TO: Mayor and Members of City Council
THRU: Jeffrey Yates, Assistant City Manager
FROM: Tyffany L. Neal, MPA, Transit Director
Kimberly Leonard, CLGBO, CLGFO, CPA, MPA
Budget and Evaluation Director
DATE: June 23, 2025
RE:
Title
Adoption of Capital Project Ordinance, Budget Ordinance Amendment, and Special Revenue Ordinance to Appropriate Federal Transit Administration (FTA) Grant NC-2025-035 and the Required Local Match
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 4: Desirable Place to Live, Work and Recreate
Executive Summary:
The City has been awarded a grant from the U.S. Department of Transportation through the Federal Transit Administration (FTA) in the amount of $587,978. This grant allocation includes:
• $328,000 for various transit capital projects,
• $179,978 for operating assistance, and
• $80,000 for special revenue projects.
To appropriate these funds, along with the required local match, City Council is requested to adopt the following ordinances:
• Capital Project Ordinance (CPO) 2025-45
• Budget Ordinance Amendment (BOA) 2025-15
• Special Revenue Ordinance (SRO) 2025-20
These ordinances authorize the appropriation of a total of $689,978, which includes $587,978 in federal grant funding and $102,000 in required local matching funds. The funds will be used to support capital projects, planning activities, safety-related initiatives, and contracted services within the City's transit program.
The $102,000 local match will be provided through the following transfers:
• $16,000 from the Fleet Fund,
• $22,279 from the General Fund, and
• $63,721 from unassigned sales tax refund revenues.
Background:
The Federal Transit Administration (FTA) provides federal grant funding to support eligible public transportation projects through several programs. The Fayetteville urbanized area receives an annual apportionment under the FTA’s Section 5307 Urban Formula Program. After identifying eligible projects and priorities, Transit staff submit a formal grant application to the FTA, which outlines in detail the specific uses of the funds. These funds are crucial in supporting both the operational and capital needs of the City’s public transit system.
A significant portion of the Section 5307 funding is typically allocated to support the annual operating budget, including preventive maintenance reimbursement, ADA paratransit services, and fixed-route operating assistance. FTA Grant NC-2025-035-00 provides $587,978 in federal funding to support annual security costs, safety enhancements at both Transit facilities, planning activities, and contracted services. These funds were previously included in the City’s FY25 Annual Operating Budget and became available following notification from the FTA regarding lapsing (expiring) funds allocated to the City.
To further support the City’s transit initiatives, Capital Project Ordinance (CPO) 2025-25 appropriates $990,000 for several capital improvements. These include the purchase of seven support vehicles, installation of bus stop amenities, upgrades to the video surveillance system, replacement of bus tracking software, and other capital maintenance expenses. The appropriation is funded by $792,000 in federal grant funding and a $198,000 local match provided by the Transit Operating Fund.
In addition, Special Revenue Ordinance (SRO) 2025-20 appropriates $100,000 to support project management, metropolitan planning, and related planning activities. This funding is composed of $80,000 in federal grant funding and a $20,000 local match, also provided by the Transit Operating Fund.
These actions are necessary to ensure the timely and efficient use of available federal funds and to advance the City’s transit operations, infrastructure, and planning objectives. Staff recommends Council adoption of the ordinances as presented.
Issues/Analysis:
As indicated above.
Budget Impact:
The required local match of $281,978, required a general fund transfer of $22,279. These funds were already appropriated, and therefore there is no impact to the general fund fund balance.
Options:
1) Adopt Capital Project Ordinance 2025-45, Special Revenue Ordinance 2025-20, and Budget Ordinance Amendment 2025-15 to appropriate the grant funds and corresponding matches.
2) Do not adopt Capital Project Ordinance 2025-45, Special Revenue Ordinance 2025-20, and Budget Ordinance Amendment 2025-15 to appropriate the grant funds and corresponding matches, and provide further guidance to staff
Recommended Action:
Staff recommends that the Council move to adopt Capital Project Ordinance 2025-45, Special Revenue Ordinance 2025-20, and Budget Ordinance Amendment 2025-15 to appropriate the grant funds and corresponding matches.
Attachments:
FTA Grant NC-2025-035
Ordinances