City staff explains OMB proposed grant-rule, says city submitted comment letter to Regulations.gov

City regulatory staff provided a high-level overview of a proposed Office of Management and Budget regulation that would change grant pre-application procedures, reporting requirements and agency authority to terminate or claw back federal grant funds under broad reputational or priority-based criteria. Liz said the city submitted a comment letter that was signed and filed before the July 13 deadline and that a Cornerstone review summarized widespread concern.

Liz said the proposed regulation could increase administrative burden and financial risk for local governments and research institutions. She reported that Cornerstone’s analysis showed roughly 95% of comments were critical; the transcript quoted a figure of 496,769 comments on Regulations.gov, and Liz said Colorado’s attorney general and other state attorneys general had submitted comments raising legal concerns.

Liz told the committee the proposed implementation date in the rule text is October 1, 2026, and that a final regulation could be published later this year; she said multiple legal challenges are possible if the rule is finalized as written. Staff offered to circulate Cornerstone’s summary and the city’s tracking number for the submitted comment file.

Why it matters: Changes to federal grant rules could materially affect how local governments apply for, receive and report on federal funds and how grant funding decisions are administratively enforced; the city’s comment and monitoring of this rule are part of standard municipal risk management and federal-engagement processes.