City warns of federal-grant uncertainty; staff recommends cautious approach

Interim City Manager Wieson Walker briefed the council on recent federal directives (including orders addressing DEIA programs, hiring freezes, and agency reviews) and the resulting uncertainty for local grantees. Walker said agencies issued an OMB memorandum that briefly paused certain financial-assistance activities; though the memo was rescinded after legal challenges, staff called the environment "fluid" and urged an inventory and risk-based response. "Elimination of DEIA and environmental justice funding will have direct impact to multiple grant awards," Walker said in summary of staff’s assessment.

Staff provided a fiscal snapshot as of Jan. 28: a federal grant portfolio just over $121.7 million, expenditures to date ~ $17.3 million, unreimbursed expenditures ~ $2 million, and roughly $4.6 million encumbered; staff also identified 81 federally funded city positions and more than $81 million in pass-through support to outside community agencies. City leadership recommended continuing essential federally funded human-service positions in the near term (to avoid cutting victim-witness, domestic-violence, and early-childhood programs), while treating capital grants more cautiously—submitting small-dollar charges to test reimbursements and pausing high-risk projects (staff flagged an EPA resiliency award of $20 million as an example). Councilors asked staff to continue pressing agency contacts for written confirmation on reimbursement status.