athens tn acfr fy2022

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City of Athens, Tennessee

Management’s Discussion and Analysis
June 30, 2022

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 $49,913,929, an increase of $15,222,589 in comparison to the prior year. Approximately
36.90% of this total amount ($18,416,143) 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 -$235,863; restricted for a specific purpose by external constraint
or enabling legislation -$11,293,715 (law enforcement - $86,368; Animal Shelter - $33,660; City Schools -
$1,335 for career ladder and $205,396 for stabilization reserve; General Obligation Bond Fund capital
projects - $7,271,759; Cemetery Perpetual Care - $238,424; Debt Service Funds for City projects - $18,771;
Debt Service Fund for Schools - $2,846,563; Hotel/Motel Tax Fund for tourism - $321,863; Internal School
Fund student activities — 177,857; Drug Fund - $91,719); committed for a specific purpose per action of the
City Council - $10,776,346 (law enforcement - $24,036; capital projects - $9,476,482; School Construction
Fund - $1,260,238; Drug Fund - $15,590); or assigned — intended by the City to be used for a specific
purpose - $9,191,862 (education - $8,296,223; cafeteria operations - $895,639).

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 $18,416,143. 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 144.93% of total fund expenditures, but represents 91.68% when
compared to total fund expenditures and transfers to other funds (General Purpose School Fund, Debt

Service Fund and Capital Improvement Fund).

The fund balance of the City of Athens’ General Fund increased by $911,110 during the current fiscal year.
Revenues increased by $527,420 while expenditures increased by $385,874 before transfers to other funds.
Property taxes increased due to an .08 cent rate increase for 2021 taxes. Local and state sales tax increased
as a result of the pandemic. State grants decreased due to one time funding in FY21 and interest earnings
decreased due to rate decreases. The transfer to the Athens City Schools decreased $60,000, the debt
service transfer increased $400,000 and the transfer to the Capital Projects Fund increased by $2,660,000.

The fund balance of the General Purpose School Fund increased by $1,958,041. Expenditures continued to
be less than revenues due to the increased funding from McMinn County and the State of Tennessee.

The Capital Improvement Fund has a total fund balance of $9,476,482. The net increase was $2,989,802.
Capital items consisted primarily of paving, equipment for new fire pumpers, purchasing a building to
replace the current animal shelter and renovations of the Public Works offices.

Proprietary funds. The City of Athens’ proprietary funds provide the same type of information in the
government-wide financial statements, but with more detail.

Unrestricted net position at the end of the year amounted to $48,902 for the Conference Center Fund,
$2,897,882 for the Sanitation Fund, $4,667,437 for the Fleet Management Fund and $380,051 for the

Employee Medical Benefits Fund.