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Tucson staff warn federal grant pause could threaten jobs as FY26 fee increases and water-rate plan roll out
Summary
City staff told the council the administration and courts have created uncertainty over federal grants; the city has $617.5 million in active federal awards and $283.9 million unspent, and expects fee increases and water-rate changes to boost certain funds in FY26.
Tucson city staff told the council on Feb. 19 that a federal pause on grant obligations and disbursements has left key programs and positions at risk while the city moves ahead with FY26 budgeting plans.
Business Services Director Angel Ozomolam and finance staff described an FY26 package that includes fee increases already approved to take effect July 1 — permit fees for planning and development services, fire, and transportation — expected to generate roughly $400,000 in additional revenue. Planning permit valuation assessment increases in Phase 2 are estimated to add about $133,000 in FY26.
Ozomolam warned that fees tied to dedicated funds…
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