TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, ICMA-CM, City Manager
FROM: Dr. Andrew Mansell, CMO Special Projects
DATE: March 23, 2026
RE:Title
Expanding Water and Sewer Assessment Assistance Program- Phase V AnnexationTitle
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COUNCIL DISTRICT(S):
Council District(s)
District 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 regarding the feasibility of expanding eligibility for 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 that would extend sewer service to approximately 8,000 parcels in what has been called 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 started in 2010 with a plan to install sewer service to approximately 500 lots per year until the scheduled completion in 2037. The Phase V Annexation area represents the final phase of PWC’s infrastructure expansion of the City’s utility infrastructure expansion.
Residents who were annexed into the City in 2006 have not yet received the utility infrastructure. Council has requested that staff evaluate options for expanding the City’s sewer connection assistance program to allow additional households to qualify for financial assistance.
Specifically, Council requested that staff examine increasing the income eligibility threshold from the current program levels to up to 120 percent of Area Median Income in order to support additional sewer connections and potentially accelerate Phase V completion.
Issues/Analysis:
The City’s sewer connection assistance programs were historically funded through the Department of Housing and Urban Development’s Community Development Block Grant (CDBG) funding. For the past several years, this program has been funded through the Economic and Community Development’s (ECD) General Fund budget. Most community development programs require the city to assist persons of low to moderate income.
The City Attorney’s Office has reviewed the program and confirms that the City may expand eligibility above the current 80 percent AMI threshold when local funds are used. As a result, the City could expand eligibility for sewer connection assistance up to 120 percent of Area Median Income if local funding were increased to support the program. Expanding eligibility may allow additional households to connect to the sewer system and could help accelerate the completion of Phase V infrastructure improvements.
Budget Impact:
Implementing an expanded eligibility program would require the appropriation of General Fund dollars and could be considered as part of the upcoming fiscal year budget process. Expanding the program to households earning up to 120 percent of Area Median Income would require the use of local funding sources.
Council previously discussed allocating approximately $250,000 to support additional sewer connections under an expanded eligibility structure. At this time, only $20,000 of General Fund resources are budgeted for this purpose. If Council wishes to proceed with the program expansion, funding would need to be considered as part of the next fiscal year budget process.
Options:
1. Receive the report.
2. Do not receive the report and provide further direction to staff.
Recommended Action::Recommended Action
For information only, no action required unless Council directs staff to include an upcoming City Council Work Session.
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Attachments:
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