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Mobile reviews finances as federal grant distributions are paused through Feb. 10
Summary
City finance staff reviewed a revised general fund reporting format and outlined a temporary federal pause on grant distributions; council members asked what programs and salaries could be affected.
The Mobile City Council received an updated general fund report on Jan. 28 and heard that a federal Office of Management and Budget directive will temporarily pause the distribution of federal grant funds through Feb. 10, 2025.
Finance staff said the city adopted a general fund reserve and is reporting a total fund balance of $127,751,121, of which $58,626,210 is held in the reserve and $69,124,911 is the general fund operating balance. The finance presentation said the city recorded net income of $1,253,691 for the month and a positive net revenue of $5,019 for the fiscal year-to-date.
Finance staff opened by explaining the change in the report format and the purpose of the reserve, saying the revision removes an “unassigned fund balance” line and instead clearly separates the reserve from the operating balance. The presentation also relayed guidance the city received from the federal Office of Management and Budget that, beginning the same day, paused distribution of federal grant programs until a comprehensive review expected on Feb. 10.
Council members pressed for specifics. Councilman Days and Councilman Spann asked whether the pause could force the city to return funds already received or whether salaries paid with federal grants could be at risk. Finance staff said the OMB directive, as they had read it, did not include language requiring reimbursement of funds already distributed and that programs with legal obligations may still proceed while the pause applies to new distributions. Staff said they expect further guidance after the Feb. 10 review and that they have scheduled internal meetings with the grants department to inventory affected projects and staffing and to report back to council.
The presentation noted the city’s reserves and current operating balance give the city latitude to maintain day-to-day operations during a temporary pause, but staff said they would provide an itemized assessment of exposure — including programs, grant-funded salaries and potential operational impacts — after the Thursday grants review meeting.
Council members said they appreciated the clearer report format and asked that future monthly materials include capital reports and more granular information about grants. Finance staff said they will circulate the underlying OMB language and follow up with the council once the city’s grants review is complete.
The finance presentation concluded with an offer to answer follow-up questions and to provide more detailed, itemized information to the council.
