(Saugus, MA) December 19, 2017 – Town Manager Scott C. Crabtree, the Board of Selectmen, and the Finance Committee are pleased to announce that the Department of Revenue (DOR) has certified the largest amount of free cash the Town has ever seen: a whopping $4.1 million.
This historic Fiscal Year 2017 free cash amount of $4,124,074 surpasses the Town’s previous record amounts of $2,945,413, which was certified by the DOR in Fiscal Year 2016, and $2,101,223, which was certified by the DOR in Fiscal Year 2015.
This free cash amount from Fiscal Year 2017 will help to maintain financial stability within the Town and sustain efforts towards continuing to upgrade the Town’s bond rating. Last year the bond rating increased from a Moody’s Investors Service A1 rating to the second-highest tier, a AA+/Stable rating with national rating agency S&P Global Ratings. This ranking, which is the highest in Saugus’ history, is now saving the taxpayers and Town substantially on current and future borrowing costs.
“For the past five and a half years, it has been a goal of this administration to build up the Town’s free cash reserve,” said Town Manager Crabtree. “Now, the Town of Saugus has the largest amount of free cash that has ever been certified. With this historic amount of free cash and with the Town’s S&P AA+/Stable bond rating, the taxpayers will save millions of dollars in borrowing on capital improvement projects, such as an estimated $7.2 million for the grades 6-12, new Massachusetts School Building Authority Middle-High School and District-Wide Master Plan Solution.”
The Town began recovering from long-term fiscal instability and the midst of a crisis when Crabtree became Town Manager in 2012. After implementing sound financial practices and policies, a goal of having free cash certified between 3-5% of the Town’s annual budget has been consistent with Crabtree’s administration. It was this formal financial management adopted policy that helped the Town reach its free cash goals. The certified free cash has partially been used to help fund deposits in the Town’s stabilization (or rainy day) fund and contributed to the Town’s bond rating increases, which has boosted the overall financial stability and sustainability of the Town.
Free cash consists of unanticipated revenues, account balances and other miscellaneous receipts that were obtained throughout the previous year. The certified free cash of $4.1 million was obtained from higher than projected revenues in the form of permits, excise taxes, tax title revenue, Federal Emergency Management Agency (FEMA) reimbursement from previous years’ storms, and other non-recurring economy driven sources.
“Saugus has benefitted from a modest uptick in economic activity, and we did experience some unexpected, one-time, non-recurring revenues,” said Crabtree.
Additionally, spending reversions and turnbacks from various Town accounts and departments reflect the conservative approach to spending utilized by the various municipal departments.
Crabtree thanked the employees, the Board of Selectmen, Finance Committee, and Town Meeting for accepting and working within the established financial management policies that made this possible.
“Our Town has obtained and now maintains a healthy and sound financial outlook, thanks to the continued support of those serving our community and working towards a unified vision,” Crabtree concluded.
About The Town of Saugus
The Town of Saugus, Massachusetts, is a family-friendly, historic neighborhood Town located along the north shore, ten miles north of Boston. First settled in 1629, Saugus is home to historic sites, top-tier public services, and a thriving business community. Strong community support, a forward-thinking approach to town government, rich recreational opportunities, affordable choices, and easy access to all the amenities that Boston has to offer – they all contribute to make Saugus a Town where businesses flourish and families make their home.