Panama City staff propose transportation impact fees; builders and Realtors warn of affordability and timing risks

City staff and consultants presented a proposed transportation impact fee at a public workshop at Panama City Hall and heard more than two hours of public comment from builders, developers, Realtors and business groups who said the fee, as proposed, could make new housing and some commercial projects less affordable or infeasible.

City Manager Jonathan Hayes opened the workshop by describing the goal: to identify revenue sources beyond the general fund to pay for transportation capacity improvements as Panama City grows. “Existing tax revenues alone are not sufficient to cover the cost of the transportation infrastructure that’s needed to keep up with the growth,” Hayes said.

The study and methodology

Kimley Horn consultant Hadley Peterson, an urban planner, and project engineer Mike Woodward summarized a year-long study that began in March 2024. Peterson said the team conducted a comparative review of impact fees in the Panhandle and Florida, produced a draft in August, and presented to the planning board in October and November before a first reading by the commission in mid-January. “We launched this in March of 2024,” Peterson said.

Woodward said the methodology follows the state’s dual-rational-nexus approach: fees must be proportional to the transportation capacity new development consumes and must be spent on improvements that benefit that development. He described steps used in the calculations: trip generation rates, local trip-length data from Bluetooth-based sources, percent-new-trip adjustments, conversion to vehicle-miles of capacity and a cost-per-vehicle-mile based on recent local lane-mile projects and FDOT capacity tables. Credits reduce the raw fee for items such as gas-tax and ad-valorem contributions. “These two things really form…