Dunedin commission approves $5 million interfund loan to cover hurricane-related costs

The Dunedin City Commission on Jan. 9 approved Resolution 25-01, authorizing an interfund loan of $5,000,000 from the city's fleet fund to the general fund to cover storm-related costs from hurricanes Helene and Milton.

City Finance Director Les Tyler said the loan will address immediate cash-flow needs for debris removal, repairs to city property and other hurricane-related expenses while reimbursements from FEMA and the state proceed. "This item is established an interfund loan of $5,000,000 between our city's internal service fund fleet fund to our city's general fund for the storm damage we incurred for the two hurricanes, Helene and Milton," Tyler said.

Tyler told commissioners the fleet fund had about $9 million in cash and that staff expects the $5 million transfer will not impair fleet operations over the next one to three years. He explained the loan term would be no more than three years in accordance with city policy and said the loan rate is set by policy as the city's weighted average investment return (as of Oct. 1) plus 50 basis points. "Staff estimates that the interest expense would be approximately $220,000 annually," Tyler said, citing a 4.41% calculated rate based on the city's October 1 portfolio return.

Tyler said initial assessments put storm-related repair and debris-removal costs at just over $20 million, a figure still being refined as assessments continue. He and other staff expected most costs to be reimbursed by FEMA and the state at a combined 87.5% (FEMA 75%, state 12.5%), with the city responsible for the remaining local share; he added that debris removal is expected to be 100% FEMA-eligible.

Commissioners asked about fallback options should costs exceed current estimates. Tyler and the city manager said additional internal loans from other funds, such as water/sewer or additional fleet fund borrowing, remain options and that staff is monitoring expenditures and reimbursements. Staff also said the city may pursue short-term external financing (a line of credit or bank loan) later in 2025 if needed and would repay borrowing as FEMA funds are received.

The commission opened the item for public comment and then voted unanimously on a roll call: Commissioner DeGarden — aye; Commissioner Sandbergen (Steven Sandbergen) — aye; Commissioner Walker — aye; Vice Mayor Gao — aye; Mayor Freyne — aye. The motion passed 5–0.

The resolution directs staff to effect the interfund transfer and return with any additional financing recommendations if further cash is required.

Votes at a glance: Resolution 25-01 — establish $5,000,000 interfund loan from Fleet Fund to General Fund for storm-related costs; mover: Vice Mayor Gao; second: Commissioner Walker; vote: unanimous (5–0); outcome: approved.