athens tn acfr fy2025

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CITY OF ATHENS, TENNESSEE
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
10
Financial Analysis of the City’s Funds
As noted earlier, the City of Athens’ uses fund accounting to ensure and demonstrate compliance with 
finance-related legal requirements.
Governmental funds. The focus of the City of Athens’ governmental funds is to provide information on 
near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing 
the City of Athens’ financing requirements. The unassigned fund balance may serve as a useful measure 
of a government’s net resources available at the end of the fiscal year for future unforeseen emergencies.
As of the end of the current fiscal year, the City of Athens’ governmental funds reported combined ending 
fund balances of $55,207,778, an increase of $2,452,817 in comparison to the prior year. Approximately 
34.82% of this total amount ($19,221,791) constitutes unassigned fund balance, which is available for 
spending at the government’s discretion. Pursuant to GASB Statement No. 54, the remainder of fund 
balance is classified as to: nonspendable -$245,174; restricted for a specific purpose by external constraint 
or enabling legislation -$8,743,740 (City Schools - $389,919 for stabilization reserve; General Obligation 
Bond Fund capital projects - $1,073,391; Cemetery Perpetual Care - $351,800; Debt Service Funds for 
City projects - $113,272; Federal Projects Fund - $200,000; Debt Service Fund for Schools - $4,042,973; 
Hotel/Motel Tax Fund for tourism - $1,015,125; Centralized Cafeteria Fund - $1,167,170; Internal School 
Fund student activities – 182,841; Drug Fund - $207,249); committed for a specific purpose per action of 
the City Council - $14,373,479 (Law enforcement – 26,668; Capital Improvement Fund for capital 
improvements - $14,346,811); or assigned – intended by the City to be used for a specific purpose -
$12,623,594 (City Schools for education).
The General Fund is the chief operating fund of the City of Athens. At the end of the current fiscal year, 
unassigned fund balance of the General Fund was $19,221,791. As a measure of the General Fund’s 
liquidity, it may be useful to compare unassigned fund balance to total General Fund expenditures.
Unassigned fund balance represents 94.94% of total fund expenditures but represents 80.47% when 
compared to total fund expenditures and transfers to other funds (Debt Service Fund, Capital 
Improvement Fund and Conference Center Fund).
The fund balance of the City of Athens’ General Fund increased by $285,835 during the current fiscal 
year. Revenues increased by $212,210 while expenditures increased by $984,149 before transfers to other 
funds. Property taxes increased due to additional residences being completed. Local and state sales tax
continued to exceed budgeted amounts. I nterest earnings decreased as interest rates began decreasing 
during the past year. Expenditures for public safety increased due to adding three new firefighter 
positions, having fewer vacancies in the police department and salary increases due to implementation of 
the updated classification/compensation plan. The transfer to the Capital Projects Fund decreased by 
$958,000.
The fund balance of the General Purpose School Fund increased by $2,749,749 . An error correction 
increased the beginning fund balance by $1,214,893. Revenues increased by $1,000,000 due to additional 
capital funding from the City to be used on Westside School, approximately $500,000 increase in county 
funds and approximately $925,000 less in capital outlay expenditures.
The fund balance of the Federal Projects Fund increased by $191,503 due to a transfer from the General 
Purpose School Fund to provide funds needed throughout the year since it operates on a reimbursement 
basis from the grants received for these programs.