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Ocean Shores LTAC sets 30% target holdback for lodging-tax funds pending final awards
Summary
The Ocean Shores Lodging Tax Advisory Committee (LTAC) agreed to use a 30% holdback as a working target when evaluating 2026 grant awards, citing revenue uncertainty and a priority to protect the convention center; the committee will re-evaluate in spring if revenues meet projections.
Ocean Shores’ Lodging Tax Advisory Committee on Oct. 9 agreed to use a 30% holdback as a working target while it evaluates grant applications for 2026, citing uneven hotel performance and uncertainty in next year’s tax receipts.
The committee’s finance briefing showed a beginning fund balance of $559,343 and an estimated $1,300,000 in hotel/motel and short-term rental tax revenue for 2026, yielding total available funds of about $1,900,000. "At the end of this year we're anticipating having $559,343," said Sarah, finance director, adding the projection of roughly $1.3 million in lodging-tax receipts for 2026.
The 30% target was chosen after the committee reviewed several scenarios: holding back 40%, 30%, 20% or releasing 90% in line with a prior committee resolution that would effectively allow a 10% holdback (i.e., 90% available). "We talked generally around the 30% for holding back, knowing that if we do hold back and the projected revenue does come in ... we would then make funds available again in the spring," Sarah said.
Committee members stressed caution. "I still feel we need to be on the high end because you have a lot of hotels that are struggling right now," said Shannon, a committee member, noting risks if hotels fail or close and the resulting drop in tax receipts. Committee member Carol Prowse and George (a convention-center representative) also voiced support for a conservative approach; George said a 30% holdback left a modest projected ending balance after fully funding current requests.
The committee emphasized the convention center — operated by the Public Facilities District — receives priority for lodging-tax funds under local guidelines. The convention-center request included $635,000 of the roughly $1.9 million projected availability; the committee discussed holding a portion of the overall holdback specifically as a reserve for the convention center’s capital needs.
No final appropriations were made at the Oct. 9 meeting. Committee chair Carol Prowse asked members to use the 30% figure as a working target while they continue application review and determine which applicants to invite for interviews. Members said they would revisit the holdback decision after year-end revenue is clearer and again in spring 2026.
The committee voted earlier in the meeting to approve the agenda; that motion passed by voice vote.
Looking ahead, the committee directed staff to proceed with evaluations using the chosen holdback target and to return with updated fund balances and any surplus figures in spring for reconsideration.
