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Poulsbo LTAC weighs how much of a record lodging-tax balance to spend
Summary
Members of Poulsbo’s Lodging Tax Advisory Committee discussed unusually large lodging-tax revenues and reserves, debating whether to use some funds for events and infrastructure now or hold 'dry powder' for future opportunities. Staff presented reserve calculations and urged a long-range strategy tied to measurable tourism impact.
Ed, chair of the Poulsbo Lodging Tax Advisory Committee, opened the meeting saying the panel faced an "unusual financial situation" with the largest reserves the committee has ever held and asked members to adopt a strategic lens for the 2025 funding cycle.
Debbie, the committee's finance director, said the balance grew for several reasons: event grants that could not be spent during the COVID period, two newly opened hotels that increased lodging-tax revenue, and conservative budgeting practices that only recognize some revenue a year later. "We started with the beginning balance of $519,000... We projected coming forth, beginning balance, about $103,126,000," she said, noting the projected 2024 ending reserve was roughly $455,000 and likely higher as revenues outpaced projections.
Committee members pushed staff on how much the committee should keep versus spend. Some members said a $45,000–$50,000 minimum had been used as a benchmark tied to policy, but several argued the committee should preserve a substantially larger cushion. Victoria suggested keeping "between 1 and 3 50" (committee discussion reflected a preference around $300,000–$350,000), and one member said she would not go as low as $50,000.
Debbie urged the panel to differentiate one-time, capital or marketing investments from recurring operational support and to target awards that better match the lodging-tax mission of driving 'heads and beds.' She said the budget baseline for 2025 is a revenue projection of about $369,000, which the committee can supplement via reserves but should do so with clear guardrails.
The committee did not take a formal vote at the call. Ed said staff will help present a clear, defensible reserve recommendation to the mayor and city council so the committee's approach is understood by elected officials before presentations and deliberations next week.
