Unexpected $2.2M interest windfall prompts Washington Unified to use Learning Recovery funds to shore up special education costs

Finance staff told trustees that Yolo County posted nearly $2.2 million in interest income for the 2023–24 year — roughly $2 million more than the district had budgeted — and that the new figure substantially improves the district's projected reserve for economic uncertainty.

Presenter 'Billy' explained the district had budgeted $150,000 in interest but the county posting raised the district's projected reserve to about 6.43% for 2026–27. That improvement removed an immediate fiscal crisis, staff said, but the board still must align the budget for 2027–28 when projections showed a shortfall. As part of that alignment, staff asked whether to keep $2,000,000 of the Learning Recovery Block Grant in restricted programming or to apply it to special education costs (thereby requiring a general fund contribution in its place).

Staff recommended using the $2 million from the learning recovery grant to supplant special education contributions so the district could meet the board's 6% reserve policy. Trustees debated a cautious approach recommended by the finance subcommittee — for example, splitting the difference and using $1 million until the county's audit is final — but ultimately approved a motion to proceed with the $2 million supplanting as included in the unaudited actuals update.

What happens next: staff will proceed with the budget alignment plan that incorporates the $2,000,000 from the Learning Recovery Block Grant to offset special education contributions and will return with audited figures or if material changes occur.