# Candid Conversations on County Finances and Housing Strategy Chair Kaylee Galloway called this Committee of the Whole meeting to order at 2:30 PM on July 8, 2025, with all seven council members present in the hybrid format that has become standard practice. What followed over nearly two hours was an unusually frank discussion of the county's financial constraints and an in-depth exploration of housing policy that revealed both the complexity of local governance and the human stakes behind budget numbers. ## Water Service Franchises: Routine Foundation Work The meeting began with two straightforward but essential items—franchise agreements for the Percie Road Water Association and Point Roberts Water District #4. Andrew Hester from Public Works explained these were standard agreements allowing water associations to use county rights-of-way for service delivery. "This will just be an agreement to allow this particular Water Association to use county rights away in their particular area for the provision of water services," Hester explained. "So it's standard language, standard agreements." Council Member Mark Stremler noted the 25-year duration, learning that these agreements will return to a future council for renewal. "25 years from now, this council, or that council, that council will potentially see this again," Hester confirmed. The brevity of this discussion belied the importance of such infrastructure—the unglamorous but critical work of maintaining basic services that often goes unnoticed when it works well. ## The Mid-Biennium Budget Reality Check The heart of the afternoon belonged to Deputy Executive Aly Panucci's presentation on the mid-biennium budget review—a process that has become both more transparent and more sobering than in years past. Panucci began with familiar principles but delivered some uncomfortable truths about the county's financial position. "Because our costs are outpacing our annual revenue growth, we have to take both short and long term actions to try to stabilize their budget and continue to try to serve the community," she explained. The goal was clear: stay within the framework of the adopted 2026 budget by finding offsetting reductions for any new costs. ### The Numbers Tell a Story The most striking slide showed potential reductions needed across various funds. If the county approved all department requests for 2026, they would need to identify $6.7 million in offsetting cuts to stay balanced. The general fund alone would require $4.9 million in reductions. "I don't expect to have to find $4.9 million of general fund reductions, because some of the asks, you know, we're still reviewing," Panucci clarified, but the magnitude of the challenge was clear. Council Member Todd Donovan pressed on a familiar frustration—the volatility of EMS fund revenues, particularly Ground Emergency Medical Transportation (GEMT) reimbursements. "It's like, we're not really worried about ending an EMS fund. We're assuming that that 1.9 million of those funds are going to be around in 2026 but I'm also hearing those might just completely go away." ### Executive Sidhu's Blunt Assessment County Executive Satpal Sidhu delivered perhaps the most candid assessment of the county's situation heard in a public meeting. "I think the biggest thing is the revenue side is very unpredictable, especially from the state and federal," he said, before addressing an often-avoided topic directly. "The second thing is we Whatcom County, like every other counties surrounding us, we are in stagnant state. We should admit that that there is no revenue growth happening normally, two to 3% growth happens. It's not we not seeing it, and there's no reasons to see it happening in next year. Also, no construction going on, no big projects going on. No no big jobs or any other thing happening. That's what creates revenue for the local government." Sidhu then turned to what he described as difficult but necessary conversations about major budget drivers: "The EMS. Our EMS is a lavish program. We should all admit that. We should all talk about it. We get quiet by this idea people going to start dying in the ambulances. I'm saying openly, because this is something we avoid talking about it, because that's the argument is used. You cut anything. That's what will happen." He continued: "Same thing is, is public safety. You talk about 60, more than 60% of our county expenses are public safety. Means our courts, our judiciary, our sheriffs, they need to get some we I think council should start thinking about that, how we can improve upon that bring some savings to that. We as a county executive office have very limited ability to do that. Council has much bigger ability to do that." ### Council's Response: Appreciation and Anxiety Council members acknowledged the unprecedented transparency while grappling with the magnitude of their responsibility. Council Member Ben Elenbaas pressed for detailed breakdowns of cost assumptions, expressing frustration with high-level summaries that make informed decisions difficult. "It absolutely matters," Elenbaas said about understanding the details behind projections. "We have to understand what limitations that the money might have and what the drivers are... It's easy for you to say we have more control, but we don't have any of that information. We only have what you give us." Council Member Donovan offered a counterpoint: "I think this is the most transparent budget process we've had since I've been on council." Council Member Barry Buchanan echoed the sentiment: "I appreciate this process. I think you guys are really responding to a lot of the concerns that Council's had over the years." ## Housing: Strategy Amid Scarcity The final hour focused on the county's five-year homeless housing plan, with Housing Program staff presenting a comprehensive strategy involving 41 different approaches. Janie Oliphant from Health and Community Services walked council through a detailed framework that has emerged from extensive community engagement. ### The Scale of Need The housing team's budget overview showed approximately $18 million annually flowing through various intervention types—rapid rehousing, emergency shelter, prevention, permanent supportive housing, and transitional housing. Behind these categories lie individual stories of housing instability and the complex web of services attempting to address them. Council Member Mark Stremler cut to a fundamental question: if the county invests $90 million over five years, "How are we going to determine if that $90 million is reducing what we're after?" ### Performance Indicators and Point-in-Time Counts The response revealed both the sophistication and limitations of current measurement approaches. The 2025 point-in-time count would show a slight decrease overall but an increase in unsheltered homelessness. Staff emphasized performance indicators for specific programs—like expecting 80% of rapid rehousing participants to exit into permanent housing—rather than relying solely on overall homelessness numbers. "When we think about sort of how to measure how well our homeless housing system is doing, I recommend thinking about the performance indicators that are forthcoming in the plan," Oliphant explained, acknowledging that larger forces like housing affordability crises operate beyond local control. ### Addressing Uncomfortable Questions Council Member Elenbaas raised the connection between addiction, mental health, and homelessness—topics that, as she noted, can be "taboo to talk about" in homeless services circles. "You can argue that addiction is keeping people homeless? Is there any flexibility in these dollars to help you provide people with what they need while you're providing housing?" The response acknowledged both the reality and the limitations. "There is flexibility with the dollars," Oliphant confirmed, explaining that some contracts include behavioral health components, but noted the broader challenge: "There are not enough behavioral health resources to address the needs of people in housing programs." ### Creative Solutions and Practical Constraints Elenbaas suggested using vacant vacation rentals as winter shelter, an idea staff found intriguing but complicated by support service requirements. "We don't ever want to put an unhoused person or family into housing that with no supports there in place, without case management," Chris D'Onofrio explained. The conversation revealed a central tension in housing policy: the desire for innovative approaches constrained by funding restrictions, capacity limitations, and the need to provide comprehensive support services rather than housing alone. ## Looking Ahead: Transparency with Consequences As the meeting concluded at 4:29 PM, council members acknowledged they faced a more demanding budget process ahead. Chair Galloway noted: "I think we need to allow for more work sessions, especially when we get into the two year cycle. But I think this year again, it's a test flight. It gives us some practice on how to engage." The day's discussions represented something relatively rare in local government—honest acknowledgment of financial constraints combined with detailed exploration of policy options. Executive Sidhu's frank assessment of revenue limitations, Panucci's transparent presentation of budget gaps, and the housing team's comprehensive strategy overview created an unusually complete picture of both challenges and possibilities. Yet transparency brings its own pressures. With clearer information comes greater responsibility for difficult decisions. The council now possesses unprecedented detail about service costs, performance measures, and competing priorities. The question becomes whether this information will enable more strategic decision-making or simply make the inevitable trade-offs more painful to contemplate. The August 6 meeting will bring preliminary review of council office budget requests, another step in what all acknowledged will be a more intensive budget process than usual. With $6.7 million in potential cuts looming and housing needs continuing to grow, the fall budget discussions promise to test both the new transparency and the council's appetite for the hard choices that honest accounting reveals.