Wilsonville joins federal lawsuit over retroactive grant conditions that could threaten transit and homelessness funds

Wilsonville announced on June 2 that the city has joined a coalition of cities, counties and transit agencies in a federal lawsuit challenging retroactive changes federal agencies made to grant agreements.

Mayor Charles O'Neil told the City Council the lawsuit, filed in U.S. District Court for the Western District of Washington, seeks to block conditions that were added to grant awards without congressional action and that the city says conflict with state and local laws. "At stake are millions in federal grants to support vital services, including public transit and homelessness assistance, which are now under threat due to unlawful changes imposed without congressional approval," O'Neil said.

The mayor said the newly imposed conditions include requirements tied to immigration enforcement and other mandates that, if enforced, "would violate Oregon state law," leaving the city with two untenable choices: comply and risk violating state law, or refuse and face large repayment obligations. "If we don't, we could be forced to repay 3 times the amount of our transit grants," O'Neil said during the meeting.

O'Neil credited the city attorney, Amanda Gil Hinman, and her team for the work that led Wilsonville to join the lawsuit. He framed the action as defending local authority and protecting services for Wilsonville residents: "Wilson stood up ... to defend the rule of law, protect our community services, and ensure that local decisions stay local," he said.

Councilors asked no questions of staff on the announcement during the meeting; no formal council action was required that night. The mayor and city attorney did not identify a deadline for the litigation or describe next court dates during the remarks. The city release and the court filing will have the formal legal claims and the list of coalition members.

The lawsuit joins a broader, multijurisdictional challenge in which local governments say federal agencies changed grant terms after awards were made. Wilsonville officials said the changes threaten funding for smart transit services and homelessness assistance but did not enumerate specific grant awards or dollar amounts in the council remarks.

Wilsonville did not at the June 2 meeting cite a specific federal statute as the basis for the challenge; the mayor described the claim as a constitutional and administrative-law concern that agencies cannot unilaterally alter grant conditions after awards without congressional authorization.

City communications said more information, including the court filing and next procedural steps, will be posted to wilsonvilleor.gov as the litigation proceeds.