Lynnwood City Council receives 2020 audit findings, continues ARPA fund discussion

The city council discusses using ARPA funds for upgrading transportation.

The Lynnwood City Council at its Monday, April 4 business meeting continued its discussion of how to spend the allotted $10.9 million in federal American Rescue Plan Act (ARPA) funds. After narrowing the choices at their March 21 meeting, councilmembers heard from Public Works Director Bill Franz on options for upgrading the city’s transportation system.

Some of the proposed updates were repaving streets, chip sealing segments of road and upgrading curb ramps.

Franz said if the council decides on the matter soon, the city can easily fit these construction projects into the 2023 schedule. Because the design process takes so much time, the city wouldn’t be able to complete the projects this year.

“A decision earlier rather than later would be better for our design team,” said city staff liaison David Mach. “The sooner we know what items on the menu you want to purchase and how much you want to spend, then we can get consultants under contract and designing so we can get these projects out for bid for early next year.”

While councilmembers agreed that upgrades to the city’s streets are necessary, some were unsure whether those upgrades should be completely funded by ARPA dollars.

“Those are all projects that we want to do, but not necessarily with ARPA money,” Councilmember Jim Smith said. “But we want to do those as part of our budgeting process. We have a lot of money that has come into the City of Lynnwood. A lot more than we had anticipated.”

Councilmember Patrick Decker agreed that these upgrades should come out of the city’s general funds as opposed to ARPA funds.

The council has until Dec. 21, 2024 to decide how to spend the ARPA funds and will continue to discuss spending options until a consensus is reached.

Also on the topic of ARPA funds, the council heard from Lynnwood Municipal Court Judge Valerie Bouffiou regarding the court’s request for using a portion of federal COVID relief money.

According to Bouffiou, the requested $64,000 will go to much-needed audio and video upgrades that will help the court become fully hybrid.

“The ability to appear for court virtually has actually been beneficial for a lot of our court participants,” Bouffiou said. “It’s provided greater access to justice for those people who were most impacted by the pandemic, such as individuals who are medically vulnerable. People who have been unable to take a day off of work or school, people who don’t have access to child care and people who haven’t had access to transportation are all now able to appear for court.”

The court is currently experiencing two major problems: lagging audio and video, and blank spots in court recordings. Due to state laws, the court is required to fully record all hearings, and is unable to do so with its current equipment.

The equipment is also not compatible with Zoom, which is what the court has been using. Right now, the court is using two separate systems to try to facilitate virtual hearings.

The council on Monday night did not decide whether to allot ARPA funds to the court.

In addition, the council held an exit conference with the Washington State Auditor’s Office (SAO) for the city’s 2020 Accountability, Financial and Federal Audits.

The reason for the accountability audit is to ensure the City of Lynnwood complied with state laws, regulations and policies in regard to safeguarding its public resources.

According to Audit Manager Haji Adams, the accountability audit did not result in a discovery of mistakes, also called findings. However, the financial audit did have some findings regarding some uncorrected misstatements on financial reports. These findings were deemed immaterial, meaning they did not affect the overall opinion or outcome of the reports they were in.

Adams reported there were no material – or larger – findings in the financial audit.

The city also received a Federal Grant Compliance Audit, which reviewed how the city handled and spent its COVID-19 relief funds. While some neighboring cities had similar findings in this area, Lynnwood’s audit came back clean, meaning the funds were mostly handled and spent correctly, according to Adams. Some immaterial findings were discovered, but they did not affect the overall use of the funds.

The city issued a portion of these funds to two subrecipients and was required to request reimbursement via a cash reimbursement basis. However, the audit found that instead of cash reimbursement, the funds were issued as a cash advance.

This matter was still deemed immaterial, as there were no oddities surrounding the funds themselves.

In other business, the council was briefed on a future public hearing regarding an environmental update to the Lynnwood City Center project. 

In February, the council heard about proposed plans for the update, which occurs roughly every 10 years. Development and Business Services Director David Kleitsch said the city desperately needs to approve the latest update before it outgrows its limitations.

The most important aspect of the update will be changing the EIS from Alternative B to Alternative C. This will revise the development scenario of City Center to increase overall capacity from 9.1 million square feet to 12.3 million square feet. Office square footage will increase from 4 million to 4.25 million, and residential square footage will increase from 3,000 to 6,000. Retail square footage is set to remain the same.

Layouts explaining the change from Alternative B to Alternative C – Amended for the City Center Plan update.

Lynnwood’s City Center Program Manager Karl Almgren said when the city adopted Alternative B, they did not realize the challenges it would present.

“We set ourselves out to achieve a great amount, and unfortunately [the alternative] hamstrung us back,” Almgren said. “So we are trying to make sure we are bringing these [updates] more in line with what we want to see as well as what the market is supporting at this time.”

Some councilmembers continued to express their disapproval of the city center expansion, claiming the city cannot handle this much growth without an extensive amount of further planning.

“What are we doing as far as the impact?” Councilmember Jim Smith asked. “What has been done about traffic? What has been done about police? We’re talking about another 3,000 units, which is about [4,000 to 6,000] additional people. And heaven knows how many more cars. And I don’t go along with the idea of, ‘Oh no, these are all people who are going to take Sound Transit.’ How are they going to get to Meadowdale Park? How are they going to get to Alderwood Mall? They’re all going to have to have cars.”

Smith said Lynnwood needs to focus on mitigating the traffic it already has before it makes it possible for even more cars on the already congested streets.

A public hearing for the updated City Center Plan will be held next month.

The council also heard from Kleitsch on the proposed updates to the Lynnwood Municipal Court’s (LMC) Title 5 related to business licensing.

According to Kleitsch, these are housekeeping updates – identified amendments that better align processes to the Washington State Bureau of Revenue Business License (BLS) – and provide clarification on licensing requirements.

Development and Business Services Manager Christy Murray said these updates will eliminate lengthy licensing processes, eradicate additional licensing fees, provide clarification on the city’s licensing types and requirements, create enforcement action to collect unpaid fees and establish a free registration process for non-resident businesses.

Councilmembers Decker and Hurst asked for clarification regarding enforcing a collection on unpaid fees for businesses that let their business licenses lapse – or didn’t obtain them in the first place.

Business License Specialist Teri Minaker explained that most other cities in the area have it written in their code that avoiding procurement of a business license can result in a misdemeanor after a certain amount of time. This misdemeanor cannot exceed a $1,000 fine or 90 days in jail. Minaker said the city certainly doesn’t want to send anyone to jail, but it needs a way to keep businesses accountable in lawfully running their establishments.

“It’s been two years and we still have five businesses within our city who just haven’t gotten a license,” Minaker said. “We have no teeth in the ordinance currently to collect upon that license. There’s nothing in there to let the police go out and do anything. Code enforcement can’t do anything. So all I do is just keep writing and calling and emailing, and we have no way to get the money from these businesses. We don’t want to go out and shut them down … just because they owe us anywhere between $125 to $1,000.”

Kleitsch said enforcing a penalty has been proven to ensure businesses obtain their licenses much faster.

“When they face a penalty, they usually comply,” he said. “When they don’t face a penalty, they don’t.”

The council was also introduced to History & Heritage Board applicant Dale Clark. Clark has already been interviewed by the city’s arts, culture and heritage coordinator as well as Mayor Christine Frizzell.

When asked why he felt preserving Lynnwood’s heritage is important, Clark said with the changing times, it’s always nice to reflect on things that once were.

“It’s very important because Lynnwood is evolving,” Clark said. “With all the building and rebuilding, it’s very important to me to at least preserve the history in one way, shape or form.”

Clark is hoping to increase community involvement in a number of ways, including painting electrical boxes around Lynnwood to improve its appearance and engaging with community members through art.

Clark was met with warm welcomes from councilmembers.

“You check off all the boxes that I just absolutely love,” Councilmember Smith said.

Clark will be reappearing before the council next week for confirmation.

— By Lauren Reichenbach

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