### Meeting Overview The Whatcom County Council held a Special Committee of the Whole meeting on September 16, 2025, to discuss the county's 2025-26 Mid-Biennium Budget Review. Deputy Executive Aly Pennucci led a comprehensive presentation on the county's structural budget challenges and proposed solutions for addressing increasing costs and revenue shortfalls. ### Key Terms and Concepts **Mid-Biennium Budget Review:** A required mid-cycle review of the county's two-year budget to address unexpected costs and make necessary adjustments for the second year of the biennium. **Structural Deficit:** When a government's ongoing expenses consistently exceed ongoing revenues, creating an unsustainable budget situation that worsens over time. **Fund Balance:** The county's financial reserves, essentially savings accounts for different county services that provide cushions during emergencies or revenue shortfalls. **Banked Capacity:** A provision that allows local governments to "bank" unused portions of their 1% annual property tax increase and use it in later years when needed. **Public Safety Sales Tax:** A new one-tenth of one percent sales tax authorized by the state legislature to help counties fund criminal justice and public safety services. **Unfunded Mandates:** Requirements imposed by state government that counties must implement but for which the state provides no funding. **Full-Time Equivalent (FTE):** A measurement of staffing that represents one full-time position, used in budgeting to track total workforce capacity. **Cost of Living Adjustments (COLAs):** Annual salary increases for employees to keep pace with inflation, currently under negotiation for 2026. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Kaylee Galloway | Council Chair | | Aly Pennucci | Deputy Executive | | Kayla Schott-Bresler | Deputy Executive | | Barry Buchanan | Council Member | | Todd Donovan | Council Member | | Ben Elenbaas | Council Member | | Jon Scanlon | Council Member | | Mark Stremler | Council Member | | Tyler Byrd | Council Member (absent) | ### Background Context Whatcom County, like many local governments across Washington State, is facing a significant budget crisis driven by inflation and state-imposed spending limits. Washington's 1% annual cap on property tax increases was enacted during a low-inflation era and now severely constrains counties' ability to keep up with rising costs. Between 2021 and 2024 alone, the county lost approximately $3.6 million in purchasing power in its general fund due to inflation. The situation is compounded by new unfunded mandates from the state, including higher public defense standards and increased jail health services requirements. Without intervention, the county's general fund would drop below its required 15% reserve threshold by 2028, and the road fund faces even more immediate crisis. This budget review represents a critical decision point where county leaders must balance essential services with fiscal sustainability, potentially affecting everything from road maintenance to public safety staffing. ### What Happened — The Short Version Deputy Executive Aly Pennucci presented a sobering analysis of the county's budget situation, showing that expenses are outpacing revenues across all major funds. The executive's office proposes cutting 13 vacant positions and freezing 9 others to save $2.8 million, while also considering implementing a new public safety sales tax that could generate $7 million annually. Key proposals include reducing health department general fund allocation by $1 million, potentially using community priority funds for one-time expenses, and increasing fees to achieve full cost recovery. The sheriff's office would face $1.25 million in budget constraints, primarily through position freezes rather than layoffs. Council members expressed interest in better long-term projections and emphasized the need for transparent public communication about these difficult decisions. The presentation revealed that even with these measures, the structural budget problem would continue requiring ongoing action for several years. ### What to Watch Next - September 23: Detailed road fund discussion and Public Works presentation - Upcoming meetings on EMS fund analysis and public safety tax implementation - Individual council member meetings with executive staff to discuss priorities - Public feedback period on 44-page budget decision document - Executive's final mid-biennium recommendations expected in coming weeks ---