Budget & Agency Funding Work Session – May 26, 2026
Budget & Agency Funding Work Session – May 26, 2026
On May 26, 2026, the Chattanooga City Council held a work session to discuss agency funding, early learning after‑school care, a community land trust proposal, economic development incentives for quantum computing, and a future budget policy resolution. Key speakers included Budget Chair Henderson, Chief of Staff (the Chief), Councilmembers Clark, Hill, Harvey, Knowles, and others. The meeting also featured presentations from the Tennessee Valley Community Land Trust board and Chattanooga Neighborhood Enterprise (CNE).
Consent Calendar
- The minutes from the previous meeting were approved without objection after a quorum was established.
Public Comments & Testimony
- No public comments were made during this session.
Discussion Items
Agency Funding Proposals
- The Chief presented a revised agency funding list using the $4 million A2407 allocation. Changes from the initial proposal included: the Chattanooga Regional Homeless Coalition came in at $861,000 (down from $880,000); Transform Ministries was added at $50,000 for the End Zone program serving at‑risk children ages 10–14 (a request from Chairman Davis).
- Four additional items were proposed: (1) A $150,000 grocery store incentive program through the IDB for a food desert; (2) $75,000 for extended child care at James A. Henry (from A2407) plus $125,000 from ARPA (reallocating unused contingency funds); (3) $200,000 for Grace Impact Center’s violence intervention initiative (a request from Councilman Clark); (4) Funding for Preserve Chattanooga from the economic development reserve.
- Councilman Clark noted that Grace Impact Center will serve the Brainerd Middle/High School area, where six Black boys were killed in one year. The program will work as a violence interrupter and address high absenteeism.
- Councilman Hill requested a comprehensive report on all gun‑violence‑prevention programs, funding stacks, and metrics. The Chief agreed to compile a common operating picture, though he acknowledged difficulty in pulling data quickly. Councilman Elliott expressed disappointment that community development had not provided requested metrics.
- Councilmember questioned the ARPA spend‑down deadline. The Chief clarified the funds are no longer classified as ARPA (due to the lost‑revenue rule), but the city plans to spend them this year.
Early Learning After‑School Care Demonstration
- The $200,000 for extended child care at James A. Henry will extend hours from 2 p.m. to 6 p.m. (a pilot). Councilman Clark and others asked for cost details for the 5–6 p.m. hour. The administration will provide the “good‑better‑best” tier analysis.
- Discussion on the Boys & Girls Club’s role clarified they will operate from the old James A. Henry community center (being transferred to the housing authority), while the new center will be run by the city.
Economic Development - Quantum (Chattanooga Next Generation Industry Program)
- Budget Chair Henderson proposed a $1 million economic development fund to incentivize quantum‑computing‑related businesses to relocate to Chattanooga, partnering with EPB, UTC, and potentially Vanderbilt. The chamber (Charles Wood) indicated they could match with another $1 million.
- The fund would be placed with the IDB and used for incentive packages. Companies would need to partner with EPB/UTC, establish a physical office/footprint, hire at least five employees, and focus on quantum, cybersecurity, AI, or mobility innovation.
- Councilman Elliott (via text) emphasized workforce pipeline development, suggesting partnerships with Chattanooga State, county schools, and UTC. Councilman Hill noted EPB’s $3.5 million grant to UTC for a quantum center.
- A consensus emerged to include the $1 million in the budget ordinance.
Community Land Trust (Tennessee Valley Community Land Trust)
- Councilwoman Hill presented a proposal to allocate $2.25 million for the down payment assistance program (unchanged) and $750,000 one‑time operating support for the Tennessee Valley Community Land Trust (CLT). The $125,000 for an incentive manager position was withdrawn because the economic development department already has the head count.
- The CLT model separates land ownership from the home, capping resale appreciation at 2% per year to preserve long‑term affordability. The buyer retains all equity in the home plus the appreciation.
- Board members and Chris Thompson (CNE) explained that operating funds will cover a CLT director and stewardship positions. They stressed that the model has a 50‑year track record and that the CLT is a separate nonprofit with community oversight.
- Councilman Knowles expressed strong opposition, calling the model a “plantation mentality” because it denies full land ownership to low‑income buyers. She cited community feedback from District 8 and objected to the inclusion of the Harriet Tubman site as an example.
- Councilman Dukes questioned the 2% appreciation rate relative to mortgage interest rates and suggested linking it to a bond index. Thompson responded that other cost savings (no PMI, tax benefits) offset the lower return.
- Councilman Henderson noted that the $750,000 allows the CLT to fundraise for land assets. Councilman Harvey supported the model as a “hand‑up” for working families.
- The five‑year goal is 210 units (first year: 20 units; second year: 40; then 50 per year). CNE will provide the first two homes.
- The council majority indicated support for the $750,000 allocation, though consensus was not unanimous.
Budget Policy Resolution (Deferred)
- Councilman Harvey announced he is still working on language for a resolution to ensure annual cost‑of‑living adjustments for first responders. It will not affect the current budget. He will bring it to the Budget and Finance Committee at a later date.
Key Outcomes
- Agency Funding Consensus: The council reached consensus on the revised agency funding list presented by the Chief, to be included in the budget ordinance.
- Early Learning Pilot: Approved the $200,000 demonstration project for extended child care at James A. Henry; administration will provide cost analysis for the 5–6 p.m. hour.
- Quantum Economic Development Fund: Consensus to add $1 million to the economic development fund (via the IDB) for quantum‑computing incentive packages.
- Community Land Trust: Majority consensus to allocate $750,000 (one‑time) to the Tennessee Valley Community Land Trust for operating expenses; the $125,000 incentive manager request was withdrawn.
- Next Steps: All changes to be incorporated into a revised budget ordinance by June 1, 2026. The council will reconvene at 3:30 p.m. for the next agenda item.
Meeting Transcript
Can you get approval of minutes because we don't have quorum? So we'll just go ahead and get started on agencies. We've got a agenda in front of you this afternoon for this afternoon. Agency funding, early learning after school care, community land trust, follow-up, economic development demonstration, and then if Councilman Harvey shows up, I think we'll talk about a budget policy resolution. So Chief, I'm gonna turn it over to you for agency funding proposals. Great. Thank you, budget chair, appreciate it. Good morning, Council. How are y'all? Morning. Um so just to kind of remind folks where we are on this. In in the initial proposal that the mayor put forward, we had a hold for agency funding. That's what I'm referencing when I say a 2407 up at the top. That hold was for four million dollars. Um in the last couple weeks been working with with many of you on this list, just talking through the different organizations and initiatives that we're proposing to fund. And so what this represents is the latest and greatest version that I think that I'm hopeful accomplishes um what we've funding for what we view as as kind of the critical civic infrastructure that we initially put forward um as well as some net new items that I want to highlight. So at the top, um, this is strictly out of that A2407 four million dollars. Um the only change relative to the first iteration of this document is that the Chattanooga Regional Homeless Coalition came in at 861 as we've been working. Our finance team has been working with them directly. Um we had we had held 880, but it came in at 861. Um, and then I've added transform ministries at 50,000, which is the last item in that first section. Um this is for a program called End Zone. Um this is um Joe Smith's group and and they work with at-risk children um and after school from ages 10 to 14, and so this is operational support for that program. Um this is a request that came in from Chairman Davis. And and then at the bottom, the reason that I just pulled these out is because I want to explain how we're proposing to fund these. Um these other four items. So the grocery store incentive program that we intend to set up through the IDB for 150,000 to try to um encourage a grocery store development in uh one of our uh most severe food deserts in town. Um we're gonna fund that from we're proposing to fund that rather from the economic development reserve fund. Also dropping down to the bottom of this list at the bottom is you'll see preserve Chattanooga. This was a request that we came in that that came in that was originally not included in our initial proposal, um, but one that has been advocated for and we would like to support them. We we can fund it through the economic development fund as well. This this money will be used to help um spin up the their operations a little bit by um helping them fund for one year a a staffer um who is going to come up with their permanent plan to uh to retain that funding. And then jumping back up to the second item in this bottom tranche, you'll see again this is the extended child care James A. Henry. So 75,000 of the 200,000 cost is gonna come from a 2407, and then we're proposing to fund the balance from ARPA. You may recall from last year's budget. We set aside a a kind of like a contingency allocation from ARPA that we thought that we may need to use to support operations as they were transitioning to James A. Henry. We did not end up needing to use that, and so this is a reallocation of those dollars, so it's a reallocation of a re of a reallocation. Um, and then net new underneath that one is Grace Impact Center. Uh we're proposing to fund this one at 200,000. This is a another violence intervention initiative. Um this is a request from Councilman Clark and would serve the Brainerd Middle and that neighborhood. Councilman Clark, would you be willing to share a little bit more about that? Absolutely. Um we have we our current violence reduction initiative that we fund through community haven't has a footprint that's only identified in one particular council area out of pretty, I would say pretty hefty amount. Uh this Grace Impact Center has a program called the Opportunity Development Initiative that will focus in some of the hot spot that overlaps District 9 in the East Elk community and the Woodmore community around Brainerd High School and Tiner High School. We felt that there was a need, Brainerd High School in one year saw six, nine black boys killed due to gang violence out of their high school in one school year. And I currently we don't have any programs, including the Curve Program or Community Haven in that hot spot working to do violence reduction initiative. So the mayor's office has been so kind to fund this at a level as a pilot program starting in August that'll be working at our community centers, Brainerd High School and Tyner uh middle school as a violence interrupter with high schoolers, uh, which is where we see the origins of gang activities and violence that oftentimes spread into our streets.
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