athens tn acfr fy2023

Machine-read OCR text; verify every number, name, and layout against the original page.

Note 14.

Note 15.

CITY OF ATHENS, TENNESSEE
NOTES TO FINANCIAL STATEMENTS
June 30, 2023

Commitments and Contingencies

The Athens Utilities Board has debt issues with outstanding balances totaling $17,594,594
representing debt issued by the City where the Utilities Board has assumed all responsibility through
resolution. This long-term debt is reported in the Athens Utilities Board financial statements. The
debt service is to be paid through user fees and Board funds, but the City is required to establish ad
valorem taxes under each debt issue if Utilities Board funds are not sufficient to service the debts.

The City is subject to lawsuits and claims arising out of its business nature. Management, after
review and consultation with counsel, believes that any liability, not covered by insurance, from
these lawsuits would not materially affect the financial position of the City.

The City has received several federal and state grants for specific purposes which are subject to
review by the grantor agencies. Such reviews could lead to a request for reimbursement to the
grantor agencies for any expenditures disallowed under the terms of the grants. Management
believes that such disallowed costs, if any, would be immaterial.

Risk Management

The City is exposed to various risks of loss to torts; theft of, damage to and destruction of assets;
errors and omissions; injuries to employees; and natural disasters for which the government carries
commercial insurance or participates in the Public Entity Partners Risk Management Pool. The
Public Entity Partners Risk Management Pool is a public entity risk pool which provides coverage
for a variety of risks to Tennessee governments. The City does not retain the risk of loss under
coverages with the pool. There have been no significant reductions in insurance coverage and
settlement amounts have not exceeded insurance coverage for the current year or the three prior

years.

-94-