Dunedin approves up to $12 million line of credit to bridge hurricane repair costs

DUNEDIN, Fla. — The Dunedin City Commission unanimously authorized a tax‑exempt non‑ad valorem revenue note (not to exceed $12 million) on Feb. 5 to bridge repair work the city has done after recent hurricanes while reimbursement from FEMA and the state is pending.

Finance Director Les Tyler told the commission staff estimates total storm repair costs at about $13.6 million and recommended a variable‑rate line of credit from Regions Capital Advantage Inc., chosen through an RFP process. Tyler summarized the terms: a formula tied to one‑month SOFR (secured overnight financing rate) — described in staff materials as 79% of the 1‑month SOFR plus 59 basis points — monthly rate reset, an estimated initial rate of 3.49% as of Jan. 21, 2026, and estimated closing costs of $60,000.

Tyler said the loan is intended as short‑term cash flow support: "The loan provides the city with flexibility to prepay with no penalties over the life of the loan." Financial advisers on the dais said interest on eligible replacement work is generally reimbursable by FEMA (approximately 87.5% of interest costs on reimbursable replacements, per staff comment).

The commission approved the measure unanimously. Staff told commissioners the city’s debt‑service ratio would remain under the city’s internal policy limit even if the full $12 million were drawn — an estimate that staff said assumed a worst‑case full draw and is therefore conservative.

If FEMA reimbursement does not arrive within four years, Tyler said the plan would be to convert obligations to a longer‑term loan and reassess capital projects and repayment schedules to manage the balance.