The Lacey Lodging Tax Advisory Committee convened on April 17 to review outcomes from its 2024 funding cycle, assess financial reports and discuss potential policy changes for future allocations.
City Management Analyst Sadie Siglin reported the city allocated $600,000 in lodging tax funds in 2024, divided across 14 events and festivals, four tourism-related facilities and two tourism promotion activities.
Notably, no new applicants received funding; all recipients had previously been awarded.
The reported impact from funded events was substantial.
“The total reported attendance resulting from tourism events was 255,521 attendees,” said Siglin, adding that “3,978 were reported to have stayed overnight.”
However, overnight stay data was not broken down by jurisdiction.
In contrast, tourism-related facilities and promotional activities brought in a combined 1.74 million visitors and 30,669 overnight stays, all of which used their full funding allocations.
Top-performing events in terms of attendance included the Regional Athletic Complex (RAC), Capital Lakefair and the Lacey July fireworks.
Overnight stays were most influenced by Experience Olympia and Beyond, RAC and the Washington Center.
Accounting Manager Chelsea Yarwood, of the Finance Department, detailed the budget performance, revealing a favorable year for revenue.
The city collected $44,000 more than budgeted in hotel-motel tax and $17,000 more in interest income.
“We didn’t have to dip into reserves like we potentially anticipated,” Yarwood said.
For 2025, revenue is projected to match the 2024 budget at $540,000, though January collections were 4.4% lower than the previous year.
By 2026, the city anticipates increasing the hotel-motel tax estimate to $560,000.
The current cash reserve stands at approximately $267,000. This includes carryover for projects like the RAC synthetic field and an operating reserve.
The committee is considering several changes for 2026, including a proposed $5,000 minimum funding threshold.
“There has been some negative feedback about low-value awards and the work recipients must do to comply,” Siglin noted.
However, some committee members were cautious, suggesting a lower threshold of $2,500 might be more inclusive.
Another significant discussion focused on capping funds for events and facilities outside Lacey’s city limits.
A proposal would limit events held outside the city or its Urban Growth Area (UGA) to a maximum of $5,000 and facilities to $15,000.
Some members proposed raising those caps to $10,000 and $20,000, respectively, to maintain flexibility for high-impact initiatives, such as the South Sound Block Party.
Additionally, the committee evaluated the potential for earmarking 2% of revenues for "true new events" that haven’t been previously held in Lacey. However, some members felt that was unnecessary.
The 2025 funding cycle awarded $607,225 across 29 recipients, with 10 first-time grantees.
Highlights included the Funk OFF! Festival, Lacey Night Market and Thurston County Fairgrounds.
The committee agreed to revisit policy proposals, such as funding minimums and caps on nonlocal events at a future meeting to allow for further discussion.
As the city anticipates new hotel developments in northeast Lacey, committee members expressed optimism about expanding tourism and revenue.
“Hopefully, that will be helpful towards collecting lodging tax,” said Siglin.
The next steps will involve further deliberation on the proposed policy adjustments before the 2026 application cycle opens.
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