athens tn acfr fy2020

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GAAP require that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management’s Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in

conjunction with it. The City of Athens’ MD&A can be found immediately following the report of the
independent auditors.

PROFILE OF THE CITY OF ATHENS

The City of Athens, incorporated in 1891, is located in the southeastern part of the state, midway
between the metropolitan cities of Knoxville and Chattanooga. This unique location affords the citizens
of the City of Athens the ability to quickly access the amenities of two metropolitan areas. In addition, its
proximity to the mountains of East Tennessee, the Tennessee River, and whitewater rafting makes it
attractive to a wide range of individuals. The City of Athens serves a population of 13,458 and occupies a
land area of approximately 14 square miles.

The City of Athens operates under the council-manager form of government, as authorized under
Chapter 455 of the Private Acts of 1953. The five council members are elected at large. All elections are
non-partisan, and the terms are for four years. Elections are held every two years on the first Tuesday in
November so that only two or three seats are up for election at any given time. The council members
select the Mayor and Vice-Mayor every two years at the council meeting in November, following the
election. Policy-making and legislative authority are vested in the council. The council is responsible,
among other things, for passing ordinances, adopting the budget, appointing committees, hiring the city
manager, and appointing the city attorney and city judge. The city manager is responsible for carrying out
the policies and ordinances of the city council, for overseeing the City’s day-to-day operations, and for
appointing the heads of the various departments.

The City provides a full range of services which include police and fire protection; sanitation
services; the construction and maintenance of highways, streets, and infrastructure; recreational activities
and cultural events. In addition to general government activities, the governing body approves the annual
budget, debt issues and provides significant funding for the Athens City Schools, which requires the
inclusion of these activities in the financial statements. The governing body appoints the Athens Utilities
Board and therefore, these activities are reported separately within the financial statements of the City of
Athens. However, the Athens Housing Authority, the McMinn County Economic Development
Authority, the E. G. Fisher Library, and the Athens Health and Educational Facilities Board have not met
the established criteria for inclusion; and, accordingly, are excluded from this report.

The annual budget serves as the foundation for the City of Athens’ financial planning and control.
The council reviews capital outlay needs each year at their annual retreat in January/February. The
finance department compiles budgetary information to be distributed to the departments by February 28.
Budget requests are submitted to the finance director in March, at which time the finance department
compiles the data and makes revenue estimates. Budget hearings are held in April of each year with the
department heads. In early May, the City Manager and/or Director of Finance make a formal balanced
budget presentation to the city council.

After much review and debate among the council, the budget is revised to include any
recommendations of the city council. A revised budget is submitted to city council at the May council
meeting. The council is required to hold a public hearing on the proposed budget and to adopt a final
budget and tax rate by June 30 each year, which is the close of the City’s fiscal year. The appropriated
budget is prepared by fund, function (e.g., public safety), department (e.g., police) and division (e.g.,
patrol). Department heads may make transfers within a division, but transfers of appropriations between
divisions and funds require approval of the city council. Budget to actual comparisons are provided in
this report for each governmental fund for which an appropriated annual budget has been adopted.

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