PANAMA CITY, Fla. (WMBB) — The cost of Hurricane Michael will always add up to more than the billions of dollars in insurance claims and money spent by local, state and federal governments. There are the mental and emotional costs that are paid every day by the survivors and their loved ones. There are costs that are harder to quantify, businesses that never reopened, jobs lost and lives forever changed.
But what can be examined is the burden currently facing local municipalities and local taxpayers. One year later and many of them are still working through the process to get repaid for Hurricane Michael expenses, while simultaneously facing losses in revenue and rising costs.
News 13 investigated these finances in an attempt to determine what local taxpayers face as the recovery continues. What we learned is that each agency faced millions in expenses in the immediate aftermath of the storm. Bay County had $236 million in expenses, Panama City faced $77 million, Callaway and Springfield are facing about $20 million and Lynn Haven faced $32 million. Bay District Schools had $143 million in costs.
The costs were mostly debris removal and immediate repairs and the bills had to be paid quickly, officials said. The state of Florida requires that government agencies pay contractors within a few weeks of receiving the invoice. But for most of the local agencies involved the process for getting repaid for money spent has taken more than a year.
Bay District has only received $23 million so far, Callaway and Springfield both got less than $2 million, and Panama City has only received $15 million
“The state is not under any prompt payment statute and FEMA is not under any prompt payment statute,” said Panama City Mayor Greg Brudnicki. “It’s slow.”
Brudnicki and other local officials said the people who work with FEMA have been solid but the process itself requires mountains of paperwork and hours of clerical work.
“It’s not the people it’s the process,” Brudnicki added. “The process is too slow. The people are trying to do everything they can.”
The process as most of the agencies implemented involved three outside firms along with FEMA, the State of Florida and the local agencies themselves.
It begins with debris haulers and the monitoring companies that oversee them. The monitoring company takes photos of the debris in the debris trucks, fills out paperwork and then submits that information to a FEMA consultant. The consultant reviews the information and along with city employees, they submit it to FEMA. FEMA examines the submission and then decides if they will pay on the request. If they choose to pay the money is then sent to the state of Florida. They then examine everything and wire the money to the local agency.
A breakdown in any of these steps causes delays. Callaway City Manager Eddie Cook said he believes most of the agencies in Bay County are about four months behind in the process.
One local agency has been very successful through this process, Bay County. The county has been reimbursed nearly $170 million on $236 million in Hurricane Michael costs.
County Manager Bob Majka said his team of employees and outside contractors have been “leaning forward” and “really engaged” with the state and FEMA.
“I think the key here in our case we’re not allowing FEMA to dictate the timeline,” Majka said. “We’re touching them at every possible touchpoint that we can.”
Thankfully, local taxpayers are not on the hook for these expenses.
But they are facing rising millage rates and the cost associated with loans taken out by local agencies. Bay County took out a $250 million loan, Panama City took out a $75 million loan, Lynn Haven took out a $30 million bond.
While the loan itself will be covered in FEMA reimbursement payments, the interest on those loans won’t. That burden will fall on local taxpayers.
“We’re looking at something between five and six grand a day and that doesn’t pick up any debris, that doesn’t fix any buildings, that doesn’t get any work done,” Brudnicki said.
Also, the agencies are seeing rising costs from insurance companies that are raising premiums following massive payouts and a losses in revenue. The cities are seeing a loss in population which translates to a loss in property tax income and utility customers.
Bay County saw a revenue loss of $1.5 million. Panama City says it’s too soon to quantify all their losses but the initial number is more than $1 million. Callaway lost $2.6 million in revenue.
This year, Panama City was faced a $7 million budget shortfall. In response, city officials raised their millage rate from 4.35 mills to 5.54 mills – a 27 percent increase.
Callaway also raised its millage rate.
Panama City officials say the decrease in property values following the storm mean that most taxpayers won’t pay any more than last year. However, that’s been a topic of some discussion amongst residents and business owners and the situation won’t be clear until property bills are finalized.
Finally, local agencies are looking at major expenses to repair broken infrastructure and implement storm hardening projects in hopes of preparing for the next natural disaster. These projects include everything from placing whole building generators on important government buildings and shelters to moving the Millville wastewater treatment plant to improving the infrastructure at both of Panama City’s hospitals.
Much of these projects can be paid for with funds from the federal government. “There are mechanisms already in place with federal government to help us so that we will be better prepared in the future,” Brudnicki said. “People have suffered enough they don‘t need to be bludgeoned by more taxes.”
HM Costs $236 M
FEMA Payments: $169.7 M
HM Loans: $250M
Revenue Loss: $1,563,675
Millage Rate change: None
Bay District Schools
HM Costs: $143M
FEMA Payments: $23M
HM Loans: None
Millage rate change: 6.122 down to 5.9476
HM Costs: $19M
FEMA Payments: $1.7M
HM Loans: Drawn $8.2M on a $50M line of credit
Revenue Loss: $2.6M
Millage Rate change: 1.99 to 2.75
HM Costs: $77M
FEMA Payments: $15M
HM Loans: $75M
Revenue Loss: $1M
Millage Rate change: From 4.35 to 5.54
HM Costs: $20M
FEMA Payments: $1.8M
HM Loans: $7M
Revenue Loss: $82,600
Millage Rate change: No change
HM Costs: $32M
FEMA Payments: $4.9 million
HM Loans: $30M Bond
Millage Rate change: No Change
HM Costs: $8M
FEMA Payments: $1.5M
HM Loans: Drawn $0 on a $5M line of credit
Revenue Loss: $500,000
Millage Rate change: The city does not collect a millage