Finance Committee — Lynnwood, WA
Date: 2026-04-20

LYNNWOOD FINANCE COMMITTEE - Regular Finance Committee
 Meeting
 City Hall, Conference Room 4
 TUESDAY, MARCH 17, 2026 3:30 PM



1. CALL TO ORDER

2. ROLL CALL

3. FINANCIAL REPORTS

 3.A Sales Tax Report - 20 minutes
 Michelle Meyer, Finance Director

 3.B 4th Quarter 2025 Financial Report - 30 minutes
 Michelle Meyer, Finance Director

 3.C Follow-Up Information: 2025-2026 Budget - 20 minutes
 Michelle Meyer, Finance Director

4. DISCUSSION ITEM

 4.A General Fund Minimum Fund Balance Policy Update - 10 minutes
 Michelle Meyer, Finance Director

 4.B Prior Biennial Budget Calendar Review - 15 minutes
 Michelle Meyer, Finance Director

5. ADJOURN




 03/17/2026
 1

City of Lynnwood
 Finance Committee – Regular Finance Committee Meeting Minutes
 Tuesday, March 17, 2026
1. Call to Order

2. Roll Call

 Present at the meeting were: Nick Coelho-Chairperson/Council President, Derica Escamilla-Council Vice
 President, Robert Leutwyler-Councilmember, Lynn Sordel-Interim Assistant City Administrator, Michelle
 Meyer-Finance Director and Estee Milburn-Council Executive Assistant.

3. Financial Reports
 3.A. Sales Tax Report

 Director Meyer shared the February sales tax report. Revenues from February 2026 for December 2025 sales
 remained below budget, reflecting ongoing declines and resulting in a year-to-date shortfall. Note there is a
 two-month delay on reporting.

 Revenue trends continue to remain relatively flat, consistent with prior expectations. Retail activity remains
 strong, while construction and motor vehicle-related revenues have declined or remained flat. Month-to-
 month comparisons were reviewed, noting February reflects December sales. Staff presented an inflation-
 adjusted analysis showing that, despite stable nominal revenues, real revenues have effectively returned to
 2019 levels, highlighting the impact of inflation on the City’s financial position.

 3.B. 4th Quarter 2025 Financial Report

 Director Meyer reviewed the draft fourth quarter 2025 financial report, which reflects the midpoint of the
 City’s biennial budget. It was noted that while the report is still being finalized, the General Fund showed
 expenditures slightly exceeding revenues, resulting in a continued decline in fund balance, though still in
 compliance with the City’s updated fund balance policy. Several revenue sources, including sales tax,
 development permits, and fines, came in below projections, while most expenditures remained in line with
 expectations due to ongoing cost controls. Discussion also highlighted declining capital funding capacity,
 particularly due to the suspension of transfers to the Economic Development Infrastructure Fund (EDIF) and
 capital development funds and included interest in revisiting EDIF policies and long-term funding strategies.

 3.C. Follow-Up Information: 2025-2026 Budget

 At the start of 2025, the City faced a $25 million shortfall due to weaker sales tax, permit fees and red-light
 camera revenue. Through budget cuts, fund transfers and policy adjustments, that deficit was reduced to
 $3.75 million by year’s end.

 In 2026, a new Public Safety Enhancement Sales Tax was expected to generate about $1.75 million. Once it
 became likely the revenue would be collected, the City planned to apply it toward closing the remaining gap,
 with the rest addressed through targeted departmental reductions, primarily by holding vacant positions rather
 than cutting current staff.

4. Discussion Item
 4.A. General Fund Minimum Fund Balance Policy Update

 Director Meyer reviewed the amended resolution to remove the December 31, 2026, sunset from the General
 Fund Reserve policy, continuing the 2.0-month reserve level. It was discussed revisiting the policy in a future
 work session and planning for long-term reserve restoration.
 4.B. Prior Biennial Budget Calendar Review

 The City of Lynnwood adopted the 2027-2028 biennial budget calendar on January 26, 2026, via Resolution
 2026-03. The Lynnwood Municipal Code (LMC) requires the City Council to adopt a budget calendar by the
 end of January for the upcoming biennium. This calendar establishes formal dates and deadlines for the
 required budget process, though additional meetings may occur outside this schedule without amending the
 adopted calendar. It was noted the resolution also corrected a minor clerical error referencing the prior 2025-
 2026 budget period.

5. Adjourn

 The meeting was adjourned at 5:05 pm.