TO: Mayor and Members of City Council
THRU: Jodi Phelps, Assistant City Manager
FROM: Christopher Cauley, Economic and Community Development Director
DATE: May 4, 2026
RE:Title
Expanding Water and Sewer Assessment Assistance Program - Phase V AnnexationTitle
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COUNCIL DISTRICT(S):
Council District(s)
Districts 6, 7, and 8
b
Relationship To Strategic Plan:
GOAL II: The City of Fayetteville will have a Responsive City Government supporting a diverse and viable economy.
Objective 2.2: To invest in community places to ensure revitalization and increase quality of life
GOAL III: The City of Fayetteville will be a city invested in Today and Tomorrow.
Objective 3.2: To manage the City's future growth and strategic land use
GOAL IV: The City of Fayetteville will be a desirable place to live, work and recreate.
Objective 4.5: To ensure a place for people to live in great neighborhoods
Executive Summary:
City Council is asked to receive the following staff report and provide consensus direction regarding potential program modifications to the City’s Water and Sewer Assessment Assistance Program associated with the Phase V Annexation Area where the Public Works Commission is currently expanding utility infrastructure.
Background:
In the spring of 2008, the City of Fayetteville and the PWC Board adopted an agreement to extend sewer service to approximately 8,000 parcels within the Phase V Annexation area. The plan is based on septic system repairs/failures, age of structures, percentage of improved lots without sewer, availability of existing approach mains, and lot density. Construction began in 2010, with a plan to install sewer service to approximately 500 lots per year until scheduled completion in 2037.
The Phase V Annexation area represents the final phase of PWC’s utility infrastructure expansion. Residents annexed into the City in 2006 have not yet received utility infrastructure.
Council requested that staff evaluate options for expanding the City’s sewer connection assistance program to allow additional households to qualify for financial assistance, including increasing the income eligibility threshold up to 120 percent of Area Median Income.
Issues/Analysis:
The City’s sewer connection assistance program was historically supported through Community Development Block Grant (CDBG)-based assistance parameters and is currently administered with General Fund resources.
The current program provides limited assistance to owner-occupied households at or below 80 percent of Area Median Income, including partial support for assessment costs and limited assistance for private plumber connection costs.
Staff reviewed the feasibility of expanding the program using local funds. The City Attorney’s Office confirmed that the current 80 percent AMI threshold is not required when local funds are used, and that Council may consider expanding eligibility up to 120 percent of Area Median Income.
Staff developed two program options for Council consideration:
• Option 1 (Recommended): Maintain assessment assistance at $2,000 toward the $5,000 assessment for eligible homeowner-occupied properties, expand eligibility up to 120 percent AMI, remove the two-year application window, and provide tiered assistance for private plumber connection costs. Plumber assistance would be based on income level, with higher assistance for lower-income households.
• Option 2: Pay the full $5,000 assessment for eligible homeowner-occupied properties up to 120 percent AMI, retain the two-year application window, and provide up to $1,000 toward private plumber connection costs.
• Option 3: Retain eligibility at 80 percent AMI for eligible homeowner-occupied properties, maintain current assistance levels of up to $2,000 for assessment costs and up to $900 for plumber connection costs, and maintain the two-year application window.
Both options would expand eligibility to households up to 120 percent AMI and would require additional General Fund resources. Estimated program costs are approximately $80,000 annually for Option 1 and $120,000 annually for Option 2, based on preliminary participation assumptions.
Budget Impact:
Implementing an expanded program would require the appropriation of additional General Fund dollars and could be considered as part of the upcoming fiscal year budget process. Based on preliminary estimates, program costs assume approximately 20 households annually. Option 1 is estimated at an average subsidy of $4,000 per household, resulting in an annual cost of approximately $80,000 (20 households × $4,000). Option 2 is estimated at an average subsidy of $6,000 per household, resulting in an annual cost of approximately $120,000 (20 households × $6,000). Actual costs will vary based on participation levels and household eligibility. Council previously discussed allocating approximately $250,000 to support additional sewer connections. At this time, approximately $20,000 of General Fund resources are budgeted for the program.
Options:
• Receive the staff report and provide consensus direction regarding potential program modifications to the City’s Water and Sewer Assessment Assistance Program.
• Do not receive the staff report and maintain the current program structure.
• Direct staff to take another action.
Recommended Action::Recommended Action
Receive the staff report and provide consensus direction regarding potential program modifications to the City’s Water and Sewer Assessment Assistance Program.
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Attachments:
Expanding Water and Sewer Assessment Assistance Program - Phase V Annexation Presentation