Panama City Seeks $ 80 Million Loan, New Internal Project Management Office
PANAMA CITY – With plans to build a premier city, Panama City commissioners authorized city staff to take out $ 80 million in loans and establish an office to manage loan-funded projects .
At Tuesday’s regular meeting, City Manager Mark McQueen recommended approving the creation of a project management office following the committee’s unanimous vote to continue PNC Bank’s line of credit.
“We have established a relationship with PNC Bank where they have a line of credit so that we can draw from that line of credit, which is directly tied to each of these FEMA funded projects,” McQueen said. “This will allow us to draw on that line of credit, do 90 days of work, claim government repayment, get those funds back, and pay off the loans immediately.”
The loans will cover 72 projects related to “Hurricane Michael Response, Recovery and Mitigation, including Debris Removal and Stormwater System Repair”, all of which are 75% repayable by FEMA, according to city officials. The remaining 25% of the costs will be shared with the state, with the city’s share ranging from 5% to 12.5%.
Commissioners appeared satisfied with the deal.
“It’s fair to say it’s a work in progress,” said Commissioner Billy Rader. “It’s about doing it right.”
“I’m glad the staff and everyone found a way to start this process because we don’t have the money – everyone knows that – and we can’t do something until we do. ‘don’t have the money for it… because (FEMA) doesn’t pay us until we do the project, “said Commissioner Jenna Haligas.” This will really speed up the process. “
Although a rate has not yet been negotiated, McQueen said the interest charges on the loans should be eligible for repayment, which was not the case when the city took out a loan with PNC from $ 75 million for emergency response and debris removal immediately following Hurricane Michel. However, legislation has been introduced that addresses retroactive interest charges incurred by local governments in areas affected by Hurricane Michael.
When asked about a timeline for construction projects, McQueen underscored his recommendation to open an in-house project management office that will be responsible for developing a timeline, among other tasks.
“We are planning to have a website, where you can go and click on the project, what is the amount, what are the funds committed, what is the city’s share,” he said, noting that the PMO will submit a monthly report for commission approval detailing any drawdown on the line of credit. “You’ll know what projects are in place… and the timeline as well. “
McQueen said he was fiscally responsible for waiving the outsourcing of project management services to third parties; instead, the internal PMO should account for around 5% of the costs of each project.
“Clearly, the scale and scope of the projects coming to Panama City from FEMA and other sources exceed the organic capacity of city staff to operate. As a result, we are creating this office to better, more efficiently manage these projects and ensure that we have transparency and audit readiness throughout the process, ”said McQueen. He added that the PMO “is designed to run those dollars more efficiently and effectively so that we can get back on our feet faster than what we’ve seen in other cities.”
The 10 to 15 positions will be advertised and then filled in the four components of the PMO: accounting, procurement, technical management and construction management. The office’s functions will come to an end as sections of the projects are completed, officials said.