The Fort Walton Beach City Council voted unanimously Tuesday to authorize an amended agreement with Okaloosa County for the design of the Around the Mound project, committing the city to fund approximately $2.025 million of the estimated $2.7 million design cost.

• The decision came after the city did not receive a Transportation Regional Incentive Program (TRIP) grant that would have covered a significant portion of the project costs.

The original interlocal agreement back in January was contingent upon receiving the grant. Under that agreement, both the city and county were to contribute $675,000 each toward the design, with the remaining costs covered by the anticipated grant.

• Councilman David Schmidt noted the competitive nature of the grant process, saying “there was about 16 districts in the state that were competing for it, and we didn’t get awarded.”

“The county’s going to honor their original $650K and we’re covering the rest,” City Manager Jason Davis told the council during Tuesday’s meeting. Davis noted the project cost has increased to “a little over 2 million now.”

Okaloosa County will maintain its commitment of $675,000 despite the grant denial, according to city officials. The funding will come from the city’s half-cent sales tax revenue, which Finance Director Nicole Nabors said currently has about $7 million in restricted fund balance.

Schmidt emphasized the project’s importance beyond downtown development, noting its connection to regional transportation needs and military mission readiness.

• “This project that we’re talking about is way more than just creating more vibrancy for downtown Fort Walton, but it’s to compliment and to go along with the huge need of trying to improve the mission readiness,” Schmidt said.

The Around the Mound project aims to increase capacity on Highway 98 to address existing and future vehicular capacity and safety issues, as well as high volumes of regional and commuter traffic traveling through Downtown Fort Walton Beach. The project currently ranks fourth on the Strategic Intermodal Systems project priority list by the Okaloosa-Walton Transportation Planning Organization.

Councilman Payne Walker expressed concerns about the piecemeal funding approach and questioned approving design funding before receiving results from a Project Development & Environmental study, which is expected in early 2026.

• “It always seems like we were throwing money out, throwing money out, throwing money out,” Walker said. “ I look forward to Around The Mound coming together when it is. It’s just sometimes I feel like we’re not aware of the full extent of the cost….I’m just disappointed that we keep getting turned down.”

The city plans to continue pursuing additional funding sources, including working with the Greater Fort Walton Beach Chamber of Commerce to identify alternative funding options. Councilman Bryce Jeter suggested leveraging the Chamber’s expertise in project funding, noting their success in similar endeavors.

City officials also indicated they plan to pursue Safe Streets for All (SS4A) implementation grants, as the project has been designated as a Tier 1 Priority Project under the recently accepted SS4A Safety Action Plan.

Attorney Jeff Burns noted that other municipalities, including the City of Destin, have successfully hired lobbyists to help secure state funding for transportation projects.

“The City of Destin hired a lobbyist about nine months ago. In this past legislative session and vote session, they actually had most of their requests approved,” Burns told the council.

The funding commitment does not impact any future budget decisions, as the money will be returned to the half-cent sales tax fund if the project does not proceed, according to city officials.