Beverly, MA — City Data

Free cash and the stabilization fund are not the same thing. Free cash is the unspent balance from the prior fiscal year, certified annually by the Massachusetts Department of Revenue. It is generated when actual revenues exceed estimates or when budgeted spending goes unspent. Beverly has certified approximately $10–11M in free cash each year from FY2023 through FY2026. Free cash can be appropriated for one-time uses — capital projects, reserve transfers, or gap-filling — but cannot be treated as a permanent revenue source. The stabilization fund is a formal reserve account that the city builds up over time by transferring free cash into it. Beverly grew its stabilization fund from near zero in FY2009 to $18.6M by FY2023. City policy targets keeping the fund at 3–8% of the general fund. Unlike free cash, the stabilization fund requires a two-thirds vote of the City Council to appropriate. Beverly has used both to help balance budgets during years of structural pressure. The Financial Forecasting Committee noted in December 2025 that this strategy has limits: drawing reserves down to cover recurring gaps eventually exhausts the buffer without fixing the underlying math.