Saugus selectmen in familiar territory concerning tax rate

SAUGUS – Department of Revenue spokesman Bob Bliss said there probably aren?t a lot of letters going out to cities and towns like the one Saugus recently received from the state DOR.?We don?t maintain a ?watch list,?” said Bliss. “But we do from time to time send out letters like this to communities that may have financial issues that could have an impact down the road.”A letter from Gerard Perry of the DOR is requiring Saugus to submit its annual financial audit and management letter along with its balance sheet by Nov. 1 before the 2013 tax rate can be set.The letter also says Saugus must certify its free cash by Nov. 1.Bliss said the DOR sent the letter after reviewing a preliminary audit by accounting firm Powers and Sullivan that found possible financial violations.?In this case, (Perry) wants to make sure that when it comes time to set a tax rate next year, all the available financial information is on hand,” said Bliss. “Clearly there are some financial questions that have arisen out of (the audit) and this would be the normal response. Our interest is making sure budgets are balanced and sufficient revenues are being raised off the tax levy to balance the budget.”Town Treasurer/Collector Wendy Hatch said the letter is similar to one the town received several years ago when there were issues with the cost of health insurance.In addition to the audit, Saugus is also facing a projected $3 million deficit for 2013, which Hatch called a “working number” that will be more fine-tuned as time goes on.If that number doesn?t go down, however, Hatch said the town will have to start cutting certain expenditures.?Hopefully the Senate and House representatives get some changes made to the governor?s budget where more money will be given to cities and towns in Massachusetts for local aid,” said Hatch. “We?re level-funding all of our revenue. We obviously have to decrease some expenditures somewhere to bring the budget into balance. We can?t start a fiscal year without a balanced budget.”Selectman Steve Castinetti was on the Board of Selectmen the last time the DOR sent a letter to the town, and said the issues were resolved.?At the time, the Town Manger was working with DOR to get things straightened out,” said Castinetti. “Ultimately they sent us a letter saying what a great job we had done so we got off the list. But I think we?re on (the watch list) for a different reason now.”Temporary Town Manager John Vasapolli said Powers and Sullivan will start its forensic audit on Monday and will take about a month to complete.?Everything we?re doing is with the advice and recommendation of the DOR as far as the audit and the Inspector General is concerned,” said Vasapolli. “They?ve been very helpful and on the basis of that audit we?ll take appropriate action. I?m informing them every step of the way and I?m taking whatever recommendations that they?re making.”The Board of Selectmen voted two weeks ago to refer $5.8 million possible bidding violations to the Inspector General.Vasapolli said he hasn?t heard any updates from the Inspector General?s office and doesn?t know how long the investigation will take.As Powers and Sullivan begins its audit, Vasapolli said the town?s finances won?t be certain until a final report is filed.?Before the selectmen can call a Town Meeting, they need to identify what shortages there are or what accounts need additional appropriations?” said Vasapolli. “It doesn?t make any sense until we get this audit down. Once it?s done we?ll know where we stand financially and where we go from here.”Matt Tempesta can be reached at [email protected].