City council reviews $29.9 million budget amendment, including $18 million pension infusion

Chattanooga City Council on Jan. 21 heard a proposed amendment to the FY2025 operating budget that would transfer $29,907,500 from general fund reserves, including an $18 million contribution to the city’s Fire and Police Pension Fund and about $11.9 million for targeted capital projects across infrastructure, parks, housing and public health.

Mayor Tim Kelly, opening the presentation, said the administration aimed to use reserve funds now to advance “key strategic priorities” and to improve the pension fund’s fiscal position. “My goal as mayor is to make sure that we're running things in the most capital efficient manner possible,” Kelly said.

Why it matters: the proposal would reduce the city’s general fund reserves from the June 30, 2024 audited level of roughly $153 million (about 43 percent of revenues) to an estimated $88 million (about 26 percent). The mayor and city staff told council members the $18 million pension infusion is intended to move the fund toward the 60 percent funding threshold recommended by the Tennessee comptroller and actuarial advisers.

Weston Porter, deputy chief financial officer, summarized the ask: “This proposed amendment is for $29,907,500 from general fund reserves to fund $18,000,000 [to the pension fund] and the remaining $11,900,000 for strategic capital projects,” he said, adding that the amendment would still leave the city above its formal policy minimum and many external benchmarks.

Mand…