As you and others have mentioned, it does make more sense to maintain IP ownership and grant a license to the City of Detroit. That'd be a hackathon I want to be in. :)
That surprises me. IP transfer means you would no longer be able to use your own code without their permission. That would be a show-stopper for me.
I guess this really highlights the problem with the whole bureaucracy in general, and that contract in particular. You know what "IP transfer" means. OP doesn't. And, I'm convinced, he doesn't have to. He is not a lawyer, he knows other things, that lawyers do no know. Cheers to you for knowing both lisp and law, but I really cannot judge OP for the fact he knows only lisp. I believe it's not him, who is guilty, but the system, where every harmless lisper can be forced into signing contract he doesn't understand because of the fact he wanted to do something good for the society (and paid 20 bucks for that, by the way).
That's another reason this contract would probably be invalid: no consideration.
http://www.nolo.com/legal-encyclopedia/consideration-every-c...
And even if nothing bad will actually happen — which might be true in this case, but not in general — you can say that moral damage is already received. And nobody will ever pay him for that, because, guess what, he is a harmless lisper and not somebody, who tries to sue everybody he sees for the moral damage.
I think you're right that author has his thinking switched here. I also observe that he didn't make a mistake in translating his thoughts to a blog post. But it's clear to me that the whole contract is a problem.
I'm pretty sure the author reversed "reasonable" and "unreasonable" from what he intended.
Also, IANAL, but I'm also pretty sure this contract would not be enforceable because of the way it was presented. There would be a very strong argument that the participants were coerced into signing.