LYNNWOOD—Finance Director Michelle Meyer shared with Lynnwood Finance Committee members on Wednesday, May 28, the mayor’s Budget Management Plan to address a projected $4,273,038 General Fund biennium budget shortfall.
The plan identifies opportunities over the next two years (until December 31, 2026) for across-the-board reductions in General Fund department operating expenditures. The opportunities identified in the Budget Management Plan were provided to the mayor by the City’s directors, the Lynnwood Times was told, except for the $33,402 target presented to City Council President Nick Coelho in Wednesday’s meeting. The city council plans to discuss the details of the Budget Management Plan in an upcoming Business Meeting sometime in mid-June.
The proposed plan does not reflect any reductions in force from adopted staffing levels and does not include any formal cuts to specific city services, according to the Meyer. Below is a breakdown of Mayor Frizzell’s Budget Management Plan by department:
- The Mayor’s office / Executive Team: $137,268 in contractual reductions
- Municipal Courts: $182,149 in vacancy/salary savings and contractual reductions
- Human Resources: $80,333 in contractual reductions
- Finance: $257,077 in vacancy savings
- Information technology: $213,061 in delayed hardware/software replacements and contractual reductions
- Police: $2,031,169 in delayed fleet replacements and vacancy savings
- Parks, Recreation, and Cultural Arts: $660,337 in vacancy savings, delay fleet replacements, and contractual reductions
- Public Works: $252,386 in savings from DBS lease termination and review of salary allocations
- Development & Business Services: $425,856 in vacancy savings and contractual reductions
The $2 million target for Law Enforcement in the Budget Management Plan is on top of a 5% vacancy savings rate that was applied to LPD in the adopted 2025-26 budget, Finance Director Meyer shared with the committee.
The immediate goal of the administration is to address the projected $3 million General Fund balance shortfall by the end of 2026 to adhere to the City’s reserve level requirement of “equaling not less than 2.5 months of the operating expenditures of the prior fiscal year,” according to Section 5 of the Lynnwood Financial Policy. As of March 31, at the end of first quarter of 2025, the City is $1.625 million underwater to its reserve requirement.
The City is monitoring overall taxes, licenses and permits, and fines and forfeiture revenues as sales tax (▼$863,820) and fines (▼$1.175 million) are coming in slightly lower (roughly $2 million year-to-date) than expected. Permit revenue from construction projects are also down as redevelopment projects such as the 18-acre Northline Village mixed-use housing, retail, office, and entertainment site that was originally scheduled to be completed in 2024, is again delayed and has yet to break ground.
All is not doom and gloom as the City’s 2025-26 adopted Operating Budget is $420.8 million, of which the General Fund comprises $158 million. The projected shortfall of $4.27 million represents 2.7% of the General Fund assuming revenue projections don’t fall southward due to what Mayor Frizzell called “the national environment of economic uncertainty” in her email to councilmembers earlier in May.
As of the end of the 1Q25 (March 31, 2025) the City of Lynnwood boasts $73,392,748 in total cash and investments, more than enough to absorb the current shortfall.
“Each department is thoughtfully managing their spending to address the current situation,” said Mayor Frizzell. “At this point, Finance Director Meyer and I are confident that with our team of Directors, we have identified measures that will provide us with stable footing from which we will continue to closely monitor revenues as 2025 continues.”
Author: Mario Lotmore
