TO: Mayor and Members of City Council
THRU: Kelly Strickland, Assistant City Manager
Jeffrey A. Yates, Assistant City Manager
FROM: Tyffany L. Neal, Transit Director
Kimberly Leonard, CLGFO, CLGBO, CPA, MPA, Budget and Evaluation Director
DATE: April 28, 2025
RE:
Title
Adoption of Budget Ordinance Amendment, Capital Project Ordinance and Special Revenue Ordinance to Appropriate Federal Transit Administration Grant NC-2025-021-00 and the Required Local Match
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 4: Desirable Place to Live, Work and Recreate
Executive Summary:
The City has been awarded a grant from the U.S. Department of Transportation via the Federal Transit Administration (FTA) in the amount of $3,631,800.
The operating grant portion of the FTA grant was originally projected at $2,740,000 in the FY25 budget. The actual award amount is $2,509,000. Therefore, the FY25 budget ordinance is being amended, with Budget Ordinance Amendment (BOA) 2025-13, to reduce appropriations by $231,000 due to the shortfall in the project grant. There are also two other components to the grant which include $950,800 of federal grant funding and requiring a $240,200 local match for various capital projects, and $172,000 of federal grant funding with a required $43,000 local match for planning activities, safety related projects, and employee training. The required local matches for the projects will be provided by a transfer from the Transit Operating Fund. Accordingly, the Council is asked to adopt BOA 2025-13 to reduce appropriations in the operating budget and adopt Capital Project Ordinance (CPO) 2025-43 and Special Revenue Ordinance (SRO) 2025-18 to appropriate the expenditures for the project component of the grant.
Background:
The FTA provides federal grant funding for eligible public transportation projects. The Fayetteville urbanized area receives an annual apportionment under FTA’s Section 5307 Urban Formula Program. Once potential uses of the funding are identified by Transit staff, a formal application is submitted to FTA to access and receive these funds. The application outlines in detail the specific uses of the grant funding.
Transit staff typically utilizes a significant portion of the FTA apportionment to support its annual operating budget in the form of preventive maintenance reimbursement, ADA paratransit reimbursement, and fixed route operating assistance. FTA grant NC-2025-021-00 provides $1,384,000 federal funding for annual preventive maintenance costs, $300,000 of federal funding for annual ADA paratransit service costs, and $825,000 of federal funding for annual fixed route operating costs. These funds were previously appropriated by Council with the adoption of the City’s FY25 Annual Operating Budget. Traditionally, these funds are awarded and received during the fiscal year to which they apply.
Capital Project Ordinance 2025-43 appropriates $1,191,00 for the purchase of support vehicles, the purchase and installation of bus stop amenities, the upgrade of the video communications system, facility renovations, and other capital maintenance costs. The funding sources for this appropriation are $950,800 of federal grant funding and a required local match of $240,200 provided by the Transit Operating Fund.
Special Revenue Ordinance 2025-18 appropriates $215,000 for employee training, metropolitan planning, and other related activities. The funding sources for this appropriation are $172,000 of federal grant funding and a required local match of $43,000 provided by the Transit Operating Fund.
Issues/Analysis:
As indicated above, this award includes $2,509,000 for routine operating and maintenance expenditures for fixed route and ADA paratransit services incurred in FY25
Budget Impact:
The required local match of $283,200 will be provided by a transfer from the Transit Operating Fund for CPO 2025-43 and SRO 2025-18. There is no impact to the fiscal year 2024-2025 General Fund budget.
Options:
1) Adopt Budget Ordinance Amendment 2025-13, Capital Project Ordinance 2025-43 and Special Revenue Ordinance 2025-18.
2) Do not adopt the Budget Ordinance Amendment 2025-13, Capital Project Ordinance 2025-43 and Special Revenue Ordinance 2025-18 and provide further guidance to staff.
Recommended Action:
Staff recommend that the Council move to adopt the Budget Ordinance Amendment 2025-13, Capital Project Ordinance 2025-43 and Special Revenue Ordinance 2025-18.
Attachments:
Budget Ordinance Amendment 2025-13
Capital Project Ordinance 2025-43
Special Revenue Ordinance 2025-18
FTA FY25 Grant NC-2025-021-00