Lacey LTAC reviews 2024 spending, approves minutes and schedules follow-up on funding policy proposals

The Lacey Lodging Tax Advisory Committee on April 17 reviewed its 2024 grant awards and attendance data, discussed budget and reserve projections for 2025 and debated several policy proposals — including a possible minimum award level, geographic limits on funding, allowing a portion of awards to be spent in advance for preparatory expenses, and a proposed administrative set‑aside — then scheduled a follow‑up meeting for May 22 to continue policy decisions.

Committee staff presented the 2024 funding cycle results and the committee adopted two routine motions at the start of the meeting: to approve the meeting agenda and to approve minutes from the Sept. 26, 2024 meeting (both passed unanimously, with no roll‑call names recorded in the transcript). Staff reported that the committee awarded about $600,000 in lodging‑tax funds for the 2024 cycle and that the committee approved $607,225 in awards for the 2025 cycle.

Why it matters: lodging‑tax dollars are restricted by state statute to tourism promotion, marketing, operations of special events and festivals, and capital or operating expenses for tourism‑related facilities. The committee’s choices about minimum awards, geographic limits and whether to allow preparatory advances would affect how and where those dollars are spent and how easy it is for smaller or new event organizers to use the program.

Key facts and figures reported - Total awards (2024 cycle): staff said roughly $600,000 was awarded across events, facilities and promotion. The 2024 breakdown reported by staff: $198,500 for events and festivals, $226,500 for tourism‑related facilities and $135,000 for tourism promotion/marketing. Staff said all 2024 awards went to prior recipients; there were no first‑time awardees that year. - Attendance and overnight stays (2024, reported by awardees): events/festivals reported a combined attendance of 255,521 and 3,978 overnight stays (staff cautioned the overnight stays are not broken down by jurisdiction). Tourism‑related facilities and promotion reported 1,740,043 visitors and 30,660 overnight stays (again not specifically attributed to Lacey). - 2025 awards: committee staff said the 2025 cycle authorized 29 awards: 22 events/festivals, six tourism‑related facilities and one tourism promotion activity; staff noted 10 first‑time recipients in 2025. The 2025 awards total was reported as $607,225. - Budget/reserves and revenue outlook: staff reported the cash balance at the end of 2024 was roughly $909,000 and after carrying forward previously reserved amounts (including a $500,000 carryover for the Regional Athletic Complex synthetic field and a two‑month operating reserve) staff estimated about $267,000 of cash was available for future supplementation. For revenues, staff said 2024 hotel‑motel tax receipts exceeded the adopted budget by about $44,000 and interest income ran about $17,000 over budget; the city is budgeting hotel‑motel tax receipts of $540,000 for 2025 with a draft projection of $560,000 for 2026 but cautioned early projections are uncertain. - Hotel pipeline: staff said there are three hotels in the pipeline in northeast Lacey (two near Hogum Bay and one on Britton Parkway) in various stages of permitting and one longer‑term project (the Quayamuth/Kwaemath Village) whose lodging‑tax eligibility is uncertain until trust/ownership details are resolved.

Policy proposals discussed (no final policy votes recorded) - Award minimums: staff proposed considering a $5,000 minimum award to reduce administrative burden for very small awards and to help awardees cover fixed costs such as insurance. Committee members debated; some favored a floor to reduce paperwork relative to award size, others said $5,000 could exclude or harm grassroots events and suggested a lower starting floor (examples discussed: $2,500 or $3,000). No decision was made; the committee asked staff to carry the discussion forward. - Geographic limits and maximums for outside‑UGA events: staff proposed restricting or capping awards for events or facilities located outside Lacey or the Lacey UGA to steer funds toward activities that create “heads‑to‑beds” in Lacey. Staff suggested a maximum of $15,000 for outside‑UGA facilities; committee members discussed higher ceilings (some suggested $10,000 or $20,000 for outside events) and noted established regional events can draw long‑distance visitors. No policy was adopted. - Dedicated pool for “new” events: staff proposed setting aside a small percentage (example: 2%) of revenues to encourage truly new events. Committee members expressed mixed views and the committee decided not to create a dedicated, ring‑fenced fund at this time. - Preparatory (advance) expenses: staff proposed allowing recipients to access up to 20% of an award before the event for deposits, insurance and early marketing (current practice is reimbursement after the event). Members raised administrative, legal and recoverability questions (for example, what happens if an event is cancelled). Several members supported a limited, narrowly‑defined advance for marketing and deposits subject to contract safeguards; staff agreed to consult legal and finance and return with options. - Excluding events that are solely fundraisers: staff proposed adding application questions to disclose whether an event is a fundraiser and, if so, for whom and for what purpose, so the committee can decide whether to fund fundraising events. Members discussed edge cases where fundraisers nevertheless produce hotel stays; the committee asked staff to add clearer application disclosures rather than adopt an outright ban at this meeting. - Administrative set‑aside: staff proposed using a small percentage of lodging tax revenue (example: 5%) to cover city administrative costs for running the LTAC program (contract drafting, finance processing, clerking and implementation). Members debated tradeoffs between more funds for awards vs. paying implementation costs; some favored a one‑year trial. No final decision was recorded. - Scoring rubric changes: staff proposed a shorter, reweighted scoring rubric that emphasizes location (events in Lacey/UGA), tourism draw (visitors from 50+ miles), community/business partnerships (hotel room blocks, restaurant partnerships, shuttles) and financial sustainability. The committee generally supported using a condensed rubric as a decision tool but confirmed that rubric scores would not be the committee’s sole determinant. Staff will update the application and rubric accordingly.

Next steps and committee directions The committee did not adopt new policy at the April meeting and directed staff to return with additional detail and legal/finance analysis on several items (advance payments, administrative set‑aside, minimum award thresholds and geographic caps). Staff said it will circulate materials and convene a follow‑up meeting on Thursday, May 22, at 3 p.m. to continue deliberations; the committee also confirmed the application window for the 2025 cycle will open in July with a funding‑workshop planned for July and awards recommendations due into the city budget process by Sept. 25.

Quotes “the hotelmotel tax was $44,000 higher than what we had budgeted as far as what we actually received,” Chelsea Yarwood, finance department, said when summarizing 2024 revenue performance. “We are increasing the expected hotelmotel tax up to $560,000 at this point,” staff said when discussing early 2026 projections and the uncertainty around interest income. “We could consider allowing recipients to use up to 20% of their funding award prior to the event to help fund some of those preparatory expenses,” staff said when outlining the advance‑payment proposal; committee members asked staff to return with contract safeguards and legal review.

Ending The committee did not finalize policy changes at the April meeting; staff will follow up with written materials and a May 22 meeting to continue decisions before finalist funding recommendations are due into the city budget schedule in late September.