Hurricane recovery depletes city's general fund balance

In similar fashion to the tropical weather events of 2024, interim City Manager Dave Bullock blew into Sarasota City Hall just more than two months ago amid budget season. On Monday he sucked the air out of the meeting chamber with some fiscally challenging news.

Last year’s back-to-back-to-back visits by Tropical Storm Debby and hurricanes Helene and Milton left up to $50 million in damages to city property in their wake, inflicting an estimated $38 million impact to the city’s general fund balance.

Entering the current fiscal year, that fund balance was approximately $32 million. With expenditures thus far of some $20 million, even with an advance of $7.7 million from FEMA, that leaves the city going into next fiscal year with an unassigned fund balance of $16.8 million, well below the city’s policy of range of 17% to 25% of its total operating budget in its emergency savings account. 

Bullock delivered that news to the Sarasota City Commission during the first of its two-day budget workshop on July 28 with the caveat that uncertainty surrounding the typically standard FEMA reimbursements for natural disaster recovery costs of at least 75% is presently not a certainty. And even if it was, it can take years to receive.

“It took a while, and it took a lot of gyrations, but there was a check in the mail,” Bullock said of the usual time frame for reimbursement. “Now we are uncertain.”

Photo by Andrew Warfield

As such, Bullock’s first, and in all likelihood only, draft city of Sarasota budget was prepared assuming a worst-case scenario of no FEMA reimbursements and a recommended “modest” property tax increase of 0.273 mill. All of the increase — about $5.2 million — would be allocated to jump start a three-year strategy to rebuild the fund balance, this year taking it above the $20 million amount spent on hurricane recovery thus far.

“I view that $20 million as a lesson learned, and we should not go into any year with less than what we had to spend,” Bullock told commissioners. “This may have been an extraordinary year. We may not get another extraordinary year for another 100 years, or we may get one this year. The inability to know what's going to happen to us indicates some level of experience that should take us to some level of fund balance expectation.”

Bullock’s submitted budget was prepared assuming no FEMA reimbursements. Should those checks arrive, so much the better. The general fund spending plan of $108.37 million is slightly higher than the current fiscal year’s $107.21 million, but it includes no new personnel that the general fund and cost-of-living increases would cover. All employees eligible for step increases, however, will receive those salary hikes. 

On the plus side, the city’s taxable property value rose 6.5% over the current fiscal year from $18.3 billion to $19.5 billion. That, however, represents a 6.32% decrease in growth from fiscal year 2025, which represents a continuing downward trend from the 2022 assessed value spike, up 17.85% from the year prior. Bullock said he expects that downward trend to continue, but added he doesn't think assessed values will ever go negative year over year.

“The operating budget is almost flat with last year,” Bullock said. “Including benefits, personnel costs went up, the operating costs went down. The capital costs have gone down, and some of our transfers have gone down. Service levels in the proposed budget have not been reduced.”

The two-day workshop included reports and budget requests from all departments across city government, including the general fund and enterprise (self-supporting) funds. Only two public hearings remain on the budget season calendar before final adoption — Tuesday, Sept. 2, and Monday, Sept. 15, both beginning at 5:30 p.m. A vote to adopt the fiscal year 2026 budget will follow the conclusion of the second public hearing.

This story was updated to correct the time of the Sept. 2 budget public hearing, and to update numbers from the budget presentation.