athens tn acfr fy2018 text edition

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Factors Affecting Financial Condition 
The information presented in the financial statements is perhaps best understood when it is considered 
from the broader perspective of the specific environment within which the City of Athens operates. 
Local Economy 
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 five 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. Food City opened in late 2017 in the downtown area, 
revitalizing an older strip center. Fairfield Inn completed construction on a new hotel in May and several 
new retailers opened during the year as well. 
The unemployment rate has varied over the past decade. In 2009, the rate was 14.9 percent, with that 
being the highest rate and the lowest rate being 4.7 percent in 2018. The rate was 4.8 percent for June 
2017. By comparison, the state rate was 3.5 percent and the federal rate was 4 percent for June 2018. 
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), 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 (73.7 percent of total general fund revenues) 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 has been to maintain approximately 2 to 3 months of expenditures in 
fund balance (approximately 17 to 25 percent). In past years the excess has typically been transferred to 
the capital improvement fund to accumulate funds for large capital items and grant matching finds. 
These funds are currently being held in the general fund and will be transferred to the capital 
improvement fund to be used for such items as designated by the council. 
The City has identified approximately $34,000,000 in capital finding items. The policy for the City 
has been to fund many of these types of projects with grant monies or the finds 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 4.8 miles of 
abandoned rail line purchased from CSX and are working on an extension of the trail to Englewood. A 
splash pad is under contract to be built at the Athens Regional Park in the coming year. 
The Athens City Schools and the City Council continue to work on options for new school 
construction and/or renovations to existing buildings. Costs are expected to exceed $40 million. The City 
Council has spent considerable time reviewing various options presented by the Schools and is working to 
determine the best answer for this request. 
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