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Manager briefs council on federal funding uncertainty; $18 million in city projects touched by freeze notices
Summary
City Manager Phil Kroll told the council that staff flagged about $18 million in local projects that could have been affected by a recent federal spending suspension and that agency guidance and court action have since clarified some—but not all—funding status.
City Manager Phil Kroll updated the council on the brief federal suspension notices and the local impact on projects, saying staff tracked immediate notifications from federal agencies and worked to protect funds where possible.
Kroll said staff identified roughly $18,000,000 in city projects at various stages that would have been affected by the initial OMB memorandum and agency suspension notices. He listed congressional district spending and CDS allocations that the city had in the pipeline: $3,000,000 for the Palace Center, $2,500,000 for the Public Safety Building and $3,900,000 for Riverwalk expansion and improvements. He also noted roughly $8,000,000 in water/sewer expansion projects were in the queue and that the Transportation funding and certain NOAA‑administered projects (the Littlefield DM removal) had received immediate pause notices from agencies.
Kroll described a flurry of agency communications after the administration’s memo and a subsequent federal court order on Jan. 31 that required agencies to notify partners whether funds would be reinstated. Some agencies have permitted projects to resume, while others have continued to pause some activity; Kroll said staff continue to work with federal partners to determine status. He said the city drew down accessible funds as soon as possible during the brief freeze window to preserve cash for immediate needs, noting that national system overloads limited some drawdowns on the day of the memorandum.
Kroll said staff do not currently expect ARPA funding to be affected and that transportation funding and many congressional allocations are likely to continue, but he cautioned there were no guarantees. He highlighted sectors that could affect municipal operations if cuts occurred—Medicaid payments tied to EMS (which could significantly affect ambulance revenue) and special education flows to schools—urging conservative planning assumptions for the FY26 budget.
Councilors asked for more detail about potential worst‑case scenarios and coordination with the school department. Kroll and the superintendent (present in prior discussions) said they were monitoring Department of Education guidance and legislative developments and will report back as the state and federal processes evolve.
