Beverly $28 Million City Hall Renovation Approved Amid Looming Structural Deficit

BEVERLY, MA — The Beverly City Council voted to approve $28 million in spending on City Hall reconstruction and renovations amid what officials admit is a structural deficit facing the city that could necessitate layoffs, increased fees, or a Proposition 2 1/2 override in the coming years.

City Council members backed Mayor Michael Cahill's request for $26 million in borrowing and another $2 million from the city's debt stabilization fund to execute plans for renovations, four years in the planning for the century-old building.

"Like past years, the financial forecasting process has shown that our revenues will not meet our expenditures when you look at projected need," Cahill said. "And, like past years, we will pass a balanced budget. We have to. ... We would not do all of the above (tax increases, fee increases, layoffs). Those are all possible ways to meet our budgetary obligations. ...

"Everything that was suggested is on the table."

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But Cahill and City Council members on the Financial Forecast Committee argued that the renovations are necessary, with costs only increasing if delayed, and that capital expenditures should not be considered in direct competition with operating expenses when it comes to municipal funding priorities.

"Both things can be true," Financial Forecast Committee Chair Kathleen Feldman said. "It doesn't sound great to say there is a deficit projected, right now, which we will fix. But this project is also really needed."

City Councilor Matthew St. Hilaire was one of two Councilors to vote against the funding, citing the uncertainty about next year's budget.

"We're going to approve a project without knowing how we are going to deal with the budget that is before us," St. Hilaire said. "We're going to be talking about that soon. But here we are voting on that (the $28 million) now. Just thought I'd point that out. I'm voting no on this."

Cahill said the Request for Proposal window for the temporary home of City Hall services — originally ticketed for the former Family Dollar building before that was deemed infeasible last year — has been extended until Feb. 6.

He said that, while the RFPs currently received have yet to be opened and examined, it is likely that not all municipal departments will be able to be housed at the same location for the approximately 18 months necessary to complete the City Hall reconstruction.

Cahill said downtown locations remain the preference for the temporary City Hall operations, but that may not ultimately be the case.

The renovated City Hall will include moving the health department, inspectional services to City Hall, resulting in a 25 percent increase in staff using the building.

The renovation will also include repurposing the abandoned annex that was home to public safety, repairing the heating system, adding a cooling system where there currently is not one, increasing storage, bathrooms, meeting rooms, private and public conference rooms, as well as make the entire building accessible.

"I understand and appreciate the challenging thinking that we're all undergoing and will continue to," Cahill said. "But if anybody has got a thought that some of that debt service capacity that's in our operating budget might, instead of going to this project, go to meet operating needs, those recurring operating needs elsewhere are either going to continue and then this debt service ability disappears, or (the funding) will go over there, and have to be pulled right back.

"It's incredibly hard to pull back something that is supporting a recurring cost on the service side of an operating budget when it's a capital need."

(Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. X/Twitter: @Scott_Souza.)