City staff briefed the Lacey City Council on lodging tax rules, the Lodging Tax Advisory Committee (LTAC) process and 2024 funding results on Oct. 14, and council discussed possible reallocation of existing lodging-tax dollars to prioritize city facilities such as the Regional Athletic Complex (RAC).

Assistant City Manager Shannon Kelly Fong and management analyst Sydney (Sadie) Siglin explained lodging tax law and local practice. “Lodging tax is actually something that is governed by the Washington State legislature,” Siglin said, summarizing state statutory limits and the three authorized uses: tourism marketing, marketing and operations of special events and festivals designed to attract visitors, and operations or capital expenditures for tourism‑related facilities. Siglin noted Lacey’s total lodging tax rate of 4 percent (the basic 2 percent plus an additional 2 percent special tax) and that funds are eligible only on stays under 30 days.

Siglin described the LTAC process: two required hoteliers, two persons involved in eligible activities and an elected official serving as chair. The committee uses an application, scoring rubric and interviews (when needed) to evaluate applicants; staff said the committee adopted a $5,000 minimum award threshold for 2026 and piloted an administrative allowance to offset some city administrative costs.

Staff reported 2024 results: the city awarded about $600,000 total across roughly 20 awardees, with the city itself receiving around $300,000 (about 50 percent) including the RAC (the single largest recipient). Staff presented an example reallocation scenario: if 80 percent of the city’s lodging-tax allocation were directed to the RAC, the RAC’s lodging-tax receipts would increase to approximately $480,000 and other city event allocations would fall to zero; the modeled net effect would reduce general-fund support for those other city programs by about $180,000.

Council members debated priorities. Multiple council members said they support shifting more lodging tax toward the RAC to cover facility operations and to reduce general‑fund pressure, but several also expressed interest in preserving funding for some local community events and start-up festivals that have grown with city assistance. Councilors asked staff to return with more options, including gradated allocation scenarios and an analysis of likely revenue increases as more hotel rooms come online in the Hawkes Prairie area.

Council also asked staff to return with cable utility-tax options; attendees suggested staff present multiple cable-tax percentages for consideration. Staff said they will meet the LTAC on Oct. 16 to finalize recommendations and will return to council with detailed options and modeled impacts.