OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Knoxville City Council FY27 Budget Hearing – May 7, 2026

City Council — Thursday, May 7, 2026
BodyKnoxville, Tennessee
SessionCity Council
DateThursday, May 7, 2026
StatusFILED
Video Record
0:00 / 7:46:27

Transcript — Verbatim
0:06

Good morning.

0:08

It is 803, and I'd like to go ahead and call our legislative budget hearing meeting to order.

0:21

Do you mind call the role?

0:24

It's so nice not to have to call the roll and be all formal.

0:27

So first up with two minutes to spare.

0:32

I'm getting ahead of schedule, boys.

0:34

We're gonna start you at 803 instead of 805.

0:37

That's good, ma'am.

0:38

I understand that the mayor can't be with us today, and you are going to uh set up the introduction to the budget for us.

0:45

That is correct.

0:45

Yes, ma'am.

0:47

Go ahead.

0:48

Go ahead.

0:49

Okay, well, uh, the Meyer said as the vice mayor said, uh, welcome, good morning to the uh legislative budget hearings for the FY27 proposed budget.

1:00

And the purpose of this is to review uh some key highlights and details of the proposed budget and then answer questions that you may have uh per the agenda.

1:14

I will be followed after I do the kind of the big picture overview.

1:18

I'll be followed by the various departments and partner agencies, and you'll be able to uh ask them questions as well, and finance will assist where we can.

1:31

Uh the mayor's not here, but you know, I thought she summarized uh the budget best when she said that uh it was balanced with uh no new uh taxes, 499 million dollar net budget, uh that invests strategically while emphasizing core services.

1:51

I thought that was a good uh a good lead-in on it.

1:55

It is a bit leaner uh, but it continues to prioritize public safety, affordable housing, parks, and uh high quality focused services.

2:07

Uh it's also got a forward-looking uh commitment to great public spaces, quality of life, job creation, and proven partnerships to get results.

2:19

Now, before I get digging into the math and everything, uh just want to introduce who I've got here with me.

2:27

Uh, most of you know Kitrin Smith, the deputy CFO, my right hand in all things financial.

2:34

Uh, she is also in charge of our accounting division and our uh treasury division.

2:42

I've got also back here, they've moved one space back so they could get a little further away from the line of fire.

2:48

Miss Penny Owens, our purchasing agent, who's in charge of the purchasing division and all procurements, and I've got Miss Donna Dyer, our revenue administrator, who is in charge of all things dealing taking in money.

3:03

She's in charge of the revenue division.

3:05

So anyway, I want to take a few minutes right now to cover the highlights of the proposed budget and then uh open it up to questions that you might have.

3:15

First off, as I said in that intro, it's a balanced budget with no tax increases.

3:20

It is somewhat tighter than in uh previous years, and that's evidenced.

3:26

Uh, the two things that pop up top of my mind are we're proposing the use of six million in unassigned fund balance for one-time capital projects, and even with that capital is down 7.2 million in what we propose from the current FY.

3:44

So uh again, a little bit tighter.

3:48

Uh it still provides top notch services uh for our citizens.

3:53

We have healthy fund balance and reserves that are maintained in this.

3:58

It's got a sound debt portfolio and bond ratings, no change there.

4:02

In fact, it's improving.

4:04

The pension fund is strong and properly funded.

4:08

Our property tax is strong, it's still growing, but the growth there is normally slow, and the sales tax is still growing, albeit a good bit slower than it was uh several years back.

4:22

Now, in terms of the hardcore figures, our total budget is six hundred and sixty-three and a half million, so that's nine point four percent or fifty-six point eight million higher than the current FY, and that reflects inflation and higher pay for personnel and benefits, you know, those compound each year.

4:44

Uh, the net budget, which excludes interfund transfers and charges, is four hundred and ninety nine million.

4:52

So that's four point six increase, which is twenty one point eight million higher than the current FY.

4:58

The general fund is 344 million.

5:03

So that's up 6.5% or 21 million compared to the current FY.

4:59

Capital is 40.7 million that's proposed, which is 7.2 million less than the current FY.

5:19

Our employee full-time spaces are proposed to go up by 18, so it would go from 1,618 spaces in the current FY to $1,636 spaces full time in FY27.

5:36

And the part time will go drop down by from 27 to 21 for a decrease of six.

5:43

Now when I say costs are up, part of that, of course, is depending on what category, especially, depends on inflation.

5:52

Inflation hovers around 2.5 to 3.2%, depending on the cost category.

5:59

And of course, the compounding effects each year of personnel and benefits costs since we implemented the compensation study recommendations back in 2022, and we did that all at once.

6:20

It's up 19.6%, which equates to around 2.2 million dollars.

6:26

Other charges, which are things like service contracts, equipment leases, internal fund charges, fuel maintenance and so forth, building rent, that's gone up 5.4%, which comes to $4.5 million an increase.

6:44

Other uses, and that's those transfers from the general fund to support entities like CAT, public assembly facilities, the pension unfunded liability, and so forth.

6:56

That's up 13%, which comes to $10.4 million.

7:00

And of course, our we have higher personnel costs.

7:04

The general fund alone, I think they're up like $4 million.

7:08

The revenues are flatter, especially sales tax.

7:12

And if you recall from the budget retreat, that is our second largest source of revenue.

7:20

The only bigger one is property tax.

7:23

But it's only projected to grow by 3%, can where compared to where we projected ending the FY at the budget retreat, this FY.

7:35

So the total for FY27 should be $72.8 million.

Discussion Breakdown — Share of Meeting
Fiscal Sustainability██████████████████18%
Public Safety█████████████13%
Economic Development█████████████13%
Engineering And Infrastructure██████████10%
Personnel Matters██████████10%
Parks and Recreation███████7%
Community Engagement█████5%
Technology and Innovation████4%
Homelessness████4%
Summary of Proceedings

Knoxville City Council FY27 Budget Hearing – May 7, 2026

The Knoxville City Council convened a legislative budget hearing starting at 8:03 AM on May 7, 2026, to review the proposed FY27 budget. CFO Boyce Evans presented a balanced $663.5 million total budget ($499 million net) with no new taxes, emphasizing strategic investments in core services, public safety, affordable housing, and parks. The budget is leaner than prior years, using $6 million in unassigned fund balance for one-time capital projects and reducing capital spending by $7.2 million. Revenues are flattening, with sales tax growth slowing to 3% and property tax growth projected at 1.75%. The general fund is $344 million, up 6.5%. Employee full-time spaces would increase by 18 to 1,636, and part-time positions drop by 6 to 21. The hearing continued through the afternoon with department presentations, followed by a public hearing at 5:00 PM.

Public Comments & Testimony

  • Vivian Scheid (3615 MLK Ave, Knoxville) urged the council to allocate more funding for warming centers and homeless services, noting that 161 people died last winter. She argued that large entertainment projects (e.g., the G10 party district) receive millions while basic needs go underfunded. She called for planning ahead to prevent homelessness among the projected 75,000 new residents by 2040.
  • Caitlin South Hall (1018 E Churchwell Ave) highlighted the absence of cooling shelters in the budget, expressing concern about record summer temperatures. She noted that public libraries are already at capacity and cannot serve as adequate cooling centers. She urged the city to establish a funding stream for cooling shelters, similar to the recent discussions about warming centers.

Discussion Items

Budget Overview (Boyce Evans, CFO)

  • Proposed budget totals $663.5 million (9.4% increase over FY26), net budget $499 million (4.6% increase). General fund $344 million. Capital budget $40.7 million (down $7.2 million).
  • Uses $6 million unassigned fund balance for one-time capital projects, including Washington Pike Improvements ($2.1M), South Knox Bridge Greenway ($1M+), Fire Station 15 ($900K), and LT Ross building repairs ($500K).
  • No tax increase; property tax rate remains at $2.1556 per $100 assessed value. Reappraisal expected to lower rate in August.
  • Sales tax projected to grow only 3% ($72.8M total); state-shared sales tax flat at $24M. Property tax growth estimated at 1.75% (increase of ~$3M).
  • 18 new FTEs: 5 police officers (for supervision under the new 10-hour shift), 6 parks part-time to full-time, 4 public service for Chihowee Park maintenance, 1 energy/sustainability manager, 1 CAT deputy director, 1 financial analyst, and 1 CAT deputy director.
  • Employee compensation: Funds 2.5% salary increase for all employees, plus 1.7% step increases for uniformed personnel. Doubles performance pay pool to 1% of payroll ($256K). Adds $200K for park seasonal workers (to $13–$15/hr). Health insurance costs remain unchanged for employees.
  • Pension unfunded liability increases by $2.1M. Debt principal at end of FY26: $104.3M; convention center debt reduced to $29.7M; expects to pay off convention center bonds 1–2 years early.
  • Stadium debt: City and county split gap; FY26 budget $1M (likely used less); sales tax came in $380K over estimate, TIF/pilot $350K short due to construction delays; net better than expected.
  • Affordable housing: $8M total, including $4.5M for Transforming Western project (final year), $2.5M for Affordable Rental Development Fund, $900K for home ownership initiatives.
  • Homeless prevention: Over $2M local/federal funds; warming center funding increased $200K to $500K (county matches, total $1M).
  • Reserves: Stabilization account $68.8M (20% of GF), assigned fund balance $17.2M (5%), charter reserve $3.44M (1%). City can operate 148 days on cash alone.

Public Safety - Knoxville Police Department (Chief Noel)

  • Requests 5 new police officers to support the transition from 12-hour to 10-hour shifts (starting July 1). The change improves officer wellness but requires more supervision. Current officer-to-supervisor ratio will be around 1:8 after hires (still high, target 1:6).
  • Also requests $100K for a wellness center at the public safety complex, leveraging $300K in private donations for a total $400K project (gym, physical therapy, kitchen, mental health resources).
  • Discussed full-time strength: current budget strength 421 officers (up from 416 long-term; historically 461+ under Mayor Ashe). Chief noted need for more officers for traffic enforcement, co-responder programs, and investigative side. Preliminary patrol staffing analysis shows need for ~15 more patrol officers.
  • Budget for co-responder program remains at 6 teams; applied for grant to add 3 more. Long-term goal: 12 teams.

Fire Department (Chief Sharp)

  • Current uniformed staff: 327 (unchanged for over 20 years, after losing 30 positions in 2003). Civilian staff: 10. No new firefighter positions in proposed budget; overtime is high. Councilwoman Parker requested overtime cost data.
  • Responding to increasing EMS calls, particularly overdose calls (peaked at ~1,000 in 2019, declining slightly). Mental health support improved: now require annual mental health checkups for all firefighters, and embed wellness training.
  • Implementing a third-party strategic plan to address staffing, rank structure, cost recovery, and career development; expected completion summer 2026, then integration with compensation and longevity studies to guide future budgets.
  • New Fire Station 15 (Burlington) is a replacement, not expansion. One expansion in 15 years (South Knoxville). Needs in all directions for future growth.

Emergency Communications (Mr. Anders)

  • FY27 request flat. Budget: city contributes $2.6M, county $1.3–1.5M, state phone tariff ~$10M. Currently operating from backup facility; main center testing soon. Interlocal agreement needs updating; will present new cost allocation to council.
  • 911 call volume increasing; technology improvements (e.g., fire alarm direct dispatch) mitigate some. Non-emergency calls consume half of resources. Nurse navigation (AMR) reducing unnecessary ambulance dispatches.

Emergency Management Agency (Colvin)

  • No budget requests. Funded through city/county 50/50 split plus $150K federal grant. Staffing is very small for community size; long-term goal to increase.

Office of Community Safety and Empowerment (Miss Middlebrook)

  • Total budget ~$2.7M local dollars (all local). Funded across three accounts: general operations (page 58), neighborhood empowerment (page 65), and violence intervention fund (page 207). Grant revenues (e.g., DOJ $2M) are separate, not included; DOJ funds are reimbursement-based and not yet drawn down.
  • Neighborhood empowerment grants reduced due to shift to increased council 202 funds ($20K per member/year). Council discussion: some want both programs; administration suggested funneling through 202 funds for efficiency.
  • NICJR (Knoxville Peace) contract had a no-cost extension through December 2026; $275K remaining from original $519K. Councilman Grant raised concerns about lack of updates and slow spending. Finance clarified reimbursement basis; mayor’s office committed to providing monthly reports going forward.

Operations (Engineering, Fleet, CAT, Public Service)

  • Engineering (Tom Claybough): Traffic calming program relaunched; 64 applications received, speed studies done, neighborhood meetings start soon. New sidewalks: none budgeted for FY27 due to cost ($1,200/linear foot). Substantial investment stormwater regulation: exempts projects under $500K and uses 5-year rolling window. Parking system: revenues $5.6M vs expenses $7.3M; still refining operations; working on long-term strategy for garages.
  • Plans Review/Building Inspections (Peter Ahrens): Development services funded by fees; benchmarks met (residential under 1 week, commercial <$500K under 2 weeks). Customer service improved. Fee restructuring kept residential fees low.
  • Fleet (Nicholas Bradshaw): 1,700 assets; diverse fuel portfolio (92 propane, 220 electric, plus gas/diesel). Budgeted $3.5M for fuel; conservatively projected.
  • CAT (Isaac Thorne): 2.6M riders in FY25 (highest since 2015), up 5% year-to-date. 191 operators, goal of 200. On-time performance up 11%. New deputy director (Suzanne Rimmer) moves from CAT to city payroll; cost-neutral. Administration budget increase in fund 100 reflects grant match for anticipated grants, not staff.
  • Public Service (Rachel Messler): Compensation study for citywide workforce will be conducted with a consultant; RFP to go out after budget approval. Longevity study also in progress. Plan to have results by December 2026 to inform FY28 budget.

Parks and Recreation (Cheryl Ely)

  • Chihowee Park: $2M capital and operating funds for transition from Legends to city management. CPAG process underway; second meeting May 14. Flooding study ongoing; capital may be used for infrastructure/amenities. Councilwoman Parker expressed concern that investment may be insufficient given flooding and community expectations; Lakeshore comparison noted but Lehner leveraged significant private funds.
  • Splash pads: $800K in ballfield capital fund for Victor Ash Park (Councilman Lloyd’s district).
  • Knoxville Art Center: New larger space at Western Heights as part of Transforming Western project, shared funding with KCDC.
  • Master plan implementation: payroll athletic increase of $250K to raise low-paid seasonal positions to $13–$15/hr.

Policy (Housing, Homelessness, Sustainability, Planning)

  • Housing and Neighborhood Development (Kevin DeBose): Blighted property fund and chronic problem properties fund total $400K. Since 2019, 70 properties put back into active use. Overcoming Barriers to Homeownership program: not in budget but private funding secured; will come to council via resolution to accept and amend budget.
  • Office of Housing Stability (Aaron Reed): Warming centers expanded to $500K city (match by county, total $1M). Seeking seasonal shelter model for 32° loss threshold. One church location lost; seeking two replacement sites. Cooling centers not yet budgeted; public comment noted urgency.
  • CAC (Misty Goodwin): LT Ross building structural repairs $500K in capital budget; also seeking congressional funding for plumbing/HVAC. City funds used for overhead and programs not covered by grants (e.g., senior case managers above income limits).
  • Planning (Amy Brooks): Comprehensive plan update enters community engagement phase; storefront on Market Square open Wednesdays and select Saturdays; staff to attend festivals. Budget for plan was approved last council; no new requests.

Finance (Boyce Evans)

  • Budget of $6M, 43 positions. Difficulty hiring governmental accountants; turnover high (lost 3 of 4 new analysts in past year). Controller search underway. Vacancies in revenue division; training curve for private-to-public transition.

Communications (Kristen Farley, Kendra Brewer)

  • Budget down 5.6% due to one FTE moved to IT; no additional requests. Website overhaul underway; expected September rollout; will be more user-friendly with personalized portals. Special events permits transitioning to online by July/August.

City Courts (Judge Tyler Cavanaugh)

  • Requested $8,500 for AV equipment (virtual hearings), $10K for website redesign (may be covered by city site), and $125K for digitization of 50 years of paper records (not funded but may use in-kind). Budget otherwise flat. Court funded solely by $50 fines and $96.50 court costs. Emphasized efficiency and ability-to-pay approaches.

Legislative (Mr. Johnson)

  • Two requests met: $45K increase for council 202 funds ($20K per member) and $25K for attorney’s contingency for litigation (beer board/land use). Both funded.

Key Outcomes

  • The proposed FY27 budget is balanced with no tax increases and includes strategic investments in public safety, affordable housing, and parks, while reducing capital spending and using $6M in unassigned fund balance for one-time projects.
  • Council will hold a public hearing at 7:00 PM on May 19, 2026, and vote on the budget on May 26, 2026.
  • No votes were taken during this work session; the hearing concluded with a recess for the public hearing at 5:00 PM.
  • Council requested additional reports: police/fire overtime breakdown, details on unassigned fund balance use over time, stadium revenue breakdown, and monthly reports on violence intervention contracts.
  • Administration committed to improving communication with employees and council regarding compensation and benefits studies.
  • The public hearing included two speakers urging increased funding for warming/cooling shelters and homelessness services.

Meeting Transcript

Good morning. It is 803, and I'd like to go ahead and call our legislative budget hearing meeting to order. Do you mind call the role? It's so nice not to have to call the roll and be all formal. So first up with two minutes to spare. I'm getting ahead of schedule, boys. We're gonna start you at 803 instead of 805. That's good, ma'am. I understand that the mayor can't be with us today, and you are going to uh set up the introduction to the budget for us. That is correct. Yes, ma'am. Go ahead. Go ahead. Okay, well, uh, the Meyer said as the vice mayor said, uh, welcome, good morning to the uh legislative budget hearings for the FY27 proposed budget. And the purpose of this is to review uh some key highlights and details of the proposed budget and then answer questions that you may have uh per the agenda. I will be followed after I do the kind of the big picture overview. I'll be followed by the various departments and partner agencies, and you'll be able to uh ask them questions as well, and finance will assist where we can. Uh the mayor's not here, but you know, I thought she summarized uh the budget best when she said that uh it was balanced with uh no new uh taxes, 499 million dollar net budget, uh that invests strategically while emphasizing core services. I thought that was a good uh a good lead-in on it. It is a bit leaner uh, but it continues to prioritize public safety, affordable housing, parks, and uh high quality focused services. Uh it's also got a forward-looking uh commitment to great public spaces, quality of life, job creation, and proven partnerships to get results. Now, before I get digging into the math and everything, uh just want to introduce who I've got here with me. Uh, most of you know Kitrin Smith, the deputy CFO, my right hand in all things financial. Uh, she is also in charge of our accounting division and our uh treasury division. I've got also back here, they've moved one space back so they could get a little further away from the line of fire. Miss Penny Owens, our purchasing agent, who's in charge of the purchasing division and all procurements, and I've got Miss Donna Dyer, our revenue administrator, who is in charge of all things dealing taking in money. She's in charge of the revenue division. So anyway, I want to take a few minutes right now to cover the highlights of the proposed budget and then uh open it up to questions that you might have. First off, as I said in that intro, it's a balanced budget with no tax increases. It is somewhat tighter than in uh previous years, and that's evidenced. Uh, the two things that pop up top of my mind are we're proposing the use of six million in unassigned fund balance for one-time capital projects, and even with that capital is down 7.2 million in what we propose from the current FY. So uh again, a little bit tighter. Uh it still provides top notch services uh for our citizens. We have healthy fund balance and reserves that are maintained in this. It's got a sound debt portfolio and bond ratings, no change there. In fact, it's improving. The pension fund is strong and properly funded. Our property tax is strong, it's still growing, but the growth there is normally slow, and the sales tax is still growing, albeit a good bit slower than it was uh several years back. Now, in terms of the hardcore figures, our total budget is six hundred and sixty-three and a half million, so that's nine point four percent or fifty-six point eight million higher than the current FY, and that reflects inflation and higher pay for personnel and benefits, you know, those compound each year. Uh, the net budget, which excludes interfund transfers and charges, is four hundred and ninety nine million. So that's four point six increase, which is twenty one point eight million higher than the current FY. The general fund is 344 million. So that's up 6.5% or 21 million compared to the current FY. Capital is 40.7 million that's proposed, which is 7.2 million less than the current FY. Our employee full-time spaces are proposed to go up by 18, so it would go from 1,618 spaces in the current FY to $1,636 spaces full time in FY27. And the part time will go drop down by from 27 to 21 for a decrease of six. Now when I say costs are up, part of that, of course, is depending on what category, especially, depends on inflation. Inflation hovers around 2.5 to 3.2%, depending on the cost category. And of course, the compounding effects each year of personnel and benefits costs since we implemented the compensation study recommendations back in 2022, and we did that all at once. It's up 19.6%, which equates to around 2.2 million dollars.

SUMMARIZED BY OPENPUBLICA AI
TRANSCRIPT VIA PUBLIC VIDEO
openpublica.com