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Panama City holds first reading of transportation impact fee ordinance; developers and residents urge tweaks
Summary
City staff presented a transportation impact fee study and a proposed ordinance creating two fee districts. Commissioners held the first public hearing; staff will notify local engineers before second reading after public concerns about costs and distribution were raised.
Panama City commissioners held the first of two public hearings Tuesday on a proposed ordinance to adopt a new transportation impact fee program for development inside city limits.
Kimley‑Horn planner Hadley Peterson and engineer partner Ginny presented the year‑long study used to calculate fees and proposed two fee districts: Panama City proper and Panama City North. The study sets fees by land use (single‑family units, multifamily, retail by 1,000 square feet, gas stations per pump) and is based on the standard statutory “dual nexus” test: fees must be proportionate to the share of new development that consumes system capacity and to the cost of expanding capacity.
Peterson and the firm described the methodology and showed draft fee tables that vary by district. The study recommends using impact fees for “capacity‑enhancing” improvements — lane additions, turn lanes, sidewalks where they add capacity, and similar projects — and not for maintenance, repair or debt service on prior projects.
Commissioners and members of the public pressed staff on several issues. Commissioner questions and public comments focused on: whether impact fees would deter needed development (a number of developers told the commission that fees are common and typically built into pro formas); whether fees could be credited or waived for projects that meet city goals, such as grocery stores in underserved neighborhoods; and how revenues would be spent inside the district where they were collected.
Several residents and businesspeople — including Derek Thomas and Dolores King — asked whether the fee would be applied retroactively to large projects already approved, such as recent high‑density housing, and staff answered that fees generally are charged for new capacity after adoption and are not retroactive to past permits or development orders.
The city manager and staff told commissioners they would notify all local engineers, the builders association and other stakeholders in the two weeks before the second reading so designers and developers have a chance to review the fee table and ask technical questions. The study’s draft ordinance sets an effective date (staff noted April 1 in the presentation) and the commission did not adopt the ordinance on Tuesday; it proceeded only with the statutorily required first hearing.
City planning staff recommended the ordinance be adopted after the second hearing and included a draft fee schedule and methodology in the packet. Staff said they will circulate the full tables and the engineering calculations to the local development community and hold a Q&A session before the second reading.
Commissioners emphasized that the ordinance would not be used for maintenance or existing projects, and said future policies could allow plan‑review credits for projects that meet specific city goals. The city manager and staff recommended the commission keep the schedule for a second reading at the next regular meeting so that the community can comment and staff can incorporate feedback.
