TO: Mayor and Members of City Council
THRU: Michael Gibson, Interim Assistant City Manager
Jeffrey Yates, ICMA-CM, Assistant City Manager
FROM: Tyffany L. Neal, MPA, Transit Director
Taylor Floyd, Budget Director
DATE: October 12, 2026
RE:Title
Accept and Appropriate $235,875 in NCDOT Urban State Match Funding for Transit Bus Purchases and Authorize the City Manager to Execute Necessary AgreementsTitle
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COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
The grant supports Strategic Plan Goal IV, Desirable Place to Live, Work and Recreate, by supporting investment in safe, reliable transit service. State participation in bus purchase costs reduces the City’s funding contribution and preserves local resources while maintaining the transit investments already approved.
Executive Summary:
Capital Project Ordinance Amendment 26-0691 accepts and appropriates $235,875 from the North Carolina Department of Transportation (NCDOT) through its Urban State Match Program to reimburse a portion of the City’s contribution toward eligible battery electric bus purchases. The state contribution covers 10% of the eligible purchase cost, replacing half of the 20% share originally funded by the City. The amendment changes the project’s funding sources without increasing its $5,676,500 budget. Staff recommends returning the $235,875 in City funding replaced by the state to the General Fund.
In addition, this item authorizes the City Manager to execute the agreements necessary to implement the grant.
This action changes how the approved bus purchases are funded; it does not authorize additional buses or expand transit service.
Background:
Capital Project Ordinance 2023-11, adopted October 10, 2022, established the transit capital project for battery-electric and hybrid buses and charging infrastructure under Federal Transit Administration (FTA) Grant 2022-059. The proposed state match agreement, NCDOT Project 26-UM-107, covers two replacement battery-electric buses with an eligible purchase cost of $2,358,754.
A local match is the portion of an eligible purchase cost not covered by federal grant funding. Under the Urban State Match Program grant agreement, federal funding covers 80% of the eligible bus purchase cost, NCDOT provides 10% ($235,875), and the City funds the remaining 10%. The proposed amendment replaces $235,875 of previously budgeted City funding with state reimbursement. General Fund pay-as-you-go funding, meaning existing City resources rather than borrowing, was the original funding source.
Issues/Analysis:
The grant reduces the City’s share of eligible bus purchase costs while preserving the approved capital project budget and scope. Reimbursement depends on eligible expenses, supporting documentation, and compliance with the agreement’s reporting deadlines.
The ordinance reduces the transfer from the Transit Operating Fund by $235,875. Because the original contribution was General Fund pay-as-you-go funding, staff recommends the related fund transfers to ensure that the amount replaced is returned to the General Fund.
Budget Impact:
The amendment adds $235,875 in NCDOT revenue and reduces the budgeted Transit Operating Fund transfer by the same amount, from $767,387 to $531,512. Total NCDOT revenue increases from $117,938 to $353,813. Federal funding remains at $4,791,175, and total project revenues and expenditures remain at $5,676,500.
Staff recommends returning $235,875 in previously committed General Fund pay-as-you-go funding to the General Fund balance through the necessary fund transfers. This action requires no additional General Fund contribution and does not authorize spending of the returned funds.
Options:
1. Adopt Capital Project Ordinance Amendment 26-0691 to accept and appropriate $235,875 in NCDOT Urban State Match funding, reduce the City-funded contribution by the same amount, authorize the necessary budgetary and financial actions to return the replaced City funding to the General Fund, and authorize the City Manager to execute the necessary agreements.
2. Do not adopt Capital Project Ordinance Amendment 26-0691 currently and provide further direction to staff regarding the grant and project funding.
Recommended Action::Recommended Action
Adopt Capital Project Ordinance Amendment 26-0691 to accept and appropriate $235,875 in NCDOT Urban State Match funding, authorize the necessary budgetary and financial actions to return the City funding replaced by the grant to the General Fund, and authorize the City Manager to execute the agreements necessary to implement the grant.
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Attachments:
Capital Project Ordinance (CPOA) 26-0691
North Carolina Department of Transportation Public Transportation Grant - Urban State Match Program Agreement
Award Letter