Panama City holds first hearing on proposed water, wastewater connection fee increases

Panama City commissioners on Oct. 14 conducted the first public hearing on an ordinance that would raise the city's water connection impact fee to $1,350 per equivalent residential connection (ERC) and its wastewater connection fee to $1,610 per ERC.

City staff said the proposed increases reflect capital investments needed to expand water and wastewater facilities to serve growth. Staff told commissioners the city's connection fees have not been updated since 2003 and recommended the changes to shift some growth‑related capacity costs from monthly utility rates to new development. Under the proposal the water fee would increase from $465 to $1,350 per ERC (a $885 increase) and the wastewater fee would increase from $1,250 to $1,610 per ERC (a $360 increase), staff said.

Staff also explained how the city measures ERCs. "One ERC represents the average capacity necessary to service a typical single‑family home," staff said, noting the city's adopted standards reserve 345 gallons per day of water and 230 gallons per day of wastewater treatment capacity for one ERC. The city calculates an ERC for new development from the number and type of fixtures (showers, toilets, dishwashers, washing machines, etc.) and divides by established factors to determine water and wastewater ERCs.

A member of the public, Walter Pia of 614 Maple Avenue, asked whether customers outside the city limits who receive city water and sewer service would face the same fee increases. "What about the customers that y'all put on? It's not in the city limits, but they still have water and sewer," Pia said. Staff did not make an immediate commitment in the hearing; the ordinance remains at first reading.

Staff provided illustrative examples during the presentation and said the fees are intended to cover the city's investment in both existing and future capacity available to serve new growth. The utilities division also told commissioners the proposal came from a fiscal year 2025 impact‑fee study commissioned from RFP consultants that calculated fees using capital expenditure needs for existing and new infrastructure.

The commission held the first hearing but did not adopt the ordinance on final reading Oct. 14; staff recommended the commission conduct the required first public hearing and return the ordinance for a subsequent vote.

What's next: The item will return to the commission for a subsequent reading and final vote after the required public‑notice period and any updates to the fee study or implementing ordinance language.

"The level of service commonly used in the industry is the capacity measured in gallons required to serve one equivalent residential connection," staff said during the hearing.