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City finance staff warns Lynn Haven faces multimillion-dollar FEMA gap from Hurricane Michael
Summary
Finance staff told the commission that FEMA adjustments have reduced federal receivables tied to Hurricane Michael, leaving Fund 101 in a roughly $900,000 negative cash position and likely requiring a $2.3 million transfer from the General Fund; longer-term impacts may total $22–23 million on the General Fund.
City finance staff told the Lynn Haven City Commission that ongoing FEMA audits and allocations for Hurricane Michael projects have cut the city's expected federal receivables substantially, creating an immediate cash shortfall.
Staff reported that Fund 101 (disaster recovery) is currently about $900,000 in a negative cash position and that the city will make a roughly $2.3 million payment from the General Fund in August to cover an upcoming liability. The staff presentation said final net impacts could be in the range of $22 million to $23 million on the General Fund when FEMA completes its allocation process.
"Today, Fund 101 is in a negative cash position of approximately $900,000," the staff member said. "We're going to make a payment, about $2,300,000, so I'll be taking that out of General Fund in August." (Staff member)
Officials cautioned that FEMA is still reviewing insurance allocations and applications for legal fees, and that federal processing has slowed because of partial federal staffing. Staff noted there is about $700,000 that is ready to be released pending administrative action, but other items remain under review.
Mayor Lowry told commissioners the numbers were "honest news" and that staff would continue to update the commission as FEMA audits progress. City Manager Lightfoot said more details would follow and recommended planning for the projected General Fund impact when preparing budget workshops.
No formal fiscal action was adopted at the meeting; the city will present follow-up details and planned transfers as staff refines final closeout numbers with FEMA.
