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Commission approves $21.65M SRF amendment with $5.41M principal forgiveness for drinking‑water projects
Summary
Panama City accepted Amendment 1 to its SRF drinking‑water loan Oct. 14, adding $21,653,303 at 0% interest with $5,413,326 in principal forgiveness and extended repayment and construction deadlines.
Panama City commissioners approved Amendment 1 to the state revolving fund (SRF) drinking‑water loan program on Oct. 14, accepting $21,653,303 in additional 0% financing with a principal forgiveness portion of $5,413,326 and extending construction and repayment deadlines.
Staff said the Florida Department of Environmental Protection agreed to move the first payment date to Sept. 15, 2027 (from May 15, 2026) and to extend the completion of construction deadline to March 15, 2027 (from Nov. 15, 2025). The amendment provides $21,653,303 at 0% interest, with 25% principal forgiveness ($5,413,326), staff said.
City consultants recommended the commission continue the five‑year rate plan adopted in 2022, which included 9% water and wastewater user‑rate increases through fiscal 2027, and to consider additional increases not less than 6.5% per year for fiscal years 2028–2030 to stabilize the system's finances given the new debt and construction schedule. Staff described a set of projects that could be moved forward with the additional funds, including lift station rehabilitation and multiple area mains already designed and shovel‑ready.
Commissioners also asked staff to pursue a higher forgiveness percentage where available across SRF loans; staff said some jurisdictions have successfully sought larger forgiveness percentages and agreed to pursue the matter administratively.
The commission approved the amendment and authorized the mayor to sign the necessary documents.
What's next: Staff will accept amended loan terms and continue to program the SRF projects; staff will also pursue additional principal forgiveness opportunities where permitted and return with updated financing and rate implications.
