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💰 The proposed $687 million budget keeps millage rates flat while funding infrastructure, airport expansions, parks, and a 3% employee COLA.
🚧 Key projects include sidewalks in Crestview and Niceville, airport upgrades, boat ramp improvements, and public safety investments.
🏞️ Commissioners are debating alternative revenue strategies, including increased user fees for tourists, and exploring MSTU rollbacks.
CRESTVIEW — At a wide-ranging budget workshop on July 8, Okaloosa County officials presented a preliminary $687 million budget proposal, holding steady on property tax millage rates while fielding calls from commissioners to explore new revenue strategies and expand capital spending in public works, parks, airports, and public safety.
County Administrator John Hofstead delivered the opening presentation, explaining that the budget preparation process began internally as early as February.
“We began budget workouts starting in February, March, and that’s the initial inquiries related to personnel requests, IT requests, and capital requests,” he said.
The countywide millage rate remains at 3.8308 mills, and the MSTU (Municipal Services Taxing Unit) millage stays flat at 0.299. Hofstead said this continued stability in property taxes reflects the county’s strong financial health.
“We currently sit at a triple-A [bond rating], which is about as strong as you can get for local government,” Hofstead said.
Property values have increased by approximately 6%, adding $1.77 billion in taxable value to the rolls. The budget includes a 3% cost-of-living adjustment (COLA) for employees, roughly in line with national inflation.
“This budget also contemplates the 3% COLA,” Hofstead said. “That’s pretty consistent with a Bureau of Labor Statistics CPI, that sits about 2.9%.”
The FY26 budget proposes 26 new positions across departments, with approximately half of these positions to be fully or partially funded by the general fund. In total, the county plans to invest in 1,125 full-time employees.
Public Works Director Scott Bitterman outlined a sprawling list of current and planned capital projects, with the department overseeing more than $161 million in combined funding. That includes $99.7 million in surtax spending, $11.4 million in the capital improvement plan, and $28 million in solid waste funds.
Projects underway include the Southwest Crestview Bypass, Union Avenue stormwater improvements, and the extension of the Valparaiso Boulevard sidewalk.
Other design initiatives include the College Boulevard roundabouts, Overbrook stormwater repairs, and drainage work in areas such as Echo Circle, Willow Grove Lane, and Okaloosa Lane.
Bitterman called FY26 the “Year of the Sidewalk,” noting the county will complete or begin work on multi-use paths in Niceville, Crestview, Laurel Hill, and Ocean City. The Bridge-to-Bridge multi-use path on Okaloosa Island is also expected to be completed this year.
Fleet services are upgrading equipment, including new dump trucks and a replacement 18,000-pound lift. Mosquito Control, fully staffed this year, launched early due to spring rains and heat.
Airport Director Tracy Stage reported that passenger traffic across the county’s three airports is projected to reach 2.5 million in 2025, up from 2 million in 2022. The Destin-Fort Walton Beach Airport alone accounts for nearly $25.7 million of the system’s $28 million operating revenue budget.
Major capital projects include replacing passenger boarding bridges, expanding the east parking lot, and completing Phase II of the covered walkways.
At Bob Sikes Airport, work includes runway rehabilitation and the installation of eVTOL charging stations. Destin Executive Airport is planning apron rehabilitation and stormwater improvements.
The airport system’s FY26 capital plan totals $15.7 million, with funding from PFCs, CFCs, and over $9 million in FAA/FDOT grants. Airport security operations are also expanding, with a $3.69 million budget for the Okaloosa County Sheriff’s Office Airport Security Unit.
Facilities and Parks Director Jeff Peters presented a five-year capital plan featuring dozens of projects, including those that are either completed, in progress, or planned.
That includes $3 million to expand the Rigdon Center, nearly $1 million in athletic field development at the Baker Area Youth Association complex, and upland and waterside upgrades at Christobal Landing and Cinco Bayou.
“We’re talking about real, tangible improvements that families will see and use — playgrounds, restrooms, court resurfacing, ramps, docks,” Peters said.
Port Dixie Park, Patriot Park, and Shalimar Bridge Park will also receive new restrooms, parking lots, and recreational upgrades. The department is requesting 12 new staff positions, including irrigation technicians, groundskeepers, and custodial staff.
Commissioner Trey Goodwin revived the long-running debate over the MSTU tax, urging staff to explore user-based revenue as an alternative to the current system.
“Our boat launches are heavily utilized by people who are not from here,” Goodwin said. “That would be another way to help capture some of those outside dollars… and reduce the burden on our taxpayers.”
Goodwin proposed using the $250,000 saved by suspending nonprofit funding to roll back the MSTU rate for fiscal year 2026.
Commissioner Sherri Cox endorsed the idea of a pilot program offering discounted or free park and ramp access to county residents.
“This wouldn’t impact our citizens primarily,” she said. “This would impact… our tourists more than their own citizens.”
Chairman Paul Mixon directed staff to return with rollback scenarios for further review.
Sheriff Eric Aden said violent crime is down 29% since 2021, thanks in part to better deputy retention.
“Now we’re down at around 2.3 [resignations] a month, and the last quarter, we’re at less than two,” Aden said.
Aden added that it costs approximately $80,000 and 11 months to train and replace one deputy.
The cadet program, supported by the board, has achieved a 94% graduation rate and an 88% employment retention rate.
A new, grant-funded community outreach coordinator — a licensed clinical social worker — will respond to mental health, domestic violence, homelessness, and addiction-related calls.
Commissioners praised the outreach efforts.
“The communication system that we just put up for the Sheriff’s Office — what a difference that is going to make when needed,” Commissioner Carolyn Ketchel said.
The board will reconvene on July 22 to set the tentative millage rate. Two public hearings are scheduled in September to finalize the FY26 budget.
“We’ll continue to fine-tune this budget in the coming weeks,” Hofstead said.
Pro Communi Bono
