Panama City Beach City Council Makes Budget Cuts: Prioritizes CRAs, Utilities, Stormwater, Safety

August 07, 2025

by Janet Pattison

PANAMA CITY BEACH, FL – The Panama City Beach City Council convened on August 6, 2025, for a comprehensive budget workshop, emphasizing fiscal prudence, infrastructure improvements, and community services in the face of flat business tax receipt (BTR) projections. With a proposed general fund of $59 million in revenue and $72 million in expenditures, the city will need to make cuts while investing in critical projects.

General Fund: Balancing Growth and Stability

The 2026 general fund, a 3% increase over 2025, relies heavily on tourism-driven BTR (34%), utility taxes (10%), and intergovernmental revenues (11%). Expenditures, up 15.6% to $72 million, prioritize capital projects (29%), personnel (45%), and operations (26%). Key features include a 3% cost-of-living adjustment for staff, a 25% rise in insurance premiums, and a freeze on new general fund positions unless funded by specific revenues. The council’s cautious approach reflects flat BTR projections and the absence of ad valorem taxes, with modest 1-3% growth expected in future years.

Departmental Budgets: Efficiency and Investment

Police Department ($22.7M): Allocates 55% to personnel, 24% to operations, and 21% to capital, including patrol vehicles, body cam upgrades, and Flock cameras. The council approved an additional $16,000 for four Flock cameras to bolster public safety by addressing gaps in license plate reader coverage.

Fire Department ($14.4M): Split between fire rescue ($12M) and beach safety ($2.27M), with capital investments in a mobile command center, training truck, and response vehicle. Staffing challenges for lifeguards persist, but no new positions were added.

Recreation Department ($13.9M): Focuses 56% on capital projects like a $4.4 million HMPG-funded community center/safe room, pickleball courts, and Miracle League field resurfacing. Community contributions include $64,000 for the Boys and Girls Club, $65,000 for the Senior Center, and $20,000 for the Bay County Estuary Club.

Street Department ($11.3M): Invests 55% in capital, including road improvements for Mandy Lane and Clarence Street, supported by a $600,000 HMPG grant for a public works safe room.

Library ($360,000): Includes a 4% increase ($29,681) to cover rising personnel and insurance costs, reflecting increased library card usage.

Administration, Legal, and Planning: Tight budgets with minimal increases, reflecting cost management. Administration ($3.4M) supports finance, facility maintenance, and HR, while Legal ($595,000) saw a 7.6% decrease.

Community Redevelopment Area (CRA): Major Infrastructure Push

The CRA budget of $68.5 million, with 84% for capital outlay, targets Front Beach Road segments 3, 4.1, 4.2, and 4.3, supported by over $15 million in HMPG grants. Additional projects include Powell Adams and Hills Road improvements, crosswalks, and traffic/parking studies. Funded by 59% debt proceeds and 33% TIF assessments, the CRA faces a potential $11 million shortfall by 2029 and a $60 million deficit by 2030. The council is exploring cost efficiencies and splitting segments to avoid delays from FEMA grant reviews, with an update scheduled for January 2025. Enhanced crosswalk designs with refuge islands and lighting were prioritized for pedestrian safety.

Stormwater Fund: Addressing Flooding

The $11.3 million stormwater budget, funded by 56% fees and 41% grants, allocates 46% to capital projects. Key initiatives include:

Lowell Water Lake: A $3 million grant-funded project for nutrient reduction and flooding control.

Frank Brown Park Basins: To reduce flooding and expand park amenities.

Randy Road Drainage: Set for construction by late 2025, addressing runoff from Manistee.

Emergency Community Fund: For agile, small-scale drainage fixes to address neighborhood issues quickly.

Utility Fund: Infrastructure Overhaul

The $124.4 million utility fund, split between water ($55.2M) and wastewater ($69.2M), operates as an enterprise fund with 71% from service charges. Water projects include main relocations, a new utilities building, and automated meter reading, while wastewater focuses on treatment facility upgrades, lift station improvements, and Laguna Beach’s septic-to-sewer transition. A seven-phase Grand Lagoon sewer project awaits grant funding to avoid burdening users.

Pier and Aquatics Center: Boosting Revenue

Pier Fund ($1.65M): Funded by 73% admissions and 24% rent, with projects like handrail replacements and a lightning rod. The council plans to raise admission fees from $4 to $5 post-restaurant construction to generate an additional $400,000, offsetting a projected $1.7 million deficit by 2030.

Aquatics Center ($1.6M): Relies on 65% transfers from the pier and 35% user fees. A new pool slide and potential membership expansion aim to boost revenue, with a $100,000 grant sought for swim lessons.

IT Department: Modernizing Systems

The $2.9 million IT budget supports a Fuel Master upgrade, ERP system implementation ($95,000), and a city fiber infrastructure project with Bay County, enhancing network security and efficiency for municipal services.

Key Decisions

Bulk Waste Program: Reduced from four to two annual pickups, saving $100,000.

Fiscal Strategy: No new general fund positions unless revenue-funded, with a focus on grant-supported capital projects to ensure long-term stability.

Community Focus: Continued support for libraries, recreation, and safety, balanced with cost efficiencies.

Watch the meeting here:

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