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Citing a one-time $2.4 million balloon payment on debt service that was worked out several years ago, the Crestwood School Board approved a short-term $3.4 million Tax Anticipation Note loan from Wayne Bank, and a general obligation note of $660,000 with The Fidelity Deposit and Discount Bank Thursday.

Business Manager Peter Bard said the balloon payment had been arranged to give the district some breathing room and a chance to gather the money for the payment, but that the COVID-19 pandemic and all the related costs and disruptions made the district unable to gather enough money. He said paying it as planned will be the right choice in the long term because it will protect the district’s credit rating.

This comes after the Board voted 5-4 at a special meeting Monday to approve a proposed final budget with an expected shortfall of $2.1 million. The budget raises property taxes by 3.7%, the maximum allowed for the district this year under state law. The red ink was to be covered by a fund balance.

During Thursday’s meeting, Bard apologized for an error of omission in the Monday budget presentation, noting he had not mentioned $1.4 million federal COVID-19 relief money available, and an expected increase in federal Title I money of about $100,000. Bard said the revised budget numbers of 2021-22 have revenue at $44.1 million and expenditures at $44.3 million, with an operating deficit of $242,305 and a total fund balance of $1.1 million.

That includes the one-time increase thanks to COVID-19 money, the $778,000 added through the 3.7% tax increase, and the $100,000 increase in Title I money.

Bard also talked about a common topic at many local School Board Budget meetings: An increase in payments to outside cyber charter schools during the pandemic. He said the district had budgeted $871,250 for state-required payments to cyber charters in 2021-22, but the actual cost so far has been nearly $1.3 million, about 47% over budget. He said the number will go up more before the end of the fiscal year June 30 as cyber charters continue to submit their bills.

Bard detailed how the district has spent nearly $500,000 in COVID-19 federal relief money so far, and said the district is expecting two additional infusions of $1.46 million and $2.9 million.

“There is light at the end of the tunnel,” Bard said, adding that it looks like the district will finish this year in good fiscal shape, allowing the board to keep expenses and tax increases down in coming years.

Reach Mark Guydish at 570-991-6112 or on Twitter @TLMarkGuydish