Bellingham City Council Budget and Finance Committee

The Budget and Finance Committee approved the city's third and final budget adjustment for 2025, addressing nearly $5 million in departmental overruns and authorizing $1.1 million in interfund loans to prevent three city funds from ending the year in deficit positions. The committee unanimously approved Ordinance 24769 after making a minor amendment to increase the hearing examiner's allocation from $10,000 to $25,000. Finance Director Andrew Asbjornsen presented the year-end budget cleanup as necessary to cover potential overages across multiple departments, though he noted not all adjustments may ultimately be needed. The largest single adjustment was $1.625 million for police jail and home monitoring costs, reflecting dramatic increases in incarceration expenses that have grown from $2.8 million budgeted originally to a projected $4 million actual cost in 2025. Fire department received $1 million ($850,000 for salaries/wages and $150,000 for EMS response to Galbraith), while other departments received smaller allocations for utilities, staffing, and operational needs. The interfund loans target three struggling funds: Medic One ($300,000), Workers Compensation ($200,000), and Health Benefits ($600,000). Despite these challenges, Asbjornsen reported that increased revenues in business and occupation tax, investment income, and utility taxes, combined with departments not using their full budget authority, could reduce the city's projected deficit from the originally budgeted $4.5 million to approximately $2 million by year-end. This represents a significant improvement but still leaves the city facing ongoing structural budget challenges heading into 2026. #