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Board hears possible loss of federal ESSER reimbursements; district braces for budget choices
Summary
Finance staff told the board the U.S. Department of Education's shortened liquidation and reimbursement window for ESSER grants could force the district to return or reallocate funds, putting several projects at financial risk.
At Wednesday's meeting Talbot County Public Schools finance staff briefed the board on a federal spending and reimbursement deadline that could require the district to return previously awarded or advanced funds tied to pandemic-related ESSER grants.
What happened: District staff summarized notifications received in late March from the U.S. Department of Education and the Maryland State Department of Education (MSDE) that shortened previously expected liquidation and reimbursement windows for ESSER-era grants. The district had applied for late-liquidation extensions; MSDE submitted a state waiver to U.S. ED asking for relief, but as of the meeting staff said the federal spending window had been closed and reimbursements curtailed, creating immediate cash-flow and project-completion risks.
Projects affected: Staff said some items already advanced with grant money include an 84-passenger bus and an activity court at Easton Elementary; the district had received the funding in advance for those purchases but may ultimately need to return the money if the federal window is not reopened. Staff estimated certain unpaid contractor or project costs related to a health center partnership with Marathon could total about $127,000 immediately and that remaining construction costs for the health center were approximately $1.4 million. MSDE was reported to have filed for a waiver the day of the meeting.
Board questions and contingency options: Board members asked whether the district could use local fund balance, re-budget FY26, or tap other grants (MABE had offered a $250,000 grant contingent on board decisions). Staff said they were preparing options and would discuss implications with county government and at upcoming work sessions; they also encouraged public participation at county budget hearings in May.
Why it matters: The change could force the district to reassign local dollars for projects or delay construction and programs. Staff emphasized some costs already incurred must be paid to avoid breaching contracts with local vendors.
Next steps: District staff will monitor MSDE's waiver request to USED, quantify final exposure, and return to the board with funding scenarios. The board was urged to consider options including fund balance, reprogramming, or seeking county funding to cover potential shortfalls.
