That is true and would explain my confusion on this matter if they have some list of apex domains they are dynamically creating sub-domains for. Honestly if this is the case I would avoid participating in this. This puts the control of the domain (sub-domain) in their hands for your city. Cities and states can already use sub-domains of their countries .gov domain structure which I realize is full of its own issues but that's another topic all together. Cities can also get citystate.gov in some states but I don't know how that process works.

This project would likely be shut down the first time someone complains to their government about one of the sites.