Delray Beach CFO: FY24 ended with $5.4 million general-fund shortfall; officials lay out earlier, longer budget calendar

City Manager Moore and Chief Financial Officer Henry Dacolis told the Delray Beach City Commission on March 18 that the city ended the last fiscal year with a $5.4 million shortfall in the general fund and outlined a new, earlier budget calendar to give commissioners more time for department-level review.

The new calendar calls for departmental presentations and four commission budget workshops in April and May, plus additional staff reviews, so commissioners can examine historical actuals, year-to-date performance and departmental projections before the city manager’s recommended budget is prepared.

Dacolis, introduced at the meeting as the city’s chief financial officer, said the number set out in the city’s closed books shows actual general-fund revenue of about $180 million and expenditures of roughly $185.5 million, producing a deficit of $5.4 million. “We’re 95% confident of these numbers, but they are still subject to audit,” Dacolis said. He added that expenses overall were managed within budget, but revenues were below amended projections.

Dacolis explained how the city reports by fund and said he will provide more granular, multi-year historical data in budget worksheets so commissioners can track trends by department and fund. He described government accounting conventions used by the city (modified accrual for government funds; accrual accounting for enterprise funds) and said the finance team will focus on 10 funds in detail and include the DDA and CRA totals in summaries.

The presentation also walked commissioners through first-quarter patterns, noting seasonality: the city recorded a positive first-quarter surplus because tax receipts and other seasonal receipts arrived early, and some capital project costs are timing-driven. Dacolis said the department will attempt monthly budget versus actual reporting in the future but that the city’s current software limits make that unlikely until migration to a new system.

Commissioners pressed for clarity on the revenue shortfall and the drawdown from reserves. Dacolis said the city began the year with audited reserves of about $48.7 million and noted the fund-balance policy target range the commission has previously adopted (21–25% of an applicable calculation). He recommended budgeting conservatively — not assuming drawdowns — and letting departments justify needs at the new review sessions.

City Manager Moore and Dacolis detailed an updated timeline: internal reviews by finance the week after submissions, three rounds of review (departmental, finance and then manager/department meetings), and the four public budget workshops scheduled for April 8, April 22, May 6 and May 20. Dacolis said department salary projections would be completed soon and that the finance team is hiring to strengthen budget capacity.

Commissioners and members of the public asked about potential recessionary pressures and federal funding opportunities; Moore said staff and a federal lobbyist are pursuing Army Corps and water-improvement funding, while Dacolis said the finance team will continue to monitor grants and revenue risks as the budget process moves forward.

The commission did not take a formal vote in the meeting on the budget; staff will return with the recommended budget and supporting worksheets ahead of the scheduled workshops.