Kelly administration proposes $1.99 mill rate to fund public safety, paving and neighborhood services

The Kelly administration presented a proposal to the Chattanooga City Council to adopt a $1.99 mill property tax rate as part of a budget amendment work session, saying the rate would raise incremental revenue to fund public safety pay increases and other city priorities while avoiding deeper service cuts.

The administration said the $1.99 rate would cover most of the remaining pay increases for police and fire after an earlier $5 million down payment, and also provide additional funding for paving, parks maintenance, affordable‑housing programs and targeted neighborhood economic development. Kevin, an administration presenter, described the plan as an attempt to “responsibly fund all three” competing resident priorities — reliable services, community improvements and tax affordability — and said the package was intended to be “resident focused, targeted, and high‑impact.”

Why it matters: Administration materials and discussion tied the proposal directly to a multi‑million dollar gap for first responder pay and to rising operating costs from inflation. Officials warned that without new recurring revenue, the city’s purchasing power will decline and service levels could erode over time. The session produced no formal vote; instead staff agreed to draft an implementing ordinance and the council scheduled follow‑up meetings and public hearings.

What the administration proposed - Public safety: Administration materials showed roughly $23 million identified for pay increases in total, counting a $5 million contribution already in the adopted budget and roughly $18 million additional needed to complete the pay plan for police and fire. The $1.99 proposal was presented as larger than the minimum needed to cover pay alone and intended to fund extra public‑safety items (vehicle replacements, a proposed new fire truck, a pension transfer, contracted security for community centers and other items) estimated in the briefing slides. - Paving and public works: A $7.5 million supplement for paving was proposed as a recurring commitment to accelerate the city’s paving program. - Neighborhoods and parks: The administration proposed $2 million for parks maintenance and $1.3 million for targeted neighborhood economic development (citing corridors such as Rossville, Highway 58, Airport Road and Glass Street). - Housing and early learning: The package included $3 million for down‑payment assistance and $1 million for owner‑occupied rehabilitation, and a $150,000 allocation to support an early‑learning project referenced in the briefing. - Other items: The draft budget listed funds for cybersecurity (about $500,000), a proposed expansion of violence‑interruption programming ($500,000 noted), funding to support the CPD drone program and photo‑radar staffing (presenters said photo‑radar positions should ultimately be self‑funding), and $550,000 to fund a callback increase requested by SEIU.

Numbers and tradeoffs: Presenters stressed the administration was trying to strike a balance between funding base services and pursuing net‑new projects. The $1.99 rate was framed as between two reference points discussed in the session — roughly $1.74 to cover only pay increases and $2.25 representing the last adopted rate — and was described as a split‑the‑difference approach to preserve service levels without adopting the higher rate.

Council reaction and alternatives: Councilmembers expressed a range of views. Several said they and their constituents strongly support pay increases for police and fire; others pressed for protection of community development and neighborhood services and questioned some proposed line items (for example, a $15,000 contract for a Birkman personality assessment drew criticism from one councilmember as a poor use of funds while asking taxpayers to pay more). Councilmember Henderson said he would sponsor an alternate proposal to set the rate at $1.67 that would combine targeted cuts with revenue to fully fund police and fire salaries; other members indicated willingness to cosponsor and to pursue line‑by‑line budget review rather than across‑the‑board reductions.

Schedule and next steps: Staff and council agreed on next procedural steps during the meeting. The administration said it would reformat the proposal, incorporate additional requests (including a request to add funding for Station 21 and adjust the ladder truck appropriation), and draft the ordinance implementing the $1.99 proposal for placement on the council agenda. Council members set an ad hoc, publicly noticed line‑item review (to be scheduled) and confirmed a public hearing on the budget amendment (August 19 in meeting materials referenced during the session) with the first week of consideration currently scheduled for August 26; staff noted a September 9 deadline for a final rate to meet printing and tax‑bill mailing timelines.

Open questions and points of contention: Council members asked for greater clarity on several items the administration listed as proposals but not yet fully scoped: the precise capital cost for a ladder truck (staff cited estimates ranging from about $1.1 million to $1.6–$1.7 million depending on type), the size of the parks maintenance funding gap (administration said a consultant is developing a more precise estimate), and whether any rental assistance would be included (administration did not propose direct rental assistance but noted existing subsidized housing programs and nonprofit partners offer eviction prevention and rental support). Several councilmembers asked the administration to present specific line‑item cut options so the body could evaluate alternate revenue/expense tradeoffs.

How council members described the tradeoffs: Multiple speakers framed the choice as a multi‑year problem that will recur if pay is not kept competitive. The administration cautioned that many proposed items — capital orders for vehicles, staffing to reach authorized sworn strength and recurring program costs — will require permanent funding or will reappear in future budgets if not addressed now.

Ending: Staff said they would return with a draft ordinance and updated materials reflecting the meeting feedback and that the council will hold the ad hoc line‑item review before the scheduled public hearing. No formal adoption occurred at the session.