Name: Bellingham City Council - Budget and Finance Committee meeting, Jun 1, 2026
Start: 2026-06-01
End: 2026-06-01
Location: City of Bellingham

City Council - Budget and Finance Committee

Mon, June 1, 2026

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City Council Budget and Finance Committee — June 1, 2026

This was a workshop-style committee meeting chaired by Councilmember Lisa Anderson, with Councilmembers Dan Hammill and Michael Lilliquist also present. Council President Hannah Stone also participated. The sole agenda item was a presentation kicking off the 2027 budget development process. No binding votes were taken.

2027 Budget Development Process Overview

Mayor Kim Lund opened the presentation by outlining the timeline and constraints facing the city's next budget cycle. Departments have until mid-July to submit their budget proposals, with Mayor Lund planning to present a proposed 2027 budget to the full council in late September.

The Mayor was direct about the financial picture: the city's structural budget problem persists. Efforts over the last two budget cycles to limit spending growth and redirect revenues to the general fund have successfully preserved existing service levels, but expenses continue to outpace revenues and very few cost-reduction levers remain. This year's adopted budget required a small number of reductions in force — layoffs the Mayor said she wants to avoid repeating.

A significant new element this cycle is the potential creation of a Regional Fire Authority (RFA). The city completed a public safety level-of-service needs assessment last year, which confirmed the need for additional dedicated revenue to sustain high-quality fire, EMS, and law enforcement services. The RFA — which would go before voters in a February special election — is being explored as a structural, long-term funding solution for public safety. Mayor Lund emphasized that the budget process will need to plan for two scenarios simultaneously: a future with an RFA, and a future without one.

Given these constraints, the 2027 budget will not identify new investment priorities. Instead, it will focus on preserving three areas: (1) public safety and current service levels as the city prepares for a potential RFA; (2) programs and policies supporting housing supply across the continuum of need; and (3) internal services, systems, and staffing that allow the city to deliver services effectively.

Council Discussion

Councilmember Hammill framed the RFA as urgent, noting that the trajectory of expenses versus revenues makes a durable funding solution critical. He expressed concern about what service levels would look like if the RFA does not pass and pledged to support public education efforts around the measure.

Councilmember Lilliquist focused on the housing priority, asking for assurance that the city's search for a third tiny home site remains active. Mayor Lund confirmed that funding has been set aside, that staff member Jason Cornelison is leading the effort, and that several site leads are being pursued — though she cautioned that many factors are outside the city's control. Lilliquist also noted that significant zoning reforms enacted over the past year are still working their way through the market, and asked whether additional housing-related work would continue even under budget pressure. The Mayor indicated that housing delivery capacity would be a key consideration in any future staffing trade-offs.

Council President Stone urged council members to communicate their priorities and, importantly, their tolerance for cuts to the Mayor's office sooner rather than later — rather than waiting for the September proposal. She acknowledged the political difficulty of naming lower-priority areas but said shared responsibility for difficult decisions requires engaging early. She also noted that with the RFA going before voters in February, the council should ideally identify potential cuts or staff reductions ahead of time so affected employees have time to prepare, even if the hope is those cuts never materialize.

Councilmember Anderson shared that council members had already met individually with the Mayor to discuss priorities and encouraged those conversations to continue through September. She raised the idea of involving unions and employees in identifying solutions if deeper cuts become necessary — drawing on her own professional experience where workforce-driven furlough arrangements temporarily preserved jobs during downturns. She emphasized that retaining employees is itself a cost-savings strategy given the expense of training and onboarding, and expressed hope that a successful RFA or an improving economy could allow the city to navigate the next few years without significant layoffs.

A staff member identified as "Marilyn" (likely Deputy Mayor or a senior budget official) noted that the city's position vacancy review process — carefully evaluating whether open positions need to be filled — has been an effective cost-control tool and will continue to be used proactively.

Key Takeaways

The city's structural budget deficit continues, with expenses outpacing revenues and few remaining options short of service cuts or new revenue. The 2027 budget will focus on preserving current service levels rather than new investments.

The Regional Fire Authority is the central financial strategy. The budget must be built for both an RFA and a non-RFA future, as voters will decide in a February special election. Multiple council members expressed urgency about the RFA's success.

Layoffs are a real possibility if the RFA fails or the deficit worsens. The city is leaning on vacancy management as a first tool, but deeper cuts may follow. Council members want early transparency about what those might look like.

Housing programs remain a stated priority, including the search for a third tiny home village site and continuation of recent zoning reforms — though tight budgets mean housing-related staffing could face trade-offs.

Council members called for early, candid engagement on budget priorities and potential cuts, rather than waiting for the Mayor's September proposal.

AI-generated summary from voice-to-text transcript. Not the official record. Verify important details with the source documents linked above.

What happened at this meeting

A presentation on the 2027 budget development process

# 2027 Budget Development Process Summary

Mayor Kim Lund presented the 2027 budget development process, with department budget submissions due mid-July for a proposed budget presentation to council in late September, while emphasizing that ongoing budget challenges require a Regional Fire Authority (RFA) as a recommended funding solution to maintain public safety and enable investments across departments. Mayor Lund confirmed that budget priorities include preserving public safety, maintaining current service levels, supporting housing supply expansion (including a third tiny home project with dedicated funds, as requested by Councilmember Liliquist), and maintaining internal systems. Mayor London and budget staff outlined strategies for managing potential budget cuts through a careful position review process to minimize layoffs, while Councilmember Stone stressed the need for council to identify priorities and potential cuts early, and Councilmember Hammel emphasized the urgency of getting the RFA passed and understood by the public. Other council members highlighted the importance of involving unions and employees in developing solutions such as furloughs to preserve positions rather than implementing layoffs.

Agenda items (1)

Procedural (1)

24943ProceduralA presentation on the 2027 budget development process

City staff will explain how the 2027 budget will be created, including the timeline, process, and opportunities for public input on spending priorities.

What happened

Verbatim transcript available

50 transcript segments indexed

City of Bellingham Budget and Finance Committee minutes June 1, 2026, 11:20 AM Chair: Lisa Anderson Phone: 360-778-8200 Members: Daniel Hammill, Michael Lilliquist Email: ccmail@cob.org Web: cob.org/council City Council committee meetings Standing committee members receive reports and information, ask questions, and vote on a recommended action for consideration by the full Council at the regular meeting.

Welcome back to Bellingham City Council Committee meetings. The next committee is budget and finance and that is chaired by Councilmember Anderson, so I'll turn it over to her at this time. >> Thank you.

There is no public comment period during committee sessions. Call to order and roll call Council President Stone called the meeting to order at 11:20 a.m. Present: Committee Chair Lisa Anderson, Fifth Ward Committee Member Daniel Hammill, Third Ward Committee Member Michael Lilliquist, Sixth Ward Budget and Finance 24943 1.

Um, we have one item before us today, city agenda item 2493, excuse me, 24943. And joining me today, um, on committee is Councilmember Hammel and Lilliquist. Um, today we're going to be discussing our budget priorities and constraints, um, and Mayor Kim Lund and staff will be doing the presentation.

Um, so turn them over to Mayor Lund. >> Thank you, Councilmember Anderson. Uh, good morning to councils. So, the memo in your packet today, along with some of the preliminary budget prioritization meetings that we had with some of you, is kicking off the 2027 budget process.

A presentation on the 2027 budget development process Summary: Mayor Kim Lund, and Forrest Longman, Deputy Administrator, presented the 2027 budget priorities and constraints. The budget process prioritizes: • Public safety – maintaining current levels of service as the City continues to plan for a potential Regional Fire Authority.

I've asked that each department have until mid-July to develop their budgets for consideration in July and August. And my intention is to present a proposed 2027 budget to council in late September. The budget challenge that we have faced the last several years, unfortunately, remains.

• Programs and policies that support the expansion of housing supply across the continuum of need. • Continued support for the internal services, systems and people that allow the City to effectively and efficiently deliver services to the public Council Members discussed the forthcoming 2027 budget and asked questions.

Our concerted efforts over the last two budgets to limit growth and create and divert revenues to the general fund have been successful in allowing us to generally retain our levels of service. However, there remain very few levers left to pull, and expenses continue to outpace our revenues.

Over the course of last year, we completed a public safety level of service needs assessment to identify the resources and associated costs necessary to maintain high quality fire, EMS, and law enforcement services.

That process confirmed the need for additional revenues to maintain quality public safety services, and we recommended, with council's confirmation, exploring a regional fire authority, or an RFA, as a durable funding solution.

Creating an RFA has the potential to structurally realign the city and put us on a new financial trajectory, one that is stable and provides the means to make investments across the city. It would enable the city to provide services to the These services our community expects across all departments, including library, IT, to parks, while also importantly providing sufficient dedicated funding for fire protection and emergency medical services.

As our financial constraints on the general fund remain, this memo does not identify priority areas for new investment. This budget cycle will seek to minimize impacts to revenue shortfalls using the city's adopted financial policies as a guide for our decision-making.

Additionally, as we navigate this planning process, we will have to prepare budgets that imagine a future built with and without an RFA. The budget process will prioritize preserving the following, including public safety, maintaining our current levels of service as we plan for a potential RFA.

We will maintain our programs and policies that support the expansion of housing supply across the continuum of need, and we are seeking to maintain continued support for our internal services, systems, and investments in the people that allow the city to effectively and efficiently deliver services to the public.

As always, 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.

I seek your feedback on these priorities and I'm looking forward to working with council in the months ahead to make sure that our budget reflects our community's needs while also taking the critical action to ensure continued fiscal health for the city.

And I'm joined here today by Deputy Longman and we're happy to answer any questions or concerns. >> Any questions, committee? [clears throat] Um, Councilmember Hammel. >> Yeah, thanks, uh, Mayor and the team for putting this together.

I think it's important to, um, set the stage for the RFA. And also for situation, as you mentioned, Mayor, that, um, um, is absent. Uh, where an RFA is not, um, on the table should it not pass. Um, so I'm that's where my concerns lie.

I have with levels of service provision that we are that we have traditionally provided Bellingham urban levels of service provision, the growth of our our community, and the the tension of how to how to figure out a a pathway forward, um, should we continue on the trajectory that we've been going on for years and years.

It's a it's a it's not really a question, it's more of a, um, an observation and a, um, for me it creates a sense of urgency on getting the RFA, uh, passed and for it to be fully understood by the public who'll be voting on it.

So, I'm very [clears throat] supportive and and and whatever ways I can help uh with this process, I will continue to do that. >> Councilmember Liliquist. >> Yeah, first of all, uh Mayor, thank you. I think you expressed it well that the the budget pressures continue.

Um I would like to ask about the third bullet point cuz it's it's so important to myself and the community having to do with a programs and policies to support expansion of housing supply across the continuum of need.

Uh I'm glad to see that will be continuing work uh in part because we have dedicated funds. And at this point, we still have federal grant programs that our providers can apply for. Um can I get some reassurance that uh one part of your housing initiative, the looking for a third tiny home, I believe we've set aside uh possible budget for that.

Um can I be assured that that is included in in part of that bullet as as work that will continue? >> There are some dollars uh set aside for that this year. Um yeah, it remains a a very high priority in the Mayor's office.

We're working on it as we speak. Um uh Jason Cornelison in our office is taking the lead on that, and we're working on, you know, the struggle is always to find sites, and uh but we've we've got a few leads, um and we continue to work hard on it.

We're hopeful we will have one this year. Um but couched with, you know, lots can happen, so. Yeah. >> Um also also on that, um what other programs and policies in particular might we highlight that would continue?

It seems to me that we enacted significant zoning reforms over the last year. We're kind of waiting to see how they play out, to see what the takers are, to see what the market does. Um So, we're kind of waiting on on those to pay off.

Are there additional things that will continue even in in budget uh climate. >> I think part of that, too, is both making sure we're prioritizing investments in the programs and policies, but also if, you know, with very few levers left to pull, we're making trade-off analysis in a worst-case scenario in the future if the RFA, you know, doesn't succeed or um we continue to be in this cycle where the reality is um to adopt this year's budget, we had to do a small number of reductions in force, and we want to avoid that.

But if we find ourselves in the future in that scenario, um where we're considering those, we'd want to make sure that, you know, being able to deliver housing for our community would be part of the way that we're considering um any any future changes in staffing levels.

>> Thank you. >> Are there any other questions or comments from council members? Uh Councilmember Stone. >> Yeah, I just I guess it's a question not so much to Mayor London but to the rest of the council.

Just wanting to make sure that earlier rather than later if there are considerations or priorities from council, you know, to make sure that those are articulated to the mayor and and her team going forward.

Um cuz what I'm thinking about is yes, the reality that there will likely be cuts. And so if we're thinking about the larger budget, yes, articulating things that are priorities and things we want to um protect.

And I think it's even harder though and maybe not um something people want to venture into, you know, politically, but I think it's it's the reality of, you know, recognizing as well trying to identify are there areas that can be cut or that are, you know, it's hard to say lower priorities.

I mean, everything's a priority, but it really is that struggle of how to how to balance, you know, that budget. So, I understand that this is work that your team will be doing and, you know, bringing forward at the end of September a a proposal, um but whether it's in, you know, open forum here or um through other conversations to to try and grapple with that because although we're usually considering and then, um you know, considering for adoption the budget that the mayor has brought forward, I feel some shared responsibility in, right, in grappling with with those difficult decisions.

Um and so, I've shared with Marilyn that obviously nobody wants to think about, you know, potential layoffs and cuts to to staffing, um but at the same time part of my perspective in thinking about, you know, policies and how we approach the budget is we don't know what the outcome of the RFA is going to be, right?

That going before the voters in a special election in in February, um is thinking about my preference would be to identify early, right, areas for potential, um cuts or staffing reductions. One, so that individuals know what to expect and can try to prepare accordingly, right?

If you're thinking about what that may look like, um but we're obviously hoping not to to have to go down that road, but I think, you know, to me more information earlier is is better, um even though that might not, you know, that may create additional tensions in other in other spaces, but just wanting to acknowledge how challenging this yeah, this process will will be collectively.

So, thanks. >> I'm Marilyn. I just wanted to emphasize that, you know, our careful, um position review process has been very successful as a cost reduction strategy and we'll continue to lean in to that to try and minimize if we find ourselves at that position where we're making difficult trade-offs um, that we will have leaned in heavily to that as vacancies arise in the city.

How do we analyze carefully whether that's an essential position to be filled or not. And so we're having conversations currently about how to continue to lean in on that strategy and and potentially evolve it as a tool right now.

>> I'm going to share. Thank you. Um, we um, as council had the opportunity to meet with mayor and some select team members just sharing with the public that um, in advance to be able to share what our priorities are and you know, kind of for me it was like where to hold the line where the last cuts would go based on those priorities.

So we're we've been given that opportunity. I'd like to encourage people to continue those conversations um, through September. One of the things that I had asked and um, I don't know if it's going to be possible and it's it's probably a lot more math and work but um, in my day job when we were looking at cuts um, unions were and employees were involved and so a lot of us decided to increase our furloughs in order to save positions and um, and it's a little bit more work when you know, like okay, we have to save 1.3 million.

How are we going to do that? But to make sure um, obviously unions are involved but um, I'm hoping involved in the way to be able to look at solutions too. So um, if the math works out to save jobs, um, I know in my day job we were able to save some jobs, but unfortunately that only happened for 1 to 2 years and we continue to do cuts.

But, you know, gave opportunity for people to be able to look for other employment and the hope was economy would turn around before we really had to come through and and and do a larger slice. Um, unfortunately the economy didn't turn around, but my hope is in the next couple of years our economy will turn around.

So, one of my priorities is to save as many positions as possible cuz with those positions are career, retirement, medical, there's a lot of things in consideration for that. So, just kind of making that a public statement that if we're really looking at those cuts, it's nice to not fill vacant positions for a period of time if we can get by with that, but if we have to do the deeper cuts, um, to involve our workforce to be able to look at, um, any solutions or ideas that they might be able to negotiate to preserve those jobs would be important to me.

So, um, and I know it's important to administration too. So, it's not just one value. I think it's a shared value cuz our employees are our best asset here, um, for the city and if we can retain them overall, it's cost savings because the training and the onboarding and everything that goes with jobs.

Um, if we can hopefully steward this for a couple more years, hopefully the RFA, um, you know, will be successful, but if not, we got to plan what's going to look like after that. Um, any other comments or things to share?

Otherwise, um, that will be the end of committee. I'll turn it back to Council President. >> Thank you very much. Um, so that marking the end of the budget and finance committee, we will adjourn for the um, midday lunch break and we will reconvene this afternoon with public health, safety, justice, and equity at 1:00 p.m.