Chattanooga City Council Passes Mayor Kelly’s First Budget

Pictured: At his desk in City Hall, Mayor Tim Kelly signs Council-approved legislation to codify the City of Chattanoooga’s Fiscal Year 2021-2022 operating and capital budgets. Kelly administration staff, from left to right: City Attorney Emily O’Donnell, Senior Advisor for Economic Development Jermaine Freeman, Chief of Staff Brent Goldberg, Deputy Chief of Staff Julia Bursch, Chief Financial Officer Daisy Madison, and Chief Policy Officer Joda Thongnopnua.

The Tennessee Conservative Staff –

Last night, September 28th,  the Chattanooga City Council unanimously voted to approve Mayor Tim Kelly’s first proposed capital and operating budgets for Fiscal Year 2021-2022.

The vote came following a certified tax rate public hearing in the Chattanooga City Council Assembly Room from 3:00-5:00 PM EDT for in-person speakers followed by a session for Zoom only speakers from 6:00-8:00PM EDT.

The public hearing was conducted to ensure Tennessee Code compliance.

The council had previously approved a 40-cent property tax increase above the new Certified Tax Rate with a 9-0 vote that would bring in $30 million in additional income that mainly would go toward pay increases for city employees, including fire and police and public works.

According to Mayor Kelly’s office, the new budget “rests on data-driven investments to market-align city pay with peer cities, repair aging infrastructure, and close gaps in access to opportunity and the amenities of a livable neighborhood.”

Mayor Kelly said, “I’m grateful to the Chattanooga City Council for partnering with us to lay the groundwork for tackling the structural challenges our community faces while we also get the basics right — all while ensuring our first responders and essential workers are paid fairly.  With this budget, we’re able to capitalize on the growth of Chattanooga’s economy to ensure every resident has access to quality and responsive city services to keep pace with that growth.”

The FY 2021-2022 budget invests 100 percent of new operating dollars, more than $30 million, toward improved compensation plans for first responders and other essential workers. 

The Mayor’s office states:

“In a national economy significantly impacted by the global pandemic, resulting labor shortages have challenged the City’s ability to provide quality and continuity to even the most essential services that Chattanoogans expect and depend on. Years of low wages –from 15% to 36% below the market’s 50^th percentile– have dried the talent pool and drained frontline City agencies of qualified personnel. To attract and retain skilled workers, this budget enables the City to better compete with higher starting wages in both the private sector, and neighboring and comparable municipalities. The median raise for General Government city employees is 18 percent, including a new minimum wage of $15 an hour.”

The new FY 2021-2022 pay plan will also provide pay increases to first responders.

The Mayor’s office states that this will position Chattanooga to compete with peer and neighboring municipalities for top talent. 

A 2019 study commissioned by City HR recommended that to meet market rates, a 23% compensation increase was needed for firefighter pay, as well as a 24% pay increase for police officers.

This budget also includes approximately $1.2 million to create a Crisis Response Program, comprised of ten social workers and a director, to provide alternative response and/or co-response to emergencies involving mental and behavioral health, substance abuse, and quality-of-life incidents related to homelessness or poverty. Crisis response teams will support Chattanooga Police and Fire personnel on social-service-focused requests for crisis counseling, case management, and initial contact for individuals who are intoxicated, in mental or emotional distress, disoriented, or in need of non-emergency medical care.

Additionally, the budget includes public-safety related capital investments totaling $5 million including the Power to Protect solar project, as well as $100,000 to provide mental-health support services to first responders – an expansion on the City’s traditional Employee Assistance Program to address the unique mental-health needs of frontline personnel.

An unprecedented $10 million will go toward Public Works’ paving program – a down payment on what will be a four-year, annual $10 million commitment ($40 million total) that aims to bring neighborhood streets into a state of good repair. Guiding this work will be a Transportation Asset Management Plan, a four-year paving plan, and full-time pothole inspector – providing more transparency, equity, and proactivity to fixing Chattanooga’s aging roads.

The capital budget also includes:

– $1.8 million for sidewalk construction and repair

– $1.6 million for CARTA

– $9 million for critical infrastructure, including additional road projects

– $1 million for parks and playgrounds – including park maintenance and expanded funding for a new parks and greenways master plan

– $1.25 million for greenways and neighborhood connectivity

– $3.5 million in infrastructure to support economic development in East Chattanooga

–  $700,000 for a community-driven Neighborhood Reinvestment Fund

A full-time Director of Neighborhood Design and Connectivity will also be hired with the aim of giving Chattanoogans access to the outdoors, as well as multimodal connections to jobs, education, healthcare, fresh food, and more.

Through a partnership with Hamilton County Schools, more than $700,000 will go toward the Community Forward Schools initiative.

The Mayor’s office states that city-funded staff, in seven schools within city limits, will work with principals to bring families the resources needed to support student social and emotional development – ensuring each child has access to safe and secure housing and career services to open pathways to good jobs.

The budget also commits $2 million in capital dollars for a Building and Construction Workforce Center at the former Garber school in East Chattanooga.

The City is partnering with the Associated General Contractors of East Tennessee, Hamilton County, Hamilton County Schools, Chattanooga State, the State of Tennessee, and others to provide industry workforce development through three integrated areas of focus: an 11^th/12^th-grade vocational academy; adult training through the Tennessee College of Applied Technology’s construction-certification and other programs; and a career and business center to connect students with on-the-job training, as well as continuing education and support services for trade professionals.

The budget also invests nearly $7 million to transform YFD Community Centers, including $2 million in capital funding for renovations.  Workforce development and other programs will be located within Community Centers.

The FY 2022 budget also increases funding for Chattanooga’s Therapeutic Recreation Centers to approximately $337,000 – to provide more staff and a doubling of operating expenses. 

The Office of Homelessness and Supportive Housing will receive an additional investment of nearly $300,000, enabling them to serve an additional 560 individuals experiencing homelessness.

New OHSH services will include: streamlining intake and service-connection processes, increasing the number of landlords who accept Housing Choice Vouchers, and creating a single point-of-contact for service referrals. According to a 2021 Point-in-Time Count, Chattanooga’s unsheltered homeless population quadrupled during the COVID-19 pandemic. 

A new Office of Community Health led by Dr. Mary Lambert will also be established.

According to the Mayor’s Office, it will help “reduce racial disparities in health outcomes (including ensuring Chattanoogans can access fresh, healthy food), build regional partnerships, and increase health literacy.”

OCH recently secured a two-year, $3.4 million grant from the U.S. Department of Health and Human Services to bring health navigators to community centers, where they will help families understand their health choices and connect them to primary care, as well as dispense information about COVID-19 vaccines.

The FY 2021-2022 budget also funds a Chief Equity Officer, in a new Office of Equity and Community Engagement.

The Mayor’s Office states this position was established “to help adopt an equity lens across city government, investments, and initiatives.”

The capital budget also invests over $1 million in digital infrastructure to support constituent access and interaction with a more open local government – including an all-new Chattanooga.gov, audio/video support for public information and meetings, Outdoor Chattanooga and 311 mobile apps, and other tech upgrades to create efficiency in development review and permitting processes. 

“I want to thank Chattanooga City Council for their leadership on getting this done for our essential workers, our first responders, and our residents. Now we’re ready to get to work,” said Mayor Kelly. “The steady leadership of Budget Committee Chairwoman Carol Berz provided our residents and stakeholders with an inclusive, thoughtful, and effective budget process that helped make our budget better.”

“I also want to thank our essential workers and first responders who stepped into the gap for all of us during this unprecedented global pandemic. We owe you a great debt,” Mayor Kelly continued. “We can do big things together, Chattanooga. This is just the first step, but it’s an important one.”

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When the mayor’s budget was first announced to the public, the Tennessee Conservative reached out to the Mayor’s office specifically questioning whether reaching the Mayor’s 2021-22 budgetary goals will require a tax increase for Chattanooga citizens.

The following is the statement we received from Director of Communications, Mary Beth Ikard:  

“The city is decreasing the property tax rate to one of the lowest rates in 50 years, or $2.25 per $100 of assessed value. This represents a 2.7 cent decrease from the current rate. Because of the increase in Chattanoogans’ property values across the city, the city will be able to capture a portion of that increase in property value. That increase in the city’s portion of property taxes will equal about $30 million for this next Fiscal Year, or an increase of 19.59% in revenue. But again, the actual tax rate is decreasing.  

Residents whose property values increased over the last four years will pay less as a proportion of their property value, though the total will be slightly higher. Residents whose property value stayed the same or dropped will both pay less as a proportion of their home value, and less in terms of actual dollars.” 

The Mayor’s office claimed that this along with trimming unnecessary spending and making budgetary cuts in practically every department will cover the 2021-22 budgetary goals.