Hobbled by financial troubles that already have resulted in two rounds of layoffs, Saugus is preparing a spending plan for the upcoming fiscal year that would trigger more cutbacks.
Just how extensive those cuts should be is an issue facing Town Meeting when it takes up the budget Monday. The new fiscal year begins July 1.
The Finance Committee has been reviewing a 2013 budget proposal submitted by Town Manager Scott Crabtree, along with an alternative plan offered by the Board of Selectmen. Both budgets are for $77.9 million.
While both proposals involve cuts, those in Crabtree’s budget are deeper because he was mandated by law to include $400,000 to cover the fiscal 2013 costs of arbitrated contract settlements with the police patrolmen and firefighters unions, and a negotiated contract with the police superior officers’ union, the town manager said. The selectmen’s budget does not include the settlements, and it is up to Town Meeting members to decide whether they are funded or the negotiations start over.
To pay for the police and fire contracts, Crabtree’s budget eliminates funding for the Youth and Recreation Department, and severely cuts funding for the library and senior center, likely forcing all three to close, Crabtree said. He said the selectmen’s budget calls for lesser cuts to those departments that would not put them at risk.
‘I just think we are in a tough financial situation.’
Meanwhile, off-duty firefighters picketed outside Town Meeting last Monday to protest that the budgets — both the town manager’s and the selectmen’s — severely cut funding for Fire Department overtime. They said the cut would cause intermittent closures of the Essex Street Fire Station, according to Bob Long, town moderator.
“It’s unfortunate Saugus will not have adequate services, particularly with the Fire Department,” Crabtree said, adding though that both his budget and the selectmen’s budget avoid any layoffs of police or firefighters.
The town manager’s budget also requires the School Department to make $184,000 in additional cuts.
Crabtree said his budget represents “what I’m legally obligated to put forward” to fund the labor agreements. He said it is up to Town Meeting to decide whether to appropriate money for the contracts.
Selectman Stephen M. Horlick said his board favors its spending plan “because we are trying to maintain some level services within the town.”’
Finance Committee chairman Robert Palleschi said last week that he expected the committee to recommend the selectmen’s budget to Town Meeting.
“I just think we are in a tough financial situation,” he said.
Saugus has been in financial turmoil as a result of an ongoing series of state-mandated audits it initiated in response to allegations of financial irregularities made by town employees following the retirement of town manager Andrew Bisignani in January.
The first of the audits, which are being carried out by the accounting firm Powers & Sullivan, determined that the town had improperly used water and sewer revenues to pay $1.4 million in wages and other expenses. A second audit found the town had incurred nearly $162,000 in wage and benefit expenses in violation of municipal finance rules. A third report, looking into the public bidding process for town projects, is expected at the end of this month.
Bisignani, currently town manager in Nahant, has denied engaging in anything that created financial irregularities.
“I acted within the authority granted to me in the town charter, and most often with the advice of town counsel and labor counsel,” Bisignani said in a statement following the most recent audit.
Crabtree, who took over the Saugus job in April, said the town carried out two rounds of layoffs in May to ease a deficit in the current fiscal year that he said was largely the result of having to correct spending practices identified by the first audit.
About 14 employees in all have been laid off and several others had their hours reduced.
Even with those cuts, Crabtree said the town faces a difficult year, citing the need to cover an approximate $400,000 fiscal 2012 deficit and to continue adjustments from past budgetary practices. He said the town also needs to curtail an overreliance on free cash, and faces rising fixed costs and contractual obligations.
School Superintendent Richard Langlois said the schools would have to cut 12 jobs under the selectmen’s budget, which provides schools with the same funding as this year but $1.7 million less than needed to maintain services and meet state mandates. He said the town manager’s budget would mean 14 job cuts.
“I understand the complications of what is going on and the issues they have in hand in trying to right the ship,” he said. “There is a lot of pain. Cutting things is a difficult thing to do because you are dealing with people and programs that affect kids. . . . We have been making good forward progress and we want to still find a way to sustain that.”
Crabtree said there is no talk at this time of seeking new tax revenues through a Proposition 2½ override.
“I don’t think it’s fair at this point to have that conversation with the public,” he said, citing the need to first restore public confidence in how the town conducts its finances.