Littleton council hears arts board on shrinking lodgers-tax grants and allocation trade-offs

The Littleton Arts and Culture Board told the City Council on Aug. 26 that lodgers-tax revenue available for arts grants is down sharply from initial projections and that the board made allocation recommendations to fit the smaller pool.

Arts and Culture Board staff said the board’s recommended 2025–26 lodgers-tax allocation is approximately $672,000, down from the original first-year projection near $1 million and below early-year actuals of about $850,000. The board presented a four-tier funding structure: four anchor institutions in Tier 1 that together receive $400,000 (four $100,000 awards), a Tier 2 nonprofit pool (about $115,000 available this cycle), a Tier 3 tourism and marketing bucket of $100,000, and a Tier 4 community partners/‘‘cap’’ group reserve for collaborations and off-cycle requests.

The board’s presentation said it received 39 Tier 2 applications this year, recommended awards to 17 of the remaining applicants, moved 19 applications to other funding sources (for example, stadium funding and local partnership streams), and recommended zero funding for two applications. Arts and Culture Board staff described using an averaging spreadsheet of reviewer recommendations to produce final award amounts and said the loss of the stadium tax revenue stream this year made meeting demand more difficult.

Why it matters: lodgers-tax receipts fund the city’s arts and culture grants; a sustained shortfall forces either cuts to grant awards, use of reserves, or reallocation of other capital or general funds that would otherwise be available for city projects.

Council members pressed staff and board members on why actual tax receipts trail original projections and on steps to stabilize future revenue. Councilmember Kyle and others noted the city’s initial projections used hotel-supplied occupancy estimates before the ballot measure and that hotels subsequently revised expected collection amounts downward. Board staff said they are scheduling a presentation from economic development and the city’s communications/marketing team and Visit Littleton representatives to better understand hotel vacancy, length of stay, short-term rental impacts and marketing opportunities to increase ‘‘heads and beds.’’

Several council members suggested planning conservatively for next year by budgeting at a discount to preliminary projections (for example, treating hotel-provided projections as optimistic and reducing them) or by holding a contingency reserve to smooth year-to-year shortfalls. Arts and Culture Board staff said they included a Tier 4 buffer this year and used off-cycle funds where possible to avoid reworking the Tier 2 recommendations.

Board members and some councilors also asked for clearer reporting from Tier 1 recipients about outcomes tied to the $100,000 awards. One councilmember said Hudson Gardens’ proposal appeared to emphasize rebranding rather than new programming and asked for follow-up reporting; Arts and Culture Board staff replied that Hudson Gardens used early awards for a recently adopted master plan and has engaged the city in planning conversations.

Decisions and directions: Council members verbally concurred with the Arts and Culture Board’s recommendations for 2025–26 lodgers-tax grants and asked staff to return with further budget detail and conservative revenue assumptions as the city finalizes next year’s projections. There was no formal recorded roll-call vote in the study session minutes presented at the meeting.

What’s next: staff said they will invite economic development and the city’s tourism and communications teams to the board to analyze hotel performance and short-term-rental collection, and the Arts and Culture Board will continue policy work for the 2026 grant cycle based on council feedback.

Ending: Councilmembers emphasized that arts funding is a city priority but said they want a more predictable approach to allocating shrinking lodgers-tax dollars and clearer outcomes reporting from major Tier 1 recipients.