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Home My WebLink AboutCity of Chattanooga - Public Financial Report Page 1 Mayor’s Letter City of Chattanooga Office of the Mayor City Hall, 101 E. 11th St., Chattanooga, TN 37402 January 31, 2022 To the CiƟzens of the City of ChaƩanooga: I am honored to present the City of ChaƩanooga's Popular Annual Financial Report for the year ended June 30, 2021. While sworn into office with just over 100 days of the 2021 ﬁscal year leŌ, our team immediately began working to make ChaƩanooga a more equitable, prosperous, and resilient city. The foundaƟon for this is the reorganizaƟon of government. Through the strategic process of reorganizing our City departments and offices, we successfully worked to align structure with our prioriƟes and values. We created a framework for establishing a new Department of Early Learning, Department of Equity and Community Engagement, Depart- ment of InnovaƟon Delivery and Performance, and more, always with residents at the top of mind. I believe ﬁrmly that the best ideas don’t come solely from inside the walls of City Hall, and that we are not truly serving the people of this great city if we are not giving them a seat at the table. That is why we began Mayor’s Open Office Hours, a recurring opportunity for residents to meet with my senior team and me in community centers across ChaƩanooga. Through these events—and undoubted- ly the many more to come—we heard from residents about the issues affecƟng their neighborhoods, as well as innovaƟve ideas to help ChaƩanooga live up to its full potenƟal. We conƟnued through the COVID-10 pandemic during the 2021 ﬁscal year, making difficult but necessary changes to city policies like the temporary closure of community centers, with the excepƟon of free, convenient vaccinaƟon opportuniƟes for ChaƩanoogans. However, we conƟnue forward in providing quality services and outreach to city residents. ChaƩanooga City Hall did not once close its doors to our consƟtuents, a testament to the dedicaƟon of our many public servants. The 2021 ﬁscal year provided a basis for the many great iniƟaƟves and improvements to come over the next several years, and I look forward to experiencing these successes with you. Together, we will conƟnue to build a city that works for everyone, as One ChaƩanooga. Sincerely, Mayor Tim Kelly City of ChaƩanooga Mayor Tim Kelly Page 2 Message from the Chief financial Officer Dear Citfzens of Chattanooga, We are pleased to present to you the City of Chattanooga’s Popular Annual Financial Report (PAFR) for the year ended June 30, 2021. This report sum- marizes the financial actfvitfes and positfon of the primary government of Chattanooga. The informatfon contained herein was derived mostly from the City’s Annual Comprehensive Financial Report (ACFR), which was pre- pared in conformity with Generally Accepted Accountfng Principles (GAAP) and independently audited. For more detailed and complete city financial informatfon, please view the ACFR at www.chattanooga.gov/finance/ finance-division/acfr. The PAFR is intended to increase awareness throughout the community of the financial operatfons of the City. As such, this report is presented on a non-GAAP basis and communicates complex financial and statfstfcal informatfon in a user friendly manner to the citfzens and other interested partfes. Government Finance Officers Associatfon of the United States and Canada (GFOA) has given an Award for Outstand- ing Achievement in Popular Annual Financial reportfng to the City of Chattanooga for its PAFR the for fiscal year end- ed June 30, 2020. The Award for Outstanding Achievement in Popular Annual Financial Reportfng is a prestfgious natfonal award recognizing conformance with the highest standards for preparatfon of state and local government popular reports In order to receive an award for Outstanding Achievement in Popular Annual Financial Reportfng, a government unit must publish a PAFR, whose contents conform to program standards of creatfvity, presentatfon, understandability, and reader appeal. An award for Outstanding Achievement in Popular Annual Financial Reportfng is valid for a period of one year only. The City of Chattanooga has received a Popular award for the last eight years. We believe our current report contfn- ues to conform to the Popular Annual Financial Reportfng requirements, and we are submitting it to GFOA. The City of Chattanooga Annual Comprehensive Financial Report for the year ended June 30, 2021, from which the informatfon on pages 8-13 has been drawn, was awarded the Certfficate of Achievement for Excellence in Financial Reportfng by Government Finance Officers Associatfon of the United States and Canada (GFOA). The Certfficate of Achievement is the highest form of recognitfon for excellence in state and local government financial reportfng. In order to be awarded a Certfficate of Achievement, a government unit must publish an easily readable and effi- ciently organized Annual Comprehensive Financial Report (ACFR), whose contents conform to program standard. Such an ACFR must satfsfy both generally accepted accountfng principles and applicable legal requirements. A Certfficate of Achievement is valid for a period of one year only. We believe that our current ACFR contfnues to conform to the Certfficate of Achievement Program’s requirements, and we are submitting it to GFOA to determine its eligibility for another Certfficate. We welcome any feedback, comments, or concerns regarding the informatfon included in this report. Respectiully, Page 3 In This Report 1 Message from the City Mayor 2 Message from the CFO 3 Contents and Award 4 City Council 5 City organizaƟonal chart 6 What is happening in Our City 7 What is happening in Our City cont. 8 Annual “Physical” 9 Where the money comes from 10 How the money is spent 11 Net posiƟon 12 Business‐type acƟviƟes 13 Capital assets & long‐ term debt Government Finance Officers Association Award for Outstanding Achievement in Popular Annual Financial Reporting Presented to City of Chattanooga Tennessee For its Annual Financial Report for the Fiscal Year Ended June 30, 2020 Executive Director/CEO Page 4 City Council Meets each Tuesday at 6:00 p.m. Chair person: Chip Henderson District 1 (423) 643-7186 District 2 Jenny Hill (423) 643-7187 District 3 Ken Smith (423) 643-7188 District 4 Darrin Ledford (423) 643-7184 District 5 Isiah Hester (423) 643-7183 District 6 Carol Berz (423) 643-7181 District 7 Raquetta Dotley (423) 643-7180 District 8 Anthony Byrd (423) 643-7182 District 9 Demetrus Coonrod (423) 643-7185 Founded as a ferry landing and warehouse site in 1815, the City of ChaƩanooga was incorpo- rated under State of Tennessee Private Acts of 1839. The City is the county seat of Hamilton County and is located near the southeastern corner of the state on the Tennessee-Georgia border. ChaƩanooga is centrally located in relaƟon to other major populaƟon centers of the southeast, being within a 150-mile radius of Knoxville and Nashville, Tennessee; Bir- mingham, Alabama; and Atlanta, Georgia. Over 11 million people live within a 2 to 2½ hour drive of ChaƩanooga. It encompasses an area of 148 square miles. Official results of the 2020 U.S. Census show a populaƟon of 181,099, an 8% growth since the 2010 Census. The most recent Census Bureau data shows the city with a populaƟon esƟmat- ed of 182,799. The City is empowered to levy a property tax on both real and personal prop- erty located within its boundaries. Corporate limits may be extended at the request of a property owner or by a referendum of the people in the affected areas that might want to peƟƟon to come into the city. The City Mayor is elected at-large and is not a member of the City Council. The Council is composed of nine members, with each mem- ber being elected from one of nine districts within the geographic boundaries of the City. The Mayor and Council are elected on a non- parƟsan basis for four-year terms. The Mayor is the City’s chief execuƟve officer and over- sees the operaƟon of all City departments. 3 4 6 8 2 1 9 5 7 Page 5 Through the One ChaƩanooga vision, ChaƩanooga Mayor Tim Kelly has aligned the prioriƟes of City Government with those established by the community to ensure all of our residents have access to opportunity, thriving neighborhoods, and good health. Whether it’s through youth engagement, vibrant public spaces, public‐private partnerships, or world‐ class public art, we are commiƩed to ensuring ChaƩanooga is the best city in America. City Government Department Contacts: City Council (423) 643‐7170 City Court (423) 643‐6311 Economic & Community Development (423) 643‐7300 Finance & Admin (423) 643‐7360 Fire Department (423) 643‐5600 Human Resources (423) 643‐7200 InformaƟon Technology (423) 643‐6300 Internal Audit (423) 643‐6200 Mayor’s Office (423) 643‐7800 MulƟcultural Affairs (423) 643‐6702 City AƩorney Office (423) 643‐8250 Police Department (423) 643‐5000 Public Library (423) 643‐7700 Public Works (423) 643‐6311 Purchasing (423) 643‐7230 TransportaƟon (423) 643‐5950 Youth & Family Development (423) 643‐6400 Page 6 Manufacturing conƟnues the resurgence that be- gan in 2008 with the announcement that Volkswagen AG would locate its United States manufacturing headquarters in ChaƩanooga. Since that Ɵme, the area has aƩracted $4 billion in for- eign direct involvement. The Enterprise South In- dustrial Park hosts numerous companies associat- ed with automobile manufacturing, as well as an Amazon distribuƟon center. The 3,000 acre indus- trial site has essenƟally been ﬁlled or commiƩed for addiƟonal potenƟal expansion of the VW plant. A new SUV, designed and built speciﬁcally for the U.S. market, began producƟon in 2016, with sales beginning in May 2017. An addiƟonal 300 employees are being hired to produce the new 5-seat SUV model to comple- ment the current 7-seat version, invesƟng an addi- Ɵonal $340 million. AddiƟonally, Volkswagen just announced another $800 million expansion to the plant facility for the producƟon of an electric vehi- cle, expected to go on sale in 2022. ATN Hoelzel LP, a supplier to VW, will move its manufacturing facility closer to the VW factory and also relocated its North American headquarters to ChaƩanooga. This $6 million move will add an esƟmated 100 jobs over the next ﬁve years. Nippon Paint, a Japa- nese company, also began construcƟon on a 270,000 square foot factory in East ChaƩanooga. This will be a $61 million investment and will bring 150 new jobs. Gestamp, a supplier to VW, BMW, and Mercedes-Benz announced plans for a $94 million expansion. This will bring an addiƟonal 260 jobs to the area. What Is Happening In Our City ChaƩanooga remains a world leader in tech- nology, having been the ﬁrst city in the world to offer a one-gigabit per second internet service since 2010 through the Electric Power Board, ChaƩanooga’s municipal power pro- vider. In 2015, ChaƩanooga became the ﬁrst city to offer a ten-gigabit connecƟon to all customers in its service area. The Fiber-to- the-Home network has offered a one-gigabit per second internet service since 2010, puƫng ChaƩanooga at 10 Ɵmes faster and 10 years ahead of the FCC NaƟonal Broad- band Plan, according to EPB officials. The ten-gigabit network is available to all 170,000 homes, schools, and businesses in the service area, a total of 600 square miles that covers urban, suburban, and rural places and a di- verse populaƟon of 300,000 people. To take advantage of the ten-gigabit speed, the city has established NoogaNet in city-owned spaces and buildings to provide free Wi-Fi. A recent study by 2 major universiƟes states areas with high-speed connecƟvity have a 0.26% lower unemployment rate. In 2016, EPB added 4K ultra high deﬁniƟon TV service, the ﬁrst in the area. To date, over $320 mil- lion has been invested in the ﬁber opƟcs and smart grid. The economic impact to the area as a result of the EPB ﬁber opƟc network has approached $1 billion since its incepƟon ac- cording to a study at The University of Ten- nessee at ChaƩanooga. Another study esƟ- mated 4,000 jobs have been created or re- tained as a result. Photo by J. P. Liu Page 7 CHATTANOOGA LARGEST EMPLOYERS Source: ChaƩanooga Chamber of Commerce Hamilton County Schools 4,980 BlueCross BlueShield of Tennessee 4,855 Erlanger Health System 4,852 CHI Memorial 3,549 Tennessee Valley Authority 3,431 Volkswagen ChaƩanooga 2,982 McKee Foods CorporaƟon 2,928 Unum 2,800 Amazon.com Services LLC 2,518 City of ChaƩanooga 2,217 Major Employment Sectors Trade, transportaƟon, uƟliƟes 20% Government 15% Manufacturing 13% Professionals & business services 20% EducaƟon & health 13% Leisure & hospitality 10% “ChaƩanooga Climbs” The ﬁrst phase of the “ChaƩanooga Climbs” campaign, conducted from July 2019—June 2024, set the following goals for job growth: increase regional employment by 5,000, increase private investment by $1 billion and cre- ate $500 million in new payroll income. The results are 2,190 new jobs were created, private investment reached $970 million and new payroll income reached $231 mil- lion. June 2021 Unemployment Rates Source: U.S. Department of Labor, Bureau of Labor StaƟsƟcs Year U.S TN ChaƩanooga MSA 2016 4.9% 4.1% 5.1% 2017 4.4% 3.6% 4.3% 2018 3.7% 3.7% 3.4% 2019 3.7% 3.4% 3.9% 2020 11.2% 9.7% 8.2% 2021 5.4% 4.9% 7.5% A Central Business Improvement District (CBID) was established in 2020 to promote conƟnued revitalizaƟon of the area. Within the CBID, the City’s $4.9 million project to reshape the histor- ic PaƩen Parkway Block is nearing compleƟon. A recent extension of M.L. King Blvd, west to the Tennessee River is complete. A porƟon of the funding was provided by a $4 million Tax Increment Financing plan and includes a medi- cal office building and new apartments. Adja- cent to the area is the former Alstom plant site, purchased in 2018 by a private development group. This 112-acre parcel along the river is envisioned to aƩract $2 billion of investment to add manufacturing, office, and residenƟal uses. The areas known as the Southside, East Main Street Corridor, and South Broad District con- Ɵnue to aƩract major investment, including recently announced grocery chain, apartments, rerouƟng of a porƟon of the Riverwalk, and townhouse developments ChaƩanooga enjoys strategic advantage related to its loca- Ɵon, strong transportaƟon system, natural resources and compeƟƟve cost of doing business. ChaƩanooga plays host to numerous naƟonal events. Major events which took place over the past several years include the ChaƩanooga Marathon, the Head of the Hooch rowing compe- ƟƟon, Ironman and Ironman 70.3 World Championship. These naƟonally recognized outdoor events helped ChaƩanooga win Out- side Magazine’s “Best Town Ever” con- test in 2015. Photo by Spackman Mossop Michaels Page 8 2021 Annual Financial “Physical” Comparison The measurement used to evaluate each fund is called fund balance which is simply an accumulaƟon of revenues minus expenditures. Maintaining an adequate fund balance is important for any municipality because it provides a ﬁnancial "safety net" in the event of emergencies, economic downturns, or other unforeseen circumstances. This year, the City’s gov- ernmental fund balance is $243.4 million which increased $24.2 million, or 11.0% compared to last year. The increase is mainly due to the increase in tax revenue of $6.2 million. 40.4% of the fund balance , or $98.4 million, is available for spending at the City’s discreƟon. The city has maintained a healthy ﬁnancial posiƟon through sound ﬁscal management. We have a history of strong ﬁscal discipline, healthy reserves, and constant review of operaƟons, being ever vigilant to ﬁnd new efficiencies and cost reducƟon measures. (1) U.S. Bureau of the Census (2) U.S. Department of Labor Bureau of Labor StaƟsƟcs ChaƩanooga’s Annual Financial “Physical” is an annual report card indi- caƟng the ﬁnancial health of our city. Government measurements (i.e., bond raƟng, etc.) used are analogous to medical vital signs. Vital signs will be reviewed annually (similar to annual physical) to determine if we improved, remained status-quo or underperformed in the areas idenƟﬁed by our City Finance Department as key indicators of the City’s ﬁnancial health. The per capita measurements are signs of the City ﬁscal health condiƟon at individual ciƟzen’s level. Governmental Funds consist of the following funds: General Fund is the chief oper- aƟng fund of the City and is used to account for all acƟviƟes except those required to be ac- counted for in another fund. Capital Project Fund focuses on project-to-date resources and construcƟon of many projects within the City. Special Revenue Funds are op- eraƟng funds which are restrict- ed as to use by federal or state government and special pur- pose funds established by the City Council, such as State Street Aid, Hotel/Motel Tax, Regional Planning Agency, etc. Debt Service Fund accumulates resources for, and payment of, general long-term obligaƟons. Permanent Fund accounts for resources provided to the City but with restricƟons, such as the Library Endowment. Page 9 Where The Money Comes From The General Fund Since the day‐to‐day operaƟon of the City is captured mostly in the General Fund, it will be our primary focus of discussion. Adequate resources are essenƟal in order to provide the municipal services the CiƟzens of the ChaƩanooga have come to expect. The cat‐ egories of revenue the City receives for opera‐ Ɵon are as follows: Tax revenues Licenses, fees, and charges Intergovernmental revenues This year’s general fund revenue increased $20.1 million or 6.7% from the prior year. The primary contribuƟng factors are the growth in property taxes and intergovernmental revenue Both are posiƟve signs of healthy economy in Taxes by far are the biggest porƟon of the total revenue city government receives each year. Here are some highlights of the changes during the year. In ﬁscal year 2021, tax revenue in‐ creased by $6.2 million or 3.6% over the last year. Property tax revenue, which includes cur‐ rent and delinquent taxes, increased by $4.8 million or 3.5%, from the prior year. Gross Re‐ ceipts Tax and Corporate Intangible Property Tax also increased $1.42 million or 8.2%. Licenses, fees, and charges $21.9 million or 7.0% Taxes $176.5 million or 55.9% Intergovernmental revenues are revenues received from oth‐ er governments such as city allocaƟon of state sales tax, allo‐ caƟon of state income tax, gas inspecƟon fees, county‐wide sales tax, etc. In ﬁscal year 2021, intergovernmental revenue increased $16.0 million, or 15.7%. This increase includes $7.0 million in FEMA/TEMA funding for the April 2020 tornado, $6.3 million in COVID‐19 grant funding, and $5.9 million in‐ crease in local opƟon sales tax. Overall increases in sales tax is an indicator of the health of the local economy. Intergovernmental revenues $117.1 million or 37.1% Licenses, fees and charges are revenues received for services provided by city government and there was a small decrease of $18,000 or 0.3% decrease from the prior year. Other reve‐ nue increased by $913,000 or 11.9%, which was largely due to refund of $1.3 million, which is offset by a insurance seƩle‐ ment of $425,000 in FY20. Investment income decreased $3.0 million or 81.5%. This decrease is primarily due to reduced interested rates resulƟng from market condiƟons during the pandemic. Page 10 How The Money Is Spent To ensure the prioriƟes of City Government are aligned with those established by the community, ﬁscal year 2021 general fund spending was allocat- ed according to then Mayor Andy Berke’s ﬁve stra- tegic priority areas: Safer Streets 52% - The City acƟvely implements smart policing strategies, effecƟve prevenƟon programs for our youth, and high-quality re- sponse. Stronger Neighborhoods 16% - Building Strong Neighborhoods is criƟcal to the long-term health of any City. Every ChaƩanooga ciƟzen should have the opportunity to live in a thriving neigh- borhood with high quality affordable homes, rec- reaƟon opportuniƟes nearby, and access to a vari- ety of transportaƟon opƟons. Smarter Students and Strong Families 12% - To ensure ChaƩanooga has a successful future and a high quality of life, the City is invesƟng in building Smarter Students and Stronger Families by sup- porƟng kids from cradle to career, providing char- acter educaƟon, and creaƟng effecƟve program- ming for seniors and parents.  Growing Economy 6% - Growing our local econo- my means invesƟng in small businesses, ensuring ChaƩanoogans have the skills to compete, and strengthening our infrastructure to support busi- ness expansion. High Performing Government 14% - The City of ChaƩanooga strives each day to operate a High Performing Government by ensuring the long- term ﬁnancial health of the City, using each dollar effecƟvely, and providing excellent customer ser- vice. Here we will only focus on the chief operaƟng fund of the City, the general fund. According to the reporƟng re- quirement of the GFOA, general fund expenditures are categorized by type of service provided. In ﬁscal year 2021, total expenditures decreased $8.4 million or 3.3 percent from the previous year. Major changes are dis- cussed below: Employee compensaƟon decreased by $4.3 million or 2.7 percent. Salaries for full-Ɵme employees de- creased $3.1 million, or 3.5 percent, primarily due to a freeze on hiring except for essenƟal posiƟons due to uncertainƟes with respect to the pandemic. OperaƟons cost decreased by $4.1 million or 4.3 per- cent. The largest decrease was for debris removal and cleanup of $3.5 million, which was due to the April 2020 tornado disaster where we incurred most of the debris removal costs in FY20 versus FY21. Oth- er decreases include $1.6 million related to a suspen- sion of the capital component of the ﬂeet lease rate and a $740,0000 decrease in on-the-job injury claims. These decreases were offset by an increase in IT maintenance costs of $1.5 million, largely due to a new SoŌware as a Service (SaaS) city-wide imple- mentaƟon for Oracle Cloud. Page 11 Governmental & Business-type The City’s overall financial conditfon is generally being reported in three distfnct sectfons:  Governmental activities: primarily supported by taxes and inter- governmental revenues. Actfvitfes include General Government, Economic and Community Development, Public Safety, Public Works, Transportatfon, Youth and Family Development.  Business – type activities: costs are supported by user fees and charges for service. Actfvitfes include electric, fiber optfc, sewer, water quality systems, solid waste disposal as well as the Chattanooga Downtown Re- development Corporatfon (CDRC) and the Tennessee Valley Regional Communicatfons System.  Component Units: these entftfes are not part of the primary government. They are legally separate from the City of Chattanooga but the City stfll has oversight responsibility. These units include: The Chattanooga Metropolitan Airport Authority, the Chattanooga Area Regional Transportatfon Authority (CARTA), and the Chattanooga Business Improvement District. Informatfon in this PAFR is limited to the governmental actfvitfes and business-type actfvitfes as these are considered the primary government. Component Units are not included in this report. For more informatfon on Component Units, please refer to the CAFR at www.chattanooga.gov/finance/ finance- division/acfr. Net Position The net positfon is the difference between assets, deferred outilows of resources (“expenses paid for a future period”), liabilitfes, and deferred inflows of resources (“income received for a future period”). It serves as a useful indicator of whether the City’s financial positfon is improving or deterioratfng. Our focus changes from general fund to the City’s primary government using the full accrual basis of accountfng which is similar to the accountfng used in the private sector. At the end of fiscal year 2021, the net positfon of the primary government, which is the combinatfon of governmental actfvi- tfes and business-type actfvitfes. By far the largest portfon of the City’s net positfon, $2.2 billion, reflects its investment in capital assets (land, buildings, equipment, infrastructure, etc), less any related debt. While capital assets are used to provide services to citfzens, these assets are not available for future spending. Also included in the city’s net positfon is $206.2 mil- lion that are subject to external restrictfons on use. The re- maining balance is unrestricted and may be used to meet the City’s ongoing obligatfons to its citfzens and creditors. There is a $282,000 deficit in unrestricted net positfon, which has been trending positfvely over the past few years. Page 12 These activities operate like private businesses with their own self- supporting revenue sources. They are not supported by taxes. Business-type Activities Net position of the Interceptor Sewer System increased $40.0 million or 9.2%, to $473.0 million. Unrestricted net position (available to fi- nance on-going operations) increased $22.7 million or 35.8% to $86.3 million. An additional 95.5 million is restricted for future capital spending, a increase of $19.0 million. Chattanooga Downtown Redevelopment Corporation (CDRC) accounts for redevelopment financing, the operations of the Southside Parking Garage and other parking facilities, and other activities. It has a net position of $10.3 million, an increase of $2.4 million from last year. The City operates a municipal solid waste landfill. The primary custom- er is city government. The fund has a net position of $15.1 million. To date, the City has accrued liabilities of $4.6 million for closure and post closure care costs with adequate investments earmarked to cover these costs. The water quality management program was established to comply with EPA guidelines. It currently has $108.5 million in net position, an increase of $14.2 million or 15.0% from last year. Net investment in capital is $57.9 million leaving the amount available to fund day-to-day operations at $46.7 million. An additional $4.0 million is restricted for future capital spending. The Tennessee Valley Regional Communication System Fund was es- tablished in fiscal year 2016 to account for a regional communication system that services multi-county/multi-state region. It currently has a net Revenue for the City’s business-type ac- tivities was $871.7 million for fiscal year 2021, a $10.9 million or 1.3% decrease. During the same time, expenses were $764.5 million, a $39.4 million or 4.9% decrease. Here we will focus our discus- sion on the major business-type activi- ties. The largest portion of the Business-type activities is Electric Power Board (EPB). EPB is a city owned company that pro- vides electric utility and fiber optic ser- vice for residential and commercial uses in Chattanooga and surrounding areas. EPB is managed as an enterprise opera- tion by a board appointed by the Mayor and City Council. This year the total net position increased $47.9 million or 10.4% to $509.0 million, mainly due to an in- crease of $84.1 million in cash and invest- ments which can be largely attributed to the June 2021 bond issuance in addition to increases of $10.3 million in Utility Plant. Operating revenues are up $6.8 million or 1.0%. For more information on the fiscal year 2021 annual report, please visitwww.epb.com/about/annual- reports/ 2021 Major Business-type Expenses (in millions) Page 13 At the end of ﬁscal year 2021 the City had $2.8 billion net investment in capital assets (net of accumulated depreciaƟon) an increase of $94.9 million or 3.5% from last year. This investment includes land, buildings, uƟlity system improvements, machinery and equipment, park faciliƟes, infrastructure, and construcƟon in progress. For more transparency and beƩer measurement of the City’s ﬁnances, the City Council has prudently adopted a Debt Management Policy which is intended to guide current and future decisions related to debt issued by the City. Performance is measured against benchmarks and changes are made as needed to meet the desired goals. The City Charter limits the amount of net general obligaƟon debt the City can issue to 10% of the assessed value of all taxable property within the City’s corporate limits. The City’s general obligaƟon debt, net of self‐supporƟng debt, is $122.1 million; this is 1.96% of the assessed value of $6,234,412,936 billion . As of year‐end, EPB had $295.8 million in revenue bond outstanding compared to $235.8 million last year. These bonds are rated “AA+” by Standard & Poor’s and Fitch. Capital Assets & Long Term Debt The City of Chattanooga main- tains an “AAA” rating from both Standard & Poor’s and Fitch Inc. for general obliga- tion debt. “AAA” is the high- est rating that can be award- ed to any entity. According to credit rating agencies, any entity receives “AAA” rating means that it has an extremely strong capacity to meet its financial commit- ments, which allows the City to take advantage of lower borrowing rates. As of June 30, 2021 the City had $693.9 million in long‐term debt outstanding. This is a $61.0 million increase or 9.6% percent from last year. Detail is provided in the narraƟve below. The city did not issue any new general obligaƟon debt in 2021. The Interceptor Sewer System drew down $47.7 million from a state revolving loan fund for EPA consent decree projects. A total of $57.8 million in debt was reƟred during the ﬁscal year; $33.4 million in bond principal payments were made with an addiƟonal $24.3 million in note and lease repayments. Below is a closer look at the ﬁve‐year comparison of the General Ob‐ ligaƟon Debt which is supported by tax payers. This report and the Comprehensive Annual Financial Report, as well as a variety of other information, can be obtained by visiting the City’s web-site: http://www.chattanooga.gov/finance/finance-division Photo by J. P. Liu Questions, comments, or suggestions regarding this report can be directed to: City of Chattanooga Finance & Administration Department 101 East 11th Street Chattanooga, TN 37402