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Council debates lodging-tax priorities; staff to return with refined goals for LTAC
Summary
City staff presented draft goals for 2026 lodging-tax spending and proposed category allocations; councilmembers debated earmarking funds for city-owned facility operations versus leaving discretion to the Lodging Tax Advisory Committee (LTAC).
City staff presented draft goals and proposed category allocations for the 2026 lodging-tax funding cycle and sought council direction to guide the Lodging Tax Advisory Committee (LTAC).
Sarah Farr, accounting and finance program manager, explained the city collects a combined 3.3% lodging tax in two parts: a 2% portion (fund 105) usable for state-authorized tourism purposes, and a 1.3% portion (fund 104) limited by council policy to capital expenditures for tourism venues owned by a municipality or public facilities district. Staff projected roughly $1.5 million in combined lodging-tax revenue for 2026 (about $900,000 in the 2% portion and $590,000 in the 1.3% portion) and recommended initial available funding targets by category: capital for tourism facilities, operations and maintenance of city-owned tourism venues, and marketing/operations for events and nonprofit tourism facilities.
Farr said the cross-country course at Flora Road ranked highly in a prior tourism-strategy prioritization and that the city anticipates annual operations and maintenance costs of roughly $257,000 once the course is established. Because of that, staff proposed prioritizing capital and operations funding for city-owned tourism destination facilities to help the course during its early years.
Several councilmembers pushed back on creating a dedicated category exclusively for city-owned facility operations and maintenance. Councilmember Wick and others argued that permanently separating a pool for city facility maintenance reduces the funding advertised to applicants and restricts LTAC's flexibility; they recommended that LTAC be given wider discretion and that the city avoid automatically earmarking recurring funds for a single facility.
Other councilmembers, including Patton and Merkel, said the council should continue to support operations and events that demonstrably bring visitors and overnight stays ("heads and beds"), and noted LTAC already asks for documentation of visitor impact. The council discussed the committee's process and whether partial awards should be used.
Staff said they would revise the draft goals and allocations to reflect council feedback and return to council with a motion consideration on July 22. The LTAC will ultimately make recommendations to the council for final funding decisions.
