TO: Mayor and Members of City Council
THRU: Jodi Phelps, Assistant City Manager
FROM: Christopher Cauley, MPA, Director of Economic and Community Development
Jacqueline Abbott, Community Relations Manager
DATE: May 26, 2026
RE:Title
Adoption of Special Revenue Fund Project Ordinance 2026-13 to Appropriate McKinsey Settlement Funds Title
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COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal I: Safe and Secure Community
Strategic Objective 1.3 Ensure low incidence of property and violent crime.
Goal 2: Responsive City Government Supporting a Diverse and Viable Economy.
Strategic Objective 2.2: Invest in community places to ensure revitalization and increase the quality of life.
Goal 4: Desirable Place to Live, Work and Recreate
Strategic Objective 4.6: Reduce poverty and homelessness.
Goal 6: Collaborative Citizen and Business Engagement.
Strategic Objective 6.2: Ensure trust and confidence in City government through transparency & high-quality customer service.
Strategic Objective 6.3: Inform and educate about local government by
enhancing public outreach and increasing community dialog, collaboration and empowerment
Executive Summary:
City Council is asked to adopt Special Revenue Fund Project Ordinance 2026-13 to appropriate $18,306 for the opioid strategies funded by McKinsey Settlement Funds. The City of Fayetteville has received approximately $18,306 in McKinsey Settlement Funds from recent litigation concerning the national opioid epidemic. These funds must be expended for a specific strategy and the strategy recommended is Exhibit E, Schedule B, Strategy D - Address the Needs of Criminal Justice-Involved Persons.
Background:
The City of Fayetteville received a one-time payment of $18,306 through the McKinsey political subdivision opioid settlement. These funds are separate from the City’s broader national opioid settlement allocation and must be used for approved opioid remediation purposes.
Staff recommends using the McKinsey settlement funds to support the North Carolina Harm Reduction Coalition’s Gate to Stability Recovery Support Pilot Program. The program is intended to provide short-term recovery support for individuals returning from incarceration who have opioid use disorder and are at risk of relapse, overdose, homelessness, or recidivism due to limited support upon release. This use aligns with Exhibit E, Schedule B, Strategy D, which addresses the needs of criminal justice-involved persons with opioid use disorder and any co-occurring substance use or mental health conditions.
Adoption of Special Revenue Fund Project Ordinance 2026-13 is required to appropriate the funds and authorize their expenditure for this purpose.
Issues/Analysis:
The McKinsey settlement payment is limited in amount and should be directed to a discrete, eligible use rather than spread across multiple activities. The proposed use provides a clear connection between the settlement purpose and the City’s ongoing public safety, homelessness, reentry, and opioid response priorities.
The North Carolina Harm Reduction Coalition is a nonprofit organization that provides outreach, linkage to care, naloxone education and distribution, harm reduction education, overdose prevention, and related support services. NCHRC has worked in Cumberland County for a number of years and has provided technical assistance related to local pre-arrest diversion and Law Enforcement Assisted Diversion efforts.
The Gate to Stability Recovery Support Pilot Program is designed to serve individuals with opioid use disorder who are transitioning out of incarceration and who lack immediate recovery support. This is a high-risk period for relapse, overdose, homelessness, and justice-system reentry. Using the McKinsey funds for this purpose allows the City to apply a small, one-time settlement payment to a targeted intervention that fits the approved opioid remediation uses.
If Council adopts the ordinance, staff will proceed with the necessary agreement and administrative steps to provide $18,306 to NCHRC for the Gate to Stability Recovery Support Pilot Program, subject to applicable settlement, City, and financial requirements.
Budget Impact:
The City received a one-time McKinsey opioid settlement payment of $18,306. Adoption of Special Revenue Fund Project Ordinance 2026-13 will appropriate these funds for eligible opioid remediation activities. No General Fund match is required.
Because this is a one-time payment, there is no ongoing McKinsey revenue source to support the program beyond this allocation.
Options:
• Adopt Special Revenue Fund Project Ordinance 2026-13 to appropriate $18,306 in McKinsey opioid settlement funds for the recommended eligible use.
• Do not adopt Special Revenue Fund Project Ordinance 2026-13. The funds would remain unappropriated and could not be expended at this time.
• Direct staff to return with an alternative eligible use for the McKinsey opioid settlement funds.
Recommended Action::Recommended Action
Staff recommends that City Council adopt Special Revenue Fund Project Ordinance 2026-13 to appropriate $18,306 in McKinsey opioid settlement funds to support the North Carolina Harm Reduction Coalition’s Gate to Stability Recovery Support Pilot Program.
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Attachments:
SRO 2026-13
Exhibit E - List of Opioid Remediation Uses