Chattanooga mayor’s proposed budget would layoff 14 employees, reserves $18 million for Walnut Street Bridge

Staff Photo by Olivia Ross / Families walk along the Walnut Street Bridge on April 15 for the Chattanooga Autism Celebration Walk. Chattanooga Mayor Tim Kelly's proposed budget includes $18 million for renovations to the Walnut Street Bridge.

Although it calls for eliminating 15 vacancies and laying off 14 employees as officials look to streamline city functions, Chattanooga Mayor Tim Kelly said his proposed budget for the upcoming fiscal year also doubles down on policy priorities centered around closing socioeconomic gaps in the city.

"Last year's budget was very much focused on One Chattanooga," Kelly said in an interview at his office Monday, referring to the seven-pillar strategy for unity that his office outlined last year. "That plan remains our North Star and our policy document."

The mayor's staff summarized Kelly's proposed budget for the fiscal year that will start July 1 in a presentation to the Chattanooga City Council on Tuesday. It contains no tax increase.

The budget earmarks $18 million for renovations to the Walnut Street Bridge, $13.3 million of which would come from federal funding sources.

It reserves another $1.6 million for new parks and greenspaces. That amount includes $1.3 million for Provence Park, in Councilwoman Demetrus Coonrod's district, and $200,000 for a partnership with Hamilton County Schools and the Trust for Public Land that involves converting schoolyards into community parks.

Additionally, $1 million would go towards revitalizing the Chattanooga Skate Park. The city plans to add nine new firefighters and spend $4.5 million to purchase five fire trucks. As part of an effort to attract and retain employees, the city intends to implement a new pay-step plan for nonsworn employees.

Council members will hold a series of educational sessions about the mayor's proposed budget between now and June. It will require two votes of approval from the panel before implementation. Those votes are scheduled to occur June 13 and June 20.

The mayor's One Chattanooga plan includes boosting access to early learning, economic vitality in the Black community and affordable housing, improving infrastructure, fostering a competitive regional economy, improving public health and making government efficient and effective.


Kelly and his staff said none of the planned layoffs would affect essential city functions like police, fire or garbage service. Officials didn't make the choice out of a need to close a budget deficit, they said.

"It's always tough to make those decisions, but in the current environment, I feel less bad about it than I might at any other time because we're within one basis point of the lowest unemployment rate we've ever had," Kelly said Monday.

State data show the unemployment rate in the Chattanooga metro area declined to 3% in March, one-tenth of a percent from the record low of 2.9% that the six-county region experienced last April.

Affected employees will be paid through June 29 and have the option to apply for other vacant positions at the city. Kelly said officials will also be providing them with aid through the city's employee assistance program. Of those 14, eight are full time and six are part time. They will be notified Wednesday.

"In the greater scheme of 2,600 city employees, this is ... fairly minor," Kelly said, "but I do take my responsibility and my pledge to reform city government and be a good steward of taxpayer dollars very seriously. In my estimation, there were moves that needed to be made. I'm not going to just take infinite creep as a necessity of city government."

The layoffs will occur across six departments, officials said, but about a third of them will be in the Department of Community Development.

Chief Operating Officer Ryan Ewalt said in an interview Monday that the city will take three divisions under its Department of Community Development -- code enforcement, neighborhood services and the office of homelessness and supportive housing -- and move them to other subdivisions of city government.

Code enforcement, for example, will move to the city's Land Development Office, which already houses the city's permitting office.

"We've gotten a lot of confusion from the public and from others around where do I go with my code-related issues, and now it will all be under one roof," Ewalt said.

Officials believe these changes will allow the Department of Community Development to focus more intently on the city's 18 community centers. City officials have said they hope to redefine those facilities as neighborhood hubs through new programming and skills-based training.

"As you take these three divisions of community development and put them where they better belong, you get community development more focused on community centers (and) serving their neighborhoods, and you have less of a need for the level of administrative support that you had a for a larger department," Ewalt said.

Ewalt added that the city is also working to reduce the number of redundant positions in city government.

"This is about realizing the vision and creating efficient, effective government," Kelly said.

Affordable housing

The city intends to add three new staff members under the leadership of its new chief housing officer, Nicole Heyman. She came on board in late 2022. That will include hiring a director of housing finance and an entrepreneurship coordinator.

Additionally, city officials plan to hire two new inspectors focused on short-term vacation rentals, which is part of a larger effort to curtail the hundreds of vacation rentals in Chattanooga operating without a permit.

"Until we crack down on illegal short-term vacation rentals, I think we're going to continue to see speculation in the housing market," Kelly said.

The city intends to use $3 million worth of federal funding to create or preserve 400 units of affordable housing over the next year. The mayor's office has also been working with consultants who are helping the city develop a more fleshed out plan for incentivizing affordable housing in Chattanooga.

Officials say they're also close to announcing the details of a five-year, $100 million affordable housing initiative, which the city seeded with $33 million last year. City leaders have said they're raising an additional $67 million in partnership with nonprofit organizations, philanthropies and the private sector.


Overall, the mayor's budget would invest $187 million into roads and public infrastructure, a $57 million increase over last year.

That number includes $10 million for paving, which the mayor noted is part of his commitment to invest $40 million over four years into repaving roads. The bulk of that funding, $142 million, has been set aside for wastewater projects.

Kelly and his staff said the city may have to close the Walnut Street Bridge for a period of time while work is underway, but there is no firm date on when renovations would begin. Officials are also still assessing whether any closure would impact the entire structure or just part of it.

"It's kind of like our Eiffel Tower," Kelly said about the bridge. "We're happy to have the federal support, but it's an icon that Chattanoogans have grown to love, and it's time. The decking is rotting, and it's got to be stripped and sandblasted and repainted. It's something we've been putting off for quite some time."

Contact David Floyd at or 423-757-6249.