Chattanooga Mayor Andy Berke's 2016 budget has received its first blessing from the city council, along with a tax break for an apartment development on Chestnut Street. And the city has taken its final step toward handling its own sewer billing.
The City Council unanimously voted Tuesday to pass the first reading of Berke's $221 million operating budget and are set to give it a second vote next week.
Councilman Jerry Mitchell, who leads the council's budget committee, praised Berke's staff for what he called an excellent job preparing and presenting the financial plan.
But Councilman Yusuf Hakeem's approval wasn't quite as cheery.
"All minds are not, let's say, satisfied with the budget in this city," Hakeem said. "But this is the budget that is, in my view, moving in the right direction when it comes to the needs and concerns of the people. I didn't say it was perfect, but I think it is in the right direction, and we can build on that."
The council still will have to vote on two readings of the capital budget before it is set to go into effect July 1.
Also on Tuesday, council members gave a preliminary OK to a property tax waiver for a 197,000-square-foot, 210-unit apartment development at 1400 Chestnut St. downtown.
The Kore Company, the Alabama-based developer of the project, says it will spend $23.6 million building the structure. In return, Kore is asking for property taxes on the land to be frozen for 10 years from 2017 to 2026, although the company will pay a full share to county schools. The land is currently assessed at $162,560. After a decade, the company wants to gradually increase its tax payments in 20 percent increments over four years.
According to the tax break deal, or payment in lieu of tax agreement (PILOT), 42 of the units will rent for $772.50 a month.
The resolution passed the city in a 6-3 vote, with only Councilmen Ken Smith, Chip Henderson and Larry Grohn voting against it.
The agreement also will have to be approved by the Hamilton County Commission.
The council also passed a resolution to allow the city to process its own sewer bills starting next month.
Right now, sewer bills in the city are processed by a California company called ENCO. Customers have complained since the company started collecting the fees in 2013, after Tennessee American Water Co. stopped handling sewer bills. People complained they weren't getting bills soon enough before they were due, and they were irked by various processing fees.
Councilman Smith said Tuesday he was pleased the city finally broke ties with ENCO.
"This is something I feel is long overdue, and I think people will be pleased we will be processing fees locally instead of a company in California that charged excessive fees," Smith said.
During an agenda session earlier Tuesday, council members heard an update about form-based code.
Planners say after meeting with numerous neighborhoods, the code is near to being crafted.
Under form-based code, the zoning districts would be categorized more by character and design rather than use, which is the primary guide for current zoning.
Lee Einsweiler, principal of Code Studio, the company contracted to develop the new zoning method, told council members the new code would streamline the development process because the rules for structure, use and design will be baked into the code.
As a result, he expects fewer requests by developers to vary plans and less outcry from neighbors, because everyone will know the rules.
He said the codes "calm down" the development environment.
The form-based code would cover North Shore, the Riverfront, downtown, the South Side and the M.L. King neighborhood.
Council Chairwoman Carol Berz said she liked the whole idea and thought it should expand to all parts of the city. She also said it could cut red tape for developers and assuage concerns of neighbors.
"People know what is expected in the front end, so they don't come in trying to wheel and deal," Berz said, adding that she thought it "takes the politics out of it."
Contact staff writer Louie Brogdon at lbrogdon@timesfreepress.com, @glbrogdoniv on Twitter or at 423-757-6481.