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Passaic council hears federal funding shift; rescinds LED sign purchase, approves CDBG allocations pending federal award
Summary
Council members approved routine CDBG allocations and a resolution rescinding a planned LED sign purchase after a federal letter narrowed eligible pandemic-era reimbursements. Administration said it will pause nonessential purchases until federal priorities are clarified.
The Passaic City Council on April 22 approved Community Development Block Grant (CDBG) allocations and voted to rescind a prior purchase authorization for LED signs after city staff said the federal government has tightened what it will reimburse.
The council voted to approve agenda items covering CDBG allocations (resolutions 26–37) and separately approved Resolution 38 to move forward with the city’s CDBG submission. Council members also approved Resolution 26, which rescinded an earlier resolution authorizing the purchase of LED signs after federal officials indicated they would not reimburse that expenditure.
Why it matters: city staff said the federal guidance affects programs and purchases the city had assumed would be reimbursable, so the administration will hold off on nonessential spending until it can confirm reimbursement. That could change planned investments in equipment and programs tied to federal grants.
City Administrator Fernandez told the council that an ad hoc committee reviewed the CDBG allocations and adjusted descriptions and arithmetic before the item reached the dais. Fernandez said the city had submitted anticipated figures to the federal government based on last year’s numbers and that an award letter is required before the CFO creates an account for spending and reimbursement.
Fernandez said the LED-sign purchase was stopped before manufacturing began after the federal contact informed the city that the program would not fund that item. "They sent the letter. They're like, we're not paying for this," Fernandez said. "Thank goodness the company hadn't started manufacturing yet, and we were able to cut the purchase of those LED signs before we were left with inability to pay for it."
Mayor Hector St. Laura told the council that the city received a "letter from the federal government" saying certain prior pandemic-era funding would no longer be available or would be reprioritized. He said the administration has instructed staff to hold off on purchases unless there is a compelling emergency justification.
On the council floor, members asked whether allocations could be changed if the federal award is smaller than anticipated; Fernandez replied that the council could re-evaluate and reallocate if the award differs from the amount submitted.
Vote and next steps: the council approved the grouped CDBG resolutions (26–37) and Resolution 38 by roll call. Fernandez said the CDBG submission uses last year’s numbers and that actual awards from the federal government will determine final allocations. The administration will return to the council with recommended changes if the award amount differs.
Council President Schaer and other members said staff will continue outreach to federal contacts to learn the new priorities and will coordinate any program changes with the council.
Ending: Council members approved the CDBG motions and the rescission of the LED-sign purchase while instructing the administration to pause nonessential, grant-dependent spending until the city receives clearer federal guidance.
