It sounds like they’ve unilaterally decided to stop paying for certain city expenses covered by the agreement (after everyone finalized their budgets) and they therefore won’t renew the agreement.
It could be just one more way to pretend they aren’t raising taxes to pay lawyers and other assorted buddies.
Also, I suspect that “insurance and risk management” might be how the cities would pay their lawyers when they get swept into the state court lawsuit? There are probably people here who could answer that.
(Rank speculation alert: I guess it could also be an attempt to strong-arm the cities into agreeing to something, like control over the police contracts for example. Or who knows what else?)
The report also mentioned that the district rather than the cities collects taxes to cover those services, and presumably won’t be giving up that money. But there was no explanation of exactly how that worked.