Article Courtesy of
By Christina LaFortune, Dave
Berman, Wayne T. Price
and Tim Walters.
Published September 17, 2017
Hurricane Irma is long gone, and the sounds of wind whipping through the trees
and waves crashing into shorelines have been replaced by the roar of chain saws
and the hammering of nails on roofs.
Something not as loud — but very noticeable — is the tapping sound on
calculators, as residents and communities start tallying Irma's costs.
There will be short-term expenses, paying for new screens enclosures and
replacing soffit. There will be the cost of cutting down and hauling away tree
limbs and vegetation.
And then there will be the longer-term economic impact that likely will hit is
subtler ways in the months ahead, ranging from potentially higher utility costs
to insurance premium hikes to homeowners' association fee increases.
The hidden costs of the monster storm are many, and will be revealed in the
months ahead. Here are but some of the way's Irma's impacts could hit consumers
down the line:
Condo, homeowners association fees
Hurricane Irma is going to make condo and homeowners'
associations grapple with how to pay for common area damages
and also make some tough decisions on any storm reserve
That could add several hundred dollars to what they're
currently paying each year.
"In my opinion, the financial impact that this storm has on
individual unit owners may significantly change how
associations deal with their reserves," said Ryan Poliakoff,
a South Florida lawyer specializing in condo issues.
Poliakoff, who also is a FLORIDA TODAY columnist, said that,
in Florida, condominiums are statutorily obligated to
collect reserves for deferred maintenance and large capital
projects — but unit owners are allowed to vote each year to
waive these reserves.
"Waiving reserves is extremely common,
and it means that, when it is time for large repair projects
— for example, a roof replacement — the association must
fund the repair with a special assessment or a bank loan,
sometimes both," Poliakoff said.
"Financial responsibility for storm damage is a little-considered, but
significant, consequence of waiving reserves on an annual basis."
After Hurricane Matthew, Florida's Public Service Commission approved — with
nary a comment — a $318.5 million request by FPL to cover the costs of
restoring power after Hurricane Matthew in September 2016. Residential
customers are paying $3.36 month per 1,000 kilowatt-hour for one year.
Irma had a much greater impact, and Florida Public Counsel J.R. Kelly said
there's little doubt there will be another surcharge for consumers from
utilities like FPL.
"I would believe that Irma is going to be a lot more than Matthew," Kelly
said, referring to FPL's storm costs. "It's across the state. I don't care
if you're on a municipal utility or a cooperative or an investor-owned
utility like FPL. I don't know of anyone that's going to be spared."
Repair costs not covered by insurance
Storm clean up costs are expected to be huge.
Homeowners socked by Hurricane Irma are quickly discovering that they are on
the hook for extra payments under their insurance policies' hurricane
deductible. The deductible has little-known provisions allowing insurers to
shift thousands of dollars of damage costs per home onto consumers.
To limit their exposure to catastrophic losses from natural disasters,
insurers in Florida sell homeowners' insurance policies with percentage
deductibles for storm damage, instead of the traditional dollar deductibles,
which are used for other types of losses, such as fire damage and theft,
according to the Insurance Information Institute.
With a policy that has a $500 standard deductible, for example, the
policyholder must pay the first $500 of the claim out of pocket.
But percentage deductibles are based on the home's insured value. So if a
house is insured for $300,000 and has a 5 percent deductible, the first
$15,000 of a claim must be paid out of the policyholder’s pocket. The
details of hurricane deductibles are spelled out on the declarations page of
Repair costs following Hurricane Irma
If they haven't jumped already, you probably will be paying more for roofs,
screen repair and other projects.
Contractors have more than enough work because of Irma damage, not to
mention the rebuilding of the Houston area after Hurricane Harvey.
It comes at a time when the construction labor market already was tight in
the Sunshine States. Some estimates are that Florida lost 20 percent of its
construction workforce following the "Great Recession."
"And they haven't come back," said Conrad J. Lazo, a Tampa-based, Florida
Bar board-certified construction attorney.
The end result: The roof estimate you had before Hurricane Irma, may be
anywhere from 1 percent to 5 percent more.
Because contractors will have to pay more for labor and materials, "I could
see the justification for increasing the price of construction work right
now," Lazo said.
"The reality is contractors are passing their costs onto the consumer," he
Florida orange juice prices could rise
As agriculture officials survey the damages to Florida's oranges, grapefruit
and tangerines crops, consumers could prices rise, along with juices made
What's being looked at is if wind knocked fruit off branches or uprooted
trees. Standing water in orchards can take a toll. Harvest season is 30 to
60 days away.
Growers can't pick the fruits now, because they're not mature, said Andrew
Meadows, a spokesman for Florida Citrus Mutual, a growers' trade
organization with about 3,000 members.
Frozen concentrated orange juice futures are rising in anticipation of Irma.
September contracts were up 3.6 percent to $150.95, according to the ICE
Losses in agriculture, the state’s second-largest industry after tourism,
are expected to be in the billions of dollars, according to the Florida Farm
Stretched social services
The social services community, including food pantries, are likely to be
stretched, as more people seek assistance.
“A lot of people are living from paycheck to paycheck,” Brevard County
Housing and Human Services Director Ian Golden said. “Those are the people I
am most concerned about.”
United Way of Brevard president Rob Rains says many people work for
companies that had to close down for days, and some will be closed for much
longer, as a result of Hurricane Irma and its aftermath, including a lack of
power and water. Some of those companies won't pay their workers for the
days the company was closed.
He used the acronym ALICE to describe their situation. It stands for
asset-limited, income-constrained employed.
"For many of these people, one setback is enough to really push them into
poverty,” Rains said. “There are people who fall through the cracks. A week
or a week-plus without a paycheck can be devastating. Right now, we’re just
beginning to see the effects, but they will be more pronounced” in the weeks
Reprioritizing government budgets
With county and local governments now facing added expenses related to the
aftermath of Hurricane Irma, there could be a need to reset spending
Brevard County Manager Frank Abbate said he believes that the county has
enough reserves in place draw from, so the county can get by while it awaits
reimbursement from the Federal Emergency Management Agency and the state.
"We're fiscally prepared for this," County Commissioner John Tobia said.
FEMA and state reimbursements combined generally cover 75 percent to 90
percent of hurricane-related expenses, depending on the category of expense.
But getting reimbursed typically is a time-consuming process.
"I think, for the most part, from a budget perspective, we'll be able to
move forward," Abbate said.
He added, though, that it's too early to tell specifically how budgeting and
spending priorities might need to be changed because of Irma.
Tobia said one area that may be affected is the county's initiative for road
reconstruction and resurfacing. The county had been hoping to use some of
its reserves to boost its road program even more than initially proposed in
the county budget for the fiscal year that begins Oct. 1. But the amount
available for that might not be as much as county officials had hoped for.
After Hurricane Matthew, county commissioners increased the amount it will
bill residents of unincorporated Brevard for trash pickup in the coming
budget year, as a way to help maintain its emergency reserves related to
hurricane debris pickup.