Tax relief targeted in Saugus

SAUGUS – Saugus residents could see some relief in their tax bill next year if the town goes through with a plan to refinance bonds issued in 2003.The Board of Selectmen voted last week to refinance a portion of bonds issued in 2003 to a lower interest rate that could save the town an estimated $700,000. Another vote authorized the issuing of bonds under the State Qualified Bond Act, which would allow the town to borrow at a higher rating.”These are big opportunities for the town,” said Town Manager Scott Crabtree. “Our bond rating was downgraded from some of the issues raised in the forensic audit ? but we can now take advantage of the higher bond rating.”Treasurer/Collector Wendy Hatch said the figures are just estimates, and financial advisers still have to calculate whether it makes financial sense to refinance.”If it’s not favorable then we still won’t go through with it,” said Hatch. “There’s no commitment at this point by the Board of Selectmen authorizing us. It’s authorizing me to work with the Town Manager and the financial adviser to go through the process to determine if it is a savings to the town.”Moody’s Investor Services downgraded Saugus’ bond rating from A1 to A2 and assigned a “negative outlook” to the town’s $22.4 million of outstanding bonds in May. By issuing State Qualified Bonds, the town will be able to borrow at the AA2/AA rating, which is one grade below the state’s and three grades above the town’s rating.According to Hatch, the money borrowed is paid off by the commonwealth, which in turn withholds that money from the state aid given to Saugus.”We’re using the commonwealth’s rating, so to speak, rather than our own which will allow us to get a more favorable interest rate from a lender,” said Hatch.Some of the 2003 bonds were used to finance several town-wide projects including the renovation of the Veterans Elementary School and water and sewer upgrades.If the town does save money on interest payments, Hatch said that will translate to less money needed for the town’s operating budget.”Any savings in interest cost is a fixed cost savings, that ultimately could result in less money to be appropriated and also free up some capacity in the operating budget to fund other necessities,” said Hatch.Matt Tempesta can be reached at [email protected].