Budget and Finance Committee (City of Bellingham City Council)

#### 2027 Budget Development Process (AB 24943) **What the issue is:** The City of Bellingham is entering the development phase of its 2027 biennial budget under conditions of structural fiscal stress. Revenues have not kept pace with expenditures over multiple budget cycles, and the administration has exhausted most of the conventional tools for closing budget gaps without reducing services or staff. The current budget cycle required a "small number of reductions in force," which the administration wants to avoid repeating. **What staff recommended:** Mayor Lund presented three budget priorities for the 2027 cycle, framed explicitly as preservation goals rather than investment goals: 1. **Public safety** — Maintain current levels of service for fire, EMS, and law enforcement as the city pursues the RFA. 2. **Housing supply** — Continue programs and policies supporting expansion of housing across the continuum of need, including the ongoing search for a third tiny home village site. 3. **Internal services and workforce** — Maintain investments in city systems, IT, and staff capacity that enable service delivery citywide. The administration also confirmed the budget timeline: departmental budgets due by mid-July; administration review in July and August; proposed 2027 budget delivered to Council in late September 2026. **The RFA as fiscal cornerstone:** Mayor Lund described the Regional Fire Authority as a potential structural realignment that would move fire and EMS funding off the general fund permanently, freeing up general fund revenue for all other city services. She noted the budget must be built in parallel — one scenario where the RFA passes a February special election, and one where it does not. The administration has not yet disclosed what the non-RFA scenario would require in terms of cuts. **Council Member Hammill's position:** Hammill expressed support for the RFA and framed the fiscal situation as creating urgency for public understanding of the ballot measure. He described the city's challenge as a structural one driven by growth in service demands and costs outpacing revenues, and said his concern lies specifically with maintaining "Bellingham urban levels of service." **Council Member Lilliquist's position:** L…

*Note: This meeting had no public comment period. All participants were elected officials or city staff.* **Mayor Kim Lund** — Presented the administration's budget framework. Framed the fiscal situation as persistent but manageable with RFA passage. Expressed strong commitment to housing programs and confirmed that housing delivery capacity would be protected in staffing decisions. **Deputy Longman** (first name not provided in source documents) — Emphasized the city's position review process as a successful cost-reduction tool. Indicated the administration is actively examining how to expand or evolve that process. **Council Member Lisa Anderson (Chair)** — Expressed shared ownership of difficult budget decisions; encouraged early and ongoing dialogue between council and the administration through September. Advocated for labor-management collaboration …

**Mayor Kim Lund, on the overall fiscal situation:** "There remain very few levers left to pull, and expenses continue to outpace our revenues." **Mayor Kim Lund, on the budget's core purpose:** "A budget at its core is a critical policy document and a reflection of the essential work that we uniquely own in this community. How the city spends its money is the purest representation of our priorities and our essential obligations to do public good." **Mayor Kim Lund, on the RFA's potential:**…

This meeting represents a formal state change in the following specific ways: 1. **The 2027 budget process is now officially open.** Prior to this meeting, budget development was in a preliminary, informal phase. This presentation marks the official kickoff, with a confirmed departmental submission deadline (mid-July) and a council delivery date (late September). 2. **Three budget preservation priorities are now on the record.** The administration has publicly articulated — for the first time in a formal committee setting — that the 2027 budget will prioritize (1) public safety levels of service, (2) housing programs and policies, and (3) internal services and workforce. These are not new investments; they are commitments to protect existing programs under fiscal pressure. 3. **The dual-scenario budget framework is now confirmed policy.** The administration publicly committed to preparing parallel budgets — one assuming RFA passage and one assuming RFA failure. This dual-track approach has not previously been articulated in this committee's record (…

--- ### Meeting Overview The City of Bellingham Budget and Finance Committee met on June 1, 2026, at 11:10 a.m. in Council Chambers. The committee, chaired by Councilmember Lisa Anderson and joined by Councilmembers Dan Hammill and Michael Lilliquist, heard a single presentation from Mayor Kim Lund and staff on the 2027 budget development process, priorities, and constraints (Agenda Item 24943). --- ### Key Terms and Concepts **Regional Fire Authority (RFA):** A special-purpose governmental entity that consolidates fire and emergency medical services under a dedicated funding structure, separate from a city's general fund. Bellingham is exploring an RFA as a long-term solution to its structural budget gap in public safety funding. Voters would decide whether to create one in a special election planned for February. **General Fund:** The primary operating fund of a city government, used to pay for day-to-day services such as police, fire, parks, library, and administration. Bellingham's general fund is under persistent pressure because expenses are growing faster than revenues. **Reduction in Force (RIF):** A formal process through which an employer eliminates staff positions, typically due to budget shortfalls. Mayor Lund noted that a small number of reductions in force were required to adopt the current-year budget. **Position Review Process:** A management strategy in which open or vacant positions are carefully evaluated before being refilled, allowing the city to reduce costs without formal layoffs. Deputy City Manager Marilyn Longman described this as a key cost-reduction tool the city will continue to use. **Continuum of Need (housing):** A framework that addresses housing across a full spectrum — from emergency shelter and transitional housing to affordable and market-rate permanent housing. Bellingham's budget priorities include preserving programs and policies that support housing supply across this continuum. **Tiny Home Village:** A form of transitional or low-cost housing consisting of small, individual dwelling units clustered on a shared site. Bellingham has operated two such villages and is pursuing a third; budget funds have been set aside and staff member Jason Cornelison is leading site identification. **Furlough:** A temporary, mandatory unpaid leave of absence used as an alternative to layoffs during budget shortfalls. Councilmember Anderson referenced furloughs from her private-sector experience as a potential tool to preserve city positions. **Structural Budget Imbalance:** A condition in which recurring expenses chronically exceed recurring revenues — not a one-time shortfall, but a built-in gap that persists year over year. Mayor Lund described this as Bellingham's ongoing challenge, with "very few levers left to pull." --- ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Lisa Anderson | Bellingham City Councilmember; Budget and Finance Committee Chair | | Dan Hammill | Bellingham City Councilmember; Budget and Finance Committee Member | | Michael Lilliquist | Bellingham City Councilmember; Budget and Finance Committee Member | | Hannah Stone | Bellingham City Councilmember (non-committee member who spoke during discussion) | | Kim Lund | Mayor, City of Bellingham; presented budget priorities | | Marilyn Longman | Deputy City Manager; spoke on position review strategy | | Jason Cornelison | Staff member in the Mayor's office; leading the search for a third tiny home village …