### Meeting Overview The Budget and Finance Committee met on July 7, 2025, to review and approve major utility rate increases for Bellingham's water, sewer, and stormwater services. The committee unanimously approved four ordinances implementing significant rate increases beginning January 2026, along with an expanded customer assistance program for low-income households. ### Key Terms and Concepts **Customer Assistance Program (CAP):** A utility bill discount program for low-income households, being expanded from seniors/disabled only to all qualifying low-income residents earning up to 80% of area median income. **Area Median Income (AMI):** The midpoint income for the Bellingham metropolitan area as published by the U.S. Department of Housing and Urban Development, used to determine eligibility for assistance programs. **System Development Charges:** Fees paid by new development to help cover the cost of infrastructure improvements needed to serve new growth. **Water System Plan:** A state-mandated document assessing current infrastructure, projecting future demands, and outlining necessary capital improvements to meet Department of Health regulations. **King Mountain Storage Project:** A proposed 5 million gallon water storage facility consisting of two tanks to address water storage deficiencies and support growth. **PFAS:** Per- and polyfluoroalkyl substances, "forever chemicals" that forced cancellation of a planned $259 million wastewater solids handling project in 2021. **Post Point Resource Recovery Plant:** Bellingham's wastewater treatment facility that processes sewage and currently incinerates solids. **ccf:** One hundred cubic feet, the unit used to measure water consumption for billing purposes. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Lisa Anderson | Committee Chair, Fifth Ward Council Member | | Daniel Hammill | Committee Member, Third Ward Council Member | | Michael Lilliquist | Committee Member, Sixth Ward Council Member | | Kim Lund | Mayor (attending) | | Mike Olinger | Public Works Deputy Director | | Mike Wilson | Assistant Director of Engineering | | Tage Aaker | Senior Project Manager at FCS consulting firm | | Forrest Longman | Deputy Administrator | | Andy Asbjornsen | Finance Director | ### Background Context Bellingham's utility infrastructure is aging, with much of it built in the 1920s and 1930s. The city has been investing only $2-3 million annually in water pipe replacement but needs to accelerate to $13 million per year. A critical example is the 100-year-old wooden pipe that is the sole connection between Lake Whatcom reservoir and the city's water treatment plant. Delaying infrastructure improvements makes them exponentially more expensive – a wastewater solids handling project that would have cost $43 million in 2012 is now estimated at $720 million by 2039. The city is balancing maintenance of existing infrastructure with accommodating growth, while trying to minimize rate shock for residents already facing housing affordability challenges. ### What Happened — The Short Version Staff presented comprehensive utility rate increases: 13% combined increases in both 2026 and 2027, followed by 9.7% in 2028. For a typical single-family customer, monthly bills will rise from $135 today to $189 by 2028. Water rates will increase 12% annually in 2026-2027, then 11% in 2028. Sewer rates will jump 19% in both 2026 and 2027, then 12% in 2028. Stormwater rates will see only inflationary adjustments plus small amounts to fund the expanded assistance program. The committee also approved expanding the customer assistance program from just seniors and disabled residents to all low-income households earning up to 80% of area median income, with discount tiers of 25%, 50%, and 75% based on income level. All four ordinances passed unanimously and move to full council. ### What to Watch Next - Full City Council vote on all four ordinances expected July 21, 2025 - Community communications campaign starting in August 2025 - Customer assistance program enrollment begins October 2025 - New rates take effect January 1, 2026 - Water System Plan final approval expected November 2025 at earliest ---