"We're on a monthly payment schedule from the borough," said Superintendent Leslie O'Keefe. "[The borough] came to us and said they were experiencing a cash flow problem… We agreed to defer the payment."

The payments are usually due on the 12th of each month, according to Brown. July and August usually feature the two largest payments and the 10 payments after that are divided equally with the exception of additional amounts for debt service.

The Board of Education allowed the borough to hold off on the April 12 payment. Of the $2.6 million the borough owed, $600,000 was paid on time, another one million is slated to be paid in the last week of April and the other million in the first week of May. Brown said the board anticipates receiving the May 12 payment on time.

Brown said he spoke with the school's various vendors to seek their permission to send the payments out a little later than usual. However, he noted the school still remained within the legal limits for when the vendors' payments were due.

Had the board not granted the extension, the borough would have had to take out a short-term anticipatory note to fulfill the obligation, according to Councilwoman Rose Inguanti, the chair of the finance committee. Not taking out the note prevented the borough from incurring an additional $75,000 in interest, according to Chief Financial Officer Ed Cortright, as well as additional bond counsel expenses.

Inguanti attributed the lack of funds to the town's diminished surplus. In the past six years the borough's surplus has dropped from well over $2,010,567 in 2001 to only $239,000 in 2007.

Cortright also noted the borough hasn’t yet received state aid and that EnCap is still delinquent by $500,000 in developer’s fees and over $200,000 in taxes, thus contributing to the current lack of funds. He said once the borough covered payroll and debt service not enough money was left to pay the schools without a tax anticipation note.

"It's a difficult place for the borough to be because when unexpected expenses come up you have to get the money somewhere else," said Inguanti.

O'Keefe said the district has granted extensions to the borough in the past, usually around August on occasions when the new tax rate hadn't yet been finalized. Cortright said the mayor is considering proposing estimated tax bills to keep prevent just such a lag in the borough’s tax collection. Last year the borough took out an $8 million tax anticipation note in part to cover the July 12 payment to the schools as well as other borough expenses for the rest of the year.