Joe Hansen, the finance director, revealed his plans to leave his position at the end of April, sparking a discussion about the future of the town’s financial management. Hansen informed the council that two candidates had already been interviewed, with one returning for a second interview. Members of the council expressed their appreciation for Hansen’s contributions. Hansen presented a comprehensive financial update, including the anticipation of a $7.5 million lost revenue replacement grant that would assist in repaying a bridge loan, provided it was not forgiven. The council also explored the possibility of an additional $500,000 in insurance reimbursement related to a business loss clause.

A significant portion of the meeting was dedicated to discussing resolution number 2594, which proposed an $8 million cash loan from the bridge loan fund to the emergency fund. This measure was intended to cover expenditures incurred from Hurricane Ian and two other hurricanes while awaiting FEMA reimbursements. The council agreed that $4 million was needed immediately, with the possibility of an additional $4 million as circumstances demanded. Hansen clarified that this was a temporary measure to address cash flow needs. The Governor’s Department of Government Efficiency had also contacted the council regarding the town’s financial stability, to which the council responded that no financial distress was anticipated in the next six months, outlining their expectations for meeting short-term obligations and debt service payments.

Attention turned to the complexities of managing FEMA-related receivables and revenues, with emphasis on reconciling expenses against insurance reimbursements. The council discussed the challenges posed by FEMA’s reimbursement process, which excludes costs already covered by insurance. The reimbursement percentage varies depending on the project type, adding further complexity to financial management. These issues were categorized as “emergency fund calculations.”

The council also addressed the implementation of a new software system. While training had begun, issues with the current software provider delayed data conversion. Despite reminders since February, the provider had not responded to requests for quotes to initiate the discovery process. The new software provider explored alternatives, such as using Excel spreadsheets for data downloads, though this method might not fully capture necessary data. Thus, the system is not yet operational.

The financial report highlighted deferred inflows, including an anticipated $8.6 million from FEMA and FDM. Due to uncertainty about the timing of receipt, these inflows were marked as deferred and were not expected within 60 days. An additional $1 million from an insurance company contributed to these deferred inflows. A negative $250,000 fund balance in the TDC was attributed to these deferred inflows as the lengthy reimbursement process delayed revenue recognition.

Positive developments in the water and utility sectors were reported, with improved cash flow and net position due to reallocating meter replacement expenses from the water utility department to the emergency fund. This adjustment increased cash availability and provided a more accurate financial representation. Stormwater fees continued to be collected without interruption, contributing positively to the department’s financial outlook. However, concerns regarding potential deficits in the water fund due to reduced customer numbers and ongoing expenses prompted discussions on exploring revenue replacement options.

A preliminary rate study was initiated to reassess water and stormwater rates. The discussion also addressed the building department’s decline in permit revenue compared to operational expenses, expected after a previous surge in permit activity. The operational costs were tied to ongoing projects, including beach nourishment and turtle lighting.

The council reviewed the status of American Rescue Act funds, with $967,000 remaining to be utilized within the next year. Impact fees for road and parks had generated minimal revenue, with no spending yet. The water and stormwater sectors reported strong income due to reimbursements for meter-related expenses. A favorable year-to-date revenue variance of $866,000 in the general fund was noted compared to the previous fiscal year. Key revenue sources included ad valorem taxes and unexpected collections from code enforcement fines.