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Middletown City officials warn federal recall of ARP/ESSER funds threatens $10M bus/maintenance facility
Summary
Treasurer Randy Bertram and district staff told the board an April 1 federal action to recall unused ARP/ESSER dollars has paused reimbursements and put about $6.5 million of ESSER money supporting a $10 million vehicle/maintenance facility at risk; the board heard options to continue work while seeking federal and state approvals.
Middletown City Schools officials told the board on April 14 that a March 28 presidential directive and a subsequent federal Department of Education letter have paused reimbursements of leftover ARP/ESSER funds and placed roughly $6.5 million in ESSER support for a $10 million bus and maintenance facility at risk.
Randy Bertram, the district treasurer, said he wrote to U.S. Rep. Warren Davidson and Ohio federal officials after receiving a notice that unused ARP/ESSER funds may be recalled and that approved late‑liquidation projects must be paused pending a reapproval process. Bertram said he learned representatives from the Department of Education, and staff in congressional offices, were already working on processes to allow some projects to proceed if states and the feds reapprove them.
Eric Sautzing, the district’s business manager, and district facilities staff described the project status: the district has spent more than $4.1 million—about 41% of an anticipated $9.9–$10 million project—and the job is at a stage where exterior siding, insulation and roofing work are the next steps. The facilities speaker said “Any pause at this point in time has a very drastic effect on the ability for us to continue going forward with the quality that is necessary” because the building is currently open to the elements and much of the cost has already been incurred.
District staff said the federal letter from Education Secretary Linda McMahon (distributed March 28) includes processes that might allow approved projects to continue but requires the state and federal programs to reapprove late‑liquidation spending. Staff said Middletown is one of about 17–18 Ohio districts with late‑liquidation projects totaling about $15 million statewide; Middletown’s exposure is roughly $6.5 million in ESSER funds.
Officials described contingency funding options: use available PI (permanent improvement) funds while holding ESSER reimbursement requests, shift later to general fund dollars if necessary, seek short‑term borrowing (the district previously borrowed $2 million to start the project), or pursue legislative or federal reapproval to preserve ESSER reimbursement. Bertram said prior communications with federal program staff gave the district reason to hope for an administrative remedy but no guarantees; board members pressed for a timeline but staff said none had been provided yet.
Board members expressed urgency about keeping the contractor and site intact. Sautzing and facilities staff said the district has submitted materials to legislators and congressional offices and will continue outreach; they also reported pay applications running roughly $600,000 per month and estimated PI dollars could cover about three months of current pay apps while the district seeks clarity.
The board did not vote to halt the project. Officials said they will return to the board if a formal pause becomes necessary; until then district leadership intends to continue contracting and construction while pursuing approvals and legislative support.
The district intends to provide additional detail to the board on reapproval timelines, the precise remedies identified by the Department of Education and any fiscal adjustments once they receive written guidance from state and federal offices.
