Panama City approves 4.62% increase to fire protection assessment as material costs jump

PANAMA CITY — Panama City residents will be seeing an increase in their fire assessment bill. 

In Tuesday's City Commission meeting, officials approved an 4.62% increase to the city's fire protection assessment in a 3-2 vote.

The fire protection assessment was first levied in September 2020, with the city collecting $5 million in its first year and second year. About 55% of the city's fire department budget is funded by the assessment.

With construction and material costs rising, officials said the 4.62% hike will bring in another $230,000 to help offset those costs.

PCB sets new assessment rates: PCB approves hikes for fire, stormwater and CRA assessments

Fire stations growing in Bay County: PCB to relocate, expand Fire Station 32 near Shipwreck Island Waterpark to meet growth

City Manager Mark McQueen said the assessment is an equitable way to ensure the city has a quality fire service.

"The reason we say equitable is because before (the fire service) was only funded through the general fund and the general fund in part receives its funding through property taxes, known as ad valorem taxes," McQueen said. "The way it works is ... not everybody pays property taxes."

About 73% of Panama City residents pay property taxes.

"The way that the city moved forward two years ago is it created the fire assessment to have those properties that are not contributing to the benefit of the fire service to contribute toward the cost of the fire service," McQueen said. "Even with that, it's only funding roughly 50% of the total cost of the fire service. We still get the other 50% from the general fund."

During Tuesday's meeting, Panama City residents addressed their concerns about the assessment.

Walter P. Henry spoke of a lack of communication to residents about the assessment and their payment plans and worried about their properties being taken from them.

Officials said they have made residents aware of the assessment and advertised their deferment program to help property owners with payments. McQueen said in its first year, 13 people signed up out 17,000 property owners and this past year, only two people signed up.

Michelle Clay also spoke about paying the assessment, saying her aunt was terrified when learning about a clause saying if someone pays another's fire assessment, they have a right to their property.

"I want to see if that can be maybe expanded upon and kind of changed where if someone goes in and pays your fire tax assessment that that doesn't give them rights to your property," Clay said. "A strange person could have went and paid this according to this clause in that letter that she received and that's what caused her panic ... anyone could go pay it. Fortunately, we were able to go pay it for her."

Special Council Mark Lawson later answered residents' concerns. Regarding awareness of the assessment, he said the assessment will be on residents' TRIM notice and will be mailed to every resident. He also stated residents can look at the city's website for more information.

Commissioner Jenna Flint Haligas said she remembers approving the assessment because of the city's damaged state after Hurricane Michael and the pandemic. While she believes officials have the hardships handled, Flint Haligas said she was concerned the city would be pulling in more money than needed if the increase was approved.

Lawson said city officials can revisit and lower the rate by September, saying they had to have a public first hearing to set the rate. They cannot increase the rating after approving it.

McQueen said they plan to use the funds from the fire assessment and general fund to build more fire stations and improve water flow at hydrants.

"Most of our stations are very substandard to 24-hour requirements of firefighters to be there and the apparatus are getting larger, so it becomes much more difficult inside these facilities," McQueen said. "And then also some of the facilities are just in the wrong place and need to be built in new and more accessible locations."

McQueen said it's city officials' goal to continue to bring the property tax rate down, making similar moves as Panama City Beach.

"The Beach has no property tax and we would like to be like that," McQueen said. "They operate off of fire assessments, they operate off the stormwater assessments, they operate off of CRA funding. They operate off of merchant fees. That's how they gain at the Beach, and that drives down and is made zero property tax."

This article originally appeared on The News Herald: Panama City officials approve 4.62% increase for fire assessment