Chattanooga’s mayor is proposing a budget for next year that lays off seven Department of Technology Services staff members but grows the department by 32 new staffers.
The proposed layoffs follow revelations that Nationwide Recovery Services, a vendor that the city contracted with for debt collection, was hacked last year. The breach affected a number of organizations and nearby governments besides Chattanooga, and it exposed data including Social Security numbers and financial information.
The changes at the city — both the layoffs and the creation of the new positions — will be effective June 30, the last day of the fiscal year, if the City Council approves the mayor’s proposal.
There were no layoffs in the previous budget, but in 2023, Mayor Tim Kelly proposed a budget that included 14 layoffs.
Kelly’s proposed budget for the upcoming fiscal year was published online in a 638-page document Tuesday, and city staff introduced the proposed budget in a presentation during a council meeting.
The budget says the Department of Technology Services will see a net increase of 25 in the number of employees. But the budget does not list the current number of employees, and the mayor’s office was unable to tell the Chattanooga Times Free Press how many people work in the department at present.
Following the budget presentation, toward the end of the council meeting, some staff from the Department of Technology Services spoke to the council about the budget — and what it will mean to them.
(READ MORE: Chattanooga rescinds contract with debt collector following data breach)
PROPOSED LAYOFFS
Aaron Welch is the director of information technology security for the city. Under the mayor’s proposed budget, he’d keep that role only until June 30.
He learned in a Tuesday staff meeting that he may be laid off. He spoke to members of the City Council during a part of the council meeting dedicated to allowing comments from the public.
“The past years have provided insight into how the wheels of local government work and the special people that choose this career over a more lucrative opportunity in the private sector,” Welch told City Council members. “One of the big selling points for me when taking this role was Mayor Kelly’s vision and One Chattanooga values of serving others with urgency, treating others with respect and dignity, be a problem solver and do the right thing. During my time here, I’ve seen those values shine through the work we do behind the scenes within DTS, throughout the city and with the community at large.
“I wish I could say the great things we have accomplished were due to clear and decisive leadership within our organization, but sadly that has not been the case,” he added. “We have been without clear leadership for over a year. To serve others with urgency, we must have alignment of resources and personnel, but despite many meetings with human resources and countless internal DTS meetings, this was never the case.”
Welch said Tuesday he was alarmed by lack of action on a utility cybersecurity policy he’d been asked to review in 2024. He found major problems with that policy, he said, and despite stating those concerns, he said they’ve yet to be addressed.
“This puts every citizen at grave risk in the event that the city is the target of another cyber incident,” he said, referencing the Nationwide breach.
He’s been the city’s IT director since January 2024.
Respect for public service was also on Tim Moreland’s mind. Moreland is a director of special projects and technology services with the Department of Technology Services. He said during the council meeting that the layoff announcement caught staff off guard.
“There was very little details provided about the actual plan itself, and people were asked to go back to their office and wait for the email to find out if they’re going to be here or not after that transformation,” he said. “I hope you can imagine what that did to people and the kind of feelings people had while they were waiting.
“You know as government employees, we don’t have a lot of parity with the private sector pay, but we do have this idea of public service, which I feel very deeply, and also this idea of some security by working in the government, and I’ve heard a lot a lot of people expressing concern about both that security that they thought they had and question if they do have any more,” he said. “We talked a lot about treating others with dignity and respect, and I think that we didn’t do that today.”
Department leadership seemed to be hit hard by the potential layoffs, he said.
Eric Holl, a spokesperson for Kelly, issued a statement after the council meeting.
“Mayor Kelly is committed to providing efficient, effective local government, drawing on his experience in the business world,” the statement said. “Since DTS was established decades ago, the department has remained largely the same while technology has changed dramatically. Reorganizations are sometimes necessary to better deliver services to the people of Chattanooga. Anyone negatively impacted by this reorganization will be offered career counseling services and given the opportunity to apply for open positions within the city.”
(READ MORE: Chattanooga sends out notices to those affected by Nationwide data breach)
COUNCIL RESPONDS
After members of the public finished speaking, two of the newer members of the City Council weighed in on what they’d heard.
“I’ve been able to see all different levels of government, and my heart deeply goes out to all of you all who are affected by this incident that happened today,” council member Ron Elliott of Missionary Ridge said. “I don’t think I have any words that can probably give you any peace of mind, but I want you to know I hear you, and I’ve served with many of you all, and I pray that there’s opportunities to find spots for you all in the city.”
Council member Dennis Clark of Cherokee Woods, who like Elliott was recently elected to the council, said he also valued the service of city staff.
“I will oftentimes talk about what customer service is — how even our own city employees are our customers and not just our taxpayers,” Clark said. “And I know sometimes there’s devil in the details about what happened. I believe in this administration and clear ideas about why we had to do what we wanted to do. However, it’s not what you do, but how you do it.”
“I hope that moving forward in our HR process that we remember that the ‘H’ stands for human,'” he said.
Contact Mariah Franklin at mfranklin@timesfreepress.com or 423-757-6354.