District monitoring state lawsuit over impounded federal funds; possible $80,000 local impact if funds withheld

Wiseburn finance staff told the board that the state of California has joined a lawsuit challenging the federal government’s withholding of certain federal education dollars and described the local budget exposure as modest but real.

Sean (Chief Business Officer/staff) said the lawsuit concerns the withholding of federal funds that affect Title I and related allocations; he estimated the potential district impact at “a little over $80,000.” Staff told trustees they are following guidance from fiscal advisers and recommended not counting the potentially withheld federal dollars as guaranteed revenue in the 45‑day budget revision. Instead, staff plan to revisit the matter at the district’s first interim budget report when there is greater clarity.

Why it matters: District staff said $80,000 is material to planning but not catastrophic; contingency plans call for using state restricted one‑time funds if federal dollars are ultimately not released. “They’re hoping … to revisit it at, like, our first interim,” Sean said; he added the district will “lead it in at the moment under the assumption that the law will be the suit will be successful” but will adjust as appropriate.

Board members asked whether the 45‑day revision should exclude the contested dollars; staff confirmed advisers recommended not making assumptions in the 45‑day revision and to wait until first interim for any baseline changes.

Ending: Staff said they will keep the board informed as litigation develops and will adjust budget assumptions at the appropriate reporting intervals.