TO: Mayor and Members of City Council
THRU: Jeffrey Yates, ICMA-CM, Assistant City Manager
FROM: Raquel Booyer, Grants Manager
Taylor Floyd, Budget & Evaluation Director
DATE: November 9, 2026
RE:Title
Adoption of Special Revenue Fund Project Ordinance Amendment 26-0747 to Align ARPA-Funded Project Expenditures for Grant Closeout
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COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal V: Financially Sound City Providing Exemplary City Services.
The proposed action supports sound financial management by ensuring the accurate accounting of federal grant expenditures, maximizing the use of available funding, and maintaining compliance with federal reporting and closeout requirements.
Executive Summary:
Staff requests that City Council adopt Special Revenue Fund Project Ordinance Amendment 26-0747 to reconcile expenditures associated with the City's American Rescue Plan Act (ARPA) allocation and facilitate the timely closeout of the federal grant.
The amendment is intended to align existing budget authority with previously authorized project expenditures and ensure the City fully utilizes its ARPA allocation before the December 31, 2026, federal expenditure deadline.
The proposed amendment does not increase the City's overall budget or appropriate additional funding. Staff will continue evaluating eligible expenditures and funding adjustments necessary to complete the grant closeout.
Background:
The City of Fayetteville received $40,427,539 in federal ARPA funding. City Council appropriated these funds through Special Revenue Ordinance Amendments 2021-21 and 2023-2, adopted June 28, 2021, and September 12, 2022, respectively.
On December 9, 2024, Council adopted Special Revenue Ordinance Amendment 2025-2, authorizing $1,811,096 in ARPA funding to reimburse eligible public safety personnel costs. This action included a corresponding reduction in budget authority within the ARPA Special Revenue Fund.
As staff reconciles the City's ARPA expenditures in preparation for federal closeout, an adjustment to the Special Revenue Fund is necessary to align project expenditures with the City's accounting records and previously approved funding authorizations.
Additionally, two affordable housing projects, Hillside Manor and Rosehill, with combined ARPA allocations of $944,775, may not be completed before the federal expenditure deadline.
To preserve these project commitments while ensuring the full utilization of ARPA funding, staff recommends applying available ARPA funds to other eligible expenditures, including public safety personnel costs, and using General Fund resources to support the affordable housing projects.
Issues/Analysis:
The City must expend its remaining ARPA allocation by December 31, 2026, and complete the required federal reporting and closeout activities.
The proposed ordinance amendment addresses accounting and budget reconciliation needs associated with previously authorized ARPA expenditures.
As the expenditure deadline approaches, staff will continue reviewing project expenditures to identify any remaining balances, confirm eligibility, and make necessary funding adjustments. This process may include reallocating ARPA funding among eligible activities and identifying alternative funding sources for projects that cannot meet the federal deadline.
These actions are intended to accomplish three objectives:
1. Ensure the City fully utilizes its $40,427,539 federal ARPA allocation.
2. Maintain funding for previously approved City projects, including affordable housing commitments.
3. Complete the required grant reconciliation and closeout in compliance with federal requirements.
Budget Impact:
The proposed ordinance amendment is intended to reconcile existing ARPA budget authority and expenditures without increasing the City's overall budget or requiring additional funding.
The anticipated substitution of General Fund resources for the $944,775 in affordable housing allocations would allow ARPA funding to be applied to other eligible expenditures before the federal deadline while preserving the City's commitments to Hillside Manor and Rosehill.
Any related transfers, funding substitutions, or additional budget amendments will need to be properly authorized and reflected in the City's financial records.
Options:
Option 1: Adopt the special revenue ordinance amendment.
Option 2: Do not adopt the amendment and provide further direction to staff.
Recommended Action::Recommended Action
Staff recommends that City Council adopt Special Revenue Fund Project Ordinance Amendment 26-0747 to reconcile previously authorized ARPA expenditures and support the timely closeout of the City's federal ARPA allocation.
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Attachments:
Special Revenue Fund Project Ordinance Amendment 26-0747