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Panama City explores stormwater utility, in‑lieu fees and green infrastructure incentives
Summary
City Engineer Stacy Rausch briefed the commission on the condition of Panama City’s stormwater system and proposed financing options including a stormwater utility using ERUs, fee‑in‑lieu regional capacity and incentives for green infrastructure; commissioners signaled support for a targeted in‑lieu program rather than a city‑wide new tax.
City Engineer Stacy Rausch told the Panama City Commission that the city’s stormwater system is substantial and underfunded: the maintenance division has 39 staff, an annual budget of about $1,530,000 (with only roughly $55,000 identified for materials), nearly 6,000 stormwater inlets, roughly 900 manholes, 167 city‑owned ponds and more than 150 miles of drainage pipe. Rausch said GIS data may undercount some assets transferred from the county.
Rausch reviewed the regulatory baseline (the city’s MS4 permit, Florida Department of Environmental Protection standards and the Northwest Florida Water Management District guidance) and described green infrastructure options — bioswales, rain gardens, permeable pavement pilots, living shorelines and tree planting — noting that engineers commonly default to ponds because they are well known and easy to model.
On financing, Rausch highlighted an existing, unused stormwater utility code adopted in 1991 that uses ERUs (equivalent residential units) and explained how a modern ERU or impervious‑area assessment works. She described an in‑lieu (fee‑in‑lieu) approach: the city could build regional ponds or treatment facilities and sell capacity to developers, use utility funds for maintenance, dredging and pollution abatement, and match grants when needed. Rausch cited nearby revenue examples: Bay County ($1.8M), Lynn Haven (~$1.7M) and Panama City Beach (~$1.5M) and described differences in how those jurisdictions assess fees.
Commissioner response split on design details but shared a common caution about imposing a new, poorly explained charge on residents. Several commissioners said they would not support a city‑wide flat tax but were open to a targeted in‑lieu program or credits to help redevelopment in constrained neighborhoods. Commissioner Street advocated a fee‑in‑lieu focused on capacity improvements for smaller or historic lots, selling excess capacity or credits to spur redevelopment. Commissioner Lucas and others emphasized educational outreach and incentives rather than punitive assessments; Commissioner Hughes and Mayor Branch stressed moving slowly and making any program business‑friendly.
Practical proposals and next steps included: exploring a narrow in‑lieu program for areas with small lots or constrained redevelopment (for example MLK corridor and historic districts); designing a five‑ to ten‑year reevaluation period for any fee structure; preparing a ward‑by‑ward work plan that maps candidate projects; and sending questionnaires and offering small developer education (pattern books or design guides) to reduce friction for low‑impact options.
No ordinance or fee was adopted during the workshop. Staff said the code already authorizes a stormwater utility but the city currently collects no stormwater utility revenue; commissioners asked staff to return with options that prioritize capacity improvements, credits for green infrastructure, and clear illustrations of where new funds would be spent.
