All the gay priests confused the city
The policy of the Archdiocese has been clear for decades. The city has been fine with it all along. What obviously happened here was that two homosexuals went to the Catholic adoption agency and wanted to sign up as an adopting “family.”
This was intentional knowing that they would be denied and then complain to local government. Local government withdrew the contract because someone was now threatening them with legal action and then covered their tracks legally by this duplicitous claim that they didn’t know about the policy.
Added bonus for the homosexuals: the Archdiocese and adopting agency had to squander resources trying to preserve the contract.