$1M in free cash for Saugus ‘great news’

SAUGUS – Town Manager Scott Crabtree said the more than $1 million in free cash certified for Saugus this year was a result of the Department of Revenue not requiring the town to reclassify illegal water and sewer spending for the full three years.Crabtree called the decision by the DOR “unexpected” after the town and the department had agreed on terms for three years.?The town was only required to reclassify one year,” said Crabtree. “This was documented through the forensic audit at $1.4 million for two years and was expected to reach $2.1 million for a third.”A three-part forensic audit from last spring detailed $1.4 million in general fund-related payroll and expenses being charged to water and sewer accounts, which the audit said is a violation of municipal finance laws. Some of these expenses include employees of the highway, forestry and cemetery department being paid out of the water and sewer accounts, hundreds of thousands of dollars in vendor expenses not properly bid and payroll stipends improperly paid to employees.Crabtree, who had stated during the spring that there would be no free cash, said higher account balances and greater revenue than estimated from the “prior administration?s fiscal budget” were also factors in Saugus? free cash.?In general this is great news for Saugus,” said Crabtree. “This is comforting news in light of the recent announcement by the governor that local aid and other cuts affecting communities are expected from the state budget, which is anticipated to have significant impact on Saugus as well as other communities. Particularly, where the town has very little monies in our stabilization account to meet for such an imposed measure.”There is currently $524,000 in the town?s stabilization account, according to Crabtree, who said it?s “important that town officials continue our discussion regarding financial management policies.”Crabtree said these policies include better planning, implementing austerity measures, a capital improvement plan and the “proper use of non-recurring revenue and free cash.”?We the town together need to change the systemic cycle that has been a detrimental practice to reaching our goal of financial stability,” said Crabtree.The Board of Selectmen and Crabtree will meet next Tuesday at 7 p.m. to discuss a four-page list of financial management policies.Matt Tempesta can be reached at [email protected].