# Border Tensions, Capital Priorities, and Water Rights: A Marathon Council Session The Whatcom County Council Committee of the Whole convened on Tuesday, March 25, 2025, for what would become a sprawling three-and-a-half-hour session that touched on everything from international tariff impacts to sewage leaking on sheriff's deputies. Chair Kaylee Galloway called the meeting to order at 1:27 p.m. in the council chambers, with all seven members present either in person or via Zoom. What began as a routine committee meeting evolved into a comprehensive examination of the county's most pressing challenges — from deteriorating U.S.-Canada relations affecting local businesses to difficult choices about which essential county facilities to build first when funding falls short. ## Legislative Update: Ferry Funding Stalled Jed Holmes from County Executive Satpal Sidhu's office opened the meeting with a sobering update on the 2025 state legislative session. While state revenues continue to rise, they're running about half a billion dollars short of initial projections across the biennium. More concerning for Whatcom County: neither the House nor Senate transportation budget proposals include additional funding for the Lummi Island ferry. "We have $5.3 million in funding from the state, and then we have over 20 years of $10 million through the CRAB program. Those are not at risk," Holmes assured council members when asked about existing ferry funding. But the lack of new money means continued reliance on current resources. Holmes, Chair Galloway, and Kayla Schott-Bresler were preparing to head to Olympia the following day to lobby about ten senators and representatives from both chambers about county priorities. The county's operating budget requests also faced challenges. Previous funding for public outreach around adjudication issues — about $350,000 in the last biennium, plus money for technical studies — wasn't included in current House and Senate proposals. Council Member Jon Scanlon announced that the Public Health Advisory Board would conduct its own lobby day in Olympia on April 10th, focusing on foundational public health services that face potential cuts in the governor's proposal. "It would impact shelter, a lot of different things we do," Scanlon explained, inviting other council members to join the morning trip. ## Border Crisis: When Neighbors Become Strangers Dr. Lori Trautman from Western Washington University's Border Policy Research Institute delivered what may have been the session's most sobering presentation, detailing how rapidly deteriorating U.S.-Canada relations are devastating local businesses and families. The statistics paint a stark picture of economic disruption. In February alone, Canadian vehicles returning to British Columbia dropped 30 percent. In the first three weeks of March, Whatcom County's land border crossings saw a 42 percent drop in Canadian vehicles — roughly 65,000 fewer trips, representing over 100,000 fewer Canadian visitors when accounting for vehicle occupancy. "Half of Canadians polled earlier this month approach the US now as a threat to national interests, with 13% considering the US as an enemy," Trautman reported. "This is unprecedented in peace times. These numbers have never looked like this in the past." The human dimension proved equally troubling. Before COVID, 78 percent of border crossers were destined for Whatcom County locations, with Canadians contributing an estimated $140 million annually — about 11.7 percent of the county's taxable retail sales. Bellingham alone saw $100 million in Canadian spending, while Blaine captured $24 million. But the border is "thickening" in both directions, Trautman explained. Canadian border officers are now actively enforcing duties and taxes on personal goods — something previously done only occasionally. Meanwhile, U.S. Customs and Border Protection has shifted from advisory approaches to active enforcement of inadmissibility rules, potentially barring violators from entering the U.S. for five years. "The 51st state rhetoric is something that I think Americans, it's easy to undercount the significance of how this is impacting Canadian sentiment towards the United States," Trautman observed, diplomatically understating what Council Member Todd Donovan later characterized as "very anti-Canadian rhetoric" and "belittling of Canadian leaders by the administration." The economic ripple effects are spreading throughout the region. Blaine businesses report sales drops as high as 60 percent. Hotel occupancy is down across border submarkets, with Bellingham showing a 12 percent decline. The Port of Bellingham has seen a "drastic drop" in Canadian passengers at Bellingham International Airport, where Canadians typically comprise 60 percent of travelers. Yet Trautman also identified potential opportunities. The county's foreign trade zone at the Port of Bellingham could attract Canadian businesses seeking to establish U.S. operations to avoid tariff complications. Some companies are already expressing interest in relocating operations south of the border. Council members pressed for specifics about the foreign trade zone's potential. Trautman explained that businesses can defer or eliminate customs duties on imported goods by operating within designated zone areas, though she recommended the Port provide detailed answers about expansion processes and requirements. ## Capital Projects: A $100 Million Choice The afternoon's most contentious discussion centered on a stark financial reality: Whatcom County cannot afford both of its highest-priority capital projects simultaneously. Deputy Executive Aly Pennucci and Facilities Director Rob Ney presented council members with an uncomfortable choice between the Northwest Annex redevelopment and a new sheriff's office and morgue facility. Both projects rely on Real Estate Excise Tax (REET) revenues for financing, and current projections show expenditures rapidly outpacing revenues. The Northwest Annex project carries a $64 million price tag for constructing a new 48,000-square-foot office building to house Public Works and Planning Development Services staff, plus creating a 26,000-square-foot shell building for future use. The sheriff's office and morgue project, estimated at $40 million, would address deteriorating conditions that Sheriff Donnell Tanksley described in stark terms during his comments to council. "We're in the lowest level of a jail," Tanksley said. "I do believe we're probably the only county office in Whatcom County where our team members literally have sewage leaking on them at times, water leaks and occupied spaces. We have water leaks in spaces that have important documents, evidence, property." Tanksley expressed frustration with what he perceived as the Northwest Annex project being given artificial priority through the planning process. "It seems to me that over the last 20 years, when we talk about building a new sheriff's office, this idea is not only kicked down the road but it's shot put down the road over and over again." The sheriff's preference would be co-locating the new facility with the jail for operational efficiencies, though wetland constraints at the LaBounty site present challenges. "If we could put that either next door under one roof it just makes sense," he told council members. But Tanksley also raised questions about how the morgue became combined with his office project. "I'm not sure how the morgue got lumped in with the sheriff's office," he said, noting that the morgue isn't mentioned in the 2025-2031 Capital Improvement Program. Council members wrestled with the implications of both facilities being desperately needed but only one financially feasible in the near term. The county has already spent $1.5 million on Northwest Annex design and another $1.5 million relocating search and rescue functions from that site. Several council members questioned whether alternatives had been adequately explored. Council Member Ben Elenbaas challenged the $64 million cost for the Northwest Annex, asking why cheaper alternatives weren't presented. "If you're building a house you can't afford, you don't build a stick-built house or a custom-built home," Elenbaas said. "You're going to build a barn door or something. If we have to have a new building and we can't afford it, why is this the only option presented here?" Rob Ney explained that the $64 million includes significant upfront costs for three building pads, utility extensions, and the county's share of a new roundabout. The shell building concept would provide economy of scale benefits and quick future expansion capability. Council Member Tyler Byrd expressed support for making a decision rather than continued delays, arguing that postponement only worsens problems. But others preferred taking more time for careful analysis of such a significant financial commitment. County Executive Sidhu urged patience: "I would suggest that we are making a hundred million dollar decision and we are in a hurry to talk in five minutes and put all the input in. That's not an efficient way to do that." The discussion concluded with plans to continue the conversation at the April 15th committee meeting, giving members time to develop specific questions and information requests for staff. ## Charter Review and Legal Counsel Options Council Member Scanlon provided updates on several initiatives stemming from the Charter Review Commission's February resolution addressing concerns about county governance and transparency. A contract with Matrix Consulting just began to examine the county's HR policies, sexual harassment protocols, and the Public Works situation from 2024. The consultant will survey county staff, conduct interviews with departments and council members, and engage with unions representing county workers. Scanlon and Council Member Donovan, with assistance from Chair Galloway, are also developing code updates related to tort claims that could require council notification in situations where members were previously uninformed. Most significantly, Scanlon outlined options for the council to obtain independent legal counsel, separate from the Prosecuting Attorney's Office. King County has operated such a system for decades, with their council hiring a legal advisor through a state process requiring approval from the presiding superior court judge on a two-year basis. Pierce County takes a different approach, hiring a legal advisor who serves as parliamentarian during meetings and continuously monitors state law changes for necessary code updates. "The ways that King County and Pierce County have set things up is that those folks only work for the legislative branch of government," Scanlon explained. "They don't work for other branches of government." Council Member Elenbaas strongly supported exploring these options: "I see a massive need here and I would be in favor of whatever we decide. It's so apparent to me that the best legal advice for our body, our council, is not always the best legal advice for the executive's office." But Prosecuting Attorney Christopher Quinn cautioned that state law charges the county prosecutor with being legal counsel for the council, so any alternative arrangement would require prosecutorial concurrence. Council members discussed various hybrid models, such as retaining day-to-day legal services through the prosecutor's office while having independent counsel available for investigations or potential conflicts of interest. ## Petrogas Compliance: A Complex Resolution The committee heard extensive background on the Petrogas facility compliance issues that have generated headlines and legal proceedings over recent years. County Assessor Rebecca Xczar detailed the complex tax appeals and settlement process. Petrogas (now operating as ALA Energy under Altagas ownership) had purchased properties worth $364 million between 2014 and 2016 but successfully appealed their tax valuations for multiple years. The primary dispute centered on "intangibles" — particularly the wharf purchased for $122 million that Petrogas argued was worth only $10 million based on construction costs rather than operational value. The county ultimately reached a stipulated settlement that resulted in Petrogas paying $1.3 million in back taxes plus interest. Northwest Clean Air Agency Executive Director Mark Buford explained how his agency discovered substantial unpermitted air emissions at the facility in 2021. After Petrogas disclosed the violations and installed temporary controls, NWCAA spent months investigating what had changed to increase emissions from what had historically been a small vent. "We found that there had been a number of projects at the facility that had increased the capacity of the facility to receive and store and ship propane and butane," Buford said. Rail car traffic increased from about 1,000 per month before these projects to 16,000 per month afterward — despite SEPA documentation stating the projects would not increase rail operations. NWCAA ultimately reached a $4 million settlement with Petrogas, money that will be reinvested in community climate mitigation and resilience projects to be announced soon. Planning and Development Services Director Mark Personius updated the committee on the county's parallel compliance process. A March 2023 agreement requires the company to apply for permits and conduct new SEPA review for any unpermitted projects since 2016. The permitting process includes site-specific issues like critical area impacts, stormwater management, geohazard analysis, and septic system capacity. The SEPA review requires three additional studies: greenhouse gas emissions analysis, rail traffic data, and vessel traffic impact analysis focusing on potential effects on southern resident killer whales. Council Member Donovan noted the county's limited penalty authority compared to NWCAA, suggesting future code revisions might be needed to address ambiguities about facility expansion definitions. ## Water Rights and Growth Planning The session's final substantive discussion focused on proposed amendments to county-wide planning policies, particularly regarding tribal cultural resources and climate change requirements mandated by recent Growth Management Act updates. Chair Galloway proposed adding language requiring cities and counties to "demonstrate compliance with the GMA relating to surface and groundwater resources prior to allocation of population and employment for their respective UGAs." The goal was ensuring jurisdictions can accommodate planned growth given available water resources. The proposal sparked intense debate about Lynden's ongoing water rights disputes and whether such requirements would unfairly limit growth in communities still working through adjudication processes. Council Member Byrd argued the language was "either an anti-growth thing or an anti-Lynden specifically thing," noting that Lynden operates under a memorandum of understanding with the Department of Ecology and has developed innovative solutions like the Darigold plant that puts water back into the Nooksack River. "If they were to come up with another solution like that, they wouldn't be able to see the benefit in population growth from that solution until what, another 20 years go by and we bring this back up for the next planning and growth phase," Byrd said. Matt Aamot from Planning and Development Services explained that the city-county planner group had not recommended this language due to uncertainties about what Lynden would need to do before receiving population allocations, particularly given ongoing adjudication processes. Galloway defended the proposal as ensuring smart growth based on water availability, suggesting municipalities with excess water rights might be more appropriate locations for new development. But other council members worried about preventing creative solutions or unfairly constraining growth options. Council Member Scanlon ultimately moved to hold the planning policy amendments until the April 15th meeting to allow more time for city input and resolution of outstanding questions. ## Executive Session and Adjournment The meeting concluded with an unexpected executive session to discuss pending litigation involving personnel matters. Prosecuting Attorney Quinn requested the closed session, stating it was important for council to be informed immediately. Five council members entered executive session at 4:37 p.m., with Council Members Donovan and Buchanan leaving before that portion began. The session ended at 4:50 p.m. with Chair Galloway noting no action was expected from the discussion. The wide-ranging session highlighted the complexity of governing a border county facing international tensions, infrastructure needs, and growth pressures while navigating limited resources and competing priorities. Council members will continue several of these discussions at upcoming meetings, with major decisions on capital projects and planning policies still pending. As the county grapples with these challenges, the human cost of delayed decisions became clear through Sheriff Tanksley's descriptions of deteriorating working conditions and Dr. Trautman's data on economic disruption from border tensions. The path forward requires balancing urgent needs against financial realities while maintaining the collaborative relationships essential for effective regional governance.