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.

Mandy Green, chief operating officer, reviewed the projects that would be paid from the roughly $11.9 million package. Staff described the allocation roughly by category and several specific line items:

- Critical infrastructure and public safety (about 73 percent of the $11.9 million): $360,000 for intersection detection (LiDAR and cameras), $50,000 for mobile traffic-count trailers, $500,000 to modernize the traffic management center, $200,000 for street-light upgrades (pilot with EPB), $632,000 for Lookout Valley infrastructure upgrades, $200,000 for property-room and HVAC upgrades at the police CBD property room, $120,000 for turnout gear drying racks, $80,000 for a fire swift-water rescue vehicle, $3,000,000 for sewer lateral/street repairs, $500,000 for two leaf-vacuum trucks, $500,000 for pedestrian-safety work (Fernway to Barton), $1,000,000 for crossroad/guardrail/pavement improvements, $700,000 for sidewalk work near Cassandra Smith Road/Big Ridge Elementary, $250,000 for Rossville Boulevard beautification, $150,000 for quick-build transportation safety pilot projects, and $500,000 for Raccoon Mountain water infrastructure.

- Parks, community development and housing: $100,000 for a Tennessee River Blueway trailhead kiosk and parking, $100,000 for sports turf at Eastside Elementary (county match), $250,000 for an inclusive playground (Heritage Park, county match), $100,000 for municipal-golf mowing equipment, $100,000 for a mountain-bike pump-track feasibility study, park signage and pavilions at several parks, $75,000 for a CARTA (transit) feasibility study for transit‑oriented development, and $100,000 to expand a 3D-printed shelter pilot program serving episodic homelessness needs.

- Technology, innovation and local economy: $600,000 as a DOT grant match to refurbish an automated/autonomous-vehicle test track (partnership with Chattanooga State, UTC and other partners), $250,000 for downtown retail recruitment and façade incentives (in partnership with Hamilton County and River City Company), $35,000 to assist the Hunter Museum/Houston Museum of Art elevator project, and $78,000 for a visitor concierge booth at the Chattanooga Airport.

- Public health, education and mobility: $455,000 for preliminary engineering and upgrades to co‑locate a crisis center at the Carol B. Burr Family Justice Center, and feasibility studies of $50,000 each for potential East Brainerd and Northgate library locations.

On the pension fund, city staff and the pension office described recent funding improvements and the goal for the $18 million contribution. Chris Hopkins (staff) told the council that the pension fund’s market-value funding had risen from the low 40s percent in the aftermath of the 2008 downturn to roughly 53 percent as of the January 2024 valuation and an estimated mid‑50s level entering 2025. “This infusion of $18,000,000 would get us to approximately 60.5 percent funded,” Hopkins said, adding that the state comptroller identifies 60 percent as an important risk threshold.

Council members pressed administration staff for more documentation about reserve policy and risk. Steve Wilson, a city finance staff member, said the city had contracted the Government Finance Officers Association (GFOA) to complete a city‑specific reserve study and that preliminary results should be available by the end of the month. “We should have preliminary numbers by the end of this month,” Wilson said; council members said they wanted the report available to the public before the scheduled public hearing.

Schedule and next steps: Councilman Smith called the budget and finance committee to order and read the ordinance (8a) into the record. The council set a public hearing for Feb. 4 and moved the ordinance’s first reading to Feb. 11; no final vote was taken on Jan. 21. Staff said the administration may return to the council to adjust timing if needed.

What’s not decided: the council did not vote on the amendment. Members repeatedly requested the GFOA’s city‑specific reserve analysis in advance of the public hearing and asked staff to provide additional project details and contract safeguards for grant matches and pilot programs.

The council’s budget and finance committee will hold the public hearing on Feb. 4 and resume consideration of the amendment at the subsequently scheduled reading on Feb. 11.