The Lacey Lodging Tax Advisory Committee on July 10 approved a package of pilot changes to how the city awards lodging-tax dollars, directing staff to allow recipients to use up to 40% of an award for pre-event marketing and to designate up to 5% of lodging-tax receipts — capped at $40,000 — to cover program administration.

The measures are intended to reduce barriers small tourism promoters have reported when applying for reimbursed awards and to cover growing administrative demands, staff said. The committee also asked staff to present guideline thresholds the committee can pilot this year: a $5,000 minimum award and a proposed cap of $25,000 for tourism-related facility awards located outside the Lacey city limits and urban growth area.

The changes grew out of applicants’ feedback at the committee meeting and in prior cycles that small awards can be administratively burdensome. "This past season ... these are real quantifiable outcomes that speak directly to the goals of this committee," said Jill Barnes, executive director of the Washington Center for the Performing Arts, during public comment, urging the committee not to restrict funding solely by geographic location. Allison Vega, a Lacey business owner and Washington Center board member, told the committee, "As Mayor Ryder often says, the Washington Center is a regional asset, and I couldn't agree more."

City staff framed the options as pilots and administrative adjustments rather than binding new policy. Staff recommended allowing recipients to access a pre-event marketing portion of their award once they are under contract and can show invoices and proof of payment; the committee approved a 40% marketing-advance threshold for marketing expenses only. Staff said recipients still must provide invoices and proof of payment to receive reimbursement for advanced marketing charges.

On administration, staff proposed using a percentage-based approach so the administrative allocation scales with revenue. Committee members settled on a 5% allocation of lodging-tax receipts for administration, with a ceiling of $40,000 and excluding interest and reserves from the base used to compute that percentage. Committee members said the cap gives budget predictability while recognizing the program's increasing workload.

Committee discussion also covered two related proposals that members asked staff to treat as pilot guidance for the current application cycle rather than hard policy. One would set a $5,000 minimum award so that recipients receive an amount more likely to offset insurance and administrative costs they told staff are sometimes larger than small awards. The other would limit awards to tourism-related facilities outside the city/UGA to a maximum of $25,000. Staff will present application-by-application options in September and report back on usage and impacts after the funding cycle.

Staff reiterated statutory constraints for lodging-tax awards: applicants must submit an application to be considered, and state law requires application materials to include estimates of how the funded activity will increase overnight stays (domestic visitors traveling 50 miles or more or visitors from other states or countries). The committee will evaluate applications in September; applications are due Aug. 22, and contracts for awarded projects are expected to be issued in January.

The committee positioned the changes as a pilot and asked staff to return next year with data on how many applicants used advanced marketing payments, how much of awards were drawn in practice, and effects on the number of applicants. Committee members said they want to re-evaluate thresholds after seeing actual application behavior before making permanent policy changes.