Town works to rebalance funds after estimated $7.6M in hurricane expenses

Six months after hurricanes Helene and Milton, the town of Longboat Key’s new estimate for the total financial impact of both hurricanes is around $7.6 million. 

Close to $5 million of that was drawn from the general fund expenditures, which largely consist of debris removal. About $4.2 million to $4.4 million of those expenditures come from debris removal, according to Finance Director Sue Smith’s presentation to the commission on April 7.

Smith explained that in disaster situations, the town pays the expenditures up front, then submits insurance claims before going for claims through the Federal Emergency Management Agency. 

The town withdrew money from its emergency reserves to cover these costs, funds designed for this purpose.

One of those emergency funds is specifically for natural disasters and started at $3.7 million, or about 60 days of the town’s operating expenses. 

After the withdrawals to cover some hurricane-related costs, the emergency fund balance dropped to $477,000. 

Smith said a recent favorable audit of the fiscal year 2024 budget produced about $2 million for the town to replenish that emergency fund. 

Aside from the $5 million from the general fund, the town used money mainly from the enterprise funds.

On April 7, Smith presented to the commission a series of budget amendments to help balance the funds and start to build the reserves back. 

Smith emphasized the low reserve fund balance would not be permanent. 

The town is pursuing claims through FEMA, and Smith said the $4.2 million to $4.4 million for debris removal would be a 100% reimbursement from FEMA. 

Though Smith is confident of reimbursement, the lingering question is how long it will take. 

“Even though we're taking down our fund balance, it's a temporary thing because we will eventually get that reimbursement from FEMA,” Smith said. “We just don't know when.”

The town’s finance department is currently working on 30 open “projects” with FEMA, Smith told commissioners. Those 30 projects span between Idalia, Debby, Helene and Milton. 

Parks and recreation facilities in the town also sustained substantial damage from Helene and Milton. Repairing the Linley Street public dock, Broadway Street boat lift, Quick Point Nature Preserve and Joan M. Durante Park carry a pre-bid price estimate of $2.6 million. 

Smith said insurance estimates came back lower compared to what the expected costs are, but the projects could also be eligible for up to 75% reimbursement through FEMA. 

Parks and recreation repairs fall into a Category G claim through FEMA, the same category which includes beach projects. 

How much the beach renourishment would cost and when it could start are still lingering questions.

Commissioner-At-Large BJ Bishop expressed concern over the lower reserve balance as it grows nearer to the next hurricane season. 

“We’re much lower in our reserves than we’re ever comfortable being,” Bishop said. “Being a couple of months away from hurricane season, what happens if we get hit again?”

Smith said the town will look into other opportunities like the Florida Recovery Obligation Calculation, which is sponsored by the state to assist municipalities in these types of situations. 

As a backup, Smith said the town could pursue a line of credit if possible. 

But Smith was not overly concerned and was confident the town could handle that if the situation arose. 

One aspect Smith is confident about is the town’s investment income, which she said has been a solid source of income. 

“Investment income has been good,” Smith said. “That's been one of our major surplus accounts, that investment income has come in higher than we budgeted. So there's a possibility that's going to happen again in fiscal year 2025.”