The city of San Luis Obispo stands to feel the effects of the Trump administration’s executive order that temporarily froze federal grants, loans, and other financial assistance programs.
City Finance Director Emily Jackson told the SLO City Council at its Feb. 18 meeting that the biggest concern about the funding pause is the local ability to receive reimbursement for the 2023 winter storms. SLO is meant to get at least $730,000 from the Federal Emergency Management Agency (FEMA).
“At this point, we’ve got about over $700,000 that’s been fully obligated by FEMA,” Jackson said. “Our best understanding is that that’s with the state now to cut us some checks. But we haven’t seen those checks come rolling in yet, and my guess is that’s because the state doesn’t have the money from the feds.”
The Federal Office of Management and Budget issued the freeze on Jan. 27—a week after President Donald Trump’s inauguration—through memorandum M-25-13.
“The use of federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” the memorandum said.
Instead, according to the memorandum, federal financial help should be provided to advance the administration’s priorities, remove the burden of inflation, “unleashing American energy” and manufacturing, “ending ‘wokeness’ and the weaponization of the government,” promote government efficiency, and “Make America Healthy Again.”
The executive order would have become effective on Jan. 28 but temporary restraining orders from two separate U.S. District judges blocked it until future review and action from the courts occur.
The temporary stay on federal grant money was intended to give the Trump administration more time to review agency programs and determine the best use of the funding that’s consistent with the president’s priorities.
“The memorandum would have been available on the Whitehouse’s website at whitehouse.gov/omb/information-for-agencies/memoranda but, like many federal webpages, it is no longer available,” the SLO City Council staff report said.
The city noted that while the impact of the executive order on city services is unclear, staff conducted an analysis of funding from federal sources to understand how future federal action would play out.
SLO expended roughly $15.7 million on storm response, so far. But the estimated total cost of repairing storm damage and safeguarding against future natural disasters remains at $48.4 million.
Jackson noted that all the repair projects have been reviewed by the city’s contacts at FEMA and the California Governor’s Office of Emergency Services. FEMA’s formal review body is determining eligibility.
“We’re still suffering a little bit from delayed permitting from U.S Army Corps of Engineers,” she said. “We have a small handful of projects that we’re still waiting for emergency permits on.”
While disaster relief funds have been fully obligated across the country, Jackson said that the possibility of refilling relief coffers is now unknown.
“There was a point at which we were saying Congress was working to refill that fund and start again providing support to public agencies,” she said. “But at this point, given the new federal administration’s actions on federal funding, it’s not really clear to us at this point what the status of that is. But that is something we’re tracking on a daily basis.”
SLO’s transit program, which is largely federally funded, could also take a hit. City Manager Whitney McDonald told council members that the city applied for a discretionary grant to buy more battery electric buses. But SLO wasn’t awarded the funding request.
“We won’t plan to move forward with that purchase at this time,” she said. “If something happens in the future with federal funding, the results will require us to come back pretty quickly with a plan for how we will address that in terms of our service delivery. It will reduce our service.”
If the federal government cuts transit funds, the city will publicly discuss service cutbacks and work on an outreach plan to inform residents about reduced services.
SLO has received significant funding from the American Rescue Plan Act with plans in the works to make more use of those dollars. Federal dollars from the act were going to be used for the city’s transit fleet replacement, a broadband plan, the widening of a portion of Higuera Street, building electrification, and the widening of the Prado Road bridge. In total, the city was anticipating $7.9 million in funding.
Nonprofits like Community Action Partnership of SLO and Transitions-Mental Health Association would also be impacted if the funding freeze goes into effect.
“If some of our nonprofit partners lose federal funding, that will have a real indirect—but we’ll feel it directly—impact to our community and the residents here, especially those who rely on some of the safety-net services that a lot of those programs provide.” Δ
Clarification: The city of SLO clarified to New Times after publication that officials will work on public outreach about possible reduced services only if the federal government cuts transit funds.
This article appears in Feb 20 – Mar 2, 2025.