Hurricane damage takes a bite out of city's fund balance

The annual budget debate on whether the city of Sarasota should keep a general fund balance higher than the recommended amount may have been settled in the wake of the 2024 hurricane season. 

During the Nov. 18 City Commission meeting, Deputy City Manager Patrick Robinson estimated the damage repair and clean-up operations from Hurricanes Helene and Milton to come in at about $18 million, which will reduce the fund balance from $28.7 million to $10.7 million, at least temporarily. 

“FEMA does reimburse 100% to 75% in the first 90 days,” Robinson said. “If that actually happens in a timely fashion, we will be basically made whole or, worst case scenario and it all came in at 75%, that would be about $12.7 million we get back." 

That would leave the fund balance at about 19.7%, Robinson told commissioners.

The Government Finance Officers Association, which sets the standard for government accounting, recommends a municipality maintain a fund balance of 22% of the general fund, enough for about three months of operations in the event of emergency. The city’s pre-hurricane fund balance was 26.8%, the argument for keeping that amount in reserve being that Sarasota is a coastal city. 

“There is always that discussion about why do you carry a little bit higher fund balance?” Robinson said. “We had about a six-foot to 10-foot storm surge. I can't imagine what 10-to-15 foot-storm surge would be, so I think having that change in your pocket goes a long way for situations like this.”

In addition to clean-up operations, the city is dealing with widespread damage to municipal properties such as parks and even at City Hall, where a massive downed live oak remains. There is also the estimated $7 million to $10 million in restoration costs for flooding at the Van Wezel Performing Arts Hall, which resulted in the cancellation of the first half of the season's performances. 

Some of damage sustained by the building, but not all, will be covered by insurance. That’s because the commission previously decided to drop non-flood-related insurance coverage for the period of April 2024 through March of 2025.

"The first year we decided not to cover the Van Wezel," lamented Mayor Liz Alpert.

“We do continue to have flood insurance, which will pay out a portion of the damage caused by the water intrusion related to the storms,” Robinson said. "A decision was made by the City Commission not to renew the property coverage on the Van Wezel. However when we do our insurance presentation, that decision will be readdressed. I believe the last increase on that property insurance was somewhere in the neighborhood of 60%, so just something to keep in mind as we move forward.”

As for the debris collection so far Robinson reported the city and its contractors have removed 280,260 cubic yards, which is approximately 392,364 tons of construction and demolition, household vegetative debris combined. That comes to 8,370 truck loads out of an initially estimated 12,000.