The City of Fayetteville is preparing for the cascading effects of recent and anticipated changes to the federal government brought about by executive orders from the Trump administration and billionaire Elon Musk’s Department of Government Efficiency (DOGE), including the mass firings of federal employees and the freezing of some federal funding.
City officials laid out their plans to address the potential withdrawal of federal support when giving a report on the city’s financial state at the Feb. 24 Fayetteville City Council meeting. While the “city’s financial strength is strong” now, Assistant City Manager and Interim Chief Financial Officer Jeffrey Yates told the council, some of its federal funding could be in jeopardy. This is especially the case for federal money the city hasn’t spent yet but has already allocated toward specific projects.
“Things we planned on doing could be at risk that we haven’t drawn down on,” Yates said. “But what I will tell you is the team is working diligently to draw every penny we can get before anything else comes down from the federal government. So we are making a specific effort to try to ensure that that doesn’t happen. But we just have to kind of keep our eye on that. It’s hard to forecast and it changes constantly.”
The city responded to the Trump administration’s initial blanket freeze on federal funding — issued on Jan. 27 — saying it was “evaluating possible impacts” of the pause. The freeze was rescinded just two days later and has been halted by federal judges, but several nonprofits and state agencies across the country have since reported being unable to access their federal funding.
The city has received millions of dollars of federal funding in the past year, including major infrastructure investments like a $5 million grant from the Federal Aviation Administration for the city’s airport development and a $6.6 million grant from the Federal Transit Administration for electric vehicle infrastructure. The city also received $40 million in American Rescue Plan Act funds during the pandemic. CityView has submitted a public records request asking for the total federal dollars the city received in 2024 but hasn’t received the records yet.
In response to a council member’s question about what staff expects will happen with federal funding, Assistant City Manager Jodi Phelps indicated that the future of federal funding remained uncertain, but staff is preparing for any losses.
“I wish I had a crystal ball and I could give you an exact answer to that, but I do not,” Phelps said. “What I can share with you that staff is doing, along with our federal consultants, we have gone out and sat with and talked to all of the department directors and we’ve created a lengthy and comprehensive list of all of the federally funded programs we have across the city, whether it’s grants, discretionary allocations, block grants, competitive funding, and also the funds that we were actively pursuing or looking at.”
Phelps said the list will also include city staff’s determination of the risk of each fund being cut based on available information.
“If it’s a high risk of being cut or unfunded or not continuing, then what are the shifts that we need to do internally for the city so we can either sustain the program or change the program or fund it a different way or do whatever based on the impact it has?” Phelps said.
Phelps said the list will allow Fayetteville to have a “very clear picture” of the value the federal funds provide to residents, or the return on investment. This will enable the city to effectively advocate for its needs with congressional offices and federal agencies in Washington, Phelps said.
“Our case would be preservation of that funding and those funding streams,” Phelps said. “I don’t know what the federal government’s going to do, but we’ve created that matrix.”
Yates also said the city is taking into consideration geopolitical factors that could impact its finances, particularly tariffs. Tariffs are taxes placed on imported foreign goods with the goal of increasing domestic production. President Donald Trump plans to place 25% tariffs on Canada and Mexico, though they have not gone into effect yet. Trump’s tariffs on steel and aluminum, also not yet implemented, have already driven construction costs in the U.S. as developers seek to purchase the building materials before the tariffs make them more expensive.
“How are discussions like tariffs impacting us? Well, we know that the cost of steel is going to go up, the price of goods is going to go up in some cases,” Yates said. “Some of our suppliers have already told us, be prepared. If tariffs go up, your price for parts, your price for construction, all these things are going to go up, and that’s above the normal inflation.”
Mass firings of federal workers
Since Trump instructed DOGE to shrink the federal workforce, the unofficial agency has fired about 30,000 civilian federal employees, Bloomberg Law and New York Magazine reported this week. The firings are expected to continue and impact about 200,000 federal employees, or about 10% of the federal workforce. In addition, about 75,000 federal workers have resigned as part of Trump’s “buyout offer,” the White House told news outlets on Feb. 12.
In Fayetteville, city managers said the mass firings and layoffs of federal workers could impact the city’s finances in the next couple of years.
Notably, federal employees who are out of a job could turn to the city for employment. This would be both a positive and negative, Yates said. On one hand, the influx of capable civil service workers would allow the city to reduce its staff vacancies, which currently sits at 10.8%. On the other hand, paying more employees means the city would have less savings to draw from for other expenditures.
“If there are a large number of federal employees that hit the job market, it’s possible that a significant number of those are going to look toward us for employment,” Yates said. “There are a lot of those jobs that would be similar or transferable skill sets to the jobs we have. If that happens and we start to see that vacancy number creep down during the year, then we’re going to have to look at the budgetary impact.”
According to the Federal Reserve Bank of St. Louis, which tracks the share of federal employees across the country, the Fayetteville metropolitan area had 15,179 federal government employees in December 2024. A 2023 Washington Post analysis of data provided by the Office of Personnel Management found that civilian federal employees make up about 6.1% of the Fayetteville metropolitan area’s workforce, the second-highest percentage in the state. This number does not account for the active-duty military service members, of which there are more than 50,000 at Fort Bragg.
City Manager Doug Hewett said the total number of federal employees in the Fayetteville metropolitan area is about 66,000, including soldiers.
“Those are your neighbors, your constituents, friends and family,” Hewett said. “And we all want what’s best for the country. But the idea that half of that number, or 10% of that number potentially have job uncertainty, that is something that is of concern.”
Contact Evey Weisblat at eweisblat@cityviewnc.com or 216-527-3608. This story was made possible by donations from readers like you to CityView News Fund, a 501(c)(3) charitable organization committed to an informed democracy in Fayetteville and Cumberland County.
Excellent, informative, well written article. This is the quality of local reporting that many of us feared had been lost and hoped would return to Fayetteville. Well done and thank you!