City finance official warns FY26 budget will be tight as nondiscretionary costs outpace revenues

City finance staff on Wednesday told a joint meeting of the Beverly City Council and the Beverly School Committee that the city expects new revenues of about $7.7 million for fiscal 2026 but faces roughly $9.9 million in largely non‑discretionary spending increases, producing a gap the administration must close before submitting a balanced budget.

Ken Ailes, presenting the city’s FY26 budget landscape for the Cahill administration, said property tax growth would provide the largest share of new revenue — approximately $5.6 million — composed of an estimated $1.25 million in new growth, a 2.5% levy increase and about $750,000 of unused levy capacity. State aid increases, motor‑vehicle excise adjustments and higher interest income account for additional revenue in Ailes’s projection, totaling an estimated $7.7 million and a proposed operating budget of $173.65 million.

"It is one of the more challenging…