It’s customary for local governments to keep a tidy sum in reserves for the proverbial rainy day, but this budget season the Town of Indian River Shores seems to be girding itself financially for a 100-year storm.
In a recent budget workshop, the consensus of the Shores Town Council was to keep reserves equal to 50 percent of the town’s annual operating expenses, to have on hand in the event of a major hurricane or other natural disaster.
That $3.3 million would supply up-front cash to hire contractors for immediate repairs, cleanup and debris removal. It could also float budget overruns in the Public Safety Department should extra staffing be needed and overtime bills start piling up.
Council members referenced hurricane damage in the Florida Panhandle from Hurricane Michael and the municipality of Mexico Beach being “wiped out” as the reason to keep enough money to operate for months, if need be.
“The reality is that we do sit on a barrier island, subject to storms that can put us in a very bad place,” Vice Mayor Bob Auwaerter said.
“It seemed to me that 50 percent [of the budget] was a number that everybody could work with,” Auwaerter said.
This year is Town Manager Joe Griffin’s first budget season with Indian River Shores, though he managed the City of Sebastian and the Sebastian Municipal Airport budgets for many years. Griffin said he was “very pleased with budget process – very, very pleased with the presentation made by Vice Mayor A regarding reserves.”
Council members agreed with Auwaerter that keeping more reserves was a better course of action than returning that money to the taxpayers. The town had the option to boost its reserves without increasing property taxes because of the $4.4 million proceeds from the 5.4-acre oceanfront parcel sold to developers in 2017.
Town assets are covered by insurance, and certain disaster-specific expenses are usually covered by the Federal Emergency Management Agency in a declared disaster zone, but insurance claims can be slow getting paid, and FEMA funds can take years or even a decade to come back into town coffers.
One such example was the Beachcomber Lane dune crossover that was unearthed and damaged by the high surf in 2016 as a result of Hurricane Matthew.
“The repair for the dune crossover after Matthew was $18,900,” Town Treasurer Heather Christmas said. “We received $8,900 from insurance but we have not received any FEMA reimbursement,”
Yet, over the past 15 years, Indian River Shores has been fortunate in terms of the cost of storm damage. Almost all the roadways in the town are under either state jurisdiction or in private ownership, and the town has relatively few assets and no utility infrastructure under its direct control other than storm drainage systems. There are no parks, public tennis courts or golf courses.
Total expenses from Hurricane Frances in 2004 were $496,000, but after insurance, plus state and federal reimbursements, the town’s cost was only $7,100. The town’s share was higher for Hurricane Jeanne in 2004. Jeanne protection and cleanup cost $393,000 with town taxpayers funding $133,000 of that.
Hurricane Wilma cost $65,000, all of which was covered by federal taxpayer funds. Hurricane Matthew cost $38,000, of which the town picked up less than $15,000 of the tab, and Hurricane Irma cost $76,000, with $11,000 ending up being the town’s responsibility.
