TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, ICMA-CM, City Manager
FROM: Brook M. Redding, MPA, PMP, Senior Assistant to the City Manager
DATE: November 24, 2025
RE:Title
American Rescue Plan Act (ARPA) Final Phase and Next Steps
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COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 1: Safe & Secure Community
Goal 2: Diverse & Viable Economy
Goal 4: Live, Work, & Recreate
Goal 6: Collaborative Government
Executive Summary:
The City of Fayetteville received $40,427,539 in federal ARPA funding to support recovery from the COVID-19 pandemic. Through strategic leadership from City Council, strong internal coordination, and dedicated community partnerships, this funding was successfully deployed across more than 50 projects advancing housing, public safety, economic vitality, infrastructure, and organizational resilience.
As of November 2025, 100% of the ARPA award is obligated, and the majority of projects are complete or nearing final implementation. With the federal obligation deadline (December 2024) now passed, and the final expenditure deadline (December 2026) approaching, the City is entering the final phase of the ARPA program: portfolio closeout.
This report outlines a structured plan to responsibly consolidate the remaining funds, close out completed projects, and bring this historic investment to a strong and compliant conclusion. Council is asked to receive the ARPA update and support the staff strategy to proceed with portfolio closeout, including fund consolidation, project closure, and preparation for reimbursement-based reallocations. A future budget ordinance will be presented for Council consideration.
Background:
Since 2021, ARPA funding has enabled the City to advance strategic Council initiatives that address immediate community needs and long-term recovery goals. The portfolio includes over 50 individual projects tied to Council-approved priorities, such as:
- Affordable Housing & Homelessness Solutions
- Small Business & Economic Recovery Programs
- Public Safety Technologies & Facilities
- Infrastructure, ADA, and Mobility Improvements
- City Operations & Service Modernization
A full list of projects is included as Appendix A, categorized by the strategic priority areas, adopted by Council.
Issues/Analysis:
To support a smooth and compliant transition into the closeout phase, staff has developed a three-part strategy and timeline:
1. Consolidate Remaining Funds - Target: February 2026
All remaining ARPA funds associated with completed project scopes will be consolidated and proposed for reallocation to reimburse the City for eligible public safety salaries, in accordance with ARPA’s revenue replacement provisions. This step will require a future Council budget ordinance and may take several months to fully execute.
2. Reassign Reimbursement Funds - Target: April 2026
Once reimbursement is completed, the equivalent General Fund dollars will be available for City use. Staff will return to Council with recommendations to allocate these funds to eligible priority projects or accounts.
3. Monitor & Close Projects - Ongoing through September 2026
Projects with remaining encumbered balances will be actively monitored and managed through final implementation. All projects with no remaining obligations will be formally closed in the financial system, providing a clean audit trail and finalizing financial records.
This approach ensures the City remains fully compliant with federal requirements while creating flexibility to direct recovered resources toward community priorities.
Budget Impact:
This plan repurposes remaining ARPA funds through internal reimbursement, allowing the released General Fund dollars to be reassigned via future budget ordinances. All remaining funds are obligated and budgeted to active projects.
To date, the City has:
- Total Award: $40,427,539
- Expended: $35,752,405
- Encumbered: $3,853,715
- Remaining: $821,419
Options:
1. Receive this report as an administrative update and allow staff to proceed with the final closeout strategy.
2. Request additional information or modify the proposed approach prior to implementation.
Recommended Action::Recommended Action
For information only, no action required unless Council moves to add to an upcoming Work Session.
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Attachments:
Appendix A - ARPA Project Portfolio Summary (by Council Strategy)