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Panama City tables proposed water and wastewater connection fee increases pending affordability measures
Summary
After hours of public comment from builders and residents, the commission voted 5-0 to table proposed increases to water and wastewater connection fees. Commissioners asked staff to return with options including phased implementation, payment plans, exemptions for infill/platted lots, and use of SHIP funds to offset costs for affordable housing.
Panama City commissioners on Oct. 28 voted unanimously to table a proposed ordinance that would raise water and wastewater connection fees, asking staff to return with targeted options to reduce the impact on existing residents and affordable housing.
The ordinance (32-74) proposed new equivalent residential connection (ERC) fees of $1,350 per ERC for water and $1,610 per ERC for wastewater, increases the utilities division said were recommended by a Raftelis study to reflect capital investments and to recover capacity costs attributable to new development.
Why it matters: Staff said the city has not updated connection fees since 2003. Speakers including local builders and the Bay Building Industry Association warned that the immediate, large increase could reduce housing affordability and blunt new construction. Several residents said the fee structure fell hardest on single-family households and retirees on fixed incomes.
Public comment and staff responses: Builders urged phased implementation or a credit/deferral mechanism to preserve affordability and competitiveness for local builders. Commissioner Hughes and others asked whether fees differ for properties outside the city limits; staff clarified that the monthly service surcharge for outside-city customers remains but that the connection-fee ordinance as written does not add a surcharge to the connection fee. Commissioners discussed a possible program to use SHIP funds to offset connection fees for affordable homes.
Commission action: Commissioner Street moved to table Ordinance 32-74 and direct staff to return with options addressing payment plans, infill exemptions, SHIP fund offsets and phased implementation. The motion passed 5-0.
Next steps: Staff will assess payment-plan mechanisms (for new-build vs. existing homes), consider exemptions for infill/platted lots or credits for existing fixtures, evaluate legal ability to surcharge connection fees for outside-city customers, and explore SHIP and other funding to reduce the one-time cost to low- and moderate-income households. The item will return to the commission at a future meeting for further action.
