Lacey finance staff told the Lodging Tax Advisory Committee on Sept. 4 that hotel-motel tax collections through July totaled about $281,000 against a projected $540,000 for 2025, roughly 52% of the annual projection.

Chelsea Yarwood, the city’s accounting manager, presented the update. "Hotel motel tax collections through July equaled just over 281,000 of the projected 540,000. This is equivalent to about 52%," she said.

Why it matters: The figure is consistent with typical seasonal pacing for lodging-tax receipts, staff said. Yarwood noted collections by the same point last year were 51%, and the city ultimately exceeded its 2024 lodging-tax budget.

Interest income and reserves: Yarwood reported interest income year-to-date (through July) of $56,007.54, outpacing the full-year 2024 interest total of $36,007.95. The city invests in a mix of professionally managed investments and the Washington State Local Government Investment Pool (LGIP); staff noted the LGIP rate in July was about 4.39%.

Starting 2025 fund balance and available reserves: Staff said the 2025 beginning-of-year lodging-tax fund balance was approximately $909,000; after set-asides for intended uses and a two-month operating reserve, about $267,000 remained available for discretionary use.

2026 revenue projection: For 2026, staff said they remain comfortable with a base hotel-motel tax projection near $560,000, but a lower projected interest income (revised from $27,500 to about $17,000) reduces total 2026 revenue available to roughly $577,000 under current estimates.

Rack synthetic-field replacement and timing: Committee members discussed long-term field-replacement needs at the Rack. Staff reported the next round of synthetic-field replacements is expected to begin in 2028 and finish around 2031. Estimates discussed ranged from several hundred thousand dollars for a single field to roughly $1 million for a major phase; staff said a multi-field replacement that would complete by 2031 is currently estimated at about $2.9 million.

Budget and funding sources: Committee members asked whether the Rack replacement would be funded solely by lodging-tax reserves. Staff said the city expects the Rack project to draw on multiple funding sources, including Parks general funds and potentially other capital funding; lodging-tax reserves are one potential contributor. A parks levy or metropolitan parks district had been discussed in prior years but failed to pass in a recent attempt, staff said.

Hotel development pipeline: Staff also updated LTAC on three hotel proposals that were in various permitting stages as of July: a Residence Inn by Marriott (about 136 rooms; grading permit issued but no building permit picked up), a Homewood Suites proposal (about 128 rooms; building permit submitted and under revision), and a third hotel proposed near the Hogum Bay area with no permits issued as of July. Staff said the three projects together would add roughly 350 rooms if built, and could strengthen future lodging tax revenues when they come online.

What’s next: Staff said they will continue to provide LTAC with periodic financial updates, and that anticipated field-replacement requests could appear in future funding cycles. Yarwood and parks staff asked LTAC to consider whether interest income could be partially allocated to reserves to help smooth costs for large capital projects such as synthetic-field replacement.