Lynnwood Mayor Christine Frizzell began her mayor comments at the Lynnwood City Council’s Oct. 31 work session with a veto of Ordinance 3416 – which eliminated Lynnwood’s $40 car tab fee.
The council approved the ordinance by a 4-2 vote at its Oct. 24 business meeting, hoping to relieve some of the financial pressure Lynnwood residents have been feeling since the start of the COVID-19 pandemic. Councilmembers Shannon Sessions and Julieta Altamirano-Crosby voted against the measure and Councilmember Josh Binda abstained.
Councilmembers previously voted to repeal the tab fees in 2021, but that vote was vetoed by former Mayor Nicola Smith. Since then, the discussion has been brought before the council twice, but has been tabled both times as Council President George Hurst wanted to hold the discussion during the budget presentations.
Frizzell said a constant concern heard from Lynnwood residents is the condition of city streets. Earlier this year, the council voted to allocate $2.5 million in American Rescue Plan Act (ARPA) funds to the city’s public works department for the most immediate street repair projects.
However, Frizzell said that eliminating the tab fees puts the department right back where it started, as the ARPA fund allocation is only slightly more than the tab fee revenues that are projected for the upcoming biennium.
“The vote for Ordinance 3416 to eliminate $2.3 million of biennial, sustainable funding from license fees for our streets is reversal of those same concerns, and damages our community for many years to come,” Frizzell said.
The mayor said vehicle tab fees are a “fair and equitable source of funding for our city streets” and ensures that residents who drive on city streets and contribute to their deterioration help fund the upkeep and repairs of them as well.
“It is clear we must preserve our ability to fund and maintain this critical infrastructure,” she said, “ensuring that Lynnwood will continue to be a wonderful place to live, work, play and shop for decades to come.”
Councilmembers did not offer any comments regarding the mayor’s veto. However, the council could still be able to overturn Frizzell’s veto with a supermajority vote. Councilmembers attempted to do that last year following former Mayor Smith’s veto and were unsuccessful.
In other business, the council received budget presentations from the city’s public works department, with an emphasis on the upcoming capital projects the department is focusing on.
Before Mayor Frizzell announced her veto of Ordinance 3416, Lynnwood Public Works Director Bill Franz said that with over 300 lane miles of roads and 120 miles of sidewalks in the city, it is incredibly important for the council to focus on maintaining that infrastructure and working to collect revenues to fund its upkeep.
“Everyone of us here used our roads or sidewalks to come to this meeting,” he said. “It’s important that our roads work well.”
Franz went on to say that the public works department’s budget might be the most confusing because it has five main operating funds: A portion of the general fund, the street fund, solid waste and recycling, utility and equipment rental funds.
“Most of our funds are in very good shape,” he said. “Others have a bit of a concern, and those are the ones I’ll go over tonight.”
In total, the operating funds for the department come in at just over $92 million.
Franz said the proposed budget for the streets fund will increase from $5.2 million to $5.9 million. This increase is mainly due to the addition of one new road maintenance worker and rapid inflation.
“We’re really feeling the effects of inflation in this budget,” he said.
Franz told the council the department has not increased its road maintenance staff since the 1980s, but with the amount of required repairs rising exponentially, he feels the need for more staff is too great to ignore any longer.
The fleet budget will decrease slightly from the last biennium, Franz said. At $4.04 million, the public works director said the city has adequate funds to maintain its roughly 200 city vehicles.
Franz said the solid waste and recycling budget request remains the same as last year, at roughly $77,000. He also spent little time discussing the roughly $74 million utility rate budget, as all those funds come from customers and do not need extra council consideration.
In addition, Franz went into detail about the department’s capital budget. This budget encapsulates the 66 projects the department plans to focus on over the next two years.
The total proposed budget for these projects is roughly $144 million.
“[These projects are] no longer a dream off in the distance of the future, these are happening in real time,” Franz said. “This is a very critical time in Lynnwood’s history and the work we do in these capital programs will be the difference between us meeting demands that this growth brings and shaping this newly-built environment in the best way possible for our community, or on the contrary, being pushed into reacting to impacts that this development on our services if we’re not prepared properly.”
Franz said the biggest concern for the department’s capital budget would be the loss in revenues generated by the lack of the city’s vehicle tab fees. Without them, revenues would drop from roughly $8.9 million per biennium to $6.5 million.
If the mayor had not vetoed the council’s vote, the public works director said the department would have to make drastic cuts to other budgets that also desperately needed funding, which would leave many roads in disarray due to lack of funds.
Council President Hurst suggested tab fees be put on voter’s ballots to let Lynnwood residents decide for themselves if they want the $40 tab fees.
“We keep hearing that residents of Lynnwood want to support the roads,” Hurst said. “Let’s have them vote on it.”
Councilmember Patrick Decker also chimed in, asking Franz how the public works department would plan to sustain the additional 6,000 housing units being constructed in the Lynnwood City Center with a huge blow to revenues if the tab fees had been cut.
“All I’ve heard the past hour is no, we don’t have the infrastructure to support this, [even with the tab fees],” Decker said.
Even before the council voted on Ordinance 3416, Decker said the city has been struggling to secure the funds for the infrastructure Lynnwood already has.
“Maybe we should go back and revisit putting 6,000 more people downtown if we don’t have the funds for this,” Decker said. “We keep buying, we keep pushing toward the future, we keep planning for the future, but we can’t even afford what we have right now.”
Councilmember Jim Smith said city staff should be working harder to continue serving Lynnwood residents without imposing more taxes on them. It’s unfair, he said, to hold voters hostage by saying they can only have a good government if they pay more in taxes to support the government’s projects.
“I think we need to be staying within our budget [and not adding more to it],” Smith said. “Things I have not heard in decades are: ‘What can we do to cut back? What can we do to be more efficient?’ Let’s make some cuts in some of the things that we’re doing. We’re more concerned about making Lynnwood bigger and bigger and bigger than we are about taking care of the people already here in Lynnwood.”
Diving into the capital budget, Franz said the public works department currently has six main capital fund areas: Fund 360, 357, 370, 380, 390 and 412.
Fund 360 has 15 capital projects, all focused on the city’s transportation. This budget section is a proposed $32.6 million, with an estimated $6.2 million of that being funded by incoming grants.
Fund 370’s focus is preparing for the new Lynnwood City Center. This area of funding houses three projects and will cost an estimated $14.9 million. However, Franz said $13.9 million of that is being supplied by state grants for the Community Recovery Center.
Fund 380 focuses on parks and recreation in the city and with 17 upcoming projects, is estimated at roughly $24 million, with $14.6 million of those funds being supplied by grants.
Fund 390 is the public safety sector of the budget. This area only has one capital project: The Community Justice Center, which will cost roughly $41.6 million.
Fund 357, the general fund, has five capital projects totaling an estimated $1.06 million.
Finally, Fund 412, or the utility budget, is estimated at $27 million for its 27 upcoming capital projects. Franz reiterated again that this fund will be paid for by utility customers and does not need further council consideration.
Also on Monday’s agenda was a revenue review from Lynnwood Finance Director Michelle Meyer. In the next two years, Lynnwood’s general fund is expected to receive roughly $128.5 million in revenues from areas such as utility, property and sales taxes, license and permit fees, recreation charges and fines and forfeitures.
Meyer said each of these areas will see at least a slight increase in revenues from previous years, mainly due to rising inflation costs.
On top of that, Meyer said the city is also expected to see between roughly $1 million to $2 million in revenues from each area such as hotel stays, the criminal justice fund, the transportation impact fund and the street operating fund.
The city can also expect around $3 million in park impact fees to be generated in the next two years, and Meyer said this will help the city greatly.
“This is our main source of funding for our new park infrastructure, recreation infrastructure,” she said. “This is the fund we are using to pay for our debt service for the Town Square Park that we just purchased.”
The biggest revenue source that city staff is anticipating is from the charge of service for the utility operating fund, which is expected to bring in roughly $61.4 million during this biennium.
Meyer then talked to the council about the calendar for voting on the finalized budget as well as the city’s property tax levy. A public hearing for both topics is scheduled on Nov. 14, and Meyer said the council will be expected to vote on the matter at its next meeting on Nov. 21.
However, some councilmembers felt there was too much of a time constraint on further discussion and wanted the vote to be pushed back another week to the council’s Nov. 28 meeting.
Council President Hurst said he would prefer a vote on Nov. 28 so council has more time to discuss points that he is sure will be brought up during the public hearing on Nov. 14.
“The budget and property taxes is one of the biggest votes that we have,” he said. “I think it would be great on the 21st to have more time to talk about the budget and make sure that we’re all clear and maybe talk about some of the things that we hear at the public hearing.”
Smith made a motion to move the city’s 2023-24 budget vote to the Nov. 28 business meeting and the motion passed unanimously. Hurst moved to move the property tax levy vote to the Nov. 28 meeting as well, and that motion also passed unanimously.
— By Lauren Reichenbach