Okaloosa commissioners approve Destin High School bond amendment; county cited as conduit only

Okaloosa County commissioners voted Feb. 3 to approve an amendment that allows Destin High School to continue restructuring its conduit bond financing, while several commissioners pressed school officials for clearer arrears and payroll figures.

Mr. Williams, executive director of Destin High School, told the board the amendment is "a required step in a strategic restructuring of our debt" and emphasized multiple times that "Okaloosa County is the issuer; the county carries absolutely no financial liability." He said the school’s original financing assumed about 800 students but current enrollment is closer to 600, creating an annual funding shortfall the school is addressing through reduced budgets and negotiations with bondholders.

County bond counsel Rick Harb and County Attorney Lynn Hoshihara explained the legal role of the county as a conduit issuer. Harb said the structure is used nationwide to permit tax-exempt municipal bonds for qualifying private not-for-profit entities that serve a public purpose and cited Chapter 159 as the statutory framework used to assess qualification. Harb added that the bonds are secured by the school’s revenues and a mortgage on school property and that he was not aware of a conduit issuer being held liable in analogous cases.

Commissioner Cox repeatedly asked for concrete numbers on arrears and payments. School officials said they entered a forbearance agreement with bondholders covering June–December, made a catch-up payment in December (about $150,000), and have amortized the next sinking fund payment under that agreement. "We are paying per the agreement that we have with them," Mr. Williams said when asked whether the school was current on payments.

After questions and discussion, Commissioner Palmer moved to approve the amendment, a motion seconded by Commissioner Mixon. The chair announced the motion passed "4 to 0" with Commissioner Cox abstaining.

The board’s action authorizes the school and bondholders to continue renegotiating amortization and forbearance terms; county officials reiterated the county’s role is limited to issuance and is not a guarantor of debt. The school offered to provide additional financial details on request and invited commissioners to attend a governing-board meeting for further review.

The amendment takes effect following the board’s approval; school and bond counsel said further restructuring steps will follow outside the county’s fiscal obligations.