# Bellingham City Council Wrestles with Budget Challenges and Municipal Priorities On a grey September evening, the Bellingham City Council convened for what would prove to be a pivotal meeting in the city's 2026 budget cycle. With Council President Hollie Huthman excused, Council President Pro Tempore Skip Williams called the meeting to order at 7 PM in Council Chambers, where six council members and a modest public audience gathered to tackle an agenda heavy with financial realities and long-term planning decisions. ## Meeting Overview The September 29, 2025 regular council meeting unfolded as a study in municipal governance under fiscal pressure. While the formal agenda included routine items like an easement relinquishment and board appointments, the meeting's true significance lay in Mayor Kim Lund's presentation of her proposed 2026 budget—a document that seeks to close a projected $10 million General Fund shortfall through difficult choices including the elimination of over 40 positions and a proposed 0.1% public safety sales tax increase. The meeting ran just over two hours, concluding at 9:06 PM after addressing seven committee reports, executive session items involving potential litigation and property acquisitions, and a robust public comment period featuring 21 speakers. The tone throughout remained professional but carried an undercurrent of concern about the city's financial trajectory and the hard decisions ahead. ## Relinquishing the Past on Iowa Street The evening began with a straightforward public hearing on an ordinance to relinquish a surplus utility easement on vacated Iowa Street behind Aaron's Bakery at 427 Ohio Street. Mike Wilson, Assistant Director of Public Works and city engineer, explained that the easement had been reserved when the street was vacated in 1977, but both city and private utilities confirmed they no longer needed it. Council Member Lisa Anderson, who had visited the site over the weekend, noted it was "really not something usable for a through fair, especially with Bellingham High School having their sports field there." She examined whether it could serve as an alley or trail but concluded it was "just not conducive for creating any kind of motor or pedestrian travel." Wilson clarified an additional detail: beyond the easement, the city was also relinquishing a covenant that would have allowed the city to reacquire the right-of-way. "We're recommending that that be done away with as well," he said. With no public testimony and brief discussion, the council unanimously approved the ordinance on first and second reading. ## Mayor's Budget Blueprint: Three Foundation Stones Mayor Lund used her report to preview the budget challenges ahead, emphasizing that "responsible stewardship of city's financial resources are among the most important responsibility the mayor and the city council have in our respective elected positions." She outlined three foundational principles underlying her budget proposal: ensuring the city's financial sustainability, focusing on work that only the city can do, and leveraging dedicated resources like voter-approved levies. The mayor was direct about the scope of the challenge: "Earlier this year, we forecasted a $10 million budget shortfall in the City's General Fund for 2026." Her solution includes reducing staffing costs by eliminating over 40 positions—most currently vacant—and proposing a 0.1% public safety sales tax increase that would generate nearly $4 million annually. "State legislators last session were aware of the financial difficulties that local governments statewide are facing," Lund explained. "They gave us just one tool for local action, and the 0.1% public safety sales tax increase is that one tool." She emphasized the tax would fund existing services, not new programs, supporting downtown bike patrols, the Grace Alternative Response Program, public defenders, domestic violence services, community court operations, and regional drug task force officers. The mayor included a video presentation explaining how Bellingham's budget is structured across more than 50 dedicated funds, most legally tied to specific purposes. The video's key message: unlike the federal government, "we're required to keep a balanced budget. We can't keep spending more than we bring in." ## Post Point Wastewater Treatment: Moving Forward Despite Concerns The afternoon's Public Works and Natural Resources Committee brought forward one of the meeting's more complex items: authorization to apply for state approval to use a General Contractor/Construction Manager (GCCM) delivery method for Post Point Wastewater Treatment Plant emission control upgrades, along with retaining attorney Michael Loulakis for legal services. Council Member Hannah Stone, committee chair, explained that the city has successfully used GCCM for two previous Post Point projects and that staff was recommending this collaborative delivery method for the emission control upgrades. The application deadline of October 15 created urgency, but Stone emphasized that "there certainly would be opportunities for additional public engagement" before final decisions. Council Member Michael Lilliquist, though not on the committee, raised detailed concerns about the project based on community letters. He outlined six areas where "compelling information" could change the equation: whether pollution levels would still be too high, risks of incinerator failure, implementation timeline extending to 2031, viability of alternatives, cost comparisons, and speed of implementation. "I'm glad that we have time and glad the administration wants to get involved in those discussions," Lilliquist said, adding, "If there's room to include me, I'd be happy to participate," despite not being on the committee. Council Member Lisa Anderson supported the application while acknowledging community concerns: "We received communication from various stakeholders and representatives within the community who would like to have a discussion. But we have a deadline." She noted that failing to meet the October 15 deadline would eliminate the GCCM option entirely, and emphasized that "there's not off-ramps available" even if the state approves the application. Stone highlighted the legal pressure: "Notice of violation that have been issued for Post Point and the requirement that the city come into compliance with the quad-L requirements." She noted that some alternative proposals "contradict state law," making the current approach "the proposal that best meets the city's needs and will address our legal requirements." ## Severe Weather Shelter: Continuity in Crisis Response The Community and Economic Development Committee addressed renewal of an interlocal agreement with Whatcom County for severe weather shelter operations. Council Member Jace Cotton, committee chair, explained that the county will again operate the approximately 60-bed shelter after receiving no applications from outside providers. Council Member Stone clarified the funding structure: Whatcom County covers the first $450,000 in expenses, with costs split evenly between city and county thereafter, up to the city's $100,000 commitment. The shelter operates when temperatures drop below 32 degrees, serving as "a life-saving intervention during extreme weather conditions." ## Business Licensing: State Mandates and Local Compliance The Budget and Finance Committee brought forward a routine but necessary ordinance updating business license requirements to comply with state law. Council Member Anderson, committee chair, explained that the state requires cities to adopt uniform standards, including raising the minimum licensing threshold from $2,000 to $4,000 annually. The change, mandated to take effect January 1, 2026, passed unanimously without discussion. ## Planning for the Future: Capital Facilities and Transportation Two significant planning documents came before the full Committee of the Whole, both representing implementation tools for the upcoming comprehensive plan update. The Capital Facilities Plan and Multimodal Transportation Plan will be embedded by reference in the comprehensive plan, allowing for updates without requiring full comprehensive plan amendments. Council President Pro Tempore Williams, chairing the committee, explained the strategic shift: "Rather than having to reconsider the whole comprehensive plan, these would be implementation documents rather than policy documents which will be referenced in the global plan." Council Member Lilliquist emphasized the importance of these planning documents to citizens: "There are 22 planning documents and if you want to know what the city's going to do and what we're going to spend money on our long-range plans where millions of dollars go, there are 22 documents listed here and they're the ones you need to pay attention to." A technical discussion arose around the Multimodal Transportation Plan regarding mode shift goals and amendment processes. Lilliquist worried that once incorporated by reference into the comprehensive plan, changes might require lengthy Type 6 processes. Mayor Lund clarified that plans adopted by reference, like bike and pedestrian master plans, don't always require such extensive procedures. ## Budget Introduction: The Heart of the Challenge The meeting's centerpiece was introduction of the 2026 proposed budget, totaling $542.9 million with an operating budget of $388.2 million and capital budget of $154.8 million. Williams highlighted the budget's foundation on three principles: financial sustainability, focusing on uniquely municipal work, and leveraging dedicated resources. The General Fund budget of $128.6 million faces the $10 million shortfall that drives the difficult decisions ahead. Williams noted that finding fiscal stability "is going to be an ongoing challenge for years" but emphasized the council's "responsibility is building a budget that truly reflects our community's values and delivers the important work that only we can do now and into the future." ## Old Business and Community Connections Council Member Dan Hammill shared appreciation for the Bellingham Fire Department after visiting Fire Station 1, where a new firefighter told him she felt confident in her colleagues because "they without any kind of hesitancy would always run towards a problem and never away from it." Hammill connected this to the budget challenges: "We face an obligation to respond to any problem that's facing Bellingham." Council Member Lilliquist reported on the All Hands Whatcom Summit addressing the opioid crisis, attended by himself and Council Members Williams, Cotton, and Hammill. Key takeaways included decreasing opioid overdoses but continued monthly deaths, the importance of human connection in addiction recovery, and critical gaps in reentry support and transitional housing. He noted that 70% of Whatcom County jail inmates struggle with substance use or addiction issues. Williams commended Hammill for supporting the Dwelik project, which "filled a gap that we didn't have which is bringing treatment programs to the people that need them as opposed to trying to get the people to go to the program." Council Member Stone requested staff time to create user-friendly resources for community members seeking information about local rights and protections, particularly for vulnerable populations. Mayor Lund noted the administration is already working with the Public Rights Project on similar efforts. Lilliquist requested policy analyst time to research King County's approach to algorithmic price fixing for rentals, hoping to bring forward local protections against anti-competitive practices. ## Behind Closed Doors: Property and Legal Matters The executive session addressed five items, three involving potential Lake Whatcom watershed property acquisitions that were for information only with no action taken. Two litigation matters resulted in council authorization: retaining outside counsel to challenge FEMA grant conditions and joining an amicus brief in Planned Parenthood v. RFK Jr. Lilliquist explained the FEMA litigation context: "These new FEMA conditions are being imposed by the Trump administration and our concern is that they're harmful to public health and that'll be the basis for our involvement in the lawsuit." ## Consent Agenda and Procedural Notes The consent agenda passed unanimously, covering routine payroll and accounts payable authorizations plus approval of previous meeting minutes. Council Member Stone noted for the public that an ordinance vacating Rimland Drive had been removed from the agenda pending property owner dedication of new right-of-way, and reminded everyone that the public safety tax proposal would come up for vote at the October 6 meeting, not this evening. ## Looking Ahead: Budget Battles and Community Priorities The September 29 meeting established the framework for challenging months ahead as Bellingham grapples with fiscal constraints while maintaining essential services. The 2026 budget proposal represents more than numbers—it's a values document that will define what kind of city Bellingham chooses to be under financial pressure. Mayor Lund's three foundational principles—sustainability, focus, and leverage—provide a roadmap, but the devil will be in the details as council members work through budget sessions in the coming weeks. The proposed public safety sales tax, adding roughly $1 to a new cell phone or $15 to a used car purchase, will test community willingness to fund existing services through new revenue. The Post Point wastewater treatment upgrades illustrate the complexity of major infrastructure decisions, where technical requirements, legal mandates, public input, and fiscal realities intersect. Council members' commitment to continued stakeholder engagement while meeting regulatory deadlines shows the delicate balance required in municipal governance. As the meeting concluded and the council prepared to transition to public comment, the weight of these decisions hung in the air. Twenty-one community members would soon have their three minutes each to weigh in on city priorities, budget choices, and the direction of their community. The real work of democracy—translating citizen needs into municipal action while managing finite resources—was just beginning. The challenges are substantial, but so is the commitment of council members to "run towards problems" rather than away from them, as Hammill noted. The coming weeks will test that resolve as Bellingham works to craft a budget that maintains essential services, preserves community values, and charts a sustainable path forward through uncertain fiscal terrain.

### Meeting Overview Bellingham City Council held its regular meeting on September 29, 2025, with 6 members present and Council President Huthman excused. The meeting focused heavily on the 2026 budget introduction, which proposes addressing a $10 million general fund shortfall through staff reductions and a proposed 0.1% public safety sales tax. ### Key Terms and Concepts **General Fund:** The city's most flexible budget account that pays for basic services like library workers, firefighters, and police. Unlike dedicated funds, it can support all city operations but faces the biggest budget challenges. **GCCM (General Contractor/Construction Manager):** A collaborative construction delivery method where the contractor works with the city during design phase, rather than traditional bidding after design is complete. **Type Six Process:** A lengthy planning procedure required to amend certain comprehensive plan documents, which can take months or years to complete. **Capital Facilities Plan:** A 20-year planning document that outlines the city's infrastructure investment priorities and becomes part of the comprehensive plan by reference. **Executive Session:** A closed meeting session where council discusses confidential matters like property acquisitions, litigation, and personnel issues, with public reporting afterward. **Interlocal Agreement:** A contract between different government entities (like city and county) to share services or costs, such as the severe weather shelter. **Utility Easement Relinquishment:** The formal process of giving up the city's legal right to use private property for utilities when that right is no longer needed. **Public Safety Sales Tax:** A 0.1% sales tax increase that state law allows cities to implement specifically for police, fire, and other safety services, requiring voter or council approval. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Edwin "Skip" Williams | Council President Pro Tempore, Fourth Ward | | Kim Lund | Mayor | | Hannah Stone | Council Member, First Ward | | Daniel Hammill | Council Member, Third Ward | | Lisa Anderson | Council Member, Fifth Ward | | Michael Lilliquist | Council Member, Sixth Ward | | Jace Cotton | At-Large Council Member | | Joel Pfundt | Public Works Director | | Mike Wilson | Assistant Director of Engineering | ### Background Context Bellingham faces significant budget challenges in 2026, with a projected $10 million shortfall in the general fund. This stems from rising costs for city services while revenue sources remain relatively flat due to state limitations on property tax increases. The city is proposing to eliminate over 40 positions (mostly vacant) and implement a 0.1% public safety sales tax to maintain current service levels. The meeting also dealt with ongoing infrastructure needs at the Post Point wastewater treatment plant, where air quality violations require expensive upgrades. The city is seeking approval to use a collaborative construction approach that could save time and money on this critical environmental project. Several major planning documents were approved that will guide city development and transportation investments over the next 20 years, representing millions in future spending decisions. ### What Happened — The Short Version Council approved giving up an unused utility easement near Aaron's Bakery on Ohio Street. They authorized applying for a special construction management approach for Post Point wastewater plant upgrades and approved continuing the county partnership for severe weather shelter operations. Two major planning documents (capital facilities and multimodal transportation) were adopted as part of the comprehensive plan update. Mayor Lund introduced her 2026 budget proposal, highlighting a $10 million shortfall and proposing a public safety sales tax. Council approved litigation positions on FEMA grant conditions and Planned Parenthood cases in executive session. ### What to Watch Next - Public hearing on 2026 budget on October 6, 2025 - Council vote on proposed 0.1% public safety sales tax (date TBD in October) - Additional budget hearing scheduled for November 3rd - Stakeholder discussions on Post Point wastewater treatment alternatives - Development of community rights and protections resource guide ---

**Q:** How much is the city's projected 2026 general fund budget shortfall? **A:** $10 million, which the city is addressing through position eliminations and a proposed public safety sales tax increase. **Q:** What percentage sales tax increase is the city proposing for public safety? **A:** 0.1%, which would add about $1 to a new cell phone cost and $15 to a used car purchase. **Q:** Who was appointed to the Bellingham-Whatcom County Commission Against Domestic Violence? **A:** Katie Chandler was appointed to a first term expiring September 29, 2029. **Q:** What construction delivery method is the city applying to use for Post Point upgrades? **A:** General Contractor/Construction Manager (GCCM), which involves the contractor in design phase for better collaboration. **Q:** What is the application deadline for the GCCM delivery method? **A:** October 15th, which is why council needed to approve the application quickly despite ongoing stakeholder discussions. **Q:** How many council members voted on all agenda items? **A:** Six council members voted on all items, with Council President Huthman excused from the meeting. **Q:** What is the city's commitment for severe weather shelter costs? **A:** Up to $100,000, with the county covering the first $450,000 in expenses before costs are split evenly. **Q:** How many positions is the city proposing to eliminate in 2026? **A:** Over 40 positions, most of which are currently vacant and frozen positions. **Q:** When is the minimum business license threshold changing? **A:** January 1, 2026, when it increases from $2,000 to $4,000 as mandated by state law. **Q:** What percentage of the general fund goes to staffing costs? **A:** Nearly 70% of the general fund pays for the people who provide city services like library workers and firefighters. **Q:** How many planning documents did Council Member Lilliquist say people should watch? **A:** 22 planning documents that guide where millions of city dollars go for long-range plans and infrastructure. **Q:** What conference did several council members attend regarding addiction issues? **A:** The "All Hands Whatcom Summit" put on by Chuck and Health Foundation, focused on community addiction response. **Q:** When does the severe weather shelter typically operate? **A:** When temperatures drop below 32 degrees, with approximately 60 beds and surge capacity as approved by officials. **Q:** What type of legal brief did council authorize regarding Planned Parenthood? **A:** An amicus brief in Planned Parenthood v. RFK Jr., supporting the organization's legal position. **Q:** How much is the proposed 2026 operating budget? **A:** $388.2 million operating budget, with an additional $154.8 million capital budget. **Q:** What property acquisitions were discussed in executive session? **A:** Three potential Lake Whatcom watershed property acquisitions, all for information and discussion only. **Q:** What ordinance was removed from final consideration? **A:** Rimland Drive vacation between Woburn Street and Barkley Boulevard, delayed until property owner dedicates new right-of-way. **Q:** How many people provided public comment after the meeting? **A:** 21 individuals provided public comments during the separate public comment period. **Q:** What two major plans were adopted as part of comprehensive plan implementation? **A:** The Capital Facilities Plan and Multimodal Transportation Plan, both incorporated by reference into the comprehensive plan. **Q:** What research project did Council Member Lilliquist request staff time for? **A:** Reviewing King County's approach to algorithmic price fixing for rentals to potentially protect Bellingham renters. ---