BEVERLY - Mayor Mike Cahill proposed a city budget Thursday night that contains no layoffs and no cuts in "core services," despite an expected $4.6 million loss in revenue due to the coronavirus pandemic.
Cahill said the city will draw on just over $1 million from the city's reserve account, reduce road and sidewalk spending by $350,000, and tighten department budgets to help make up the difference in lost revenue.
"The key here is this has allowed us to keep staffing levels the same -- and since services people count on in Beverly are provided by our city and school employees, that has to be the priority now," Cahill said in his budget message to councilors.
The proposed budget covers fiscal year 2021, which begins July 1. The total budget is $136.5 million, a 1.2% increase over this year's. The school budget will increase by $1.4 million.
Cahill said he expects a 17.5% reduction in local aide from the state, as well as less money coming in from meals, hotel rooms and motor vehicle excise taxes and from building permits.
In anticipation of those declines, city departments have held off on spending over the last three months and turned back nearly $2 million of budgeted money, and have tightened their budgets for next year, the mayor said.
Cahill said the city will benefit from "sound financial decisions" over the last several years that has has allowed it to build its reserve fund, which is designed to stabilize the city during tough economic times. But he cautioned that those reserves will be needed for the next few years, not just this year. Fiscal Year 2022, he said, will be an even more difficult budget year.
The city will also take advantage of a one-year reduction in debt payments of $496,000, although the following year will see a "significant" increase in debt costs to pay for the new middle school and the police station that is under construction, Cahill said.
Although there are no planned layoffs or "core service" cuts, Cahill said budgets will be tighter and there is a "higher likelihood" that any unforeseen costs may not be able to be absorbed.
Cahill mentioned one area that will see a cut -- the $350,000 in road and sidewalk repairs. Cahill noted that the city spent more money on roads and sidewalks this year than it had in many years.
City councilors, who saw the budget for the first time on Thursday, did not ask any questions during the meeting. The council will hold hearings on the budget over the next two weeks and are scheduled to vote on it on June 24.
Staff writer Paul Leighton can be reached at 978-338-2535 or email@example.com.