The Lakewood city administration broke the law when it failed to get City Council approval for money to start its Police Department, state auditors reported.
The city spent $4.7 million in 2004 – most of it on the police force launch – without elected leaders adopting the necessary budget amendments in an open public meeting, auditors said in a preliminary report.
Lakewood had the cash, but Galen Kidd, city finance director, said he failed to go before the City Council and obtain a budget amendment to properly spend the money.
“It was my error,” Kidd said. “I didn’t finish the process. The financials were OK. The issue was in accountability.”
The official audit criticism is the first Lakewood has had since it became a city in 1996.
City Council members Pad Finnigan and Doug Richardson, who were also on the council in 2004, said Kidd’s error was a technicality.
But state auditor Brian Sonntag said Lakewood should have followed a more open process that included a public hearing so interested citizens would know what was going on, then gotten council approval.
“They had the money,” he said. “But it’s public money that needs to be spent after a public hearing. The operative word is public.”
Auditors said the city must monitor its spending better. City officials said they are now watching expenditures more carefully to make sure they don’t exceed budget appropriations in various funds.
Kidd said once forming the new Police Department was under way, things got hectic, and he forgot to get council approval. Despite the audit criticism, he said, nothing was hidden, there were plenty of public discussions, and the startup was successful.
Auditors say the money was spent illegally. They say the city’s budget, as adopted and amended by the council, establishes the legal authority for the city to spend money. Cities can only spend what they appropriate in each budget fund.
The Lakewood City Council budgeted nearly $57 million spread over 11 funds in 2004, auditors said.
But Lakewood officials spent $3.7 million above the general fund budget level without council authorization. Lakewood officials also exceeded their budget in a police investigation fund, in a fund that holds most of the city’s grant money, and in a capital improvement fund for parks. All told, the unauthorized spending was $4.7 million.
The final Lakewood audit report should be released by mid-May.
Kidd plans to resign May 11. He has been with the city administration since October 1995, months before it incorporated in 1996.
Both he and City Manager Andrew Neiditz said Kidd’s departure isn’t related to the audit problem. Kidd said he had planned to leave before it surfaced.
Lakewood began forming its own Police Department in early 2004, and started full operations in November. Until then, it had contracted with the Pierce County sheriff for police services. The total police budget for 2005, the first full year of operations, was about $14 million.
Kidd said the council agreed to establish the Police Department in 2004 and approved using reserves to finance some costs.
Richardson, who was mayor in 2004, said the council knew one-time startup costs would total $3 million to $5 million. He said the council would have supported a budget amendment to reflect the actual spending levels.
Finnigan said he would have questioned such an amendment. He and Councilman John Arbeeny blamed former City Manager Scott Rohlfs for failing to tell the council how funds were or were not being adjusted.
Rohlfs, who retired in early 2005, couldn’t be reached for comment.
“It got done,” Arbeeny said of forming the Police Department. “But we violated procedures outlined in the law.”
Rob Tucker: 253-597-8374
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