Council reviews request to use opioid settlement funds to continue retail-theft diversion program; no vote taken

The Lynnwood City Council discussed a proposal on May 27 to use opioid settlement money (Fund 147) to continue a retail-theft diversion program that pairs criminal-court diversion with intensive case management and substance-use services.

Program background: The program — run through a partnership of the city prosecutor’s office, the police department and Law Enforcement Assisted Diversion (LEAD) — was funded earlier through a state-organized grant program that is ending June 15. City staff and Council member Hurst proposed using part of the city’s opioid settlement balance to continue the work through December.

Financial ask and city funds: Council member Hurst said the immediate ask is $271,330 from the city’s opioid settlement balance (Fund 147). City staff reported the city currently has about $1,100,000 in that fund and anticipates receiving roughly $2.8 million over the duration of settlements; staff emphasized the money typically arrives in tranches over multiple years.

What proponents said: Lynnwood prosecutor Yelena Stock, who oversees the diversion intake and case-screening, told the council the program is intended to address the root causes of retail theft — often chemical dependency — by offering defendants a diversion track with treatment or an education component. Stock said the program had reduced invoicing to the city by roughly $10,000 per month while the state grant covered part of the cost and that continuing the dedicated prosecutor position and related tracking would require funding.

LEAD’s role: Ashley Dawson, program director at LEAD, said a dedicated LEAD case manager focused on the program’s referrals would cost approximately $88,000 for the six-month continuation. LEAD serves clients with a long-term case-management model to connect participants to housing, treatment and other services; Dawson said many diverted people succeed when they have a dedicated case manager.

Program outcomes to date (as presented): Stock reported the office identified roughly 203 eligible retail-associated cases under the program; of those, 103 people accepted diversion, eight opted out, 39 were disqualified, and a number were referred to LEAD. At the time of the presentation, 29 LEAD referrals had completed diversion successfully and dozens more were on active stipulated orders of continuance (SOC) while participating in services; prosecutors said results would continue to evolve as year-long diversions complete.

Concerns and compliance questions: Julie Moore, assistant city administrator and the staff lead for opioid funds, said the state MOU that governs opioid settlement use is focused on opioid use disorder (OUD) and co-occurring conditions and that the city must show a connection between the program participants and opioid/substance-use disorder to align expenditures with the MOU. Moore also said there are currently no standardized state audit reporting templates for the city’s opioid funds; the city would need to develop reporting and contract terms if it awards funds to outside providers.

Council perspectives and next steps: Council member Hurst urged continuation, saying the program addresses root causes and offers public-safety and social-service benefits. Council members asked staff for the state MOU and additional written details about how the city would track outcomes and ensure eligibility under the opioid-funds MOU. No vote was taken; staff said they would follow up with additional information and a proposed agreement or procurement approach if the council wishes to move forward.

Ending: Staff will circulate the state MOU and return with proposed contract language and reporting requirements for council consideration before any funds are committed.