They are, but you are either being ungenerous in your question or missing vital context that anyone familiar with a city council meeting would already know.

OP is bragging that the municipality is paying for a service without increasing local taxes to pay for it. Increasing local taxes is the obvious way that municipalities typically pay for something like this. But increasing local taxes also generates predictable and often persuasive complaints from old cranks who never want to increase local taxes. OP's muni is thus circumventing those complaints by using grant money for the rollout.

While it's true that state and fed grants use tax dollars, it's irrelevant to the OP's brag. E.g.,

Old crank at meeting says, "I don't want to pay more money for a service I don't need." Applause break.

Old crank at meeting says, "I don't think it's right to take a grant created with state and federal taxes which I don't believe in paying." Awkward silence.

Edit: clarification