Chattanooga Mayor Tim Kelly Proposes $30 Million American Rescue Plan Investment "To Stimulate Citywide Prosperity"

  • Friday, July 8, 2022

Mayor Tim Kelly on Friday announced his proposal to use $30 million in funding from the American Rescue Plan Act "to invest in 36 innovative, local initiatives that together will spur economic growth while closing gaps in public health and education across the city. With unprecedented investments in the areas of affordable housing, workforce development, early learning, and public health and safety, the proposed spending plan aims to address Chattanooga’s most difficult challenges and catalyze generational change."  


The $30 million investment focuses on the following priority areas:


  • $5.8M to increase availability of affordable homes, creating more than 230 new affordable rental units

  • $5.3M toward preventing homelessness and supporting the transition to permanent housing

  • $1.6M to preserve existing affordable housing, helping keep families in their homes even as property values rise 

  • $5.9M toward workforce development initiatives that help provide direct pathways to stable careers 

  • $2.9M to expand access to resources for minority business owners and entrepreneurs, helping close long-standing opportunity gaps

  • $3.7M for public safety and youth mentorship initiatives to empower young people and make Chattanooga safer for all residents

  • $1.2M to improve access to mental health care, while also helping expand and diversify the city’s mental health workforce

  • $3.6M to expand the city’s early learning system for families and children who need it most


Together, these investments include $11 million for local, minority-led initiatives and $10 million in seed investments for new or expanded programs.


The final spending plan is contingent upon City Council approval, which is slated for July 26.


“Chattanooga suffers from long-standing social and economic inequalities, driven by the ongoing disinvestment and neglect of some of our most vulnerable neighborhoods,” said Mayor Kelly.

“While it will take much more than $30 million to solve these deep-rooted issues, this investment represents an enormous step forward in removing the persistent barriers that have created and sustained inequities in Chattanooga for far too long, especially among the Black community.”


The community was invited to submit applications for funding through a formal notice of funding opportunity posted on April 29, 2022. The City received more than 200 applications totaling over $200 million in funding requests. Initiatives were selected based on a highly competitive and structured technical review process, during which a committee comprising the Mayor’s senior staff evaluated each application according to five elements: community priority area, outcome and impact, racial equity and inclusion, organizational structure, and reasonable budget.  


"This was a highly competitive process that demonstrated the incredible passion and will of our community to make Chattanooga a better place," said Mayor Kelly. “I deeply appreciate our non-profit community who stepped up to solve our most pressing problems and only wish we had more funds available for distribution.”


Upon approval from City Council, the city will begin immediate engagement with the selected organizations to provide technical assistance for the duration of the funding period - which lasts through the end of 2024 - with the goal of ensuring accountability, helping them build capacity, and building sustainability for the long-term. 


The initiatives selected for funding work across multiple areas of focus, and the majority have deep roots in the community, helping us directly reach those who are most in need,” said Mayor Kelly. “From creation of a new low-barrier shelter to expanding broadband connectivity to low-income households across the city, I look forward to working alongside these organizations in our shared goal to create One Chattanooga, where every resident has an opportunity to thrive and prosper.”


The spending plan was guided by the Chattanooga Equitable Recovery Commission, which was formed "to ensure Chattanooga’s fund allocation process is administered with integrity and accountability, through an equity lens." The commission issued a recommended framework for the City’s American Rescue Plan Investments, which was formally adopted by Mayor Kelly on Friday, April 29, and included in the formal notice of funding opportunity. For more information, visit https://recovery.chattanooga.gov.
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