,000 residents by the year
2050.
Since that time, much like the area's first settlers were attracted to the area with its endless possibilities,
Southlake has continued to attract the suburban settler desiring a high quality of life and the small-town
charm that has been preserved from Southlake's past.
Services Provided
Services provided by the City under general governmental functions include public events, public safety,
planning and development, engineering, street and storm drainage maintenance, parks operation and
maintenance, recreation programming and facilities, library services, and general administrative services.
The City does not provide educational or welfare services.
Water and sewer services and solid waste collection are provided under an enterprise fund concept, with
user charges set by the City Council to ensure adequate coverage of operating expenses and payments
of outstanding debt.
Component Units
The financial reporting entity includes all the funds of the primary government, as well as all its component
units in accordance with GASB Codification of Governmental Accounting and Financial Reporting
Standards, Section 2100, "Defining the Reporting Entity." Component units are legally separate entities for
which the primary government is financially accountable and for which the nature and significance of
their relationship with the primary government are such that exclusion would cause the City's basic
financial statements to be misleading or incomplete.
The City's financial statements include the following blended component units:
The Southlake Parks Development Corporation ("SPDC") was formed in January 1994 pursuant to a
successful election in November 1993 to adopt an additional half -cent sales tax for park and recreation
facility development. SPDC is organized exclusively to act on behalf of the City for the financing,
development and operation of parks and recreation facilities.
Also, included in this report is financial information for the Southlake Crime Control and Prevention District
(the "District"). In November 1997, voters approved an additional half -cent sales tax for Crime Control
and Prevention initiatives. The District is organized exclusively to act on behalf of the City for the financing,
development and crime control throughout the City.
vi
In May 2015, Southlake voters overwhelmingly approved the reallocation of a portion of the District
half -cent sales tax for the purpose of constructing and operating a recreation center through the
Southlake Community Enhancement and Development Corporation ("CEDC"). The District's half -cent
sales tax was reduced to a one -eighth cent tax, and the remaining three -eighths was reallocated to
address recreational and economic development needs for the City, as permitted by State law, through
CEDC.
Also, included in this report is financial information for the Tax Increment Financing District (the "TIF") which
was created in 1997 to encourage quality commercial growth. The TIF was formed to finance and make
public improvements, under the authority of the Tax Increment Financing Act.
Additional information on these legally separate entities can be found in the notes to the financial
statements (see Note 1).
ECONOMIC CONDITION AND OUTLOOK
The City is in a prime location in Northeast Tarrant County, 5 minutes west of Dallas/Fort Worth International
Airport, and 10 minutes east of the Alliance Airport, a commercial aviation and industrial complex in
north Fort Worth. State Highway 114, FM 1709, and FM 1938, the regional road arterials, serve the City.
Over 2,600 businesses, including 77 new businesses for FY 2023, from many industries including professional,
scientific, and technical services, healthcare and social services, hospitality, retail, and banking and
financial services have come together to make Southlake a full -service business community.
Sabre, home of Travelocity.com, is the City's largest employer with approximately 2,000 employees and
Verizon Wireless' Network Control Center takes advantage of high-tech infrastructure to manage all
wireless communications west of the Mississippi River from its Southlake location.
Housina Permits
There were 73 single family residential permits issued in fiscal year 2023 with an average new home
construction value, excluding land value, of approximately $1,425,000. As noted on the chart below, the
City experienced a decrease in residential home construction.
Property Taxes
Total certified taxable value for commercial and residential property was $9.065 billion, an increase of
$844 million and a 10.3 percent increase from the prior year. New construction added $129 million to the
tax roll.
As the City's economy has grown, it has been possible to implement twelve tax relief measures since 2009.
The City has provided for maximum homestead exemption relief for homeowners for many years and is
including the maximum allowable 20% exemption for FY 2023.
vii
In FY 2023, the City incorporated a tax rate of $0.36 per $100 valuation, reducing the rate by three cents
from operations. The tax rate of $0.36 is split between General Fund operations and debt service. The
allocation for FY 2023 is $0.295 for general operations and $0.065 for debt service.
Sales Taxes
The City of Southlake experienced an increase in sales tax collections during the fiscal year as indicated
on the chart. Sales tax collections totaled $45,369,619 in FY 2023, an 8.36% increase from the previous
year.
Sales Tax Revenue
50,000,000
45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
2019 2020 2021 2022 2023
■ General ■ SPDC ■ Crime ■ CEDC
Future Economic Outlook
The City's dedication to quality development, sound fiscal policies, and effective strategic management
has made it an exemplary community in the Dallas -Fort Worth region. With impeccably built
neighborhoods, a successful downtown, and a diverse business community, the City offers an enhanced
quality of life for both residents and visitors.
During 2023, 19 new construction commercial permits were issued by the City representing over
462,008 square feet of future retail/office space. The following projects have been approved for
development in the City:
• The Constellation Southlake development will include four (4) large warehouse buildings totaling
approx. 546,330 sq. ft.
• The Wheelhouse will include two (2) single -story buildings totaling approx. 19,461 sq. ft. for office
showroom with retail sales and automobile and motorcycle sales and/or service uses. Additionally,
The Wheelhouse will include three (3) single -story buildings totaling approx. 47,629 sq. ft.
The City has the following development projects under construction:
• Next Century Health Care Plaza will include six (6) single -story medical office buildings totaling
approx. 50,000 sq. ft.
• Carillon Parc is a 42-acre mixed -use development featuring a luxury boutique hotel, office spaces,
upscale residences, advanced health and wellness offerings, dining, and luxury shopping as well
as an expansive park.
• Mustang Business Park will include three (3) distribution warehouse buildings totaling approx.
340,180 sq. ft. on approx. 26.27 acres.
• Capital Grille plans to open an approx. 9,447 sq. ft. restaurant within an existing building in the
development on 7.25 acres.
viii
During FY 2023, the following significant projects were completed which will have impact the local
economy going forward:
• Southlake Town Square's second Class -A office building opened in FY 2023. The new five -story,
151,000 square -foot office building was built adjacent to the existing Granite Place One building
that opened in 2016.
• The XO Marriage Center will include a three-story, approx. 32,190 sq. ft. building with office,
assembly, and studio uses.
• GMI Southlake will include 3 flex light industrial/corporate office buildings totaling approx.
58,780 sq. ft.
• Methodist Southlake Hospital Emergency Department expansion will include a one-story,
approximately 6,000 sq. ft. addition to the existing hospital building to provide new nuclear
medicine facilities.
Financial Management Principles
The City has strong financial management principles that provide the framework for financial
sustainability.
• Tax rate management. The tax rate is allocated properly between maintenance /operations and
debt service.
• Structural balance. The City's ability to weather potential economic downturns or other financial
challenges is critical. The City does not use reserves to balance the operating budget.
• Reserve management. The City's fund balance policy requires a minimum 15% and optimum
25% balance. The City uses "excess" reserves as a means to fund one-time, "pay-as-you-go"
projects.
• Multi -year financial plan.The long-term effect of today's decisions on tomorrow's financial
situation is an important consideration during the budget process.
• Quality service delivery. The City is committed to meeting the needs of our community through
high quality service delivery.
• Risk management. The City supports ongoing initiatives to safeguard the public trust by internal
audits and other initiatives to maintain a strong control environment.
OTHER INFORMATION
Independent Audit
The City Charter requires an annual audit of the financial status of the City by independent Certified
Public Accountants selected by the City Council. This requirement has been met and the auditor's report
has been included in this report.
Awards
The Certificate of Achievement is a prestigious national award recognizing conformance with the highest
standards for preparation of state and local government financial reports. In order to be awarded a
Certificate of Achievement, a government unit must publish an easily readable and efficiently organized
annual comprehensive financial report, whose contents conform to program standards.
Such Annual Comprehensive Financial Report must satisfy both generally accepted accounting
principles and applicable legal requirements. A Certificate of Achievement is valid for a period of
one year only. The City of Southlake received a Certificate of Achievement for the year ended
September 30, 2022, and believes our current report conforms to the Certificate of Achievement program
requirements, and we are submitting it to GFOA.
ix
In addition, the City also received the GFOA's Distinguished Budget Presentation award for its annual
budget dated October 1, 2022. To qualify for this award, the City's budget document was judged to be
proficient in all categories, including as a policy document, a financial plan, and operations guide, and
a communications device.
Acknowledgments
The preparation of this report could not be accomplished without the dedication and efficiency of the
entire staff and our independent auditor. I would like to express my sincere appreciation to all employees
who contributed to its preparation. I would also like to thank the Mayor and members of the City Council
for their support in planning and conducting the financial operations of the City in a responsible and
efficient manner.
Respectfully submitted,
Sharen Jackson
Chief Financial Officer
x
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Southlake
Texas
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
September 30, 2022
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Executive Director/CEO
xi
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City of Southlake, Texas
List of Principal Officials
September 30, 2023
John Huffman Mayor
Shawn McCaskill Mayor Pro Tern
Kathy Talley Deputy Mayor Pro Tern
Randy Williamson
Council Member
Randy Robbins
Council Member
Ronell Smith
Council Member
Amy Torres-Lepp
Council Member
Alison Ortowski City Manager
Amy Shelley City Secretary
Sharen Jackson
Chief Financial Officer
Daniel Cortez
Director of Economic Development/Tourism
Robert Cohen
Director of Public Works
David Miller
Director of Community Services
Stacey Black
Director of Human Resources
Dennis Killough
Director of Planning/Development
Pilar Schank
Director of Communications
Blair Halbert
Director of Information Technology
James Brandon
Police Chief
Michael Starr
Fire Chief
XIV
Financial Section
weaver
Independent Auditor's Report
To the Honorable Mayor and Members of
City Council and Management of the
City of Southlake, Texas
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business -type activities,
each major fund and the aggregate remaining fund information of the City of Southlake, Texas (City), as
of and for the year ended September 30, 2023, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund
and the aggregate remaining fund information of the City, as of September 30, 2023, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of
the Financial Statements section of our report. We are required to be independent of the City and to
meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to
our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1 to the basic financial statements, during the year ended September 30, 2023, the
City implemented Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription -
Based Information Technology Arrangements. Our opinions are not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
The City's management is responsible for the preparation and fair presentation of the financial statements
in accordance with accounting principles generally accepted in the United States of America, and for
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue
as a going concern for twelve months beyond the financial statement date, including any currently
known information that may raise substantial doubt shortly thereafter.
Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 1 Dallas, Texas 75201
Main: 972.490.1970
3 CPAs AND ADVISORS I WEAVER.COM
The Honorable Mayor and Members of
City Council and Management of the
City of Southlake, Texas
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government
Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is
expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the City's ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control -related
matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's
discussion and analysis and the required supplementary information, as listed in the table of contents, be
presented to supplement the basic financial statements. Such information is the responsibility of
management and, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with GAAS,
which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
4
The Honorable Mayor and Members of
City Council and Management of the
City of Southlake, Texas
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The Combining and Individual Nonmajor Fund Financial
Statements and Schedules are presented for purposes of additional analysis and are not a required part
of the basic financial statements.
The Combining and Individual Nonmajor Fund Financial Statements and Schedules are the responsibility
of management and was derived from and relates directly to the underlying accounting and other
records used to prepare the basic financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with GAAS. In our opinion, the other
supplementary information is fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
Other Information Included in the Annual Comprehensive Financial Report (ACFR)
Management is responsible for the other information included in the ACFR. The other information
comprises the introductory and statistical sections but does not include the basic financial statements
and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other
information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If,
based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 14,
2024 our consideration of the City's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the City's internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering
the City's internal control over financial reporting and compliance.
-
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
March 14, 2024
5
Management's Discussion and Analysis
Management's Discussion and Analysis
The City of Southlake's Management's Discussion and Analysis (MD&A) is designed to provide an
objective and easy to read analysis of the City's financial activities based on currently known facts,
decisions, and conditions. It is intended to provide a broad overview and short-term analysis of the City's
activities based on information presented in the financial statements. Specifically, this information is
designed to assist the reader in focusing on significant financial issues, provide an overview of the City's
financial activity, identify changes in the City's financial position (its ability to address the next and
subsequent years' challenges), identify material deviations from the approved budget, and identify
individual fund issues.
The City presents its financial statements in accordance with the reporting model required by
Governmental Accounting Standards Board Statement 34, Basic Financial Statements -and
Management's Discussion and Analysis -for State and Local Governments. This reporting model
significantly changes not only the presentation of financial data, but also the manner in which the
information is recorded.
The information contained within this MD&A is only a component of the entire financial statement report.
Readers should consider the information presented here in conjunction with additional information that
we have furnished in our letter of transmittal, which can be found on pages v-x of this report.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of the City of Southlake exceeded its liabilities and
deferred inflows of resources at September 30, 2023 by $784,978,302 (net position). Of this amount,
$128,848,839 (unrestricted net position) may be used to meet the government's ongoing
obligations to citizens and creditors.
• The City's total net position increased by $45,174,1 16. This increase can be largely attributed to a
rise in sales tax revenue and investment income.
• As of September 30, 2023, the City's governmental funds reported combined ending fund
balances of $200,115,933. Of this amount, $54,317 is reported as nonspendable, $121,781,095 is
restricted by an outside source, $1,658,817 is committed for future uses, $59,027,095 is assigned by
management for specified purposes, and $17,594,609 is available for spending at the
government's discretion (unassigned fund balance).
• At the end of the current fiscal year, unassigned fund balance for the General Fund was
$17,594,609 or 32.2% of total General Fund expenditures.
• At the end of the current fiscal year, the City of Southlake outstanding debt totals $129,081,119 a
net increase of $20,195,737 from the previous year. This increase was largely the result of significant
differences between projected and actual investment earnings with the City's pension plan and
the issuance of tax notes during the year.
OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis is intended to serve as an introduction to the City's basic financial statements.
The reporting focus is on the City as a whole and on individual major funds. It is intended to present a
more comprehensive view of the City's financial activities.
The basic financial statements are comprised of three components: 1) government -wide financial
statements, 2) fund financial statements, and 3) notes to the financial statements. This report also includes
supplementary information intended to furnish additional detail to support the basic financial statements
themselves.
0
GOVERNMENT -WIDE FINANCIAL STATEMENTS
The government -wide financial statements include the Statement of Net Position and the Statement of
Activities. These statements are designed to provide readers with a broad overview of the City's finances
in a manner similar to a private -sector business. Both are prepared using the economic resources
measurement focus and the accrual basis of accounting; meaning that all the current year's revenues
and expenses are included regardless of when cash is received or paid.
The Statement of Net Position presents information on all of the City's assets and deferred outflows of
resources and liabilities and deferred inflows of resources, including capital assets and long-term
obligations. The difference between the two is reported as net position. Over time, the increases or
decreases in net position may serve as a useful indicator of whether the financial position of the City is
improving or deteriorating. Other indicators of the City's financial position should be taken into
consideration, such as the change in the City's property tax base and condition of the City's infrastructure
(i.e., roads, drainage systems, water and sewer lines, etc.), in order to more accurately assess the overall
financial condition of the City.
The Statement of Activities presents information showing how the City's net position changed during the
most recent fiscal year. It focuses on both the gross and net costs of the government's various activities
and thus summarizes the cost of providing specific government services. This statement includes all current
year revenues and expenses.
The Statement of Net Position and the Statement of Activities divide the City's activities into two types:
Governmental activities - Most of the City's basic services are reported here, including general
administration, debt services, public safety, public works, parks and community services, public library,
public events and facilities, planning and development and finance. Property, sales and franchise taxes
provide the majority of the financing for these activities.
Business -Type activities - Activities for which the City charges a fee to customers to pay most or all of the
costs of a service it provides are reported here. The City's business -type activities include water
distribution, wastewater collection and solid waste collection and disposal.
The government -wide financial statements are found on pages 23-24 of this report.
FUND FINANCIAL STATEMENTS
The City of Southlake, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance -related legal requirements. A fund is a grouping of related
accounts that is used to maintain control over resources that have been segregated for specific activities
or objectives. These statements focus on the most significant funds and may be used to find more detailed
information about the City's most significant activities. All of the funds of the City can be divided into
two categories: governmental funds and proprietary funds.
Governmental Funds- These funds are used to account for the majority of the City's activities, which are
essentially the same functions reported as governmental activities in the government -wide statements.
However, unlike the government -wide financial statements, governmental fund financial statements
focus on near -term inflows and outflows of spendable resources, as well as spendable resources available
at the end of the fiscal year for future spending. Such information may be useful in evaluating a
government's near -term financing requirements.
IN
The focus of the governmental funds financial statements is narrower than that of the government -wide
financial statements. Therefore, it is useful to compare the information presented for governmental funds
with similar information presented for governmental activities in the government -wide financial
statements. By doing so, readers may better understand the long-term impact of the government's
near -term financing decisions. Both the governmental funds Balance Sheet and the governmental funds
Statement of Revenues, Expenditures and Changes in Fund Balances provided a reconciliation to
facilitate this comparison. The reconciliation explains the differences between the government's activities
as reported in the government -wide financial statements and the information presented in the
governmental funds financial statements.
The City maintains 26 individual governmental funds. Information is presented separately in the
governmental funds Balance Sheet and in the governmental funds Statement of Revenues, Expenditures
and Changes in Fund Balances for the General Fund, General Obligation Debt Service Fund, General
Capital Projects Fund, Southlake Parks Development Corporation, and Community Enhancement
Development Corporation Special Revenue Fund, all of which are considered to be major funds. Data
for the other governmental funds are combined into a single, aggregated presentation. Individual fund
data for each of the non -major governmental funds is provided in the form of combining statements
elsewhere in this report.
The basic governmental funds financial statements can be found on pages 28-24 of this report.
Proprietary Funds - When the City charges customers for services it provides, the activities are generally
reported in proprietary funds. The City of Southlake maintains two different types of proprietary funds:
enterprise and internal service funds.
Enterprise funds are used to report the same functions presented as business -type activities in the
government -wide financial statements. The City uses enterprise funds to account for its water and sewer
operations and solid waste. These services are primarily provided to outside or non -governmental
customers.
Internal service funds are an accounting device used to accumulate and allocate costs internally among
the City's various functions. The City uses internal service funds to account for vehicle and equipment
replacement. Because these services predominantly benefit the governmental rather than business -type
functions, they have been included within the governmental activities in the government -wide financial
statements.
Proprietary fund financial statements provide the same type of information as the government -wide
financial statements, only in more detail. The proprietary funds financial statements can be found on
pages 37-39 of this report.
Fiduciary funds - the City presents one trust fund, the Southlake OPEB Liability Trust Fund, which accounts
for the funding of post -employment healthcare benefits for retirees of the City and their dependents. The
financial statements for the fiduciary funds can be found on pages 43-44 of this report.
NOTES TO THE FINANCIAL STATEMENTS
The Notes provide additional information that is essential to a full understanding of the data provided in
the government -wide and fund financial statements. The Notes to the Financial Statements can be found
on pages 47-87 of this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position over time may serve as a useful indicator of the City's financial position. As
of September 30, 2023, the City's assets and deferred outflows of resources exceeded liabilities and
deferred inflows of resources by $784,978,302 (net position), at the close of the most recent fiscal year.
The largest portion of the City's net position, $525,807,105, reflects its investment in capital assets
(land and improvements, building, infrastructure, machinery and equipment, and right -to -use assets net
of accumulated depreciation and amortization); less any related debt used to acquire those assets that
is still outstanding. The City uses these assets to provide services to its citizens; consequently, these assets
are not available for future spending. Although the City reports its capital assets net of related debt, the
resources needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
Governmental Activities net position increased by $32,727,308. This can be largely attributed to higher
levels of sales tax revenues and interest income received by the City which were due to sharp inclines in
inflation and higher interest rates.
Business -type Activities net position increased by $12,446,808. The majority of this change can be
attributed to a continued increase in demand forwater as the region experienced significantly less rainfall
than average for FY 2023 and record high temperatures. This change can also be attributed to Interest
and investment earnings which increased by over $2.5 million, with rising interest rates.
The following analysis highlights the net position as of September 30, 2023 and 2022:
Governmental Activities
Business -type Activities
Totals
2023
2022
2023
2022
2023
2022
Current and
other assets
$ 228,001,169
$ 190,955,229
$ 79,307,211
$ 69,996,562
$ 307,308,380 $
260,951,791
Capital assets
516,100,285
508,388,715
98,690,072
97,474,702
614,790,357
605,863,417
Total assets
744,101,454
699,343,944
177,997,283
167,471,264
922,098,737
866,815,208
Deferred outflows of
resources
13,228,194
4,961,219
1,081,723
580,775
13,995,534
5,541,994
Long-term liabilities
101,619,386
79,872,374
27,461,733
29,013,008
129,081,119
108,885,382
Other liabilities
14,759,356
9,782,068
5,304,624
4,646,604
20,063,980
14,428,672
Total liabilities
116,378,742
89,654,442
32,766,357
33,659,612
149,145,099
123,314,054
Deferred inflows of
resources
1,975,158
8,402,281
310,095
836,681
1,970,870
9,238,962
Net position:
Net investment
in capital assets
450,639,461
444,246,656
75,167,644
77,774,937
525,807,105
522,021,593
Restricted
121,858,264
99,360,585
8,464,094
9,877,167
130,322,358
109,237,752
Unrestricted
66,478,023
62,641,199
62,370,816
45,903,642
128,848,839
108,544,841
Total net position
$ 638,975,748
$ 606,248,440
$ 146,002,554
$ 133,555,746
$ 784,978,302 $
739,804,186
12
The following analysis highlights the changes in net position for the year ended September 30, 2023 and
2022:
Revenues:
Program revenues:
Charges for services
Operating grants
and contributions
Capital grants
and contributions
General revenues:
Taxes
Investment earnings
Miscellaneous
Gain on sale of
capital assets
Total revenues
Expenses:
General government
Public safety
Public works
Culture and recreation
Interest on long-term debt
Water and sewer
Total expenses
Increases in net position
before transfers
Transfers
Change in net position
Net position, beginning
Change in accounting
principle
Net position, beginning,
as restated
Net position, ending
Governmental Activities
Business -type Activities
Totals
2023
2022
2023
2022
2023
2022
$ 11,629,939
$ 11,524,968
$ 37,630,965
$ 37,241,976
$ 49,260,904 $
48,766,944
825,770
8,736,294
-
-
825,770
8,736,294
2,382,770
2,653,556
2,064,296
1,376,002
4,447,066
4,029,558
93,889,807
88,105,225
-
-
93,889,807
88,105,225
7,934,301
(475,934)
2,594,308
(171,020)
10,528,609
(646,954)
512,725
804,354
-
398,399
804,354
4,156
-
-
-
4,156
-
117,179,468
111,348,463
42,289,569
38,446,958
159,354,711
149,795,421
19,837,190
20,685,238
-
-
19,837,190
20,685,238
26,658,917
24,915,801
26,658,917
24,915,801
12,108,564
10,111,585
12,108,564
10,111,585
25,112,091
16,970,272
24,997,765
16,970,272
2,071,867
1,979,546
-
-
2,071,867
1,979,546
-
-
28,506,292
28,397,036
28,506,292
28,397,036
85,788,629
74,662,442
28,506,292
28,397,036
114,180,595
103,059,478
31,390,839
36,686,021
13,783,277
10,049,922
45,174,116
46,735,943
1,336,469
1,360,830
(1,336,469)
(1,360,830)
-
-
32,727,308
38,046,851
12,446,808
8,689,092
45,174,116
46,735,943
606,248,440
567,799,031
133,555,746
124,866,654
739,804,186
692,665,685
-
402,558
-
-
-
402,558
606,248,440
568,201,589
133,555,746
124,866,654
739,804,186
693,068,243
$ 638,975,748
$ 606,248,440
$ 146,002,554
$ 133,555,746
$ 784,978,302 $
739,804,186
13
FINANCIAL ANALYSIS OF THE GOVERNMENTAL FUNDS
Governmental Funds - The focus of the City of Southlake's governmental funds is to provide information
on near -term inflows, outflows and balances of spendable resources. Such information is useful in
assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful
measure of a government's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined fund balances
of $200,115,933. Approximately 8.8% or $17,594,609 constitutes unassigned fund balance, which is
available for spending at the government's discretion. Other portions of the fund balance are either
nonspendable, restricted, committed or assigned to indicate that it is (1) not in spendable form, $54,317;
(2) restricted for particular purposes, $121,781,095; (3) committed for particular purposes, $1,658,817; or
(4) assigned for particular purposes, $59,027,095.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned
fund balance of the General Fund was $17,594,609. As a measure of the General Fund's liquidity, it may
be useful to compare both the unassigned fund balance and total fund balance to total fund
expenditures. Unassigned General Fund fund balance represents 32.2% of total General Fund
expenditures, while total General Fund fund balance represents 89.7 % of total General Fund
expenditures.
The fund balance of the General Fund decreased $143,958 during the current fiscal year. This net
decrease was the result of several factors including (1) sales tax revenues increased by over $1.7 million
due to inflation spikes, and increases in interest rates amplified investment income by over $2.2 million
from FY 2022, both of which contributed to an increase in overall revenues of $3,662,306 in the General
Fund; (2) police and fire services saw a significant increase in expenditures of over $9.2 million, as over
$8 million of public safety related costs were allocated back to the General Fund in FY 2023 after being
funded by the ARPA grant in the prior fiscal year; and (3) subscriptions are reported for the first time in
FY 2023 as the City implemented GASB Statement No. 96. This in conjunction with the reporting of leases
in accordance with GASB Statement No. 87 resulted in a significant increase in principal and interest
expenditures being reported in the General Fund.
The General Obligation Debt Service Fund has a fund balance of $2,993,263, all of which is restricted for
the payment of debt service. The fund balance decreased during the year by $294,133. This decrease
was expected as reserves, property tax collections, and future debt service requirements are all
considered in the determination of tax rates and the budget of the General Obligation Debt Service
Fund.
The fund balance in the General Capital Projects Funds ended the year at $62,405,360, an increase of
$16,566,936. This increase can be attributed to the issuance of $13,397,000 of tax notes and interfund
transfers of $9,545,000. Interest and investment earnings also increased in this fund for FY 2023 by over
$2.4 million because of rising interest rates. These inflows of resources were made available to fund various
capital projects for the City.
The Southlake Parks Development Corporation Special Revenue fund balance increased by $232,387
primarily due to increases in sales tax revenue of $815,180. As previously noted, this sales tax revenue
increase was due to higher inflation. Transfers out of the Southlake Parks Development Corporation
Special Revenue Fund increased by almost $2.5 million for the current year to fund debt service
obligations and planned capital projects.
The Community Enhancement Development Corporation Special Revenue Fund balance increased
$4,103,574. This increase was due to increased sales taxes and charges for services revenues related to
record memberships, program attendance, and event rentals at The Marq, Southlake's state-of-the-art
fitness and aquatics facility and event venue.
14
FINANCIAL ANALYSIS OF THE PROPRIETARY FUNDS
The City's proprietary funds provide the same type of information found in the government -wide financial
statements, but in more detail.
Unrestricted net position reported in the Proprietary Funds included $62,370,816 in the Water and Sewer
Fund and $11,708,552 in the Vehicle and Equipment Replacement Fund. Total net position in the Water
and Sewer Fund increased by $12,446,808 while the Vehicle and Equipment Replacement Fund net
position increased by $2,523,748. Continued increases in demand for water due to significantly lower than
average rainfall and record heat is the primary reason for the respective change in the Water and Sewer
Fund net position. Transfers to fund vehicle and equipment purchases of $3.2 million, net of depreciation,
resulted in the increase in net position in the Vehicle and Equipment Replacement Fund.
GENERAL FUND BUDGETARY HIGHLIGHTS
The City made revisions to the original budget approved by the City Council. Management's estimate of
the General Fund's budgeted revenues increased $1,651,1 16 or 3.0% from original budget based on year-
to-date experience. Actual revenues exceeded budget by $4,698,804 primarily due to municipal sales
and mixed beverage taxes exceeding budget by $2,882,698.
Actual expenditures were $1,273,185 more than budget primarily because of more than $2 million of
capital outlays related to subscriptions reported as a result of the implementation of GASB Statement
No. 96.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets - The City's investment in capital assets for its governmental and business -type activities as
of September 30, 2023 amount to $614,790,357 (net of accumulated depreciation and amortization). This
investment in capital assets includes land, buildings, improvements, machinery and equipment,
infrastructure, construction in progress, and right -to -use assets.
The City has elected to use the modified approach for its street system in lieu of the depreciation method.
An up-to-date inventory of these infrastructure assets was performed and the annual costs to maintain
and preserve these assets was established and disclosed through administrative policy. The current
condition level of the street system meets the target condition level established by the City. There were
no significant changes in the condition levels of infrastructure assets, and the differences between the
estimated amounts necessary to maintain and preserve the street system at target condition levels and
the actual amount of expense incurred for that purpose for 2023 was not material.
Major capital projects completed during the current year included the following:
• Drainage improvements at North Peytonville and Raven Bend
• Gateway Lakes Park drainage improvements
• Southlake Park water line improvements
15
Governmental Activities Business -type Activities
Totals
2023
2022
2023
2022
2023
2022
Land and improvements
$ 111,367,374
$ 112,488,586
$ 21,447,795
$ 21,033,596
$ 132,815,169
$ 133,522,182
Construction in progress
17,195,881
10,045,101
5,519,580
1,414,673
22,715,461
11,459,774
Buildings and
improvements
106,641,267
109,721,666
107,643
137,961
106,748,910
109,859,627
Improvements
-
-
71,571,273
74,823,256
71,571,273
74,823,256
Infrastructure
265,723,506
265,262,406
-
-
265,723,506
265,262,406
Machinery and equipment
12,358,011
10,537,317
43,781
65,216
12,401,792
10,602,533
Right -to -use assets:
Lease equipment
447,330
333,639
-
-
447,330
333,639
Subscriptions
2,366,916
-
-
-
2,366,916
-
Total
$ 516, 100,285
$ 508,388,715
$ 98,690,072
$ 97,474,702
$ 614,790,357
$ 605,863,417
Additional information on the City's capital assets
can be found
in Note 4 on pages
66-67 of this report.
Long-term Debt - At the end of the current fiscal year, the governmental activities had $76,946,956 total
bonds outstanding which were issued to finance capital improvements for roadway, parks and
recreation, public buildings and infrastructure. The business -type activities had $25,805,21 1 of total bonds
outstanding which were issued to finance projects to increase capacity of the utility system.
Governmental Activities
Business -type Activities
Totals
2023
2022
2023
2022
2023
2022
Bonds Payable
$ 76,946,956
$ 74,015,056
$ 25,805,211
$ 28,512,757
$ 102,752,167 $
102,527,813
Total OPEB liability
728,306
1,059,723
59,591
82,972
787,897
1,142,695
Net pension liability
18,318,244
1,332,735
1,498,377
300,064
19,816,621
1,632,799
Financed purchases
308,329
405,368
-
-
308,329
405,368
Lease liabilities
448,904
338,051
-
-
448,904
338,051
Subscription liabilities
2,165,395
-
-
-
2,165,395
-
Compensated absences
2,703,252
2,721,441
98,554
117,215
2,801,806
2,838,656
$ 101,619,386
$ 79,872,374
$ 27,461,733
$ 29,013,008
$ 129,081,119 $
108,885,382
The City takes it debt obligation very seriously. Several years ago, the City Council working with City staff
set goals to reduce the debt as percentage of assessed valuation over the total long term debt. As you
can see in the figure below, the City has reduced the percentage from 3.01% in 2003 to 0.24% in 2023,
during a time of growth for the City. The line that you see on this chart is a graphic illustration of one of
the reasons why two bond rating agencies have rated Southlake's bonds "AAA".
In
LONG-TERM DEBT —DEBT AS % OF ASSESSED VALUATION
3.50%
$120,000,000
3 00% —
5100,000,000
3.01
2.
2 50%
`a
$90,000,000
2.36
>
2 00%
— — —
p
2.079fi0o
g
I H
$60,000,000<
5
z
1 50%
1 71
1.4694.49%.515J.49%
0
1.37%
$40,000,000
1.00%
— - — 1.19'ii.12%
0.92%
DIM
— 0.72%
_ —�
$20,000,000
0.58%
0
0.3496.27
1
$-
0 03% _
2003200420052006200720082009201020112012201320142015201620172018201920202021
FISCAL YEAR
The City has been able to effectively manage its debt during a period of growth using cash to partially
offset borrowing needs. Additionally, managing debt amortization has been a tool used to reduce
borrowing costs.
The City's bonds are rated "AAA" by Standard and Poor's and Fitch Ratings. The City is permitted by
Article XI, Section 5, of the State of Texas Constitution to levy taxes up to $2.50 per $100 of assessed
valuation for general governmental services including the payment of principal and interest on general
obligation long-term debt.
Additional information on the City's long-term debt can be found in Note 5 on pages 67-73 of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The State of Texas, by constitution, does not have a personal income tax and therefore the State operates
primarily using sales and gasoline taxes. Local governments primarily rely on property and sales taxes and
fees to fund their government activities.
While property taxes are important to the City, they represent 36.6% of total governmental revenue. Sales
tax has grown to the largest governmental resource representing 41.5% of total governmental revenue.
The City monitors all of its resources and determines the need for program adjustment or fee increases
accordingly.
The FY 2024 adopted budget incorporates a tax rate of $0.319 per $100 valuation, reducing the rate by
over four cents. The tax rate of $0.319 is split between General Fund operations and debt service. The
allocation for FY 2024 is $0.264 for general operations and $0.055 for debt service. The reduction has been
taken from both the operations and debt service part of the rate.
The ongoing use of the 20% homestead exemption will complement the current over-65 exemption of
$75,000, disabled exemption of $75,000, and the over-65 tax freeze. The continuation of these exemptions
offers additional tax relief. A 20% homestead exemption will reduce the taxable value of an average -
valued home in Southlake by $201,479.
17
The property owner of an average -valued home will see the equivalent of a tax rate reduction of
approximately six cents per $100 valuation with the exemption applied. With the homestead exemption
in place, and considering the tax rate reduction, the equivalent residential tax rate on an average -valued
home is $0.255.
More than 70% of the City's General Fund budgeted expenditures are related to personnel costs. It is the
City's goal to continue to provide for a fair compensation and benefits program to ensure a stable and
high -performing workforce. The FY 2024 budget recognizes and addresses the competitive labor market
and the need to recruit and retain strong talent.
Multi -year financial planning is another budget development consideration, one of the most important.
Executive leaders evaluate the operational impact of all identified projects and include those costs in
future budget projections. Staff monitors trends that depict the long-term financial health of the City and
uses these trends to make decisions to reach financial and service goals.
The City has taken an additional formal step to understand and plan for the organization's financial future
by adopting the Sustainability Master Plan as an element of the Southlake Comprehensive Plan. It
contains formal recommendations to ensure positive financial outcomes for the City.
Requests for Information
This financial report is designed to provide a general overview of the City of Southlake's finances for all
those with an interest in the government's finances. Questions concerning any of the information
provided in this report or requests for additional financial information should be addressed to the Office
of the Chief Financial Officer, 1400 Main Street, Suite 420, Southlake, Texas 76092.
In
Basic Financial Statements
Me
20
Government -wide Financial Statements
21
22
City of Southlake, Texas
Statement of Net Position
September 30, 2023
Exhibit 1
PRIMARY GOVERNMENT
GOVERNMENTAL
BUSINESS -TYPE
ACTIVITIES
ACTIVITIES
TOTAL
ASSETS
Cash and investments
$ 211,313,556
$ 56,209,506 $
267,523,062
Receivables (net of allowance for uncollectibles)
12,137,136
7,445,660
19,582,796
Prepaid items
1,048,510
-
1,048,510
Inventories
47,008
-
47,008
Restricted assets
Cash and cash equivalents
2,991,225
15,353,708
18,344,933
Restricted cash for customer deposits
-
298,337
298,337
Receivables
11,446
-
11,446
OPEB asset
452,288
-
452,288
Capital assets:
Not being depreciated/amortized
347,460,257
26,967,375
374,427,632
Net of depreciation/amortization
168,640,028
71,722,697
240,362,725
Total assets
744,101,454
177,997,283
922,098,737
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding
581,108
219,000
800,108
Deferred outflows - TMRS pension
11,649,044
848,525
12,497,569
Deferred outflows - TMRS OPEB
186,305
14,198
200,503
Deferred outflows - OPEB Health
811,737
-
811,737
Total deferred outflows of resources
13,228,194
1,081,723
14,309,917
LIABILITIES
Accounts payable
7,590,687
3,999,563
11,590,250
Accrued liabilities
1,624,789
314,698
1,939,487
Accrued interest payable
-
106,845
106,845
Retainage payable
358,321
401,005
759,326
Deposits payable
750,032
-
750,032
Unearned revenue
4,051,000
184,176
4,235,176
Liabilities payable from restricted assets
Accrued interest
384,527
-
384,527
Customer meter deposits
-
298,337
298,337
Non -current liabilities:
Due within one year
11,383,590
2,521,298
13,904,888
Due in more than one year
90,235,796
24,940,435
115,176,231
Total liabilities
116,378,742
32,766,357
149,145,099
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding
76,633
280,969
357,602
Deferred inflows - leases
944,303
-
944,303
Deferred inflows - TMRS OPEB
407,911
29,126
437,037
Deferred inflows - OPEB Health
546,311
-
546,311
Total deferred inflows of resources
1,975,158
310,095
2,285,253
NET POSITION
Net investment in capital assets
450,639,461
75,167,644
525,807,105
Restricted for
Debt service
5,256,902
-
5,256,902
OPEB Asset
452,288
452,288
Capital projects
34,698,804
34,698,804
Municipal court
859,689
859,689
Reinvestment zone
8,347,195
8,347,195
Police
8,530,927
8,530,927
Parks and recreation
58,345,188
58,345,188
Library
19,534
19,534
Storm water
2,162,574
2,162,574
Promotion of culture and tourism
3,185,163
-
3,185,163
Impact fees
-
8,464,094
8,464,094
Unrestricted
66,478,023
62,370,816
128,848,839
TOTAL NET POSITION
$ 638,975,748
$ 146,002,554 $
784,978,302
The Notes to the Financial Statements are an integral part of this statement.
23
City of Southlake, Texas
Statement of Activities
For the Fiscal Year Ended September 30, 2023
Exhibit 2
Net(Expense)Revenue and
Program Revenues
Changes in Net Position
Primary Government
Charges for
Operating Grants
Capital Grants
Governmental
Business - Type
Functions/Program Activities
Expenses
Services
and Contributions
and Contributions
Activities
Activities
TOTAL
PRIMARY GOVERNMENT:
Governmental Activities:
General government
$ 19,837,190
$ 1,712,925 $
140
$
$ (18,124,125)
$ $
(18,124,125)
Public safety
26,658,917
774,891
726,998
(25,157,028)
(25,157,028)
Public works
12,108,564
3,477,348
-
2,382,770
(6,248,446)
(6,248,446)
Culture and recreation
25,112,091
5,664,775
98,632
-
(19,348,684)
(19,348,684)
Interest on long-term debt
2,071,867
(2,071,867)
(2,071,867)
Total governmental activities
85,788,629
11,629,939
825,770
2,382,770
(70,950,150)
(70,950,150)
Business -type Activities:
Water and sewer
Total business -type activities
TOTAL PRIMARY GOVERNMENT
28,506,292 37,630,965
28,506,292 37,630,965
2,064,296
2,064,296
11,188,969 11,188,969
11,188,969 11,188,969
$ 114.294.921 $ 49.260.904 $ 825,770 $ 4.447.066 (70,950150) 11,188,969 (59,761,181)
General revenues and transfers:
General revenues
Property taxes, levied for general purposes
Sales taxes
Franchise taxes
Investment income
Gain on disposal of capital assets
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year
NET POSITION, end of year
The Notes to the Financial Statements are an integral part of this statement.
42,315,760
47,917,152
3,656,895 -
7,934,301 2,594,308
4,156 -
512,725
1,336,469 (1,336,4691
42,315,760
47,917,152
3,656,895
10,528,609
4,156
512,725
103,677,458 1,257,839 104,935,297
32,727,308 12,446,808 45,174,116
606,248,440 133,555,746 739,804,186
$ 638.975.748 $ 146,002,554 $ 784,978, 002
24
Fund Financial Statements
25
26
Governmental Funds Financial Statements
27
City of Southlake, Texas
Balance Sheet -Governmental Funds
September 30, 2023
ASSETS
Cash and investments
Receivables, net of allowances for uncollectibles:
Ad valorem taxes
Franchise taxes
Sales taxes
Interest
Leases
Other
Inventories
Prepaid items
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
LIABILITIES
Accounts payable
Accrued liabilities
Retainage payable
Deposits payable
Unearned revenue
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES
Unavailable resources
Deferred inflows - leases
TOTAL DEFERRED INFLOWS OF RESOURCES
FUND BALANCES
Nonspendable
Restricted
Committed
Assigned
Unassigned
TOTAL FUND BALANCES
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
GENERAL
OBLIGATION GENERAL
DEBT CAPITAL
GENERAL SERVICE PROJECTS
$ 49,724,073 $ 2,991,225 $ 67,912,481
47,760
10,463
737,965
-
4,679,857
- -
28,258
853 19,363
940,596
- -
45,774
130
47,008
-
7,309
- -
$ 56,258,600
$ 3,002,671 $ 67,931,844
$ 3,902,745 $ $ 1,727,606
1,383,661 -
- 261,963
41,766 642,816
670,763 2,894,099
5,998,935 5,526,484
383,172 9,408
907,028 -
1,290,200 9,408
54,317 - -
- 2,993,263 34,698,804
31,320,539 27,706,556
17,594,609 - -
48,969,465 2,993,263 62,405,360
$ 56,258,600 $ 3,002,671 $ 67,931,844
The Notes to the Financial Statements are an integral part of this statement.
28
Exhibit 3
COMMUNITY
SOUTHLAKE
ENHANCEMENT
PARKS
DEVELOPMENT
DEVELOPMENT
CORPORATION
NON -MAJOR
TOTAL
CORPORATION -
SPECIAL
GOVERNMENTAL
GOVERNMENTAL
OPERATING
REVENUE
FUNDS
FUNDS
$
11,951,582
$ 19,619,222
$
51,441,830
$
203,640,413
-
-
-
58,223
-
-
-
737,965
2,336,558
1,730,784
1,092,731
9,839,930
3,500
5,605
14,671
72,250
38,271
-
-
978,867
38,456
157,002
217,002
458,364
-
-
-
47,008
-
-
7,309
$
14,368,367
$ 21,512,613
$
52,766,234
$
215,840,329
$
53,450
$ 71,765
$
1,835,126
$
7,590,692
16,137
117,261
107,730
1,624,789
-
-
96,358
358,321
65,450
-
750,032
-
486,138
-
4,051,000
69,587
740,614
2,039,214
14,374,834
12,679
-
-
405,259
37,275
-
944,303
49,954
-
1,349,562
-
-
-
54,317
14,248,826
20,771,999
49,068,203
121,781,095
-
-
1,658,817
1,658,817
-
59,027,095
-
-
17,594,609
14,248,826
20,771,999
50,727,020
200,115,933
$
14,368,367
$ 21,512,613
$
52,766,234
$
215,840,329
29
City of Southlake, Texas Exhibit 4
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
September 30, 2023
Total fund balances - governmental funds
$ 200,115,933
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not current financial resources and therefore, are not
reported in the governmental funds balance sheet (less $6,311,032 in assets allocated to governmental
activities from the internal service fund).
509,789,253
Interest payable on long-term debt does not require current financial resources; therefore, interest
payable is not reported as a liability in the governmental funds balance sheet.
(384,527)
Internal service funds are used by management to charge the cost of certain activities, such as fleet
management, to individual funds. This amount represents the assets less the liabilities of the internal service
fund allocated to governmental activities.
18,019,584
OPEB asset has not been included in the governmental fund financial statements, as these assets do
not represent current financial resources.
452,288
Revenues earned but not available within sixty days of the year end are not recognized as revenue on
the fund financial statements.
405,259
For debt refundings, the difference between the acquisition price and net carrying amount of the debt
has been deferred and amortized in the government -wide financial statements. This amount is the net of
deferred losses, $581,113 and gains ($76,633) on refundings.
504,480
Deferred outflows of resources related to the City's pension and OPEB liabilities result in an increase in
net position in the government -wide financial statements.
12,647,086
Deferred inflows of resources related to the City's pension and OPEB liabilities result in a decrease in
net position in the government -wide financial statements.
(954,222)
Long-term liabilities, including bonds payable and net pension and OPEB liabilities, are not due and
payable in the current period and therefore are not reported in the fund financial statements.
(101,619,386)
NET POSITION OF GOVERNMENTAL ACTIVITIES
$ 638,975,748
The Notes to the Financial Statements are an integral part of this statement.
30
31
City of Southlake, Texas
Statement of Revenues, Expenditures,
and Changes in Fund Balances - Governmental Funds
For the Fiscal Year Ended September 30, 2023
GENERAL
OBLIGATION
GENERAL
DEBT
CAPITAL
GENERAL
SERVICE
PROJECTS
REVENUES
Ad valorem taxes, penalties and interest
$ 26,578,947
$ 5,886,605
$
Franchise taxes
3,656,895
-
Municipal sales and mixed beverage taxes
22,790,698
Licenses, permits and fees
2,101,778
Charges for services
2,098,618
Fines and forfeitures
795,072
Intergovernmental revenue
496,469
794,189
Capital recovery fees
-
-
466,928
Investment income (losses)
2,088,292
155,007
2,322,954
Contributions
45,788
-
10,253
Miscellaneous
230,110
136,476
Total revenues
60,882,667
6,041,612
3,730,800
EXPENDITURES
Current
General government
City secretary/mayor
586,176
City manager's office
1,107,936
Human resources
965,103
Support services
4,891,905
Economic development
332,109
Finance
1,847,819
Municipal court
799,731
Teen court
145,254
Information technology
3,635,409
Public safety
Police services
8,263,315
Fire services
11,798,804
Public safety support
1,575,064
Public works
Public works administration
2,340,428
-
Streets and drainage
1,163,500
3,805,906
Planning
1,245,423
-
Building inspection
1,209,322
Cultural and recreation
Community services
1,415,750
Parks and recreation
4,268,243
Library services
1,139,467
Promotion of tourism
-
Intergovernmental
-
-
Capital outlay
4,897,087
-
6,204,052
Debt service:
Principal retirement
918,815
5,795,832
-
Interest and fiscal charges
24,257
942,467
95,906
Total expenditures
54,570,917
6,738,299
10,105,864
Excess (deficiency) of revenues
over (under) expenditures
6,311,750
(696,6871
(6,375,0641
OTHER FINANCING SOURCES (USES)
Issuance of long-term debt
-
-
13,397,000
Issuance of financed purchases
53,975
-
Issuance of subscriptions
2,608,340
Sale of capital assets
4,156
-
-
Transfers from other funds
2,844,912
402,554
9,545,000
Transfers to other funds
(11,967,091)
Total other financing sources (uses)
(6,455,708)
402,554
22,942,000
Net change in fund balances
(143,958)
(294,133)
16,566,936
Fund balances, beginning of year
49,113,423
3,287,396
45,838,424
FUND BALANCES, END OF YEAR
$ 48,969,465
$ 2,993,263
$ 62,405,360
The Notes to the Financial Statements are an integral part of this statement.
32
Exhibit 5
COMMUNITY
SOUTHLAKE
ENHANCEMENT
PARKS
DEVELOPMENT
DEVELOPMENT
CORPORATION
NON -MAJOR
TOTAL
CORPORATION
SPECIAL
GOVERNMENTAL
GOVERNMENTAL
OPERATING
REVENUE
FUNDS
FUNDS
$
$
$ 9,834,043
$ 42,299,595
-
3,656,895
11,426,173
8,463,832
5,236,449
47,917,152
-
-
373,299
2,475,077
116,376
4,413,152
1,606,564
8,234,710
-
-
108,613
903,685
254,541
1,545,199
-
-
-
466,928
306,621
632,339
1,980,613
7,485,826
-
6,685
47,341
110,067
9,573
136,566
512,725
11,849,170
13,525,581
19,578,029
115,607,859
-
-
-
586,176
1,107,936
965,103
1,579,012 6,470,917
- 332,109
- 1,847,819
86,012 885,743
- 145,254
3,635,409
2,429,139 10,692,454
- 11,798,804
1,575,064
- 2,340,428
522,694 5,492,100
- 1,245,423
1,209,322
1,632,063
5,097,866
120,653
8,266,332
-
-
-
4,268,243
7,929
1,147,396
863,647
863,647
-
-
6,454,981
6,454,981
291,744
130,805
3,502,350
15,026,038
-
21,862
4,041,219
10,777,728
1,143
1,373,066
2,436,839
1,923,807
5,251,676
20,980,702
99,571,265
9,925,363
8,273,905
(1,402,673)
16,036,594
-
-
13,397,000
-
-
53,975
130,805
292,043
3,031,188
-
-
4,156
14,336,589
27,129,055
(9,692,976)
(4,301,136)
(3,031,383)
(28,992,586)
(9,692,976)
(4,170,331)
11,597,249
14,622,788
232,387
4,103,574
10,194,576
30,659,382
14,016,439
16,668,425
40,532,444
169,456,551
$ 14,248,826
$ 20,771,999
$ 50,727,020
$ 200,115,933
33
City of Southlake, Texas Exhibit 6
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of the Governmental Fund
to the Statement of Activities
For the Fiscal Year Ended September 30, 2023
Net change in fund balances - total governmental funds $ 30,659,382
Amounts reported for governmental activities in the statement of activities
are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities,
the cost of those assets is allocated over their estimated useful lives and reported as depreciation and
amortization expense. This is the amount of capital assets additions recorded in the current period (does not
include additions of $2,100,595 allocated from internal service fund). 14,810,538
Depreciation and amortization expense on capital assets are reported in the statement of activities
but does not require the use of current financial resources. Therefore, depreciation and amortization expenses
are not reported as expenditures in the governmental funds. (does not include $1,111,549 allocated from internal
service fund). (9,405,509)
The issuance of long-term debt (e.g. bonds) provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the current financial resources of
governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds
report the effect of premiums, discounts, and similar items when debt is first issued, whereas the amounts are
deferred and amortized in the statement of activities. This amount is the net effect of the following items:
Issuance of bonds $ (13,397,000)
Issuance of financed purchases (53,975)
Issuance of SBITAs (3,031,188)
Principal payments on debt 9,766,871
Principal payments on financed purchases and other lease liabilities 1,010,857
Amortization of premiums and deferred gains and losses 420,241
(5,284,194)
The changes in net pension liability and deferred outflows/inflows from TMRS are not reported in the
governmental funds. This is the net effect of the increase in the net pension liability, ($16,985,509), decrease in
deferred inflows of resources, $6,976,554, and increase in deferred outflows of resources, $8,370,643.
(1,638,312)
The changes in total OPEB liability and deferred outflows/inflows from TMRS are not reported in
the governmental funds. This is the net effect of the decrease in the total SDBF OPEB liability $331,417, increase in
deferred inflows of resources, ($325,733), and decrease in deferred outflows of resources, ($52,701).
(47,017)
The changes in net OPEB liability and deferred outflows/inflows for healthcare are not reported in
the governmental funds. This is the net effect of the decrease in the total healthcare OPEB asset, ($265,119),
decrease in deferred inflows of resources, $315,012, and increase in deferred outflows of resources, $23,043.
72,936
Current year changes in the long-term liability for compensated absences do not require the use of
current financial resources; and therefore, are not reported as expenditures in governmental funds.
18,192
Current year changes in accrued interest payable do not require the use of current financial
resources; and therefore, are not reported as expenditures in governmental funds.
(63,525)
Internal service funds are used by management to charge the costs of certain activities, such as
fleet management, to individual funds. The net income of the internal service fund is allocated entirely to
governmental activities.
2,523,748
Governmental funds do not recognize assets contributed by developers. However, in the statement
of activities, the fair value of those assets is recognized as revenue, then allocated over their estimated useful lives
and reported as depreciation expense.
1,111,400
Gain on disposal of capital assets results in an increase in net position, but the net effect is not
reported in governmental funds.
4,156
Certain revenues in the government -wide statement of activities that do not provide current financial
resources are not reported as revenue in the governmental funds.
(34,487)
Change in net position of governmental activities
$ 32,727,308
The Notes to the Financial Statements are an integral part of this statement.
34
Proprietary Funds Financial Statements
35
36
City of Southlake, Texas Exhibit 7
Statement of Net Position - Proprietary Funds
September 30, 2023
BUSINESS -TYPE
GOVERNMENTAL
ACTIVITIES
ACTIVITIES
WATER AND SEWER
VEHICLE AND EQUIPMENT
ENTERPRISE
REPLACEMENT INTERNAL
FUND
SERVICE FUND
ASSETS
CURRENT ASSETS
Cash and investments
$ 56,209,506
$ 10,664,368
Receivables, net of allowance for uncollectibles:
Billed and unbilled trade accounts
7,425,171
-
Interest
20,489
2,983
Prepaid expenses
-
1,041,201
Restricted assets:
Cash restricted for capital
15,353,708
-
Restricted cash for customer deposits
298,337
Total current assets
79,307,211
11,708,552
NON -CURRENT ASSETS
Capital assets:
Land
21,447,794
-
Buildings and improvements
935,501
Distribution system
155,756,543
-
Equipment
3,024,292
703,246
Vehicles
-
13,243,633
Capacity rights
9,190,988
-
Construction in progress
5,519,581
Total capital assets
195,874,699
13,946,879
Less: accumulated depreciation and amortization
(97,184,627)
(7,635,847)
Capital assets, net of accumulated depreciation and amortization
98,690,072
6,311,032
Total non -current assets
98,690,072
6,311,032
TOTAL ASSETS
$ 177,997,283
$ 18,019,584
DEFERRED OUTFLOW OF RESOURCES
Deferred loss on refunding
$ 219,000
$ -
Deferred outflows - TMRS pension
848,525
Deferred outflows - TMRS OPEB
14,198
Total deferred outflows of resources
1,081,723
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND NET POSITION
CURRENT LIABILITIES
Accounts payable
3,999,563
Accrued liabilities
314,698
Retainage payable
401,005
Accrued interest
106,845
Unearned revenue
184,176
Current portion of general obligation debt
2,488,640
Current portion of compensated absences
32,658
Payable from restricted assets:
Customer meter deposits
298,337
Total current liabilities
7,825,922
NON -CURRENT LIABILITIES
General obligation debt
23,316,571
Compensated absences
65,896
Net pension liability
1,498,377
Total OPEB liability
59,591
Total non -current liabilities
24,940,435
TOTAL LIABILITIES
32,766,357
DEFERRED INFLOW OF RESOURCES
Deferred gain on refunding
280,969
Deferred inflows - TMRS OPEB
29,126
Total deferred inflows of resources
310,095
NET POSITION
Net investment in capital assets
75,167,644
6,311,032
Restricted for impact fees
8,464,094
-
Unrestricted
62,370,816
11,708,552
TOTAL NET POSITION
$ 146,002,554
$ 18,019,584
The Notes to the Financial Statements are an integral part of this statement.
37
City of Southlake, Texas
Statement of Revenues, Expenses,
and Changes in Net Position - Proprietary Funds
For the Fiscal Year Ended September 30, 2023
OPERATING REVENUES
Charges for sales and services:
Water, sewer and garbage
Service charges
Total operating revenues
OPERATING EXPENSES:
Personnel services
Contractual services
Supplies
Utilities
Administrative
Maintenance
Professional benefits
Depreciation and amortization
Total operating expenses
OPERATING INCOME (LOSS)
NON -OPERATING REVENUES (EXPENSES)
Investment income
Interest expense and bond administration expense
Total non -operating revenues (expenses)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS
CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions - property owners
Contributions - impact fees
Transfers from other funds
Transfers to other funds
Total capital contributions and transfers
Change in net position
Net position, beginning of year
NET POSITION, END OF YEAR
BUSINESS -TYPE
ACTIVITIES
WATER AND SEWER
ENTERPRISE
FUND
$ 37,504,661
126,304
37,630,965
2,994,673
2,483,268
474,494
11,243,234
38,735
5,435,490
44,492
5,148,187
Exhibit 8
GOVERNMENTAL
ACTIVITIES
VEHICLE AND EQUIPMENT
REPLACEMENT INTERNAL
SERVICE FUND
13,178
1,111,549
27,862,573
1,124,727
9,768,392
(1,124,727)
2,594,308
448,475
(643, 719)
-
1,950,589
448,475
11,718,981
(676,252)
1,678,920
385,376
-
67,091
3,200,000
(1,403,560)
-
727,827
3,200,000
12,446,808
2,523,748
133,555,746
15,495,836
$ 146,002,554 $
18,019,584
The Notes to the Financial Statements are an integral part of this statement.
38
City of Southlake, Texas Exhibit 9
Statement of Cash Flows - Proprietary Funds
For the Fiscal Year Ended September 30, 2023
BUSINESS -TYPE
GOVERNMENTAL
ACTIVITIES
ACTIVITIES
WATER AND SEWER
VEHICLE AND EQUIPMENT
ENTERPRISE
REPLACEMENT INTERNAL
FUND
SERVICE FUND
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users
$
36,189,860
$
Cash payments to suppliers
(19,018,468)
(13,178)
Cash payments to employees
(2,894,437)
Net cash provided by (used in) operating activities
14,276,955
(13,178)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets
(4,684,637)
(3,141,794)
Principal payments on bonds
(2,439,168)
Interest paid on capital debt
(893,107)
Contributions - impact fees
385,376
Net cash used in capital and related
financing activities
(7,631,536)
(3,141,794)
CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES
Transfers from other funds
67,091
3,200,000
Transfers to other funds
(1,403,560)
-
Net cash provided by (used in) non -capital
financing activities
(1,336,469)
3,200,000
CASH FLOWS FROM INVESTING ACTIVITIES
Net investment gains
2,594,308
448,475
Interest received
39,101
6,204
Net cash provided by investing activities
2,633,409
454,679
Net change in cash and cash equivalents
7,942,359
499,707
CASH AND CASH EQUIVALENTS, beginning of year
63,919,192
10,164,661
CASH AND CASH EQUIVALENTS, end of year
$
71,861,551
$
10,664,368
RECONCILIATION TO STATEMENT OF NET POSITION
Cash and cash equivalents
$
56,209,506
$
10,664,368
Cash restricted for capital
15,353,708
-
Restricted cash for customer deposits
298,337
-
Total cash and cash equivalents
$
71,861,551
$
10,664,368
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Operating income (loss)
$
9,768,392
$
(1,124,727)
Adjustments to reconcile operating income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization
5,148,187
1,111,549
Decrease (increase) in assets and deferred outflows
of resources
Receivables
(1,407,391)
-
Deferred outflows of resources - pensions and OPEB
(579,642)
Increase (decrease) in liabilities and deferred outflows
of resources
Payables and accruals
682,584
Customer deposits
(25,425)
Deferred inflows of resources - pensions and OPEB
(476,393)
Decrease in pension and OPEB liabilities
1,174,932
Unearned revenue
(8,289)
Net cash provided by (used in) operating activities
$
14,276,955
$
(I3,178)
NON -CASH CAPITAL AND RELATED FINANCING:
Contributions of capital assets from developers
$
1,678,920
$
The Notes to the Financial Statements are an integral part of this statement.
39
40
Fiduciary Fund Financial Statements
41
42
City of Southlake, Texas
OPEB Liability Trust Fund
Statement of Fiduciary Net Position
December 31, 2022
Exhibit 10
Trust Fund*
Southlake
OPEB
Liability
ASSETS
Investments
$
2,339,116
TOTAL ASSETS
$
2,339,1 16
NET POSITION
Restricted for post employment benefits other
than pensions
$
2,339,116
TOTAL NET POSITION
$
2,339,1 16
* The Southlake Other Post Employment Benefit (OPEB) Liability Trust Fund is reported as of
December 31, 2022.
The Notes to the Financial Statements are an integral part of this statement.
43
City of Southlake, Texas
OPEB Liability Trust Fund
Statement of Changes in Fiduciary Net Position
For the Fiscal Year Ended December 31, 2022
Exhibit 11
Trust Fund
Southlake
OPEB
Liability
ADDITIONS
Employer contributions
$ 225,370
Investment earnings, net of unrealized/realized gain/(loss)
(343,355)
TOTAL ADDITIONS
(117,985)
DEDUCTIONS
Benefit payments
85,370
Administrative expenses
7,980
TOTAL DEDUCTIONS
93,350
Change in net position
(211,335)
Net position, beginning of year
2,550,451
NET POSITION - END OF YEAR
$ 2,339,116
The Notes to the Financial Statements are an integral part of this statement.
44
Notes to the Financial Statements
45
m
City of Southlake, Texas
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies
General Statement
The City of Southlake (the City) operates under a Home Rule Council - Manager form of government. All
powers of the City are vested in an elected council, which enables local legislation, adopts budgets,
determines policies and appoints the City Manager. The City Manager is responsible for executing the
laws and administering the government of the City.
The accounting and reporting policies of the City relating to the funds included in the accompanying
basic financial statements conform to accounting principles generally accepted in the United States of
America applicable to state and local governments. Generally accepted accounting principles for local
governments include those principles prescribed by the Governmental Accounting Standards Board
(GASB). The more significant accounting policies of the City are described below.
Financial Reporting Entity
The City is governed by an elected mayor and six -member council. The accompanying financial
statements present the government and its component units, entities for which the government is
considered to be financially accountable. The criteria for including legally separate organizations as
component units within the City's reporting entity are set forth in Section 2100 of GASB's Codification of
Governmental Accounting and Financial Reporting Standards (GASB Codification).
Blended component units are, in substance, part of the primary government's operations, even though
they are legally separate entities. Thus, blended component units are appropriately presented as funds
of the primary government.
Based on these criteria, the financial information of the following entities has been blended within the
reporting entity. Individual financial statements are not available for these component units.
Southlake Parks Development Corporation (SPDQ - The SPDC is a nonprofit industrial development
corporation formed in January 1994 under the Development Corporation Act of 1979. The SPDC is
organized exclusively to act on behalf of the City for the financing, development and operation of parks
and recreation facilities. The affairs of the SPDC are managed by a seven member board of directors, of
which four are members of the City Council. The annual corporate budget and issuance of debt must be
approved by the City Council. Since the Board of the SPDC is substantively the same as the City Council,
the SPDC has been reported as a blended component unit.
Southlake Community Enhancement and Development Corporation (CEDC)_ - The CEDC was formed
under the Development Corporation Act of 1979, as amended, Title 12, Subtitle C1 of the Texas Local
Government Code. The CEDC is organized to promote economic development within the City, including
developing, implementing, providing and financing projects including a community entertainment and
recreation center for the City. The CEDC is governed by a seven member board appointed by the City
Council. The annual budget and issuance of debt must be approved by the City Council. Since the CEDC
provides services entirely to the City, it has been reported as a blended component unit.
Southlake Tax Increment Financing District (TIF) - The TIF was formed to finance and make public
improvements, under the authority of the Tax Increment Financing Act. The TIF is governed by a
nine member board of directors consisting of the eight members appointed by the City Council, and
one member appointed by Carroll Independent School District. Since the Board of the TIF is substantively
the same as the City Council, the City has operational responsibility for the TIF and the City receives
financial benefit from the TIF, the TIF has been reported as a blended component unit.
47
City of Southlake, Texas
Notes to the Financial Statements
Southlake Crime Control and Prevention District (CCDJ - The CCD was formed under Chapter 363 of the
Texas Local Government Code, the Crime Control and Prevention Act. The CCD is organized exclusively
to act on behalf of the City for the financing, development and crime control throughout the City. The
CCD is governed by a seven member board appointed by the City Council. The annual budget and
issuance of debt must be approved by the City Council. Since the CCD provides services entirely to the
City, it has been reported as a blended component unit.
Basis of Presentation
The government -wide financial statements (the statement of net position and the statement of activities)
report information on all of the activities of the City, except for fiduciary funds. The effect of interfund
activity, within the governmental and business -type activities columns, has been removed from these
statements. Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business -type activities, which rely to a significant extent on fees
and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given program
are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
program.
Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit
from goods, services, or privileges provided by a given program and 2) operating or capital grants and
contributions that are restricted to meeting the operational or capital requirements of a particular
program. Taxes and other items not properly included among program revenues are reported instead as
general revenues.
Fund Financial Statements
The City segregates transactions related to certain functions or activities in separate funds in order to aid
financial management and to demonstrate legal compliance. Separate statements are presented for
governmental funds and proprietary funds. These statements present each major fund as a separate
column in the fund financial statements; all non -major funds are aggregated and presented in a single
column.
Governmental funds are those funds through which most governmental functions typically are financed.
The measurement focus of governmental funds is on the sources, uses and balances of current financial
resources.
Governmental Funds
The City reports the following major governmental funds:
General Fund
The General Fund is the general operating fund of the City. It is used to account for all financial
resources not accounted for in other funds. All general tax revenues and other receipts that are not
restricted by law or contractual agreement to some other fund are accounted for in this fund. General
operating expenditures, fixed charges and capital improvement costs that are not paid through other
funds are paid from the General Fund.
m
City of Southlake, Texas
Notes to the Financial Statements
General Obligation Debt Service Fund
The General Obligation Debt Service Fund is used to account for the accumulation of financial
resources for the payment of principal, interest and related costs on long-term debt paid primarily
from taxes levied by the City. The fund balance of the General Obligation Debt Service Fund is
restricted exclusively for debt service expenditures.
General Capital Projects Fund
The General Capital Projects Fund is used to account for resources used for the acquisition and/or
construction of capital facilities by the City, except those financed by proprietary funds and not
accounted for by another capital projects fund.
Southlake Parks Development Corporation
The Southlake Parks Development Corporation (SPDC) Fund was established to account for the
general operations of the non-profit corporation established to finance, develop and operate park
and recreational facilities. The SPDC is funded primarily through the municipal sales taxes.
Community Enhancement and Development Corporation
The Community Enhancement and Development Corporation (CEDC) Fund was established to
account for the general operations of the non-profit corporation established to finance, develop and
operate a community entertainment and recreation center. The CEDC is funded primarily through
municipal sales taxes and user fees.
Proprietary Funds
Proprietary Funds are accounted for using the economic resources measurement focus and the accrual
basis of accounting. The accounting objectives are determinations of net income, financial position and
cash flow. All assets, deferred outflows of resources, liabilities, and deferred inflows of resources are
included in the Statement of Net Position.
The City reports the following major proprietary fund:
Water and Sewer Enterprise Fund
The Water and Sewer Enterprise Fund is used to account for the acquisition, operation and
maintenance of a municipal water and sewer utility, supported primarily by user charges to the public.
Additionally, the City reports an Internal Service Fund which is used to account for vehicle and equipment
replacement provided to departments of the City.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods
in connection with a proprietary fund's principal ongoing operations. Operating expenses for the
proprietary funds include the cost of personnel and contractual services, supplies and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as non -operating
revenues and expenses.
49
City of Southlake, Texas
Notes to the Financial Statements
Fiduciary Funds
The City also presents one trust fund, Southlake OPEB Liability Trust Fund. The City's OPEB Liability Trust Fund
accounts for the funding of postemployment healthcare benefits for retirees of the City and their
dependents which is presented as of December 31, 2022.
Measurement Focus and Basis of Accounting
Measurement focus refers to what is being measured; basis of accounting refers to when revenues and
expenditures are recognized in the accounts and reported in the financial statements. Basis of
accounting relates to the timing of the measurement made, regardless of the measurement focus
applied.
The government -wide statements and fund financial statements for proprietary and fiduciary funds are
reported using the accrual basis of accounting. The government -wide, proprietary fund, and fiduciary
trust fund financial statements are prepared using the economic resources measurement focus. The
economic resources measurement focus means all assets and liabilities (whether current or non -current)
are included in the statement of net position and the operating statements present increases (revenues)
and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are
recognized when earned, including unbilled water and sewer services which are accrued. Expenses are
recognized at the time the liability is incurred.
Governmental fund financial statements are reported using the current financial resources measurement
focus and are accounted for using the modified accrual basis of accounting. Under the modified accrual
basis of accounting, revenues are recognized when susceptible to accrual; i.e., when they become both
measurable and available.
"Measurable" means the amount of the transaction can be determined and "available" means
collectible within the current period or soon enough thereafter to be used to pay liabilities of the current
period. The City considers all revenues as available if they are collected within 60 days after year end.
Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on
long-term debt which is recognized when due, and certain compensated absences and claims and
judgments which are recognized when the obligations are expected to be liquidated with expendable
available financial resources.
Property taxes, sales taxes, franchise taxes and interest are susceptible to accrual. Other receipts become
measurable and available when cash is received by the City and are recognized as revenue at that time.
50
City of Southlake, Texas
Notes to the Financial Statements
Cash, Cash Equivalents and Investments
In accordance with GASB Statement No. 31, the City's general policy is to report money market
investments and short-term participating interest -earning investment contracts at amortized cost and to
report nonparticipating interest -earning investment contracts using a cost -based measure. However, if
the fair value of an investment is significantly affected by the impairment of the credit standing of the
issuer or by other factors, it is reported at fair value. All other investments are reported at fair value unless
a legal contract exists which guarantees a higher value. The term "short-term" refers to investments, which
have a remaining term of one year or less at the time of purchase. The term "nonparticipating" means
that the investment's value does not vary with market interest rate changes. As of September 30, 2023,
the investments held by the City had a remaining maturity of greater than one year from purchase and
accordingly are carried at fair value.
The City's cash and cash equivalents are defined as cash on hand, cash and pooled investment demand
deposits held with financial institutions, and short-term investments with original maturities of three months
or less from the date of acquisition. Cash and cash equivalents also includes long-term investments with
maturity of greater than one year. The classification of the City's cash and cash equivalents is reported in
Note 2.
The City pools idle cash from all funds for the purpose of increasing income through coordinated
investment activities. Interest earnings are allocated to the respective funds based upon each fund's
relative balance in the pool.
Cash and cash equivalents reported as restricted are restricted for debt service, acquisition and
construction of capital assets, and for utility deposits held by the City.
Property Taxes
The City's property tax is levied each October 1 on the assessed value listed as of the prior January 1 for
all real and certain personal property located within the City. Appraised values are established by the
Central Appraisal Districts at 100% of estimated market value and certified by the Appraisal Review Board.
The assessed value upon which the 2022 levy was based on was $12,376,568,531. Taxes are due on
October 1 and are delinquent after the following January 31.
The City is permitted by Article XI, Section 5 of the State of Texas Constitution to levy taxes up to $2.50 per
$100 of assessed valuation for general governmental services, including the payment of principal and
interest on general obligation long-term debt. The combined tax rate to finance general governmental
services including the payment of principal and interest on long-term debt for the year ended
September 30, 2023 was 0.360 per $100 of assessed valuation.
In Texas, countywide central appraisal districts are required to assess all property within the appraisal
district on the basis of 100% of its appraised value and are prohibited from applying any assessment ratios.
The value of property within the appraisal district must be reviewed every five years; however, the City
may, at its own expense, require annual reviews of appraised values.
Interfund Receivables and Payables
Activities between funds that are representative of lending/borrowing arrangements outstanding at the
end of the fiscal year are referred to as "due to/from other funds."
Any residual balances outstanding between the governmental activities and business -type activities are
reported in the government -wide financial statements as "internal balances".
51
City of Southlake, Texas
Notes to the Financial Statements
Transactions between Funds
Interfund services provided and used are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that
are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund
and as a reduction of expenditures/expenses in the fund reimbursed. All other interfund transactions,
except interfund services provided and used and reimbursements, are recorded as transfers. Interfund
services provided and used are not eliminated in the process of consolidation.
Inventories
Inventories are stated at cost (first -in, first -out) and are determined annually by taking a physical inventory.
Inventory in the general fund consists of gasoline held for consumption and is reported on the
consumption method. Under the consumption method the cost is recorded as an expenditure at the time
individual inventory items are utilized.
Prepaid Items
Certain payments reflect costs applicable to future periods and are recorded as prepaid items in the
government -wide and fund financial statements. These items consist principally of postage and deposits
for purchases and are reported on the consumption method.
Leases
Effective October 1, 2021, the City implemented GASB Statement No. 87, Leases, which required the
recognition of certain lease assets and liabilities for leases that previously were classified as operating
leases and recognized as inflows of resources or outflows of resources based on the payment provisions
of the contract.
Lessee - The City recognizes a lease liability and an intangible right -to -use lease asset (lease asset) in the
government -wide and proprietary funds financial statements.
At implementation of GASB Statement No. 87, the City initially measured the lease liabilities at the present
value of payments expected to be made during the remaining lease term. Subsequently, the lease
liability is reduced by the principal portion of lease payments made. The lease right -to -use asset was
initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before
the lease commencement date, plus certain initial direct costs. Subsequently, the lease right -to use asset
is amortized on a straight-line basis over its useful life.
Key estimates and judgments related to leases include how the City determines (1) the discount rate it
uses to discount the expected lease payments to present value, (2) lease term and (3) lease payments.
The City uses the interest rate charged by the lessor as the discount rate. When the interest rate
charged by the lessor is not provided, the City generally uses its estimated incremental borrowing
rate as the discount rate for leases.
The lease term includes the noncancellable period of the lease. Lease payments included in the
measurement of the lease liability are composed of fixed payments and purchase option price
that the City is reasonably certain to exercise.
The City monitors changes in circumstances that would require a re -measurement of its lease and will
remeasure the lease asset and liability if certain changes occur that are expected to significantly affect
the amount of the lease liability.
52
City of Southlake, Texas
Notes to the Financial Statements
Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt
on the Statement of Net Position.
Lessor —The City recognizes a lease receivable and deferred inflow of resources in the government -wide
and governmental funds financial statements.
At implementation of GASB Statement No. 87, the City measured the lease receivable at the present
value of payments expected to be received during the lease term. Subsequently, the lease receivable is
reduced by the principal portion of lease payments received. The deferred inflow of resources is initially
measured as the initial amount of the lease receivable, adjusted for lease payments received at or before
the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue
over the life of the lease term.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the
expected lease receipts to present value, (2) lease term and (3) lease receipts.
• The City uses its estimated incremental borrowing rate as the discount rate for leases.
• The lease term includes the non -cancellable period of the lease. Lease receipts included in the
measurement of the lease receivable is composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a re -measurement of its lease, and will
remeasure the lease receivable and deferred inflows of resources if certain changes occur that are
expected to significantly affect the amount of the lease receivable.
Subscription -Based Information Technology Arrangements (SBITAs)
The City has noncancellable contracts with SBITA vendors for the right -to -use information technology (IT)
software, alone or in combination with tangible capital assets (the underlying IT assets). The City
recognizes a subscription liability, reported with long-term debt, and a right -to -use subscription asset
(an intangible asset), reported with other capital assets, in the government -wide and proprietary fund
financial statements. The City recognizes subscription liabilities with an initial, individual value of $5,000 or
more.
At the commencement of a SBITA, the City initially measures the subscription liability at the present value
of payments expected to be made during the subscription term. Subsequently, the subscription liability is
reduced by the principal portion of SBITA payments made. The subscription asset is initially measured as
the initial amount of the subscription liability, adjusted for SBITA payments made at or before the SBITA
commencement date, plus certain initial implementation costs. Subsequently, the subscription asset is
amortized on a straight-line basis over the shorter of the subscription term or the useful life of the underlying
IT assets.
Key estimates and judgments related to SBITAs include how the City determines (1) the discount rate
it uses to discount the expected subscription payments to present value, (2) subscription term, and
(3) subscription payments.
• The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest
rate charged by the SBITA vendor is not provided, the City generally uses its estimated incremental
borrowing rate as the discount rate for SBITAs.
• The subscription term includes the noncancellable period of the SBITA.
53
City of Southlake, Texas
Notes to the Financial Statements
• Subscription payments included in the measurement of the subscription liability are composed of fixed
payments, variable payments fixed in substance or that depend on an index or a rate, termination
penalties if the City is reasonably certain to exercise such options, subscription contract incentives
receivable from the SBITA vendor, and any other payments that are reasonably certain of being
required based on an assessment of all relevant factors.
The City monitors changes in circumstances that would require a remeasurement of its SBITAs and will
remeasure the subscription asset and liability if certain changes occur that are expected to significantly
affect the amount of the subscription liability.
Capital Assets
Capital assets, which include property, plant, equipment, right -to -use lease assets, and infrastructure
assets, are reported in the applicable governmental or business -type activities columns in the
government -wide financial statements and in the fund financial statements for proprietary funds. All
capital assets are valued at historical cost or estimated historical cost if actual historical cost is not
available. Donated assets are valued at acquisition value on the date donated.
The costs of normal repairs and maintenance that do not add to the value of the asset or materially
extend the asset lives are not capitalized. Renewals and betterments are capitalized.
Assets capitalized have an original cost of $5,000 or more and over one year of useful life.
Depreciation/amortization has been calculated on each class of depreciable property using the
straight-line method. Estimated useful lives are as follows:
Buildings
20
- 50 Years
Water and sewer distribution system
35
- 50 Years
Water hydrants
10
- 15 Years
Water tanks
35 Years
Computer equipment
5 Years
Heavy equipment and vehicles
10
- 20 Years
Light vehicles
2
- 10 Years
Vehicles
5 Years
Improvements
25 Years
Infrastructure
10 Years
The street network is not depreciated. The City has elected to use the modified approach in accounting
for its street infrastructure. The modified approach allows governments to report as expenses in lieu of
depreciation, infrastructure expenditures which maintain the asset but do not add to or improve the asset.
Additions and improvements to the street network are capitalized. The City uses an asset management
system to rate street condition and quantify the results of maintenance efforts.
The City has established the Vehicle and Equipment Replacement Internal Service Fund to account for
City -owned vehicles and equipment. The fund receives transfers from other funds.
Right -to -use lease and subscription assets are amortized over the duration of the lease using the
straight-line method.
54
City of Southlake, Texas
Notes to the Financial Statements
Compensated Absences
City employees earn vacation and sick leave, which may either be taken or accumulated, up to certain
amounts, until paid upon retirement or termination. Employees with 10 or 20 year tenures of continuous
employment with the City are eligible to receive payment of their unused sick leave, within certain
limitations. Upon termination or retirement, an employee is reimbursed up to a maximum number of hours
of vacation pay based upon the years of service. All vacation is accrued in the government -wide and
proprietary fund financial statements. A liability for these amounts is reported in the governmental funds
only if they have matured.
Long -Term Obligations
In the government -wide financial statements and proprietary fund financial statements, long-term debt
and other long-term obligations are reported as liabilities in the applicable governmental activities,
business -type activities, or proprietary fund statement of net position. Bond premiums and discounts, as
well as any deferred losses and gains on the refunding of bonds, are amortized over the life of the bonds
using the effective interest method. Bonds payable are reported net of the applicable bond premium or
discount. Issuance costs are recorded as expenses when incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums and discounts received on debt issuances are reported as other
financing sources or uses. Issuance costs, whether or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
Pensions and Other Postemployment Benefits (OPEB)
For purposes of measuring the net pension and net OPEB liabilities (assets), pension and OPEB related
deferred outflows and inflows of resources and pension and OPEB expense, City specific information
about its Fiduciary Net Position in the Texas Municipal Retirement System (TMRS) and additions
to/deductions from TMRS's Fiduciary Net Position have been determined on the same basis as they are
reported by TMRS. For this purpose, plan contributions are recognized in the period that compensation is
reported for the employee, which is when contributions are legally due. Benefit payments and refunds
are recognized when due and payable in accordance with the benefit terms. Investments are reported
at fair value.
Information regarding the City's Total Pension Liability and Total OPEB Liability is obtained from TMRS
through reports prepared for the City by TMRS consulting actuary, Gabriel Roeder Smith & Company, in
compliance with Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and
Financial Reporting for Pensions, and GASB Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions.
Information regarding the City's Total OPEB Liability of its Retiree Health Care Plan is obtained from Public
Agency Retirement Services (PARS) through reports prepared for the City by PARS consulting actuary,
Gabriel Roeder Smith & Company, in compliance with Governmental Accounting Standards Board
(GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions.
55
City of Southlake, Texas
Notes to the Financial Statements
Deferred Outflows of Resources
In addition to assets, the statement of financial position and/or balance sheet will sometimes report a
separate section for deferred outflows of resources. This separate financial statement element, deferred
outflows of resources, represent a consumption of net assets that applies to a future period(s) and so will
not be recognized as an outflow of resources (expense/expenditure) until then. The City has the following
items that qualify for reporting in this category:
Deferred loss on refunding - these deferred outflows result from the difference in the carrying value of
refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the
life of the refunded or refunding debt.
Pensions/OPEB - these deferred outflows result from pension/OPEB contributions after the measurement
date (deferred and recognized as a reduction of the pension/OPEB liability in the following fiscal year);
changes in actuarial assumptions and/or differences between expected and actual economic
experience (deferred and amortized over the estimated average remaining lives of participants) and/or
differences in projected and actual earnings on pension/OPEB assets (deferred and amortized over a
closed five year period).
Deferred Inflows of Resources
In addition to liabilities, the statement of net position and/or balance sheet will sometimes report a
separate section for deferred inflows of resources, which represents acquisitions of net assets that apply
to future periods.
Deferred gain on refunding - these deferred inflows result from the difference in the debt's reacquisition
price and its carrying value that was refunded. This amount is deferred and amortized over the shorter of
the life of the refunded or refunding debt.
Pensions/OPEB - Differences in expected and actual experience and differences in assumption changes
are deferred and amortized over a closed period equal to the estimated average remaining lives of all
employees provided pensions through the plan, while investment experience differences are amortized
over a closed 5-year period.
Deferred Inflows from Leases
Collections of lease receivables, are deferred in both the governmental fund and government wide
financial statements. These amounts are recognized in a systematic manner over the life of the lease.
Deferred Inflows from Unavailable Revenues
In addition to liabilities, the governmental funds balance sheet reports deferred inflows from receivables
that were not collected within 60 days of year-end. The deferred inflow from receivables balances and
changes are reported as a reconciling amount to the statements of net position and activities. Deferred
inflows from leases are also reported on the governmental fund balance sheet.
56
City of Southlake, Texas
Notes to the Financial Statements
Fund Equity
The City classifies governmental fund balances as follows:
1. Nonspendable fund balance - includes amounts that are not in a spendable form or are required
to be maintained intact (example - inventory or permanent funds).
2. Restricted fund balance - includes amounts that can be spent only for the specific purposes
stipulated by external resource providers either constitutionally or through enabling legislation
(example - court technology and court security funds).
3. Committed fund balance - includes amounts that can only be used for specific purposes
determined by City Council (example - capital projects and police expenditures).
4. Assigned fund balance - comprises amounts intended to be used by the City for specific
purposes. Intent can be expressed by the City Council or their designee (Chief Financial Officer).
In governmental funds other than the General Fund, assigned fund balance represents the
amount that is not restricted or committed. This indicates that resources in other governmental
funds are, at a minimum, intended to be used for the purpose of that fund (example - facility
maintenance and economic investments).
5. Unassigned fund balance - is the residual classification of the General Fund and includes all
amounts not contained in other classifications.
The City has also adopted the following policies:
Committed Fund Balance - The City Council is the City's highest level of decision -making authority and
approval by ordinance is required to establish, modify, or rescind a fund balance commitment. The
ordinance must either be approved or rescinded, as applicable, prior to the last day of the fiscal year.
The amount subject to the constraint may be determined in the subsequent period.
Assigned Fund Balance - The City Council has authorized the City's Chief Financial Officer as the official
authorized to assign fund balance to a specific purpose as approved by this fund balance policy.
Unassigned Fund Balance - It is the goal of the City to maintain a fund balance in the General Fund, equal
to a minimum of 15% of General Fund budgeted operating expenditures, with the optimum goal of 25%.
The City considers a balance of less than 15% to be cause for concern, barring unusual or deliberate
circumstances.
It is the goal of the City to maintain 60 days of working capital in the Water and Sewer Enterprise Fund,
with the optimum goal of 90 days of working capital.
The City shall also maintain all reserve funds for all statutorily required reserve funds to guarantee debt
service.
Order of Expenditure of Funds - When multiple categories of fund balance are available for expenditures,
the City will start with the most restricted category and spend those funds first before moving to the next
category with available funds (restricted, committed, assigned and unassigned).
During fiscal year 2006, the City began assigning funds for strategic initiatives. The source of these funds is
reserves in excess of 25% of General Fund expenditures. The funds will be used for one-time high impact
projects involving infrastructure maintenance, community enhancement and capital acquisition and are
reported as assigned fund balance in the General Fund.
57
City of Southlake, Texas
Notes to the Financial Statements
As of September 30, 2023, the City had the governmental fund balances categorized as follows:
COMMUNITY
ENHANCEMENT
GENERAL
SOUTHLAKE
DEVELOPMENT
OBLIGATION
GENERAL
PARKS
CORPORATION
NON -MAJOR
TOTAL
DEBT
CAPITAL
DEVELOPMENT
SPECIAL
GOVERNMENTAL
GOVERNMENTAL
GENERAL
SERVICE
PROJECTS
CORPORATION
REVENUE
FUNDS
FUNDS
FUND BALANCES
Nonspendable for:
Inventories
$ 47,008
$
$
$
$
$
$ 47,008
Prepaid items
7,309
7,309
Restricted for:
Debt service
-
2,993,263
2,638,758
5,632,021
Capital projects
-
34,698,804
-
34,698,804
Municipal court
-
859,689
859,689
Reinvestment zone
8,347,195
8,347,195
Parks and recreation
14,248,826
20,771,999
23,324,363
58,345,188
Storm water
-
-
2,162,574
2,162,574
Police
8,530,927
8,530,927
Library
19,534
19,534
Promotion of tourism
3,185,163
3,185,163
Committed for:
Police
1,601,369
1,601,369
Parks and recreation
-
57,448
57,448
Assigned for:
Teen Court
21,862
-
21,862
Senior Center
11,486
11,486
Recycling
70,977
70,977
Reforestation
153,918
153,918
Public art
610,439
610,439
Facility maintenance
11,843,299
11,843,299
Economic investment
3,225,478
3,225,478
Strategic initiatives
15,383,080
-
15,383,080
Capital projects
-
27,706,556
27,706,556
Unassigned
17,594,609
-
-
17,594,609
TOTAL FUND BALANCES
$ 48,969,465
$ 2,993,263
$ 62,405,360
$ 14,248,826
$ 20,771,999
$ 50,727,020
$ 200,115,933
Net Position
Net position represents the difference between assets plus deferred outflows of resources and liabilities
plus deferred inflows of resources. Net investment in capital assets consists of capital assets, net of
accumulated depreciation/amortization, reduced by the outstanding balances of any borrowing used
for the acquisition, construction or improvement of those assets, and adding back unspent proceeds.
Net position is reported as restricted when there are limitations imposed on their use either through the
enabling legislations adopted by the City or through external restrictions imposed by creditors, grantors
or laws or regulations of other governments.
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or
grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted
net position and unrestricted net position in the government -wide and proprietary fund financial
statements, a flow assumption must be made about the order in which the resources are considered to
be applied. It is the City's policy to consider restricted net position to have been depleted before
unrestricted net position is applied.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses/expenditures during the
reporting period. Actual results could differ from those estimates.
Deficit Fund Balance
There are no deficit fund balances reported as of September 30, 2023.
m
City of Southlake, Texas
Notes to the Financial Statements
New Accounting Pronouncements
The GASB pronouncements effective in fiscal year 2023 and beyond are listed as follows:
GASB Statement No. 94, Public -Private and Public -Public Partnerships and Availability Payment
Arrangements, improves financial reporting by addressing these relationships and availability payment
arrangements. The requirements of this Statement are effective for fiscal years beginning after
June 15, 2022. The requirements of this Statement have no impact on the City's financial statements.
GASB Statement No. 96, Subscription -Based Information Technology Arrangements (SBITA), provides
guidance on the accounting and financial reporting for SBITAs for government end users. This statement
1) defines a SBITA; 2) establishes that a SBITA results in a right -to -use subscription asset - an intangible asset
- and a corresponding subscription liability, 3) provides the capitalization criteria for outlays other than
subscription payments; and 4) requires note disclosures regarding a SBITA. The requirements of this
statement are effective for reporting periods beginning after June 15, 2022, with earlier application
encouraged. The City has implemented this Statement in fiscal year 2023.
GASB Statement No. 99, Omnibus 2022, enhances comparability in accounting and financial reporting
and improves the consistency of authoritative literature by addressing (1) practice issues that have been
identified during implementation and application of certain GASB Statements and (2) accounting and
financial reporting for financial guarantees. The requirements of this Statement related to extension of use
of London Interbank Offered Rate (LIBOR), accounting for Supplemental Nutrition Assistance Program
(SNAP) distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging
governments, clarification of certain provisions in Statement No. 34, as amended and terminology
updates related to Statements No. 53 and 63 were implemented in the prior fiscal year. All other
requirements of this Statement have been implemented in fiscal year 2023.
GASB Statement No. 100, Accounting Changes and Error Corrections - an amendment of GASB
Statement No. 62, enhances the accounting and financial reporting requirements for accounting
changes and error corrections to provide more understandable, reliable, relevant, consistent and
comparable information for making decisions or assessing accountability. The requirements of this
Statement are effective for accounting changes and error corrections made in fiscal years beginning
after June 15, 2023, and all reporting periods thereafter. The City is currently evaluating the impact of this
Statement.
GASB Statement No. 101, Compensated Absences, will better meet the information needs of financial
statement users by updating the recognition and measurement guidance for compensated absences.
The objective is achieved by aligning the recognition and measurement guidance under a unified model
and by amending certain previously required disclosures. The requirements of this Statement are effective
for fiscal years beginning after December 15, 2023, and all reporting periods thereafter. The City is
currently evaluating the impact of this Statement.
Subsequent Events
The City has evaluated all events or transactions that occurred after September 30, 2023 through
March 14, 2024, the date the financial statements were available to be issued. During this period, there
were no subsequent events requiring disclosure.
59
City of Southlake, Texas
Notes to the Financial Statements
Note 2. Cash and Investments
The funds of the City must be deposited and invested under the terms of a contract, contents of which
are set out in the Depository Contract Law. The depository bank places approved pledged securities for
safekeeping and trust with the City's agent bank in an amount sufficient to protect City funds on a
day-to-day basis during the period of the contract. The pledge of approved securities is waived only to
the extent of the depository bank's dollar amount of Federal Deposit Insurance Corporation (FDIC)
insurance.
At September 30, 2023, the carrying amount of the City's on demand deposits was $21,945,957 and the
bank balance was $22,474,420. As of September 30, 2023, none of the City's deposits were
uncollateralized.
The following legal and contractual provisions govern deposits and investments:
The Public Funds Investment Act (Government Code Chapter 2256) contains specific provisions in the
areas of investment practices, management reports and establishment of appropriate policies.
Among other things, the Public Funds Investment Act (PFIA) requires the City to adopt, implement, and
publicize an investment policy. That policy must address the following areas: (1) safety of principal and
liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risk levels, (5) expected
rates of return, (6) maximum allowable stated maturity of portfolio investments, (7) maximum average
dollar -weighted maturity allowed based on the stated maturity date for the portfolio, (8) investment staff
quality and capabilities, and (9) and bid solicitation preferences for certificates of deposit.
Statutes and the City's investment policy authorized the City to invest in the following investments as
summarized in the table below:
Authorized
Maximum
Investment Type Maturity
Maximum
Percentage
of Portfolio
U.S. Government securities
5 years
100%
Municipal obligations
5 years
50%
Repurchase agreements
90 days
50%
Certificates of deposit
5 years
100%
Bankers acceptances
270 days
20%
Commercial paper
270 days
20%
Money Market Mutual Funds
60 days*
50%
Eligible investment pools
N/A
100%
Insured deposit accounts
N/A
20%
*dollar weighted average maturity
The Act also requires the City to have independent auditors perform test procedures related to investment
practices as provided by the Act. The City is in substantial compliance with the requirements of the Act
and with local policies.
.E
City of Southlake, Texas
Notes to the Financial Statements
Cash and investments as of September 30, 2023, are classified in the accompanying financial statements
as follows:
Primary Government:
Cash and cash equivalents
$ 267,523,062
Restricted cash and cash equivalents
18,344,933
Restricted cash for customer deposits
298,337
Total primary government
286,166,332
Trust Fund:
Investments at fair value
2,339,116
Total fiduciary funds
2,339,116
Total cash and investments
$ 288,505,448
Cash and investments of the primary government as of September 30, 2023 consist of the following:
Cash on hand $ 4,350
Deposits with financial institutions 21,945,957
Investments at amortized cost 140,708,888
Investments at fair value 123,507,137
Total cash and investments $ 286,166,332
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value
to changes in market interest rates. One of the ways that the City manages its exposure to interest rate
risk is by investing mainly in investment pools which purchase a combination of shorter term investments
with an average maturity of less than 60 days, thus reducing the interest rate risk. The City monitors the
interest rate risk inherent in its portfolio by measuring the weighted average maturity of its portfolio. The
City has no specific limitations with respect to this metric.
As of September 30, 2023, the City did not invest in any securities which are highly sensitive to interest rate
fluctuations.
m
City of Southlake, Texas
Notes to the Financial Statements
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. Presented below is the minimum rating required by (where applicable) the Public Funds
Investment Act, the City's investment policy, or debt agreements, and the actual rating as of year-end
for each investment type.
Investment Type Amount
U.S. Government securities
$ 19,874,165
Municipal bonds
4,403,687
Mutual funds
99,229,285
TexStar
46,012,214
TexPool
54,581,754
Lonestar Investment Pool
26,236,769
Texas Class
13,878,151
Total $ 264,216,025
Minimum Rating as
Legal of Year
Rating End
N/A
AAA
A
AAA
N/A
AAAm
AAA/AAAm
AAAm
AAA/AAAm
AAAm
AAA/AAAm
AAAm
AAA/AAAm
AAAm
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any
one issuer. As of September 30, 2023, the City investments other than external investment pools that
represent 5% or more of the City's investments include mutual funds, municipal bonds, commercial paper
and U.S. Government securities as described in the table in the following Custodial Credit Risk section.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution,
a government will not be able to recover its deposits or will not be able to recover collateral securities
that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the
event of the failure of the counterparty to a transaction, a government will not be able to recover the
value of its investment or collateral securities that are in the possession of another party. The Public Funds
Investment Act and the City's investment policy do not contain legal or policy requirements that would
limit the exposure to custodial credit risk for deposits or investments, other than the following provision for
deposits:
The Public Funds Investment Act requires that a financial institution secure deposits made by state or local
governmental units by pledging securities in an undivided collateral pool held by a depository regulated
under state law (unless so waived by the governmental unit).
The market value of the pledged securities in the collateral pool must equal at least the bank balance
less the FDIC insurance at all times. As of September 30, 2023, none of the City's cash deposits were
uncollateralized.
62
City of Southlake, Texas
Notes to the Financial Statements
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application,
provides a framework for measuring fair value which establishes a three -level fair value hierarchy that
describes the inputs that are used to measure assets and liabilities.
Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets that
a government can access at the measurement date.
Level 2 inputs are inputs —other than quoted prices included within Level 1—that are observable
for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.
If a price for an identical asset or liability is not observable, a government should measure fair value using
another valuation technique that maximizes the use of relevant observable inputs and minimizes the use
of unobservable inputs. If the fair value of an asset or a liability is measured using inputs from more than
one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority
level input that is significant to the entire measurement.
The City has recurring fair value measurements as presented in the table below. The City's investment
balances and weighted average maturity of such investments are as follows:
Fair Value Measurements
Weighted
Percent of
Average
Value at
Total
Maturity
9/30/23 Level 1Inputs Level 2Inputs Level 3Inputs
Investments
(Days)
Investments not subject to Fair Value
Investment Pools
TexPool
$ 54,581,754 $ $ $
21%
28
TexStar
46,012,214
17%
30
Lone Star
26,236,769
10%
27
Texas CLASS
13,878,151
5%
29
Investments by Fair Value Level
U.S. Treasury Notes & Bonds
4,973,913 4,973,913
2%
39
U.S. Government securities
14,900,252 14,900,252
6%
130
Municipal Bonds
4,403,687 4,403,687
2%
225
Mutual Funds Short -Term Investments Trust
99,229,285 99,229,285 -
37%
28
Total
$ 264,216,025 $ 99,229,285 $ 24,277,852 $
100%
70
Mutual funds reported as level 1
are valued at the net asset value (NAV) of shares held by the City at
year end. The NAV is a quoted price in an active market.
U.S. Government Securities, commercial paper and municipal bonds classified in Level 2 of the fair value
hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on
the securities' relationship to benchmark quoted prices.
Investment in State Investment Pools
The City is a voluntary participant in four investment pools: TexPool, TexStar, Texas CLASS and Lone Star.
State Comptroller of Public Accounts exercises responsibility over TexPool. This oversight includes the ability
to significantly influence operations, designation of management, and accountability for fiscal matters.
Additionally, the State Comptroller has established an advisory board composed of both participants in
TexPool and other persons who do not have a business relationship with TexPool. TexPool operates in a
manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. TexPool uses
amortized costs rather than market value to report net position to compute share prices. Accordingly, the
fair value of the position in TexPool is the same as the value of TexPool shares.
63
City of Southlake, Texas
Notes to the Financial Statements
TexStar is administered by Hilltop Securities and JPMorgan Chase. TexStar is a local government
investment pool created under the Interlocal Cooperation Act specifically tailored to meet Texas state
and local government investment objectives of preservation of principal, daily liquidity, and competitive
yield. TexStar uses amortized costs rather than market value to report net position to compute share prices.
Accordingly, the fair value of the position in TexStar is the same as the value of TexStar shares.
Texas CLASS is organized under the Sixth Amended and Restated Trust Agreement in accordance with all
the requirements contained in section 2256.016 of the Public Funds Investment Act. Texas CLASS is
administered by Public Trust Advisors, LLC and all funds are held by the custodial agent, Wells Fargo N.A.
Texas CLASS may invest in obligations of the U.S. or its agencies and instrumentalities; repurchase
agreements; SEC -registered money market funds rated in the highest rating category by at least
one NRSRO; and commercial paper rated A-1, P-1 or equivalent by two nationally recognized rating
agencies. Texas CLASS is measured at fair value (i.e., net asset value).
The Lone Star Investment Pool (the Pool) is organized in conformity with the Interlocal Cooperation Act,
Chapter 791 of the Texas Government Code, and the Public Funds Investment Act, Chapter 2256 of the
Texas Government Code. The Pool is governed by an 11 member Board of Trustees, consisting of
individuals representing entities participating in the Pool. The fair value of the City's position in the Pool is
the same as the value of the Pool shares.
Note 3. Receivables
Receivables at September 30, 2023, for the government's individual major, non -major, internal service,
and fiduciary funds in the aggregate, including the applicable allowances for uncollectible accounts,
consist of the following:
General
Obligation
General
SPDC
CEDC
Debt
Capital
Special Rev.
Special
General
Service
Projects
Fund
Revenue
Receivables:
Property taxes
$
390,450
$
85,971
$
$
- $
-
Sales taxes
4,679,857
-
2,336,558
1,730,784
Franchise taxes
737,965
-
-
Accounts
-
-
38,456
-
Interest
28,258
853
19,363
3,500
5,605
Leases
940,596
-
-
38,271
-
Other
45,774
130
-
157,002
Gross receivables
6,822,900
86,954
19,363
2,416,785
1,893,391
Less: allowance
342,690
75,508
-
-
Net total receivables
$
6,480,210
$
11,446
$
19,363
$
2,416,785 $
1,893,391
Water
Primary
Non -Major
and
Internal
Government
Governmental
Sewer
Service
Total
Receivables:
Property taxes
$
-
$
$
$
476,421
Sales taxes
1,092,731
9,839,930
Franchise taxes
-
737,965
Accounts
217,002
7,486,879
7,742,337
Interest
14,671
20,489
2,983
95,722
Leases
-
-
-
978,867
Other
-
-
202,906
Gross receivables
1,324,404
7,507,368
2,983
20,074,148
Less: allowance
-
61,708
-
479,906
Net total receivables
$
1,324,404
$
7,445,660
$
2,983
$
19,594,242
64
City of Southlake, Texas
Notes to the Financial Statements
The Water and Sewer Fund and the Storm Water Utility Fund accounts receivable include unbilled charges
for services rendered through September 30, 2023, of $3,245,182.
Lease Receivables
The City is a lessor for non -cancelable leases of the right -to -use of land, buildings, and infrastructure for
which the City recognizes a lease receivable and a deferred inflow of resources in the government -wide
and governmental fund financial statements. The interest rates for the leases approximate 2.9% annually,
and the terms range from 5 to 25 years. The lease receivables that exist at September 30, 2023, relate to
leases whose terms expire between December 2023 and January 2028.
At the commencement of a lease, the City initially measures the lease receivable at the present value of
payments expected to be received during the lease term. Subsequently, the lease receivable is reduced
by the principal portion of lease payments received. The deferred inflow of resources is initially measured
as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease
commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the
life of the lease term. The City has $978,867 remaining in lease receivables and $944,303 remaining in
deferred inflow as of September 30, 2023. The City recorded lease revenue including interest of $400,966
in the fiscal year.
As of September 30, 2023, the expected lease receipts through the expiration of all leases for which the
City is a lessor is as follows:
Fiscal Year Ending
September 30, Principal Interest Total
2024
$ 252,124 $
26,968 $
279,092
2025
226,422
20,247
246,669
2026
239,670
13,331
253,001
2027
213,636
6,016
219,652
2028
47,015
284
47,299
Total
$ 978,867 $
66,846 $
1,045,713
65
City of Southlake, Texas
Notes to the Financial Statements
Note 4. Capital Assets
Capital asset activity for the year ended September 30, 2023, was as follows:
Governmental Activities:
Capital assets not being
depreciated/amortized:
Land
Street infrastructure
Construction -in -progress
Total capital assets not
being depreciated/amortized
Capital assets being depreciated/amortized:
Land improvements
Buildings and building improvements
Public art
Equipment
Vehicles
Drainage infrastructure
Right -to -use assets:
Lease equipment
Subscriptions
Total capital assets being
depreciated/amortized
Accumulated depreciation/amortization:
Land improvements
Buildings and building improvements
Public art
Equipment
Vehicles
Drainage infrastructure
Right -to -use assets:
Lease equipment
Subscriptions
Total accumulated
depreciation/amortization
Total capital assets being
depreciated/amortized, net
Governmental activities capital assets, net
Business Type Activities:
Capital assets not being depreciated/amortized:
Land
Construction -In -Progress
Total capital assets not
being depreciated/amortized
Capital assets being depreciated/amortized:
Buildings and building improvements
Equipment
Vehicles
Capacity rights
Distribution system
Total capital assets being
depreciated/amortized
Accumulated depreciation/amortization:
Buildings and building improvements
Equipment
Vehicles
Capacity rights
Distribution system
Total accumulated
depreciation /a m ortizaf ion
Total capital assets being
depreciated/amortized, net
Business type activities capital assets, net
Beginning Capital Sales or Adjustments/ Ending
Balance Acquisitions Disposals Transfers Balance
$ 96,956,849 $ 356,950 $
232,358,551 592,026
10,045,101 8,928,677
339,360,501 9,877,653
$ $ 97,313,799
232,950,577
(1,777,897) 17,195,881
(1,777,897) 347,460,257
41,721,306
349,129
42,070,435
142,247,034
62,200
142,309,234
1,814,405
-
142,315
1,956,720
21,920,658
4,597,845
(27,738)
15,317,603
41,808,368
15,317,603
-
(15,317,603)
-
64,168,812
6,598
1,635,582
65,810,992
545,069
264,171
(53,691)
-
755,549
3,071,032
3,071,032
287,734,887
8,350,975
(81,429)
1,777,897
297,782,330
(26,189,569)
(1,827,291)
(28,016,860)
(33,167,020)
(3,188,259)
(36,355,279)
(1,172,753)
(96,655)
-
(1,269,408)
(16,635,059)
(2,777,151)
27,738
(10,065,885)
(29,450,357)
(10,065,885)
10,065,885
(31,264,957)
(1,773,106)
(33,038,063)
(211,430)
(150,480)
53,691
(308,219)
(704,116)
(704,116)
(118,706,673)
(10,517,058)
81,429
(129,142,302)
169,028,214
(2,166,083)
1,777,897
168,640,028
$ 508,388,715
$ 7,711,570
$
$
$ 516,100,285
Beginning
Capital
Sales or
Adjustments/
Ending
Balance
Acquisitions
Disposals
Transfers
Balance
$ 21,033,596
$ 414,198
$
$ -
$ 21,447,794
1,414,673
4,670,170
(565,262)
5,519,581
22,448,269 5,084,368
(565,262) 26,967,375
935,501
-
-
935,501
2,498,009
14,466
511,817
3,024,292
511,817
-
(511,817)
-
9,190,988
-
-
9,190,988
153,926,558
1,264,723
565,262
155,756,543
167,062,873
1,279,189
565,262
168,907,324
(797,540)
(30,318)
-
(827,858)
(2,439,502)
(35,901)
(505,108)
(2,980,511)
(505,108)
505,108
(4,990,775)
(183,820)
-
(5,174,595)
(83,303,515)
(4,898,148)
(88,201,663)
(92,036,440)
(5,148,187)
(97,184,627)
75,026,433
(3,868,998)
565,262
71,722,697
$ 97,474,702
$ 1,215,370 $
$
$ 98,690,072
City of Southlake, Texas
Notes to the Financial Statements
Depreciation/amortization expenses were charged as a direct expense to functions of the primary
government as follows:
Governmental activities:
General government
$ 2,584,421
Public safety
2,064,569
Public works
2,005,126
Culture and recreation
3,862,942
Total depreciation/amortization
expense - governmental activities
$ 10,517,058
Business -type activities:
Water and Sewer
$ 5,148,187
Note 5. Long -Term Debt
The City issues general obligation bonds, combination tax and revenue certificates of obligation and tax
notes to provide for the acquisition and construction of major capital facilities and infrastructure.
Combination tax and revenue certificates of obligation are issued for both governmental and
business -type activities. General obligation bonds, governmental revenue bonds and tax notes pledge
the full faith and credit of the City. Combination tax and revenue certificates of obligation are payable
from the net revenues of the water and sewer system and general debt service tax.
In prior years, the City has legally defeased certain outstanding general obligation and revenue debt by
placing funds into irrevocable trusts pledged to pay all future debt service payments of the refunded
debt. Accordingly, a liability for the defeased debt issues is not included in the City's financial statements.
As of September 30, 2023, the City had no additional outstanding bonds that were legally defeased.
As of September 30, 2023, the City had $9,881,821 in authorized but unissued general obligation bonds.
The City does not anticipate the issuance of additional general obligation debt within the next
twelve months.
67
City of Southlake, Texas
Notes to the Financial Statements
General obligation bonds, certificates of obligation, tax notes, and governmental revenue bonds are as
follows as of September 30, 2023:
Final
Interest
Business -
General Obligation Bonds and Certificates of Obligation
Maturity
Rates
Governmental
Type
$11,300,000 Series 2012, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2032
3.0 -
4.25%
$ 3,070,000
$ 1,445,000
$9,965,000 Series 2012, General Obligation
Refunding Bonds
2026
3.0 -
4.25%
2,470,000
30,000
$14,250,000 Series 2013, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2033
2.0
- 5.0%
-
1,445,000
$22,295,000 Series 2013, General Obligation
Refunding Bonds
2026
2.0
- 5.0%
6,830,000
160,000
$21,330,000 Series 2014, General Obligation
Refunding Bonds
2026
2.0
- 5.0%
185,000
345,000
$8,780,000 Series 2014, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2034
2.0
- 3.5%
-
2,730,000
$3,295,000 Series 2015, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2035
2.75
- 4.0%
-
2,245,000
$7,910,000 Series 2017, General Obligation
Refunding Bonds
2028
3.0
- 4.0%
2,103,835
2,241,163
$5,400,000 Series 2017, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2037
2.25
- 5.0%
-
4,240,000
$4,205,000 Series 2018, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2038
3.0
- 4.0%
-
3,430,000
$17,290,000 Series 2019, General Obligation
Refunding Bonds
2030
3.0
- 5.0%
3,305,000
4,275,000
$4,240,000 Series 2021, General Obligation
Refunding Bonds
2031
1.21%
1,623,000
1,752,000
$8,595,000 Series 2022, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2037
4.0
- 5.0%
7,210,000
-
$ 26,796,835
$ 24,338,163
City of Southlake, Texas
Notes to the Financial Statements
Governmental Revenue Bonds
$16,000,000 Series 2014, Southlake Parks Development
Corporation, Sales Tax Revenue Refunding Bonds
$24,450,000 Series 2016, Southlake Community Enhancement
and Development Corporation, Sales Tax Revenue Bonds
$9,945,000 Series 2017, Southlake Community Enhancement
and Development Corporation, Sales Tax Revenue Bonds
Final
Interest
Maturity
Rates
Governmental
2027
3%
$ 4,615,000
2036
3.00 - 5.00%
18,625,000
2036
2.00 - 5.00%
7,535,000
4) ;su, i i O,uuu
Final Interest
Governmental Tax Notes
Maturity
Rates Governmental
$3,753,000 Series 2021, Tax Notes
2026
0.83% $
2,023,000
$13,397,000 Series 2023, Tax Notes
2030
3.48%
13,397,000
$
15,420,000
During 2023, the City issued $13,397,000
of Tax Notes, Series
2023. The debt
was issued for the purpose of
construction of roadway capital improvement projects.
The following is a summary of long-term liability transactions
for the year ended
September
30, 2023:
Amount
Beginning
Ending
Due within
Balance Additions
Reductions
Balance
One year
Governmental activities:
General obligation bonds and
certificates of obligation $
32,848,669 $
$ (6,051,834)
$ 26,796,835
$ 6,051,358
Sales tax revenue bonds
33,730,000
(2,955,000)
30,775,000
3,080,000
Tax notes
2,686,000 13,397,000
(663,000)
15,420,000
669,000
Bond premiums (discounts)
4,750,387 -
(795,266)
3,955,121
-
Total bonds payable
74,015,056 13,397,000
(10,465,100)
76,946,956
9,800,358
Total OPEB liability -SDBF
1,059,723 -
(331,417)
728,306
-
Net pension liability
1,332,735 16,985,509
18,318,244
-
Compensated absences
2,721,441 2,341,730
(2,359,919)
2,703,252
591,235
Financed purchase liabilities
405,368 -
(97,039)
308,329
99,853
Right -to -use lease liability
338,051 255,917
(145,064)
448,904
127,780
Subscription liability
- 3,031,188
(865,793)
2,165,395
764,364
Total governmental activities $
79,872,374 $ 36,011,344
$ (14,264,332)
$ 101,619,386
$ 11,383,590
City of Southlake, Texas
Notes to the Financial Statements
Typically, liquidation of the liabilities for compensated absences, total OPEB, and net pension occurs
within the General Fund, Community Enhancement Development Corporation Special Revenue Fund,
and the Water and Sewer Enterprise Fund where the payroll costs are incurred.
Typically, liquidation of bonds payable occurs from the General Obligation Debt Service Fund, Southlake
Parks Development Corporation Debt Service Fund, and Community Enhancement Development
Corporation Debt Service Fund.
Amount
Beginning
Ending
Due within
Balance
Additions
Reductions
Balance
One year
Business -type activities:
General obligation bonds and
certificates of obligation
$ 26,777,331
$ -
$ (2,439,168)
$ 24,338,163
$ 2,488,640
Bond premiums
1,735,426
-
(268,378)
1,467,048
-
Total bonds payable
28,512,757
-
(2,707,546)
25,805,211
2,488,640
Total OPEB liability - SDBF
82,972
-
(23,381)
59,591
-
Net pension liability
300,064
1,198,313
1,498,377
-
Compensated absences
117,215
139,097
(157,758)
98,554
32,658
Total business -type activities
$ 29,013,008
$ 1,337,410
$ (2,888,685)
$ 27,461,733
$ 2,521,298
The annual aggregate maturities for each bond type are as follows:
General Obligation Bonds and Certificates of Obligation
Governmental Activities
Fiscal Year Ending
September 30,
Principal
Interest
Total
2024
$ 6,051,358
$ 919,280
$ 6,970,638
2025
6,298,304
675,660
6,973,964
2026
6,560,251
419,782
6,980,033
2027
1,632,198
259,470
1,891,668
2028
1,695,724
197,119
1,892,843
2029-2033
3,724,000
422,006
4,146,006
2034-2038
835,000
72,550
907,550
Total $ 26,796,835 $ 2,965,867 $ 29,762,702
Sales Tax Revenue Bonds
Governmental Activities
Fiscal Year Ending
September 30,
Principal
Interest
Total
2024
$ 3,080,000
$ 939,106
$ 4,019,106
2025
3,025,000
816,731
3,841,731
2026
2,790,000
706,256
3,496,256
2027
2,640,000
618,506
3,258,506
2028
1,890,000
550,556
2,440,556
2029-2033
10,355,000
1,853,006
12,208,006
2034-2038
6,995,000
322,553
7,317,553
Total $ 30,775,000 $ 5,806,714 $ 36,581,714
70
City of Southlake, Texas
Notes to the Financial Statements
Tax Notes
Governmental Activities
Fiscal Year Ending
September 30,
Principal
Interest
Total
2024
$
669,000
$
539,802
$ 1,208,802
2025
804,000
472,395
1,276,395
2026
810,000
462,252
1,272,252
2027
3,115,000
402,967
3,517,967
2028
3,225,000
292,651
3,517,651
2029-2033
6,797,000
238,606
7,035,606
Total
$
15,420,000
$
2,408,673
$ 17,828,673
General Obligation Bonds and Certificates of Obligation
Business -Type Activities
Fiscal Year Ending
September 30,
Principal
Interest
Total
2024
$
2,488,640
$
788,662
$ 3,277,302
2025
2,477,697
694,050
3,171,747
2026
2,565,748
598,818
3,164,566
2027
2,543,802
501,548
3,045,350
2028
2,633,276
408,500
3,041,776
2029-2033
8,174,000
1,103,606
9,277,606
2034-2038
3,455,000
226,019
3,681,019
Total
$
24,338,163
$
4,321,203
$ 28,659,366
The City has entered into multiple arrangements for the purpose of financing the purchase of various
equipment. The City's arrangements incur interest at 2.9% annually, and have 5 year terms expiring in
2026.
The annual debt service requirement to amortize the financed purchase liabilities outstanding at
September 30, 2023, are as follows:
Financed Purchase Liabilities
Governmental Activities
Fiscal Year Ending
September 30,
Principal
Interest
Total
2024
$ 99,853
$ 8,942 $
108,795
2025
102,748
6,046
108,794
2026
105,728
3,066
108,794
Total
$ 308,329
$ 18,054 $
326,383
71
City of Southlake, Texas
Notes to the Financial Statements
The City has entered into multiple lease agreements as lessee for the right -to -use equipment over the
term of the lease. The City is required to make periodic payments at its incremental borrowing rate or the
interest rate stated or implied within the leases. Effective October 1, 2021, the City implemented GASB
Statement No. 87, Leases. At implementation of this statement, the City initially measured the lease liability
at the present value of payments expected to be made during the remaining lease term.
The City's lessee arrangements incur interest at rates of approximately 2.9% annually; all of which
are accounted for within the City's governmental activities. All such arrangements range between 3 and
5 years in length.
The annual debt service requirement to amortize the other lease liabilities outstanding at September 30,
2023, are as follows:
Lease Liabilities
Fiscal Year Ending
September 30,
2024
2025
2026
2027
2028
2029
Principal
$ 127,780
126,751
92,027
40,370
32,268
29,708
Governmental Activities
Interest
$ 8,126
5,085
2,159
1,106
601
294
Total
$ 135,906
131,836
94,186
41,476
32,869
30,002
Total $ 448,904 $ 17,371 $ 466,275
Subscription Based Information Technology Arrangements (SBITA)
The City has entered into multiple SBITAs that allow the right -to -use the SBITA vendor's information
technology software over the subscription term. The City is required to make annual or monthly payments
at its incremental borrowing rate or the interest rate stated or implied within the SBITAs. The SBITA rate,
term and ending subscription liability are as follows:
Interest Liability at SBITA Term Ending
Rate(s) Commencement in Months Balance
Governmental activities
Software 2.240% - 3.257% 3,031,188 21 - 107 $ 2,165,395
Total governmental activities $ 2,165,395
72
City of Southlake, Texas
Notes to the Financial Statements
The future principal and interest SBITA payments as of fiscal year end are as follows:
Fiscal Year
Ending
2024
2025
2026
2027
2028
2029 - 2031
Principal
Interest
Total
$ 764,364
$ 64,308
$ 828,672
615,512
42,021
657,533
269,633
23,748
293,381
156,211
15,478
171,689
137,117
77'1 cco
10,768
O 110
147,885
7'}1 L7L
Total governmental activities $ 2,165,395 $ 165,441 $ 2,330,836
The value of the subscription assets as of the end of the current fiscal year was $3,071,032 and had
accumulated amortization of $704,1 16.
Note 6. Transfers
All interfund transfers between the various funds are approved supplements to the operations of those
funds. Individual fund transfers for fiscal year 2023 were as follows:
Transfers out:
General Fund
Southlake Parks Development
Corporation Fund
Community Enhancement and
Development Corporation Fund
Nonmajor Governmental Funds
Water and Sewer Enterprise Fund
Total transfers
Transfers in:
General
General
Vehicle and
Obligation
Capital Nonmajor
Water and Sewer
Equipment
General Debt Service
Projects Governmental
Enterprise
Replacement Total
Fund Fund
Fund Funds
Fund
Fund transfers
$ - $ -
$ 8,600,000 $ 100,000
$ 67,091
$ 3,200,000 $ 11,967,091
408,593 9,284,383
9,692,976
478,930 - - 3,822,206 4,301,136
553,829 402,554 945,000 1,130,000 3,031,383
1,403,560 - - - 1,403,560
$ 2,844,912 $ 402,554 $ 9,545,000 $ 14,336,589 $ 67,091 $ 3,200,000 $30,396,146
73
City of Southlake, Texas
Notes to the Financial Statements
During the year, interfund transfers were used for the following recurring items:
• To allocate indirect charges from the General Fund to the Southlake Parks Development
Corporation, Water and Sewer Enterprise Fund, and other nonmajor governmental funds.
• To move revenues from the fund with collection authorization to the General Obligation Debt
Service Fund and other nonmajor debt service funds as debt service principal and interest
payments become due.
• To move funding for vehicle and equipment replacement from the General Fund to the internal
service fund.
• To fund the annual subsidy for commercial vehicle enforcement.
Further, during the year ended September 30, 2023, the City made the following one-time transfers:
• Transfer of $8,500,000 from the General Fund to the General Capital Projects Fund for infrastructure
projects.
• Transfer of $100,000 from the General Fund to the General Capital Projects Fund for public art
projects.
• Transfer of $6,500,000 from the Southlake Parks Development Corporation to the Southlake Parks
Development Corporation Capital Projects Fund for parks projects.
• Transfer of $1,375,000 from the Community Enhancement and Development Corporation to the
Community Enhancement and Development Corporation Capital Projects Fund for community
enhancement projects.
• Transfer of $1,130,000 from nonmajor governmental funds to the Crime Control District Capital
Projects Fund for crime control district projects.
• Transfer of $945,000 from nonmajor governmental funds to the General Capital Projects Fund for
infrastructure projects.
• Transfer of $67,091 from the General Fund to the Water and Sewer Enterprise Fund to move
revenue to the appropriate fund.
Note 7. Retirement Plan
A. Plan Description
The City participates as one of 919 plans in the defined benefit cash -balance plan administered by
the Texas Municipal Retirement System (TMRS). TMRS is a statewide public retirement plan created by the
State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government
Code (the TMRS Act) as an agent multiple -employer retirement system for employees of Texas
participating cities. The TMRS Act places the general administration and management of TMRS with a
six -member, Governor -appointed Board of Trustees; however, TMRS is not fiscally dependent on the State
of Texas. TMRS issues a publicly available Annual Comprehensive Financial Report (Annual Report) that
can be obtained at tmrs.com.
All eligible employees of the City are required to participate in TMRS.
B. Benefits Provided
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing
body of the city, within the options available in the state statutes governing TMRS.
At retirement, the Member's benefit is calculated based on the sum of the Member's contributions,
with interest, and the city -financed monetary credits with interest. The retiring Member may select one of
seven monthly benefit payment options. Members may also choose to receive a portion of their benefit
as a lump sum distribution in an amount equal to 12, 24 or 36 monthly payments, which cannot exceed
75% of the total Member contributions and interest.
74
City of Southlake, Texas
Notes to the Financial Statements
At the date the plan began, the City granted monetary credits for service rendered before the plan
began of a theoretical amount at least equal to two times what would have been contributed by the
employee, with interest, prior to establishment of the plan. Monetary credits for service since the plan
began are a percent (100%, 150%, or 200%) of the employee's accumulated contributions. In addition,
the City can grant, as often as annually, another type of monetary credit referred to as an updated
service credit which is a theoretical amount which, when added to the employee's accumulated
contributions and the monetary credits for service since the plan began, would be the total monetary
credits and employee contributions accumulated with interest if the current employee contribution rate
and City matching percent had always been in existence and if the employee's salary had always been
the average of his salary in the last three years that are one year before the effective date. At retirement,
the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the
employer -financed monetary credits with interest were used to purchase an annuity.
Members can retire at ages 60 and above with 5 or more years of service or with 20 years of service. A
member is vested after 5 years. The plan provisions are adopted by the governing body of the City, within
the options available in the state statutes governing TMRS and within the actuarial constraints also in the
statutes.
Employees covered by benefit terms.
At the December 31, 2022 valuation and measurement date, the following employees were covered by
the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 171
Inactive employees entitled to but not yet receiving benefits 304
Active employees
C. Contributions
352
827
Member contribution rates in TMRS are either 5%, 6% or 7% of the Member's total compensation, and the
city matching percentages are either 100%, 150% or 200%, both as adopted by the governing body of
the city. Under the state law governing TMRS, the contribution rate for each city is determined annually
by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The city's contribution rate is
based on the liabilities created from the benefit plan options selected by the city and any changes in
benefits or actual experience over time.
Employees for the City were required to contribute 7% of their annual compensation during the fiscal
year. The contribution rates for the City were 12.56% and 12.46% in calendar years 2022 and 2023,
respectively. The city's contributions to TMRS for the year ended September 30, 2023, were $3,879,580
and were greater than the required contributions by $87,516.
D. Net Pension Liability
The city's Net Pension Liability (NPL) was measured as of December 31, 2022, and the Total Pension
Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as
of that date.
75
City of Southlake, Texas
Notes to the Financial Statements
Actuarial Assumptions
The Total Pension Liability in the December 31, 2022 actuarial valuation was determined using the following
actuarial assumptions:
Inflation 2.5% per year
Overall payroll growth 2.75% per year, adjusted down for population declines, if any
Investment Rate of Return 6.75%, net of pension plan investment expense, including inflation
Salary increases are based on a service -related table. Mortality rates for active members are based on
the PUB(10) mortality tables with the Public Safety table used for males and the General Employee table
used for females. Mortality rates for healthy retirees and beneficiaries are based on the Gender -distinct
2019 Municipal Retirees of Texas mortality tables. The rates for actives, healthy retirees and beneficiaries
are projected on a fully generational basis by Scale UMP to account for future mortality improvements.
For disabled annuitants, the same mortality tables for healthy retirees are used with a 4- year set -forward
for males and a 3-year set -forward for females. In addition, a 3.5% and 3.0% minimum mortality rate is
applied, for males and females respectively, to reflect the impairment for younger members who become
disabled. The rates are projected on a fully generational basis by Scale UMP to account for future
mortality improvements subject to the floor.
The actuarial assumptions were developed primarily from the actuarial investigation of the experience
of TMRS over the four-year period from December 31, 2014 to December 31, 2018. The assumptions were
adopted in 2019 and first used in the December 31, 2019, actuarial valuation. The post -retirement mortality
assumption for Annuity Purchase Rates (APRs) is based on the Mortality Experience Investigation Study
covering 2009 through 2011 and dated December 31, 2013. Plan assets are managed on a total return
basis with an emphasis on both capital appreciation as well as the production of income to satisfy the
short-term and long-term funding needs of TMRS.
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best estimate ranges of expected future real rates of return (expected
returns, net of pension plan investment expense and inflation) are developed for each major asset
class. These ranges are combined to produce the long-term expected rate of return by weighting the
expected future real rates of return by the target asset allocation percentage and by adding expected
inflation. In determining their best estimate of a recommended investment return assumption under
the various alternative asset allocation portfolios, GRS focused on the area between (1) arithmetic
mean (aggressive) without an adjustment for time (conservative) and (2) the geometric mean
(conservative) with an adjustment for time (aggressive). The target allocation and best estimates of real
rates of return for each major asset class in fiscal year 2023 are summarized in the following table:
Long -Term
Expected Real
Target
Rate of Return
Asset Class
Allocation
(Arithmetic)
Global Equity
35.0%
7.70%
Core Fixed Income
6.0%
4.90%
Non -Core Fixed Income
20.0%
8.70%
Other public and private markets
12.0%
8.10%
Real Estate
12.0%
5.80%
Hedge funds
5.0%
6.90%
Private Equity
10.0%
11.80%
Total
100.0%
City of Southlake, Texas
Notes to the Financial Statements
Discount Rate
The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used
to determine the discount rate assumed that Member and employer contributions will be made at the
rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was
projected to be available to make all projected future benefit payments of current active and inactive
Members. Therefore, the long-term expected rate of return on pension plan investments was applied to
all periods of projected benefit payments to determine the Total Pension Liability.
Changes in the Net Pension Liability
Balance at 12/31/2021
Changes for the year:
Service Cost
Interest
Change of benefit terms
Difference between expected
and actual experience
Changes of assumptions
Contributions - employer
Contributions - employee
Net investment income
Benefit payments, including refunds
of employee contributions
Administrative expense
Other changes
Net Changes
Balance at 12/31/2022
Increase
Total
(Decrease)
Net
Pension
Plan Fiduciary
Pension
Liability
Net Position
Liability
(a)
(b)
(a) - (b)
$ 129,296,554 $ 127,663,755 $ 1,632,799
4,838,653 - 4,838,653
8,750,754 - 8,750,754
1,059,885 - 1,059,885
- 3,714,760 (3,714,760)
2,070,328 (2,070,328)
(9,335,205) 9,335,205
(4,150,172) (4,150,172) -
(80,641) 80,641
- 96,228 (96,228)
10,499,120 (7,684,702) 18,183,822
$ 139,795,674 $ 119,979,053 $ 19,816,621
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the Net Pension Liability of the city, calculated using the discount rate of 6.75%, as
well as what the city's Net Pension Liability would be if it were calculated using a discount rate that is
1 percentage point lower (5.75%) or 1 percentage point higher (7.75%) than the current rate:
1 % Decrease 1 % Increase
in Discount Discount in Discount
Rate (5.75%) Rate (6.75%) Rate (7.75%)
Net pension liability $ 41,676,615 $ 19,816,621 $ 2,081,726
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's Fiduciary Net Position is available in the Schedule of
Changes in Fiduciary Net Position, by Participating City. That report may be obtained at trms.com.
77
City of Southlake, Texas
Notes to the Financial Statements
E. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions
For the year ended September 30, 2023, the City recognized pension expense of $5,667,661. At
September 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Differences between expected and actual economic experience
Changes in actuarial assumptions
Difference between projected and actual investment earnings
Contributions subsequent to the measurement date
Total
Deferred Deferred
Outflows of Inflows of
Resources Resources
$ 1,138,771 $ -
69,944 -
8,283,395 -
3,005,459 -
$ 12,497,569 $ -
The $3,005,459 reported as deferred outflows of resources related to pensions resulting from contributions
subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability for the
year ending September 30, 2024. Other amounts reported as deferred outflows and inflows of resources
related to pensions will be recognized in pension expense as follows:
Fiscal
Year Ended
Sept. 30
2024
$ 987,196
2025
2,367,315
2026
2,473,154
2027
3,664,445
Total
$ 9,492,1 10
Note 8. Other Postemployment Benefits (OPEB)
The City of Southlake provides for two other postemployment benefit (OPEB) plans; one provides for
postemployment health insurance benefits through an agent -multiple employer defined benefit medical
plan (Southlake Retiree Health Care Plan), and the other is the Texas Municipal Retirement System
Supplemental Death Benefits Fund, a single employer defined benefit OPEB plan. Both plans are
described in detail below. Aggregate amounts for the two OPEB plans are as follows:
Retiree
Healthcare
TMRS
Plan
SDBF
Total
OPEB liability (asset)
$ (452,288)
$ 787,897
$ 335,609
Deferred outflows of resources
811,737
200,503
1,012,240
Deferred inflows of resources
546,311
437,037
983,348
OPEB expense
(86,898)
53,634
(33,264)
m
City of Southlake, Texas
Notes to the Financial Statements
City of Southlake Retiree Health Care Plan
Plan Description
The City provides other postemployment healthcare benefits in accordance with City policy.
Administration of the City of Southlake Retiree Healthcare Plan trust is through Public Agency Retirement
Services (PARS) with an IRC Section 115 Irrevocable Exclusive Benefit Trust. Trustee for the plan is US Bank.
Ultimate authority for investment decisions and actions necessary to maintain the City's participation in
the program resides with the City Manager, appointed as Plan Administrator through a 2009 resolution of
the City Council. Investment strategy is currently through the City's selection of PARS Moderately
Conservative High Mark Plus.
A third -party administrator is utilized to provide claims administration and payment of claims. Insurance is
purchased to provide specific stop loss and aggregate stop loss protection. A separate financial
statement is not issued for the plan.
Benefits Provided
Regular full-time employees retiring from the City of Southlake have the option to continue medical
insurance coverage until the retiree becomes eligible for Medicare or is eligible to be covered under
another medical plan. The City contributes $125 per month towards the premium for retiree insurance
coverage or $225 towards the premium for retirees and dependents. Recommendations for plan benefits
are presented to City Council for their approval during the annual budget process.
Employees Covered by Benefit Terms
The following table provides a summary of the number of participants in the plan as of December 31,
2022:
Inactive employees currently receiving benefits 6
Inactive employees entitled to but not yet receiving benefits -
Active Employees 339
345
Contributions
The City's contributions during the fiscal year ending September 30, 2023 were $211,408 and were greater
than the required contributions by $172,323. The benefit payments were determined in a manner similar
to how the benefit payments for the measurement period were developed. The City, through its
budgeting process, determines the annual contributions to the Plan based on the actuarially determined
contribution and the availability of funds.
Net OPEB Asset
The City's total OPEB asset is based on an actuarial valuation performed as of December 31, 2022.
79
City of Southlake, Texas
Notes to the Financial Statements
Actuarial Assumptions
The total OPEB asset in the December 31, 2022 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement:
Actuarial Cost Method
Individual Entry -Age Normal
Single Discount Rate
5.00% as of December 31, 2022
Inflation rate
2.50% per year
Salary Increases
3.50% to 11.50% including inflation
Demographic Assumptions
Based on the experience study covering the four-year
period ending December 31, 2018 as conducted for the
Texas Municipal Retirement System (TMRS).
Mortality
For healthy retirees, the gender -distinct 2019 Municipal
Retirees of Texas mortality tables are used. The rates are
projected on a fully generational basis using the ultimate
mortality improvement rates in the MP tables published
through 2019 to account for future mortality improvements.
Healthcare Cost trend rates
Initial rate of 7.00% declining to ultimate rates of 4.25% after
15 years.
Participation Rates
30% of employees who retire at age 55 or older, or retire
through disability retirement at any age, were assumed to
maintain their health coverage after retirement.
Single Discount Rate. Projected benefit payments are required to be discounted to their actuarial present
values using a Single Discount Rate that reflects (1) a long-term expected rate of return on OPEB plan
investments (to the extent that the plan's fiduciary net position is projected to be sufficient to pay
benefits), and (2) tax-exempt municipal bond rate based on an index of 20-year general obligation bonds
with an average AA credit rating as of the measurement date (to the extent that the contributions for use
with the long-term expected rate of return are not met).
For the purpose of this valuation, the expected rate of return on OPEB plan investments is 5.0%; the
municipal bond rate is 1.84% (based on the daily rate closest to but not later than the measurement date
of the Fidelity "20-Year Municipal GO AA Index"); and the resulting Single Discount Rate is 5.0%.
The City's has consistently funded the actuarially determined employer contribution, which is based on a
closed amortization policy. As a result, the plan's fiduciary net position is projected to be sufficient to pay
benefits for all future years.
:E
City of Southlake, Texas
Notes to the Financial Statements
Changes in the Net OPEB Asset
Balance at 12/31/2021
Changes for the year:
Service Cost
Interest
Difference between expected and
actual experience
Changes of assumptions
Contributions - employer
Net investment income
Benefit payments, including refunds
of employee contributions
Administrative expense
Net Changes
Balance at 12/31/2022
Increase (Decrease)
Total
Plan
Net
OPEB
Fiduciary
OPEB
(Asset) Liability
Net Position
(Asset) Liability
(a)
(b)
(a) - (b)
$ 1,833,044
$ 2,550,451
$ (717,407)
120,612
-
120,612
92,533
-
92,533
(163,080) - (163,080)
89,089 - 89,089
- 225,370 (225,370)
(343,355) 343,355
(85,370) (85,370) -
- (7,980) 7,980
53,784 (211,335) 265,119
$ 1,886,828 $ 2,339,116 $ (452,288)
Consistent with the requirements of GASB Statements No. 74, the employer contributions include
"amounts for OPEB as the benefits come due that will not be reimbursed to the employer using OPEB plan
assets." The $85,370 in benefit payments was paid by the City using its own assets.
The plan fiduciary net position is 139% of the total OPEB liability as of the measurement date, resulting in
the net OPEB asset.
The benefit payments during the measurement period were determined as follows:
City's explicit subsidy $ 12,625
City's implicit subsidy (explicit subsidy * 5.522) 72,745
Total benefit payments
$ 85,370
The 5.522 implicit factor equals the ratio of the expected implicit subsidy to the expected explicit subsidy.
Sensitivity of the Net OPEB Asset to Changes in the Discount Rate and Healthcare Cost Trend Rates
Regarding the sensitivity of the net OPEB asset to changes in the Single Discount Rate, the following
presents the plan's net OPEB asset, calculated using a discount rate of 5.00%, as well as what the plan's
net OPEB asset would be if it were calculated using a discount rate that is one percent lower or
one percent higher:
1 % Decrease 1 % Increase
in Discount Discount in Discount
Rate (4.00%) Rate (5.00%) Rate (6.00%)
Net OPEB asset $ (280,776) $ (452,288) $ (606,527)
m
City of Southlake, Texas
Notes to the Financial Statements
Regarding the sensitivity of the net OPEB asset to changes in the healthcare cost trend rates, the following
presents the plan's net OPEB asset, calculated using the assumed trend rates as well as what the plan's
net OPEB asset would be if it were calculated using a trend rate that is one percent lower or one percent
higher:
Current Healthcare
Cost Rate
1%Decrease Assumption 1%Increase
Net OPEB asset $ (635,302) $ (452,288) $ (236,267)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
For the year ended December 31, 2022, the City recognized OPEB expense of $(86,898). At
September 30, 2023, the reported deferred outflows of resources and deferred inflows of resources related
to OPEB from the following sources:
Deferred
Deferred
Outflows of
Inflows of
Resources
Resources
Difference between Expected and Actual Economic Experiences
$ 13,607
$ 376,091
Changes in Assumptions
291,511
170,220
Investment Experience
314,383
-
Contributions subsequent to the measurement date
192,236
-
$ 811,737
$ 546,311
The $192,236 reported as deferred outflows of resources related to OPEB resulting from contributions
subsequent to the measurement date will increase the net OPEB asset during the year ending
September 30, 2024. Amounts reported as deferred outflows of resources and deferred inflows of
resources related to OPEB will be recognized in OPEB expense as follows:
Fiscal Year
Ended Sept. 30
2024
$ 24,330
2025
49,084
2026
68,741
2027
69,036
2028
(26,923)
Thereafter
(111,078)
Total $ 73,190
Differences between expected and actual experience and changes in assumptions are recognized in
OPEB expense using a systematic and rational method over a closed period equal to the average of the
expected remaining service lives of all employees that are provided with OPEB through the OPEB plan
(active employees and inactive employees) determined as of the beginning of the measurement period.
The expected remaining service lives of all active employees in the plan were approximately 3,227 years.
Additionally, the total plan membership (active employees and inactive employees) was 345. As a result,
the average of the expected remaining service lives for purposes of recognizing the applicable deferred
outflows and inflows of resources established in the current measurement period is 9.3548 years.
m
City of Southlake, Texas
Notes to the Financial Statements
Additionally, differences between projected and actual earnings on OPEB plan investments should be
recognized in OPEB expense using a systematic and rational method over a closed five-year period.
For this purpose, the deferred outflows and inflows of resources are recognized in the OPEB expense as a
level dollar amount over the closed period identified above.
Other Post Employment Benefits Supplemental Death Benefit Fund
Plan Description
Texas Municipal Retirement System ("TMRS") administers a defined benefit group -term life insurance plan
known as the Supplemental Death Benefits Fund ("SDBF"). This is a voluntary program in which
participating member cities may elect, by ordinance, to provide group -term life insurance coverage for
their active members, including or not including retirees. Employers may terminate coverage under and
discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be
effective the following January 1. The City has elected to participate in the SDBF for its active members
including retirees. As the SDBF covers both active and retiree participants, with no segregation of assets,
the SDBF is considered to be an unfunded single -employer OPEB plan (i.e. no assets are accumulated in
a trust that meets the criteria in paragraph 4 of GASB Statement No. 75) for City reporting.
Benefits Provided
The death benefit for active employees provides a lump -sum payment approximately equal to the
employee's annual salary (calculated based on the employee's actual earnings, for the 12-month period
preceding the month of death). The death benefit for retirees is considered an other postemployment
benefit ("OPEB") and is a fixed amount of $7,500.
At the December 31, 2022 valuation and measurement date, the following employees were covered by
the benefit terms:
Inactive employees currently receiving benefits 119
Inactive employees entitled to but not yet receiving benefits 81
Active Employees 352
552
Contributions
The member city contributes to the SDBF at a contractually required rate as determined by an annual
actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding
policy for the SDBF program is to assure that adequate resources are available to meet all death benefit
payments for the upcoming year. The intent is not to pre -fund retiree term life insurance during
employees' entire careers.
Contributions are made monthly based on the covered payroll of employee members of the
participating member city. The contractually required contribution rate is determined annually for each
city. The rate is based on the mortality and service experience of all employees covered by the SDBF and
the demographics specific to the workforce of the city. There is a one-year delay between the actuarial
valuation that serves as the basis for the employer contribution rate and the calendar year when the rate
goes into effect. The funding policy of this plan is to assure that adequate resources are available to meet
all death benefit payments for the upcoming year.
m
City of Southlake, Texas
Notes to the Financial Statements
The retiree portion of contribution rates to the SDBF for the City was 0.05% and 0.06% in calendar years
2022 and 2023, respectively. The City's contributions to the SDBF for the year ended September 30, 2023
were $14,788, and were equal to the required contributions.
Total OPEB Liability
The City's Total OPEB Liability (TOL) was measured as of December 31, 2022 and was determined by an
actuarial valuation as of that date.
Actuarial Assumptions
The Total OPEB Liability in the December 31, 2022 actuarial valuation was determined using the following
actuarial assumptions:
Inflation
Salary Increases
Discount rate
Retiree's share of benefit -related costs
Administrative expenses
2.50%
3.50% to 11.50% including inflation
4.05%
$0
All administrative expenses are paid
through the Pension Trust and
accounted for under reporting
requirements of GASB Statement No.
68.
Salary increases were based on a service -related table. Mortality rates for service retirees were based on
the 2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis
with scale UMP. Mortality rates for disabled retirees were based on 2019 Municipal Retirees of Texas
Mortality Tables with a 4-year set -forward for males and a 3-year set -forward for females. In addition, a
3.5% and 3% minimum mortality rate will be applied to reflect the impairment for younger members who
become disabled for males and females, respectively. The rates are projected on a fully generational
basis with scale UMP to account for future mortality improvements subject to the floor.
Actuarial assumptions used in the December 31, 2022 valuation were developed primarily from the
actuarial investigation of the experience of TMRS over the four-year period from December 31, 2014 to
December 31, 2018. They were first adopted in 2019 and first used in the December 31, 2019 actuarial
valuation.
The discount rate used to measure the Total OPEB Liability was 4.05% and was based on the Fidelity Index's
"20-Year Municipal GO AA Index" rate as of December 31, 2022.
RE
City of Southlake, Texas
Notes to the Financial Statements
Changes in Total OPEB Liability
Total OPEB Liability
Balances as of 12/31/2021
$ 1,142,695
Changes for the year:
Service cost
79,856
Interest
21,624
Difference between expected and
actual experience
26,255
Changes of assumptions
(467,745)
Contributions - employer
(14,788)
Net Changes
(354,798)
Balances as of 12/31/2022
$ 787,897
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the City, calculated using the discount rate of 4.05%, as
well as what the City's total OPEB liability would be if it were calculated using a discount rate that is
1 percentage -point lower (3.05%) or 1 percentage -point higher (5.05%) than the current rate:
1 % Decrease Discount Rate 1 % Increase
(3.05%) (4.05%) (5.05%)
Total OPEB liability $ 964,063 $ 787,897 $ 653,413
OPEB Expense and Deferred Oufflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended September 30, 2023, the City recognized OPEB expense of $53,634. At September 30,
2023, the City reported deferred outflows and inflows of resources related to the OPEB plan from the
following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Difference between expected and actual economic experiences $ - $ (27,836)
Changes in actuarial assumptions 186,030 (409,201)
Contributions subsequent to the measurement date 14,473
$ 200,503 $ (437,037)
The $14,473 reported as deferred outflows of resources related to the OPEB plan resulting from
contributions subsequent to the measurement date will reduce the Total OPEB liability during the year
ending September 30, 2024.
m
City of Southlake, Texas
Notes to the Financial Statements
The other amounts reported as deferred outflows and inflows of resources related to the OPEB plan will
be recognized in OPEB expense as follows:
Fiscal Year
Ended Sept. 30
2024
$ (33,058)
2025
(41,875)
2026
(31,951)
2027
(56,169)
2028
(69,614)
Thereafter
(18,340)
Total
$ (251,007)
Note 9. Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of
their salary until future years. The deferred compensation is not available to employees until termination,
retirement, death, or unforeseeable emergency.
All amounts of compensation deferred under the plan, all property and rights purchased with such
amounts, and all income attributable to such amounts, property, or rights are held in trust or under one
or more annuity contracts described in Internal Revenue Code Section 401 (f). Except as may otherwise
be permitted or required by law, no assets or income of the plan shall be used for, or diverted to, purposes
other than for the exclusive purpose of providing benefits for participants and their beneficiaries or
defraying reasonable expenses of administration of the plan. In accordance with GASB 97, the plans as
amended are not included in the City's financial statements.
Note 10. Risk Financing and Insurance
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. During the fiscal year 1990, the City
joined the Texas Municipal League Workers Compensation Joint Insurance Fund ("the Pool") for risks
related to employees. Premiums are paid to the Pool, which retains a limit of loss. Reinsurance companies
insure the risks beyond those limits. The City retains, as a risk, only the deductible amount of each policy.
The City continues to carry commercial insurance with Texas Municipal League provided by Mutual of
Omaha for other risks including general liability, property, and errors and omissions. There were no
significant reductions in coverage in the past year and there were no settlements exceeding insurance
coverage in any of the past three years.
Note 11. Commitments and Contingencies
The City has entered into various contracts with the Trinity River Authority (TRA) and other cities. Terms of
the agreements provide the City will pay an amount equal to its proportional share of maintenance and
operations and debt service based upon volumes of wastewater transported, treated, or disposed of.
The City's proportional share of future costs under these contracts is indeterminable and has not been
recorded. Payments to the TRA under these contracts for the year ended September 30, 2023 were
$4,01 1,159.
City of Southlake, Texas
Notes to the Financial Statements
The City has authorized various contracts obligating future funds of the City as the contracted services
are performed. Significant amounts unexpended under such contracts at year-end are reflected as
reserves for authorized contracts in the applicable funds.
The City has certain claims and litigation pending with respect to matters arising in the normal course of
operations. City management is of the opinion that the settlement of these matters will not have a
material adverse impact on the City's financial statements.
Note 12. Tax Abatement
The City enters into economic development agreements authorized under Chapter 380 of the
Texas Local Government Code. These agreements are planning tools designed to stimulate economic
activity, redevelopment, community improvement, and provide a return on investment for the
community. These programs abate or rebate property and/or sales taxes and may include other
incentive payments such as fee reductions or construction cost reimbursements. Economic
development agreements are considered on a case -by -case basis by the City Council and generally
contain recapture provisions, which may require repayment or termination if recipients do not meet the
required provisions of the economic incentives.
Chapter 380 of the Texas Local Government Code allows the City to provide grants for the purpose of
promoting local economic development. These grants are based on a percentage of property and/or
sales tax received by the City. For the fiscal year ending September 30, 2023, the City rebated $236,989
in sales taxes, $136,003 in property taxes, and $556,662 in hotel occupancy taxes. The City also refunded
$250,988 in public works, permit, and plan review fees and $943,606 in developer construction cost
reimbursements for the fiscal year ending September 30, 2023.
m
Required Supplementary Information
:•
a
Budgetary Comparison Schedules
m
City of Southlake, Texas
General Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Fiscal Year Ended September 30, 2023
Exhibit A-1
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Ad valorem taxes, penalties and interest
$ 26,990,927
$ 26,915,642
$ 26,578,947
$ (336,695)
Franchise taxes
2,969,000
2,993,190
3,656,895
663,705
Municipal sales and mixed beverage tax
19,908,000
19,908,000
22,790,698
2,882,698
License, permits and fees
1,512,100
1,668,200
2,101,778
433,578
Charges for services
1,901,470
2,006,129
2,098,618
92,489
Fines and forfeitures
952,700
798,000
795,072
(2,928)
Intergovernmental revenue
72,000
396,002
496,469
100,467
Investment income (losses)
36,550
1,259,700
2,088,292
828,592
Contributions
5,000
54,000
45,788
(8,212)
Miscellaneous
185,000
185,000
230,110
45,110
Total revenues
54,532,747
56,183,863
60,882,667
4,698,804
EXPENDITURES
General government
City secretary/mayor
626,040
635,932
586,176
49,756
City manager's office
1,102,636
1,129,452
1,107,936
21,516
Human resources
1,005,686
1,033,494
965,103
68,391
Support services
4,596,989
4,708,000
4,891,905
(183,905)
Economic development
361,748
361,748
332,109
29,639
Finance
2,008,960
1,920,224
1,847,819
72,405
Municipal court
855,746
832,831
799,731
33,100
Teen court
163,886
163,886
145,254
18,632
Information technology
4,448,800
4,989,208
3,635,409
1,353,799
Public safety
Police services
8,610,351
8,429,762
8,263,315
166,447
Fire services
11,056,104
11,680,997
11,798,804
(117,807)
Public safety support
1,607,350
1,697,559
1,575,064
122,495
Public works
Public works administration
2,461,558
2,514,533
2,340,428
174,105
Streets and drainage
1,305,334
1,219,983
1,163,500
56,483
Planning
1,290,249
1,285,722
1,245,423
40,299
Building inspection
1,244,279
1,279,692
1,209,322
70,370
Culture and recreation
Community services
1,528,915
1,533,774
1,415,750
118,024
Parks and recreation
4,267,603
4,318,521
4,268,243
50,278
Library services
1,096,363
1,136,726
1,139,467
(2,741)
Capital Outlay
3,376,688
2,425,688
4,897,087
(2,471,399)
Debt Service
Principal
-
-
918,815
(918,815)
Interest
-
-
24,257
(24,257)
Total expenditures
53,015,285
53,297,732
54,570,917
(1,273,185)
Excess of revenues over expenditures
1,517,462
2,886,131
6,311,750
3,425,619
OTHER FINANCING SOURCES (USES)
Issuance of financed purchases
53,975
53,975
Issuance of subscriptions
2,608,340
2,608,340
Sale of capital assets
-
-
4,156
4,156
Transfers from other funds
2,707,410
2,844,912
2,844,912
-
Transferstootherfunds
(11,700,000)
(11,967,091)
(11,967,091)
-
Total other financing sources (uses)
(8,992,590)
(9,122,179)
(6,455,708)
2,666,471
Net change in fund balance
(7,475,128)
(6,236,048)
(143,958)
6,092,090
Fund balances, beginning of year
49,113,423
49,113,423
49,113,423
FUND BALANCES, END OF YEAR
$ 41,638,295
$ 42,877,375
$ 48,969,465 $
6,092,090
The Notes to the Budgetary Comparison Schedules are an integral part of this statement.
92
City of Southlake, Texas
Southlake Parks Development Corporation Operating Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Fiscal Year Ended September 30, 2023
REVENUES
Municipal sales tax
Charges for services
Investment income (losses)
Total revenues
EXPENDITURES
Community services
Capital outlay
Total expenditures
Excess of revenues over expenditures
OTHER FINANCING USES
Transfers to other funds
Net change in fund balance
Fund balances, beginning of year,
FUND BALANCE, END OF YEAR
BUDGETED AMOUNTS
ORIGINAL FINAL
Exhibit A-2
VARIANCE WITH
FINAL BUDGET -
POSITIVE
ACTUAL (NEGATIVE)
$ 9,898,000
$ 9,898,000
$ 11,426,173 $
1,528,173
153,824
153,824
116,376
(37,448)
4,200
163,000
306,621
143,621
10,056,024
10,214,824
11,849,170
1,634,346
1,691,151
1,709,826
1,632,063
77,763
228,200
316,944
291,744
25,200
1,919,351
2,026,770
1,923,807
102,963
8,136,673
8,188,054
9,925,363
1,737,309
(9,686,624)
(9,692,976)
(9,692,976)
-
(1,549,951)
(1,504,922)
232,387
1,737,309
14,016,439
14,016,439
14,016,439
-
$ 12,466,488
$ 12,511,517
$ 14,248,826 $
1,737,309
The Notes to the Budgetary Comparison Schedules are an integral part of this statement.
93
City of Southlake, Texas
Community Enhancement Development Corporation Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Fiscal Year Ended September 30, 2023
REVENUES:
Municipal sales tax
Charges for services
Investment income (losses)
Contributions
Miscellaneous
Total revenues
EXPENDITURES:
Community services
Capital outlay
Debt Service
Principal
Interest
Total expenditures
Excess of revenues over expenditures
OTHER FINANCING USES:
Issuance of subscriptions
Transfers to other funds
Total other financing uses
Net changes in fund balance
Fund balances, beginning of year
FUND BALANCES, END OF YEAR
BUDGETED AMOUNTS
ORIGINAL FINAL ACTUAL
Exhibit A-3
VARIANCE WITH
FINAL BUDGET -
POSITIVE
(NEGATIVE)
$ 7,423,500
$ 7,423,500
$ 8,463,832 $
1,040,332
3,920,303
4,324,454
4,413,152
88,698
5,500
165,015
632,339
467,324
4,947
5,270
6,685
1,415
-
-
9,573
9,573
11,354,250
11,918,239
13,525,581
1,607,342
5,442,174
5,442,174
5,097,866
344,308
-
-
130,805
(130,805)
-
21,862
(21,862)
-
-
1,143
(1,143)
5,442,174
5,442,174
5,251,676
190,498
5,912,076
6,476,065
8,273,905
1,797,840
-
-
130,805
130,805
(4,276,356)
(4,301,136)
(4,301,136)
-
(4,276,356)
(4,301,136)
(4,170,331)
130,805
1,635,720
2,174,929
4,103,574
1,928,645
16,668,425
16,668,425
16,668,425
-
$ 18,304,145
$ 18,843,354
$ 20,771,999 $
1,928,645
The Notes to the Budgetary Comparison Schedules are an integral part of this statement.
94
City of Southlake, Texas
Notes to Budgetary Comparison Schedules
Budgetary Data
The City Council adheres to the following procedures in establishing the budgets reflected in the financial
statements:
Each year the City Manager is required to submit to the City Council, between sixty and
ninety days prior to the beginning of each fiscal year, a proposed budget for the fiscal year
beginning on the following October 1. The operating budget includes proposed expenditures and
the means of financing them.
2. Public hearings are conducted to obtain taxpayers' comments.
3. Prior to October 1, the budget is legally enacted by the City Council through passage of an
ordinance.
4. Annual budgets are legally adopted for the General Fund, the Tax Increment Financing District,
Community Enhancement Development Corporation, Crime Control District, Parks Dedication,
Hotel Occupancy, Storm Water Utility, Red Light Camera, Parks and Recreation, Court Security,
Court Technology, Library, Commercial Vehicle Enforcement, and Southlake Parks Development
Corporation Special Revenue Funds and all Debt Service Funds on a basis consistent with
accounting principles generally accepted in the United States of America. Formal budgetary
integration is not employed for proprietary funds. However, the City does adopt an annual budget
for those funds for managerial control.
5. During the fiscal year, the City Council may transfer funds allocated to a department to another
department or re -estimate revenues or expenditures. The City Manager may transfer budgeted
funds within a department. Expenditures should not exceed appropriations at the department
level.
6. Budgetary data for the Police, Municipal Jury, Oil and Gas, Truancy Prevention, Disaster Recovery,
and all Capital Projects Funds are not presented, as such funds are budgeted over the life of the
respective project, and not on an annual basis. Budgetary information for the Proprietary Funds
has not been presented since reporting on such budgets is not legally required.
7. General Fund reported expenditures in excess of appropriations for the year ended
September 30, 2023 as follows:
• Support services - ($183,905)
Due to planned and approved developer reimbursement that was not budgeted because it
was unclear when conditions for payment would be met.
• Fire services - ($1 17,807)
Due to additional salary and other personnel -related costs.
• Library services - ($2,741)
• Due to additional salary and other personnel -related costs.
• Capital outlay - ($2,471,399)
Due to implementation of GASB 96, not a true cash flow expenditure over budget.
• Debt service: Principal - ($918,805)
Due to implementation of GASB 96, not a true cash flow expenditure over budget.
• Debt service: Interest - ($24,257)
Due to implementation of GASB 96, not a true cash flow expenditure over budget.
95
W.
Required Pension and OPEB Schedules
97
City of Southlake, Texas
Schedule of Changes in Net Pension Liability
and Related Ratios
Texas Municipal Retirement System
Last Nine Measurement Years
Total pension liability:
Service cost
Interest
Changes of benefit terms
Difference between expected and actual
experience
Change in assumptions
Benefit payments, including refunds of
employee contributions
Net change in total pension liability
Total pension liability - beginning
Total pension liability - ending (a)
Plan fiduciary net position:
Contributions - employer
Contributions - employee
Net investment income
Benefit payments, including refunds of
employee contributions
Administrative expense
Other
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Net pension liability - ending (a) - (b)
Plan fiduciary net position as a
percentage of total pension liability
Covered payroll
Net pension liability as a percentage
of covered payroll
Measurement
Measurement
Measurement
Year
Year
Year
2022
2021
2020
$ 4,838,653
$ 4,328,436
$ 4,289,132
8,750,754
8,133,486
7,554,362
1,059,885
426,450
39,572
(4,150,172)
(3,847,375)
(2,798,825)
10,499,120
9,040,997
9,084,241
129,296,554
120,255,557
111,171,316
139,795, 674
129,296,554
120,255,557
3,714,760
3,348,713
3,322,051
2,070,328
1,871,403
1,829,612
(9,335,205)
14,591,844
7,731,319
(4,150,172)
(3,847,375)
(2,798,825)
(80,641)
(67,416)
(49,969)
96,228
462
(1,950)
(7,684,702)
15,897,631
10,032,238
127,663,755
111,766,124
101,733,886
119,979,053
127,663,755
111,766,124
$ 19,816,621
$ 1,632,799
$ 8,489,433
85.82%
98.74%
92.94%
$ 29,576,118 $ 26,441,262 $ 26,137,309
67.00% 6.18% 32.48%
Exhibit A-4
Measurement
Measurement
Measurement
Measurement
Measurement
Measurement
Year
Year
Year
Year
Year
Year
2019
2018
2017
2016
2015
2014
$ 4,190,311
$ 3,919,389
$
3,579,734
$
3,482,384
$
3,222,126
$ 2,906,949
6,945,183
6,379,342
5,865,601
5,393,997
5,090,308
4,779,462
250,630
537,249
213,937
179,076
102,364
(1,602,645)
324,280
-
-
-
760,500
-
(2,671,062)
(2,506,166)
(1,930,078)
(2,304,726)
(1,921,361)
(1,680,030)
9,039,342
8,329,814
7,729,194
6,750,731
7,253,937
4,403,736
102,131,974
93,802,160
86,072,966
79,322,235
72,068,298
67,664,562
111,171,316
102,131,974
93,802,160
86,072,966
79,322,235
72,068,298
3,212,690
2,992,110
2,682,629
2,595,919
2,425,455
2,283,310
1,773,541
1,673,450
1,520,518
1,480,965
1,409,008
1,340,870
13,337,326
(2,598,044)
10,284,603
4,588,256
97,252
3,463,018
(2,671,062)
(2,506,166)
(1,930,078)
(2,304,726)
(1,921,361)
(1,680,030)
(75,264)
(50,164)
(53,258)
(51,781)
(59,224)
(36,150)
(2,262)
(2,623)
(2,699)
(2,790)
(2,925)
(2,972)
15,574,969
(491,437)
12,501,715
6,305,843
1,948,205
5,368,046
86,158,917
86,650,354
74,148,639
67,842,796
65,894,591
60,526,545
101,733,886
86,158,917
86,650,354
74,148,639
67,842,796
65,894,591
$ 9,437,430
$ 15,973,057
$
7,151,806
$
11,924,327
$
11,479,439
$ 6,173,707
91.51 %
84.36%
92.38%
86.15%
85.53%
91.43%
$ 25,334,408
$ 23,710,761
$
21,721,689
$
21,156,637
$
20,113,150
$ 19,154,225
37.25%
67.37%
32.92%
56.36%
57.07%
32.23%
• •
City of Southlake, Texas Exhibit A-5
Schedule of Pension Contributions
Texas Municipal Retirement System
Last Nine Fiscal Years
Contribution
in Relation of
Contributions as
Actuarially
the Actuarially
Contribution
a Percentage of
Determined
Determined
Deficiency
Covered
Covered
Contribution
Contribution
(Excess)
Payroll
Payroll
2015
$ 2,439,627
$ 2,439,627
$
$ 20,034,712
12.18%
2016
2,508,791
2,632,209
(123,418)
21,551,426
12.21
2017
2,580,380
2,654,303
(73,923)
21,525,552
12.33%
2018
2,829,615
2,894,219
(64,604)
23,132,172
12.51
2019
3,101,504
3,182,749
(81,245)
25,156,408
12.65%
2020
3,131,667
3,201,451
(69,784)
25,202,798
12.70%
2021
3,244,987
3,297,682
(52,695)
26,156,402
12.61
2022
3,547,858
3,610,307
(62,449)
28,738,669
12.56%
2023
3,792,064
3,879,580
(87,516)
31,070,964
12.49%
Note: The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
No]
City of Southlake, Texas
Schedule of Changes in Net OPEB Liability (Asset)
and Related Ratios
Southlake Net OPEB Liability (Asset) for Health Insurance
Last Six Measurement Years
Total OPEB liability (asset):
Service cost
Interest
Changes of benefit terms
Difference between expected and actual
experience
Change in assumptions
Benefit payments, including refunds of
employee contributions
Net change in total OPEB liability (asset)
Total OPEB liability (asset) - beginning
Total OPEB liability (asset) - ending (a)
Plan fiduciary net position:
Contributions - employer
Net investment income
Benefit payments, including refunds of
employee contributions
Administrative expense
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Net OPEB liability (asset)- ending (a) - (b)
Plan fiduciary net position as a
Exhibit A-6
Measurement
Measurement
Measurement
Measurement
Measurement
Measurement
Year
Year
Year
Year
Year
Year
2022
2021
2020
2019
2018
2017
$ 120,612
$ 80,561
$ 73,365
$ 66,950
$ 53,239
$ 55,061
92,533
97,367
114,848
108,953
87,706
84,496
(163,080)
6,855
(337,496)
(1,262)
16,549
(3,965)
89,089
(217,142)
87,222
8,001
297,855
-
(85,370)
(83,319)
(81,362)
(75,967)
(75,843)
(76,779)
53,784
(115,678)
(143,423)
106,675
379,506
58,813
1,833,044
1,948,722
2,092,145
1,985,470
1,605,964
1,547,151
1,886,828
1,833,044
1,948,722
2,092,145
1,985,470
1,605,964
225,370
323,319
321,362
165,967
172,843
116,779
(343,355)
117,346
201,804
207,145
(38,598)
121,500
(85,370)
(83,319)
(81,362)
(75,967)
(75,843)
(76,779)
(7,980)
(7,918)
(6,098)
(5,348)
(4,389)
(3,483)
(211,335)
349,428
435,706
291,797
54,013
158,017
2,550,451
2,201,023
1,765,317
1,473,520
1,419,507
1,261,490
2,339,116
2,550,451
2,201,023
1,765,317
1,473,520
1,419,507
$ (452,288)
$ (717,407)
$ (252,301)
$ 326,828
$ 511,950
$ 186,457
percentage of total OPEB liability (asset) 123.97% 139.14% 112.95% 84.38% 74.22%
Covered payroll $ 30,420,420 $ 27,287,214 $ 26,994,043 $ 26,143,074 $ 22,468,011
Net OPEB liability (assef)as a percentage
of covered payroll -1.49% -2.63% -0.93% 1.25% 2.28%
Note: Only six years of data is presented in accordance with GASB #75. Additional years' information will be displayed as it becomes available.
88.39%
$ 20,607,676
0.90%
UK
City of Southlake, Texas
Schedule of Contributions
Southlake Net OPEB Liability for Health Insurance
Last Six Fiscal Years
Contribution in
Relation of the
Actuarially
Actuarially
Fiscal
Determined
Determined
Year
Contribution
Contribution
2018
$ 89,240 $
168,167
2019
89,240
177,639
2020
140,254
301,318
2021
142,458
332,082
2022
144,728
229,678
2023
39,085
211,408
Exhibit A-7
Contributions as
Contribution
a Percentage of
Deficiency
Covered
Covered
(Excess)
Payroll
Payroll
$ (78,927)
$ 23,132,172
0.73%
(88,399)
24,537,271
0.72%
(161,064)
24,988,882
1.21 %
(189,624)
25,882,453
1.28%
(84,950)
29,572,038
0.78%
(172,323)
31,894,347
0.66%
Note: The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
City of Southlake, Texas
Schedule of Changes in the Total OPEB Liability
and Related Ratios
Texas Municipal Retirement System - Supplemental Death Benefits
Last Six Measurement Years
Exhibit A-8
Measurement
Measurement
Measurement
Measurement
Measurement
Measurement
2022
2021
2020
2019
2018
2017
Total OPEB liability:
Service cost
$
79,856
$ 66,103
$ 52,275
$ 38,002
$ 42,679
$
34,755
Interest
21,624
21,646
24,403
25,388
23,155
21,919
Changes of benefit terms
-
-
-
-
-
-
Difference between expected and actual
experience
26,255
(26,578)
(37,301)
(13,112)
(18,599)
-
Change in assumptions
(467,745)
38,907
156,506
149,523
(56,421)
62,407
Contributions - employer
(14,788)
(13,221)
(2,614)
(5,067)
(2,371)
(4,344)
Net change in total pension liability
(354,798)
86,857
193,269
194,734
(11,557)
114,737
Total OPEB liability- beginning
1,142,695
1,055,838
862,569
667,835
679,392
$
564,655
Total OPEB liability - ending (a)
$
787,897
$ 1,142,695
$ 1,055,838
$ 862,569
$ 667,835
$
679,392
Covered employee payroll
$
29,576,118
26,441,273
26,137,309
25,334,408
23,710,761
$
21,721,689
Net pension liability as a percentage
of covered employee payroll
2.66%
4.32%
4.04%
3.40%
2.82%
3.13%
Note: The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
103
City of Southlake, Texas
Schedule of OPEB Contributions
Texas Municipal Retirement System - Supplemental Death Benefits
Last Six Fiscal Years
Contribution
in Relation of
Actuarially
the Actuarially
Fiscal
Determined
Determined
Year
Contribution
Contribution
2018
$ 2,846
$ 2,846
2019
3,965
3,965
2020
3,206
3,206
2021
10,272
10,272
2022
21,326
21,326
2023
15,327
15,327
Exhibit A-9
Contribution
Contributions as
Deficiency Covered
a Percentage of
(Excess) Payroll
Covered Payroll
$ $ 23,132,172
0.01
25,156,408
0.02%
25,202,798
0.01
26,156,403
0.04%
28,738,669
0.07%
31,070,964
0.05%
Note: The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
104
City of Southlake, Texas
Condition Rating of Street System
September 30, 2023
2023
2022
2021
International Roughness Index (IRI) 73.6
69.8
73.0
Pavement Condition Index (PCI)
81.2
78.6
80.0
Pavement Quality Index (PQI)
81.8
79.3
80.0
Needed
Actual
Difference
2019
$ 1,000,000
$ 813,411
$ (186,589)
2020
1,100,000
1,100,285
285
2021
1,200,000
1,336,244
136,244
2022
1,900,000
1,706,384
(193,616)
2023
1,900,000
1,982,896
82,896
Exhibit A-10
i-ITy
Required
Minimum
78.0
The City hired a consultant to implement a pavement management system (PMS) to cover all public
streets within the City. The condition of street pavement is measured using the Standard for Roads
Pavement Condition Index (SRPCI) as developed by the American Society for Testing and Materials
(ASTM). The SRPCI is based on a weighted average of thirteen defects found in pavement surfaces. The
consultant conducted a pavement condition survey on all City -owned streets. This consisted of a
roughness survey and a surface distress survey, along with a deflection survey of selected roads. A present
status analysis was conducted using data obtained from pavement condition survey to determine the
International Roughness Index (IRI) and the Pavement Condition Index (PCI). These indices were then
combined into the composite Pavement Quality Index (PQI). Values of PQI can range from 0 to 100.
Typical values for a newly constructed pavement range from 95.0 to 100.0. The PQI level at which a
pavement becomes in need of rehabilitation is typically in the 50.0 to 70.0 range. It was the City's policy
to maintain a PQI of 73.0 until 2012 when the City increased the minimum PQI to 78.0. Needed
maintenance is calculated based upon inspections and the PQI.
In accordance with GASB Statement No. 34, the City is required to report at least three complete
condition assessments at transition using the modified approach. The condition assessments were
completed by the City and concluded that the eligible infrastructure assets are being preserved at or
above the condition level established by the City. Half of the City's public streets will be assessed annually
to ensure all public streets are assessed every two years.
The City calculates needed maintenance of its street system annually. However, the scheduling of these
road projects often crosses fiscal years. Therefore, actual maintenance may be less than the calculated
needed maintenance in one fiscal year and greater than the calculated needed maintenance in the
subsequent fiscal year.
105
W.
Combining and Individual Fund
Financial Statements and Schedules
107
Major Governmental Funds
General Obligation Debt Service Fund
The General Obligation Debt Service Fund is used to account for the accumulation of resources for, and
the payment of, general obligation bonds and interest from governmental resources.
City of Southlake, Texas
General Obligation Debt Service Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit B-1
VARIANCE WITH
BUDGETED AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Ad valorem taxes, penalties, and interest
$ 5,943,869
$ 5,943,869
$ 5,886,605
$ (57,264)
Investment income (losses)
6,300
110,000
155,007
45,007
Total revenues
5,950,169
6,053,869
6,041,612
(12,257)
EXPENDITURES
Debt Service
Principal
5,795,832
5,795,832
5,795,832
-
Interest
954,600
954,600
942,467
12,133
Total expenditures
6,750,432
6,750,432
6,738,299
12,133
Excess (deficiency) of revenues
over (under) expenditures
(800,263)
(696,563)
(696,687)
(124)
OTHER FINANCING SOURCES:
Transfers from other funds
402,554
402,554
402,554
-
Total other financing sources
402,554
402,554
402,554
Net change in fund balance
(397,709)
(294,009)
(294,133)
(124)
Fund balance, beginning of year
3,287,396
3,287,396
3,287,396
-
FUND BALANCE, END OF YEAR
$ 2,889,687
$ 2,993,387
$ 2,993,263
$ (124)
Special Revenue Funds
The Special Revenue Funds are used to account for revenue sources that are legally restricted or
committed to expenditures for specified purposes.
Police Fund -- Established to account for resources required to be utilized by the police department.
Parks and Recreation Fund - Established to account for resources restricted for use by the community
services department.
Parks Dedication Fund - Established to account for resources restricted for use by the community
services department.
Crime Control District Fund - Established to account for the operations of the Crime Control District,
which was established for the financing and development of crime control within the City. The Crime
Control Fund is funded primarily through the municipal sales taxes.
Hotel Occupancy Fund - Established to account for all revenues and expenditures relating to the
hotel occupancy tax received by the City.
Storm Water Utility Fund - Established to account for fees collected for the purpose of improving,
upgrading and maintaining the City's drainage system. The City is mandated by the Texas Commission
on Environmental Quality (TCEQ) to develop and maintain a Storm Water Management Plan in order
to address capacity and quality issues and protect its residents and their properties from possible
flooding and pollution problems. Drainage fees are collected to fund the activities required to comply
with TCEQ regulations.
Court Security Fund - Established to account for municipal court fees assessed to provide court
security.
Court Technology Fund - Established to account for municipal court fees assessed to provide court
technology.
Municipal Jury Fund - Established to account for municipal court fees assessed to provide jury services.
Library Fund - Established to account for resources donated for use by library services.
Red Light Camera Fund - Established to account for fees assessed for red light violations captured
through the City's camera monitoring system.
Oil and Gas Fund- Established to account for permits fees and the related expenditures for oil and gas
drilling.
Commercial Vehicle Enforcement Fund - Established to account for the fees assessed for commercial
vehicle violations.
Truancy Prevention - Established to account for municipal court fees assessed to provide for juvenile
case manager services.
Tax Increment Financing District - Established to account for the general operations of the TIF, which
was formed to finance and make public improvements. The TIF is funded primarily through the
assessment of ad valorem taxes.
Disaster Recovery - Established to account for grant awards to provide disaster relief.
we
Debt Service Funds
The Debt Service Funds are utilized to account for the accumulation of financial resources for, and the
payment of, long-term debt principal, interest, and related costs arising from the issuance of bonds.
Southlake Parks Development Corporation Debt Service Fund - Established to accumulate resources
to finance the debt service of debt issues of the Southlake Parks Development Corporation.
Community Enhancement and Development Corporation Debt Service Fund - Established to
accumulate resources to finance the debt service of debt issues for the community entertainment
and recreation center.
Capital Projects Funds
The Capital Projects Funds are utilized to account for financial resources to be used for the acquisition or
construction of specified capital improvements (other than those financed by proprietary funds).
Southlake Parks Development Corporation Capital Projects Fund - Established to fund the acquisition
and construction of park recreational facilities as approved by the SPDC board of directors. The fund
has been funded primarily through the issuance of general obligation debt.
Community Enhancement and Development Corporation Capital Projects Fund - Established to fund
the acquisition and construction of a community entertainment and recreation center as approved
by the CEDC board of directors. The fund has been financed through the issuance of sales tax
revenue bonds.
Crime Control District Capital Projects Fund - Established to account for the acquisition and
construction of capital assets as approved by the District's board of directors. The fund has been
funded primarily through the issuance of general obligation debt.
City of Southlake, Texas
Nonmajor Governmental Funds
Combining Balance Sheet
September 30, 2023
ASSETS
Cash and cash equivalents
Accounts receivable
Sales tax receivable
Interest receivable
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Accrued liabilities
Retainage payable
Total liabilities
FUND BALANCES
Restricted
Committed
Total fund balances
TOTAL LIABILITIES AND FUND BALANCES
SPECIAL REVENUE
Parks Crime
and Parks Control
Police Recreation Dedication District
$ 96,540 $ 216,447 $ 1,600,913 $ 4,689,014
- - - 828,399
28 62 456 1,340
$ 96,568 $ 216,509 $ 1,601,369 $ 5,518,753
$ 7,984 $ $ $ 79,243
- 63,218
7,984 142,461
88,584 216,509 - 5,376,292
- - 1,601,369 -
88,584 216,509 1,601,369 5,376,292
$ 96,568 $ 216,509 $ 1,601,369 $ 5,518,753
OWN
Exhibit C-1
(Page 1 of 2)
SPECIAL REVENUE
Storm
Hotel Water Court Court Municipal Red Light
Occupancy Utility Security Technology Jury Library Camera
$ 3,070,534 $ 1,959,643 $ 455,130 $ 301,206 $ 1,905 $ 19,528 $ 311,057
- 217,002 - - - - -
264,332 - - - - - -
875 559 130 86 1 6 89
$ 3,335,741 $ 2,177,204 $ 455,260 $ 301,292 $ 1,906 $ 19,534 $ 311,146
$ 138,831
$ 5,250
$ 2,512
$ 10,896
$ $ $ 71,648
11,747
9,380
1,891
-
-
150,578
14,630
4,403
10,896
71,648
3,185,163
2,162,574
450,857
290,396
1,906 19,534 239,498
3,185,163
2,162,574
450,857
290,396
1,906 19,534 239,498
$ 3,335,741
$ 2,177,204
$ 455,260
$ 301,292
$ 1,906 $ 19,534 $ 311,146
113
City of Southlake, Texas
Nonmajor Governmental Funds
Combining Balance Sheet - Continued
September 30, 2023
ASSETS
Cash and cash equivalents
Accounts receivable
Sales tax receivable
Interest receivable
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Accrued liabilities
Retainage payable
TOTAL LIABILITIES
FUND BALANCES
Restricted
Committed
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCES
SPECIAL REVENUE
Tax
Commercial
Increment
Oil and
Vehicle
Truancy
Financing Disaster
Gas
Enforcement
Prevention
District Recovery
$ 57,432
$ 212,080 $
116,497
$ 9,318,088 $
16
60
33
2,657
$ 57,448
$ 212,140 $
116,530
$ 9,320,745 $
6,153
$ 958,209 $
15,341
6,153 973,550
- 205,987 116,530 8,347,195
57,448 - - -
57,448 205,987 116,530 8,347,195
$ 57,448 $ 212,140 $ 116,530 $ 9,320,745 $
114
DEBT SERVICE
Exhibit C-1
(Page 2 of 2)
CAPITAL PROJECTS
Southlake
Community
Southlake
Community
TOTAL
Parks
Enhancement
Parks
Enhancement
Crime
NON -MAJOR
Development
Development
Development
Development
Control
GOVERNMENTAL
Corporation
Corporation
Corporation
Corporation
District
FUNDS
$ 2,022,413
$ 615,592
$ 21,481,980
$ 2,269,860
$ 2,625,971
$ 51,441,830
-
-
-
-
-
217,002
-
-
-
-
-
1,092,731
577
176
6,124
647
749
14,671
$ 2,022,990
$ 615,768
$ 21,488,104
$ 2,270,507
$ 2,626,720
$ 52,766,234
$ $ $ 546,379 $ 8,020 $ 6,154 $ 1,835,126
- - - 107,730
96,358 96,358
642,737 8,020 6,154 2,039,214
2,022,990 615,768 20,845,367 2,262,487 2,620,566 49,068,203
- - - - - 1,658,817
2,022,990 615,768 20,845,367 2,262,487 2,620,566 50,727,020
$ 2,022,990 $ 615,768 $ 21,488,104 $ 2,270,507 $ 2,626,720 $ 52,766,234
WIN
City of Southlake, Texas
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended September 30, 2023
SPECIAL REVENUE
Parks
Crime
and
Parks
Control
Police
Recreation
Dedication
District
REVENUES
Ad valorem taxes, penalties and interest
$ -
$
$ -
$
Municipal sales tax
-
-
3,050,459
Licenses, permits and fees
-
373,299
-
Fines and forfeitures
10,809
-
Charges for services
-
-
-
Grants
-
-
-
Investment income (losses)
3,938
8,398
58,572
170,543
Contributions
-
35,140
-
-
Miscellaneous
22,240
-
-
-
Total revenues
36,987
43,538
431,871
3,221,002
EXPENDITURES
Current:
General government
Support services
-
-
-
Municipal court
-
-
-
Public safety
Police services
72,854
-
1,698,546
Public works
Streets and drainage
-
-
-
-
Cultural and recreation
Community services
-
20,268
-
-
Library services
-
-
-
-
Promotion of culture and tourism
-
-
-
Intergovernmental
Capital outlay
13,257
-
589,446
Debt service:
Principal retirement
-
-
160,131
Interest and fiscal charges
-
-
-
12,031
Total expenditures
86,111
20,268
-
2,460,154
Excess (deficiency) of revenues
over (under) expenditures
(49,124)
23,270
431,871
760,848
OTHER FINANCING SOURCES (USES)
Issuance of subscriptions
-
-
251,198
Transfers from other funds
-
-
-
-
Transfers to other funds
-
-
-
(1,227,049)
Total other financing sources (uses)
-
-
-
(975,851)
Net change in fund balances
(49,124)
23,270
431,871
(215,003)
Fund balances, beginning of year
137,708
193,239
1,169,498
5,591,295
FUND BALANCES, END OF YEAR
$ 88,584
$ 216,509
$ 1,601,369
$ 5,376,292
Exhibit C-2
(Page 1 of 2)
SPECIAL REVENUE
Storm
Hotel
Water
Court
Court Municipal
Red Light
Occupancy
Utility
Security
Technology Jury
Library
Camera
2,185,990
-
-
-
-
28,106
23,155 565
-
1,606,564
-
- -
106,511
55,280
17,325
11,633 (1)
658
12,343
-
-
-
-
12,201
-
2,292,501
1,661,844
45,431
34,788 564
12,859
12,343
-
29,890
55,772
350
-
-
-
-
-
-
105,035
-
522,694
-
-
-
-
7,929
863,647
-
-
40,845
-
-
4,847
-
2,241
1,141
-
271
-
-
910,480
522,694
32,402
55,772
350
7,929
105,035
1,382,021
1,139,150
13,029
(20,984)
214
4,930
(92,692)
40,845
-
-
-
-
(891,400)
(912,934)
-
-
(850,555)
(912,934)
-
-
-
531,466
226,216
13,029
(20,984)
214
4,930
(92,692)
2,653,697
1,936,358
437,828
311,380
1,692
14,604
332,190
$ 3,185,163 $
2,162,574 $
450,857 $
290,396 $
1,906
$ 19,534
$ 239,498
117
City of Southlake, Texas
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances -
Continued
For the Year Ended September 30, 2023
SPECIAL REVENUE
Tax
Commercial
Increment
Oil and
Vehicle
Truancy
Financing
Disaster
Gas
Enforcement
Prevention
District
Recovery
REVENUES
Ad valorem taxes, penalties and interest
$
$
$ $
9,834,043
$
Municipal sales tax
-
Licenses, permits and fees
Fines and forfeitures
17,746
28,232
Charges for services
-
-
-
Grants
-
-
-
254,541
Investment income (losses)
2,182
10,450
3,930
279,967
-
Contributions
-
-
-
-
Miscellaneous
-
-
-
-
TOTAL REVENUES
2,182
28,196
32,162
10,114,010
254,541
EXPENDITURES
Current:
General government
Support services
1,579,012
Municipal court
-
-
Public safety
Police services
155,912
396,792
Public works
Streets and drainage
-
-
Cultural and recreation
Community services
Library services
Promotion of culture and tourism
-
-
Intergovernmental
6,454,981
Capital outlay
-
254,541
Debt service:
Principal retirement
-
Interest and fiscal charges
-
-
-
TOTAL EXPENDITURES
155,912
-
8,430,785
254,541
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES
2,182
(127,716)
32,162
1,683,225
-
OTHER FINANCING SOURCES (USES)
Issuance of subscriptions
-
-
-
Transfers from other funds
100,000
Transfers to other funds
-
TOTAL OTHER FINANCING SOURCES (USES)
100,000
-
-
NET CHANGE IN FUND BALANCES
2,182
(27,716)
32,162
1,683,225
FUND BALANCES,
BEGINNING OF YEAR
55,266
233,703
84,368
6,663,970
FUND BALANCES, END OF YEAR
$ 57,448
$ 205,987
$ 116,530 $
8,347,195
$
Exhibit C-2
(Page 2 of 2)
DEBT SERVICE CAPITAL PROJECTS
Southlake
Community
Southlake
Community
Parks
Enhancement
Parks
Enhancement Crime
Development
Development
Development
Development Control
Corporation
Corporation
Corporation
Corporation District
TOTAL
NON -MAJOR
GOVERNMENTAL
FUNDS
$ $ $ $ $ 9,834,043
5,236,449
373,299
108,613
1,606,564
254,541
114,801 61,802 865,225 93,236 103,820 1,980,613
- - - - - 47,341
114,326 136,566
114,801 61,802 865,225 207,562 103,820 19,578,029
1,579,012
86,012
2,429,139
-
522,694
100,385
120,653
-
7,929
-
-
863,647
-
6,454,981
-
-
2,043,717
450,193
110,351
3,502,350
2,334,000
1,540,000
-
-
-
4,041,219
455,417
904,206
-
-
-
1,373,066
2,789,417
2,444,206
2,144,102
450,193
110,351
20,980,702
(2,674,616)
(2,382,404)
(1,278,877)
(242,631)
(6,531)
(1,402,673)
-
-
-
-
-
292,043
2,784,383
2,447,206
6,500,000
1,375,000
1,130,000
14,336,589
-
-
-
-
-
(3,031,383)
2,784,383
2,447,206
6,500,000
1,375,000
1,130,000
11,597,249
109,767
64,802
5,221,123
1,132,369
1,123,469
10,194,576
1,913,223
550,966
15,624,244
1,130,118
1,497,097
40,532,444
$ 2,022,990
$ 615,768
$ 20,845,367
$ 2,262,487
$ 2,620,566 $
50,727,020
City of Southlake, Texas
Police Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit C-3
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Fines and forfeitures
$
$ 10,809
$ 10,809
$ -
Investment income (losses)
2,400
3,938
1,538
Miscellaneous
22,240
22,240
Total revenues
35,449
36,987
1,538
EXPENDITURES
Public safety
I Police services
86,061
86,061
72,854
13,207
Capital outlay
-
-
13,257
(13,257)
Total expenditures
86,061
86,061
86,111
(50)
Excess (deficiency) of revenues
over (under) expenditures
(86,061)
(50,612)
(49,124)
1,488
Net change in fund balances
(86,061)
(50,612)
(49,124)
1,488
Fund balances, beginning of year
137,708
137,708
137,708
-
FUND BALANCES, END OF YEAR
$ 51,647
$ 87,096
$ 88,584
$ 1,488
120
City of Southlake, Texas
Parks and Recreation Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
REVENUES
Investment income (losses)
Contributions
Total revenues
EXPENDITURES
Cultural and recreation
Community services
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Net change in fund balances
Fund balances, beginning of year
FUND BALANCES, END OF YEAR
BUDGETED AMOUNTS
600 $
46,500
47,100
5,000 $
35,000
Exhibit C-4
VARIANCE WITH
FINAL BUDGET -
POSITIVE
ACTUAL (NEGATIVE)
8,398 $ 3,398
35,140 140
43,538 3,538
82,500 72,500 20,268 52,232
82,500 72,500 20,268 52,232
(35,400) (32,500) 23,270 55,770
(35,400) (32,500) 23,270 55,770
193,239 193,239 193,239 -
$ 157,839 $ 160,739 $ 216,509 $ 55,770
121
City of Southlake, Texas
Parks Dedication Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit C-5
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Licenses, permits, and fees
$ 90,000
$ 373,300
$ 373,299
$ (1)
Investment income (losses)
500
35,000
58,572
23,572
Total revenues
90,500
408,300
431,871
23,571
Net change in fund balance
90,500
408,300
431,871
23,571
Fund balances, beginning of year
1,169,498
1,169,498
1,169,498
-
FUND BALANCES, END OF YEAR
$ 1,259,998
$ 1,577,798
$ 1,601,369
$ 23,571
122
City of Southlake, Texas
Crime Control District Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit C-6
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Municipal sales fax
$ 2,424,000
$ 2,424,000
$ 3,050,459
$ 626,459
Investment income (losses)
2,225
104,000
170,543
66,543
Total revenues
2,426,225
2,528,000
3,221,002
693,002
EXPENDITURES:
Public safety
Police services
2,501,884
2,486,198
1,698,546
787,652
Capital outlay
65,000
65,000
589,446
(524,446)
Debt service:
Principal retirement
-
-
160,131
(160,131)
Interest and fiscal charges
-
-
12,031
(12,031)
Total expenditures
2,566,884
2,551,198
2,460,154
91,044
Excess (deficiency) of revenues
over (under) expenditures
(140,659)
(23,198)
760,848
784,046
OTHER FINANCING SOURCES (USES):
Issuance of subscriptions
-
-
251,198
251,198
Transfers to other funds
(1,227,049)
(1,227,049)
(1,227,049)
-
Total other financing (uses)
(1,227,049)
(1,227,049)
(975,851)
-
Net change in fund balance
(1,367,708)
(1,250,247)
(215,003)
784,046
Fund balances, beginning of year
5,591,295
5,591,295
5,591,295
-
FUND BALANCES, END OF YEAR
$ 4,223,587
$ 4,341,048
$ 5,376,292
$ 784,046
123
City of Southlake, Texas
Hotel Occupancy Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit C-7
VARIANCE WITH
BUDGETED AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Municipal sales tax
$ 1,705,300 $ 2,000,000
$ 2,185,990
$ 185,990
Investment income (losses)
2,500 60,000
106,511
46,511
Total revenues
1,707,800 2,060,000
2,292,501
232,501
EXPENDITURES:
Promotion of culture and tourism
965,493
965,493
863,647
101,846
Capital Outlay
-
-
40,845
(40,845)
Debt service:
Principal retirement
4,847
(4,847)
Interest and fiscal charges
-
-
1,141
(1,141)
Total expenditures
965,493
965,493
910,480
55,013
Excess (deficiency) of revenues
over (under) expenditures
742,307
1,094,507
1,382,021
287,514
OTHER FINANCING USES:
Issuance of subscriptions
-
-
40,845
40,845
Transfers to other funds
(824,482)
(891,400)
(891,400)
Total other financing (uses)
(824,482)
(891,400)
(850,555)
Net change in fund balance
(82,175)
203,107
531,466
328,359
Fund balances, beginning of year
2,653,697
2,653,697
2,653,697
-
FUND BALANCES, END OF YEAR
$ 2,571,522
$ 2,856,804 $
3,185,163
$ 328,359
124
City of Southlake, Texas
Storm Water Utility Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit C-8
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Charges for service
$ 1,591,500
$ 1,604,500
$ 1,606,564
$ 2,064
Investment income (losses)
500
30,000
55,280
25,280
Total revenues
1,592,000
1,634,500
1,661,844
27,344
EXPENDITURES:
Public works
Streets and drainage
732,373
610,941
522,694
88,247
Excess revenues over expenditures
859,627
1,023,559
1,139,150
115,591
OTHER FINANCING USES:
Transfers to other funds
(911,234)
(912,934)
(912,934)
-
Net change in fund balance
(51,607)
110,625
226,216
115,591
Fund balances, beginning of year
1,936,358
1,936,358
1,936,358
-
FUND BALANCES, END OF YEAR
$ 1,884,751
$ 2,046,983
$ 2,162,574
$ 115,591
125
City of Southlake, Texas
Court Security Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
REVENUES
Fines and forfeitures
Investment income (losses)
Total revenues
EXPENDITURES
General government
Municipal court
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Net change in fund balance
Fund balances, beginning of year
FUND BALANCES, END OF YEAR
$
Exhibit C-9
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET -
POSITIVE
FINAL FINAL ACTUAL (NEGATIVE)
34,400 $ 25,000 $ 28,106 $ 3,106
500 10,500 17,325 6,825
78,580 78,580 29,890 48,690
- - 2,241 (2,241)
271 (271)
(43,680) (43,080) 13,029 56,109
(43,680) (43,080) 13,029 56,109
437,828 437,828 437,828 -
$ 394,148 $ 394,748 $ 450,857 $ 56,109
126
City of Southlake, Texas
Court Technology Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
REVENUES
Fines and forfeitures
Investment income (losses)
Total revenues
EXPENDITURES
General government
Municipal court
Excess revenues over expenditures
Net change in fund balance
Fund balances, beginning of year
FUND BALANCES, END OF YEAR
BUDGETED AMOUNTS
$ 27,500 $ 22,000 $
Exhibit C-10
VARIANCE WITH
FINAL BUDGET -
POSITIVE
ACTUAL (NEGATIVE)
23,155 $ 1,155
28,000
29,000
34,788
5,788
59,500
59,500
55,772
3,728
(31,500)
(30,500)
(20,984)
9,516
(31,500)
(30,500)
(20,984)
9,516
311,380
311,380
311,380
-
$ 279,880 $
280,880 $
290,396 $
9,516
127
City of Southlake, Texas
Library Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit C-I I
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Investment income (losses)
$ 70
$ 400
$ 658
$ 258
Contributions
4,000
9,000
12,201
3,201
Total revenue
4,070
9,400
12,859
3,459
EXPENDITURES
Cultural and recreation
Library services
8,000
8,000
7,929
71
Excess (deficiency) of revenues
over (under) expenditures
(3,930)
1,400
4,930
3,530
Net change in fund balance
(3,930)
1,400
4,930
3,530
Fund balances, beginning of year
14,604
14,604
14,604
-
FUND BALANCES, END OF YEAR
$ 10,674
$ 16,004
$ 19,534
$ 3,530
Ml
City of Southlake, Texas
Red Light Camera Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit C-12
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Investment income (losses)
$ 500
$ 7,600
$ 12,343
$ 4,743
EXPENDITURES:
Public safety
Police services
208,705
208,705
105,035
103,670
Excess (deficiency) of revenues
(208,205)
(201,105)
(92,692)
108,413
over (under) expenditures
Net change in fund balance
(208,205)
(201,105)
(92,692)
108,413
Fund balances, beginning of year
332,190
332,190
332,190
-
FUND BALANCES, END OF YEAR
$ 123,985
$ 131,085
$ 239,498
$ 108,413
129
City of Southlake, Texas
Commercial Vehicle Enforcement
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit C-13
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Fines and forfeitures
$ 25,000
$ 15,000
$ 17,746
$ 2,746
Investment income (losses)
200
6,500
10,450
3,950
Total revenues
25,200
21,500
28,196
6,696
EXPENDITURES
Public safety
Police services
157,095
167,385
155,912
11,473
Excess (deficiency) of revenues
over (under) expenditures
(131,895)
(145,885)
(127,716)
18,169
OTHER FINANCING SOURCES
Transfers from other funds
100,000
100,000
100,000
Total other financing sources
100,000
100,000
100,000
-
Net change in fund balance
(31,895)
(45,885)
(27,716)
18,169
Fund balances, beginning of year
233,703
233,703
233,703
-
FUND BALANCES, END OF YEAR
$ 201,808
$ 187,818
$ 205,987
$ 18,169
130
City of Southlake, Texas Exhibit C-14
Tax Increment Financing District Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Ad valorem taxes, penalties and interest
$ 9,468,834
$ 9,834,043
$ 9,834,043
$
Investment income (losses)
3,990
170,000
279,967
109,967
Total revenues
9,472,824
10,004,043
10,114,010
109,967
EXPENDITURES
General government:
Support services
645,076
645,076
1,579,012
(933,936)
Public safety:
Police services
385,506
385,506
396,792
(11,286)
Intergovernmental
6,051,811
6,454,981
6,454,981
Total expenditures
7,082,393
7,485,563
8,430,785
(945,222)
Excess of revenues over expenditures
2,390,431
2,518,480
1,683,225
(835,255)
Net change in fund balance
2,390,431
2,518,480
1,683,225
(835,255)
Fund balance, beginning of year
6,663,970
6,663,970
6,663,970
FUND BALANCE, END OF YEAR
$ 9,054,401
$ 9,182,450
$ 8,347,195
$ (835,255)
131
City of Southlake, Texas
Southlake Parks Development Corporation Debt Service Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
REVENUES:
Investment income (losses)
EXPENDITURES:
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES:
Transfers from other funds
Total other financing sources
Net change in fund balance
Fund balances, beginning of year
FUND BALANCES, END OF YEAR
Exhibit C-15
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET -
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
$ 1,900 $ 76,000 $ 114,801 $ 38,801
2,334,000
456,383
2,334,000
2,334,000
(2,788,483) (2,714,383) (2,674,616)
39,767
2,784,383 2,784,383 2,784,383
2,784,383 2,784,383 2,784,383
(4,100) 70,000 109,767 39,767
1,913,223 1,913,223 1,913,223 -
$ 1,909,123 $ 1,983,223 $ 2,022,990 $ 39,767
132
City of Southlake, Texas
Community Enhancement Development Corporation Debt Service Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2023
Exhibit C-16
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Investment income (losses)
$ 1,050
$ 40,000
$ 61,802
$ 21,802
EXPENDITURES:
Debt service:
Principal retirement
1,540,000
1,540,000
1,540,000
-
Interest and fiscal charges
907,206
907,206
904,206
3,000
TOTAL EXPENDITURES
2,447,206
2,447,206
2,444,206
3,000
Excess (deficiency) of revenues
over (under) expenditures
(2,446,156)
(2,407,206)
(2,382,404)
24,802
OTHER FINANCING SOURCES:
Transfers from other funds
2,447,206
2,447,206
2,447,206
Total other financing sources
2,447,206
2,447,206
2,447,206
Net change in fund balance
1,050
40,000
64,802
24,802
Fund balances, beginning of year
550,966
550,966
550,966
-
FUND BALANCES, END OF YEAR
$ 552,016
$ 590,966
$ 615,768
$ 24,802
133
134
Statistical Section
135
136
City of Southlake, Texas
Statistical Section (Unaudited)
This part of the City of Southlake's annual comprehensive financial report presents detailed information as
a context for understanding what the information in the financial statements, notes disclosures, and
required supplementary information says about the City's overall financial health. This information has not
been audited by the independent auditor.
Contents Page
FinancialTrend......................................................................................................................................................138
These tables contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
RevenueCapacity...............................................................................................................................................144
These tables contain information to help the reader assess the City's two most significant local revenue
source, the property and sales taxes.
DebtCapacity......................................................................................................................................................148
These tables present information to help the reader assess the affordability of the City's current levels of
outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information.......................................................................................................152
These tables offer economic and demographic indicators to help the reader understand the environment
within which the City's financial activities take place.
OperatingInformation.........................................................................................................................................154
These tables contain service and infrastructure data to help the reader understand how the information
in the City's financial report relates to the services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these tables is derived from the annual comprehensive financial reports for the
relevant year.
137
City of Southlake, Texas
Net Position by Component
(Accrual Basis of Accounting)
Last Ten Fiscal Years
(Unaudited)
Governmental activities
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business -type activities
Net investment in capital assets
Restricted
Unrestricted
Total business -type activities net position
Primary government
Net investment in capital assets
Restricted
Unrestricted
Total primary governmental net position
Source: Annual Comprehensive Financial Report
Fiscal Year
$ 338,303,633 $ 366,796,228 $ 364,161,725 $ 385,506,389
15,092,604 13,624,164 11,589,350 49,850,439
P V I L, I LU,JU/- P 4J7,VUu, 1 71- .P 4JU,/'io, I J4 P 'iu I ,Lu/ ,LJ`i
$ 73,126,147 $ 78,143,445 $ 79,055,138 $ 82,251,014
2,140,022 3,151,309 6,817,038 7,804,197
13,945,038 10,509,498 12,487,875 15,721,755
$ 89,211,207 $ 91,804,252 $ 98,360,051 $ 105,776,966
$ 411,429,780 $ 444,939,673 $ 443,216,863 $ 467,757,403
17,232,626 16,775,473 18,406,388 57,654,636
72,677,183 69,957,298 93,479,954 61,652,181
$ 501,339,589 $ 531,672,444 $ 555,103,205 $ 587,064,220
HE
Table 1
Fiscal Year
2018 2019 2020 2021 2022 2023
$
392,406,812
$
399,651,828
$
415,945,257
$
432,717,828
$
444,246,656
$
450,639,461
28,492,591
32,690,100
25,518,844
39,870,051
99,360,585
121,858,264
78,585,681
87,753,906
96,924,423
95,211,152
62,641,199
66,478,023
$
499,485,084
$
520,095,834
$
538,388,524
$
567,799,031
$
606,248,440
$
638,975,748
$
83,461,157
$
83,223,713
$
76,271,158
$
77,068,608
$
77,774,937
$
75,167,644
8,980,312
6,215,686
10,555,032
10,966,728
9,877,167
8,464,094
17,935,009
21,579,170
29,619,463
36,831,318
45,903,642
62,370,816
$
110,376,478
$
111,018,569
$
116,445,653
$
124,866,654
$
133,555,746
$
146,002,554
$
475,867,969
$
482,875,541
$
492,216,415
$
509,786,436
$
522,021,593
$
525,807,105
37,472,903
38,905,786
36,073,876
50,836,779
109,237,752
130,322,358
96,520,690
109,333,076
126,543,886
132,042,470
108,544,841
128,848,839
$
609,861,562
$
631,114,403
$
654,834,177
$
692,665,685
$
739,804,186
$
784,978,302
139
City of Southlake, Texas
Changes in Net Position
(Accrual Basis of Accounting)
Last Ten Fiscal Years
(Unaudited)
Expenses
Governmental activities:
General government
Public safety
Public works
Culture and recreation
Interest on long-term debt
Total governmental activities expenses
Business -type activities:
Water and sewer
Total business -type activities expenses
Total primary government expenses
Program Revenues
Governmental activities:
Charges for Services:
General government
Public safety
Public works
Culture and recreation
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business -type activities:
Charges for services:
Water and sewer
Capital grants and contributions
Total business -type activities program revenues
Total primary government program revenues
Net(Expenses)Revenue
Governmental activities
Business -type activities
Total primary government net expenses
General Revenues
and Other Changes in Net Position
Governmental activities:
General revenues:
Property taxes
Sales taxes
Franchise taxes
Investment income (losses)
Gain (Loss) on sale of capital assets
Miscellaneous
Transfers
Total governmental activities
Business -type activities:
Interest on investments
Gain (Loss) on sale of capital assets
Transfers
Miscellaneous
Total business -type activities
Total primary government
Change in Net Position
Governmental activities
Business -type activities
Total primary government
Source: Annual Comprehensive Financial Report
Fiscal Year
2014 2015 2016
$ 13,417,904 $ 14,602,425 $ 12,851,787
18,245,617
18,176,698
19,300,590
8,870,998
9,762,184
11,950,671
8,948,841
9,311,006
10,655,763
5,097,036
2,528,113
3,005,359
54,580,396
54,380,426
57,764,170
25,030,426 26,692,373 24,741,428
25,030,426 26,692,373 24,741,428
$ 79,610,822 $ 81,072,799 $ 82,505,598
$ 2,657,883 $ 2,309,861 $ 2,363,499
3,907,068
4,427,137
4,620,030
360,529
265,432
223,533
1,379,658
1,399,822
1,537,185
443,157
455,575
310,636
4,436,346
8,967,466
2,228,863
13,184,641
17,825,293
11,283,746
23,591,438 24,792,619 25,474,777
3,510,936 5,776,438 1,638,842
27,102,374 30,569,057 27,113,619
$ 40,287,015 $ 48,394,350 $ 38,397,365
$ (41,395,755) $ (36,555,133) $ (46,480,424)
2,071,948 3,876,684 2,372,191
$ (39,323,807) $ (32,678,449) $ (44,108,233)
$ 33,099,007 $ 33,176,285 $ 34,501,608
26,623,661
30,090,614
29,047,285
2,841,025
3,327,739
2,955,114
482,607
523,954
379,342
99,109
102,900
102,960
639,571
1,066,818
136,477
915,116
968,160
(3,767,400)
64,700,096
69,256,470
63,355,386
101,469
112,967
94,837
-
23,100
317,276
(915,116)
(968,160)
3,767,400
6,963
4,521
4,095
(806,684)
(827,572)
4,183,608
$ 63,893,412
$ 68,428,898
$ 67,538,994
$ 23,304,341 $ 32,701,337 $ 16,874,962
1,265,264 3,049,112 6,555,799
$ 24,569,605 $ 35,750,449 $ 23,430,761
140
Table 2
Fiscal Year
2017 2018 2019 2020 2021 2022 2023
$ 17,430,052
$ 18,255,444
$ 20,014,583
$ 21,275,487
$ 20,990,841
$ 20,685,238
$ 19,837,190
21,179,963
23,962,971
23,881,485
24,054,527
23,642,969
24,915,801
26,658,917
8,979,020
10,040,453
10,081,721
9,839,646
9,122,951
10,111,585
12,108,564
11,780,022
12,775,020
15,955,201
17,665,953
15,367,103
16,970,272
25,112,091
3,834,897
3,047,221
2,750,037
2,171,359
2,076,809
1,979,546
2,071,867
63,203,954
68,081,109
72,683,027
75,006,972
71,200,673
74,662,442
85,788,629
24,703,007 29,068,434 29,873,788 27,490,815 25,730,741 28,397,036 28,506,292
24,703,007 29,068,434 29,873,788 27,490,815 25,730,741 28,397,036 28,506,292
$ 87,906,961 $ 97,149,543 $ 102,556,815 $ 102,497,787 $ 96,931,414 $ 103,059,478 $ 114,294,921
$ 2,262,247 $
2,895,701
$ 2,498,549
$ 1,631,816
$ 1,733,148
$ 1,957,434
$ 1,712,925
3,929,564
2,495,288
3,001,895
2,536,553
2,166,430
803,365
774,891
143,935
1,635,163
1,724,344
1,824,434
1,658,723
4,287,138
3,477,348
1,814,319
1,301,793
2,145,128
2,993,552
3,387,430
4,477,031
5,664,775
328,288
459,006
866,518
1,807,473
894,423
8,736,294
825,770
7,714,765
1,044,834
1,437,166
1,422,315
5,882,015
2,653,556
2,382,770
16,193,118
9,831,785
11,673,600
12,216,143
15,722,169
22,914,818
14,838,479
27,939,504
32,229,361
29,929,932
32,271,341
32,071,140
37,241,976
37,630,965
3,851,057
2,367,774
896,652
1,315,092
3,332,452
1,376,002
2,064,296
31,790,561
34,597,135
30,826,584
33,586,433
35,403,592
38,617,978
39,695,261
$ 47,983,679
$ 44,428,920
$ 42,500,184
$ 45,802,576
$ 51,125,761
$ 61,532,796
$ 54,533,740
$ (47,010,836) $ (58,249,324) $ (61,009,427) $ (62,790,829) $ (55,478,504) $ (51,747,624) $ (70,950,150)
7,087,554 5,528,701 952,796 6,095,618 9,672,851 10,220,942 11,188,969
$ (39,923,282) $ (52,720,623) $ (60,056,631) $ (56,695,211) $ (45,805,653) $ (41,526,682) $ (59,761,181)
$ 37,705,796 $
40,380,926
$ 41,734,946
$ 41,973,780
$ 41,660,369
$ 41,392,861
$ 42,315,760
29,968,331
30,822,431
31,868,204
32,119,114
38,461,312
43,723,490
47,917,152
2,907,537
2,972,143
3,114,117
2,811,573
2,671,726
2,988,874
3,656,895
843,082
2,108,804
3,247,401
1,721,876
101,746
(475,934)
7,934,301
71,284
-
-
-
-
-
4,156
216,881
-
476,577
1,222,231
709,736
804,354
512,725
(157,975)
1,211,036
1,178,932
1,234,945
1,284,122
1,360,830
1,336,469
71,554,936
77,495,340
81,620,177
81,083,519
84,889,011
89,794,475
103,677,458
167,068
320,473
868,227
566,411
32,272
(171,020)
2,594,308
350
-
-
-
-
-
157,975
(1,211,036)
(1,178,932)
(1,234,945)
(1,284,122)
(1,360,830)
(1,336,469)
3,968
4,166
-
329,361
(886,397)
(310,705)
(668,534)
(1,251,850)
(1,531,850)
1,257,839
$ 71,884,297
$ 76,608,943
$ 81,309,472
$ 80,414,985
$ 83,637,161
$ 88,262,625
$ 104,935,297
$ 24,544,100 $ 19,246,016 $ 20,610,750 $ 18,292,690 $ 29,410,507 $ 38,046,851 $ 32,727,308
7,416,915 4,642,304 642,091 5,427,084 8,421,001 8,689,092 12,446,808
$ 31,961,015 $ 23,888,320 $ 21,252,841 $ 23,719,774 $ 37,831,508 $ 46,735,943 $ 45,174,116
141
City of Southlake, Texas
Fund Balances, Governmental Funds
(Modified Accrual Basis of Accounting)
Last Ten Fiscal Years
(Unaudited)
General Fund
Nonspendable
Committed for:
Police expenditures
Assigned for:
Teen Court expenditures
Senior Center expenditures
Recycling
Reforestation expenditures
Public art
Facility maintenance
Economic investment
Strategic initiatives
Unassigned
Total general fund
Table 3
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ 46,008 $ 27,826 $ 86,286 $ 57,997 $ 86,286 $ 63,189 $ 40,839 $ 69,373 $ 401,529 $ 54,317
28,647 34,609 46,657
18,832
19,077
19,835
19,684
19,835
20,427
20,693
20,721
20,882
21,862
10,623
10,624
10,743
10,671
10,743
10,938
11,064
11,074
11,042
11,486
34,609
40,612
59,163
52,811
59,163
66,253
70,395
76,458
138,291
70,977
44,098
101,873
111,728
112,300
111,728
63,030
35,150
54,847
96,012
153,918
-
-
-
-
678,829
835,991
500,819
364,046
441,984
610,439
6,708,556
7,222,995
8,813,795
9,351,441
10,064,326
11,843,299
-
-
-
-
2,237,211
2,282,718
3,525,280
2,870,637
2,950,994
3,225,478
7,980,605
7,673,680
5,297,998
6,052,063
5,299,595
7,585,671
10,603,712
15,096,120
20,306,807
15,383,080
16,399,991
18,230,317
19,762,633
18,745,735
11,799,021
12,517,340
14,022,976
15,810,846
14,681,556
17,594,609
$ 24,563,413
$ 26,138,618
$ 25,348,386
$ 25,097,918
$ 27,010,967
$ 30,668,552
$ 37,644,723
$ 43,725,563
$ 49,113,423
$ 48,969,465
All Other Governmental Funds*
Nonspendable
$ -
$ -
$ -
$ -
Restricted for:
Debt Service
12,150,184
11,057,196
9,005,985
8,029,607
Capital projects
-
-
-
-
Municipal court expenditures
860,556
878,490
838,458
868,393
Reinvestment zone expenditures
4,422,565
4,010,195
3,851,783
1,954,971
Parks and recreation
53,053,840
41,949,791
72,654,652
78,664,646
Storm water
-
-
-
-
Police expenditures
Library expenditures
Promotion of culture and tourism
-
-
-
-
Committed for:
Police expenditures
5,532,996
7,813,849
4,986,804
3,645,226
Parks and recreation
8,020,248
10,720,498
11,125,967
17,968,695
Oil and gas expenditures
53,160
53,168
53,227
53,404
Storm water expenditures
450,824
451,371
4,856,336
453,374
Library expenditures
7,967
8,832
7,132
7,432
Capital projects
-
-
-
-
Assigned for:
$ 50,177
$ -
$ -
$ -
$ -
$ -
7,750,782
8,419,008
7,102,145
5,594,579
5,751,585
5,632,021
-
-
-
-
26,395,656
34,698,804
851,104
847,247
739,828
775,437
835,268
859,689
923,093
2,925,977
4,999,895
5,641,893
6,663,970
8,347,195
40,726,831
24,372,567
9,381,019
24,792,059
47,632,465
58,345,188
-
-
1,789,612
1,255,873
1,936,358
2,162,574
-
-
7,791,993
8,530,927
-
-
14,604
19,534
-
-
1,834,337
2,089,422
2,653,697
3,185,163
4,743,948
5,254,694
5,256,684
6,549,013
1,169,498
1,601,369
8,904,671
8,815,413
11,121,825
1,793,351
55,266
57,448
53,719
54,754
55,424
55,541
-
-
456,388
465,180
-
-
8,338
9,528
11,323
12,725
34,285,874
44,554,528
45,315,086
44,304,341
Capital projects 19,442,768 27,706,556
Unassigned (175,833)
Total all other governmental funds $ 84,552,340 $ 76,943,390 $ 107,380,344 $ 111,645,748 $ 98,704,748 $ 95,718,896 $ 87,431,345 $ 92,864,234 $ 120,343,128 $ 151,146,468
Source: Annual Comprehensive Financial Report
Notes: ° Includes encumbrances and prepaid items.
* The City started splitting parks and recreation with storm water and promotion of culture and tourism in 2020
4
142
City of Southlake, Texas
Changes in Fund Balances, Governmental Funds
(Modified Accrual Basis of Accounting)
Last Ten Fiscal Years
(Unaudited)
REVENUES
Ad valorem taxes, penalties and interest
Franchise taxes
Municipal sales tax and mixed beverage tax
Licenses, permits and fees
Charges for services
Fines and forfeitures
Intergovernmental revenue
Capital recovery fees
Investment income (losses)
Contributions
Miscellaneous
Total revenues
EXPENDITURES
General government
Public safety
Public works
Culture and recreation
Intergovernmental
Capital outlay
Debt service
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Sale of property
Issuance of tax notes payable
Issuance of general obligation bonds
Premium (Discount) on issuance of refunding bonds
Issuance of sales tax revenue bonds
Issuance of refunding bonds
Issuance of financed purchase obligation
Issuance of subscriptions
Premium (Discount) on issuance of general obligation bonds
Payment to refund bond escrow agent
Transfer from other funds
Transfer to other funds
Total other financing sources (uses)
NET CHANGE IN FUND BALANCES
Debt service as a percentage
of noncapital expenditures
Source: Annual Comprehensive Financial Report
Table 4
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ 33,174,810 $ 33,294,062 $ 34,445,902 $ 37,688,372 $ 40,484,511 $ 41,744,243 $ 41,980,391 $ 41,675,661 $ 41,429,872 $ 42,299,595
2,841,025 3,327,739 2,955,114 2,907,537 2,972,143 3,114,117 2,811,573 2,671,726 2,988,874 3,656,895
26,623,661 30,090,614 29,047,285 29,968,331 30,822,431 31,868,204 32,119,114 38,461,312 43,723,490 47,917,152
3,925,956 4,385,000 4,590,477 4,103,003 2,184,965 3,161,228 2,868,166 2,041,189 3,071,428 2,475,077
1,778,003 1,849,747 1,797,676 1,909,922 1,984,377 4,970,991 5,013,769 5,783,552 7,104,883 8,234,710
2,374,221 1,943,406 2,011,137 1,969,180 2,040,036 1,798,033 968,495 954,809 1,213,211 903,685
214,152 90,428 128,489 100,899 2,108,228 124,141 1,737,849 760,658 9,974,795 1,545,199
474,172 866,782 1,237,552 308,095 376,004 621,715 693,293 232,525 773,745 466,928
457,820 490,551 71,411 118,956 2,044,822 3,123,081 1,634,301 96,183 (448,117) 7,485,826
130,564 112,409 383,732 859,199 97,644 198,449 82,225 72,565 242,645 110,067
552,544 672,333 528,093 544,727 481,919 341,934 1,544,346 836,962 324,548 512,725
72,546,928 77,123,071 77,196,868 80,478,221 85,597,080 91,066,136 91,453,522 93,587,142 110,399,374 115,607,859
8,629,250 8,974,058 9,301,750 9,608,516 11,053,010 12,988,724 13,233,455 14,236,006 13,493,594 15,976,466
16,924,285 16,968,939 17,376,310 18,520,588 19,806,464 21,145,351 21,534,858 22,015,080 22,719,906 24,066,322
6,303,749 5,332,402 5,483,131 19,112,170 23,225,431 5,687,428 7,834,577 7,177,205 8,861,496 10,287,273
7,227,628 7,441,366 8,456,526 8,783,323 8,026,149 21,815,043 13,226,045 11,202,609 13,118,278 14,545,618
3,834,118 4,478,312 4,623,919 5,348,444 6,045,218 6,123,926 7,214,798 6,049,200 5,934,584 6,454,981
14,623,962 21,349,324 8,658,067 4,800,627 12,214,328 8,285,716 15,951,425 11,521,223 11,601,162 15,026,038
11,930,280 14,489,311 13,394,604 13,258,185 12,220,242 8,385,059 9,896,675 10,341,201 8,645,737 10,777,728
4,982,567 3,894,535 3,796,740 4,084,086 3,695,048 3,175,731 3,108,014 2,629,585 2,321,838 2,436,839
74,455,839 82,928,247 71,091,047 83,515,939 96,285,890 87,606,978 91,999,847 85,172,109 86,696,595 99,571,265
(1,908,911) (5,805,176) 6,105,821 (3,037,718) (10,688,810) 3,459,158 (546,325) 8,415,033 23,702,779 16,036,594
1,521 3,271 - 6,019 27,288 52,124 4,156
- - - 3,753,000 - 13,397,000
4,380,000 - - - - -
- - 884,928 1,329,086 8,595,000
- 24,450,000 9,945,000 - -
23,400,000 - 3,830,000 10,860,000 1,989,000 - -
- - - - 514,162 53,975
- - - 3,031,188
1,301,376 2,168,153 737,765 -
(25,547,122) - - (4,309,151) (12,311,639) - (1,954,804) - -
20,498,983 21,925,067 23,584,605 23,332,602 23,056,973 17,941,263 15,937,424 14,161,081 28,575,100 27,129,055
(20,383,867) (22,156,907) (28,352,005) (24,940,577) (23,345,937) (20,662,331) (16,702,479) (14,876,959) (29,714,270) (28,992,586)
3,650,891 (228,569) 21,850,753 8,742,802 (288,964) (2,837,602) (765,055) 3,098,606 8,759,881 14,622,788
$ 1,741,980 $ (6,033,745) $ 27,956,574 $ 5,705,084 $ (10,977,774) $ 621,556 $ (1,311,380) $ 11,513,639 $ 32,462,660 $ 30,659,382
27.7% 29.1 % 27.0% 25.5% 21.8%
16.1% 17.1% 17.6% 14.6% 15.6%
143
City of Southlake, Texas
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(Unaudited)
Estimated Market Value
Fiscal Year
Real Property
2014
$ 5,935,122,961
2015
6,341,625,915
2016
6,635,586,201
2017
7,556,442,291
2018
8,254,704,348
2019
9,002,807,317
2020
9,653,389,547
2021
9,802,447,688
2022
10,643,270,202
2023
12,463,083,634
Source: Tarrant Appraisal District
Personal Property
$ 588,389,191
614,607,452
542,023,423
543,192,799
602,971,804
614,999,492
659,212,511
667,695,748
653,950,010
668,386,843
Less:
Tax -Exempt Property
$ 638,106,472
756,399,951
1,039,819,893
1,364,174,169
1,683,599,421
1,845,495,105
1,967,287,039
2,040,326,726
2,094,175,854
2,280,735,668
Total Taxable Assessed
Value
$ 5,885,405,680
6,199,833,416
6,137,789,731
6,735,460,921
7,174,076, 731
7,772,311,704
8,345,315,019
8,429,816,710
9,203,044,358
10,850,734,809
Table 5
Total Direct Tax Rate
0.46200
0.46200
0.46200
0.46200
0.46200
0.44700
0.41000
0.40500
0.39000
0.36000
144
City of Southlake, Texas
Direct and Overlapping Property Tax Rates (Per $100 of Assessed Value)
Last Ten Fiscal Years
(Unaudited)
Table 6
City Direct Rates
Overlapping Rates
General
Carroll
Tarrant County
Tarrant County
Operating/
Obligation
Independent
Hospital
College
Fiscal Year
General Rate
Debt Service
Total Direct
School District
Tarrant County
District
District
2014
0.34200
0.12000
0.46200
1.40000
0.264000
0.227897
0.149500
2015
0.34200
0.12000
0.46200
1.40000
0.264000
0.227897
0.149500
2016
0.36200
0.10000
0.46200
1.39500
0.264000
0.227897
0.149500
2017
0.36200
0.10000
0.46200
1.39000
0.254000
0.227897
0.144730
2018
0.36200
0.10000
0.46200
1.38500
0.244000
0.224429
0.140060
2019
0.35700
0.09000
0.44700
1.38000
0.234000
0.224429
0.136070
2020
0.33000
0.08000
0.41000
1.30000
0.234000
0.224429
0.130170
2021
0.33000
0.07500
0.40500
1.28640
0.234000
0.224429
0.130170
2022
0.32500
0.06500
0.39000
1.26860
0.229000
0.224429
0.130170
2023
0.29500
0.06500
0.36000
1.21880
0.224000
0.224429
0.130170
Source: Tarrant Appraisal District
145
City of Southlake, Texas
Principal Property Tax Payers
Current Year and Nine Years Ago
(Unaudited)
Table 7
2023
2014
ercen age Or
ercen age o
Total City
Total City
Taxable
Taxable
Taxable Assessed
Assessed
Taxable Assessed
Assessed
Taxpayer
Value
Value°
Taxpayer
Value
Value
Town Square Ventures LP
$ 235,528,626
2.17%
Verizon Wireless Texas LLC
$ 177,921,915
3.02%
Cellco Partnership
114,233,083
1.05%
Town Square Ventures LP
116,505,690
1.98%
TD Ameritrade Services Company INC
82,935,654
0.76%
SLTS Grand Avenue/II LP
73,544,854
1.25%
SC Southlake Owner LLC
66,858,035
0.62%
Wyndham Properties Ltd
52,366,496
0.89%
Carroll/1709 LTD
56,721,930
0.52%
Sabre Headquarters LLC
45,538,556
0.77%
Excel Southlake LP
50,505,178
0.47%
Carroll/1709 Ltd
44,199,577
0.75%
3503 RP Southlake Corners Kimball LP
47,999,900
0.44%
H & C Southlake Hilton LLC
30,000,000
0.51 %
1400 Plaza Place Southlake Owner LLC
42,222,000
0.39%
Inland Western Southlake Corners Ltd
27,700,000
0.47%
DSL Landlord II LLC
37,702,272
0.35%
Cambridge 114 Inc
20,924,941
0.36%
MCI Communications Svcs Inc
36,802,911
0.34%
Costco Wholesale Corporation
20,309,231
0.35%
Total
$ 771,509,589
7.11 %
Total
$ 609,011,260
10.35%
Total Assessed Valuation
$ 10,850,734,809
100.00%
Total Assessed Valuation
$ 5,885,405,680
100.00%
Source: Tarrant Appraisal District
Notes: °Taxpayers are assessed on January 1, 2022 (2022 tax year) for the 2023 fiscal year.
bTaxpayers are assessed on January 1, 2017 (2017 tax year) for the 2018 fiscal year.
146
City of Southlake, Texas
Ad Valorem Tax Levies and Collections
Last Ten Fiscal Years
(Unaudited)
Collected within the Fiscal Year of the Levy
Taxes Levied for the
Collections in
Fiscal Year
Fiscal Year
Amount
Percentage of Levy
Subsequent Years
2014
$ 27,136,997
$ 26,865,897
99.00
$ 71,124
2015
27,791,839
27,556,790
99.15
106,959
2016
28,965,792
28,684,131
99.03
169,955
2017
31,410,934
31,054,006
98.86
95,328
2018
33,358,429
32,975,600
98.85
62,938
2019
34,957,519
34,486,820
98.65
12,206
2020
34,109,141
33,572,469
98.43
84,975
2021
34,329,457
33,833,652
98.56
(107,814)
2022
34,526,168
34,013,771
98.52
(57,965)
2023
34,929,247
34,409,848
98.51
-
Source: Tarrant County Tax Office
Total Collections
Amount
$ 26,937,021
27,663,749
28,854,086
31,149,334
33,038,538
34,499,026
33,657,444
33,725,838
33,955,806
34,409,848
Table 8
Percentage of Levy
99.26
99.54
99.61
99.17
99.04
98.69
98.68
98.24
98.35
98.51
147
City of Southlake, Texas Table 9
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Unaudited)
Fiscal Year
General
Obligation
Bonds
Certificates of
Obligation
Governmental Activities
Financed
Revenue Bonds Tax Notes Purchases
Business -Type Activities
General Contract
Obligation Certificates Revenue
Leases Subscriptions Bonds of Obligation Obligations
Total Primary
Government
Percentage
of Personal
Income°
Per Capita'
2014
$ 45,355,674
$ 41,553,855
$ 27,150,000 $
$ 18,923,955
$28,009,860
$ 1,100,000
$ 162,093,344
10.93
$ 5,910
2015
40,847,363
33,182,855
25,540,000
15,422,270
30,035,860
750,000
145,778,348
9.03
5,238
2016
40,733,282
29,511,905
48,330,000
12,974,232
29,143,202
385,000
161,077,621
9.30
5,694
2017
39,022,933
18,706,525
57,207,643
13,846,422
28,963,708
-
157,747,231
8.08
5,358
2018
30,112,187
11,050,000
53,605,000
9,187,813
30,550,000
134,505,000
6.14
4,547
2019
40,949,900
6,606,486
44,592,458
14,816,097
22,463,654
129,428,595
6.01
4,270
2020
33,224,148
6,172,109
41,767,697
12,678,798
21,352,753
115,195,505
5.29
3,793
2021
27,428,338
3,782,833
38,832,936
3,753,000 -
- 12,916,025
18,217,805
104,930,937
4.84
3,363
2022
22,757,701
12,783,180
35,788,175
2,686,000 405,368
338,051 11,319,357
17,193,400
103,271,232
4.12
3,271
2023
17,925,536
10,953,008
32,648,415
15,420,000 308,329
448,904 2,165,395 9,676,216
16,128,995
105,674,798
4.09
3,305
Note: Details regarding the City's
outstanding debt
can be found in the
notes to
the financial statements.
'See Table
13 for personal income
and population data.
Mr.
City of Southlake, Texas
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
(Unaudited)
General Bonded Debt Outstanding
Less: Available
General
Certificates of
Debt Service
Fiscal Year
Obligation Bonds
Obligation
Total
Funds
2014
$ 64,279,629
$ 69,563,715
$ 133,843,344
$ 9,809,483
2015
56,269,633
63,218,715
119,488,348
8,735,479
2016
53,707,514
58,655,107
112,362,621
6,899,109
2017
52,869,355
47,670,233
100,539,588
7,444,512
2018
39,300,000
41,600,000
80,900,000
7,345,622
2019
55,765,997
29,070,140
84,836,137
8,009,333
2020
45,902,946
27,524,862
73,427,808
6,774,153
2021
40,344,363
22,000,638
62,345,001
5,315,367
2022
34,077,058
29,976,580
64,053,638
5,436,574
2023
27,601,752
27,082,003
54,683,755
5,256,902
Note: Details regarding the city's outstanding debt can be found in the notes to the financial
statements.
°See Table 5 for property value data.
bSee Table 13 for
population data.
Table 10
Percentage of
Actual Taxable
Net General
Value of
Bonded Debt
Property°
Per Capita
$ 124,033,861
2.11 % $
4,523
110,752,869
1.79%
3,979
105,463,512
1.72%
3,728
93,095,076
1.38%
3,162
73,554,378
1.03%
2,487
76,826,804
0.99%
2,535
66,653,655
0.80%
2,195
57,029,634
0.68%
1,828
58,617,064
0.64%
1,857
49,426,853
0.50%
1,710
149
City of Southlake, Texas
Direct and Overlapping Governmental Activities Debt
As of September 30, 2023
(Unaudited)
Governmental Unit
Debt repaid with property taxes
Carroll ISD
Denton County
Grapevine-Colleyville ISD
Keller ISD
Northwest ISD
Tarrant County
Tarrant County College District
Tarrant County Hospital District
Subtotal, overlapping debt
City of Southlake (direct debt)
Total direct and overlapping debt
Gross Bonded Debt
Percentage of Debt
Applicable to Area
Table 11
Share of Overlapping
Debt
$ 288,580,000
85.02% $
245,350,715
624,655,000
0.15%
936,983
289,240,590
1.62%
4,685,698
782,924,989
2.43%
19,025,077
1,807,155,334
0.93%
16,806,545
376,120,000
4.09%
15,383,308
591,230,000
4.09%
24,181,307
448,410,000
4.09%
18,339,969
344,709,602
$ 79,869,587
100.00%
79,869,587
$
424,579,189
Source: Municipal Advisory Council of Texas.
Note: Includes only debt of the City's governmental activities.
Note: Per the Municipal Advisory Council of Texas, the overlapping percentages are calculated by
determining the estimated share assessed valuation of taxable property within the overlapping
taxing bodies and the City, and then dividing that share value by the total assessed value of
taxable property within the overlapping tax body.
150
City of Southlake, Texas
Pledged -Revenue Coverage - Southlake Parks Development Corporation
Last Ten Fiscal Years
(Unaudited)
Table 12
Southlake Parks Development Corporation - Sales Tax Revenue Refunding Bonds
Debt Service
Total Annual
Fiscal Year
Sales Tax Collections
Principal
Interest
Requirement'
Times Coverage
2014
$ 6,571,836
$ -
$ 93,333
$ 93,333
70.41
2015
7,440,726
1,120,000
463,200
1,583,200
4.70
2016
7,318,490
1,150,000
429,150
1,579,150
4.63
2017
7,578,446
1,190,000
394,050
1,584,050
4.78
2018
7,705,009
1,225,000
357,825
1,582,825
4.87
2019
7,741,005
1,260,000
320,550
1,580,550
4.90
2020
7,908,601
1,300,000
282,150
1,582,150
5.00
2021
9,249,930
1,340,000
242,550
1,582,550
5.84
2022
10,610,993
1,385,000
201,675
1,586,675
6.69
2023
12,829,196
1,415,000
159,675
1,574,675
8.15
Note: °Includes Principal and Interest
151
City of Southlake, Texas Table 13
Pledged -Revenue Coverage - Southlake Community Enhancement and Development Corporation
Last Ten Fiscal Years
(Unaudited)
Southlake Community Enhancement and Development Corporation - Sales Tax Revenue Bonds
Debt Service
Total Annual
Fiscal Year
Sales Tax Collections
Principal
Interest
Requirement°
Times Coverage
2016
(1) $ 5,421,104 $
$ -
$ -
-
2017
5,613,664
-
869,749
869,749
6.45
2018
5,707,414
1,190,000
1,252,239
2,442,239
2.34
2019
5,734,078
1,280,000
1,163,406
2,443,406
2.35
2020
5,858,223
1,340,000
1,102,406
2,442,406
2.40
2021
6,851,800
1,410,000
1,033,656
2,443,656
2.80
2022
7,859,995
1,475,000
968,056
2,443,056
3.22
2023
8,463,832
1,540,000
899,206
2,439,206
3.47
Note: 'Includes Principal and Interest
(1) This was the year of issuance. Accordingly, no principal or interest payments were scheduled in this year, and no debt was outstanding in
the previous 2 years that was secured by pledged revenue.
152
City of Southlake, Texas
Demographic and Economic Statistics
Last Ten Calendar Years
(Unaudited)
Fiscal Year Estimated Population°
2014
27,425
2015
27,833
2016
28,290
2017
29,440
2018
29,580
2019
30,310
2020
30,370
2021
31,199
2022
31,569
2023
31,975
Note: 'City of Southlake Economic Development
6Carroll Independent School District
`Texas Workforce Commission
Per Capita Personal
Personal Income
Income
School Enrollment
$ 1,483,500,525 $
54,093
7,864
1,613,952,171
57,987
7,884
1,732,875,660
61,254
8,177
1,951,901,440
66,301
8,190
2,189,038,320
74,004
8,341
2,151,828,140
70,994
8,344
2,177,863,070
71,711
8,509
2,169,765,654
69,546
8,318
2,506,862,721
79,409
8,382
2,585,284,275
80,853
8,318
Table 14
Unemployment Rated
4.4%
3.5%
3.5%
3.0%
3.2%
2.7%
5.2%
3.6%
3.0%
3.6%
153
City of Southlake, Texas
Principal Employers
Current Year and Nine Years Ago
(Unaudited)
Employer°
Sabre Holdings
TD Ameritrade
Carroll ISD
Gateway Church
Verizon Wireless
Keller Williams
City of Soufhlake
Central Market
Total
Total Southlake Daytime Employeesb
Source: °City of Soufhlake Economic Development
bTexas Workforce Commission
2023
Percentage of Total
Employees°
City Employment
2,200
13.75%
1,876
11.72%
1,176
7.35%
706
4.41 %
650
4.06%
650
4.06%
448
2.80%
390
2.44%
8,096 50.60%
. lull
Table 15
2014
Percentage of Total
Employees° City Employment
3,000 23.24%
1,123
8.70%
570
4.42%
637
4.93%
487
3.77%
337
2.61 %
360
2.79%
6,514
12,909
50.46%
154
City of Southlake, Texas
Full-time Equivalent City Government Employees by Function/Program
Last Ten Fiscal Years
(Unaudited)
Table 16
Fiscal Year
Function/Program
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
General Government and
Administration
55.75
52.00
51.00
57.00
60.00
74.00
75.75
78.14
80.64
82.64
Public Safety
140.45
140.95
140.95
139.95
141.45
145.15
145.15
145.15
145.15
149.70
Public Works
27.25
33.25
35.25
34.50
35.50
35.00
35.00
35.00
34.35
35.35
Culture and Recreational
62.15
65.65
71.40
72.03
114.78
108.93
111.80
113.93
113.93
121.48
Water and Sewer
29.50
29.50
30.25
31.00
31.00
31.00
30.00
30.00
31.65
31.65
Community Development
23.00
23.00
23.00
23.00
23.00
22.00
23.00
22.50
22.50
23.50
Economic Development
4.00
4.00
4.00
1.00
1.00
2.00
3.63
3.63
4.00
4.00
Total
342.10
348.35
355.85
358.48
406.73
418.08
424.33
428.35
432.22
448.32
Source: City Budget
155
City of Southlake, Texas
Operations Indicators by Function/Program
Last Ten Fiscal Years
(Unaudited)
Table 17
Fiscal Year
Function/Program
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Public Safety
Police
Number of Employees
68
68
68
67
68
72
72
72
72
76
Number of Violations (Citations)
18,122
16,241
15,003
13,840
13,492
13,759
9,095
8,230
9,551
7,342
Number of Arrests
1,284
1,095
513
1,148
1,027
719
1,025
838
640
324
Number of Alarm calls
3,087
3,497
3,673
3,284
3,434
3,171
2,465
2,549
893
1,469
Fire
Number of Employees
72
72
73
73
73
73
73
73
73
74
Number of Fire runs
1,245
1,220
760
807
811
748
999
1,036
834
894
Number of EMS runs
1,492
1,448
1,745
1,808
1,802
1,875
1,517
1,994
2,256
2,418
Number of Hazardous materials runs
56
43
95
105
109
90
94
92
111
93
Number of Alarm calls
461
501
608
652
651
678
602
748
659
590
Development Services
Streets maintained (miles)
268
204
209
199
211
213
214
214
214
217
Streets crack sealed (blocks)
94
N/A
N/A
75
391
384
5
0
68
0
Roadway signage replaced/installed
188
N/A
568
N/A
21
136
13
132
128
137
Asphalt repairs (tons)
2,802
4,849
4,667
6,671
5,191
6,100
213
7,747
151
250
Concrete repairs to roads/sidewalks (cu. yds.)
240
2,421
308
1,462
1,188
503
41
1,269
11
7
Right-of-way maintenance (miles)
484
N/A
N/A
5
417
417
558
55
7
2
Building Permits Issued°
3,051
2,979
2,703
3,163
3,453
3,133
2,834
3,209
3,372
2,990
Planning & Zoning cases heard
143
136
190
100
110
76
62
82
53
65
Cultural and Recreational
Parks and Recreation
Park maintain& operate per acre
1,205
1,200
1,106
1,106
1,106
1,106
1,106
561
561
561
Participants in Leisure Service Programs
6,227
6,200
8,687
8,735
9,844
17,555
8,065
7,360
13,010
25,000
Participants in Special Events
47,000
60,000
66,000
72,625
71,400
65,000
900
36,300
44,000
48,000
Participants in Senior Center Programs
4,935
4,900
8,868
13,449
13,552
14,068
4,989
6,390
6,691
8,663
Library
Volumes in Collection
46,781
44,971
45,416
44,899
43,947
41,789
43,699
41,895
42,607
42,034
Patrons
16,662
16,838
13,461
13,764
14,327
15,267
13,274
14,467
15,446
17,054
Water and Sewer
Number of Water Consumers
9,825
10,183
10,581
10,941
11,009
11,133
11,236
11,349
11,461
11,528
Number of Sewer accounts
7,770
8,167
8,470
8,889
9,111
11,886
9,053
9,142
9,229
9,319
Line inspections (feet)
217,000
1,086,624
789,266
687,246
574,136
641,941
377,081
214,789
141,503
189,370
Water meters installed/repaired/replaced
745
1,284
10,566
135
191
279
186
359
4,099.00
102
Transmitters installed/replaced
610
N/A
10,566
489
124
113
466
1,327
7,891.00
6,666
Gallons purchased from Ft. Worth (millions)
3,220,075
3,069,971
2,904,048
3,206,363
3,156,019
2,762,227
3,013,801
3,057,825
3,914,878
3,805,874
Gallons distributed (millions)
2,964,457
2,870,430
2,935,818
2,900,926
3,229,438
2,363,542
2,957,582
2,731,697
3,569,090
3,539,810
Maximum Storage Capacity (million of gallons)
21
21
21
21
21
21
21
21
21
21
Source: City Departments
6,576,470
7,215,563
6,844,057
7,003,047
7,166,675
5,978,074
6,461,341
6,161,822
7,799,580
7,720,950
Notes: N/A Data not available
°Includes residential, commercial, and miscellaneous (e.g. pools, fences) permits.
156
City of Southlake, Texas
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
(Unaudited)
Table 18
_ Fiscal Year
Function/Program 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Public Safety
Police Stations
3
Police Patrol Units
26
Fire Stations
3
Police Motorcycle Units
5
Cultural and Recreational
Parks
18
Playgrounds
5
Dog Park
1
Senior Center
1
Tennis Courts
21
In -line hockey rink/turf field°
1
Ballfields
44
Soccer Fields
17
Nature Center
1
Water and Sewer
Wafer Mains (miles)
294
Lift Stations
14
Sanitary Sewer Mains (miles)
209
Drainage, ditches/creeks (miles)
91
Fire hydrants
2,486
Wafer valves
6,686
Source: City Departments
Note: N/A - Data not available
°In -line hockey rink converted to turf field
in 2020.
3 3
3
3
3
3
3
3
3
25 25
25
25
25
21
23
20
23
3 3
3
3
3
3
3
3
3
5 5
5
5
5
5
5
5
5
18 18
18
18
18
18
35
35
35
7 6
1 1
6
1
6
1
7
1
7
1
6
1
7
1
7
1
1 1
21 21
1
21
1
21
1
21
1
21
1
21
1
21
1
21
1 1
32 27
1
29
1
29
1
29
1
29
1
22
1
22
1
22
13 12
21
21
21
21
21
21
21
285
290
284
298
301
304
293
294
296
13
13
14
15
15
15
9
13
13
206
209
212
216
218
220
220
222
223
36
36
48
52
51
51
42
51
51
2,594
2,643
2,723
2,774
2,809
2,854
2,919
2,938
2973
N/A
7,154
7,360
7,553
7,673
7,818
8,023
8,104
8212
157
City of Southlake, Texas
Single Audit Report
For the Fiscal Year Ended September 30, 2023
weaver
Assurance - ,,x • Advisory
City of Southlake, Texas
Single Audit Report
For the Fiscal Year Ended September 30, 2023
Table of Contents
Page
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing
Standards................................................................................................................................................................1
Independent Auditor's Report on Compliance for Each Major
State Program, Report on Internal Control over Compliance, and Report on
Schedule of Expenditures of State Awards Required by the
TexasGrant Management Standards.................................................................................................................3
Schedule of Expenditures of State Awards...........................................................................................................6
Notes to Schedule of Expenditures of State Awards...........................................................................................7
Schedule of Findings and Questioned Costs........................................................................................................8
CorrectiveAction Plan..........................................................................................................................................10
weaver
Independent Auditor's Report on Internal Control over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards
The Honorable Mayor and Members of the City Council of the
City of Southlake, Texas
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business -type activities, each major fund, and the aggregate remaining fund information
of the City of Southlake, Texas (the City) as of and for the year ended September 30, 2023, and the related
notes to the financial statements, which collectively comprise the City's basic financial statements, and
have issued our report thereon dated March 14, 2024.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control
over financial reporting (internal control) as a basis for designing procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of the City's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in
the preceding paragraph and was not designed to identify all deficiencies in internal control that might
be material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that have not been identified. However, as described in the accompanying
schedule of findings and questioned costs, we did identify certain deficiencies in internal control that we
consider to be a significant deficiency.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected on a
timely basis.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance. We consider the deficiency described in the accompanying schedule of findings and
questioned costs as item 2023-001 to be a significant deficiency.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect
on the financial statements. However, providing an opinion on compliance with those provisions was not
an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 1 Dallas, Texas 75201
Main: 972.490.1970
CPAs AND ADVISORS I WEAVER.COM
The Honorable Mayor and Members of the City Council of the
City of Southlake, Texas
City's Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City's response
to the findings identified in our audit and described in the accompanying Corrective Action Plan. The
City's response was not subjected to the other auditing procedures applied in the audit of the financial
statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
March 14, 2024
2
weaver
Independent Auditor's Report on Compliance for Each Major State
Program, Report on Internal Control over Compliance, and Report on Schedule of
Expenditures of State Awards Required by the Texas Grant Management Standards
To the Honorable Mayor and Members of the City Council of the
City of Southlake, Texas
Report on Compliance for Each Major State Program
Opinion on Each Major State Program
We have audited the City of Southlake, Texas (the City)'s compliance with the types of compliance
requirements identified as subject to audit in the Texas Grant Management Standards that could have a
direct and material effect on each of the City's major state programs for the year ended September 30,
2023. The City's major state programs are identified in the summary of auditor's results section of the
accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to
above that could have a direct and material effect on each of its major state programs for the year
ended September 30, 2023.
Basis for Opinion on Each Major State Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in
the United States of America (GAAS); the standards applicable to financial audits contained in
Government Auditing Standards issued by the Comptroller General of the United States (Government
Auditing Standards); and the Texas Grant Management Standards (TxGMS) issued by the Texas
Comptroller of Public Accounts Statewide Procurement Division. Our responsibilities under those standards
and TxGMS are further described in the Auditor's Responsibilities for the Audit of Compliance section of
our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in
accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each
major state program. Our audit does not provide a legal determination of the City's compliance with the
compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements
of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City's
state programs.
Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 1 Dallas, Texas 75201
Main: 972.490.1970
3
CPAs AND ADVISORS I WEAVER.COM
The Honorable Mayor and Members of the City Council of the
City of Southlake, Texas
Auditor's Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an
opinion on the City's compliance based on our audit. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance
with GAAS, Government Auditing Standards, and TxGMS will always detect material noncompliance
when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control. Noncompliance with the compliance requirements referred to above is
considered material, if there is a substantial likelihood that, individually or in the aggregate, it would
influence the judgment made by a reasonable user of the report on compliance about the City's
compliance with the requirements of each major state program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and TxGMS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material noncompliance, whether due to fraud or error, and design
and perform audit procedures responsive to those risks. Such procedures include examining, on
a test basis, evidence regarding the City's compliance with the compliance requirements
referred to above and performing such other procedures as we considered necessary in the
circumstances.
• Obtain an understanding of the City's internal control over compliance relevant to the audit in
order to design audit procedures that are appropriate in the circumstances and to test and report
on internal control over compliance in accordance with the TxGMS, but not for the purpose of
expressing an opinion on the effectiveness of the City's internal control over compliance.
Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and any significant deficiencies and material weaknesses in
internal control over compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a state program on a timely basis. A material weakness in internal control over compliance
is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a state
program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance with a type of compliance requirement of a state program that is less severe than a material
weakness in internal control over compliance, yet important enough to merit attention by those charged
with governance.
4
The Honorable Mayor and Members of the City Council of the
City of Southlake, Texas
Our consideration of internal control over compliance was for the limited purpose described in the
Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all
deficiencies in internal control over compliance that might be material weaknesses or significant
deficiencies in internal control over compliance. Given these limitations, during our audit we did not
identify any deficiencies in internal control over compliance that we consider to be material weaknesses,
as defined above. However, material weaknesses or significant deficiencies in internal control over
compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of the
TxGMS. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of State Awards Required by the Texas Grant Management Standards
We have audited the financial statements of the governmental activities, the business -type activities,
each major fund, and the aggregate remaining fund information of the City as of and for the year ended
September 30, 2023, and the related notes to the financial statements, which collectively comprise the
City's basic statements. We issued our report thereon dated March 14, 2024, which contained an
unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming
opinions on the financial statements that collectively comprise the basic financial statements. The
accompanying schedule of expenditures of state awards is presented for purposes of additional analysis
as required by the Texas Grant Management Standards and is not a required part of the basic financial
statements. Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements
and certain additional procedures including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the schedule of expenditures of state
awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
l tJ�G,uP� a4 f ;f• f
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
March 14, 2024
5
City of Southlake, Texas
Schedule of Expenditures of State Awards
For the Fiscal Year Ended September 30, 2023
State Grantor/Pass-Through Grantor/
Grant
State
Program Title
Number
Expenditures
Office of the Governor, Public Safety Office
FY23 Bullet -Resistant Shield Grant Program
4605/01
$ 154,726
Texas Comptroller of Public Accounts
LEOSE - Law Enforcement Officer
Standards and Education
N/A
3,412
Texas Department of State Health Services
Passed through North Central Texas
Trauma Regional Advisory Council
FY23 EMS County Assistance Allocations
N/A
6,652
Texas Department of Transportation
Regional Toll Revenue Funding for
N White Chapel Blvd; Bluestem to Wingate
0902-90-249
597,421
Texas Division of Emergency Management
2023 Spring Fire Weather
TX-TFMS-230003
25,483
2023 Spring Fire Weather
TX-TFMS-230003
32,289
2023 Summer Fire Weather
TX-TFMS-230007
142,134
2023 Summer Fire Weather
TX-TFMS-230007
80,852
2023 Summer Fire Weather
TX-TFMS-230007
22,375
2023 Summer Fire Weather
TX-TFMS-230007
46,224
2023 Summer Fire Weather
TX-TFMS-230007
28,085
Passed through Texas A&M Engineering
Extension Service
22-0027 Severe Weather 4Nov
471090-100133-5474
6,699
22-0030 Severe Weather 12DEC
471090-100135-5474
2,387
22-0004 SV WX 23JAN
471090-100137-5474
5,895
22-0008 02APR SV WX
471090-100140-5474
1,230
23-0017 15June SV WX
471090-100146-5474
6,665
Total Texas Division of Emergency Management
400,318
TOTAL STATE ASSISTANCE
$ 1,162,529
See accompanying Notes to the Schedule of Expenditures of State Awards.
6
City of Southlake, Texas
Notes to the Schedule of Expenditures of State Awards
Note 1. General and Basis of Presentation
The accompanying schedule of expenditures of state awards (Schedule) includes the state award
activity of the City of Southlake, Texas (City) under programs of the state governments for the year ended
September 30, 2023. The accompanying notes are an integral part of this Schedule. The information in
this Schedule is presented in accordance with the requirements of the State of Texas Grant Management
Standards (TxGMS) issued by the Texas Comptroller of Public Accounts Statewide Procurement Division.
Because the Schedule presents only a selected portion of the operations of the City, it is not intended to
and does not present the financial position, changes in net position or cash flows of the City.
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such
expenditures are recognized following the cost principles contained in the TxGMS, wherein certain types
of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the
Schedule represent adjustments or credits made in the normal course of business to amounts reported as
expenditures in prior years.
Note 2. Subrecipients
Of the state expenditures presented in the Schedule, the City provided no state awards to subrecipients.
Note 3. Loans
At September 30, 2023, the City had no loans or loan guarantees outstanding with state awarding
agencies.
Note 4. Indirect Cost Rate
The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the TxGMS.
7
City of Southlake, Texas
Schedule of Findings and Questioned Costs
For the Fiscal Year Ended September 30, 2023
Section 1. Summary of Auditor's Results
Financial Statements
An unmodified opinion was issued on the financial statements.
Internal control over financial reporting:
• Material weakness(es) identified?
• Significant deficiency(ies) identified
that are not considered to be material weakness(es)?
Noncompliance material to the
financial statements noted?
State Awards
Yes X No
X Yes None reported
Yes X No
An unmodified opinion was issued on compliance for the major programs.
Internal control over major programs:
• Material weakness(es) identified?
• Significant deficiencies identified that are not
considered to be material weakness(es)?
Any audit findings disclosed that are required to
be reported in accordance with Texas Grant
Management Standards?
Identification of major programs:
Assistance Listing/Grant Identification Number
Major State Program:
0902-90-249
Dollar threshold used to distinguish between
Type A and Type B programs:
Yes X No
Yes X None reported
Yes X No
Name of State Program or Cluster
Regional Toll Revenue Funding for
N White Chapel Blvd; Bluestem to Wingate
$750,000
0
City of Southlake, Texas
Schedule of Findings and Questioned Costs - Continued
For the Fiscal Year Ended September 30, 2023
Section 2. Financial Statement Findings
Finding 2023-001
Significant Deficiency in Internal Controls over Financial Reporting- Payroll
Criteria
Management is responsible for maintaining effective internal controls over financial reporting. As part of
this responsibility, management sets the City's objectives, implements controls and evaluates the internal
control system.
Condition and Context
It was identified that the City's Human Resource Department manually adjusted overtime based on
calculations performed by Human Resources' personnel.
Cause
The manual adjustments to overtime did not receive a secondary review and are posted by the preparer
of the calculation. This lead to a lack of segregation of duties in the internal control environment related
to overtime calculations.
Effect or Potential Effect
Failure to implement effective internal controls over manually adjusted overtime could result in errors.
Recommendation
We recommend the City implement a process in which all payroll calculations are performed by the City's
payroll system. If manual adjustments are required the manual adjustment is reviewed and approved by
a second individual prior to posting.
Views of Responsible Officials and Planned Corrective Action
See corrective action plan.
Section 3. State Award Findings and Questioned Costs
None
Section 4. Schedule of Prior Year Findings and Questioned Costs
None
C'-i - 0l
SOUTHLAKE
Finance Department
Planned Corrective Action:
The City's Finance and Human Resources Departments will work with Tyler Technologies to
implement overtime calculations within Munis, the Financial ERP system used by the City, which
will eliminate manual overtime calculations in the payroll cycle. Additionally Human Resources
will institute secondary review and approval procedures for all changes occurring during payroll
processing.
Responsible officials:
Nicole Bradshaw, Deputy Director of Finance
Stacey Black, Senior Director of Human Resources
Planned completion date:
Review and approval procedures will be implemented immediately, and ERP system
modifications are planned to be completed by June 30, 2024.
10
1400 Main Street, Suite 440, Southlake, TX 76092, (817) 748-8345