09/13/2026
Cape Canaveral neighbors,
Much of what I am about to share has already been stated for the record in recent Council meetings, but I believe residents deserve to see it here online as well. It's a long post, but it's three years of info and hours of meetings, budgets, and audits distilled down to what I think is important.
Over the last few weeks, I’ve watched comments, rumors, and accusations circulate online about our City, our City Council, Staff, taxes, reserves, services, myself, and the future of our City.
I have been working through budgets, audits, financial reports, meeting records, our Charter, our Code, and the timeline of how we got here so that I can continue to communicate to the public and make the best decisions with our Council and Staff in our current and final 26-27 budget. I have also worked through this in our public meetings with the City Council and met with the City Manager, City Attorney, Finance Director, former auditors, investigators, new auditors, and residents.
There is also an ongoing investigation. I will not speculate about it, but I do want to address what the public records already show.
First, it is important to know that Cape Canaveral has a "Council-Manager" form of government. The Charter and Code state that City Council sets policy, adopts the budget, approves the millage rate, and holds the City Manager accountable. The administration led by the City Manager prepares the budget, manages daily operations, tracks revenues and expenses, reconciles accounts, classifies fund balance, and reports the City’s financial condition with the support of City Staff.
Council does not prepare the budget book, reconcile accounts, classify assigned versus unassigned reserves, or prepare the audit. Council reviews what is officially presented, asks questions, gives direction, and votes in public. I want to make sure that when I say "unassigned reserves" throughout this letter, I am essentially talking about a savings account that is defined by our Code. The Code defines several different types of reserves which we currently manage as it requires.
I wanted to share some of the high-level info above, because there seems to be confusion about who is paid to do what. The City Manager, Finance Director, and department directors are full-time paid professionals with salaries and benefits in the six-figures. The Mayor and Council Members are essentially volunteers who are paid a small four-figure annual amount with no employee-related benefits. I only make this point because some seem to think we have a highly paid “Strong Mayor” form of government like some of the larger metro cities in America.
Your City Council is made up of 5 elected residents, including the Mayor, who rely on professional staff to provide accurate financial information so we make the best decisions for the community.
As many of you know, for years, I voted against six consecutive budgets starting in 2018 because I believed the City of Cape Canaveral was on the wrong financial path. I raised concerns about the large tax increase that just occurred at that time before being sworn in.
I also learned that many residents, including myself, were concerned about spending, debt, budget procedures, staffing, overhead, large capital projects (City Hall, Community Center, CAPE Center, Promenade/Civic Hub), future maintenance and operation costs, and whether the City was building an operating model residents could afford down the road. I believe my consistency on these concerns is one of the reasons I have been re-elected and eventually became Mayor.
I lost those votes. Those budgets were passed, and specifically, properties for leisure and recreation were purchased, new recreational buildings were built, and expenses and staffing grew disproportionately to support much of those areas. We were told emphatically that these "nice to haves" will not impact the taxpayers, but a growing voice of residents knew it would. TO date, the numbers show that the costs to maintain these new amenities come with a year-over-year increase in high ongoing costs.
While I was on the Council and became Mayor we saw a growing group of residents become vocal about the City's spending, and some ended up running and getting elected. However, until that happned, my seat on the dais did not come with a majority who had the power to make a change until September 2024. I say that because being elected is not the same as having the votes. Being Mayor also does not change the reality that I am one of five votes. I have lost Budget approvals from 2018-2024 even as Mayor.
Here is what the records show:
Our Charter and Code are clear.
City Charter ARTICLE V. - FINANCIAL MANAGEMENT § 5.06(c) says:
“If at any time during the fiscal year it appears probable to the city manager that the revenues or fund balances available will be insufficient to finance the expenditures for which appropriations have been authorized, the manager shall report to the city council without delay, indicating the estimated amount of the deficit, any remedial action taken by the manager and recommendations as to any other steps to be taken.”
City Code § 2-210(e) says:
“If, after the annual audit, prior committed or assigned fund balance causes the unassigned fund balance to fall below 17 percent of general fund operating expenditures, the city manager will so advise city council in order for the necessary action to be taken to restore the unassigned fund balance to 20 percent of general fund operating expenditures.”
It also says:
“The city manager will prepare and submit a plan for committed and/or assigned fund balance reduction, expenditure reductions and/or revenue increases to city council.”
And:
“The city shall take action necessary to restore the unassigned fund balance to acceptable levels within two years.”
These are the safeguards written into our Charter and Code.
I encourage you to read the Charter and Code sections referenced in full, which is the governing procedures and policies that the Council and City Staff follow.
PLEASE SEE THE CHARTER AND CODE ABOVE AND APPLY TO THE TIMELINE BELOW:
September 2023: Council adopted the FY 2023 to 2024 budget. I voted against it. That budget included a significant tax increase to support the growing expenditures and included large capital purchases that were not the major priorities.
That same FY 2023 to 2024 Budget Book is what we rely on to make decisions, which told Council:
“Financial Stability – The unobligated General Fund cash balance is forecasted to be approximately $3,272,193 at the conclusion of FY 2022-2023. This is 20.2% of the FY 2023-2024 General Fund Expenditure budget and is in excess of the 20% required by the City’s fiscal policy.”
The General Fund section also stated: “The General Fund is financially sound with an anticipated non-obligated Fund Balance at the end of September 2023 of approximately $3,272,193.”
So the adopted budget presented the City as finishing up the FY 2022-2023 year as financially sound, and the above reserve policy was sufficient for the FY 2023-2024 Budget.
September 2024: Council was coming to the end to the budget year again, and we adopted FY 2024 to 2025 budget.
That Budget Book again presented the City as financially sound and I supported that budget.
Page 2 stated: “Financial Stability – The unobligated General Fund cash balance is forecasted to be approximately $3,755,125 at the conclusion of FY 2023-2024. This is 20.1% of the FY 2024-2025 General Fund Expenditure budget and is in excess of the 20% required by the City’s fiscal policy.”
The General Fund section stated: “The General Fund is financially sound with an anticipated unobligated Fund Balance at the end of September 2024 of approximately $3,272,193.”
It also stated: “The Budget meets this criterion with an expected undesignated fund balance of 20.2% of FY 2024-2025 expenditures.”
So again, Council was voting on a Budget Book that represented the City as financially sound and meeting the reserve policy.
January 2025: The former City Manager was terminated by a majority of the City Council. The Finance Director became Interim City Manager with a contract that assumed all City Manager's responsibilities in the Charter and Code until we could secure a recruiting firm and hire a new City Manager. At that point, it's important to note that the same person responsible for finance was also serving as the City’s top administrator.
February 2025: The FY 2023 to 2024 audit was issued. It showed a different reserve picture. This was the Budget that started this timeline in September 2023, which I did not support.
The audit showed the General Fund’s unassigned fund balance had fallen to $1,492,504, or 8.35% of General Fund expenditures.
The audit also said the City was not in compliance with its fund balance policy at September 30, 2024.
The audit stated that it is “management’s responsibility to monitor the City’s financial condition.” Our Interim City Manager at the time provided a written response acknowledging the issue. It said: “The Financial Services Department concurs…”
It also said that, moving into the FY 2025 to 2026 budget:
“Capital Projects and other operating expenses will be thoroughly scrutinized to reduce expenses…”
And it specifically stated: “The Administrative/Financial Services Director, John DeLeo, (who was also our Interim City Manager) will ensure that expenses are reduced and Council is thoroughly briefed…”
After that audit, Council should have been clearly shown the audited unassigned balance, the required reserve amount, the shortfall, the proposed spending reductions, any revenue options, and the two-year correction path required by Code during the upcoming Budget Workshops and Hearings. We did not receive any of those code/charter required actions in the Auditor presentation, which you can see on our meeting recordings. In fact, if you go back and listen to the auditors' presentation in Feb of 2025, it is not made clear that there was a problem.
The next proposed budget was presented a few months later on June 30th with a tax increase that the Council worked through and confirmed could be avoided while also maintaining reserves. That process advanced through September as our new City Manager came on board a month prior in August 2025.
He walked into what appeared to be a strong budget and minimum reserve levels, according to the budget.
September 2025: The FY 2025 to 2026 Budget Book was adopted.
You can read that Budget Book, which on Page 2 stated:
“Financial Stability – The unobligated General Fund cash balance is forecasted to be approximately $3,562,496 at the conclusion of FY 2024-2025. This is 16.9% of the FY 2025-2026 General Fund Expenditure budget and is above the 16.7% required by the City’s fiscal policy.”
The General Fund section also stated: “The General Fund reserves are estimated to be 16.9%, above the required unobligated Fund Balance at the end of September 2025 at approximately $3,562,496.”
This is the budget that not only presented that these minimum levels will be followed, but you can hear in those meetings the Council confirm with the City Management, largely led by the Finance Director, since our new City Manager was just hired.
February 2026: The next audit showed the unassigned fund balance had fallen to 0% of operating expenditures. It also said the City received an “unfavorable” condition, with 65% of applicable indicators unfavorable. The audit repeated prior findings, including fund balance policy and reconciliation of account balances.
Our new City Manager, who started August 2025, did not create this problem. He inherited it, disclosed it, and responded to it for the first time in February 2026, when he properly brought the problem forward. You can see the clear difference in this meeting compared to the prior year. The former Finance Director, who had also served as Interim City Manager before our new City Manager, had returned to his position as the Finance Director, and about a month later was no longer with the City.
The City Finance Director's written response to the audit placed reasoning on the property tax millage rate being too low. However, while this could absolutely bring in more revenue, he was required to work within the budget he presented as balanced with adequate reserves that we adopted. He was also still obligated to notify council to reduce expenses and communicate accurate reserves to the council.
Remember the Code.
The tax decrease was not the problem; in fact, I believe it was the reduction in the tax rate supported by a majority in September of 2024 and 2025 that forced the City government to confront whether its spending and growing overhead were sustainable. Had we simply continued raising taxes to keep pace with spending, I do not believe the underlying imbalance would have surfaced as clearly or as quickly.
Without another tax increase, new General Fund debt, or outside grant money masking the problem, the City finally had to confront its cost structure.
When people say, “Council and the Mayor should have known, or they already knew,” I point back to the official records Council was given as instructed by the Code. Council relied on the City management and Budget Books they presented with the financial information .
The meeting recordings, along with Budget Books, are available for anyone to verify that Council asked questions and was assured reserves would be maintained.
It is clear, in my opinion, that the former City Manager and Finance Director at the time failed to clearly notify and submit the correction plan to the Council as required by the Code. They also showed “balanced budgets” and "financial stability" with adequate reserves that were not managed properly with transparency. This happened while reserves were presented to remain above the minimum percentage. They showed inaccurate and overstated minimum-level reserves in the proposed budgets as inflated cash forward that can’t be verified and/or at least understood by me or anyone I have asked.
The reserve problem developed over several years as reserves were used to support spending. I disagreed with former Council members on voting for those budgets, but based on what was presented publicly, I do not believe they understood that unassigned reserves were being depleted this way. Management (not the City Council) is required to know and communicate the City’s financial condition and to give Council the notice required by the Code.
The records I have reviewed and are available to the public show serious inconsistencies about reporting, reserve classifications, reconciliation, and required notice.
Those questions should be answered by the records and independent review, not rumors.
Residents are now being asked to carry the burden with a tax increase for decisions and reporting failures they did not control or create.
For years, City spending grew. Operations expanded. Large recreation and culture facilities were added beyond what I felt and expressed was needed. Personnel and operating costs increased to service those facilities. Unassigned reserves weakened, and this was never discussed in public by the City Management with the City Council in the budgets until we brought on our new City Manager.
Cape Canaveral’s problem starts with addressing spending and the way City operations have unsustainably grown.
Another very important point I need to make is based on what I have heard for years and continue to hear, with the City of Cape Canaveral having one of the lowest millage rates in Brevard County. That may be true, but it is not the full story.
A low millage rate does not mean inexpensive government.
According to some of the recent available State of Florida municipal financial data going back to 2024, the City of Cape Canaveral may have one of the lower millage rates, BUT it is also the third highest in Brevard County for municipal expenses per resident. This is not the only measure, but it's far better than a rate, and we can look at other benchmarks like population, other enterprise funds, special assessments, and the taxable value to show how we compare. I can tell you that we are low on rate but higher on per capita from my research. Since 2008, Cape Canaveral’s total expenses increased from about $11.39 million to $28.67 million, which is about a 151.8% increase, as we have seen a decline in population.
As I have said in the past, even below or at the rollback rate, the City has and would still receive more ad valorem tax revenue than we did last year. So when we say, "tax decrease," it does not always mean a decrease in revenue and, in our case, has not in the past. The City has seen an increase in property tax revenues, which means more funds, not less.
City Hall should not go back to the old methods that contributed to this problem by reaching for residents’ tax bills before reducing recurring expenses. Spending has to be controlled as we have seen it exceed reasonable inflation numbers, and revenue has absolutely kept pace with a tax decrease.
City Hall must learn to operate within what residents can afford and what Council approves.
Our unassigned fund balance is one reserve requirement that we saw depleted, but that does not mean all City reserves were depleted. We will receive updated numbers on Tuesday, but I believe we are at about $2.3 million in reserves, and we should have a forecast on unassigned by the end of this year and the upcoming budget. Claims that the City has “no reserves” are simply not accurate, although some reserves are lower than they should be. "Unassigned Reserves" is what I believe people mean, but we also manage and calculate assigned and committed reserves.
Most importantly, after we reduce spending, I believe the Council will adopt and the City Manager will implement a reserve restoration plan by the end of this year that will not only comply with our Code, but will also include additional measures and internal controls designed to prevent this from ever happening again.
We will restore reserves, but we should do it responsibly: reduce recurring expenses first, protect essential services, use year-end surplus, review nonessential assets, consider revenue opportunities, and rebuild reserves without automatically forcing the burden onto residents.
That is also why I opposed suspending the minimum reserve requirement when this first came before us. The Code gives us two years to restore it, and I believe we can, in addition to creating a committed fund balance policy that the Council controls for emergencies as the unassigned level intended to cover as well.
My strategy going forward: Raising taxes should not be the first answer to higher government spending. It should be the last. Before asking residents for another dollar, City Hall needs to exhaust every reasonable opportunity to reduce costs, eliminate waste, restructure operations, renegotiate expenses, better utilize or sell assets, build partnerships, and find more efficient ways to provide the services our residents value. Yes, I absolutely believe we can reduce expenses and increase the level of service.
Some of the challenges we face today were predictable. Projects were approved without sufficient planning for the long-term cost of operating and maintaining them, while overhead continued to grow. We are not going to fix poor planning by simply throwing more taxpayer money at it.
That masks the problem and rewards complacency.
City Hall needs better planning, measurable results, fiscal discipline, and the same pressure to innovate that families and businesses face when money is tight. I believe we have the right team to do that with our City Manager and supporting Directors, as well as the community as a whole.
I want to sincerely thank the citizens who have stepped forward and offered to volunteer their time, experience, and talents. They are part of the solution. We should welcome that spirit of service and look for every responsible opportunity to partner with our community rather than assuming every challenge requires a larger budget.
Please watch the prior budget meetings, especially the past three years. I will try to post links to the meetings and documents I reference in the comments.
Most importantly, please attend the September 15 budget hearing starting at 6:00 pm at City Hall. I hope to see you there.
I will do my best to stay engaged on this post to anything related to the budget and try to answer any questions that would be helpful for the community. Thank you, and as always, you can also email me at [email protected].
