Item 4G - MemoItem 4G
ICITY OF
SOUTHLAKE
MEMORANDUM
March 3, 2026
To: Alison Ortowski, City Manager
From: Sharen Jackson, Chief Financial Officer
Subject: Approve the 2025 Annual Comprehensive Financial Report
Action
Requested: Approval of the September 30, 2025, Annual Comprehensive Financial
Report
Background
Information: The purpose of this item is to seek City Council approval of the
2025 Annual Comprehensive Financial Report.
The City Charter requires the City to have an independent audit
performed by a Certified Public Accountant at the close of each
fiscal year. Weaver L.L.P., Certified Public Accountants, performed
the audit for fiscal year 2025.
The City received an unmodified ("clean") opinion on the City's
financial statements for the year ended September 30, 2025.
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: 2025 Annual Comprehensive Financial Report (electronic copy
attached). Hard copies available upon request.
Staff
Recommendation: Approval of the 2025 Annual Comprehensive Financial Report.
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CITY OF SOUTHLAKE, TEXAS
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2025
No Text
City of Southlake, Texas
Annual Comprehensive Financial Report
For the Fiscal Year Ended September 30, 2025
CITY OF
SOUTHLA14CE
As Prepared by:
The Finance Department
Sharen Jackson, CPA, Chief Financial Officer
Nicole Bradshaw, CPA, Deputy Director of Finance
No Text
City of Southlake
Annual Comprehensive Financial Report
For the Fiscal Year Ended September 30, 2025
Table of Contents
Exhibit Page
INTRODUCTORY SECTION
Letter of Transmittal v
Certificate of Achievement xvi
Organizational Chart xvii
List of Principal Officials xviii
FINANCIAL SECTION
Independent Auditor's Report
3
Management's Discussion and Analysis
9
Basic Financial Statements
Government -Wide Financial Statements
Statement of Net Position
1
25
Statement of Activities
2
26
Fund Financial Statements
Governmental Funds Financial Statements
Balance Sheet
3
30
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
4
32
Statement of Revenues, Expenditures, and Changes in Fund Balance
5
34
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures
and Changes in Fund Balance to the Statement of Activities
6
36
Proprietary Funds Financial Statements
Statement of Net Position
7
38
Statement of Revenues, Expenses, and Changes in Net Position
8
40
Statement of Cash Flows
9
41
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position
10
45
Statement of Changes in Fiduciary Net Position
11
46
Notes to the Basic Financial Statements
49
Required Supplementary Information
Budgetary Comparison Schedule - General Fund
A-1
92
Budgetary Comparison Schedule - Southlake Parks Development Corporation
Operating Fund
A-2
93
Budgetary Comparison 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 Liability (Asset) for Health Insurance
A-6
102
Schedule of Contributions - Southlake Net OPEB Liability (Asset) for Health Insurance
A-7
104
Schedule of Changes in the Total OPEB Liability and Related Ratios - TMRS -
Supplemental Death Benefits
A-8
106
Schedule of OPEB Contributions - TMRS - Supplemental Death Benefits
A-9
108
Condition Rating of Street System
A-10
110
City of Southlake
Annual Comprehensive Financial Report
For the Fiscal Year Ended September 30, 2025
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
113
Nonmajor Governmental Funds
Combining Balance Sheet - Nonmajor Governmental Funds
C-1
116
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance -
Nonmajor Governmental Funds
C-2
120
Budgetary Comparison Schedule - Police Special Revenue Fund
C-3
124
Budgetary Comparison Schedule - Parks and Recreation Special Revenue Fund
C-4
125
Budgetary Comparison Schedule - Parks Dedication Special Revenue Fund
C-5
126
Budgetary Comparison Schedule - Crime Control District Special Revenue Fund
C-6
127
Budgetary Comparison Schedule - Hotel Occupancy Special Revenue Fund
C-7
128
Budgetary Comparison Schedule - Storm Water Utility Special Revenue Fund
C-8
129
Budgetary Comparison Schedule - Court Security and Technology
C-9
130
Special Revenue Fund
Budgetary Comparison Schedule - Library Special Revenue Fund
C-10
131
Budgetary Comparison Schedule - Red Light Camera Special Revenue Fund
C-1 1
132
Budgetary Comparison Schedule - Commercial Vehicle Enforcement
C-12
133
Budgetary Comparison Schedule - Tax Increment Financing District
Special Revenue Fund
C-13
134
Budgetary Comparison Schedule - Southlake Parks Development
Corporation Debt Service Fund
C-14
135
Budgetary Comparison Schedule - Community Enhancement Development
Corporation Debt Service Fund
C-15
136
Table
Page
Statistical Section
Net Position By Component
1
140
Changes in Net Position
2
142
Fund Balances, Governmental Funds
3
144
Changes in Fund Balances, Governmental Funds
4
146
Assessed Value and Estimated Actual Value of Taxable Property
5
148
Direct and Overlapping Property Tax Rates
6
149
Principal Property Tax Payers
7
150
Ad Valorem Tax Levies and Collections
8
151
Ratios of Outstanding Debt By Type
9
152
Ratios of General Bonded Debt Outstanding
10
153
Direct and Overlapping Governmental Activities Debt
11
154
Pledged -Revenue Coverage - Southlake Parks Development Corporation
12
155
Pledged -Revenue Coverage - Southlake Community Enhancement and
Development Corporation
13
156
Demographic and Economic Statistics
14
157
Principal Employers
15
158
Full -rime Equivalent City Government Employees By Function/Program
16
159
Operating Indicators By Function/Program
17
160
Capital Asset Statistics By Function/Program
18
161
Introductory Section
IVA
Finance Department
February 23, 2026
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, 2025. 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
the financial position and results of operations fairly. 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, 2025. 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 SOUTHLAKE
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.
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 city was officially incorporated on
September 25, 1956, by a public vote of 30 in favor and 24 against. The original city 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 police chief 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. Southlake residents adopted a home -rule charter in April 1987, which created the current
council-manager form of government. Six Council Members and a Mayor are elected at large on a
nonpartisan basis for staggered three-year terms. However, the most crucial event in bringing residential
subdivision development to Southlake was the completion of water and sewer lines in the city's southern
portion 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 is just over 33,000 and is estimated to reach just over 34,000 residents by the year
2050.
Since then, much like the area's first settlers were attracted to the area with its endless possibilities,
Southlake has continued attracting the suburban settlers desiring a high quality of life and the small-town
charm preserved from Southlake's past.
Services Provided
The City provides a full range of municipal services established by statute or charter, including providing
police, fire and ambulance services, planning, zoning and development services, engineering, streets
and storm drainage, infrastructure, construction and maintenance, parks operations and maintenance,
recreation programming and facilities, library services, and other general administrative 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.
JJ
INTEGRITY
INNOVATION
TEAMWORK
EXCELLENCE
ACCOUNTABILITY
-
L i Delivering mtstandng
customer exper ences
through innovation.
passion, and a strong
culture.
C2 Enhancing the sense
of community by
proactively creabng
opportunities for
community partnerships.
volunteer involvement,
and citizen engagement.
C - Customer Ciblectives
City of Southlake Strategy Map
The mission of the City of Southlake is to provide municipal services that support
the highest quality of life for our residents. a supportive environment for local
businesses, and unique and special experiences for visitors.
We e�4w- on Our Focus Areas
000
Safety & Infrastructure &
Partnerships & Performance
Security Development
Volunteerism Management &
Service Delivery
7We Provide
Stewardship
Safegwrding the
public trust through
a Commitment to
thoughtful planning and
responsible. conservative
financial management
Investing to provide &
aintaln high quality
public assets.
c = c�nancol Obtecbnes
rW-_Manag*1
The
71
BI Achieving strong
outcomes through
contir l evaluation
and pursuit of bettor
practices that improve
cove business operations
B2 Collaborating with select
part,— to knplement
service solutions
B3 fill—t ningan
environment of
future readiness by
understanding and
acting upon the forces.
trends. and coming
challenges affecting
services
B = Susness Oblecies
15
_ i Defining and managing
a professional workplace
culture that supports
City values and promotes
a positive employee
ezparience.
L2 Fostering positive
employee engagement
L 3 Attracting, developing &
retaining a talented and
motivated workfwce
for lasting world -class
performance.
L' Learning 8 Growth Objectives
vi
Budaetary Information
Annual budgets are legally adopted by the City Council prior to October 1, the beginning of the fiscal
year, for all City operating funds. Although formal budgetary integration is not employed for proprietary
funds, the City does adopt an annual budget for those funds for managerial control. The budget is
prepared by fund, function (e.g., public safety), and department (e.g., police services). The City Manager
may transfer budgeted funds within a department, as appropriate. Transfers of funds from one
department to another or re -estimating revenues or expenditures must have City Council approval.
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.
In May 2015, Southlake voters overwhelmingly approved the reallocation of a portion of the District's 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.
This report also includes 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.
The City of Southlake is currently 94% developed and made up of over 3,300 businesses, including 65 new
businesses for FY 2025. Businesses 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 1,900 employees.
Carroll I.S.D. and Charles Schwab are the next most significant employers, with approximately 1,600 and
1,100 employees, respectively.
vii
Housing Permits
There were 66 single-family residential permits issued in FY 2025 with an average new home construction
value, excluding land value, of approximately $1,984,000. As noted in the following chart, the City
experienced an increase in residential home construction.
Single Family Residential Home Permits
120
100
80
60
40
20
-11
0
2021 2022 2023 2024 2025
Property Taxes
Total certified taxable value for commercial and residential property was $12 billion, an increase of $676
million and a 5.9% percent increase from the prior year. New construction added $150 million to the tax
roll.
Tax rate management and tax relief have been guiding financial management principles that Southlake
has strategically implemented over time, beginning in 2009 with the adoption of a homestead exemption.
Since that time, Southlake has annually implemented tax relief, first in the form of the homestead
exemption and then beginning in 2019 with tax rate reductions. New development and strong sales tax
revenues, combined with expenditure management, have made it possible to implement thirteen relief
initiatives since 2009.
In FY 2025, the City incorporated a total tax rate of $0.305 per $100 valuation, reducing the rate by $0.014
from FY 2024. The tax rate of $0.305 is split between General Fund operations and debt service. The
allocation for FY 2025 is $0.250 for general operations and $0.055 for debt service.
Sales Taxes
In Southlake, the total sales tax rate is 8.25%. The City receives $0.02 of sales tax for every dollar spent in
our city limits (the remainder goes to the State). One of those pennies goes to the General Fund and can
be spent on general operating costs, like supplies, salaries, and general maintenance. The other penny is
split between our Crime Control and Prevention District ("CCPD"), the Southlake Parks Development
Corporation ("SPDC"), and the Community Enhancement and Development Corporation ("CEDC").
Southlake Sales Tax Districts
]% Cencral Fund
1/8% CCPD
'A
ISPOC
hi-
3/8% CCDC
1/
viii
Sales taxes are an essential source of revenue for the City, making up approximately 38% of total
revenues. It is estimated that non-residents who shop and dine in Southlake generate up to 70% of the
sales tax revenue. These monies are used to support the City's general operations, fund parks
development, crime prevention and safety initiatives, construction and operations of The Marq, and
economic development, and pay off the debt for these funds. Utilizing special sales tax districts has
allowed the City of Southlake to maintain excellent financial conditions and reduce the property tax
burden.
The City of Southlake experienced an increase in sales tax collections during the fiscal year, as indicated
on the chart. Sales tax collections exceeded $42.6 million in FY 2025, a 1.46% increase from the previous
year. This increase was expected by the City.
Sales Tax
$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
2021 2022 2023 2024 2025
General ■ SPDC ■ Crime CEDC
Future Economic Outlook
Generating economic development is a significant consideration in the City of Southlake's future
economic outlook. To that end, the City has developed the following policy statement related to public
investment in economic development.
General Purpose and Objectives of Incentives
The City of Southlake is committed to improving the quality of life for its citizens through the attraction and
retention of high -quality development that drives a dynamic and sustainable economic environment. On
a case -by -case basis, Southlake will consider providing inducement packages as a stimulus for economic
development activity, including business attraction, relocation, and retention.
ix
Public Funds Investment Guiding Principles
In carrying out its economic development objectives, the City of Southlake will adhere to the following
guiding investment principles to best determine the strategic investment of its resources in eligible
projects:
• Project supports comprehensive plan implementation
• Project will retain, expand, or attract targeted industries
• Project will contribute to a top -tier workforce by retaining or expanding the daytime population
and preferred job types
• Project includes preferred quality of life benefits such as open space preservation and project
enhancements
• Public investment is performance -based and considers reasonable return on investment via direct
financial return and other indirect benefits
• Investments will be made into projects sponsored by a financially viable company in good legal
standing with the City and State
• Project will make a unique or unequaled contribution to development or redevelopment efforts
in the City of Southlake due to its magnitude, significance to the community, or aesthetic quality
Criteria
Investment recommendations will be based on the evaluation of criteria, including the following:
• What is the estimated total value of capital investment for buildings, other real
property improvements, furniture, fixtures, and equipment?
• What is the value of the Real and Business Personal Property that will be added
to the tax rolls?
Fiscal Impact
0 How much direct sales tax will be generated?
• Will infrastructure construction be required?
• Will the project generate overnight stays in the community? If so, how many
annually?
• What is the estimated return on public investment?
• How many jobs will be brought to Southlake?
Employment
• How many jobs will be retained?
Impact
• What types of jobs will be created?
. What will the total annual payroll be?
• What is the average annual salary of jobs created and/or retained?
Community
How compatible is the project with the City's comprehensive plan goals?
Impact
How does the project support goals related to the preferred quality of life
benefit, such as preservation of open sace and project enhancements?
• Does the project meet the following minimum preferred thresholds?
o Capital investment: $5,000,000
o Jobs created or retained: 100
o Average annual total compensation of jobs created or retained:
Project Eligibility
$50,000
o Average education level: 4-year degree
o Target industry alignment
• If the project does not meet the preferred thresholds, will it make a unique or
unequaled contribution to the development or redevelopment efforts in the
City? How?
x
Target Industries
The Southlake 2035 Economic Development Master Plan specifies these target industries:
• Full -service and limited -service restaurants (unique, independent, farm -to -
table, chef -driven, etc.)
• Specialty grocery (organic/local, specialty foods, dine -in or takeaway
house -made prepared foods, artisanal cafe, wine and cheese from
around the globe)
Niche Retail
0 House & home retail (furnishings and appliances, home design showrooms,
smart home technology)
• Health, beauty, and wellness (salons, spas, fitness training/gyms, yoga
studios)
• Culinary Hub (farm -to -table, farmers market, specialty food retailers,
commercial -grade kitchens, culinary business incubator)
• Corporate headquarters and regional offices (large-scale, build -to -suit
campus office)
Office
0 Multi -tenant garden -style (professional services: accountants,
engineers/planners/architects, information technology, lawyers,
advertising and media, management consulting, actuary)
• Health, beauty, and wellness (specialized facilities for cosmetic
procedures, healthy living, etc.)
Medical and
• Specialized pediatric and senior clinic/outpatient facilities
Healthcare
• Specialized medical facilities for surgical procedures (implanted medical
devices, bariatric, etc.)
• Medical/wellness hub along SH 114
• Research & Development Center
Finance,
Insurance and
0 Corporate headquarters and regional offices
Wealth
0 Professional services
Management
Information
Corporate headquarters and regional offices
Technology and
Professional services
Media
• Telecommunications
Biotechnology
Corporate headquarters and regional offices
and
Pharmaceuticals
Research and development
Eligible Activities
Investment funds may be used for one or more of the following eligible activities to assist a targeted
industry in locating in the City or to facilitate a redevelopment project:
• Capital investments related to real property construction and acquisition
• Improvements to an existing building
• On -site and/or off -site infrastructure
• Site enhancements that the City may support to encourage upgraded aesthetics or amenities
• Other purposes which bring value to the community as determined by the Southlake City Council
Exclusionary Factors
Even though a project might meet all the minimum project qualifications, it will not be considered for
public investment if any of the following factors apply:
• If the project would, for any reason, result in a net reduction of the ad valorem tax valuation of all
facilities in the City owned by the company or its parent, subsidiary, or affiliated companies,
assistance will not be provided.
• Investment will not be provided to companies not in good legal standing with the state or that
have not met their obligations as businesses in the City of Southlake.
• No prior commitment to investment shall be binding if the company originally receiving the
assistance assigns it to another company unless the City has consented to such assignment in
writing, as specified in an approved investment agreement.
• The financial condition of the company receiving the assistance must not make its ability to meet
its obligations uncertain.
Available Investment Tools
This is a tool whereby all or a portion of the increase in the value of real and/or
Tax Abatement
business personal property can be exempted from taxation. The legal authority for
tax abatements comes from Chapter 312 of the Texas Property Tax Code;
therefore, cities must meet the provisions of the Code when using abatements.
Chapter 380
This incentive option is authorized under Chapter 380 of the Texas Local
Economic
Government Code. It is an agreement between the taxpayer and taxing entity to
Development
offer a variety of fee -based or tax -based incentives, grants (which may or may not
Grants
be repaid), or rebates. This is a flexible option, but there are certain state law
requirements that must be met in all cases.
Infrastructure
The City of Southlake has a track record of facilitating development through
Participation
enhancement of water, sewer, and roadway infrastructure relevant to sites
selected for significant projects as needed.
Tax Increment
Tax Increment Financing is a tool to finance public improvements within a defined
Reinvestment
area. The improvements should enhance the environment and attract new
Zone
investment. The statutes governing tax increment financing are in Chapter 311 of
the Texas Tax Code.
Public
A PID is a defined geographical area established to provide specific types of
Improvement
improvements or maintenance within the area which are financed by assessments
Districts (PID)
against the property owners within the area. Chapter 372 of the Texas Local
Government Code authorizes the creation of PIDs by cities.
Fee Waivers or
The City of Southlake will consider a waiver or reimbursement of development fees
Reimbursement
on eligible projects.
The City entered into no new incentive agreements for FY 2025. All projects undergo this rigorous vetting
process before the City enters into any agreements. Agreements also undergo periodic monitoring after
inception to ensure that performance targets are being met.
xii
Major Development Projects
In 2025, the following projects have been approved for development in the City:
• Dakota's Southlake will include a new restaurant, event hall, and retail buildings.
• The Hideaway will include 7 single-family residential lots on approximately 8.4 acres.
• 1835 Shady Oaks Drive will include 19 residential lots and 4 office buildings on approximately 21.2
acres.
• Linmar Estates will include 10 single-family residential lots on approximately 10.85 acres.
• Liberty Commons will include 14 single-family residential lots and 5 office, retail, and/or
commercial lots on approximately 15.1 acres.
• The Oaks will include 11 single-family residential lots on approximately 12.85 acres.
The City has the following development projects under construction:
• The Overlook and Willowtree Gardens will include a single-family residential component and an
office building component.
• Brumlow East will include a 32.8-acre mixed -use development encompassing a single-family
residential component with 56 residential homes and approximately 71,000 square feet of office
and office/warehouse buildings.
• Lambert Homes will include an approximate 10,570 sq. ft. two-story building (serving as Lambert
Homes' primary office, retail, and storage space), and an approximate 2,800 sq. ft. one-story
building intended for future retail use.
• Southlake Municipal Service Center will support the City of Southlake Public Works Operations. The
site will also include a Training Tower for the Department of Public Safety's use.
• The Wheelhouse will include 2 single -story buildings totaling approximately 19,461 sq. ft. for office
showroom with retail sales and automobile and motorcycle sales and/or service uses. Additionally,
The Wheelhouse will include 3 single -story buildings totaling approximately 47,629 sq. ft. with
garage and storage uses, maintenance of personal vehicles, and a hobby shop for personal use.
• The Garden District Residences will include 58 residential units in 2 four-story buildings on
approximately 2.24 acres.
• Next Century Health Care Plaza will include 6 single -story medical office buildings totaling
approximately 50,000 sq. ft.
• The Elmore will modify the building color and add a screening wall for the existing hotel.
• Tom Thumb Gas Station —The project will convert the former Texaco establishment into a Tom
Thumb Gasoline Service Station and Convenience Store at the northwest corner of the W.
Southlake Blvd. and N. White Chapel Blvd. intersection.
• Tommy's Car Wash - Northeast Corner of W. Southlake Boulevard and N. Pearson Ln. will include
a self-service car wash with a conceptual future retail component.
• Restoration Church will include construction of an additional 2-story building, expansion of the
parking lot, and development of a dry detention pond.
• Carillon Parc Residential will include 79 residential lots and 3 commercial lots.
• Kirkwood East will include 8 buildings totaling approximately 50,000 sq. ft. at build -out - 2 are under
construction.
• Highland Terrace will include 9 residential lots on 3.91 acres along White Chapel Lane.
• Rainey Estates will include 4 one -acre lots on 4.75 acres at the southwest corner of North White
Chapel Blvd. and West Bob Jones Road.
During FY 2025, the following significant projects were completed, which will have an impact on the local
economy in the future:
Constellation included 4 large warehouse buildings totaling approximately 546,330 sq. ft.
Southlake Marketplace included lighting improvements, landscape improvements, and the
construction of an approximately 2,600 sq. ft. drive-thru restaurant.
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 residents,
businesses, and visitors an enhanced quality of life.
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 of 15% and an
optimum of 25%. The City uses "excess" reserves 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 important 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 public trust through internal
audits and other initiatives to maintain a strong control environment.
Multi -year Sustainability
Executive leaders evaluate the operational impact of all identified projects and include those costs in
future budget projections. The Executive Leadership Team has also begun a more formalized 5-year
financial roadmap that reflects known and planned expenditures to create further predictability for future
budgets.
Staff monitors trends that depict the City's long-term financial health and uses these trends to make
decisions to reach financial and service goals. Thoroughly understanding economic conditions is critical
for proper planning.
Economic Information Used for City Financial Projections
CITY OF
SOUTHLAKE
rElnc,milc C 'Consumer
ornmercial
40
Indicators Growth Spending
Interest Rates Wages Building Permits Retail Sales
GDB Growth Unemployment Home Values Projections
Fuel Costs Healthcare Costs Top Taxpayer Meetings
xlv
The City has taken an additional formal step to understand and plan for the organization's financial future
by adopting the Southlake Sustainability Plan as an element of the Southlake Comprehensive Plan.
It contains formal recommendations to ensure positive financial outcomes for the City. Management is
working with the City Council to update this plan.
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. Additionally, the City has an Audit Committee as a subcommittee of the
City Council, which hears and reviews all recommendations made by the independent auditors.
Awards
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Southlake for its Annual
Comprehensive Financial Report for the fiscal year ended September 30, 2024. This was the 25th
consecutive year that the City has received this prestigious national award. To earn the Certificate of
Achievement, the City published an easy -to -read and efficiently organized Annual Comprehensive
Financial Report with contents that conformed to program standards. This report must satisfy both GAAP
and applicable legal requirements.
A Certificate of Achievement is valid for one year. The City believes that the current Annual
Comprehensive Financial Report continues to meet the Certificate of Achievement Program's
requirements and thus is submitting it to GFOA to determine its eligibility for another certificate.
GFOA named the City of Southlake a 2024 Triple Crown winner. GFOA's Triple Crown designation
recognizes governments that have received GFOA's Certificate of Achievement for Excellence in
Financial Reporting, Popular Annual Financial Reporting Award, and the Distinguished Budget
Presentation Award for a fiscal year. The City has received this designation 6 years in a row.
Acknowledgments
This report could not have been prepared without the dedication and efficiency of the entire staff and
our independent auditor. I want to express appreciation to City employees throughout the organization,
especially those staff members in the Finance Department, who were instrumental in the successful
completion of this report. I would also like to thank the Mayor and members of the City Council for their
support in planning and conducting the City's financial operations in a responsible and efficient manner.
Respectfully submitted,
9MMIK, 9-t,c�
Sharen Jackson
Chief Financial Officer
xv
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reportilia
Presented to
Cite of Southlake
Texas
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
September 30. 2024
Executive Director -CEO
xvi
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aCORPORATETEAM a CITY DEPARTMENTS 0 CORPORATE FUNCTIONAL AREAS
City of Southlake, Texas
List of Principal Officials
September 30, 2025
Shawn McCaskill Mayor
Randy Williamson Mayor Pro Tern
Kathy Talley Deputy Mayor Pro Tern
Austin Reynolds
Council Member
Randy Robbins
Council Member
Frances Scharli
Council Member
Chuck Taggart
Council Member
Alison Ortowski City Manager
Stacey Black Assistant City Manager/Senior Director of Human Resources
James Brandon Assistant City Manager
Amy Shelley City Secretary
Sharen Jackson
Chief Financial Officer
Daniel Cortez
Economic Development & Tourism Director
Lauren LaNeave
Interim Public Works Director
David Miller
Community Services Director
Dennis Killough
Planning & Development Services Director
Pilar Schank
Communications Director
Ashleigh Casey
Police Chief
Shannon Langford
Fire Chief
Financial Section
No Text
wAssuraeaver�
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
2300 North Field Street, Suite 1000
Dallas, Texas 75201
972-490-1970
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, 2025, 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, 2025, 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, 2025, the
City implemented Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated
Absences. Beginning fund balance has been restated as a result of the implementation of this statement.
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.
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
February 23, 2026 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
February 23, 2026
5
No Text
Management's Discussion and Analysis
No Text
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, providing an overview of the City's
financial activities, identifying changes in the City's financial position (its ability to address the next and
subsequent years' challenges), identifying material deviations from the approved budget, and identifying
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-xv 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 on September 30, 2025, by $877,425,605 (net position). Of this
amount, $193,476,699 (unrestricted net position) may be used to meet ongoing obligations to
citizens and creditors.
• The net position of the City's governmental activities increased by $33,942,106 while the net
position of business -type activities increased by $15,976,136.
• As of September 30, 2025, the City's governmental funds reported combined ending fund
balances of $236,228,550. Of this amount, $52,557 is reported as nonspendable, $130,370,724 is
restricted by outside sources, $2,095,138 is committed for future uses, $85,777,498 is assigned by
management for specified purposes, and $17,932,633 is available for spending at the
government's discretion (unassigned fund balance).
• At the end of the current fiscal year, the unassigned fund balance for the General Fund was
$17,932,633, or 32.6 percent of total General Fund expenditures.
• At the end of the current fiscal year, the City of Southlake's outstanding debt totaled $125,647,396,
a net increase of $2,950,740 from the previous year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This 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 current -year 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 the condition of the City's
infrastructure (i.e., roads, drainage systems, water and sewer lines, etc.), to assess the overall financial
condition of the City more accurately.
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 most of the financing for these activities.
Business -type activities —These are activities for which the City charges customers a fee to pay most or all
the costs of a service it provides. 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 25-26 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 the City's funds can be divided into two
categories: governmental funds and proprietary funds.
Governmental Funds —These funds account for the majority of the City's activities and essentially perform
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 fund 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 fund Balance Sheet and the governmental fund
Statement of Revenues, Expenditures, and Changes in Fund Balances provide 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 fund financial statements.
The City maintains 25 individual governmental funds. Information is presented separately in the
governmental fund Balance Sheet and in the governmental fund 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 Capital Projects Fund, Southlake Parks
Development Corporation Special Revenue Fund, 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 nonmajor 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 30-36 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 fund financial statements can be found on
pages 38-41 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 45-46 of this report.
Notes to the Financial Statements
The Notes to the Financial Statements 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 49-87 of this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position over time may be a useful indicator of the City's financial position. As of
September 30, 2025, the City's assets and deferred outflows of resources exceeded liabilities and deferred
inflows of resources by $877,425,605 (net position) at the close of the most recent fiscal year.
The following analysis highlights the net position as of September 30, 2025, and 2024:
Governmental Activities Business -type Activities Totals
2025
2024
2025
2024
2025
2024
Current and
other assets
$ 266,958,845
$ 234,247,365
$ 115,137,603
$ 98,781,086
$ 382,096,448
$ 333,028,451
Capital assets
534,451,622
532,406,280
100,998,598
96,335,544
635,450,220
628,741,824
Total assets
801,410,467
766,653,645
216,136,201
195,116,630
1,017,546,668
961,770,275
Deferred outflows of
resources
6,502,931
8,572,281
498,314
726,463
7,001,245
9,298,744
Long-term liabilities
86,788,950
87,183,147
38,858,446
35,513,509
125,647,396
122,696,656
Other liabilities
12,841,324
13,050,024
4,902,162
3,358,199
17,743,486
16,408,223
Total liabilities
99,630,274
100,233,171
43,760,608
38,871,708
143,390,882
139,104,879
Deferred inflows of
resources
3,437,216
2,022,673
294,210
278,800
3,731,426
2,301,473
Net position:
Net investment
in capital assets
483,829,097
472,883,752
74,243,805
74,231,905
558,072,902
547,115,657
Restricted
1 13,078,1 18
111,948,381
12,797,886
11,659,020
125,876,004
123,607,401
Unrestricted
107,938,693
88,137,949
85,538,006
70,801,660
193,476,699
158,939,609
Total net position
$ 704,845,908
$ 672,970,082
$ 172,579,697
$ 156,692,585
$ 877,425,605
$ 829,662,667
12
The following analysis highlights the changes in net position for the year ended September 30, 2025 and
2024:
Governmental
Activities
Business -type Activities
Totals
2025
2024
2025
2024
2025
2024
Revenues:
Program revenues:
Charges for services
$ 12,709,757
$ 12,298,382
$ 37,270,626
$ 35,597,701
$ 49,980,383 $
47,896,083
Operating grants
and contributions
250,232
375,784
-
-
250,232
375,784
Capital grants
and contributions
7,907,152
4,890,150
3,311,503
1,734,388
11,218,655
6,624,538
General revenues:
Taxes
93,943,756
91,590,428
-
-
93,943,756
91,590,428
Investment earnings
10,184,249
11,116,664
4,158,232
3,839,868
14,342,481
14,956,532
Miscellaneous
310,807
151,752
-
-
310,807
151,752
Gain on sale of
capital assets
283,742
143,146
28,381
96,269
312,123
239,415
Total revenues
125,589,695
120,566,306
44,768,742
41,268,226
170,358,437
161,834,532
Expenses:
General government
27,449,966
26,994,341
-
-
27,449,966
26,994,341
Public safety
29,067,535
27,798,598
29,067,535
27,798,598
Public works
12,945,970
10,709,563
12,945,970
10,709,563
Culture and recreation
20,390,226
19,939,371
20,390,226
19,939,371
Promotion of culture
and tourism
1,818,301
871,217
1,818,301
871,217
Interest on long-term debt
1,564,205
1,867,737
-
-
1,564,205
1,867,737
Water and sewer
-
-
27,203,992
28,969,340
27,203,992
28,969,340
Total expenses
93,236,203
88,180,827
27,203,992
28,969,340
120,440,195
117,150,167
Increases in net position
before transfers
32,353,492
32,385,479
17,564,750
12,298,886
49,918,242
44,684,365
Transfers
1,588,614
1,608,855
(1,588,614)
(1,608,855)
-
-
Change in net position
33,942,106
33,994,334
15,976,136
10,690,031
49,918,242
44,684,365
Net position, beginning,
as previously presented
672,970,082
638,975,748
156,692,585
146,002,554
829,662,667
784,978,302
Change in accounting
principle (GASB 101)
(2,066,280)
-
(89,024)
-
(2,155,304)
-
Net position, beginning,
as restated 670,903,802 638,975,748 156,603,561 146,002,554 827,507,363 784,978,302
Net position, ending $ 704,845,908 $ 672,970,082 $ 172,579,697 $ 156,692,585 $ 877,425,605 $ 829,662,667
The largest portion of the City's net position, $558,072,902, 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.
13
Governmental activities net position increased by $33,942,106. This can be largely attributed to the City's
total revenues of $125,589,695 exceeding total expenses of $93,236,203 by $32,353,492. Significant
changes in revenues and expenses between FY 2025 and FY 2024 include the following:
• The City received $7.79 million in public works -related capital grants and contributions for FY 2025,
including donated capital assets of $6 million and grant funding related to replacing the North
White Chapel Bridge for over $930,000. The total increase from FY 2024 was over $2.9 million.
• Tax revenues increased by over $2.4 million. Sales taxes increased by over $988,000, while property
tax revenues increased by over $1.4 million for FY 25. Property tax rates were reduced to the no -
new -revenue rate, so this increase was related to additional properties being added to the tax
roll and increases in total assessed property values.
• Public safety expenses increased by over $1.2 million for FY 2025. Salary and benefit -related costs
were the driving factors for this increase, which resulted from scheduled raises and increased
overtime needs.
• Public works had an increase of over $2.2 million. This increase can be largely attributed to an
almost $2 million increase in non -capital project costs for FY 2025.
• Promotion of culture and tourism increased by almost $1 million. This increase can be attributed
to an almost $600,000 increase in non -capital project costs for FY 2025. Additionally, an increase
of almost $250,000 is attributable to added spending on City and other local events.
The net position of business -type activities increased by $15,976,136. While revenues consistently outpace
expenses in business -type activities, there were some significant increases and decreases in revenues and
expenses for FY 2025.
Charges for services increased by almost $1.7 million in FY 2025, primarily due to higher wastewater rates.
Capital contributions increased by over $1.5 million, to $3,311,503, due to increased donations of capital
assets from developers. Additionally, land purchased for the new Municipal Service Center, valued at
$4,168,934, was transferred from governmental activities to business -type activities. Investment earnings
increased by over $318,000, largely due to interest rates remaining high, while cash and investment
balances increased by over $16 million.
Business -type activity expenses decreased by almost $1.8 million in FY 2025. This reduction was driven by
lower purchased water costs and decreased wastewater treatment expenses. Wastewater treatment
savings of over $1.2 million resulted from Trinity River Authority's ability to reduce debt service costs by
issuing commercial paper as needed to fund construction at the City's two treatment plants, rather than
issuing traditional bonds upfront. These lower financing costs were passed through to participating cities,
including Southlake.
The City also experienced a decline in contractual service costs associated with the implementation of
the Environmental Protection Agency's Lead and Copper Rule Revisions (LCRR). Because the primary
compliance date was October 16, 2024, most related project costs were incurred prior to FY 2025.
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.
14
As of the end of the current fiscal year, the City's governmental funds reported combined fund balances
of $236,228,550. Approximately 7.6 percent or $17,932,633 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, $52,557;
(2) restricted for particular purposes, $130,370,724; (3) committed for particular purposes, $2,095,138; or
(4) assigned for particular purposes, $85,777,498.
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 $17,932,633. 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 fund balance represents 32.6 percent of total General Fund expenditures, while
total fund balance represents 91.3 percent of total General Fund expenditures.
The fund balance of the General Fund increased by $2,593,864 during the current fiscal year. This net
increase was the result of several factors, including:
• Tax revenues increased overall, with property tax revenues rising by more than $721,000 due to
additional properties being added to the tax roll and continued growth in total assessed values.
Sales tax revenues also increased by more than $562,000.
• The specific change that resulted in an increase in fund balance for the General Fund was the
planned reduction of transfers out to other funds for $2.6 million. In the past, these transfers were
used to fund capital projects and other initiatives, but the strategy to fund these projects changed
as a part of the budget process in conjunction with the property tax strategy.
The General Obligation Debt Service Fund has a fund balance of $1,869,414, all of which is restricted for
debt service payment. The fund balance decreased during the year by $398,804. This decrease was
expected as reserves, property tax collections, and the current year's debt service requirements were all
considered when determining the current property tax rate in accordance with the Texas Tax Code.
The fund balance in the General Capital Projects Fund ended the year at $85,609,504, an increase of
$15,548,165. This increase can be attributed to interfund transfers of $8.9 million, which were received to
reimburse project expenditures for $4,168,934, and to cash -fund upcoming roadway, drainage, and other
infrastructure projects. In addition, $9,150,000 in certificates of obligation and intergovernmental revenues
of over $1.3 million were received to fund various infrastructure projects. These inflows of resources were
made available to fund various capital projects for the City, and in FY 2025, the City spent $8.17 million of
available project funding on capital outlays in the General Capital Projects Fund.
The Southlake Parks Development Corporation Capital Projects Fund significantly decreased
expenditures, approximately $12.8 million, for FY 2025. In FY 2024, a large turf replacement project was
substantially completed. A $6 million transfer was made from the Southlake Park Development
Corporation Special Revenue Fund to provide additional funding for park capital projects.
The Southlake Parks Development Corporation Special Revenue Fund decreased its fund balance by
$856,544. This reduction was primarily due to an increase in capital expenditures of $996,777, related to a
Parks security camera replacement project.
The Community Enhancement Development Corporation Special Revenue Fund increased its fund
balance by $4,350,912. Revenues outpaced expenditures for the year as budgeted and planned each
year. The only significant variances for the fund include an increase in sales tax revenues of over $122,000
and a decrease in transfers out to other funds of $234,000, primarily related to the reduction in transfers
to the Community Enhancement Development Corporation Capital Projects Fund.
15
FINANCIAL ANALYSIS OF THE PROPRIETARY FUNDS
The City's proprietary funds provide the same information found in the government -wide financial
statements, but in more detail.
Unrestricted net position reported in the Proprietary Funds included $85,538,006 in the Water and Sewer
Fund and $15,957,924 in the Vehicle and Equipment Replacement Fund. The total net position in the
Water and Sewer Fund increased by $15,976,136, while the net position of the Vehicle and Equipment
Replacement Fund increased by $3,377,948.
Revenues consistently outpace expenses in the Water and Sewer Fund each year, which is the primary
driver for the continued increase in net position. In the current year, capital contributions increased by
over $5.6 million due to the donation of $3,311,503 in capital assets from developers, and the transfer of
land purchased for the new Municipal Service Center from governmental activities, valued at $4,168,934.
Additionally, charges for services increased by almost $1.7 million due to an increase in wastewater
treatment rates. Water and Sewer Fund expenses decreased by almost $1.9 million in FY 2025. This
reduction was driven by lower purchased water costs and decreased wastewater treatment expenses.
$4.25 million was transferred to fund vehicle and equipment purchases in FY 2025. This inflow, net of
depreciation expense of almost $1.6 million, resulted in an 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. Actual revenues exceeded
budget by $1,108,769. The General Fund expenditure budget was amended across departments, but
there was no net change in the total expenditure budget. Actual expenditures, in total, were $2,581,757
less than final budget. This favorable variance, in conjunction with the revenue variance, resulted in the
actual ending fund balance exceeding the ending budgetary fund balance by $4,681,752.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets —As of September 30, 2025, the City's investment in capital assets for its governmental and
business -type activities amounts to $635,450,220 (net of accumulated depreciation and amortization).
This investment 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 were 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 2025 were not material.
Major capital projects completed during the current year included the following:
• Pearson Pump Station Residual Control Improvements
• Bicentennial Water Tower Fence and Driveway
North White Chapel and Kirkwood Branch Bridge Replacement
• Watermere Gazebo
Emergency Operations Center Relocation
• DPS West Public Art Project
• 8" Sewer Line on Shady Oaks to Fox Hollow
I -I
Governmental Activities
Business -type Activities
Totals
2025
2024
2025
2024
2025
2023
Land and improvements
$ 112,915,198
$ 109,622,983
$ 27,841,307
$ 21,646,232
$ 140,756,505
$ 131,269,215
Construction in progress
22,369,388
30,310,495
3,471,445
4,701,687
25,840,833
35,012,182
Buildings and
improvements
107,079,329
108,497,159
47,007
77,325
107,126,336
108,574,484
Improvements
-
-
69,397,388
69,697,534
69,397,388
69,697,534
Infrastructure
275,516,892
269,447,100
-
-
275,516,892
269,447,100
Machinery and equipment
12,644,796
11,783,462
231,587
173,796
12,876,383
11,957,258
Right -to -use assets:
Lease buildings
130,017
234,031
-
-
130,017
234,031
Lease equipment
442,331
569,408
-
-
442,331
569,408
Subscriptions
3,353,671
1,941,642
9,864
38,970
3,363,535
1,980,612
Total
$ 534,451,622
$ 532,406,280
$ 100,998,598
$ 96,335,544
$ 635,450,220
$ 628,741,824
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 $65,056,556 total
bonds outstanding, which were issued to finance capital improvements for roadway, parks and
recreation, public buildings, and infrastructure. The business -type activities had $37,309,801 in total bonds
outstanding, issued to finance projects to increase the utility system's capacity.
Governmental Activities
Business -type Activities
Totals
2025
2024
2025
2024
2025
2024
Bonds Payable
$ 65,056,556
$ 66,351,332
$ 37,309,801
$ 34,118,969
$ 102,366,357
$ 100,470,301
Total OPEB liability
799,991
803,422
64,367
64,590
864,358
868,012
Net pension liability
11,579,778
14,056,529
1,053,290
1,214,748
12,633,068
15,271,277
Compensated absences
5,396,320
3,132,308
224,003
81,150
5,620,323
3,213,458
Financed purchases
105,728
208,476
-
-
105,728
208,476
Lease liabilities
588,312
813,519
-
-
588,312
813,519
Subscription liabilities
3,112,755
1,817,561
4,732
34,052
3,117,487
1,851,613
Arbitrage liability
149,510
-
202,253
-
351,763
-
$ 86,788,950
$ 87,183,147
$ 38,858,446
$ 35,513,509
$ 125,647,396
$ 122,696,656
The City takes its debt obligation very seriously. Several years ago, the City Council, working with City staff,
set goals to reduce the debt as a 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 percent in 2003 to
0.21 percent in 2025, during a time of growth for the City. Our debt management strategies receive a
rigorous annual review from bond rating agencies tasked with letting potential borrowers know how
creditworthy the City is. The City has three AAA ratings - a strong external endorsement of the City's
financial management.
17
3.50%
3.00%
2.50%
a 1.00%
0.50%
0.00%
Long-term Debt as a Percentage of
Assessed Valuation
LONG-TERM DEBT —DEBT AS % OF ASSESSED VALUATION
m a Ln W P w m O ti N m R �/1 %0 f, w m O 1-4 N m `T u'1
o O o 0 o O O - . . .--� ti . .--i .--i � N N N N N N
O O O O O O O O O O O O O O O O O O O O O O O
N N N N N N N N N N N N N N N N N N N N N N N
FISCAL YEAR
$120,000, 000
$100,000, 000
$80,000,000
0
0
$60,000,000 5
A
$40,000,000
$20,000,000
S-
It should be noted that although the total debt issued has fluctuated based on the timing of important
projects, the City has generally reduced its property tax -supported obligations since 2003. 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 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 67-72 of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Property taxes represent 37.7 percent of total governmental revenue, while sales tax is the largest source
at 38.6 percent. The City monitors these resources closely and evaluates the need for program
adjustments or fee changes as appropriate.
Maintaining structural balance remains foundational to Southlake's budgeting standards. The FY 2026
adopted budget continues to align recurring expenditures with reliable revenue streams, reinforcing
financial sustainability and preserving capacity for strategic investment.
The FY 2026 budget incorporates a tax rate of $0.295 per $100 valuation, a reduction of one cent from
the prior year. This rate is allocated between General Fund operations ($0.240) and debt service ($0.055),
with the reduction applied to the operations portion.
In
In keeping with the City's commitment to tax relief, the budget retains the maximum allowable 20 percent
homestead exemption, along with existing exemptions for residents over 65 and disabled homeowners.
For an average -valued home, the homestead exemption lowers taxable value by approximately
$222,617, resulting in an effective tax savings of roughly 5.9 cents per $100 valuation. After accounting for
both the exemption and the adopted rate reduction, the equivalent residential tax rate is approximately
$0.236.
During the FY 2026 budget process, staff refreshed expenditure projections and identified cost growth
pressures of approximately 5 percent, driven largely by compensation, benefits, contracts, utilities, and
asset maintenance. The City also benchmarks organic budget growth against the Dallas/Fort Worth
Consumer Price Index (CPI). For FY 2026, this guideline was calculated at 2.5 percent, below projected
expenditure demands. Growth above the benchmark is primarily attributable to the City's market -
leadership pay philosophy, which targets the 85th percentile for public safety and the 70th percentile for
general government.
To manage cost pressures while maintaining high service standards, the City employs several operational
strategies, including budget optimization, vacancy and workforce review, contract renegotiation,
cooperative purchasing, process and technology improvements, lifecycle asset planning, and the
targeted use of one-time funds for non -recurring needs.
Through this disciplined approach, the FY 2026 budget limits General Fund expenditure growth to
approximately 3.5 percent, while continuing to support exceptional service delivery and long-term
financial resilience.
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, 4th Floor Finance Department, Southlake, Texas 76092.
ILI
20
Basic Financial Statements
21
22
Government -wide Financial Statements
23
24
City of Southlake, Texas
Statement of Net Position
September 30, 2025
Exhibit 1
PRIMARY GOVERNMENT
GOVERNMENTAL
BUSINESS -TYPE
ACTIVITIES
ACTIVITIES
TOTAL
ASSETS
Cash and investments
$ 250,445,040
$ 80,238,078
$ 330,683,118
Receivables (net of allowance for uncollectibles)
10,796,882
6,774,016
17,570,898
Due from other governments
431,890
-
431,890
Prepaid items
2,203,435
2,203,435
Inventories
33,277
-
33,277
Restricted assets
Cash and cash equivalents
1,812,181
27,825,422
29,637,603
Restricted cash for customer deposits
-
300,087
300,087
OPEB asset
1,236,140
-
1,236,140
Capital assets:
Not being depreciated/amortized
367,726,561
31,312,752
399,039,313
Net of depreciation/amortization
166,725,061
69,685,846
236,410,907
Total assets
801,410,467
216,136,201
1,017,546,668
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding
149,583
64,838
214,421
Deferred outflows - TMRSpension
5,697,629
423,495
6,121,124
Deferred outflows - TMRS OPEB
122,035
9,981
132,016
Deferred outflows - OPEB Health
533,684
-
533,684
Total deferred outflows of resources
6,502,931
498,314
7,001,245
LIABILITIES
Accounts payable
5,389,645
3,843,829
9,233,474
Accrued liabilities
1,956,399
255,933
2,212,332
Due to other governments
2,154,494
-
2,154,494
Accrued interest payable
-
247,056
247,056
Retainage payable
765,636
91,323
856,959
Deposits payable
842,431
-
842,431
Unearned revenue
1,276,071
163,934
1,440,005
Liabilities payable from restricted assets
Accrued interest
456,648
-
456,648
Customer meter deposits
-
300,087
300,087
Non -current liabilities:
Due within one year
12,499,548
3,117,059
15,616,607
Due in more than one year
74,289,402
35,741,387
110,030,789
Total liabilities
99,630,274
43,760,608
143,390,882
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding
49,898
184,583
234,481
Deferred inflows - leases
453,601
-
453,601
Deferred inflows - TMRSpension
1,818,055
87,573
1,905,628
Deferred inflows - TMRS OPEB
301,060
22,054
323,114
Deferred inflows - OPEB Health
814,602
-
814,602
Total deferred inflows of resources
3,437,216
294,210
3,731,426
NET POSITION
Net investment in capital assets
483,829,097
74,243,805
558,072,902
Restricted for:
Debt service
4,475,582
-
4,475,582
OPEB Asset
1,236,140
1,236,140
Municipal court
993,658
993,658
Reinvestment zone
13,567,422
13,567,422
Police
7,066,809
7,066,809
Parks and recreation
65,502,673
65,502,673
Library
16,612
16,612
Storm water
9,226,800
9,226,800
Promotion of culture and tourism
6,431,129
-
6,431,129
Impact fees
4,561,293
12,797,886
17,359,179
Unrestricted
107,938,693
85,538,006
193,476,699
TOTAL NET POSITION
$ 704,845,908
$ 172,579,697
$ 877,425,605
The Notes to the Financial Statements are an integral part of this statement.
25
City of Southlake, Texas
Statement of Activities
For the Fiscal Year Ended September 30, 2025
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
$ 27,449,966
$ 2,177,296 $ 40 $
$ (25,272,630)
$ $
(25,272,630)
Public safety
29,067,535
1,444,393 94,092
(27,529,050)
(27,529,050)
Public works
12,945,970
3,368,835 - 7,793,538
(1,783,597)
(1,783,597)
Culture and recreation
20,390,226
5,719,233 156,100 113,614
(14,401,279)
(14,401,279)
Promotion of culture and tourism
1,818,301
- - -
(1,818,301)
(1,818,301)
Interest on long-term debt
1,564,205
-
(1,564,205)
(1,564,205)
Total governmental activities
93,236,203
12,709,757 250,232 7,907,152
(72,369,062)
(72,369,062)
Business -type Activities:
Water and sewer
27,203,992
37,270,626 - 3,311,503
13,378,137
13,378,137
Total business -type activities
27,203,992
37,270,626 - 3,311,503
13,378,137
13,378,137
TOTAL PRIMARY GOVERNMENT
$ 120,440,195
$ 49,980,383 $ 250,232 $ 11,218,655
(72,369,062)
13,378,137
(58,990,925)
General revenues and transfers:
General revenues
Property taxes, levied for general purposes
44,757,795
-
44,757,795
Sales taxes
45,818,639
45,818,639
Franchise taxes
3,367,322
-
3,367,322
Investment income
10,184,249
4,158,232
14,342,481
Gain on disposal of capital assets
283,742
28,381
312,123
Miscellaneous
310,807
-
310,807
Transfers
1,588,614
(1,588,614)
-
Total general revenues and transfers
106,311,168
2,597,999
108,909,167
Change in net position
33,942,106
15,976,136
49,918,242
Net position, beginning of year, as previously presented
672,970,082
156,692,585
829,662,667
Change in accounting principle (GASB 101)
(2,066,280)
(89,024)
(2,155,304)
Net position, beginning of year, as restated
670,903,802
156,603,561
827,507,363
NET POSITION, end of year
The Notes to the Financial Statements are an integral part of this statement.
$ 704,845,908 $ 172,579,697 $ 877,425,605
26
Fund Financial Statements
27
m
Governmental Funds Financial Statements
29
City of Southlake, Texas
Balance Sheet -Governmental Funds
September 30, 2025
ASSETS
Cash and investments
Receivables, net of allowances for uncollectibles:
Taxes
Interest
Leases
Other
Due from other governments
Inventories
Prepaid items
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
LIABILITIES
Accounts payable
Accrued liabilities
Due to other governments
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
CAPITAL PROJECTS
GENERAL
SOUTHLAKE
OBLIGATION
GENERAL
PARKS
DEBT
CAPITAL
DEVELOPMENT
GENERAL
SERVICE
PROJECTS
CORPORATION
$ 52,524,941
$ 1,812,181
$ 86,612,382
$ 19,757,208
4,020,383
59,434
-
-
181,431
5,757
261,510
62,770
500,322
-
-
-
933,711
9
82,043
6,786
425,104
33,277
-
19,280
-
-
$ 58,220,131
$ 1,877,381
$ 87,381,039
$ 19,819,978
$ 3,419,794 $ $ 770,840 $ 273,015
1,592,578 - -
1,165,779 - -
- 168,018 597,618
68,938 704,693 -
834,791 - -
7,081,880 1,643,551 870,633
548,179 7,967 127,984
453,601 - -
1,001,780 7,967 127,984
52,557 - - -
- 1,869,414 31,983,287 18,949,345
32,151,281 53,626,217
50,136,471 1,869,414 85,609,504 18,949,345
$ 58,220,131 $ 1,877,381 $ 87,381,039 $ 19,819,978
The Notes to the Financial Statements are an integral part of this statement.
30
Exhibit 3
SPECIAL REVENUE
SOUTHLAKE COMMUNITY
PARKS ENHANCEMENT NONMAJOR TOTAL
DEVELOPMENT DEVELOPMENT GOVERNMENTAL GOVERNMENTAL
CORPORATION CORPORATION FUNDS FUNDS
$ 12,635,424 $ 28,849,067 $ 36,341,616 $ 238,532,819
1,837,287 1,360,953 744,168 8,022,225
40,167 91,966 115,463 759,064
- - - 500,322
38,458 171,268 240,416 1,465,905
- - - 431,890
33,277
19,280
$ 14,551,336 $ 30,473,254 $ 37,441,663 $ 249,764,782
$ 248,162 $ 152,322 $ 525,517 $ 5,389,650
32,677 162,487 168,657 1,956,399
497,428 368,465 122,822 2,154,494
- - - 765,636
68,800 842,431
441,280 1,276,071
778,267 1,193,354 816,996 12,384,681
12,820 1,000 697,950
- - 453,601
12,820 1,000 1,151,551
- - - 52,557
13,760,249 29,279,900 34,528,529 130,370,724
- - 2,095,138 2,095,138
- 85,777,498
- - - 17,932,633
13,760,249 29,279,900 36,623,667 236,228,550
$ 14,551,336 $ 30,473,254 $ 37,441,663 $ 249,764,782
31
City of Southlake, Texas Exhibit 4
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
September 30, 2025
Total fund balances - governmental funds
$ 236,228,550
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 $7,309,740 in assets allocated to governmental
activities from the internal service fund).
527,141,882
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.
(456,648)
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.
23,267,664
OPEB asset has not been included in the governmental fund financial statements, as these assets do
not represent current financial resources.
1,236,140
Revenues earned but not available within sixty days of the year end are not recognized as revenue on
the fund financial statements.
697,950
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, $149,583, and gains ($49,898) on refundings.
99,689
Deferred outflows of resources related to the Citys pension and OPEB liabilities result in an increase in
net position in the government -wide financial statements.
6,353,348
Deferred inflows of resources related to the Citys pension and OPEB liabilities result in a decrease in
net position in the government -wide financial statements.
(2,933,717)
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.
(86,788,950)
NET POSITION OF GOVERNMENTAL ACTIVITIES
$ 704,845,908
The Notes to the Financial Statements are an integral part of this statement.
32
33
City of Southlake, Texas
Statement of Revenues, Expenditures,
and Changes in Fund Balances - Governmental Funds
For the Fiscal Year Ended September 30, 2025
REVENUES
Ad valorem taxes, penalties and interest
Franchise taxes
Municipal sales and mixed beverage taxes
Licenses, permits and fees
Charges for services
Fines and forfeitures
Intergovernmental revenue
Capital recovery fees
Investment income
Contributions
Miscellaneous
Total revenues
EXPENDITURES
Current
General government
City secretary/mayor
City manager's office
Human resources
Support services
Economic development
Finance
Municipal court
Teen court
Information technology
Public safety
Police services
Fire services
Public safety support
Public works
Public works administration
Streets and drainage
Planning
Building inspection
Cultural and recreation
Community services
Parks and recreation
Library services
Promotion of culture and tourism
Intergovernmental
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
Issuance of long-term debt
Issuance of subscriptions
Premium on issuance of long-term debt
Sale of capital assets
Insurance recoveries
Transfers from other funds
Transfers to other funds
Total other financing sources (uses)
Net change in fund balances
Fund balances, beginning of year
FUND BALANCES, END OF YEAR
CAPITAL PROJECTS
GENERAL
SOUTHLAKE
OBLIGATION
GENERAL
PARKS
DEBT
CAPITAL
DEVELOPMENT
GENERAL
SERVICE
PROJECTS
CORPORATION
$ 27,911,529
$ 6,132,810
$
$
3,367,322
-
21,840,435
1,998,868
2,589,722
1,053, 751
130,557
1,309,330
-
-
360,248
-
2,366,429
123,425
3,390,652
850,000
87,150
-
4,455
31,571
287,616
-
61,633,379
6,256,235
5,064,685
881,571
624,870
1,220,634
754,749
5,519,418
467,201
2,185,679
787,438
164,467
3,412,494
9,195,718
12,702,849
1,799,979
2,590,077 -
1,413,045 3,757,161
1,091,451 -
1,341,060
1,510,113 - -
4,161,255 472 58,196
1,149,729 - -
1,671,031 - 4,331,976 1,130,115
1,104,359 6,123,304 - -
54,908,211
7,056,801
8,177,691
1,188,311
6,725,168
(800,566)
(3,113,006)
(306,740)
-
9,150,000
864,421
-
-
542,237
48,854
-
77,951
-
-
-
3,277,470
401,762
8,968,934
6,000,000
(8,400,000)
-
(4,131,304)
401,762
18,661,171
6,000,000
2,593,864
(398,804)
15,548,165
5,693,260
47,542,607
2,268,218
70,061,339
13,256,085
$ 50,136,471 $
1,869,414 $
85,609,504 $
18,949,345
The Notes to the Financial Statements are an integral part of this statement.
34
Exhibit 5
SPECIAL REVENUE
SOUTHLAKE
COMMUNITY
PARKS
ENHANCEMENT
NONMAJOR
TOTAL
DEVELOPMENT
DEVELOPMENT
GOVERNMENTAL
GOVERNMENTAL
CORPORATION
CORPORATION
FUNDS
FUNDS
$
$
$ 10,685,868
$ 44,730,207
-
3,367,322
10,827,190
8,020,141
5,130,873
45,818,639
-
-
268,931
2,267,799
362,810
4,481,176
1,724,932
9,158,640
-
-
123,963
1,177,714
10,881
1,450,768
-
-
-
360,248
375,479
1,098,999
1,556,234
9,761,218
-
21,221
50,879
195,276
2,083
21,108
310,807
11,565,479
13,623,620
19,573,669
118,598,638
624,870
1,220,634
754,749
700,000
6,219,418
467,201
2,185,679
73,288
860,726
164,467
3,412,494
3,053,110 12,248,828
10,881 12,713,730
- 1,799,979
421,039
3,011,116
618,891
5,789,097
-
1,091,451
-
-
-
1,341,060
2,273,752
5,993,951
57,271
9,835,087
-
-
569,442
4,789,365
14,999
1,164,728
1,237,407
1,237,407
-
-
7,216,430
7,216,430
1,069,013
282,247
763,430
9,247,812
-
15,328
4,191,506
11,434,497
374
1,061,547
2,124,095
3,342,765
6,291,900
19,989,241
100,954,920
8,222,714
7,331,720
(415,572)
17,643,718
-
9,150,000
864,421
542,237
48,854
-
77,951
5,300,820
23,948,986
(9,079,258)
(2,980,808)
(1,981,372)
(22,441,438)
(9,079,258)
(2,980,808)
3,319,448
12,191,011
(856,544)
4,350,912
2,903,876
29,834,729
14,616,793
24,928,988
33,719,791
206,393,821
$ 13,760,249 $
29,279,900 $
36,623,667
$ 236,228,550
35
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, 2025
Net change in fund balances - total governmental funds $ 29,834,729
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 $1,961,541 allocated from internal service fund). 8,393,276
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 $1,597,991 allocated from internal
service fund). (10,169,149)
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 $ (9,150,000)
Bond premiums (542,237)
Issuance of SBITAs (864,421)
Principal payments on debt 10,230,052
Principal payments on financed purchases, lease and subscription liabilities 1,204,445
Amortization of premiums and deferred gains and losses 701,611
1,579,450
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 decrease in the net pension liability, $2,476,751, increase in
deferred inflows of resources, ($1,486,598), and decrease in deferred outflows of resources, ($1,797,781).
(807,628)
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 $14,485, decrease in
deferred inflows of resources, $29,314, and decrease in deferred outflows of resources, ($43,663).
(10,918)
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 increase in the total healthcare OPEB asset, $370,522,
increase in deferred inflows of resources, ($197,341), and decrease in deferred outflows of resources, ($56,440).
116,741
Current year changes for the following long-term liabilities do not require the use of current financial resources
and are therefore not reported as expenditures in governmental funds:
Compensated absences $ (197,732)
Accrued interest payable (141,721)
Arbitrage liability (149,510)
(488,963)
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.
3,377,948
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.
6,073,564
In the statement of activities, the reassignment of capital assets between governmental activities and
business -type activities would be reported as a transfer. Governmental funds would not report this transfer as
there is no flow of current financial resources.
(4,168,934)
Gain on disposal of capital assets results in an increase in net position, but the net effect is not
reported in governmental funds.
540
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.
211,450
Change in net position of governmental activities $
33,942,106
The Notes to the Financial Statements are an integral part of this statement.
36
Proprietary Funds Financial Statements
37
City of Southlake, Texas
Statement of Net Position - Proprietary Funds
September 30, 2025
BUSINESS -TYPE
GOVERNMENTAL
ACTIVITIES
ACTIVITIES
WATER AND SEWER
VEHICLE AND EQUIPMENT
ENTERPRISE
REPLACEMENT INTERNAL
FUND
SERVICE FUND
ASSETS
CURRENT ASSETS
Cash and investments
$ 80,238,078
$ 13,724,402
Receivables, net of allowance for uncollectibles:
Billed and unbilled trade accounts
6,415,848
-
Interest
358,168
49,366
Prepaid expenses
-
2,184,156
Restricted assets:
Cash restricted for capital
27,825,422
-
Restricted cash for customer deposits
300,087
-
Total current assets
115,137,603
15,957,924
NON -CURRENT ASSETS
Capital assets:
Land
27,841,307
-
Buildings and improvements
935,501
Distribution system
163,979,838
-
Equipment
2,774,319
985,740
Vehicles
-
16,005,117
Capacity rights
9,190,988
-
Construction in progress
3,471,445
SBITA
87,316
-
Total capital assets
208,280,714
16,990,857
Less: accumulated depreciation and amortization
(107,282,116)
(9,681,117)
Capital assets, net of accumulated depreciation and amortization
100,998,598
7,309,740
Total non -current assets
100,998,598
7,309,740
Total assets
216,136,201
23,267,664
DEFERRED OUTFLOW OF RESOURCES
Deferred loss on refunding
64,838
-
Deferred outflows - TMRS pension
423,495
Deferred outflows - TMRS OPEB
9,981
Total deferred outflows of resources
$ 498,314
$
The Notes to the Financial Statements are an integral part of this statement.
38
Exhibit 7
LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION
CURRENT LIABILITIES
Accounts payable
Accrued liabilities
Retainage payable
Accrued interest payable
Unearned revenue
Current portion of compensated absences
Current portion of subscription liability
Current portion of total OPEB liability
Current portion of general obligation debt
Payable from restricted assets:
Customer meter deposits
Total current liabilities
NON -CURRENT LIABILITIES
Compensated absences
General obligation debt
Net pension liability
Total OPEB liability
Arbitrage liability
Total non -current liabilities
Total liabilities
DEFERRED INFLOW OF RESOURCES
Deferred gain on refunding
Deferred inflows - TMRS pension
Deferred inflows - TMRS OPEB
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted for impact fees
Unrestricted
TOTAL NET POSITION
BUSINESS -TYPE
GOVERNMENTAL
ACTIVITIES
ACTIVITIES
WATER AND SEWER
VEHICLE AND EQUIPMENT
ENTERPRISE
REPLACEMENT INTERNAL
FUND
SERVICE FUND
$ 3,843,829
$
255,933
91,323
247,056
163,934
50,340
4, 732
1,240
3,060, 747
300,087
8,019, 221
173,663
34,249,054
1,053, 290
63,127
202,253
35, 741, 387
43, 760, 608
184,583
87,573
22,054
294,210
-
74,243,805
7,309,740
12,797,886
-
85,538,006
15,957,924
$ 172,579,697
$ 23,267,664
39
City of Southlake, Texas
Statement of Revenues, Expenses,
and Changes in Net Position - Proprietary Funds
For the Fiscal Year Ended September 30, 2025
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
Gain on disposal of capital assets
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 of her funds
Transfers to of her funds
Total capital contributions and transfers
Change in net position
Net position, beginning of year, as previously presented
Change in accounting principle (GASB 101)
Net position, beginning of year, as restated
NET POSITION, END OF YEAR
Exhibit 8
BUSINESS -TYPE
GOVERNMENTAL
ACTIVITIES
ACTIVITIES
WATER AND SEWER
VEHICLE AND EQUIPMENT
ENTERPRISE
REPLACEMENT INTERNAL
FUND
SERVICE FUND
$ 37,231,507
$
39,119
37,270,626
2,965,617
2,520,189
-
336, 852
3,000
9,515,745
-
7, 739
5,512,599
42,438
-
5,386,238
1,597,991
26, 287, 417
1,600,991
10, 983, 209
(1,600,991)
4,158,232
572,541
28,381
156,398
(916,575)
-
3,270,038
728,939
14,253,247
(872,052)
7,087,871
392,566
-
-
4,250,000
(5,757,548)
-
1,722,889
4,250, 000
15,976,136
3,377,948
156,692,585
19,889,716
(89,024)
-
156,603,561
19,889,716
$ 172,579,697
$ 23,267,664
40
City of Southlake, Texas
Statement of Cash Flows - Proprietary Funds
For the Fiscal Year Ended September 30, 2025
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users
Cash payments to suppliers
Cash payments to employees
Net cash provided by (used in) operating activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets
Principal payments on bonds
Proceeds from issuance of bonds
Interest paid on capital debt
Bond administrative costs
Proceeds from disposal of capital assets
Contributions - impact fees
Net cash provided by (used in) capital and related
financing activities
CASH FLOWS FROM NON -CAPITAL FINANCING ACTIVITIES
Transfers from other funds
Transfers to other funds
Net cash provided by (used in) non -capital
financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Net interest received
Net cash provided by investing activities
Net change in cash and cash equivalents
CASH AND CASH EQUIVALENTS, beginning of year
CASH AND CASH EQUIVALENTS, end of year
RECONCILIATION TO STATEMENT OF NET POSITION
Cash and cash equivalents
Cash restricted for capital
Restricted cash for customer deposits
Total cash and cash equivalents
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Operating income (loss)
Adjustments to reconcile operating income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization
Decrease (increase) in assets and deferred outflows
of resources
Receivables
Deferred outflows of resources - pensions and OPEB
Increase (decrease) in liabilities and deferred outflows
of resources
Payables and accruals
Customer deposits
Deferred inflows of resources - pensions and OPEB
Decrease in pension and OPEB liabilities
Unearned revenue
Net cash provided by (used in) operating activities
NON -CASH CAPITAL AND RELATED FINANCING:
Contributions of capital assets from developers
Transfers of capital assets from governmental activities
Exhibit 9
BUSINESS -TYPE
GOVERNMENTAL
ACTIVITIES
ACTIVITIES
WATER AND SEWER
VEHICLE AND EQUIPMENT
ENTERPRISE
REPLACEMENT INTERNAL
FUND
SERVICE FUND
$ 37,579,191 $
(16,591,167) (3,000)
(2,858,428)
18,129,596 (3,000)
(2,889,285)
(2,162,744)
(2,507,016)
5,570,000
(673,739)
-
(7,286)
28,381
215,118
392,566
-
(86,379)
(1,947,626)
4,250,000
(5,757,548)
-
(5,757,548)
4,250,000
4,098,444
534,393
4,098,444
534,393
16,384,113
2,833,767
91,979,474
10,890,635
$ 108,363,587 $
13,724,402
$ 80,238,078 $ 13,724,402
27,825,422 -
300,087
$ 108,363,587 $ 13,724,402
$ 10,983,209 $ (1,600,991)
5,386,238 1,597,991
289,637
151,438
1,398,224
29,675
63,603
(161,681)
(10, 747)
$ 18,129,596 $ (3,000)
$ 2,918,938 $
4,168,934
$ 7,087,872 $
41
42
Fiduciary Fund Financial Statements
43
44
City of Southlake, Texas
OPEB Liability Trust Fund
Statement of Fiduciary Net Position
December 31, 2024
Exhibit 10
Trust Fund*
Southlake
OPEB
Liability
ASSETS
Investments $ 3,053,913
TOTAL ASSETS $ 3,053,913
NET POSITION
Restricted for post employment benefits other
than pensions $ 3,053,913
TOTAL NET POSITION $ 3,053,913
* The Southlake Other Post Employment Benefit (OPEB) Liability Trust Fund is reported as of
December 31, 2024.
The Notes to the Financial Statements are an integral part of this statement.
45
City of Southlake, Texas
OPEB Liability Trust Fund
Statement of Changes in Fiduciary Net Position
For the Fiscal Year Ended December 31, 2024
ADDITIONS
Employer contributions
Investment earnings, net of unrealized/realized gain/(loss)
TOTAL ADDITIONS
DEDUCTIONS
Benefit payments
Administrative expenses
TOTAL DEDUCTIONS
Change in net position
Net position, beginning of year
NET POSITION - END OF YEAR
Exhibit 11
Trust Fund
Southlake
OPEB
Liability
$ 210,489
183,435
393,924
70,489
9,574
80,063
313,861
2,740,052
$ 3,053,913
The Notes to the Financial Statements are an integral part of this statement.
46
Notes to the Financial Statements
47
EM
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.
49
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 nonmajor 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.
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.
50
City of Southlake, Texas
Notes to the Financial Statements
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 Capital Projects Fund
The Southlake Parks Development Corporation Capital Projects (SPDCCP) Fund was 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.
Southlake Parks Development Corporation
The Southlake Parks Development Corporation (SPDC) Fund (Special Revenue) 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 municipal sales taxes.
Community Enhancement and Development Corporation
The Community Enhancement and Development Corporation (CEDC) Fund (Special Revenue) 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.
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, 2024.
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.
51
City of Southlake, Texas
Notes to the Financial Statements
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.
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, 2025,
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.
52
City of Southlake, Texas
Notes to the Financial Statements
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 2024 levy was based on was $12,035,593,743. 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, 2025 was 0.305 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".
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.
53
City of Southlake, Texas
Notes to the 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.
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 noncancellable 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.
54
City of Southlake, Texas
Notes to the Financial Statements
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.
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
Right -to -use buildings
2 -
10 Years
Right -to -use equipment
2 -
10 Years
Right -to -use subscription assets (SBITAs)
1.5 -
10 Years
55
City of Southlake, Texas
Notes to the Financial Statements
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 or subscription
using the straight-line method.
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 to 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. A liability for compensated absences 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.
56
City of Southlake, Texas
Notes to the Financial Statements
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.
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.
57
City of Southlake, Texas
Notes to the Financial Statements
Fund Balances
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. The City reported an assigned fund balance in
its General Capital Projects Fund of $53,626,217 on September 30, 2025. This fund balance is assigned with
the intent to cash -fund future capital projects.
0
City of Southlake, Texas
Notes to the Financial Statements
As of September 30, 2025, the City had the governmental fund balances categorized as follows:
SOUTHLAKE
SOUTHLAKE
COMMUNITY
PARKS
PARKS
ENHANCEMENT
GENERAL
DEVELOPMENT
DEVELOPMENT
DEVELOPMENT
OBLIGATION
GENERAL
CORPORATION
CORPORATION
CORPORATION
NONMAJOR
TOTAL
DEBT
CAPITAL
CAPITAL
SPECIAL
SPECIAL
GOVERNMENTAL
GOVERNMENTAL
GENERAL
SERVICE
PROJECTS
PROJECTS FUND
REVENUE
REVENUE
FUNDS
FUNDS
FUND BALANCES
Nonspendable for:
Inventories
$ 33,277
$ -
$ -
$ -
$ -
$ -
$ -
$ 33,277
Prepaid items
19,280
-
-
-
-
-
-
19,280
Restricted for:
-
Debt service
-
1,869,414
-
-
-
-
2,994,773
4,864,187
Capital projects
-
-
19,206,863
-
-
-
-
19,206,863
Municipal court
-
-
-
-
-
-
993,658
993,658
Reinvestment zone
-
-
-
-
-
-
13,567,422
13,567,422
Parks and recreation
-
-
-
18,949,345
13,760,249
29,279,900
2,631,040
64,620,534
Storm water
-
-
6,847,610
-
-
-
2,355,875
9,203,485
Police
-
-
-
-
-
-
7,039,020
7,039,020
Impact Fees
-
-
4,428,814
-
-
-
-
4,428,814
Library
-
-
-
-
-
-
16,612
16,612
Promotion of tourism
-
-
1,500,000
-
-
-
4,930,129
6,430,129
Committed for:
-
Police
-
-
-
-
-
-
2,032,115
2,032,115
Parks and recreation
-
-
-
-
-
-
63,023
63,023
Assigned for:
-
Teen Court
24,167
-
-
-
-
-
-
24,167
Senior Center
12,564
-
-
-
-
-
-
12,564
Recycling
84,425
-
-
-
-
-
-
84,425
Reforestation
219,205
-
-
-
-
-
-
219,205
Public art
492,663
-
-
-
-
-
-
492,663
Facility maintenance
14,326,367
-
-
-
-
-
-
14,326,367
Economic investment
3,845,657
-
-
-
-
-
-
3,845,657
Strategic initiatives
13,146,233
-
-
-
-
-
-
13,146,233
Capital projects
-
-
53,626,217
-
-
-
-
53,626,217
Unassigned
17,932,633
-
-
-
17,932,633
TOTAL FUND BALANCES
$50,136,471
$ 1,869,414
$85,609,504
$ 18,949,345
$ 13,760,249
$ 29,279,900
$ 36,623,667
$ 236,228,550
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, 2025.
59
City of Southlake, Texas
Notes to the Financial Statements
New Accounting Pronouncements
The GASB pronouncements effective in fiscal year 2025 and beyond are listed as follows:
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. GASB 101 was
implemented in the City's fiscal year 2025 financial statements with a restatement of ($2,155,304) to net
position as of October 1, 2024 to reflect the changes adopted to conform to the new standard.
GASB Statement No. 102, Certain Risk Disclosures, will provide users of government financial statements
with essential information about risks related to a government's vulnerabilities due to certain
concentrations or constraints. The requirements of this Statement are effective for fiscal years beginning
after June 15, 2024, and all reporting periods thereafter. The City has implemented this Statement in fiscal
year 2025 with no impact to amounts or disclosures previously reported.
GASB Statement No. 103, Financial Report Model Improvements, will establish new accounting and
financial reporting requirements - or modify existing requirements - related to the following:
• Management's discussion and analysis
• Unusual or infrequent items
• Presentation of the proprietary fund statement of revenues, expenses, and changes in fund net
position
• Information about major component units in basic financial statements
• Budgetary comparison information
• Financial trends information in the statistical section
The requirements of this Statement are effective for fiscal years beginning after June 15, 2025, and all
reporting periods thereafter. The City is currently evaluating the impact of this Statement.
GASB Statement No. 104, Disclosure of Certain Capital Assets, will establish requirements for certain types
of capital assets to be disclosed separately in the capital assets note disclosures required by Statement
No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local
Governments. It will also establish requirements for capital assets held for sale, including additional
disclosures for these capital assets. The requirements of this Statement are effective for fiscal years
beginning after June 15, 2025, 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, 2025 through
February 23, 2026, the date the financial statements were available to be issued. During this period, there
were no subsequent events requiring disclosure.
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, 2025, the carrying amount of the City's on demand deposits was $16,517,801 and the
bank balance was $16,582,559. As of September 30, 2025, 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
365 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.
m
City of Southlake, Texas
Notes to the Financial Statements
Cash and investments as of September 30, 2025, are classified in the accompanying financial statements
as follows:
Primary Government:
Cash and investments
Restricted cash and investments
Restricted cash for customer deposits
Total primary government
Trust Fund:
Investments at fair value
Total fiduciary funds
Total cash and investments
$ 330,683,118
29,637,603
300,087
360,620,808
3,053,913
3,053,913
$ 363,674,721
Cash and investments of the primary government as of September 30, 2025 consist of the following:
Cash on hand $ 4,750
Deposits with financial institutions 16,517,801
Investments at amortized cost 208,280,965
Investments at fair value 135,817,292
Total cash and investments $ 360,620,808
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, 2025, the City did not invest in any securities which are highly sensitive to interest rate
fluctuations.
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.
Minimum
Rating as
Legal
of Year
Investment Type
Amount
Rating
End
U.S. Government securities
$ 115,836,838
N/A
AAA
Mutual funds
19,980,454
N/A
AAAm
TexStar
78,009,576
AAA / AAAm
AAAm
TexP o o I
43, 516, 601
AAA / AAAm
AAAm
Lonesfar Investment Pool
43,002,344
AAA / AAAm
AAAm
Texas Class
43,752,444
AAA / AAAm
AAAm
Total $ 344,098,257
62
City of Southlake, Texas
Notes to the Financial Statements
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, 2025, 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, 2025, none of the City's cash deposits were
uncollateralized.
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.
63
City of Southlake, Texas
Notes to the Financial Statements
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
9/30/25
Level I Inputs Level 2Inputs
Level 3Inputs
Investments
(Days)
Investments not subject to Fair Value
Investment Pools
TexPool
$ 43,516,601
$ $
$
13%
44
TexStar
78,009,576
23%
49
Lonestar Corporate Overnight
43,002,344
11%
40
Texas Class
43,752,444
13%
23
Investments by Fair Value Level
Federal Farm Cr Bks
12,106,556
12,106,556
4%
360
Federal Home Loan Banks
5,041,773
5,041,773
1%
611
U.S. Treasury
98,688,509
98,688,509
29%
380
Mutual Fund
19,980,454
19,980,454
6%
28
Total
$ 344,098,257
$ 19,980,454 $ 115,836,838
$
100%
192
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.
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.
64
City of Southlake, Texas
Notes to the Financial Statements
Note 3. Receivables
Receivables at September 30, 2025, for the government's individual major, nonmajor, internal service,
and fiduciary funds in the aggregate, including the applicable allowances for uncollectible accounts,
consist of the following:
Receivables:
Property taxes
Sales taxes
Accounts
Interest
Leases
Ambulance
Other
Gross receivables
Less: allowance
Net total receivables
Receivables:
Property taxes
Sales taxes
Accounts
Interest
Leases
Ambulance
Other
$ 640,251
3,709,456
181,431
500,322
455,835
5,965,171
General
Obligation
Debt
$ 131,885
5,757
137,651
General SPDC
Capital Capital
Projects Projects
82,043
261,510
343,553
62,770
62,770
SPDC
Operating
Special
1,837,287
38,458
40,167
1,915,912
$ 5,635,847 $ 65,200 $ 343,553 $ 62,770 $ 1, 915, 912
CEDC Water Primary
Special Non -Major and Internal Government
Revenue Governmental Sewer Service Total
$ - $ - $ - $ - $ 772,136
1,360,953 744,168 - - 7,651,864
171,268 242,727 6,409,105 - 6,943,601
91,966 115,463 358,168 49,366 1,166,598
- - - - 500,322
- - - - 455,835
75 9A9 - 55l A A 7
Gross receivables 1,624,187 1,102,358 6,843,235 49,366 18,044,203
Less: allowance - 2,311 69,219 - 473,305
Net total receivables $ 1,624,187 $ 1,100,047 $ 6,774,016 $ 49,366 $ 17,570,898
The Water and Sewer Fund and the Storm Water Utility Fund accounts receivable include unbilled charges
for services rendered through September 30, 2025, of $2,978,456.
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, 2025, relate to
leases whose terms expire between December 2024 and January 2028.
65
City of Southlake, Texas
Notes to the Financial Statements
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 $500,322 remaining in lease receivables and $453,601 remaining in
deferred inflow as of September 30, 2025. The City recorded lease revenue including interest of $243,254
in the fiscal year.
As of September 30, 2025, 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
2026 $ 239,670 $
2027 213,636
2028 47,016
Interest Total
13,331 $ 253,001
6,016 219,652
284 47,300
Total $ 500,322 $ 19,631 $ 519,953
Note 4. Capital Assets
Capital asset activity for the year ended September 30, 2025, was as follows:
Governmental Activities:
Capital assets not being
depreciated/amortized:
Land
Street infrastructure
Constructio non -progress
Total capital assets not
being depreciated/amortized
Capital assets being depreciated/amortized:
Land improvements
Buildings and building improvements
Public art
Equipment
Drainage infrastructure
Right -to -use assets:
Lease buildings
Lease equipment
Subscriptions
Total capital assets being
depreciated/amortized
Accumulated depreciation/amortization:
Land improvements
Buildings and building improvements
Public art
Equipment
Drainage infrastructure
Right -to -use assets:
Lease buildings
Lease equipment
Subscriptions
Total accumulated
depreciation/amortization
Total capital assets being
depreciated/amortized, net
Governmental activities capital assets, net
Beginning
Capital
Sales or
Adjustments/
Ending
Balance
Acquisitions
Disposals
Transfers
Balance
$ 97,561,246
$ 4,923,976
$
$ -
$ 102,485,222
235,604,673
529,271
-
6,738,007
242,871,951
30,310,495
5,262,341
(13,203,448)
22,369,388
363,476,414
10,715,588
-
(6,465,441)
367,726,561
41,914,608
-
-
180,600
42,095,208
147,464,249
1,872,370
149,336,619
1,956,720
-
-
163,988
2,120,708
43,753,052
4,429,260
(2,638,721)
-
45,543,591
68,694,406
620,317
-
79,549
69,394,272
312,041
-
-
-
312,041
726,812
-
-
-
726,812
3,531,488
2,404,313
(765,915)
5,169,886
308,353,376
7,453,890
(3,404,636)
2,296,507
314,699,137
(29,852,871)
(1,812,361)
-
-
(31,665,232)
(39,546,102)
(3,359,926)
(42,906,028)
(1,377,708)
(94,262)
-
-
(1,471,970)
(31,969,590)
(3,509,205)
2,580,000
(32,898,795)
(34,851,979)
(1,897,352)
-
-
(36,749,331)
(78,010)
(104,014)
-
-
(182,024)
(157,404)
(127,077)
-
(284,481)
(1,589,846)
(862,943)
636,574
-
(1,816,215)
(139,423,510)
(11,767,140)
3,216,574
-
(147,974,076)
168,929,866
(4,313,250)
(188,062)
2,296,507
166,725,061
$ 532,406,280
$ 6,402,338
$ (188,062)
$ (4,168,934)
$ 534,451,622
City of Southlake, Texas
Notes to the Financial Statements
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
Capacity rights
Distribution system
Subscriptions
Total capital assets being
depreciated/amortized
Accumulated depreciation/amortization:
Buildings and building improvements
Equipment
Capacity rights
Distribution system
Subscriptions
Beginning
Capital Sales or
Adjustments/
Ending
Balance
Acquisitions Disposals
Transfers
Balance
$ 21,646,232
$ 2,026,141 $ -
$ 4,168,934
$ 27,841,307
4,701,687
2,852,872 -
(4,083,114)
3,471,445
935,501
-
935,501
2,891,880
108,550
(226,111) - 2,774,319
9,190,988
-
- 9,190,988
159,003,927
892,797
- 4,083,114 163,979,838
87,316
-
- 87,316
172,109,612
1,001,347
(226,111) 4,083,114 176,967,962
(858,176)
(30,318)
- - (888,494)
(2,718,084)
(50,759)
226,111 (2,542,732)
(5,358,415)
(183,820)
- - (5,542,235)
(93,138,966)
(5,092,237)
(98,231,203)
(48,346)
(29,106)
- - (77,452)
Total accumulated
depreciation/amortization
(102,121,987)
(5,386,240) 226,111
- (107,282,116)
Total capital assets being
depreciated/amortized, net
69,987,625
(4,384,893) -
4,083,114 69,685,846
Business type activities capital assets, net
$ 96,335,544 $
494,120 $
$ 4,168,934 $ 100,998,598
Depreciation/amortization expenses were
charged as
a direct expense
to functions of the primary
government as follows:
Governmental activities:
General government
$ 2,808,611
Public safety
2,484,211
Public works
2,326,238
Culture and recreation
4,148,080
Total depreciation/amortization
expense - governmental activities
$ 11,767,140
Business -type activities:
Water and Sewer
$ 5,386,240
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, 2025, the City had no additional outstanding bonds that were legally defeased.
As of September 30, 2025, 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, 2025:
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%
$ 2,460,000
$ 1,155,000
$9,965,000 Series 2012, General Obligation
Refunding Bonds
2026
3.0 - 4.25%
820,000
-
$14,250,000 Series 2013, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2033
2.0 - 5.0%
-
1,190,000
$22,295,000 Series 2013, General Obligation
Refunding Bonds
2026
2.0 - 5.0%
2,160,000
-
$21,330,000 Series 2014, General Obligation
Refunding Bonds
2026
2.0 - 5.0%
65,000
120,000
$8,780,000 Series 2014, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2034
2.0 - 3.5%
-
1,920,000
$3,295,000 Series 2015, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2035
2.75 - 4.0%
-
2,300,000
$7,910,000 Series 2017, General Obligation
Refunding Bonds
2028
3.0 - 4.0%
1,312,173
1,397,825
$5,400,000 Series 2017, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2037
2.25 - 5.0%
-
3,760,000
$4,205,000 Series 2018, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2038
3.0 - 4.0%
-
3,070,000
$17,290,000 Series 2019, General Obligation
Refunding Bonds
2030
3.0 - 5.0%
2,365,000
3,075,000
$4,240,000 Series 2021, General Obligation
Refunding Bonds
2031
1.21%
1,245,000
1,384,000
$8,595,000 Series 2022, Tax and Waterworks and Sewer
System (Limited Pledge) Certificates of Obligation
2037
4.0 - 5.0%
4,020,000
-
$9,805,000 Series 2024, Tax and Waterworks and Sewer
2039
4.0-5.0%
-
9,805,000
System (Limited Pledge) Certificates of Obligation
$14,720,000 Series 2025, Tax and Waterworks and Sewer
2035
5.0%
9,150,000
5,570,000
System (Limited Pledge) Certificates of Obligation
$ 23,597,173
$ 34,746,825
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
Governmental Tax Notes
$3,753,000 Series 2021, Tax Notes
$13,397,000 Series 2023, Tax Notes
Final
Maturity
Interest
Rates
2027
3%
2036
3.00 - 5.00%
2036
2.00 - 5.00%
Final
Interest
Maturity
Rates
2026
0.83%
2030
3.48%
Governmental
$ 1,825,000
16,270,000
6,575,000
$ 24,670,000
Governmental
$ 680,000
$ 13,947,000
During 2025, the City issued $14,720,000 of Tax and Waterworks and Sewer System Revenue Certificates
of Obligation, Series 2025 used for improving, extending and equipping the City's combined waterworks
and sewer system.
The following is a summary of long-term liability transactions for the year ended September 30, 2025:
Governmental activities:
General obligation bonds and
certificates of obligation
Sales tax revenue bonds
Tax notes
Bond premiums (discounts)
Total bonds payable
Total OPEB liability -SDBF
Net pension liability
Compensated absences*
Financed purchase liabilities
Right -to -use lease liability
Subscription liability
Arbitrage liability
Total governmental activities
Amount
Beginning
Ending
Due within
Balance
Additions
Reductions
Balance
One year
$ 20,745,477
$ 9,150,000
$ (6,298,304)
$ 23,597,173
$ 6,560,251
27,695,000
-
(3,025,000)
24,670,000
2,790,000
14,751,000
-
(804,000)
13,947,000
810,000
3,159,855
542,237
(859,709)
2,842,383
-
66,351,332
9,692,237
(10,987,013)
65,056,556
10,160,251
803,422
-
(3,431)
799,991
18,633
14,056,529
-
(2,476,751)
11,579,778
-
3,132,308
2,264,012
5,396,320
1,209,139
208,476
-
(102,748)
105,728
105,728
813,519
-
(225,207)
588,312
235,485
1,817,561
2,404,313
(1,109,119)
3,112,755
770,312
-
149,510
-
149,510
-
$ 87,183,147
$ 14,510,072
$ (14,904,269)
$ 86,788,950
$ 12,499,548
City of Southlake, Texas
Notes to the Financial Statements
Beginning
Balance
Additions
Amount
Ending Due within
Reductions Balance One year
Business -type activities:
General obligation bonds and
certificates of obligation $ 31,654,520 $ 5,570,000 $ (2,477,695) $ 34,746,825 $ 3,060,747
Bond premiums 2,464,449 538,488 (439,961) 2,562,976 -
Total bonds payable 34,118,969 6,108,488 (2,917,656) 37,309,801 3,060,747
TotalOPEBliability -SDBF 64,590 - (223) 64,367 1,240
Net pension liability 1,214,748 - (161,458) 1,053,290 -
Compensated absences* 81,150 142,853 224,003 50,340
Subscription liability 34,052 - (29,320) 4,732 4,732
Arbitrage liability - 202,253 202,253 -
Total business -type activities $ 35,513,509 $ 6,453,594 $ (3,108,657) $ 38,858,446 $ 3,117,059
*Compensated absences are reported as a net change for the year as allowed under the provisions of GASB 101, para. 30.
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.
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
2026 $
6,560,251
959,508
$ 7,519,759
2027
3,527,198
694,722
4,221,920
2028
3,685,724
526,456
4,212,180
2029
3,857,000
348,452
4,205,452
2030
3,614,000
172,558
3,786,558
2031-2035
1,918,000
232,737
2,150, 737
2036-2040
435,000
17,500
452,500
Total $
23,597,173
$ 2,951,933
$ 26,549,106
Sales Tax Revenue Bonds
Governmental Activities
Fiscal Year Ending
September 30,
Principal
Interest
Total
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
1,950,000
492,956
2,442,956
2030
2,005,000
433,631
2,438,631
2031-2035
10,990,000
1,212,463
12, 202,463
2036-2040
2,405,000
36,509
2,441,509
Total
$ 24,670,000
$ 4,050,877 $
28,720,877
70
City of Southlake, Texas
Notes to the Financial Statements
Tax Notes
Governmental Activities
Fiscal Year Ending
September 30,
Principal
Interest
Total
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
3,339,000
178,437
3,517,437
2030
3,458,000
60,169
3,518,169
Total
$
13,947,000
$ 1,396,476
$ 15,343,476
General Obligation Bonds
and Certificates
of Obligation
Business -Type Activities
Fiscal Year Ending
September 30,
Principal
Interest
Total
2026
$
3,060,747
$ 1,404,538
$ 4,465,285
2027
3,248,802
1,218,472
4,467,274
2028
3,378,276
1,089,175
4,467,451
2029
3,426,000
957,443
4,383,443
2030
3,090,000
831,327
3,921,327
2031-2035
13,458,000
2,474,362
15,932,362
2036-2040
5,085,000
397,769
5,482,769
Total
$
34,746,825
$ 8,373,086
$ 43,119,911
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, 2025, are as follows:
Financed Purchase Liabilities
Governmental Activities
Fiscal Year Ending
September 30, Principal Interest Total
2026 105,728 3,066 108,794
Total $ 105,728 $ 3,066 $ 108,794
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.
71
City of Southlake, Texas
Notes to the Financial Statements
The annual debt service requirement to amortize the other lease liabilities outstanding at September 30,
2025, are as follows:
Lease Liabilities
Governmental Activities
Fiscal Year Ending
September 30, Principal Interest Total
2026 235,485 13,073 248,558
2027 158,128 7,487 165,615
2028 125,282 3,719 129,001
2029 69,417 637 70,054
Total $ 588,312 $ 24,916 $ 613,228
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% - 3.591 %
Total governmental activities
5,257,200 16 - 105 $ 3,1 12,755
$ 3,112,755
Business -type activities
Software 3.591% 62,932 36 $ 4,732
Total business -type activities $ 4,732
The future principal and interest SBITA payments as of fiscal year end are as follows:
Fiscal Year
Ending Principal Interest Total
2026
2027
2028
2029
2030
2031 - 2033
Total governmental activities
Fiscal Year
Ending
$ 770,312
$ 88,746
$ 859,058
571,537
68,483
640,020
512,096
52,282
564,378
522,765
37,313
560,078
438,826
22,060
460,886
297,219
13,765
310,984
$ 3,112,755
$ 282,649
$ 3,395,404
Principal
Interest
Total
2026 $ 4,732 $ 170 $ 4,902
Total business -type activities $ 4,732 $ 170 $ 4,902
The value of the governmental activities subscription assets as of the end of the current fiscal year was
$5,169,886 with accumulated amortization of $1,816,215. The value of the business -type activities
subscription assets as of the end of the current fiscal year was $87,316 with accumulated amortization of
$77,452.
72
City of Southlake, Texas
Notes to the Financial Statements
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 2025 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
Southlake Parks
Nonmajor Equipment
General Debt Service
Projects
Development
Governmental Replacement Total
Fund Fund
Fund
Corp -CPF
Funds Fund transfers
$ 3,900,000 $ - $ 250,000 $ 4,250,000 $ 8,400,000
473,469
535,777 - -
679,610 401,762 900,000
1,588,614 - 4,168,934
6,000,000 2,605,789
2,445,031
9,079,258
2,980,808
1,981,372
5,757,548
$ 3,277,470 $ 401,762 $ 8,968,934 $ 6,000,000 $ 5,300,820 $ 4,250,000 $28,198,986
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 to the internal service fund.
• To fund the annual subsidy for commercial vehicle enforcement.
Further, during the year ended September 30, 2025, the City made the following one-time transfers:
• Transfer of $3,500,000 from the General Fund to the General Capital Projects Fund for infrastructure
projects.
• Transfer of $400,000 from the General Fund to the General Capital Projects Fund for public art
projects.
• Transfer of $6,000,000 from the Southlake Parks Development Corporation Special Revenue Fund
to the Southlake Parks Development Corporation Capital Projects Fund for parks projects.
• Transfer of $200,000 from the Hotel Occupancy Tax Fund to the General Capital Projects Fund for
parks projects.
• Transfer of $300,000 from the Park Dedication Special Revenue Fund to the General Capital
Projects Fund for parks projects.
• Transfer of $400,000 from the Storm Water Utility Fund to the Drainage Capital Projects Fund for
drainage projects.
• Transfer of $4,168,934 from the Water and Sewer Enterprise Fund to the General Capital Projects
Fund for reimbursement of capital project expenditures.
Capital assets of $4,168,934 were transferred out of the General Capital Projects Fund to the Water and
Sewer Enterprise Fund during the year ended September 30, 2025. In the statement of activities, the
reassignment of capital assets between governmental activities and business -type activities is reported
as a transfer.
73
City of Southlake, Texas
Notes to the Financial Statements
Note 7. Retirement Plan
A. Plan Description
The City participates as one of 938 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.
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, 2024 valuation and measurement date, the following employees were covered by
the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 210
Inactive employees entitled to but not yet receiving benefits 337
Active employees
359
906
74
City of Southlake, Texas
Notes to the Financial Statements
C. Contributions
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 12.57% and 13.07% in calendar years 2024 and 2025,
respectively. The City's contributions to TMRS for the year ended September 30, 2025, were $4,410,203
and were greater than the required contributions by $32,298.
D. Net Pension Liability
The City's Net Pension Liability (NPL) was measured as of December 31, 2024, and the Total Pension
Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as
of that date.
Actuarial Assumptions
The Total Pension Liability in the December 31, 2024 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. Male rates are multiplied by 103% and female rates are
multiplied by 105%. 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, 2018 to December 31, 2022. The assumptions were
adopted in 2023 and first used in the December 31, 2023, 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.
75
City of Southlake, Texas
Notes to the Financial Statements
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 2025 are summarized in the following table:
Long -Term
Expected Real
Target
Rate of Return
Asset Class
Allocation
(Arithmetic)
Global Equity
35.0%
7.10%
Core Fixed Income
6.0%
5.00%
Non -Core Fixed Income
6.0%
6.80%
Other private markets
4.0%
7.30%
Real Estate
12.0%
6.70%
Hedge funds
5.0%
6.40%
Private Debt
13.0%
8.20%
Infrastructure
6.0%
6.00%
Private Equity
13.0%
8.50%
Total
100.0%
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.
76
City of Southlake, Texas
Notes to the Financial Statements
Changes in the Net Pension Liability
Balance at 12/31 /2023
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 12/31/2024
Increase
Total
(Decrease)
Net
Pension
Plan Fiduciary
Pension
Liability
Net Position
Liability
(a)
(b)
(a) - (b)
$ 150,050,088
$ 134,778,811
$ 15,271,277
5,531,410
-
51531,410
10,109,922
-
10,109,922
2,155,880 - 2,155,880
4,172,806 (4,172,806)
2,323,561 (2,323,561)
14,030,968 (14,030,968)
(6,078,356) (6,078,356) -
(89,814) 89,814
- (2,100) 2,100
11,718,856 14,357,065 (2,638,209)
$ 161, 768, 944 $ 149,135, 876 $ 12, 633, 068
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 $ 37,078,829 $ 12,633,068
$ (7,260,632)
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 tmrs.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, 2025, the City recognized pension expense of $5,283,455. At
September 30, 2025, 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
Deferred Deferred
Outflows of Inflows of
Resources Resources
$ 2,647,161 $
3,473,963
(239,109)
(1,666,519)
Total $ 6,121,124 $ (1,905,628)
The $3,473,963 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, 2026. Other amounts reported as deferred outflows and inflows of resources
related to pensions will be recognized in pension expense as follows:
Fiscal
Year Ended
September 30,
2026
$ 1,077,178
2027
2,268,469
2028
(1,617,437)
2029
(986,677)
Total
$ 741,533
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)
$ (1,236,140)
$ 864,358
$ (371,782)
Deferred outflows of resources
533,684
132,016
665,700
Deferred inflows of resources
814,602
323,114
1,137,716
OPEB expense
68,186
29,405
97,591
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 1 15 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, 2024:
Inactive employees currently receiving benefits 3
Inactive employees entitled to but not yet receiving benefits -
Active Employees 349
352
Contributions
The City's contributions during the fiscal year ending September 30, 2025 were $184,927 and were greater
than the required contributions by $77,921. 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, 2024.
79
City of Southlake, Texas
Notes to the Financial Statements
Actuarial Assumptions
The total OPEB asset in the December 31, 2024 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, 2024
Inflation rate
2.50% per year
Salary Increases
3.60% to 11.85% including inflation
Demographic Assumptions
Based on the 2023 experience study conducted for the
Texas Municipal Retirement System (TMRS)
Mortality
For healthy retirees, the gender -distinct Municipal Retirees
of Texas mortality tables were used, with male rates
multiplied by 103% and female rates multiplied by 105%.
The rates are projected on a fully generational basis using
the ultimate mortality improvement rates in the MP-2021
table to account for future mortality improvements.
Healthcare Cost trend rates
Initial rate of 7.50% 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 4.08% (based on the daily rate closest to but not later than the measurement date
of the Bond Buyer "20-Bond GO 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 12/31/2023
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 12/31/2024
Increase (Decrease)
Total
Plan
Net
OPEB
Fiduciary
OPEB
(Asset) Liability
Net Position
(Asset) Liability
(a)
(b)
(a) - (b)
$ 1,874,434
$ 2,740,052
$ (865,618)
135,113
-
135,113
95,337
-
95,337
(330,311)
-
(330,311)
1 13, 689
-
1 13, 689
-
210,489
(210,489)
-
183,435
(183,435)
(70, 489)
(70, 489)
-
-
(9,574)
9,574
(56,661)
313,861
(370,522)
$ 1,817,773
$ 3,053,913
$ (1,236,140)
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 $70,489 in benefit payments was paid by the City using its own assets.
The plan fiduciary net position is 168% 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:
Citys explicit subsidy $ 9,100
City's implicit subsidy (explicit subsidy *6.746) 61,389
Total benefit payments
$ 70,489
The 6.746 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 $ (1,063,175)
$ (1,236,140) $ (1,390,911)
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:
1 % Decrease
Current Healthcare
Cost Rate
Assumption 1% Increase
Net OPEB asset $ (1,422,090) $ (1,236,140) $ (951,064)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
For the year ended December 31, 2024, the City recognized OPEB expense of $68,186. At
September 30, 2025, 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 $ 8,799 $ (573,028)
Changes in Assumptions 293,011 (241,574)
Investment Experience 65,538 -
Contributions subsequent to the measurement date 166,336 -
$ 533,684 $ (814,602)
The $166,336 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, 2026. 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
2026
$ (11,918)
2027
(11,623)
2028
(107,581)
2029
(107, 920)
2030
(79,794)
Thereafter
(128,418)
Total $ (447,254)
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 3,119 years.
Additionally, the total plan membership (active employees and inactive employees) was 352. 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 8.8618 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, 2024 valuation and measurement date, the following employees were covered by
the benefit terms:
Inactive employees currently receiving benefits 147
Inactive employees entitled to but not yet receiving benefits 79
Active Employees 359
585
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 0.06% and 0.05% in fiscal years 2024
and 2025, respectively. The City's contributions to the SDBF for the year ended September 30, 2025 were
$17,042, and were equal to the required contributions.
Total OPEB Liability
The City's Total OPEB Liability (TOL) was measured as of December 31, 2024 and was determined by an
actuarial valuation as of that date.
Actuarial Assumptions
The Total OPEB Liability in the December 31, 2024 actuarial valuation was determined using the following
actuarial assumptions:
Inflation
2.50%
Salary Increases
3.60% to 11.85% including inflation
Discount rate
4.08%
Retiree's share of benefit -related costs
$0
Administrative expenses
All administrative expenses are paid through the Pension
Trust and accounted for under reporting requirements of
GASB Statement No. 68.
Mortality rates - service retirees
2019 Municipal Retirees of Texas Mortality Tables. Male
rates are multiplied by 103% and female rates are
multiplied by 105%. The rates are projected on a fully
generational basis by the most recent Scale MP-2021
(with immediate convergence).
Mortality rates - disabled retirees
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 impairement for
younger members who become disabled for males and
females, respectively. The rates are projected on a fully
generational basis by the most recent Scale MP-2021
(with immediate convergence) to account for future
mortality improvements subject to the floor.)
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, 2024 valuation were developed primarily from the
actuarial investigation of the experience of TMRS over the four-year period from December 31, 2018 to
December 31, 2022. They were first adopted in 2023 and first used in the December 31, 2023 actuarial
valuation.
The discount rate used to measure the Total OPEB Liability was 4.08% and was based on the Bon Buyer
"20-Bond GO Index" rate closest to, but not later than, December 31, 2024.
RE
City of Southlake, Texas
Notes to the Financial Statements
Changes in Total OPEB Liability
Balances as of 12/31 /2023
Changes for the year:
Service cost
Interest
Difference between expected and
actual experience
Changes of assumptions
Contributions - employer
Net Changes
Balances as of 12/31/2024
Total OPEB Liability
$ 868,012
43,059
33,161
(8,459)
(51,542)
(19,873)
(3,654)
$ 864,358
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 4.08%, 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 (3.08%) or 1 percentage -point higher (5.08%) than the current rate:
1 % Decrease Discount Rate 1 % Increase
(3.08%) (4.08%) (5.08%)
Total OPEB liability $ 1,047,495 $ 864,358 $ 722,619
OPEB Expense and Deferred Oufflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended September 30, 2025, the City recognized OPEB expense of $29,405. At September 30,
2025, 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 $ 13,670 $ (36,631)
Changes in actuarial assumptions 105,056 (286,483)
Contributions subsequent to the measurement date 13,290 -
$ 132,016 $ (323,1 14)
The $13,290 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, 2026.
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
2026
$ (36,891)
2027
(61,109)
2028
(74, 554)
2029
(23, 280)
2030
(8,554)
Total
$ (204,388)
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 Cityjoined
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, 2025 were
$4,568,218.
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, 2025, the City rebated $53,374
in sales taxes and $664,337 in hotel occupancy taxes. The City also refunded $700,000 in public
improvement reimbursement for the fiscal year ending September 30, 2025.
m
No Text
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, 2025
Exhibit A-1
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Ad valorem taxes, penalties and interest
$ 28,487,889
$ 27,487,889
$ 27,911,529
$ 423,640
Franchise taxes
3,453,329
3,330,744
3,367,322
36,578
Municipal sales and mixed beverage tax
21,978,469
22,325,000
21,840,435
(484,565)
License, permits and fees
1,414,100
1,653,100
1,998,868
345,768
Charges for services
2,142,237
2,163,377
2,589,722
426,345
Fines and forfeitures
798,500
978,000
1,053,751
75,751
Intergovernmental revenue
72,000
345,000
130,557
(214,443)
Investment income
1,987,500
1,984,500
2,366,429
381,929
Contributions
5,000
72,000
87,150
15,150
Miscellaneous
185,000
185,000
287,616
102,616
Total revenues
60,524,024
60,524,610
61,633,379
1,108,769
EXPENDITURES
General government
City secretary/mayor
672,400
672,400
624,870
47,530
City manager's office
1,282,875
1,282,875
1,220,634
62,241
Human resources
1,074,739
924,739
754,749
169,990
Support services
5,832,004
5,849,004
5,519,418
329,586
Economic development
583,626
583,626
467,201
116,425
Finance
2,265,952
2,265,952
2,185,679
80,273
Municipal court
794,143
844,143
787,438
56,705
Teen court
184,485
184,485
164,467
20,018
Information technology
5,311,331
5,211,331
3,412,494
1,798,837
Public safety
Police services
9,372,390
9,226,390
9,195,718
30,672
Fire services
12,640,044
13,040,394
12,702,849
337,545
Public safety support
1,865,056
1,865,056
1,799,979
65,077
Public works
Public works administration
2,906,101
2,908,801
2,590,077
318,724
Streets and drainage
1,466,904
1,526,904
1,413,045
113,859
Planning
1,227,780
1,225,030
1,091,451
133,579
Building inspection
1,436,730
1,440,730
1,341,060
99,670
Culture and recreation
Community services
1,612,877
1,613,377
1,510,113
103,264
Parks and recreation
4,660,415
4,513,915
4,161,255
352,660
Library services
1,265,886
1,276,586
1,149,729
126,857
Capital Outlay
1,034,230
1,034,230
1,671,031
(636,801)
Debt Service
Principal
-
-
1,104,359
(1,104,359)
Interest
-
-
40,595
(40,595)
Total expenditures
57,489,968
57,489,968
54,908,211
2,581,757
Excess of revenues over expenditures
3,034,056
3,034,642
6,725,168
3,690,526
OTHER FINANCING SOURCES (USES)
Issuance of subscriptions
-
-
864,421
864,421
Sale of capital assets
48,854
48,854
Insurance recoveries
-
-
77,951
77,951
Transfers from other funds
3,228,755
3,277,470
3,277,470
-
Transfers to other funds
(7,150,000)
(8,400,000)
(8,400,000)
-
Total other financing sources (uses)
(3,921,245)
(5,122,530)
(4,131,304)
991,226
Net change in fund balance
(887,189)
(2,087,888)
2,593,864
4,681,752
Fund balances, beginning of year
47,542,607
47,542,607
47,542,607
-
FUND BALANCES, END OF YEAR
$ 46,655,418
$ 45,454,719
$ 50,136,471
$ 4,681,752
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, 2025
REVENUES
Municipal sales tax
Charges for services
Investment income
Total revenues
EXPENDITURES
Community services
Capital outlay
Total expenditures
Excess of revenues over expenditures
OTHER FINANCING USES
Transfers to other funds
Total other financing uses
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)
$ 10,962,603
$ 11,200,000
$ 10,827,190 $
(372,810)
288,869
311,729
362,810
51,081
420,000
325,000
375,479
50,479
11,671,472
11,836,729
11,565,479
(271,250)
2,537,522
2,546,892
2,273,752
273,140
1,082,000
1,082,000
1,069,013
12,987
3,619,522
3,628,892
3,342,765
286,127
8,051,950
8,207,837
8,222,714
14,877
(9,072,648)
(9,079,258)
(9,079,258)
-
(9,072,648)
(9,079,258)
(9,079,258)
-
(1,020,698)
(871,421)
(856,544)
14,877
14, 616,793
14, 616, 793
14, 616, 793
-
$ 13,596,095
$ 13,745,372
$ 13,760,249 $
14,877
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, 2025
REVENUES:
Municipal sales tax
Charges for services
Investment income
Contributions
Miscellaneous
Total revenues
EXPENDITURES:
Community services
Capital outlay
Debt Service
Principal
Interest
Total expenditures
Excess of revenues over expenditures
OTHER FINANCING USES:
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)
$ 8,146,612
$ 8,300,000
$ 8,020,141 $
(279,859)
4,587,766
4,389,490
4,481,176
91,686
770,000
900,000
1,098,999
198,999
4,933
4,933
21,221
16,288
-
-
2,083
2,083
13,509,311
13,594,423
13,623,620
29,197
8,100,770
6,792,654
5,993,951
798,703
1,634,180
1,634,180
282,247
1,351,933
-
-
15,328
(15,328)
-
-
374
(374)
9,734,950
8,426,834
6,291,900
2,134, 934
3,774,361
5,167, 589
7,331,720
2,164,131
(2,978,603)
(2,980,808)
(2,980,808)
-
(2,978,603)
(2,980,808)
(2,980,808)
-
795,758
2,186, 781
4,350,912
2,164,131
24,928,988
24,928,988
24,928,988
-
$ 25,724,746
$ 27,115,769
$ 29,279,900 $
2,164,131
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:
1. 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, Police Special Revenue, Parks and
Recreation, Court Security and 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 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, 2025 as follows:
• Capital outlay ($636,801) - Due to GASB 87 and 96, not a true cash flow expenditure over
budget.
• Debt service: Principal ($1,104,359) - Due to GASB 87 and GASB 96, not a true cash flow
expenditure over budget.
• Debt service: Interest ($40,595) - Due to GASB 87 and 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 Ten 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
Measurement
Year
Year
Year
Year
2024
2023
2022
2021
$ 5,531,410
$ 5,197,252
$ 4,838,653
$ 4,328,436
10,109,922
9,435,242
8,750,754
8,133,486
2,155,880
1,315,727
1,059,885
426,450
-
(467,923)
-
-
(6,078,356)
(5,225,884)
(4,150,172)
(3,847,375)
11,718,856
10,254,414
10,499,120
9,040,997
150,050,088
139,795,674
129,296,554
120,255,557
161,768,944
150,050,088
139,795,674
129,296,554
4,172,806
3,967,997
3,714,760
3,348,713
2,323,561
2,229,213
2,070,328
1,871,403
14,030,968
13,917,389
(9,335,205)
14,591,844
(6,078,356)
(5,225,884)
(4,150,172)
(3,847,375)
(89,814)
(88,341)
(80,641)
(67,416)
(2,100)
(617)
96,229
462
14,357,065
14,799,757
(7,684,701)
15,897,631
134,778,811
119,979,054
127,663,755
111,766,124
149,135,876
134,778,811
119,979,054
127,663,755
$ 12,633,068
$ 15,271,277
$ 19,816,620
$ 1,632,799
92.19% 89.82%
$ 33,122,218 $ 31,845,904
38.147. 47.95%
85.82% 98.747.
$ 29,576,118 $ 26,441,262
67.00% 6.18%
142
Exhibit A-4
Measurement
Measurement
Measurement
Measurement
Measurement
Measurement
Year
Year
Year
Year
Year
Year
2020
2019
2018
2017
2016
2015
$ 4,289,132
$ 4,190,311
$ 3,919,389
$ 3,579,734
$ 3,482,384
$ 3,222,126
7,554,362
6,945,183
6,379,342
5,865,601
5,393,997
5,090,308
39,572
250,630
537,249
213,937
179,076
102,364
-
324,280
-
-
-
760,500
(2,798,825)
(2,671,062)
(2,506,166)
(1,930,078)
(2,304,726)
(1,921,361)
9,084,241
9,039,342
8,329,814
7,729,194
6,750,731
7,253,937
111,171,316
102,131,974
93,802,160
86,072,966
79,322,235
72,068,298
120,255,557
111,171,316
102,131,974
93,802,160
86,072,966
79,322,235
3,322,051
3,212,690
2,992,110
2,682,629
2,595,919
2,425,455
1,829,612
1,773,541
1,673,450
1,520,518
1,480,965
1,409,008
7,731,319
13,337,326
(2,598,044)
10,284,603
4,588,256
97,252
(2,798,825)
(2,671,062)
(2,506,166)
(1,930,078)
(2,304,726)
(1,921,361)
(49,969)
(75,264)
(50,164)
(53,258)
(51,781)
(59,224)
(1,950)
(2,262)
(2,623)
(2,699)
(2,790)
(2,925)
10,032,238
15,574,969
(491,437)
12,501,715
6,305,843
1,948,205
101,733,886
86,158,917
86,650,354
74,148,639
67,842,796
65,894,591
111,766,124
101,733,886
86,158,917
86,650,354
74,148,639
67,842,796
$ 8,489,433
$ 9,437,430
$ 15,973,057
$ 7,151,806
$ 11,924,327
$ 11,479,439
92.947.
91.51 %
84.36%
92.38%
86.15%
85.53%
$ 26,137,309
$ 25,334,408
$ 23,710,761
$ 21,721,689
$ 21,156,637
$ 20,113,150
32.487.
37.25%
67.37%
32.92%
56.36%
57.07%
City of Southlake, Texas
Schedule of Pension Contributions
Texas Municipal Retirement System
Last Ten Fiscal Years
Actuarially determined contribution
Contribution in relation of the actuarially
determined contribution
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of
covered payroll
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
2025
2024
2023
2022
2021
$ 4,377,905
$ 4,105, 607
$ 3,792,064
$ 3,547,858
$ 3,244,987
4,410,203
4,151, 701
3,879, 580
3,610,307
3,297,682
$ (32,298)
$ (46,094)
$ (87,516)
$ (62,449)
$ (52,695)
$ 34, 084, 513
$ 33,106, 641
$ 31, 070, 964
$ 28, 738, 669
$ 26,156, 402
12.94%
12.547o
12.49%
12.56%
12.61 %
No]
Exhibit A-5
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
2020
2019
2018
2017
2016
$ 3,131,667
$ 3,101,504
$ 2,829,615
$ 2,580,380
$ 2,508,791
3,201,451
3,182, 749
2,894,219
2,654,303
2,632,209
$ (69,784)
$ (81,245)
$ (64,604)
$ (73,923)
$ (123,418)
$ 25,202,798
$ 25,156,408
$ 23,132,172
$ 21,525,552
$ 21,551,426
12.70%
12.65%
12.51 %
12.33%
12.21 %
IN
City of Southlake, Texas
Schedule of Changes in Net OPEB Liability (Asset)
and Related Ratios
Southlake Net OPEB Liability (Asset) for Health Insurance
Last Eight 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
percentage of total OPEB liability (asset)
Covered payroll
Net OPEB liability (asset) as a percentage
of covered payroll
Measurement
Measurement
Measurement
Measurement
Year
Year
Year
Year
2024
2023
2022
2021
$ 135,113
$ 128,267
$ 120,612
$
80,561
95,337
95,803
92,533
97,367
(330,311)
(16,206)
(163,080)
6,855
113,689
(150,440)
89,089
(217,142)
(70,489)
(69,818)
(85,370)
(83,319)
(56,661)
(12,394)
53,784
(115,678)
1,874,434
1,886,828
1,833,044
1,948,722
1,817,773
1,874,434
1,886,828
1,833,044
210,489
209,818
225,370
323,319
183,435
269,081
(343,355)
117,346
(70,489)
(69,818)
(85,370)
(83,319)
(9,574)
(8,145)
(7,980)
(7,918)
313,861
400,936
(211,335)
349,428
2,740,052
2,339,116
2,550,451
2,201,023
3,053,913
2,740,052
2,339,116
2,550,451
$ (1,236,140)
$ (865,618)
$ (452,288)
$
(717,407)
168.00%
146.18%
123.97%
139.147
$ 33,824,780
$ 32,671,598
$ 30,420,420
$
27,287,214
-3.65%
-2.65%
-1.49%
-2.63%
Note: The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
IN
Exhibit A-6
Measurement
Measurement
Measurement
Measurement
Year
Year
Year
Year
2020
2019
2018
2017
$ 73,365
$
66,950
$
53,239
$
55,061
114,848
108,953
87,706
84,496
(337,496)
(1,262)
16,549
(3,965)
87,222
8,001
297,855
(81,362)
(75,967)
(75,843)
(76,779)
(143,423)
106,675
379,506
58,813
2,092,145
1,985,470
1,605,964
1,547,151
1,948,722
2,092,145
1,985,470
1,605,964
321,362
165,967
172,843
116,779
201,804
207,145
(38,598)
121,500
(81,362)
(75,967)
(75,843)
(76,779)
(6,098)
(5,348)
(4,389)
(3,483)
435,706
291,797
54,013
158,017
1,765,317
1,473,520
1,419,507
1,261,490
2,201,023
1,765,317
1,473, 520
1,419,507
$ (252,301)
$
326,828
$
511,950
$
186,457
112.95%
84.38%
74.22%
88.39%
$ 26,994,043
$
26,143,074
$
22,468,011
$
20,607,676
-0.93%
1.25%
2.287o
0.90%
103
City of Southlake, Texas
Schedule of Contributions
Southlake Net OPEB Liability (Asset) for Health Insurance
Last Eight Fiscal Years
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
2025
2024
2023
2022
Actuarially determined contribution
$ 107,006
$ 41,843
$ 39,085
$ 144,728
Contribution in relation of the actuarially
determined contribution
184,927
209,480
211,408
229,678
Contribution deficiency (excess)
$ (77,921)
$ (167,637)
$ (172,323)
$ (84,950)
Covered payroll
$ 34,620,184
$ 33,925,759
$ 31,894,347
$ 29,572,038
Contributions as a percentage of
covered payroll
0.53%
0.62%
0.66%
0.78%
Note: The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
104
Exhibit A-7
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
2021
2020
2019
2018
$
142,458
$ 140,254
$ 89,240
$ 89,240
332,082
301,318
177,639
168,167
$
(189,624)
$ (161,064)
$ (88,399)
$ (78,927)
$
25,882,453
$ 24,988,882
$ 24,537,271
$ 23,132,172
1.28%
1.21 %
0.72%
0.73%
105
City of Southlake, Texas
Schedule of Changes in the Total OPEB Liability
and Related Ratios
Texas Municipal Retirement System - Supplemental Death Benefits
Last Eight Measurement Years
Measurement
Measurement
Measurement
Measurement
2024
2023
2022
2021
Total OPEB liability:
Service cost
$ 43,059
$ 35,030
$ 79,856
$ 66,103
Interest
33,161
32,232
21,624
21,646
Changes of benefit terms
-
-
-
-
Difference between expected and actual experience
(8,459)
(12,044)
26,255
(26,578)
Change in assumptions
(51,542)
44,005
(467,745)
38,907
Contributions -employer
(19,873)
(19,108)
(14,788)
(13,221)
Net change in total pension liability
(3,654)
80,115
(354,798)
86,857
Total OPEB liability- beginning
868,012
787,897
1,142,695
1,055,838
Total OPEB liability - ending (a)
$ 864,358
$ 868,012
$ 787,897
$ 1,142,695
Covered employee payroll
$ 33,122,218
$ 31,845,904
$ 29,576,118
26,441,273
Net pension liability as a percentage
of covered employee payroll 2.61% 2.73%
Note: The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
2.66% 4.32%
N
Exhibit A-8
Measurement Measurement Measurement Measurement
2020 2019 2018 2017
$ 52,275 $ 38,002 $ 42,679 $ 34,755
24,403 25,388 23,155 21,919
(37,301) (13,112) (18,599) -
156,506 149,523 (56,421) 62,407
(2,614) (5,067) (2,371) (4,344)
193,269 194,734 (11,557) 114,737
862,569 667,835 679,392 $ 564,655
$ 1,055,838 $ 862,569 $ 667,835 $ 679,392
26,137, 309 25, 334, 408 23, 710, 761 $ 21, 721, 689
4.04% 3.40% 2.82% 3.13%
107
City of Southlake, Texas
Schedule of OPEB Contributions
Texas Municipal Retirement System - Supplemental Death Benefits
Last Eight Fiscal Years
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
2025
2024
2023
2022
Actuarially determined contribution
$
17,042
$
19,864
$
15,327
$
21,326
Contribution in relation of the actuarially
determined contribution
17,042
19,864
15,327
21,326
Contribution deficiency (excess)
$
-
$
-
$
-
$
-
Covered employee payroll
$
34,084,513
$
33,106,641
$
31,070,964
$
28,738,669
Contributions as a percentage of
covered employee payroll
0.05%
0.06%
0.05%
0.07%
Note: The schedule is intended to show information for 10 years. Additional years
will be displayed as they become available.
Note: There are no assets accumulated in a trust that meet the criteria of
GASB codification P22.101 or P52.101 to pay related benefits for the plan.
E
Exhibit A-9
Fiscal Year Fiscal Year Fiscal Year Fiscal Year
2021 2020 2019 2018
$ 10,272 $ 3,206 $ 3,965 $ 2,846
10,272 3,206 3,965 2,846
$ 26,156, 403 $ 25, 202, 798 $ 25,156, 408 $ 23,132,172
0.04% 0.01 % 0.02% 0.01
City of Southlake, Texas Exhibit A-10
Condition Rating of Street System
September 30, 2025
City
Required
2025 2024 2023 Minimum
International Roughness Index (IRI) 74.3 79.7 73.6
Pavement Condition Index (PCI) 86.9
80.0
81.2
Pavement Quality Index (PQI)
87.3
81.2
81.8 78.0
Needed
Actual
Difference
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
2024
2,500,000
911,077
(1,588,923)
2025
3,333,000
3,600,613
267,613
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.
are
Combining and Individual Fund
Financial Statements and Schedules
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.
OWN
City of Southlake, Texas
General Obligation Debt Service Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
REVENUES
Ad valorem taxes, penalties, and interest
Investment income
Total revenues
EXPENDITURES
Debt Service
Principal
Interest
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 balance, beginning of year
FUND BALANCE, END OF YEAR
Exhibit B-1
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET -
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
$ 6,253,136 $ 6,069,800 $ 6,132,810 $ 63,010
130,000 130,000 123,425 (6,575)
6,123,304 6,123,304 6,123,304
/,068,//U /,U68,//U /,U56,8U1
(685,634) (868,970) (800,566)
401,762
(283,872)
401,762
(467,208)
401,762
(398,804)
11,969
11,969
68,404
68,404
$ 1,984,346 $ 1,8U1,010 $ 1,869,414 $ 68,4U4
113
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 and Technology Fund - Established to account for municipal court fees assessed to
provide court security and 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.
114
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).
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.
115
City of Southlake, Texas
Nonmajor Governmental Funds
Combining Balance Sheet
September 30, 2025
ASSETS
Cash and cash equivalents
Receivables, net of allowances for uncollectibles:
Taxes
Interest
Other
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Accrued liabilities
Due to other governments
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable resources
FUND BALANCES
Restricted
Committed
Total fund balances
TOTAL LIABILITIES AND FUND BALANCES
SPECIAL REVENUE
Parks Crime
and Parks Control
Police Recreation Dedication District
$ 71,238 $ 233,116 $ 2,025,679 $ 5,262,596
- - - 436,278
232 739 6,436 16,475
- - - 11,071
$ 71,470 $ 233,855 $ 2,032,115 $ 5,726,420
$ 7,984 $
7,984
$ $ 1,658
1 16, 502
122,822
240,982
63,486 233,855 5,485,438
- - 2,032,115 -
63,486 233,855 2,032,1 15 5,485,438
$ 71,470 $ 233,855 $ 2,032,115 $ 5,726,420
SPECIAL REVENUE
Exhibit C-1
(Page 1 of 2)
Storm
Court
Hotel
Water
Security and
Municipal
Red Light
Occupancy
Utility
Technology
Jury
Library
Camera
$ 5,043,490
$ 2,138,958
$ 789,278
$ 3,304
$ 16,559
$ 83,032
307,890
-
-
-
-
-
16,319
6,787
2,514
11
53
264
2,632
224,464
-
-
-
-
$ 5,370,331
$ 2,370,209
$ 791,792
$ 3,315
$ 16,612
$ 83,296
426,308 $ - $ - $
12,894 14,334 2,012 -
439,202 14,334 2,012 -
1,000 - - - -
4,930,129 2,355,875 789,780 3,315 16,612 83,296
4,930,129 2,355,875 789,780 3,315 16,612 83,296
$ 5,370,331 $ 2,370,209 $ 791,792 $ 3,315 $ 16,612 $ 83,296
117
City of Southlake, Texas
Nonmajor Governmental Funds
Combining Balance Sheet - Continued
September 30, 2025
ASSETS
Cash and cash equivalents
Receivables, net of allowances for uncollectibles:
Taxes
Interest
Other
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Accrued liabilities
Due to other governments
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable resources
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
$ 62,823
$ 290,471
$ 199,928
$ 13,588,548
$
200
907
635
43,136
-
-
-
2,249
$ 63,023
$ 291,378
$ 200,563
$ 13,633,933
$
$ -
$ -
$ -
$ 50,272
$
6,676
16,239
6,676
66,511
- 284,702 200,563 13, 567, 422
63,023 - -
63,023 284,702 200,563 13,567,422
$ 63,023 $ 291,378 $ 200,563 $ 13,633,933 $
ME
DEBT SERVICE CAPITAL PROJECTS
Exhibit C-1
(Page 2 of 2)
Southlake
Community
Community
TOTAL
Parks
Enhancement
Enhancement
Crime
NON -MAJOR
Development
Development
Development
Control
GOVERNMENTAL
Corporation
Corporation
Corporation
District
FUNDS
$ 2,250,076
$ 735,212
$ 2,401,063
$ 1,146,245
$ 36,341,616
- - - - 744,168
7,149 2,336 7,628 3,642 115,463
- - - - 240,416
$ 2,257,225
$
737,548 $
2,408,691
$
1,149,887
$
37,441,663
$ -
$
- $
11,506
$
27,789
$
525,517
168,657
122,822
11,506 27,789 816,996
- - - - 1,000
2,257,225 737,548 2,397,185 1,122,098 34,528,529
- - - - 2,095,138
2,257,225 737,548 2,397,185 1,122,098 36,623,667
$ 2,257,225 $ 737,548 $ 2,408,691 $ 1,149,887 $ 37,441,663
ME
City of Southlake, Texas
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended September 30, 2025
SPECIAL REVENUE
Parks
Crime
and
Parks
Control
Police
Recreation
Dedication
District
REVENUES
Ad valorem taxes, penalties and interest
$
$
$
$ -
Municipal sales tax
2,602,813
Licenses, permits and fees
268,931
-
Fines and forfeitures
848
-
-
Charges for services
-
-
33,948
Intergovernmental revenue
-
-
-
Investment income
2,815
10,132
91,370
219,586
Contributions
-
41,510
-
-
Miscellaneous
21,108
-
-
-
Total revenues
24,771
51,642
360,301
2,856,347
EXPENDITURES
Current:
General government
Support services
-
Municipal court
-
-
Public safety
Police services
11,804
-
2,460,663
Fire services
-
-
-
Public works
Public works administration
-
-
Streets and drainage
-
-
-
Cultural and recreation
Community services
48,772
-
-
Parks and recreation
-
60,000
-
Library services
-
-
-
Promotion of culture and tourism
-
-
-
Intergovernmental
-
-
-
Capital outlay
-
-
-
-
Debt service:
Principal retirement
3,754
-
-
162,311
Interest and fiscal charges
546
-
-
9,851
Total expenditures
16,104
48,772
60,000
2,632,825
Excess (deficiency) of revenues
over (under) expenditures
8,667
2,870
300,301
223,522
OTHER FINANCING SOURCES (USES)
Transfers from other funds
-
-
-
-
Transfers to other funds
-
(300,000)
(113,480)
Total other financing sources (uses)
-
-
(300,000)
(113,480)
Net change in fund balances
8,667
2,870
301
110,042
Fund balances, beginning of year
54,819
230,985
2,031,814
5,375,396
FUND BALANCES, END OF YEAR
$ 63,486
$ 233,855
$ 2,032,115
$ 5,485,438
120
SPECIAL REVENUE
Exhibit C-2
(Page 1 of 2)
Storm
Court
Hotel
Water
Security and
Municipal
Red Light
Occupancy
Utility
Technology
Jury
Library
Camera
2,528,060
-
-
68,708
764
-
56,362
1,623,766
-
-
-
188,379
69,612
33,811
8
839
4,937
-
-
-
9,369
-
2,772,801
1,693,378
102,519
772
10,208
4,937
73,288
-
49,487
618,891
-
-
14,999
1,237,407
-
108,644
-
19,069
2,372
1,919
-
140
1,367,039
618,891
75,800
14,999
49,487
1,405,762
1,074,487
26,719
772
(4,791)
(44,550)
(698,750)
(869,142)
(698,750)
(869,142)
-
707,012
205,345
26,719
772
(4,791)
(44,550)
4,223,117
2,150, 530
763,061
2,543
21,403
127,846
$ 4,930,129 $
2,355,875 $
789,780 $
3,315
$ 16,612
$ 83,296
121
City of Southlake, Texas
Nonmajor Governmental Funds
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances -
Continued
For the Year Ended September 30, 2025
SPECIAL REVENUE
Tax
Commercial
Increment
Oil and
Vehicle
Truancy
Financing
Disaster
Gas
Enforcement
Prevention
District
Recovery
REVENUES
Ad valorem taxes, penalties and interest
$
$
$ $
10,685,868
$
Municipal sales tax
-
-
Licenses, permits and fees
-
Fines and forfeitures
15,660
37,983
-
Charges for services
-
-
10,856
-
Intergovernmental revenue
-
-
-
10,881
Investment income
2,651
14,904
7,690
533,359
-
Contributions
-
-
-
-
Miscellaneous
-
-
-
-
Totalrevenues
2,651
30,564
45,673
11,230,083
10,881
EXPENDITURES
Current:
General government
Support services
700,000
Municipal court
-
-
Public safety
Police services
150,397
380,759
-
Fire services
-
-
10,881
Public works
Public works administration
421,039
-
Streets and drainage
-
Cultural and recreation
Community services
-
-
Parks and recreation
-
509,442
Library services
-
-
Promotion of culture and tourism
-
-
Intergovernmental
-
7,216,430
Capital outlay
-
-
Debt service:
Principal retirement
-
Interest and fiscal charges
-
-
-
-
Total expenditures
150,397
-
9,227,670
10,881
Excess (deficiency) of revenues
over (under) expenditures
2,651
(119,833)
45,673
2,002,413
-
OTHER FINANCING SOURCES (USES)
Transfers from other funds
-
250,000
-
-
Transfers to other funds
-
-
Total other financing sources (uses)
250,000
-
-
Net change in fund balances
2,651
130,167
45,673
2,002,413
Fund balances, beginning of year
60,372
154,535
154,890
11,565,009
FUND BALANCES, END OF YEAR
$ 63,023
$ 284,702
$ 200,563 $
13,567,422
$
122
Exhibit C-2
(Page 2 of 2)
DEBT SERVICE
CAPITAL PROJECTS
Community
Community
TOTAL
Southlake Parks
Enhancement
Enhancement
Crime
NONMAJOR
Development
Development
Development
Control
GOVERNMENTAL
Corporation
Corporation
Corporation
District
FUNDS
$
$
$
$
$ 10, 685, 868
5,130, 873
268,931
123,963
1,724,932
10,881
137,791
75,403
104,005
58,942
1,556,234
-
-
-
-
50,879
-
-
-
21,108
137,791
75,403
104,005
58,942
19,573,669
700,000
73,288
3,053,110
10,881
421,039
618,891
8,499 57,271
- 569,442
14,999
1,237,407
- - 7,216,430
- - 107,337 547,449 763,430
2,309,000 1,695,000 - - 4,191, 506
301,910 747,181 1,061,547
2,610,910
2,442,181
115,836
547,449
19,989,241
(2,473,119)
(2,366,778)
(11,831)
(488,507)
(415,572)
2,605,789
2,445,031
5,300,820
-
-
(1,981,372)
2,605,789
2,445,031
3,319,448
132,670
78,253
(11,831)
(488,507)
2,903,876
2,124,555
659,295
2,409,016
1,610,605
33,719,791
$ 2,257,225 $
737,548 $
2,397,185 $
1,122,098 $
36,623,667
123
City of Southlake, Texas
Police Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
REVENUES
Fines and forfeitures
Investment income
Miscellaneous
Total revenues
EXPENDITURES
Current:
Public safety
Police services
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Net change in fund balances
Fund balances, beginning of year
FUND BALANCES, END OF YEAR
Exhibit C-3
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET -
ORIGINAL
1,200
POSITIVE
FINAL ACTUAL (NEGATIVE)
- $ 848 $ 848
1,800 2,815 1,015
21,956 21,108 (848)
23,756 24,771 1,015
21,030
23,724
11,804
11,920
-
-
3,754
(3,754)
-
-
546
(546)
21,030
23,724
16,104
7,620
(19,830)
32
8,667
8,635
(19,830)
32
8,667
8,635
54,819
54,819
54,819
-
$ 34,989 $
54,851 $
63,486 $
8,635
124
City of Southlake, Texas
Exhibit C-4
Parks and Recreation Special Revenue Fund
Budgetary Comparison Schedule (GAAP
Basis)
For the Year Ended September 30, 2025
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Investment income $
8,000
$ 8,000
$ 10,132
$ 2,132
Contributions
62,600
41,600
41,510
(90)
Total revenues
70,600
49,600
51,642
2,042
EXPENDITURES
Cultural and recreation
Community services
87,500
87,500
48,772
38,728
Total expenditures
87,500
87,500
48,772
38,728
Excess (deficiency) of revenues
over (under) expenditures
(16,900)
(37,900)
2,870
40,770
Net change in fund balances
(16,900)
(37,900)
2,870
40,770
Fund balances, beginning of year
230,985
230,985
230,985
-
FUND BALANCES, END OF YEAR $
214,085
$ 193,085
$ 233,855
$ 40,770
125
City of Southlake, Texas
Parks Dedication Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
Exhibit C-5
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Licenses, permits, and fees
$ 90,000
$ 185,000
$ 268,931
$ 83,931
Investment income
60,000
60,000
91,370
31,370
Total revenues
150,000
245,000
360,301
115,301
EXPENDITURES:
Current:
Culture and recreation
Parks and recreation
60,000
60,000
60,000
-
Excess of revenues
over expenditures
90,000
185,000
300,301
115,301
OTHER FINANCING USES:
Transfers to other funds
-
(300,000)
(300,000)
-
Total other financing uses
-
(300,000)
(300,000)
-
Net change in fund balance
90,000
(115,000)
301
115,301
Fund balances, beginning of year
2,031,814
2,031,814
2,031,814
-
FUND BALANCES, END OF YEAR
$ 2,121,814
$ 1,916,814
$ 2,032,115
$ 115,301
126
City of Southlake, Texas
Crime Control District Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
Exhibit C-6
VARIANCE WITH
BUDGETED AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Municipal sales tax
$ 2,652,000
$ 2,652,000
$ 2,602,813
$ (49,187)
Investment income
185,000
185,000
219,586
34,586
Miscellaneous
-
-
33,948
33,948
Total revenues
2,837,000
2,837,000
2,856,347
19,347
EXPENDITURES:
Public safety
Police services
2,662,607
2,662,607
2,460,663
201,944
Capital outlay
80,000
80,000
-
80,000
Debt service:
Principal retirement
-
-
162,311
(162,311)
Interest and fiscal charges
-
-
9,851
(9,851)
Total expenditures
2,742,607
2,742,607
2,632,825
109,782
Excess revenues over expenditures
94,393
94,393
223,522
129,129
OTHER FINANCING SOURCES (USES):
Transfers to other funds
(113,480)
(113,480)
(113,480)
-
Total other financing (uses)
(113,480)
(113,480)
(113,480)
-
Net change in fund balance
(19,087)
(19,087)
110,042
129,129
Fund balances, beginning of year
5,375,396
5,375,396
5,375,396
-
FUND BALANCES, END OF YEAR
$ 5,356,309
$ 5,356,309
$ 5,485,438
$ 129,129
127
City of Southlake, Texas
Hotel Occupancy Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
Exhibit C-7
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Municipal sales tax
$ 2,347,250
$ 2,500,000
$ 2,528,060
$ 28,060
Investment income
125,000
125,000
188,379
63,379
Miscellaneous revenue
-
-
56,362
56,362
Total revenues
2,472,250
2,625,000
2,772,801
147,801
EXPENDITURES:
Promotion of culture and tourism
1,548,118
1,548,118
1,237,407
310,711
Capital outlay
-
-
108,644
(108,644)
Debt service:
Principal retirement
-
19,069
(19,069)
Interest and fiscal charges
-
-
1,919
(1,919)
Total expenditures
1,548,118
1,548,118
1,367,039
181,079
Excess revenues over expenditures
924,132
1,076,882
1,405,762
328,880
OTHER FINANCING USES:
Transfers to other funds
(669,728)
(698,750)
(698,750)
-
Total other financing (uses)
(669,728)
(698,750)
(698,750)
-
Net change in fund balance
254,404
378,132
707,012
328,880
Fund balances, beginning of year
4,223,117
4,223,117
4,223,117
-
FUND BALANCES, END OF YEAR
$ 4,477,521
$ 4,601,249
$ 4,930,129
$ 328,880
City of Southlake, Texas
Storm Water Utility Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
REVENUES:
Charges for service
Investment income
Total revenues
EXPENDITURES:
Public works
Streets and drainage
Excess revenues over expenditures
OTHER FINANCING USES:
Transfers to other funds
Total other financing (uses)
Net change in fund balance
Fund balances, beginning of year
FUND BALANCES, END OF YEAR
Exhibit C-8
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET -
POSITIVE
ORIGINAL FINAL ACTUAL (NEGATIVE)
1,619,550 $ 1,618,500 $ 1,623,766 $ 5,266
66,000 66,000 69,612 3,612
617,842
617,842
618,891
(1,049)
1,067,708
1,066,658
1,074,487
7,829
(869,184)
(869,142)
(869,142)
-
(869,184)
(869,142)
(869,142)
-
198,524
197,516
205,345
7,829
2,150,530
2,150,530
2,150,530
-
$ 2,349,054 $
2,348,046
$ 2,355,875 $
7,829
129
City of Southlake, Texas
Court Security and Technology Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
Exhibit C-9
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Fines and forfeitures
$ 43,000
$ 43,000
$ 68,708
$ 25,708
Investment income
27,000
27,000
33,811
6,811
Total revenues
70,000
70,000
102,519
32,519
EXPENDITURES
General government
Municipal court
117,686
118,316
73,288
45,028
Debt service:
Principal retirement
-
-
2,372
(2,372)
Interest and fiscal charges
-
-
140
(140)
Total expenditures
117,686
118,316
75,800
42,516
Excess (deficiency) of revenues
over (under) expenditures
(47,686)
(48,316)
26,719
75,035
Net change in fund balance
(47,686)
(48,316)
26,719
75,035
Fund balances, beginning of year
763,061
763,061
763,061
-
FUND BALANCES, END OF YEAR
$ 715,375
$ 714,745
$ 789,780
$ 75,035
130
City of Southlake, Texas Exhibit C-10
Library Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
VARIANCE WITH
BUDGETED AMOUNTS FINAL BUDGET -
REVENUES
Investment income
$ 700 $
700 $
839 $
139
Contributions
4,000
9,200
9,369
169
Total revenue
4,700
9,900
10,208
308
EXPENDITURES
Cultural and recreation
Library services
15,000
15,000
14,999
1
Excess (deficiency) of revenues
over (under) expenditures
(10,300)
(5,100)
(4,791)
309
Net change in fund balance
(10,300)
(5,100)
(4,791)
309
Fund balances, beginning of year
21,403
21,403
21,403
-
FUND BALANCES, END OF YEAR
$ 11,103 $
16,303 $
16,612 $
309
131
City of Southlake, Texas
Red Light Camera Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
Exhibit C-11
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Investment income
$ 1,500
$ 1,500
$ 4,937
$ 3,437
EXPENDITURES:
Public safety
Police services
50,000
50,000
49,487
513
Excess (deficiency) of revenues
(48,500)
(48,500)
(44,550)
3,950
over (under) expenditures
Net change in fund balance
(48,500)
(48,500)
(44,550)
3,950
Fund balances, beginning of year
127,846
127,846
127,846
-
FUND BALANCES, END OF YEAR
$ 79,346
$ 79,346
$ 83,296
$ 3,950
132
City of Southlake, Texas
Commercial Vehicle Enforcement
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
REVENUES
Fines and forfeitures
Investment income
Total revenues
EXPENDITURES
Public safety
Police services
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-12
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
$ 20,000
$ 15,000
$ 15,660
$ 660
7,000
7,000
14,904
7,904
27,000
22,000
30,564
8,564
205,660
205,660
150,397
55,263
(178, 660)
(183, 660)
(119, 833)
63,827_
250,000
250,000
250,000
-
250,000
250,000
250,000
-
71,340
66,340
130,167
63,827
154,535
154,535
154,535
-
$ 225,875
$ 220,875
$ 284,702
$ 63,827
133
City of Southlake, Texas Exhibit C-13
Tax Increment Financing District Special Revenue Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES
Ad valorem taxes, penalties and interest
$ 9,605,358
$ 10,685,868
$ 10,685,868
$ -
Investment income
300,000
375,000
533,359
158,359
Chargers for services
-
-
10,856
10,856
Total revenues
9,905,358
11,060,868
11,230,083
169,215
EXPENDITURES
General government:
Support services
-
700,000
700,000
-
Public safety:
Police services
380,160
380,160
380,759
(599)
Public works:
Public works administration
504,000
504,000
421,039
82,961
Culture and recreation:
Parks and recreation
545,237
545,237
509,442
35,795
Intergovernmental
6,718,991
7,216,430
7,216,430
-
Total expenditures
8,148,388
9,345,827
9,227,670
118,157
Excess of revenues over expenditures
1,756,970
1,715,041
2,002,413
287,372
Net change in fund balance
1,756,970
1,715,041
2,002,413
287,372
Fund balance, beginning of year
11,565,009
11,565,009
11,565,009
-
FUND BALANCE, END OF YEAR
$ 13,321,979
$ 13,280,050
$ 13,567,422
$ 287,372
134
City of Southlake, Texas
Southlake Parks Development Corporation Debt Service Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
Exhibit C-14
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Investment income
$ 69,000
$ 95,000
$ 137,791
$ 42,791
EXPENDITURES:
Debt service:
Principal retirement
2,309,000
2,309,000
2,309,000
-
Interest and fiscal charges
302,789
302,789
301,910
879
Total expenditures
2,611,789
2,611,789
2,610,910
879
Excess (deficiency) of revenues
over (under) expenditures
(2,542,789)
(2,516,789)
(2,473,119)
43,670
OTHER FINANCING SOURCES:
Transfers from other funds
2,605,789
2,605,789
2,605,789
-
Total other financing sources
2,605,789
2,605,789
2,605,789
-
Net change in fund balance
63,000
89,000
132,670
43,670
Fund balances, beginning of year
2,124,555
2,124,555
2,124,555
-
FUND BALANCES, END OF YEAR
$ 2,187,555
$ 2,213,555
$ 2,257,225
$ 43,670
135
City of Southlake, Texas Exhibit C-15
Community Enhancement Development Corporation Debt Service Fund
Budgetary Comparison Schedule (GAAP Basis)
For the Year Ended September 30, 2025
VARIANCE WITH
BUDGETED
AMOUNTS
FINAL BUDGET -
POSITIVE
ORIGINAL
FINAL
ACTUAL
(NEGATIVE)
REVENUES:
Investment income
$ 35,000
$ 35,000
$ 75,403
$ 40,403
EXPENDITURES:
Debt service:
Principal retirement
1,695,000
1,695,000
1,695,000
-
Interest and fiscal charges
750,031
750,031
747,181
2,850
TOTAL EXPENDITURES
2,445,031
2,445,031
2,442,181
2,850
Excess (deficiency) of revenues
over (under) expenditures
(2,410,031)
(2,410,031)
(2,366,778)
43,253
OTHER FINANCING SOURCES:
Transfers from other funds
2,445,031
2,445,031
2,445,031
-
Total other financing sources
2,445,031
2,445,031
2,445,031
-
Net change in fund balance
35,000
35,000
78,253
43,253
Fund balances, beginning of year
659,295
659,295
659,295
-
FUND BALANCES, END OF YEAR
$ 694,295
$ 694,295
$ 737,548
$ 43,253
136
Statistical Section
137
W-1
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......................................................................................................................................................140
These tables contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
RevenueCapacity...............................................................................................................................................148
These tables contain information to help the reader assess the City's two most significant local revenue
source, the property and sales taxes.
DebtCapacity......................................................................................................................................................152
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.......................................................................................................157
These tables offer economic and demographic indicators to help the reader understand the environment
within which the City's financial activities take place.
OperatingInformation.........................................................................................................................................159
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.
139
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
$ 364,161,725 $ 385,506,389 $ 392,406,812 $ 399,651,828
11,589,350 49,850,439 28,492,591 32,690,100
$ 79,055,138 $ 82,251,014 $ 83,461,157 $ 83,223,713
6,817,038 7,804,197 8,980,312 6,215,686
12,487,875 15,721,755 17,935,009 21,579,170
$ 98,360,051 $ 105,776,966 $ 110,376,478 $ 111,018,569
$ 443,216,863 $ 467,757,403 $ 475,867,969 $ 482,875,541
18,406,388 57,654,636 37,472,903 38,905,786
93,479,954 61,652,181 96,520,690 109,333,076
$ 555,103,205 $ 587,064,220 $ 609,861,562 $ 631,114,403
140
Table 1
Fiscal Year
2020
2021
2022
2023
2024
2025
$ 415,945,257
$ 432,717,828
$ 444,246,656
$ 450,639,461
$ 472,883,752
$ 483,829,097
25,518,844
39,870,051
99,360,585
121,858,264
111,948,381
113,078,118
96,924,423
95,211,152
62,641,199
66,478,023
88,137,949
107,938,693
$ 538,388,524
$ 567,799,031
$ 606,248,440
$ 638,975,748
$ 672,970,082
$ 704,845,908
$
76,271,158
$
77,068,608
$ 77,774,937
$ 75,167,644
$ 74,231,905
$ 74,243,805
10,555,032
10,966,728
9,877,167
8,464,094
11,659,020
12,797,886
29,619,463
36,831,318
45,903,642
62,370,816
70,801,660
85,538,006
$
116,445,653
$
124,866,654
$ 133,555,746
$ 146,002,554
$ 156,692,585
$ 172,579,697
$
492,216,415
$
509,786,436
$ 522,021,593
$ 525,807,105
$ 547,115,657
$ 558,072,902
36,073,876
50,836,779
109,237,752
130,322,358
123,607,401
125,876,004
126,543,886
132,042,470
108,544,841
128,848,839
158,939,609
193,476,699
$
654,834,177
$
692,665,685
$ 739,804,186
$ 784,978,302
$ 829,662,667
$ 877,425,605
141
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
Promotion of culture and tourism
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
Notes: The City started splitting out promotion of culture and tourism in 2024
Fiscal Year
2016 2017 2018 2019
$ 12,851,787 $ 17,430,052 $ 18,255,444 $ 20,014,583
19,300,590 21,179,963 23,962,971 23,881,485
11,950,671 8,979,020 10,040,453 10,081,721
10,655,763 11,780,022 12,775,020 15,955,201
3,005,359 3,834,897 3,047,221 2,750,037
57,764,170 63,203,954 68,081,109 72,683,027
24,741,428 24,703,007 29,068,434 29,873,788
24,741,428 24,703,007 29,068,434 29,873,788
$ 82,505,598 $ 87,906,961 $ 97,149,543 $ 102,556,815
$ 2,363,499
$ 2,262,247
$ 2,895,701
$ 2,498,549
4,620,030
3,929,564
2,495,288
3,001,895
223,533
143,935
1,635,163
1,724,344
1,537,185
1,814,319
1,301,793
2,145,128
310,636
328,288
459,006
866,518
2,228,863
7,714,765
1,044,834
1,437,166
11,283,746
16,193,118
9,831,785
11,673,600
25,474,777 27,939,504 32,229,361 29,929,932
1,638,842 3,851,057 2,367,774 896,652
27,113,619 31,790,561 34,597,135 30,826,584
$ 38,397,365 $ 47,983,679 $ 44,428,920 $ 42,500,184
$ (46,480,424) $ (47,010,836) $ (58,249,324) $ (61,009,427)
2,372,191 7,087,554 5,528,701 952,796
$ (44,108,233) $ (39,923,282) $ (52,720,623) $ (60,056,631)
$ 34,501,608 $ 37,705,796 $ 40,380,926 $ 41,734,946
29,047,285 29,968,331 30,822,431 31,868,204
2,955,114 2,907,537 2,972,143 3,114,117
379,342 843,082 2,108,804 3,247,401
102,960 71,284 - -
136,477 216,881 - 476,577
(3,767,400) (157,975) 1,211,036 1,178,932
63,355,386 71,554,936 77,495,340 81,620,177
94,837
167,068
320,473
868,227
317,276
350
-
-
3,767,400
157,975
(1,211,036)
(1,178,932)
4,095
3,968
4,166
4,183,608
329,361
(886,397)
(310,705)
$ 67,538,994
$ 71,884,297 $
76,608,943
$ 81,309,472
$ 16,874,962 $ 24,544,100 $ 19,246,016 $ 20,610,750
6,555,799 7,416,915 4,642,304 642,091
$ 23,430,761 $ 31,961,015 $ 23,888,320 $ 21,252,841
142
Table 2
Fiscal Year
2020 2021 2022 2023 2024 2025
$ 21,275,487
$ 20,990,841
$ 20,685,238
$ 26,292,171
$ 26,994,341
$ 27,449,966
24,054,527
23,642,969
24,915,801
26,658,917
27,798,598
29,067,535
9,839,646
9,122,951
10,111,585
12,108,564
10,709,563
12,945,970
17,665,953
15,367,103
16,970,272
18,657,110
19,939,371
20,390,226
-
-
-
-
871,217
1,818,301
2,171,359
2,076,809
1,979,546
2,071,867
1,867,737
1,564,205
75,006,972
71,200,673
74,662,442
85,788,629
88,180,827
93,236,203
27,490,815 25,730,741 28,397,036 28,506,292 28,969,340 27,203,992
27,490,815 25,730,741 28,397,036 28,506,292 28,969,340 27,203,992
$ 102,497,787 $ 96,931,414 $103,059,478 $ 114,294,921 $ 117,150,167 $120,440,195
$ 1,631,816
$ 1,733,148
$ 1,957,434
$ 1,712,925
$ 2,271,472
$ 2,177,296
2,536,553
2,166,430
803,365
774,891
1,081,451
1,444,393
1,824,434
1,658,723
4,287,138
3,477,348
3,337,594
3,368,835
2,993,552
3,387,430
4,477,031
5,664,775
5,607,865
5,719,233
1,807,473
894,423
8,736,294
825,770
375,784
250,232
1,422,315
5,882,015
2,653,556
2,382,770
4,890,150
7,907,152
12,216,143
15,722,169
22,914,818
14,838,479
17,564,316
20,867,141
32,271,341
32,071,140
37,241,976
37,630,965
35,597,701
37,270,626
1,315,092
3,332,452
1,376,002
2,064,296
1,734,388
3,311,503
33,586,433
35,403,592
38,617,978
39,695,261
37,332,089
40,582,129
$ 45,802,576
$ 51,125,761
$ 61,532,796
$ 54,533,740
$ 54,896,405 $
61,449,270
$ (62,790,829) $ (55,478,504) $ (51,747,624) $ (70,950,150) $ (70,616,511) $ (72,369,062)
6,095,618 9,672,851 10,220,942 11,188,969 8,362,749 13,378,137
$ (56,695,211) $ (45,805,653) $ (41,526,682) $ (59,761,181) $ (62,253,762) $ (58,990,925)
$ 41,973,780
$ 41,660,369
$ 41,392,861
$ 42,315,760
$ 43,315,203
$ 44,757,795
32,119,114
38,461,312
43,723,490
47,917,152
44,830,166
45,818,639
2,811,573
2,671,726
2,988,874
3,656,895
3,445,059
3,367,322
1,721,876
101,746
(475,934)
7,934,301
11,116,664
10,184,249
-
-
-
4,156
143,146
283,742
1,222,231
709,736
804,354
512,725
151,752
310,807
1,234,945
1,284,122
1,360,830
1,336,469
1,608,855
1,588,614
81,083,519
84,889,011
89,794,475
103,677,458
104,610,845
106,311,168
566,411
32,272
(171,020)
2,594,308
3,839,868
4,158,232
-
-
-
96,269
28,381
(1,234,945)
(1,284,122)
(1,360,830)
(1,336,469)
(1,608,855)
(1,588,614)
(668,534)
(1,251,850)
(1,531,850)
1,257,839
2,327,282
2,597,999
$ 80,414,985
$ 83,637,161
$ 88,262,625
$ 104,935,297
$ 106,938,127
$108,909,167
$ 18,292,690 $ 29,410,507 $ 38,046,851 $ 32,727,308 $ 33,994,334 $ 33,942,106
5,427,084 8,421,001 8,689,092 12,446,808 10,690,031 15,976,136
$ 23,719,774 $ 37,831,508 $ 46,735,943 $ 45,174,116 $ 44,684,365 $ 49,918,242
143
City of Southlake, Texas
Fund Balances, Governmental Funds
(Modified Accrual Basis of Accounting)
Last Ten Fiscal Years
(Unaudited)
Fiscal Year
2016
2017
2018
2019
General Fund
Nonspendable
$ 86,286
$ 57,997
$ 86,286
$ 63,189
Committed for:
Police expenditures
-
46,657
-
-
Assigned for:
Teen court expenditures
19,835
19,684
19,835
20,427
Senior center expenditures
10,743
10,671
10,743
10,938
Recycling
59,163
52,811
59,163
66,253
Reforestation expenditures
111,728
112,300
111,728
63,030
Public art
-
-
678,829
835,991
Facility maintenance
-
-
6,708,556
7,222,995
Economic investment
-
-
2,237,211
2,282,718
Strategic initiatives
5,297,998
6,052,063
5,299,595
7,585,671
Unassigned
19, 762, 633
18, 745, 735
11, 799, 021
12, 517, 340
Total general fund
$ 25,348,386
$ 25,097,918
$ 27,010,967
$ 30,668,552
All Other Governmental Funds*
Nonspendable
$ -
$ -
$ 50,177
$ -
Restricted for:
Debt service
9,005,985
8,029,607
7,750,782
8,419,008
Capital projects
-
-
-
-
Municipal court expenditures
838,458
868,393
851,104
847,247
Reinvestment zone expenditures
3,851,783
1,954,971
923,093
2,925,977
Parks and recreation
72,654,652
78,664,646
40,726,831
24,372,567
Storm water
-
-
-
-
Police expenditures
-
-
-
-
Impact fees
-
-
-
-
Library expenditures
-
-
-
-
Promotion of culture and tourism
-
-
-
-
Committed for:
Police expenditures
4,986,804
3,645,226
4,743,948
5,254,694
Parks and recreation
11,125,967
17,968,695
8,904,671
8,815,413
Oil and gas expenditures
53,227
53,404
53,719
54,754
Storm water expenditures
4,856,336
453,374
456,388
465,180
Library expenditures
7,132
7,432
8,338
9,528
Capital projects
-
-
34,285,874
44,554,528
Assigned for:
Capital projects
-
-
-
-
Unassigned
-
-
-
-
Total all other governmental funds
$ 107,380,344
$ 111,645,748
$ 98,704,748
$ 95,718,896
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
144
Table 3
Fiscal Year
2020
2021
2022
2023
2024
2025
$ 40,839
$ 69,373
$ 401,529
$ 54,317
$ 44,905
$ 52,557
20,693
20,721
20,882
21,862
23,161
24,167
11,064
11,074
11,042
11,486
12,061
12,564
70,395
76,458
138,291
70,977
77,363
84,425
35,150
54,847
96,012
153,918
160,358
219,205
500,819
364,046
441,984
610,439
539,053
492,663
8,813,795
9,351,441
10,064,326
11,843,299
12,934,258
14,326,367
3,525,280
2,870,637
2,950,994
3,225,478
3,541,789
3,845,657
10,603,712
15,096,120
20,306,807
15,383,080
13,189,926
13,146,233
14, 022, 976
15, 810, 846
14, 681, 556
17, 594, 609
17, 019, 733
17, 932, 633
$ 37, 644, 723
$ 43, 725, 563
$ 49,1 13, 423
$ 48, 969,465
$ 47, 542, 607
$ 50,136,471
7,102,145
5,594,579
5,751,585
5,632,021
5,052,068
4,864,187
-
-
26,395,656
34,698,804
24,660,776
19,206,863
739,828
775,437
835,268
859,689
920,494
993,658
4,999,895
5,641,893
6,663,970
8,347,195
11,565,009
13,567,422
9,381,019
24, 792, 059
47, 632, 465
58, 345,188
55, 441, 867
64, 620, 534
1,789,612
1,255,873
1,936,358
2,162, 574
2,150, 530
9,203,485
-
-
7,791,993
8,530,927
7,323,201
7,039,020
-
-
-
-
-
4,428,814
-
-
14,604
19,534
21,403
16,612
1,834,337
2,089,422
2,653,697
3,185,163
4,223,117
6,430,129
5,256,684
6,549,013
1,169,498
1,601,369
2,031,814
2,032,115
11,121,825
1,793,351
55,266
57,448
60,372
63,023
55,424
55,541
-
-
-
-
11,323
12,725
-
-
-
-
45, 315, 086
44, 304, 341
-
-
-
-
-
-
19, 442, 768
27, 706, 556
45, 400, 563
53, 626, 217
(175,833)
-
-
-
-
-
$ 87,431,345
$ 92,864,234
$ 120,343,128
$ 151,146,468
$ 158,851,214
$186,092,079
145
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
Promotion of culture and tourism
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
Insurance recoveries
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 lease
Issuance of subscriptions
Premium (Discount) on issuance of long-term debt
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
Fiscal Year
2016 2017 2018 2019
$ 34,445,902
$ 37,688,372
$ 40,484,511
$ 41,744,243
2,955,114
2,907,537
2,972,143
3,114,117
29,047,285
29,968,331
30,822,431
31,868,204
4,590,477
4,103,003
2,184,965
3,161,228
1,797,676
1,909,922
1,984,377
4,970,991
2,011,137
1,969,180
2,040,036
1,798,033
128,489
100,899
2,108,228
124,141
1,237,552
308,095
376,004
621,715
71,411
118,956
2,044,822
3,123,081
383,732
859,199
97,644
198,449
528,093
544,727
481,919
341,934
77,196,868 80,478,221 85,597,080 91,066,136
9,301,750
9,608,516
11,053,010
12,988,724
17,376,310
18,520,588
19,806,464
21,145,351
5,483,131
19,112,170
23, 225, 431
5,687,428
8,456,526
8,783,323
8,026,149
21,815,043
4,623,919
5,348,444
6,045,218
6,123,926
8,658,067
4,800,627
12, 214, 328
8,285,716
13,394,604 13,258,185 12,220,242 8,385,059
3,796,740 4,084,086 3,695,048 3,175, 731
71,091,047 83,515,939 96,285,890 87,606,978
6,105,821 (3,037,718) (10,688,810) 3,459,158
6,019
-
884,928
1,329,086
24,450,000
9,945,000
-
-
3,830,000
10,860,000
2,168,153
-
(4,309,151)
-
(12,311,639)
23,584,605
23,332,602
23,056,973
17,941,263
(28,352,005)
(24,940,577)
(23,345,937)
(20,662,331)
21,850,753
8,742,802
(288,964)
(2,837,602)
$ 27,956,574
$ 5,705,084
$ (10,977,774)
$ 621,556
27.5% 22.0% 18.9% 14.6%
146
Table 4
Fiscal Year
2020
2021
2022
2023
2024
2025
$ 41,980,391
$ 41,675,661
$ 41,429,872
$ 42,299,595
$ 43,350,717
$ 44,730,207
2,811,573
2,671,726
2,988,874
3,656,895
3,445,059
3,367,322
32,119,114
38, 461, 312
43, 723, 490
47,917,152
44, 830,166
45,818, 639
2,868,166
2,041,189
3,071,428
2,475,077
2,266,949
2,267,799
5,013,769
5,783,552
7,104,883
8,234,710
8,783,400
9,158, 640
968,495
954,809
1,213,211
903,685
962,141
1,177,714
1,737,849
760,658
9,974,795
1,545,199
4,014,451
1,450,768
693,293
232,525
773,745
466,928
143,101
360,248
1,634,301
96,183
(448,117)
7,485,826
10,613,238
9,761,218
82,225
72,565
242,645
110,067
90,855
195,276
91,453,522
93,587,142
110,399,374
115,607,859
118,651,829
118,598,638
13,233,455
14,236,006
13,493,594
15,976,466
16,107,327
15,910,238
21,534,858
22,015,080
22,719,906
24,066,322
25,686,718
26,762,537
7,834,577
7,177,205
8,861,496
10,287,273
9,003,118
11,232,724
13,226,045
11,202, 609
13,118, 278
14,545,618
15,841,400
15,789,180
-
-
-
-
871,217
1,237,407
7,214,798
6,049,200
5,934,584
6,454,981
6,849,951
7,216,430
15,951,425
11,521,223
11,601,162
15,026,038
24,681,093
9,247,812
9,896,675
10,341, 201
8,645,737
10, 777,728
11,001,476
11,434,497
3,108,014
2,629,585
2,321,838
2,436,839
2,485,911
2,124,095
91,999,847
85,172,109
86,696,595
99,571,265
112,528,211
100,954,920
(546,325)
8,415,033
23,702,779
16,036,594
6,123,618
17,643,718
27,288
52,124
4,156
43,351
48,854
-
-
-
-
77,951
-
13,397,000
9,150,000
3,753,000
-
-
-
-
8,595,000
1,989,000
-
-
-
-
514,162
53,975
752,937
-
-
3,031,188
377,356
864,421
737,765
-
-
542,237
-
(1,954,804)
-
-
-
-
15,937,424
14,161,081
28,575,100
27,129,055
24,187,053
23,948,986
(16,702,479)
(14,876,959)
(29,714,270)
(28,992,586)
(25,206,427)
(22,441,438)
(765,055)
3,098,606
8,759,881
14,622,788
154,270
12,191,011
$ (1,311,380)
$ 11,513,639
$ 32,462,660
$ 30,659,382
$ 6,277,888
$ 29,834,729
17.1 %
17.6%
14.6%
15.6%
15.47o
14.6%
147
City of Southlake, Texas
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(Unaudited)
Fiscal Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Source: Tarrant Appraisal District
Estimated Market Value
Real Property
6,803,420,392
7,728,483,676
8,434,595,190
9,207,076,601
9,875,022,046
10,050,064,169
10,901,930,889
13,402,397,974
16,010,553,069
16,190,376, 641
Personal Property
543, 329, 621
544, 366, 919
604,366,009
616,734,066
660,867,222
670,131,158
656,909,695
694,991,067
756, 859, 920
763,770,067
Less:
Tax -Exempt Property
1,076,075,223
1,405,299,263
1,731,612,466
1,898,185,963
2,044,945,094
2,119,446,400
2,175,862, 927
3,692,093,268
5,407,631,097
4,918,552,965
Total Taxable Assessed
Value
6,270,674,790
6,867,551,332
7,307,348,733
7, 925, 624, 704
8,490,944,174
8, 600, 748, 927
9,382, 977, 657
10,405,295,773
11,359,781,892
12,035,593, 743
Table 5
Total Direct Tax Rate
0.46200
0.46200
0.46200
0.44700
0.41000
0.40500
0.39000
0.36000
0.31900
0.03050
.;
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
Tarrant
Tarrant
General
Carroll
County
County
Operating/
Obligation
Independent
Tarrant
Denton
Hospital
College
Fiscal Year
General Rate
Debt Service
Total Direct
School District
County
County
District
District
2016
0.36200
0.10000
0.46200
1.39500
0.264000
0.262000
0.227897
0.149500
2017
0.36200
0.10000
0.46200
1.39000
0.254000
0.248410
0.227897
0.144730
2018
0.36200
0.10000
0.46200
1.38500
0.244000
0.237810
0.224429
0.140060
2019
0.35700
0.09000
0.44700
1.38000
0.234000
0.225570
0.224429
0.136070
2020
0.33000
0.08000
0.41000
1.30000
0.234000
0.225280
0.224429
0.130170
2021
0.33000
0.07500
0.40500
1.28640
0.234000
0.224990
0.224429
0.130170
2022
0.32500
0.06500
0.39000
1.26860
0.229000
0.233090
0.224429
0.130170
2023
0.29500
0.06500
0.36000
1.21880
0.224000
0.217543
0.224429
0.130170
2024
0.26400
0.05500
0.31900
1.00250
0.194500
0.189485
0.194500
0.112170
2025
0.25000
0.05500
0.30500
0.96170
0.187500
0.187869
0.182500
0.112280
Source: Tarrant Appraisal District
149
Percentage
of Total City
Taxable
Taxable Assessed Assessed
Value Value°
$ 355,969,563
2.96%
97,014,735
0.81%
72,870,632
0.61%
61, 005,178
0.51 %
59,000,000
0.49%
50,442,582
0.42%
50,000,000
0.42%
41,321,552
0.34%
41,070,026
0.34%
36,426,103
0.30%
$ 865,120,371
7.20%
12, 035, 593, 743 100.00%
City of Southlake, Texas
Principal Property Tax Payers
Current Year and Nine Years Ago
(Unaudited)
2025
Taxpayer
KRG Town Square Ventures LLC
Cellco Partnership
MCI Communications Svcs Inc
5C SL Park Village LLC
Carroll/1709 Ltd
Ameritrade Services Company Inc
1400 Plaza Place Southlake Owner LLC
Southlake Investor LLC
DSL Landlord II LLC
Oncor Electric Delivery Co LLC
Total
Total Assessed Valuation
2016
Taxpayer
Verizon Wireless Texas LLC
Town Square Ventures LP
SLTS Grand Avenue/II LP
Wyndham Properties Ltd
Sabre Headquarters LLC
Carroll/1709 Ltd
H & C Southlake Hilton LLC
Inland Western Southlake Corners Ltd
Cambridge 114 Inc
Costco Wholesale Corporation
Total
Total Assessed Valuation
Source: Tarrant Appraisal District
Notes: °Taxpayers are assessed on January 1, 2024 (2024 fax year) for the 2025 fiscal year.
bTaxpayers are assessed on January 1, 2015 (2015 tax year) for the 2016 fiscal year.
Table 7
Percentage
of Total City
Taxable
Taxable Assessed Assessed
Value Value
$ 172,818,555
2.79%
141,692,722
2.29%
80,996,312
1.31 %
56,153,054
0.91 %
54,803,383
0.887o
50,236,877
0.81 %
45,538,856
0.73%
31, 208,142
0.507o
29,435,986
0.477o
22,492,599
0.36%
$ 685,376,486
11.05%
6,199,833,416 100.00%
150
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
2016
28, 965, 792
28, 684,131
99.03
170,212
2017
31,410,934
31,054,006
98.86
95,762
2018
33, 358, 429
32, 975, 600
98.85
66,132
2019
34, 957, 519
34, 486, 820
98.65
13,609
2020
34,109,141
33, 572, 469
98.43
91,517
2021
34,329,457
33,833,652
98.56
(85,748)
2022
34,526,168
34,013,771
98.52
(38,751)
2023
34,929,247
34,409,848
98.51
(19,884)
2024
35,165, 809
34, 649, 633
98.53
54,424
2025
36,212,175
35,484,373
97.99
-
Source: Tarrant County Tax Office
Total Collections
Amount
28,854,343
31,149, 768
33, 041, 732
34,500,429
33, 663, 986
33, 747, 904
33,975,020
34, 389, 964
34, 704,057
35, 484, 373
Table 8
Percentage of Levy
99.62
99.17
99.05
98.69
98.69
98.31
98.40
98.46
98.53
95.69
151
City of Southlake, Texas
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Unaudited)
Governmental Activities
General
Obligation
Certificates of
Financed
Fiscal Year
Bonds
Obligation
Revenue Bonds
Tax Notes
Purchases
Leases
2016
40, 733, 282
29, 511, 905
48, 330, 000
-
-
-
2017
39, 022, 933
18, 706, 525
57, 207, 643
-
-
-
2018
30,112,187
11, 050, 000
53, 605, 000
-
-
-
2019
40, 949, 900
6,606,486
44, 592, 458
-
-
-
2020
33, 224,148
6,172,109
41, 767, 697
-
-
-
2021
27, 428, 338
3,782,833
38, 832, 936
3,753,000
-
-
2022
22, 757, 701
12, 783,180
35, 788,175
2,686,000
405,368
338,051
2023
17, 925, 536
10, 953, 008
32, 648, 415
15, 420, 000
308,329
448,904
2024
12, 933, 845
9,282,834
29, 383, 653
14, 751, 000
208,476
813,519
2025
8,455,209
16, 480, 455
26,173, 892
13, 947, 000
105,728
588,312
Business -Type Activities
General
Contract
Obligation
Certificates of
Revenue
Total Primary
Fiscal Year
Bonds
Obligation
Revenue Bonds
Obligations
Subscriptions
Government
2016
12, 974, 232
29,143, 202
-
385,000
-
161, 077, 621
2017
13, 846, 422
28, 963, 708
-
-
-
157, 747, 231
2018
9,187,813
30,550,000
-
-
-
134,505,000
2019
14,816,097
22,463,654
-
-
-
129,428,595
2020
12, 678, 798
21, 352, 753
-
-
-
115,195, 505
2021
12, 916, 025
18, 217, 805
-
-
-
104, 930, 937
2022
11, 319, 357
17,193, 400
-
-
-
103, 271, 232
2023
9,676,216
16,128, 995
-
-
-
105, 674, 798
2024
8,020,271
26, 098, 698
-
-
34,052
103, 343, 909
2025
6,442,963
30,866,840
-
-
4,732
106,177,886
Note: Details regarding the Citys outstanding debt can be found in the notes to the financial statements.
'See Table 14 for personal income and population data.
Table 9
Subscriptions
2,165,395
1,817,561
3,112, 755
Percentage
of Personal
Income'
Per Capita'
9.30
5,694
8.08
5,358
6.14
4,547
6.01
4,270
5.29
3,793
4.84
3,363
4.12
3,271
4.09
3,305
2.99
3,192
3.03
3,189
152
City of Southlake, Texas
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
(Unaudited)
General Bonded Debt Outstanding
General Less: Available
Obligation
Certificates of
Debt Service
Fiscal Year
Bonds
Obligation
Total
Funds _
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
2024
20,954,116
35,381,535
56,335,651
4,776,366
2025
14,898,172
47,347,295
62,245,467
4,475,582
Note: Details regarding
the citys outstanding
debt can be found in the notes to the financial statements.
°See Table 5 for property value data.
bSee Table 14
for population data.
Table 10
Percentage of
Actual Taxable
Net General
Value of
Bonded Debt
Property°
Per Capital'
105,463,512
1.687
3,728
93, 095, 076
1.36%
3,162
73,554,378
1.01%
2,487
76,826,804
0.97%
2,535
66,653,655
0.78%
2,195
57, 029, 634
0.66%
1,828
58,617,064
0.62%
1,857
49,426,853
0.48%
1,546
51,559,285
0.45%
1,593
57,769,885
0.48%
1,735
153
City of Southlake, Texas
Direct and Overlapping Governmental Activities Debt
As of September 30, 2025
(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
Source: Municipal Advisory Council of Texas.
Note: Includes only debt of the Citys governmental activities.
Gross Bonded Debt
$ 233,465,000
721,100,000
302,425,000
678, 700,000
2,988,390,000
314,050,000
547,535,000
431,255,000
$ 68,863,351
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.
Percentage of Debt
Applicable to Area
84.42%
0.18%
1.52%
2.43%
1.04%
3.86%
3.86%
3.86%
Table 11
Share of Overlapping
Debt
$ 197,091,153
1,297,980
4,596,860
16,492,410
31,079,256
12,122, 330
21,134,851
16, 646, 443
300, 461, 283
100.00% 68,863,351
$ 369,324,634
154
City of Southlake, Texas
Pledged -Revenue Coverage - Southlake Parks Development Corporation
Last Ten Fiscal Years
(Unaudited)
Southlake Parks Development Corporation - Sales Tax Revenue Refunding Bonds
Debt Service
Fiscal Year
Sales Tax Collections
Principal
Interest
2016
7,318,490
1,150,000
429,150
2017
7,578,446
1,190,000
394,050
2018
7,705,009
1,225,000
357,825
2019
7,741,005
1,260,000
320,550
2020
7,908,601
1,300,000
282,150
2021
9,249,930
1,340,000
242,550
2022
10,610,993
1,385,000
201,675
2023
12,829,196
1,415,000
159,675
2024
10, 661, 725
1,460,000
116,550
2025
10,827,190
1,330,000
74,700
Note: 'Includes Principal and Interest
Table 12
Total Annual
Requirement°
Times Coverage
1,579,150
4.63
1,584,050
4.78
1,582,825
4.87
1,580,550
4.90
1,582,150
5.00
1,582,550
5.84
1,586,675
6.69
1,574,675
8.15
1,576,550
6.76
1,404,700
7.71
155
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
2024
7,897,574
1,620,000
822,556
2,442,556
3.23
2025
8,020,141
1,695,000
747,181
2,442,181
3.29
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.
156
City of Southlake, Texas
Demographic and Economic Statistics
Last Ten Calendar Years
(Unaudited)
Fiscal Year
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Estimated Population°
28,290
29,440
29,580
30,310
30,370
31,199
31,569
31,975
32,376
33,297
Note: "City of Southlake Economic Development
bCarroll Independent School District
`Texas Workforce Commission
Personal Income
1,732,875,660
1,951,901,440
2,189,038,320
2,151, 828,140
2,177,863,070
2,169, 765, 654
2,506,862,721
2,585,274,675
3,453,871,680
3, 503, 708, 544
Per Capita Personal
Income
61,254
66,301
74,004
70,994
71,711
69,546
79,409
80,853
106,680
105,226
School Enrollment`
8,177
8,190
8,341
8,344
8,509
8,318
8,382
8,464
8,280
8,094
Table 14
Unemployment Rated
3.5%
3.0%
3.2%
2.7%
5.2%
3.6%
3.1%
3.9%
4.0%
4.4%
157
City of Southlake, Texas
Principal Employers
Current Year and Nine Years Ago
(Unaudited)
2025
►ME
Percentage of
Total City
Employer°
Employees°
Employment
Employees°
Sabre Holdings
1,900
13.33%
3,600
Charles Schwab
1,650
11.58%
-
Carroll ISD
1,150
8.07%
1,100
Keller Williams
650
4.56%
693
Verizon Wireless
625
4.39%
750
City of Southlake
581
4.08%
-
Gateway Church
570
4.007o
824
Total
7,126
50.02%
6,967
Total Southlake Daytime Employees
14,244
12,361
Source: "City of Southlake Economic Development
':'Texas Workforce Commission
Table 15
Percentage of
Total City
Employment
29.13%
0.00%
8.90%
5.61 %
6.07%
0.00%
6.67%
56.37%
W.
City of Southlake, Texas
Full-time Equivalent City Government Employees by Function/Program
Last Ten Fiscal Years
(Unaudited)
Table 16
Fiscal Year
Function/Program
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
General Government and
Administration
51.00
57.00
60.00
74.00
75.75
78.14
80.64
82.64
82.63
81.63
Public Safety
140.95
139.95
141.45
145.15
145.15
145.15
145.15
149.70
150.55
148.55
Public Works
35.25
34.50
35.50
35.00
35.00
35.00
34.35
35.35
35.35
35.35
Culture and Recreational
71.40
72.03
114.78
108.93
111.80
113.93
113.93
121.48
121.48
119.48
Water and Sewer
30.25
31.00
31.00
31.00
30.00
30.00
31.65
31.65
31.65
31.65
Community Development
23.00
23.00
23.00
22.00
23.00
22.50
22.50
23.50
23.50
23.50
Economic Development
4.00
1.00
1.00
2.00
3.63
3.63
4.00
4.00
4.00
4.00
Total
355.85
358.48
406.73
418.08
424.33
428.35
432.22
448.32
449.16
444.16
Source: City Budget
159
City of Southlake, Texas
Operations Indicators by Function/Program
Last Ten Fiscal Years
(Unaudited)
Fiscal Year
Table 17
Function/Program
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Public Safety
Police
Number of employees
68
67
68
72
72
72
72
76
76
76
Number of violations (citations)
15,003
13,840
13,492
13,759
9,095
8,230
9,551
7,342
8,582
10,193
N umber of arrests
513
1,148
1,027
719
1,025
838
640
324
367
506
Number of alarm calls
3,673
3,284
3,434
3,171
2,465
2,549
893
1,469
1,523
1,434
Fire
Number of employees
73
73
73
73
73
73
73
74
74
72
Number of fire runs
760
807
811
748
999
1,036
834
894
940
786
Number of EMS runs
1,745
1,808
1,802
1,875
1,517
1,994
2,256
2,418
2,423
2,724
Number of hazardous materials runs
95
105
109
90
94
92
ill
93
151
140
Number of alarm calls
608
652
651
678
602
748
659
590
598
670
Development Services
Streets maintained (miles)
209
199
211
213
214
214
214
217
217
218
Streets crack sealed (blocks)
N/A
75
391
384
5
0
68
0
0
0
Roadway signage replaced/installed
568
N/A
21
136
13
132
128
137
165
144
Asphalt repairs (tons)
4,667
6,671
5,191
6,100
213
7,747
151
250
375
454
Concrete repairs to roads/sidewalks (cu. yds.)
308
1,462
1,188
503
41
1,269
11
7
15
20
Right-of-way maintenance (miles)
N/A
5
417
417
558
55
7
2
9
10
Building permits Issued°
2,703
3,163
3,453
3,133
2,834
3,209
3,372
2,990
2,827
3,017
Planning & zoning cases heard
190
100
110
76
62
82
53
65
77
81
Cultural and Recreational
Parks and Recreation
Park maintain & operate per acre
1,106
1,106
1,106
1,106
1,106
561
561
561
1,139
1,139
Participants in leisure service programs
8,687
8,735
9,844
17,555
8,065
7,360
13,010
25,000
22,790
23,722
Participants in special events
66,000
72,625
71,400
65,000
900
36,300
44,000
48,000
54,700
47,900
Participants in senior center programs
8,868
13,449
13,552
14,068
4,989
6,390
6,691
8,663
10,219
11,107
Library
Volumes in collection
45,416
44,899
43,947
41,789
43,699
41,895
42,607
42,034
42,533
44,899
Patrons
13,461
13,764
14,327
15,267
13,274
14,467
15,446
17,054
15,450
15,587
Water and Sewer
Number of water consumers
10,581
10,941
11,009
11,133
1 1, 236
11,349
11,461
1 1, 528
11,598
11,647
Number of sewer accounts
8,470
8,889
9,111
11,886
9,053
9,142
9,229
9,319
9,387
9,444
Line inspections (feet)
789,266
687,246
574,136
641,941
377,081
214,789
141,503
189,370
409,254
59,634
Water meters installed/repaired/replaced
10,566
135
191
279
186
359
4,099.00
102
94
99
Transmitters installed/replaced
10,566
489
124
113
466
1,327
7,891.00
6,666
203
425
Gallons purchased from Ft. Worth (millions)
2,904,048
3,206,363
3,156,019
2,762,227
3,013,801
3,057,825
3,914,878
3,805,874
3,527,876
3,557,846
Gallons distributed (millions)
2,935,818
2,900,926
3,229,438
2,363,542
2,957,582
2,731,697
3,569,090
3,539,810
3,371,031
3,500,604
Maximum storage capacity (million of gallons)
21
21
21
21
21
21
21
21
21
21
Source: City Departments
Notes: N/A Data not available
'Includes residential, commercial, and miscellaneous (e.g. pools, fences) permits.
E$
City of Southlake, Texas
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
(Unaudited)
Fiscal Year
Table 18
Function/Program
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Public Safety
Police Stations
3
3
3
3
3
3
3
3
3
3
Police Patrol Units
25
25
25
25
21
23
20
23
23
23
Fire Stations
3
3
3
3
3
3
3
3
3
3
Police Motorcycle Units
5
5
5
5
5
5
5
5
5
4
Cultural and Recreational
Parks
18
18
18
18
18
35
35
35
35
37
Playgrounds
6
6
6
7
7
6
7
7
7
7
Dog Park
1
1
1
1
1
1
1
1
1
1
Senior Center
1
1
1
1
1
1
1
1
1
1
Tennis Courts
21
21
21
21
21
21
21
21
21
21
In -line hockey rink/turf field
1
1
1
1
1
1
1
1
1
1
Ballfields
27
29
29
29
29
22
22
22
22
22
Soccer Fields
12
21
21
21
21
21
21
21
21
21
Nature Center
1
1
1
1
1
1
1
1
1
1
Pickleball courts
0
0
0
0
0
0
0
0
9
9
Wafer and Sewer
Water Mains (miles)
290
284
298
301
304
293
294
296
304
314
Lift Stations
13
14
15
15
15
9
13
13
13
13
Sanitary Sewer Mains (miles)
209
212
216
218
220
220
222
223
224
224
Drainage, ditches/creeks (miles)
36
48
52
51
51
42
51
51
51
51
Fire hydrants
2,643
2,723
2,774
2,809
2,854
2,919
2,938
2,973
3,017
3,051
Water valves
7,154
7,360
7,553
7,673
7,818
8,023
8,104
8,212
8,309
8,401
Source: City Departments
Note: N/A - Data not available
'In -line hockey rink converted to turf field in 2020.
161
City of Southlake, Texas
Single Audit Report
For the Fiscal Year Ended September 30, 2025
weaver
Assurance • i,,x • Advisory
City of Southlake, Texas
Single Audit Report
For the Fiscal Year Ended September 30, 2025
Table of Contents
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.............................................................................................................
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.........................................................................
Schedule of Expenditures of State Awards...................................................................
Notes to Schedule of Expenditures of State Awards ...................................................
Page
.....................................3
..................................... 6
..................................... 7
Schedule of Findings and Questioned Costs........................................................................................................8
wAssuraeaver�
2300 North Field Street, Suite 1000
Dallas, Texas 75201
972-490-1970
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, 2025, and the related
notes to the financial statements, which collectively comprise the City's basic financial statements, and
have issued our report thereon dated February 23, 2026.
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.
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 City'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.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
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.
CPAs AND ADVISORS I WEAVER.COM
The Honorable Mayor and Members of the City Council of the
City of Southlake, Texas
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
February 23, 2026
2
wAssuraeaver�
2300 North Field Street, Suite 1000
Dallas, Texas 75201
972-490-1970
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,
2025. 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, 2025.
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.
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, 2025, and the related notes to the financial statements, which collectively comprise the
City's basic statements. We issued our report thereon dated February 23, 2026, 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.
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
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.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
February 23, 2026
5
City of Southlake, Texas
Schedule of Expenditures of State Awards
For the Fiscal Year Ended September 30, 2025
State Grantor/Pass-Through Grantor/ Grant State
Program Title Number Expenditures
Texas Comptroller of Public Accounts
LEOSE- Law Enforcement Officer
Standards and Education
N/A
$ 8,908
Texas Department of State Health Services
Passed through North Central Texas
Trauma Regional Advisory Council
FY25 EMS County Assistance Allocations
N/A
5,241
Texas Department of Transportation
Regional Toll Revenue Funding for
N W hite Chapel Blvd; Bluestem to Wingate
0902-90-249
930,167
Green Ribbon Funding for Phase 1 South Side of Dove and SH 114 Intersection
0353-03-1 1 1
71,690
Total Texas Department of Transportation
1,001,857
Texas Division of Emergency Management
2025 Wildfire Season
25-0001
7,967
2025 Wildfire Season
25-0001
38,866
20Jan Winter Weather
25-0003
14,394
2023 Wildfire Season
23-0001
2,119
Passed through Texas A&M Forest Service
Training Request
TT-1763-23636
420
Training Request
TT-1763-23637
420
Training Request
TT-1763-22635
420
Training Request
TT-1763-26095
560
Training Request
TT-1763-26096
560
Training Request
TT-1763-26097
560
Training Request
TT-1763-27335
1,300
Passed through Texas A&M Fire Service
Training Request
TT-1763-26098
700
Training Request
TT-1763-26099
560
Training Request
TT-1763-26100
140
Total Texas Division of Emergency Management
TOTAL STATE ASSISTANCE
68,986
$ 1,084,992
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 government for the year ended
September 30, 2025. 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, 2025, 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 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, 2025
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
Yes X 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
$1,000,000
0
City of Southlake, Texas
Schedule of Findings and Questioned Costs - Continued
For the Fiscal Year Ended September 30, 2025
Section 2. Financial Statement Findings
None
Section 3. State Award Findings and Questioned Costs
None
Section 4. Schedule of Prior Year Findings and Questioned Costs
None