Fort Walton Beach approves interlocal agreement with Okaloosa County for ‘Around the Mound’

In Brief:

🚦 Fort Walton Beach and Okaloosa County will each contribute $675,000 toward the $2.7 million design of the “Around the Mound” project.
🛣 The plan aims to divert U.S. 98 traffic around downtown, improving safety and reducing congestion.
📈 Leaders hope to secure TRIP and SS4A grants, with discussions underway about hiring a lobbyist to improve future funding success.

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FORT WALTON BEACH — The Fort Walton Beach City Council voted unanimously Tuesday night to authorize Mayor Nic Allegretto to sign an amended interlocal agreement with Okaloosa County that splits the cost of designing the long-planned “Around the Mound” traffic project.

The agreement, approved by the County Commission in January, formalizes a joint effort to seek state and federal grants while advancing design work for the $2.7 million project, which aims to divert U.S. 98 traffic around downtown to improve safety, relieve congestion, and support regional mobility. The Okaloosa-Walton Transportation Planning Organization ranks the project fourth on its Strategic Intermodal Systems (SIS) priority list.

According to the agreement, the project is intended to “increase the capacity of US 98 to accommodate current and future traffic and to reduce regional and commuter traffic through downtown Fort Walton Beach.” The latest Florida Department of Transportation (FDOT) five-year work program has no design funding for the project through 2030, prompting local leaders to act now.

Under the deal, both the city and county will contribute $675,000 each if a Transportation Regional Incentive Program (TRIP) grant covers the remaining 50 percent of design costs. If awarded, the TRIP grant would provide $1.35 million. The agreement also commits both governments to pursue a federal Safe Streets and Roads for All (SS4A) implementation grant, which could offset the local match or accelerate later phases such as right-of-way acquisition.

City Manager Jason Davis told the council the county will honor its original $650,000 commitment despite earlier grant setbacks, with the city covering the rest from its half-cent sales tax revenue. “We’re ready to move forward,” Davis said.

City Attorney Jeff Burns noted that the original contract was contingent on grant funding, but Davis persuaded the county to commit regardless.

Councilmember David Schmidt clarified that the city’s share is currently $2,025,000, thanking the county for its contribution and urging the project’s start to align with the Brooks Bridge replacement.

“From a traffic management standpoint, we can get those orange cones off our street in under 10 years,” Schmidt said.

Allegretto explained to residents that the half-cent sales tax is an extra half-penny on each taxable purchase, designated for non-recurring projects such as parks or major infrastructure. Finance Director Nicole Nabors said the city currently has about $7 million in the restricted fund balance, adding that if the project does not move forward, “it will get put back into half-cent” for other uses.

Councilman Payne Walker asked when the project development and environment (PD&E) study is due. Allegretto estimated spring 2026, noting it was initially set for February.

Walker also pressed for details on what would happen if the PD&E deems the project too costly, and expressed frustration over repeated grant denials. “We’re important… but then we don’t get any money… taxpayers keep ponying up more,” he said.

Schmidt said Fort Walton Beach had competed against 16 districts for TRIP funding last time, but was not awarded.

Councilman Bryce Jeter suggested enlisting the Greater Fort Walton Beach Chamber of Commerce to help find additional funding. Allegretto said the chamber board is already organizing efforts to support the project.

During public comment, resident Patrice Miles asked whether taxpayers could face utility or service fee hikes. Allegretto said no increases are planned for this project, and funding would come from existing reserves.

Tim Gibson, Planning Supervisor for the city’s Growth Management Department, explained that while SS4A funds are not currently available, the city intends to apply in the next cycle. He noted the program focuses heavily on multimodal safety improvements, not just vehicle traffic.

Several council members also discussed the idea of hiring a lobbyist in future years to improve grant success rates, citing Destin’s success after employing one during the last legislative session.

“If there’s an ROI… I’m all for it,” Schmidt said. Davis added that while the move wouldn’t happen this year, “maybe something we can look at going forward.” Burns said Destin had “most of their requests approved” after hiring a lobbyist.

The interlocal agreement remains in effect until the project is completed and can only be terminated with mutual consent. It also includes provisions for dispute resolution, indemnification, and compliance with Florida law.

“This project… is way more than just creating more vibrancy for downtown Fort Walton,” Schmidt said. “It’s to complement and go along with the huge need of trying to improve the mission readiness… the traffic… on Highway 98 is directly impacting our economy.”