CAPE CANAVERAL — Two days before the City Council takes a final vote on a budget that could more than triple the city’s property tax rate, Mayor Wes Morrison has published a detailed public accounting of how Cape Canaveral’s emergency reserves fell from a reported 20 percent of operating expenditures to zero, and who he believes is responsible.
The statement, posted to residents online, runs several thousand words and is built largely on the city’s own adopted budget books, independent audits, Charter provisions and Code sections. Morrison writes that much of it has already been stated on the record at recent Council meetings, but that residents deserve to see it compiled in one place.
“There is also an ongoing investigation,” Morrison wrote. “I will not speculate about it, but I do want to address what the public records already show.”
What the budget books said
Morrison’s central argument is a document-versus-document comparison. In each of three consecutive years, he writes, the adopted budget book presented to Council described the city as financially sound and in compliance with its own reserve policy.
The FY 2023-2024 budget book projected an unobligated General Fund cash balance of approximately $3,272,193 at the close of FY 2022-2023, which it described as 20.2 percent of the following year’s General Fund expenditure budget and in excess of the 20 percent required by fiscal policy.
The FY 2024-2025 budget book projected approximately $3,755,125, described as 20.1 percent and again above the requirement.
The FY 2025-2026 budget book projected approximately $3,562,496, described as 16.9 percent and above a 16.7 percent requirement.
Morrison voted against the first of those three budgets. He supported the second and third.
What the audits found
The picture in the independent audits was different.
According to Morrison, the FY 2023-2024 audit, issued in February 2025, showed the General Fund’s unassigned fund balance had fallen to $1,492,504, or 8.35 percent of General Fund expenditures. The audit stated the city was not in compliance with its fund balance policy as of September 30, 2024.
The audit issued in February 2026 showed the unassigned fund balance had fallen to zero percent of operating expenditures. Morrison writes that it also assigned the city an “unfavorable” financial condition, with 65 percent of applicable indicators unfavorable, and repeated prior findings on fund balance policy and reconciliation of account balances.
The notification requirement
Morrison anchors his account in two provisions.
City Charter Article V, § 5.06(c), requires that if it appears probable to the city manager that available revenues or fund balances will be insufficient to cover authorized appropriations, the manager must report to Council without delay with the estimated deficit, remedial action taken, and recommendations.
City Code § 2-210(e) requires that if an annual audit shows unassigned fund balance has fallen below 17 percent of General Fund operating expenditures, the city manager must advise Council so action can be taken to restore it to 20 percent. The same section requires the city manager to prepare and submit a reduction or revenue plan, and requires the city to restore the balance to acceptable levels within two years.
Morrison writes that after the February 2025 audit, Council should have been shown the audited unassigned balance, the required reserve amount, the shortfall, proposed spending reductions, revenue options and the two-year correction path. “We did not receive any of those code/charter required actions in the Auditor presentation,” he wrote, pointing readers to the meeting recordings.
Who was in the chair
The sequence Morrison lays out involves a period when one person held both relevant jobs.
In January 2025, the Council voted 3-2 to terminate City Manager Todd Morley. Administrative and Financial Services Director John DeLeo was appointed to serve as the city’s top administrator, later under an interim contract assuming the city manager’s Charter and Code responsibilities.
“At that point, it’s important to note that the same person responsible for finance was also serving as the City’s top administrator,” Morrison wrote.
The February 2025 audit response, according to Morrison, stated that the Financial Services Department concurred with the finding and that DeLeo would ensure expenses were reduced and Council thoroughly briefed.
Keith Touchberry was hired as city manager in August 2025 after serving as assistant city manager. DeLeo returned to the finance director position and, per Morrison’s account, left the city about a month after the February 2026 audit was presented.
“Our new City Manager, who started August 2025, did not create this problem,” Morrison wrote. “He inherited it, disclosed it, and responded to it.”
Morrison writes that the finance director’s written response to the 2026 audit attributed the problem to a millage rate that was too low. Morrison rejects that framing, writing that management was obligated to work within the budget it had presented as balanced and to notify Council of the shortfall regardless.
The sheriff’s investigation
On July 21, 2026, Touchberry told the Council and residents he had asked the Brevard County Sheriff’s Office to investigate the city’s former financial leadership. He said a review of roughly 15 years found the city had routinely relied on cash forward from prior years to balance its budget, which he described as not a recurring revenue source and not a fix for a structural imbalance.
Touchberry said the purpose was to determine the facts and evaluate whether criminal conduct, employee misconduct, policy violations, internal control failures or organizational deficiencies occurred. He said the city had no report of missing money and that a deficit by itself is not evidence of wrongdoing.
The Sheriff’s Office has confirmed the investigation is open.
Tuesday’s vote
At an August 3 meeting that ran roughly five hours, the Council set a maximum millage rate of 10 mills for FY 2026-2027, the highest allowed and more than a 200 percent increase over the current general fund rate of 3.9250 mills. Under Florida law the Council may lower that figure before final adoption but cannot exceed it.
City officials said the city needs roughly $20 million to fund next year’s budget and is about $4 million short at the current rate.
Morrison writes that he opposes leading with a tax increase. He argues the city’s low millage rate has masked a high cost structure, citing state municipal financial data indicating Cape Canaveral ranks third highest in Brevard County for municipal expenses per resident. He writes that total city expenses grew from about $11.39 million in 2008 to $28.67 million, an increase of roughly 152 percent, during a period of population decline.
He also disputes the claim that the city has no reserves at all, writing that unassigned fund balance is one category among several and that he believes the city holds roughly $2.3 million in total reserves, with updated figures expected Tuesday.
“Raising taxes should not be the first answer to higher government spending,” Morrison wrote. “It should be the last.”
He writes that he expects the Council to adopt and the city manager to implement a reserve restoration plan by the end of this year, including additional internal controls, and that he opposed suspending the minimum reserve requirement when that came before the Council.
The final budget and millage hearing is scheduled for Tuesday, September 15, at 6:00 p.m. at Cape Canaveral City Hall. Morrison listed his city email address, w.morrison@capecanaveral.gov, and said he would respond to budget questions on the post.
The Space Coast Rocket has requested the FY 2023-2024 and FY 2024-2025 audits and the adopted budget books referenced in the mayor’s statement, and will report on the figures independently.
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