That is a SLIF Grant funded project. The SLIF Grants didn't receive final legislative approval until mid December. Then agreements had to be sent, signed and returned, pushing it into January. No "work" could be done until the City received the agreements back from State Parks.
Proposals, engineering, specs, bid advertising and opening, contract acceptance and other such things take time. I'm surprised they're getting started on it so soon.
They couldn't delay the project until next winter, since there's a specific timetable requirement for completion of the grant project. Also, if the City didn't begin work and using the funds there was a possibility that the Governor would see all that money laying around and strip it to help alleviate the State Budget crisis.
Funds are reimbursed after the City pays the bills. Until the City submits for reimbursement, that money is sitting in a State Park Account.
There may be things that LHC appears to SNAFU, but this one is out of their hands. This is the same grant program that I deal with, so I know of what I speak.