Chattanooga holds public hearing on FY2026 budget amendment; mayor proposes 1.93 millage, council to vote next week

Chattanooga City Council held a public hearing Aug. 19 on Mayor Tim Kelly’s proposed FY2026 budget amendment that would exceed the certified tax rate to 1.93 mills, and Council Budget Chair Rakita Dotley said the council will vote on competing proposals next week.

Chief of staff Kevin Rowe told the council the administration’s proposal would raise roughly $44,850,000 above the current projection and that roughly $31,500,000 of the increase would be directed to operations—principally public safety and infrastructure—with about $13,350,000 earmarked for capital projects. Rowe said the median homeowner impact of the proposal would be about $34 per month.

The hearing drew more than an hour of public comment. Supporters — including nonprofit leaders, students, and unions — said the compromise rate of 1.93 balances service needs with affordability. Donna Conoco of Signal Centers said, “This proposal is not just about taxes. It's about sustaining a quality of life, safety, and opportunity that makes Chattanooga the great community it is.” Emily O’Donnell of Legal Aid of East Tennessee urged investment as prevention, saying eviction-prevention work returns public dollars and estimated that planned services could yield “over $2,400,000 back to the city taxpayers.” SEIU Local 205 President Jessica Stewart asked the council to “support and fully fund the mayor’s proposed budget,” including increased on-call pay for city employees.

Opponents and some residents urged caution and more transparency. Daniel Bradley accused the city of misleading taxpayers about assessments and demanded “a full independent audit of city and county spending.” Several speakers asked the council to tap existing discretionary funds rather than raise taxes. William Lloyd cited the city's annual outside financial audit and said the general fund showed about $152,900,000 in discretionary funds as of June 30, 2024, and asked, “Tell the taxpayers why do we have this much money and why are we not using it for the needs that are very obvious?”

First responders and union leaders gave extended testimony about recruitment, retention and workload. Chris Mullenix, president of the Fraternal Order of Police, said the department has “71 operational vacancies” and warned low pay causes departures; multiple officers described working extra jobs to make ends meet. Firefighters and family members also urged higher staffing and pay, pointing in one case to East Brainerd’s population growth and a need for Station 21 to be a double-company station.

Council members and staff repeatedly framed the choice as balancing competitive pay for public safety and continued investment in infrastructure and services versus the burdens on fixed-income and low-income residents. Dotley reminded the public that an alternate proposal from Councilman Henderson — withholding an intent-to-exceed at 1.69 mills — will be the subject of a second public hearing next week and that the council will vote on both proposals on Aug. 26.

Votes at a glance

The council also conducted regular business during the Aug. 19 meeting and approved multiple ordinances, resolutions and purchases (motions passed by voice vote; detailed tallies were not recorded in the public transcript).

- Zoning ordinances (final reading, items a–f): Approved as a package. (See transcript excerpts at 00:11:58–00:16:56 for the ordinance package.) - Wastewater easements (final reading, items a–b): Approved (see 00:16:56–00:19:00). - Minutes: Approved without objection (see 00:19:05–00:19:30). - Appointment: Veronica Bryant confirmed to Chattanooga Sports Authority, District 5 term beginning 08/20/2025 (see 00:19:30–00:20:00). - Reimbursement: Authorized payment of $269,000 to Du James LLC for lightweight flowable fill work on Braust and Eighth Street (see 00:20:02–00:20:40). - UTC contract: Authorized a contract with the University of Tennessee at Chattanooga related to the USDOT smart grants program (see 00:20:40–00:21:40). - Grant application: Authorized Parks to apply for/accept a Tennessee Tourism Enhancement grant of $100,000 for Coolidge Park live/electric project with up to $100,000 private match (see 00:21:40–00:22:00). - Change order: Approved change order No. 2 with Jay Brennan Construction, increasing the City Hall annex contract by $128,973.27 (see 00:22:00–00:22:45). - Multiple fleet and wastewater purchases and one RFP recommendation for risk management third-party claims administration were approved (see 00:22:45–00:26:00).

What it means next

No final tax-rate decision was made at the hearing. The council will hold a second public hearing and consider Councilman Henderson’s alternate proposal (1.69 mills) next week; Dotley said the council will vote on both proposals on Aug. 26. If adopted, the amendment would change the city’s FY2026 operating and capital budget allocations as described by administration staff.

Meeting context and notable details

- Administration figures presented by Kevin Rowe: current projected general fund revenue $345,000,000; proposed revenue if the rate is adopted $390,000,000; incremental revenue $44,850,000; operations allocation ~$31,500,000; capital allocation ~$13,350,000. Rowe described an approximate median homeowner cost of about $34 per month. - Public comment lasted roughly one hour before the council paused to ensure all speakers in line could be heard at a later session; multiple speakers represented nonprofits, labor, students and first responders. - Several speakers called for greater transparency about the city’s discretionary fund and for targeted rather than across-the-board adjustments to employee pay.

The council’s next public hearing and scheduled votes are set for the week of Aug. 26; the record of today’s public hearing will be part of the debate before the council takes a final vote.