Audit: Saugus in better financial shape

SAUGUS – It was just a year ago the Department of Revenue told the town it needed to get its financial act together or face possible intervention.The question now is did the town do it?The simple answer is yes, but the truer answer depends on how you look at it.According to the fiscal year end audit by Melanson Heath and Company the town has finished off the year in better financial shape than last.”It’s not great,” said Frank Byron, president of Melanson Heath, “but it’s better.”While the general fund showed a $226,420 deficit, the stabilization fund saw an increase of $193,000 and the water and sewer enterprise accounts each ended the fiscal year with a surplus.Kasabuski Ice Arena, however, is still bringing down the town. The rink ended the year roughly $650,000 short.Byron said the two funds the town is still clearly struggling with are health insurance costs and the ice rink.Town Manger Andrew Bisignani said the entire health insurance deficit, $1.2 million, would be raised in the 2008 budget, which made that issue a wash. He also said he is working on a new plan to relieve the town of Kasabuski’s debt.”From an outsider’s point of view it looks like the town has turned a corner and is on it’s way back from the trying financial situation it had in 2006,” Byron said.The Department of Revenue has agreed with Melanson Heath that the town is making some progress, however, it still has its concerns.DOR Spokesman Robert Bliss said intervention is not an issue at the moment but he didn’t completely rule it out.”It’s not currently being entertained,” he said. “The town has been making some movement on thorny issues.”But, he said, the failure to come up with a plan to fund the teacher contract has the potential to thwart any progress made.In fact, failure to fund the teacher contract means the tax rate cannot be set and the town will essentially start off 2008 about $10 million in debt.Without a tax rate the town can’t issue tax bills, which leaves it woefully short in operating funds. Bisignani said he expects to have to borrow money by the second week of January. That could cost the town upwards of $100,000 in interest.Also, while the town may have turned a corner financially, that has yet to trickle down to day-to-day operations. The fire and police departments are running at what they believe is a bare bones level and overtime for both are set to run out early next year. The Essex Street Fire Station is slated to close in March, as is the Public Library.The School Department was forced to lay off 29 teachers last year when its budget took a $1.3 million hit. Now it is struggling with the possibility that it might have to find $330,000 within its budget to fund the teacher contract.Still, despite the cutback in services, Byron said the town is in much better financial shape than it has been.”And the condition of accounts and records is much, much better than it was years back,” he said. “We came in to do the audit and the books were (ready) and things were prepared for us. Everyone is doing better.”