TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, ICMA-CM, City Manager
Jodi Phelps, Assistant City Manager
FROM: Christopher Cauley, MPA, Economic and Community Development
Director
Dr. Gerald Newton, Development Services Director
Taylor Floyd, Budget & Evaluation Director
DATE: October 26, 2026
RE:Title
Adoption of Resolution Accepting the HUD Automated Permitting Systems Demonstration Grant, Authorization to Execute Grant Documents, and Adoption of Special Revenue Fund Project Ordinance 26-0685Title
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COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 2: Economic & Strategic Growth
• Objective 2.1: To ensure a diverse City tax base.
• Objective 2.6: To manage the City’s future growth and strategic land use.
Goal 4: Financially Sound City Providing Exemplary City Services
• Objective 4.1: To ensure strong financial management with fiduciary accountability and plan for future resource sustainability by aligning resources with City priorities.
Goal 5: Collaborative Citizen & Business Engagement Base
• Objective 5.1: To ensure collaborative relationships with the business community, local governments, military, and stakeholders.
Executive Summary:
The U.S. Department of Housing and Urban Development (HUD) has awarded the City of Fayetteville $1,000,000 through the Automated Permitting Systems Demonstration program. City Council is asked to formally accept the grant award, adopt Special Revenue Fund Project Ordinance 26-0685 appropriating the federal funds, and authorize the City Manager to execute the Federal Award Agreement and associated grant documents. The award requires no local match.
Background:
In July 2026, the City of Fayetteville submitted an application to HUD’s Office of Policy Development and Research for the Automated Permitting Systems Demonstration. The City requested $1 million to competitively procure, implement, and evaluate a modern automated development review and permitting system.
The application was developed through coordination among Economic and Community Development, Information Technology, and Development Services. The proposed project is intended to modernize the City’s development review and permitting environment from initial application and site review through building permits, inspections, and occupancy.
The proposal builds on ongoing City efforts to improve Development Services operations and an independent current-environment assessment conducted by BerryDunn. That work identified opportunities to improve application completeness, workflow coordination, customer communication, technology integration, and performance measurement while building upon an existing digital permitting environment and established review processes.
The City proposed an integrated, cloud-based platform that would connect development review, plan review, permitting, inspections, applicant communication, and performance reporting. The application also identified artificial intelligence-assisted submission review as a core capability. The proposed technology would help applicants identify missing information, required documents, expected plan sheets, and basic deficiencies before formal technical review begins. Automated tools would support staff review but would not replace professional judgment or City authority over code interpretation, inspections, approvals, denials, enforcement, or other final governmental actions.
HUD subsequently selected Fayetteville for the full $1,000,000 requested award. The Federal Award Agreement identifies the award as a cooperative agreement under Assistance Listing 14.506, with no required cost share and a period of performance ending September 30, 2029. HUD signed the agreement on September 22, 2026.
Issues/Analysis:
HUD has awarded the City $1,000,000 for implementation and evaluation of an automated permitting system. The City will be responsible for federal grant administration, procurement, financial oversight, performance reporting, and coordination with HUD throughout the period of performance.
The award is structured as a cooperative agreement, meaning HUD will remain involved in project implementation, evaluation, and reporting. The project will include baseline data development, procurement, system implementation, testing, training, operational evaluation, and preparation of required HUD reports and research deliverables.
The Federal Award Agreement is administered on a cost-reimbursement basis and requires the City to maintain appropriate financial, contractual, performance, and supporting documentation related to the award.
Project Implementation
The City has not selected a software vendor. Technology and professional services will be procured through full and open competition in accordance with applicable federal requirements and City procedures.
The submitted project budget includes funding for:
• Cloud permitting platform subscription, licensing, and AI-assisted functionality
• System implementation and workflow configuration
• Data migration, integration, and reporting configuration
• Owner-side implementation project management
• Cybersecurity, testing, and quality assurance
• Staff training, applicant education, and change management
• Evaluation, data analysis, reporting, editing, and accessibility
The project will evaluate whether automated permitting improves application completeness, processing times, workflow efficiency, staff workload, applicant experience, communication, and overall development-review performance. The City will collect and compare pre- and post-implementation data and will document both the benefits and limitations of the technology.
Special Revenue Fund Project Ordinance
A Special Revenue Fund Project Ordinance is required to recognize and appropriate the $1,000,000 federal award. The ordinance will establish the financial authority necessary to administer grant revenues and expenditures in accordance with HUD requirements.
The City’s submitted budget does not charge City personnel, fringe benefits, travel, equipment, construction, or indirect costs to the HUD award. City staff participation will be supported through existing departmental budgets.
Budget Impact:
The City will recognize and appropriate $1,000,000 in federal funding through Special Revenue Fund Project Ordinance 26-0685.
The HUD Automated Permitting Systems Demonstration requires no local match or cost share. City staff time associated with grant administration and implementation will be supported through existing departmental budgets.
The City currently maintains recurring expenditures for its existing permitting and enterprise systems. As overlapping functions are replaced or consolidated, those existing appropriations are expected to provide the principal funding base for ongoing system costs after the HUD grant period. Final subscription, support, staffing, and integration costs will be determined through competitive procurement and addressed through the City’s annual budget process.
Options:
Option 1: Accept the $1,000,000 HUD Automated Permitting Systems Demonstration Grant, adopt the resolution accepting the award, adopt Special Revenue Fund Project Ordinance 26-0685 appropriating the federal funds, and authorize the City Manager to execute the Federal Award Agreement and associated grant documents.
Option 2: Decline to accept the HUD Automated Permitting Systems Demonstration Grant and do not adopt the associated resolution or Special Revenue Fund Project Ordinance.
Option 3: Provide alternative direction to staff.
Recommended Action::Recommended Action
Accept the $1,000,000 HUD Automated Permitting Systems Demonstration Grant, adopt the resolution accepting the award, adopt Special Revenue Fund Project Ordinance 26-0685 appropriating the federal funds, and authorize the City Manager to execute the Federal Award Agreement and associated grant documents.
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Attachments:
HUD Federal Award Agreement
Authorizing Resolution
Special Revenue Fund Project Ordinance 26-0685