Debi Humann sued the city in federal court earlier this year, alleging that she was wrongly fired for raising questions about other city employees' pay.
The lawsuit is ongoing.
The payment was ordered by an administrative law judge, according to a statement from Humann's attorneys. Humann's lawyers allege that she was fired and her position was eliminated as punishment for her reporting problems with the city payroll.
"We look forward to clearing Debi's name and vindicating her whistleblower activities in the federal lawsuit," the statement said.
Mayor Dave Earling said Wednesday he could not comment on pending litigation.
The dispute involves former Mayor Mike Cooper and his then-assistant Kimberly Cole. Cole was accused of not working all the hours listed on her timesheets at her $79,000-a-year job. Cole was fired after Earling took office.
Humann was cooperating with a state investigation regarding Cole's work when Cooper fired Humann in 2011. He publicly said he could no longer trust her.
Cole was kicked off the Lynnwood City Council in September for attendance problems.
The lawsuit alleges that the city failed to follow due process regarding Humann's employment and that she was defamed by Cooper, Earling and others.
The City Council in June approved paying her more than $91,000. Humann had worked for the city since 1999.
Rikki King: 425-339-3449; email@example.com.
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