At first glance the news is great: The town of Saugus recorded a $4.1 million free cash amount to round off its budget surplus as the calendar year draws to a close.
That number, as Town Manager Scott Crabtree observed, dwarfs the $3 million in free cash recorded in 2016. Crabtree announced the 2017 free cash total on Wednesday, the first day of winter, casting town financial planners squarely in the role of the proverbial squirrel prudently prepared for winter.
Unlike a lot of people in his job, Crabtree doesn’t shy away from highlighting and explaining town financial news when it comes down the pike. He accurately pointed out precisely and succinctly in a town press release that Saugus has seen its free cash surplus rise over the course of the last several years and it has enjoyed improvements in its bond rating.
The town manager has good reason to celebrate the town’s financial success. It is the most effective way for Crabtree to rebuke the critics who put him through a political firestorm before Crabtree won out. It is also a way to remind town residents who might be worried about the town’s massive school project that Saugus is in good financial shape.
With plans underway to reorient education in Saugus with a new middle school-high school and revamped primary education plan, the town is embarking on a bold and expensive project. It will have state support but it will also represent a significant challenge for the town.
Saugus voters by a 2 to 1 margin in June approved two ballot questions encompassing the project and its $185 million total price tag. They also approved a property tax debt exclusion measure to provide local funding for the project.
Town officials, led by Crabtree, ensure residents stayed informed about the project and understood the state’s initial $64 million commitment to help pay for the project. Local officials aided by state legislators are sure to take every step necessary to apply for any additional state help available for the project and take necessary steps to keep project costs under control.
Building a new school is not the same as undertaking a multi-school project on the scale Saugus is envisioning. Big projects with big price tags can translate into complicated projects with cost overruns.
Free cash is a hedge against project expenses that, as Crabtree points out, will be offset by the financial advantages posed by the windfall and the town’s AA+ bond rating for a savings of about $7.2 million on the middle-high school project.
That’s great news but Saugus needs to take every step possible to plan, financially speaking, for the long haul with the school project. The town is sure to experience new growth and new tax revenue with the resurgence of Route 1 as a development zone. But it is also sure to face an array of unanticipated revenue drops and expenses that seem to haunt all communities.
Crabtree is a proven financial leader and he will need all of his skills and all the free cash the town can generate over the next several years as Saugus makes a grand educational ambition a reality.
