Beverly Council adopts FY27 budget 5-4 after heated debate over cuts and reserves

The Beverly City Council approved the city’s FY27 budget, Order 151, on June 23 after a lengthy session of amendments and debate that stretched over several hours.

The measure passed 5-4 after councilors considered dozens of line-by-line proposals from Vice President Councilor St. Hilaire and others. The final package included several smaller amendments the council adopted during the meeting — reductions to the mayor’s discretionary expenses, elimination of a $7,000 mail-messenger line, and a cut to the budget analyst appropriation — while rejecting larger ideas to remove the city’s reserve or eliminate key executive staff positions.

Mayor Cahill opened the debate by outlining the city’s reserves and asking the council to preserve certain lines. He said the city’s reserves had been intentionally drawn down in the last year and that, at June 30, the reserves were projected to represent about 17% of the FY27 budget; he also urged the council not to remove a small COLA line for non-union department heads that would cover roughly a 3% increase. “We have done the work needed to balance the budget and deliver critical core services,” he said, asking councilors to consider the operational impacts of cuts.

Councilor St. Hilaire argued repeatedly that the city’s spending is unsustainable and proposed a package of targeted reductions he said would save approximately $724,320, and urged canceling the City Hall renovation to free further funds. He pressed for zeroing a number of mayoral and executive-office lines and for eliminating consultant spending.

On the other side, councilors urging caution pointed to risks from removing flexibility and staff capacity. Finance staff and the budget analyst repeatedly warned that certain reductions would expose the city to fiscal risk: Jerry Perry, the council’s budget analyst, told the council that zeroing the Reserve for Unforeseen (line 57820, $225,000) would be “not a good idea from a fiduciary point of view,” noting that municipalities typically rely on that funding to manage unexpected expenses between July 1 and the later free-cash certification.

Votes at a glance: the council adopted the FY27 budget as amended (Order 151) 5-4. Among the amendments adopted during the session were a reduction to the mayor’s general expenses line (51891) from $13,500 to $10,000 (carried 9-0); elimination of the Executive Office Racial Justice line (51141) was adopted separately (see related article); the appropriation for the budget analyst (line 51106) was reduced from $79,869.75 to $59,869.75 (carried 9-0); and the $7,000 mail messenger line (51186) was removed (carried 5-4). Several other proposed cuts — including eliminating the chief of staff/sustainability position and a plan to zero the city’s $225,000 reserve for unforeseen costs — failed to gain enough votes.

Council President noted the outcome reflects a mix of hard choices and commented that the council would continue work on revenue ideas and longer-term structural solutions; several councilors urged the formation of a deficit-reduction committee and more public engagement on potential revenue and service options.

What happens next: The adopted FY27 budget goes into effect July 1; enterprise fund rates and retained-earnings transfers were affirmed as part of the package. Councilors and city staff said they expected the budget process to continue as they prepare for FY28, which staff and multiple councilors forecast will present a deeper structural challenge.

The council did not take action on some outstanding policy matters during the meeting; several councilors signaled willingness to reconvene smaller working groups and to press state officials for greater aid.

Speakers quoted in this article are members of the official meeting record: Mayor Cahill; Vice President Councilor St. Hilaire; Jerry Perry, budget analyst; Finance Director Brian Eales.

The council scheduled additional public hearings later this week on related municipal matters.