The city of Chattanooga wants to use federal COVID-19 relief funds to provide $1.7 million in unexpected end-of-year bonuses to employees.

In a presentation to the City Council on Tuesday, Chief Operating Officer Maura Sullivan said the one-time supplemental payments to all employees who worked throughout the pandemic would take up the largest share of available CARES Act funding.

"I am thrilled to come before you with this news, a little bleary-eyed as you would also see from members of the finance team," she said. "We have received about $2.5 million in reimbursement from the state for CARES Act dollars, and we're excited about that. And this allows us — along with some very, very tight budgeting that we've been doing, and taking care of our budget in the way that we have with our hiring freeze and other items that we've done to keep our cost measures in check — this allows us to be able to offer a one-time supplement to employees.

"And we'd like this to move forward as quickly as possible so that we can get this to employees before the end of the year."

The one-time payments would go to every non-elected employee who worked throughout the pandemic and would provide $400 to employees who were able to work from home and $500 to those who weren't. If passed on the proposed schedule, the payments would go out to employees in their Dec. 18 paychecks.

The city's 2021 budget was rocked in the last leg of planning by the rampantly growing COVID-19 pandemic and EF-3 tornado that devastated parts of the city on Easter. Those hurdles resulted in more than $8 million in last-minute cuts, a hiring freeze and other precautions to help the city weather the still unknown economic impacts of the virus.

While the city managed to avoid layoffs despite the financial turmoil, employees who were once set for significant pay increases went without. Raises were erroneously included in the budget and then revoked in an amendment, although a few employees below the federal poverty level got a boost.

(READ MORE: Before COVID-19, Chattanooga was set to increase minimum wage to $15 to match market)

Now remaining employees will receive some financial help through this newest amendment.

Under the city finance department's proposed plan, another $300,000 of the city's funds would go to small businesses hurting from the pandemic. The city would use the remaining money to offset other impacts of the virus, including $40,000 for the Bessie Smith Cultural Center, $160,000 for the United Way of Greater Chattanooga and a projected $225,000 to supplement the Tivoli Theatre.

(READ MORE: 'Honest mistake': Chattanooga looks to remove $1.5 million in raises accidentally included in city budget)

Chairman Chip Henderson raised concerns about spending the money in some of these ways, if it could be used for other coronavirus-related expenses the city has incurred.

"I have no problem with the bonuses going to city employees. They need it. They're underpaid. We need to get them up to a livable wage," he said, asking about some $575,000 in reimbursable COVID-19 expenses that have come before the council.

"So why would we not take the extra $800,000 I think that's leftover [after] the bonuses and apply it to our out-of-pocket expenses?" he said. "I know I've said this before, but we need a fire academy, and I've been told there's not money for it, and here's this $800,000 that we're going to give to well-deserving organizations, but we have needs in our own house.

"There are needs, and then there are priorities, and I would think having a fire academy would be a top priority for this city."

Sullivan responded, "We do have enough dollars with our vacancies in fire to start an academy, and that is our plan for just a little bit longer."

She noted that the city is looking at deferred fire and police academies beginning in March.

"It won't be a full fire and police [academy], but it will be good numbers," she said.

"We're trying to get both of those classes as large as we can," she said, estimating class sizes will be in excess of 20.

Henderson suggested following the quick turnaround on the employee bonuses but not wrapping the remaining funds in the same budget amendment until there's a consensus on what should be done with that money.

Councilwoman Demetrus Coonrod agreed.

"In terms of priorities, I just don't think United Way should have even made the cut," she said, before asking for a report of pandemic reimbursement funds to date. "I don't know if we can use that money in a different way."

To pass the amendment by the end of the year, the council will use the last three meetings of the year, starting next week, to host a public hearing on Dec. 1, first vote on Dec. 8 and then final vote on Dec. 15.

Contact Sarah Grace Taylor at or 423-757-6416. Follow her on Twitter @_sarahgtaylor.