athens tn acfr fy2020 text edition

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Economic Condition and Outlook 
The economic indicators for the City of Athens and the region were very positive and unemployment 
rates were very low until the impact of COVID-19. Unemployment rates increased significantly as many 
businesses were forced to close for a period of time. Conditions began to stabilize in May and June and 
have shown significant improvement since then including a steady decline in the unemployment rates. 
The highest unemployment rate was 17.2% in April and has declined since then to less than 7%. 
Compared to the prior year, sales tax was down in March and April by an average of 4% each month, but 
has averaged a 6% increase each month beginning in June. 
COVID-19 continues to create some 
uncertainty, but there are positives in the community. 
Major industries located within the City include several automotive parts suppliers, manufacturers of 
electrical components and plastics, and a producer of dairy products. Denso, the City's largest employer, 
has expanded three times in the past six years. This increases employment by over 400 employees for this 
one industry. E&E Manufacturing, Creative Foam and Maxwell Industries have expanded their facilities 
and hired additional employees. A new retail development is being planned that will include at least four 
new retail establishments and three outparcels. 
During the past ten years, the government's expenses related to education have generally increased in 
both percentage and amount. This is due to the increased state funding for The Basic Education Program 
(BEP), grants, funding for renovations, an increase in sales tax collections and increases designed to meet 
the maintenance of effort as required by the state. 
During the past ten years, taxes and intergovernmental revenues have increased in both amount and 
percentage. Property tax collections have grown because of the growth of Denso, personal property tax 
growth throughout the entire city and due to a tax rate increase for the 2015 property taxes. Sales taxes 
have also grown, and the City now accounts for approximately 79 percent of sales tax collections within 
McMinn County. 
Long-Term Financial Planning 
Unassigned fund balance in the general fund has continued to grow for seven of the past ten years. 
The current year resulted in an increase in the unassigned fund balance. The policy is to maintain an 
unassigned fund balance in the general fund that equals 75% of budgeted expenditures. After the fiscal 
year is closed, a recommendation is made to the City Council to transfer the excess amount to the capital 
improvement fund to accumulate funds for large capital items and grant matching funds. 
The City has identified approximately $40,000,000 in capital funding items. The policy for the City 
has been to fund many of these types of projects with grant monies or the funds accumulated in the capital 
improvement fund. The City continues to do stream mitigation work and storm water projects to improve 
water quality in the local creeks and streams. The City and McMinn County, with assistance from the 
Athens Parks Foundation, have been making improvements to the Eureka Trail, which is 5.6 miles of 
abandoned rail line purchased from CSX and goes from Athens to Englewood. 
Relevant Financial Policies 
Revenue policies provide for the City to budget revenues conservatively so that the chance of a revenue 
shortage during the year is remote. The City will review annually all fees and charges to assure that they 
maintain their inflation-adjusted purchasing power. The City will make every effort to avoid becoming too 
dependent on one source of revenue in order to minimize serious fluctuation in any year. The City will 
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