CAPE CANAVERAL, Fla. – Cape Canaveral’s city manager announced Tuesday the city faces a $4 million budget deficit — and that the Brevard County Sheriff’s Office will investigate whether criminal conduct or employee misconduct contributed to the financial crisis.
City Manager Keith Touchberry made the announcement at the opening of a budget workshop, telling officials and residents the problem didn’t happen overnight.
“The challenges before us did not emerge during a single budget cycle,” Touchberry said. “Nor can they be resolved within one. They are the result of financial practices and policy decisions that developed over many years.”
15 Years of Deficit Spending
Touchberry said the city spent roughly 15 years approving annual budgets in which projected expenses outpaced recurring revenue. To cover the gap, the city routinely tapped a budgetary tool called “cash forward” — money carried over from the prior fiscal year.
“While the use of cash forward is permissible as a budgetary financing mechanism, it is not a recurring source of revenue and is not meant to resolve a structural imbalance between ongoing revenues and ongoing expenditures,” Touchberry said.
He said the way cash forward was presented in the budget process made it harder to see how heavily the city was leaning on accumulated reserves to fund day-to-day operations — obscuring the true trajectory of the city’s finances.
No Reserve Funds Remain
The result: Cape Canaveral now has no meaningful reserve funds available.
That leaves the city with little financial cushion to handle a hurricane, an economic downturn, unexpected infrastructure failures, or other emergencies without cutting services, raising revenue, or both, Touchberry said.
The proposed fiscal year 2026–2027 budget projects expenditures exceeding anticipated revenue by approximately $4 million.
“This is not simply a budget gap for one year,” Touchberry said. “It is evidence of a structural imbalance that must now be addressed directly.”
Ballot Measure Adds Uncertainty
Touchberry flagged an additional threat on the horizon: Amendment 3, which is expected to appear on Florida’s November 2026 general election ballot. If approved by voters, the amendment could significantly reduce the city’s ad valorem tax base by expanding property tax exemptions and further limiting growth in taxable value.
Sheriff’s Office Called In
Touchberry said the city has asked the Brevard County Sheriff’s Office to investigate the overall management of the city’s finances. The inquiry will examine whether any criminal conduct, employee misconduct, policy violations, failures of internal controls, or organizational deficiencies occurred.
“Significant concerns have been identified about the historical management of the city’s finances and the financial practices that contributed to our current fiscal condition,” Touchberry said. “To ensure those concerns are reviewed objectively and independently, the city has requested the Brevard County Sheriff’s Office to conduct an investigation.”
Despite the severity of the situation, Touchberry expressed confidence in a path forward.
“I am confident that we can restore this city’s financial health, rebuild its reserves, strengthen public confidence, and leave this organization stronger and more resilient than we found it,” he said.