The golf course along 68th Avenue West for years has been sponging money from other city funds, including the utility fund, the state said.
State auditors presented their findings at City Hall on Monday night. They said the city needs to make a plan for the city-owned golf course to repay the money diverted to it from other parts of the budget, and internal controls need to be put in place to safeguard public resources.
In response, Mayor Don Gough's staff say the golf course is just starting to make a profit, and city officials need time to sort out the auditors' findings.
The city also issued a statement Thursday saying it will stop making short-term loans to the golf course fund from the city utility fund.
Essentially, the audit says that $1.66 million in loans made to the golf course by the end of 2011 should not have happened without council approval. The council does allow the mayor's office to make some loans between city funds without permission, but the amount exceeded the authorized limit, auditors said.
On Thursday, the mayor's office issued a statement saying the too-large loan was an oversight and has been corrected.
Lynnwood is in compliance with most areas of state law governing fiscal accountability, auditors found. However, the city's financial condition remains a concern.
Lynnwood paid off the bonds used to pay for the golf course in December 2011.
The city is now studying options, including whether to close or sell the course, or outsource operations.
The mayor's staff plan to research the issue and bring recommendations to the council in the next few months.
Rikki King: 425-339-3449; firstname.lastname@example.org.
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