CAPE CANAVERAL, Fla. – Cape Canaveral is facing a roughly $4 million budget shortfall after years of relying on reserve funds to balance its budget, and city leaders say residents could soon see cuts to services and staffing.
City Manager Keith Touchberry says the city has been using money carried forward from previous budgets for about 15 years, as projected expenses repeatedly exceeded recurring revenue.
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Now, those reserves are essentially gone.
“This is not simply a budget gap for one year. It is evidence of a structural imbalance that must now be addressed directly,” Touchberry said.
The city’s reserves, which were once around 40% of the budget, have been depleted. Audits also found the city’s unassigned fund balance fell below the required 17% threshold.
Touchberry pushed for a higher property-tax rate to help close the gap, but the City Council rejected the proposed increase.
He warned that keeping the millage rate at the lower level would mean reductions in city services.
“You’ll see a reduction in trash pickup or slower trash pickup. The grass not getting cut as often. Maybe some delayed responses to emails and phone calls,” Touchberry said.
The city has also been cutting back on staffing.
Touchberry said the city has been forced to handle its workload with significantly fewer employees.
“15 people doing the work of 40 and those numbers have been changing since that budget hearing. We’ve accepted resignations. We’ve adjusted to those resignations,” he said.
The city has also asked the Brevard County Sheriff’s Office to investigate its financial management and determine how Cape Canaveral reached its current financial condition.
The investigation will look at whether criminal conduct, employee misconduct, policy violations, failures of internal controls or other organizational issues contributed to the situation.
Touchberry said the city wants to understand what happened.
“If there was criminality, fine. If there was no criminality, fine. Was it incompetence? Was it mismanagement? What are the reasons we got to where we got to,” he said.
City leaders are expected to continue discussing ways to close the $4 million gap, including potential spending cuts and additional sources of revenue.
Some residents have questioned whether the city should look more closely at revenue from the tourism industry.
Leaders are also watching Amendment 3, which is expected to appear on the November ballot and could affect the city’s property-tax base if approved.
The city is expected to continue working through its budget options at Tuesday’s meeting.
