I think the issue is that the city paid a bunch of money to build the system but still cannot run it for a profit. So the city has to keep paying ongoing losses

I think the issue is that the city paid a bunch of money to build the system but still cannot run it for a profit. So the city has to keep paying ongoing losses for the system in order to run it. They can shut it down of course, but that would be a big black eye for the politicians. So they gave it away to Google, who promised to run it and provide free internet to people for a very low setup fee.