DOR says Saugus in no danger of state takeover

SAUGUS – Bob Bliss, spokesperson for the Department of Revenue (DOR), said although Saugus is under scrutiny by the department, the town is in no danger of coming under state control in the wake of recent audit findings in the sewer and water accounts.Bliss said the DOR’s main job is to make sure towns and cities are able to climb out of financial trouble.”We’re not investigators,” Bliss said. “That’s up to somebody else. Our job is to help the town determine the scope of the financial problem or financial hole and then to make sure that solutions are arrived at, and if there is a deficit ? it’s dealt with.”Bliss pointed to cities like Springfield and Lawrence, both of which had some form of state intervention, as rare cases that have never happened in a town like Saugus.Read the Department of Revenue letter to Saugus.”In situations like this, sometimes you have people say, ‘We need state control or oversight or a finance control board.’ That is extremely unlikely ? ” Bliss said. “There was a control board in Springfield set up in 2004 ? Springfield is a city of almost 160,000. Lawrence has a fiscal overseer ? who has the authority to make bottom-line decisions. That situation has not occurred in a town.”Despite this, Gerard Perry, director of accounts for the DOR, sent a letter to Town Manager Scott Crabtree outlining 12 steps the town needs to take immediately, which include providing monthly budget reports, having the Board of Selectmen approve all indirect costs associated with the water and sewer accounts, and resolving any deficit for fiscal year 2012 and projected deficit for 2013.Bliss would not speculate on possible outcomes of the audit, but noted Saugus’ present situation is “uncommon.””As information gets uncovered, you have to figure out how to deal with it,” Bliss said. “In rare occasions, you may have to go to the Legislature to get authority to deficit-borrow. That means that you borrow money to pay it off, which you’re going to have to repay.”Bliss said dealing with a deficit requires “a lot of timely financial reporting” from the town and noted in most cases, deficits can be paid out of a town’s current budget.”If there is a deficit, first of all you try to deal with it in your next year’s budget,” Bliss said. “Without knowing how large the deficit it, it’s kind of pointless to speculate. In most circumstances, when you have a deficit, frequently you’re able to deal with it in your budget. You set aside money to pay the bills basically.”Crabtree said he and the Board of Selectmen have “serious concerns” about the financial stability of the town and have requested tiered cuts from 6 percent down from each department head.Crabtree previously estimated more than $3 million in deficits for the new fiscal year that begins July 1, but said Wednesday that he’ll have a clearer idea of the number in a “couple of weeks.”In the meantime, Crabtree said, working with the DOR will help “establish financial stability and transparency.””Optimistically, looking forward, we’ll be able to see what the budget is and what we’re spending the money on,” Crabtree said. “It will be a much more open process. In general, to create transparency and stability, and build trust and confidence ? that takes time. You’re probably looking at a couple of years to change that trust and opening.”Steve Castinetti, vice chairman of the Board of Selectmen, said he likes several of the bullet points listed in the letter from the DOR, including setting up a three-member audit committee.”The audit committee, I think, is a good idea if we get the right people on it,” Castinetti said. “We’re certainly going to have to have to have qualified people who are going to oversee ongoing audits of the finances. I hope we can get the right people to step up.”With some town officials squaring off over the audit in newspaper commentaries recently, Castinetti said now is not the time for derision.”The problem is, all that does is further serve to divide this town,”