athens tn acfr fy2023

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City of Athens, Tennessee

Management’s Discussion and Analysis
June 30, 2023

Long-term debt. At the end of the current fiscal year, the City of Athens had a bond anticipation note
outstanding with a balance of $35,000,000. It is backed by the full faith and credit of the City. This short
term financing will be converted to long term general obligation debt through the USDA in an amount not
to exceed $40,000,000 once the project is completed. These monies are being used to construct a new Pre-
K to 5" grade school building, resulting in four schools being combined into one. $3,325 is owed to the
USDA due to an advance on the debt referred to above in order to lock in the interest rate for the debt. The
City also has a 2021 general obligation bond debt outstanding in the amount of $6,855,000. These funds
will be used for a new animal shelter, a fire training facility, street improvements related to the new school
being constructed and renovations to City Hall. The Athens Utilities Board has debt outstanding totaling
$17,594,594 to be repaid by user fees and Board funds. In the event of default, the City is required to
establish ad valorem taxes to repay the outstanding debt. Detailed information on long-term debt activity
can be found in Note 3 on pages 42 to 45 of this report.

State statutes do not limit the amount of general obligation bonded debt a governmental entity may issue.

Economic Factors and Next Year’s Budgets and Rates

The unemployment rate for the City of Athens is currently 4.7%, which is a decrease from the rate of 4.9%
a year ago. Athens’ rate is higher than the federal rate and the state rate.

The local option sales tax has grown in excess of 8% beginning in May, 2020 and the state shared sales tax
growth has exceeded the local rate. Management has been conservative in estimating all revenues for 2023-
2024. The property tax rate decreased to $1.0078 (due to reappraisal) for the 2023 taxes and the monthly
residential refuse fee remained at $9.50. A classification/compensation study is expected to be completed to
determine pay for the coming year due to changes in the labor market.

Requests for Information

This financial report is designed to provide a general overview of the City of Athens’ finances for all those
with an interest in the City’s finances. Questions concerning any of the information provided in this report
or requests for additional financial information may be addressed to the City of Athens, Office of the
Finance Director, 815 North Jackson Street, Athens, Tennessee 37303.

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