City finance staff say state intends to reimburse $47 million ESSER carryover; city would cover shortfall if federal reimbursement fails

At its April 7 meeting the Springfield City Finance Committee received an informational briefing on federal ESSER reimbursements for school construction and building projects and the risk that a $47 million balance could remain unreimbursed. Kathy Bono of the city finance team told the committee the federal government had approved a late-liquidation request for ESSER funds (a carryover) and that the state Department of Elementary and Secondary Education (DESE) had told the city it intends to continue processing reimbursement requests and to reimburse the city for the outstanding balance.

Bono said the federal late-liquidation approval covered about $58 million and that the city has received roughly $11.1 million in reimbursements to date, leaving a balance of about $47 million pending reimbursement. She explained how ESSER reimbursements work: the projects must be completed, all permits, contracts and invoices submitted, and the city must request reimbursement; there is no advance payment — funds are disbursed on a reimbursement basis. The city’s next reimbursement submission was scheduled for around April 20 and was expected to seek roughly $10 million.

Committee members asked what happens if federal or state payments do not arrive. Bono said the state had told cities and towns it would continue to operate “normally on a reimbursement basis” and that DESE intends to reimburse Springfield for the outstanding $47 million. She added that, if the funds ultimately are not reimbursed, the city would have to cover the costs and that the practical options would be to use a combination of free cash and stabilization (reserves). Bono said the city’s stabilization balance was “approximately, some a little over $71,000,000 right now,” and councilors noted that using a $47 million shortfall would reduce reserves well below the city’s target (the committee was told the city’s reserve level was about 5.7% at present and a $47 million draw would put it below the 5% goal).

Committee members and residents pressed for clarity about what the ESSER money paid for: Bono said these ESSER funds were used largely for capital projects — HVAC systems, playgrounds, practice fields, an amphitheater design and other physical improvements — not operating costs or instruction. That distinction was central to the committee’s concern: the projects are largely built or near completion (Bono said most projects were about 90% complete, with some HVAC work at about 70%), so the city cannot meaningfully stop work midstream.

Bono emphasized that the city is in daily contact with the school department and the state and that staff will continue monthly submissions and follow up with DESE. She also confirmed that if a shortfall occurs the city would be responsible for covering eligible costs that are not reimbursed and that doing so would harm the city’s reserves. Committee members asked finance staff to update the council after the April 20 submission and to notify councilors if any change in DESE’s position occurs.