Beverly City Council approves mayor's FY26 budget 8-1 after hours of amendments and debate

The Beverly City Council on Monday approved Mayor Cahill's fiscal year 2026 budget by an 8-1 vote after a lengthy public hearing record and a night of council debate and amendment attempts.

Councilors spent the meeting discussing the budget's long-term outlook, including a forecasted structural deficit in FY27, and considered a slate of targeted reductions proposed by several council members. "The budget before us, the mayor's FY26 budget, will cause a structural deficit in FY27," Councilor Hausman said, urging that any cuts proposed that night add up to at least $800,000 if they were to materially change the projected shortfall.

The council's deliberations followed the administration's presentation and prior subcommittee and public hearings. Finance Director Brian Ailes and budget analyst Jerry Perry answered questions about contingency funding, use of ARPA and free-cash timing, and the limits of the council's powers to reallocate funds. Perry advised the council that a material mitigation for the projected FY27 gap would require cuts in the $800,000 to $1,000,000 range and cautioned that moving contingency funds could limit options before free cash is certified in the fall.

Major debate points

- Schools: Several councilors, including Councilors St. Hilaire, Feldman and Sweeney, pressed that the budget does not fully address challenges at Beverly Middle School and said staff and program reductions there were a particular concern. Councilor St. Hilaire called recent middle-school performance "a historically bad year," and said the budget did not align with priorities residents have expressed.

- Revenues and levy capacity: Councilors discussed the administration's proposal to use excess levy capacity and the city's revenue limits. Councilor Feldman said she has been working with leadership to pursue a possible Proposition 2—2 override on a future ballot to fund long-term needs for schools and roads and sidewalks.

- Sustainability and grants: The mayor and councilors described the sustainability office as both a revenue and cost-saving center. Mayor Cahill said the city has secured roughly $2.9 million in federal and state grants and about $320,000 in tax credits tied to sustainability projects, and that grant work helped secure 8 new electric school buses and other projects. Councilor Hausman and Councilor Bowen warned against relying solely on volunteer or advisory groups to deliver technical implementation.

- Capital accounting and transparency: Councilor Sweeney proposed reducing a $150,000 capital outlay line (account 1422758757, page 83) to $0, arguing the line had been used as a contingency for the McPherson Youth Center construction and that contingency funding would be better handled through a free-cash request or the reserve for unforeseen. Finance Director Ailes cautioned the council that change orders were already being prepared and that some of the contingency fund had likely been needed.

Amendments and votes

Councilors proposed multiple line-item amendments; the council debated each and voted them up or down before taking the main budget vote. Key amendments that were moved and voted on (motion text paraphrased from council floor):

- Reduce capital outlay (account 1422758757, page 83) from $150,000 to $0 (Councilor Sweeney). Motion failed, 4-5.

- Reduce assistant sustainability director (account 1121151180, page 18) from $60,839 to $0 (Councilor Sweeney). Motion failed, 3-6.

- Reduce associate planner (line 51115) from $34,953 to $0 (Councilor St. Hilaire). Motion failed, 1-8.

- Reduce reserve for unforeseen (line 57820) from $225,000 to $0 (Councilor St. Hilaire). Motion failed, 1-8.

- Reduce reserved nonunion salary pool (line 57811) from $150,000 to $0 (Councilor St. Hilaire). Motion failed, 1-8.

- Reduce executive department expenses (line 51891) from $18,500 to $0 (Councilor St. Hilaire). Motion failed, 2-7.

- Reduce several mayor's office staffing lines (combined $235,937) to $0 (Councilor St. Hilaire). Motion failed, 1-8.

Council process and administration responses

Budget analyst Jerry Perry and Finance Director Brian Ailes repeatedly told the council that some funding choices (contingency placement, timing of free cash certification) had practical effects on when and how money could be spent. Perry noted contingency funds are prudent for ongoing construction projects and that moving funds into free cash would not provide access until certification later in the year. Ailes warned the council that change orders on the McPherson Youth Center project already were being prepared and that eliminating the contingency could force an immediate request for new funding.

Final action

After the amendment process, the council voted on the main order to adopt the FY26 budget. The motion carried 8-1. Vice President Crowley called the vote after the council president made a closing statement that framed the approved budget as the start of further work to address structural pressures, a process he urged the council to continue collaboratively.

Votes at a glance (other agenda items taken earlier in the meeting)

- Order 191 (right-of-first-refusal/sale to eligible buyer at 80% of AMI): approved 9-0.

- Order 77A (amendment to Chapter 270, Downtown Beverly Parking District; on-street regulation on Pleasant Street): approved 9-0 (final passage).

- Order 180 (handicapped parking space to be placed at 27 Giles Ave): approved 9-0 (final passage).

What's next

Councilors said the FY26 vote begins, not ends, discussions about how to address projected FY27 shortfalls. Several councilors urged earlier, more public work on next year's forecast, expanded community engagement on revenue options (fees, potential override) and a clearer, multi-year capital plan for vehicle replacements and other projects. The council recessed for a two-minute break and then adjourned for the summer recess; staff said they would call special meetings if necessary over the summer.

(For completeness: the article summarizes motions and final tallies taken from the council record; amendment motions and vote counts are exact where the council roll-call was not in the transcript.)