After being able to give a somewhat sunny budget recommendation to the Federal Way Public Schools (FWPS) board of directors on May 8, Sally McLean was back with more budget news during the school board’s May 22 meeting.

This time, the news was not so sunny.

There will be more hits to the school district’s budget going forward, this time because of reductions in federal funding, which at $16.8 million annually, makes up for approximately 8.2 percent of the district’s budget overall.

McLean, the assistant superintendent of business services, described some of the legislation that came as a result of last summer’s debt limit ceiling debate in Washington D.C. McLean said one of the new outcomes is going to be “sequestration” of federal funds.

“Our federal funds are now subject to sequestration. So when you go onto Wikipedia, you get a late Latin term, ‘sequestro’, which means ‘set aside.’ In the early Latin, it means ‘mediator’ or ‘trustee.’ So it’s going to be set aside until they figure out how to do the $1.2 trillion reduction,” McLean said. “In the definition of Congress, sequestration triggers across the board automatic reductions. So funding is not set aside or subject to mediation, it’s eliminated.”

McLean said the sequestration reductions are estimated to be anywhere between 7.8 percent to 9.1 percent, which would result in approximately a $1 million loss for FWPS annually moving forward.

For the immediate future, McLean said the district would be able to cover the loss for the 2012-13 school year, through carrying over previously unused federal funding and using other funding sources available to the district. The year after, however, will be different, she said.

“We will undoubtedly need some program modifications and reductions as a result of this in 2013-14,” she said.

The district’s head financier did note that this sequestration can be avoided through Congressional action, but there’s a limited timeframe for that to happen because the sequestrations will take effect on Jan. 2, 2013.

One area that this sequestration process could potentially impact FWPS is through Title I funds. Title I funds are apportioned to districts that have a higher than average poverty rate within the district.

McLean noted that Title I funds are, for now, increased by approximately $800,000 for the district. If and when the sequestration takes effect, that gain of $800,000 is likely to be eliminated.

School board director Angela Griffin was concerned about this development.

“The $800,000 we’re getting because of the need we have will now be cut, but we’ll still have to figure out how to fulfill that need?” Griffin asked.

McLean answered in the affirmative, but still ended on a positive note.

“I wanted to bring this to you because it’s a big deal, but on the other hand, I want to tell we’ve got it under control,” she said.