City Council - Special Meeting

Mon, October 5, 2026

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Bellingham City Council (Committee of the Whole) — Special Meeting, October 5, 2026

This was the first of three planned budget work sessions, convening the full council as a committee of the whole in the Mayor's boardroom. No binding votes were taken. Finance Director Andy Asmerson, Mayor Kim Lund, and department heads presented preliminary 2027 budget overviews for internal/central services departments. Council Member Dan Hammill participated remotely; all others were present in person.

Budget Overview and Structural Changes

Finance Director Andy Asmerson opened by orienting the council to the 2027 budget book. The total proposed budget is approximately $542.8 million — nearly identical to the 2026 proposed budget of $542.9 million, a difference of only about $100,000.

Two significant structural changes were introduced:

New Central Services Fund (Fund 580): Finance, Human Resources, and the civil side of the Legal Department are being consolidated out of the General Fund into a new internal service fund, alongside the new Communications Department and the existing IT internal service fund. The total cost of this fund is approximately $10.2 million, of which the General Fund will contribute roughly $3.25 million; the remaining approximately $7 million is charged back to other funds (utilities, Greenways, etc.) for services they consume. Previously, those inter-fund charges were run through the General Fund, making them less visible. The mayor and finance director noted this is a more transparent accounting approach — one councilmember compared the old method to revenues being "laundered through the General Fund." IT was moved to this structure several years ago; this consolidates the remaining central services into the same model.

REIT Fund Consolidation: Two REIT funds (141 and 142) were merged into one, simplifying tracking of real estate excise tax projects.

Council members pressed on the General Fund reserve picture. Asmerson noted the current budget assumes the worst-case scenario — that all 2026 authorized expenditures are spent — giving an estimated beginning General Fund reserve of about $15 million. Through August, actual spending has been slightly favorable. The city's target is an emergency reserve floor of 18% of operating expenses. The city has not yet dipped below that threshold. However, the budget as structured shows a projected $8 million gap for 2026, which staff expect to be smaller given actual trends.

Mayor Lund was direct: the city is counting heavily on November's Regional Fire Authority (RFA) ballot measure to relieve ongoing structural pressure. If it fails, she indicated the city will begin a careful deliberation process on cuts, with a likely decision point by mid-2027. She declined to release detailed reduction scenarios publicly before the election, citing concern about undue alarm to city staff. Council members Huthman and Lilliquist pushed for more transparency about the "two-budget" reality, with Lilliquist noting it is "more than a hypothetical — it's a genuine possibility."

Finance Department

Asmerson described the Finance Department budget as largely status quo. Notable changes:

Hearing Examiner reorganization: The Hearing Examiner is no longer identified as a standalone department. The half-time support staff position is being moved into the Finance Department (under the City Clerk function), and the contracted hearing examiner costs are moving to Non-Departmental. The rationale: the position lacked a proper chain of command (it had been reporting to the Mayor's office, which staff found inappropriate) and the hearing examiner role is primarily a contracted external service. Council member Lilliquist questioned whether Finance was a logical home given the examiner's quasi-judicial function and asked whether the Council's own budget might be more appropriate; staff explained it mirrors how most other cities handle it (through the clerk's office). Council members requested that the examiner's costs remain easily identifiable, and Asmerson confirmed a "group activity" code will allow that.

Utility Billing System: A new utility billing system is targeted to go live in Q1 2027.

Contracts/Point-of-Sale Systems: Work continues on digital signature-capable contract software and a modernized point-of-sale system.

Two FTE positions in Finance remain unfilled as a budget-saving measure.

Legal Department

City Attorney (identified in the transcript as "James") presented a flat budget with no new staff, programs, or equipment. Key points:

The civil division moves to the Central Services Fund; the criminal prosecution division remains in the General Fund.

The city expects nearly 3,000 unique case filings in Bellingham Municipal Court in 2026, with a similar number anticipated in 2027, including DUIs, domestic violence, assaults, and other criminal matters.

A fourth prosecutor position, vacant since April, is being filled this month.

Public defense costs are rising sharply and will continue to rise as the state Supreme Court's new public defender caseload standards take effect. Council member Lilliquist asked for a 10-year trend breakdown separating civil and criminal cost trajectories; staff committed to providing that data. Council member Huthman flagged public defense cost growth as a potential subject for state legislative lobbying.

Human Resources Department

HR Director Deborah Dana reported a status-quo budget that retains last year's staffing reductions. Key highlights:

Workday HCMS Implementation: The city is deep into implementing Workday, a modern human capital management system, replacing the outdated "Pyline" system. The platform handles payroll, timekeeping, onboarding, benefits, and HR functions. Staff have been working seven-to-eight-hour days dedicated to the project on top of regular duties. Implementation is targeted for mid-December 2026. Temporary positions added to support the project will conclude around year-end. A post-implementation support RFP is being prepared (the IT director confirmed budget exists for an ongoing consultant in 2027–2029).

Active labor negotiations: Five bargaining agreements are currently being negotiated (police guild, Whatcom Dispatchers Guild, IAFF Locals 106 and 10, and Teamsters Local 231), with the goal of having successor agreements effective January 1, 2027.

Healthcare cost analyst: A specialized position to analyze healthcare costs and identify containment strategies was posted, failed to attract suitable candidates, and has been re-posted with a refined job description. HR hopes to hire by late November.

Salary reclassifications: Three existing HR positions are being reclassified upward to reflect expanded skills developed during Workday implementation.

Council members noted that healthcare costs — not staffing — are the primary driver of the HR budget's growth, and emphasized the importance of filling the analyst position.

Information Technology Department

IT Director Don Berdick presented a budget focused on maintaining core services, infrastructure, and software. Notable items:

Software costs continue to rise at double-digit rates (Microsoft contract alone is nearly $1 million), offsetting hardware savings from moving to a "run to failure" replacement model.

Workday operationalization: In 2027, workday moves from "project" to "operational" status. The IT budget includes approximately $200,000 for HR staff reimbursement and funds for an ongoing consultant to support system enhancements post-launch.

Cybersecurity: The city has one dedicated security analyst but has deliberately distributed security responsibility across all technical staff. Berdick noted that within state CISO peer networks, the consensus has shifted to "not if, but when" for a cyberattack. A completed SCADA cybersecurity audit of water and sewer treatment plants was cited as a recent accomplishment. A city-wide incident response plan is in place; a CJIS (criminal justice information systems) audit is planned in collaboration with the police department.

Infrastructure: A new mirrored server environment at the Pacific Operations Center (POC) building — designed to withstand significant earthquakes — now allows the city to switch data centers within minutes. Other projects include migrating from Mitel to Teams Phone, completing GIS modernization, and a dedicated cloud pipeline to Microsoft Azure.

Accessibility compliance: Work continues toward federal web accessibility standards, with a deadline now extended to April 2027.

Communications Department (New)

Communications Director Melissa (last name unclear in transcript) presented the budget for this newly created department. Key points:

Not entirely new: The department consolidates existing communications and community engagement staff from the Mayor's Office, Planning, and IT (BTV/public access television), changing their reporting relationships rather than creating new positions.

Public Works communications staff are *not* included in the new department at this time; a dotted-line relationship will continue while the administration evaluates integration over the coming year.

BTV: Staff acknowledged a secular decline in traditional cable television viewership and plan to do strategic planning in 2027 around BTV's future direction, including its shifting role toward videography, YouTube, and social media storytelling, and the implications of declining PEG (public, educational, and government) funding.

2027 priorities: Emergency communications planning (assisted by a Coast Guard retiree intern), digital asset management system, analytics and metrics development, and preparatory work for a 2028 website content management system migration.

Planning and Community Development Department

Director Blake (last name unclear) presented alongside staff including housing, long-range planning, and development services managers. Key points:

Housing expenditures: The budget shows a notable spike in community development spending in 2026–2027 due to approximately $11 million in committed expenditures for two affordable housing projects: the Unity project (Unity and Flora streets) and an Old Town project.

Development Services Fund strain: Permit volumes have declined (currently in the high 300s of housing starts), reducing fee revenues. The fund has been drawing down reserves to maintain service levels — consistent with executive orders prioritizing responsiveness — but that is no longer sustainable. Staff plan a fee study and cost-recovery system development as top 2027 priorities.

Code reform workload: The department faces a heavy legislative mandate backlog: revisions to residential land use regulations, a critical areas ordinance update, and converting Title 20 into a unified development code. Lilliquist pressed on whether additional contract resources could accelerate this work; Mayor Lund acknowledged the city is "at the bone" after a 40-position reduction, and Blake emphasized needing to "catch our breath" from years of state-imposed unfunded mandates.

Affordable Housing Levy renewal is on the horizon; staff will begin preparatory work.

Other initiatives: Landlord-tenant advisory work group (monthly meetings, report due ~September 2027); industrial land supply study with the port and county; and an annexation/UGA strategy, pending outcomes of a Growth Management Hearings Board proceeding expected in November.

Mayor's Office

Mayor Lund described a staff reorganization driven by budget constraints:

Two communications positions move to the new Communications Department.

With Deputy Mayor Janice's departure, the city is shifting from a two-deputy to a one-deputy model.

A long-frozen "climate analyst" position is being reconfigured into an Executive Program Manager to support mayoral priorities generally, and has not yet been filled.

An Urban Transformation Strategist position moves up from Planning (the incumbent, Darby Gallagan, moves with the role) to focus on economic development, business support, and downtown vitality — described as a "concierge" for businesses navigating city processes.

Climate work is being embedded across all departments rather than housed primarily in one office; the mayor highlighted a community solar array on water treatment tanks (funded by a Northwest Clean Air Agency grant) and an upcoming electric car-share program as current initiatives.

The Mayor's Office continues to manage contracts for alternative response, domestic violence services, and racial equity commission work.

Key Takeaways

The city's fiscal picture is precarious. The 2027 budget is nearly flat at $542.8 million, with a structural reliance on the November RFA ballot measure passing to avoid significant service cuts. If the RFA fails, a formal reduction planning process will begin in mid-2027.

A new Central Services Fund restructures how internal departments are funded, moving Finance, HR, Legal (civil), Communications, and IT into a transparent internal service fund model — a more accurate picture of true departmental costs across all city funds.

Workday goes live in December 2026, a major modernization of HR and payroll systems after two years of intensive work; post-launch consultant support is budgeted through at least 2029.

Development services revenues are under pressure from declining permit volumes; a fee study and cost-recovery system are planned to stabilize that fund without further drawing on reserves.

Cybersecurity posture is being taken seriously but the city operates with one dedicated security analyst; leadership acknowledges a cyberattack is a matter of "when, not if" and has invested in resilience infrastructure and incident planning accordingly.

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

Budget work session

# 2027 Budget Work Session Summary

Finance Director Andy Esmerson presented the preliminary 2027 budget of $542 million, representing only a $100,000 increase from 2026, and walked council through significant structural changes including consolidating REIT funds, establishing a new central services fund (fund 580) for finance, HR, legal, and communications at $10.2 million total cost, and closing multiple debt service and tech replacement funds. Council members questioned whether these changes represented actual savings or merely improved transparency, with staff confirming they net out identically but provide clearer visibility into departmental cost allocations previously hidden in the general fund; council also requested restoration of preliminary budgets to the online budget page for comparative analysis. The 2027 general fund budget is notably balanced with only approximately $150,000 difference between revenue and expenses, though council expressed concerns about whether it adequately accounts for increasing benefit costs and whether approving it despite drawing on emergency reserves is prudent, given economic uncertainty and the contingency on the RFA passing. Key departmental updates included HR Director Deborah Dana's presentation on the Workday HR/payroll system implementation (targeting mid-December with temporary positions through December 31st), IT Director Don Berdick's overview of technology initiatives including utility billing system implementation and cybersecurity challenges (with only one dedicated security analyst), and presentations on a new consolidated Communications and Community Engagement Department, the Development Services Fund's reserve depletion from reduced housing permits, and the mayor's office reorganization prioritizing regional fire authority, equity, climate action, and health services.

Agenda items (1)

Procedural (1)

25085ProceduralBudget work session

City officials will meet to discuss and work through the city's budget for the upcoming year, reviewing spending plans and financial priorities before formal approval.

What happened

Verbatim transcript available

430 transcript segments indexed

R is sleeping. Good morning and welcome to a special meeting of the Bellingham City Council. Today is Monday, October 5th, 2026. We are convening this morning in the mayor's boardroom for a special meeting.

Um, and we are convened as the committee of the whole. So, I just wanted to note that council member Hammill is joining us remotely and council members Williams, Littleton, Cotton, Anderson, and myself are here in chambers um with council member at this time.

With that, we will get started. This we are here for agenda bill 255085. This is a budget work session. The mayor and department heads will present preliminary budgets for infield services including finance, legal, human resources, information technology, and the new communications department.

The planning and community development department, and the mayor's office. More information on the 2027 preliminary budget can be found at co.org/budget. and council member at all has found a project copy of the 2027 proposed budget um here as well.

So first or >> yeah I'll um yeah welcome just in front of you we have um a you have an item for the finance department. We have others for all the other departments we'll be discussing today that we'll pass out.

We'll get to them. Uh finance was also able to get us the printed buckets which is awesome. Um, and yeah, we're just going to dive right in and this is meant to be a discussion. So Andy's going to start just kind of going over the budget book and and how that works and then he'll dive into the finance department and feel free to jump in with questions or whatever as we go along.

I >> was just going to mention um so these proposed one pagers were included in the packet and so it looks like we have printed copies here as well. just if there are any differences between what we received today and what was in the packet just to highlight those but otherwise we'll assume they're the same.

>> They're all the same. I believe they should be the same. >> Thank you. >> Yeah. >> All right. Well, thank you Boris. Thank you uh council. I'm Andy Esmerson, your finance director. I'm going to walk you through the uh preliminary budget.

So, everybody has the budget book. So, it's good to kind of walk through what we actually have in this uh nice big document here. So, uh, we start off with really, uh, the mayor's message as was discussed during the last last council meeting last week, um, of the budget priorities and what we're looking uh, like going into this 2027 budget.

Uh, then we get into the budget overview really kind of talks about the organizational structure of the city. And then um through that uh in the budget overview, it also talks about the budget process.

It identifies all the funds of the city. So this is really great as a a quick reference point to look back and know what fund we're talking about when there's so many funds of the city that have individual uses or purposes.

Uh so right there on page 12 and 13 really walk you through and fif and and 14 walk you through all the different funds that are included in this budget uh for the funds of the city. And then there's a big uh overview of the entire budget there on page 15 that takes you through every fund and the changes um in this in this budget book uh and just a summarized version on page 15 and 16.

So uh very useful. Uh then it walks right into the fund budgets. So the fund budgets go individually by fund of each of the ones that are listed previously. And then we'll go into the department budgets which we'll spend more of time uh in all of our work sections as the departments uh are associated with several funds uh that they may operate.

So uh the departmental budgets and summarize it by the department uh categorization and then at the end of that after that we go into the capital budget uh with all the capital budgeted projects and then it ends with the position uh budgeted position.

So this is budgeted positions by department. So you can look at each of the departments, each of the uh descriptions of the uh positions in those departments and how many uh FTE are associated with each department and each uh union group.

So that that really walks through kind of the functions of the budget book. uh some items we wanted to bring forward um to bring to your attention uh this year is on page uh 12 we have consolidated REIT into one fund.

So, uh, I'll just kind of summarize some of the things that Forest mentioned, uh, last week in the budget, uh, introduction, but so with the combining of 142 and 141 141, the purposes of REIT, um, there really wasn't a need to keep that in two different funds.

So, we really want to consolidate that. So, it made it nice and clear uh, where all those REIT projects were. And new this year, if you go to page 14, we've added a central services fund. So this is fund 580 which will uh encompass the change of moving finance, HR and the legal civil uh portion of the legal department into a central services fund.

And then we're also adding a communication department to that fund as well. So shifting of some of those u costs from the general fund are now going to be in that central services fund. Um so those are those are some of the bigger changes.

At the end of uh the fund budgets on page 73 it does mention some funds that were closed. Really there three different debt service funds and then we had closed the purchasing department um the purchasing materials management fund a few years ago and then we had also consolidated our tech replacement fund 541.

So those are listed on page 73. So they are not noted on those um summary pages, but uh historic information will be included on the prior years. So that really takes us into the walks you through the budget book.

I'll I'll guess some interesting facts on the budget book too is that uh last year's budget was 542 million uh that we brought forward uh for council and we are we are at that uh number again in this current budget.

So we're right at 542 million. It was only a change of about $100,000 from the proposed 206 budget to the propos uh 27 budget. Any questions on the budget book or the or the structure of the budget book?

>> Could you give me that number again? >> Uh last year's budget. >> Yeah. >> Uh so last year's uh total expenses were 542.9 million >> and budgeted or actual. >> Uh that was proposed budget in the preliminary budget.

>> This is budgeted budget you just mentioned that >> and now uh this year the proposed budget is 542.8 believe >> mentioned the the creation of that central services fund, right? And you know certain um certain items there, but the revenue source for that fund is the same as the general fund, right?

Or >> so it's um basically Yeah. So >> to me it's kind of like oh we're taking it out of the general fund but understand is that that money is still going to >> Yeah. So, so last year those uh three departments cost the general fund uh there was total expenses of the general fund of 8.4 million but it brought in each of those departments for the services provided out to the other funds was 5.3 million.

So net difference of about 3.3 million. uh internal departments within the general fund did not identif we didn't charge say uh fire or police all that was just housed within the finance department. So we didn't see that back and forth within the same department.

Now you're going to be seeing basically the difference of that uh 3.2 million 3.3 million that was just the finance department the cost of the finance HR and legal within the general fund. Now that is housed in a central services department and that is going to be charged to the general fund.

And so the general fund will be paying uh roughly 3.25 million for those services this year. And so you'll see those incremental increases to fire to police for each of the departments within the general fund uh that will be now paying into the central services fund.

>> But is that entirely true? For example, if public works has significant number of employees who are actually utility funded, but then as an internal service charge from public works for HR services or whatever, then in a certain sense some proportion of that money would be other funds and Greenway's uh employees who are who endowment funded their HR component would it in a sense be you know all those the mix in whatever department would be the mix that flows into this this new fund.

>> Yes, you're correct. So the general fund is paying about 3.25 million. That fund is bringing in 10.2 million. So the fund itself for the cost of HR, legal and communication department is 10.2 million.

And so the general fund cost of those central services are 3.25. And the rest of those charges are the services being provided to the other funds and other departments. And I'd just add, although it may not feel like it right now, this is a actually a more transparent way to show these services in the budget because prior this was all just sort of hidden in the in the general fund of how much each of these services or departments were driving these services, right?

So, so now instead of having it all sort of in the general fund, you'll be able to in the fire department, their expense is reflecting the cost they're driving for finance, IT or well, it was always that way, but finance and HR and legal and that type of thing.

So, >> awesome. And >> um couple things. one, I'd probably be able to go back and look at it, but just a question and then well, a request and then a question. Um, I was informed that the past preliminary budget that used to live online isn't there anymore.

And I was kind of wondering, you know, like on the page, I haven't had a chance to look, but um I would typically now that I've got this book, go back and look at those to see last year. Um, so if it's possible to get those back online, I'm not sure why they're not there.

Um, that would be appreciated. Um, yes, >> director. Um, those budgets should still all be there. We have, I think, at least six years history of past adopted budgets and the 2026 adopted budget as well.

>> I think she was asking about preliminary budget, too. preliminary, not the final because that would allow me to see what was proposed previously, not what we ended up um because I try to look at the anomaly and go back through the notes.

So, it is helpful, I know, for me um to be able to see those preliminary ones. Um but then kind of going back just so that my um my actual question. So with the um with this change to make it more transparent and so a certain amount nearly 7 million came out of those other funding sources.

Um previously was that 7 million just all general fund or were we in the past um also that's you know three million was coming from the general for um these expenses and then 7 million were others and it was just harder to track.

I guess I'm >> Yeah. So in the past um so the 5.3 million so the other there's no change basically to the other depart other funds. So that all kind of recognizes the same expenses and it'll look the same.

What's different is that each of the departments uh within the within the general fund fire police there wasn't a proportionate share being charged to each of the other departments. That was just being housed within the finance department.

So the finance department and HR and legal cost um were not being reimbursed about 3.25 last year. That would have been the cost that would have been allocated to those other departments within the general fund.

And so now um >> so this will save money in our general fund basically. >> Yeah. It'll have basically it'll be basically the same. It'll net out the same. It's just housed in a different >> It was just housed in a different >> So those other funds were always paying into it, but it just showed up in the general fund.

It was it was called our IAP. You may have heard that word before, our internal uh charges allocation. And so most of the IAP is gone now and it's been replaced with this external fund. So instead of sort of getting laundered through the general fund and disappearing, it's all happening in this.

>> So it used to inflate the general fund with this pseudo revenue. Instead, it never goes into inflated. It goes over here. It's spent over here. Yeah, you got it. >> Yep. >> Thank you for clarification.

>> And so this was done with the IT department a few years ago as well as we moved it out of the general fund into the central services fund. So now we're really consolidating all the central services into the internal service funds.

>> Thank you. >> Yeah, good questions. Anything else? >> All right. All right. Well, I think that um is the big question. We're really dig into excuse me a lot of the uh individual details of what that means for each of the departments as we talk about each of the departments and we are really starting with the central services.

So this your opportunity to kind of see all the changes that have gone on with the central services consolidating them to that central services fund. So I'm going to kick us off with the finance department.

So, um, as, uh, Forest mentioned and in the proposal, it's really kind of a status quo budget. There isn't a lot of changes going into, um, at least the finance department, uh, this year. And so, um, other than the big change of really moving into that central services fund, one other item I'd like to add is that we have, uh, removed the hearing examiner as a separately identified fund within the general fund.

We still have all the hearing examiner costs within the general fund, but uh the hearing examiner expenses for the hearing examiner uh costs are going to be in non-EP departmental and we've moved the the half-time uh the half FTE into the finance department and we'll still provide all the same services associated with what is done has gone on before within the hearing examiner, but we are not identifying it as a separate department within the general fund as there isn't uh really truly operations.

It's it's really uh based on uh all the all the requests or all the all the hearings that are necessary for the hearing examiner. And so the costs will still be identified. We can still pull those out at any time and and clearly identify what's associated with that um uh with that activity, but we're putting it into non-departmental within the general fund.

And then any questions on it? >> I'm wondering what's the benefit to that? Um if I mean if the public or a council or anybody wanted to know um the actual costs of the hearing examiner and be able to look at those budgets if it's embedded within finance.

It's not as easy to just have a one page and look at it. We would have to ask you to pull it out. I'm just kind of wondering why that move. uh we saw it under the similar vein of I don't know if you >> Yeah, I can just there's a couple things at play.

One is it was really really small as a department, right? And the dollar amounts involved in the grand scheme of things is really small, but also you have a a staff member there who essentially doesn't have a real chain of command um and someone that they reported to within a department structure.

And we felt like that needed to be resolved. Not that there's anything wrong with how that person's been performing just to have a little better clarity on that and for them to have proper support moving forward.

It just seemed like that the clear thing was to put that position somewhere and then it was like, well, we don't want to just leave this money with no people as a department. So then we felt like it made sense to move the money as well.

Yeah, it's >> the official chain of command was through the mayor's office and that just seemed not correct to us. So moving that.5 FTE's reporting structure into the finance department seems a lot more independent and appropriate >> and it's really a contracted service.

And so the whole function primarily of the hearing examiner was really a contracted um service. And so it it really wasn't an operational department of the city. >> Thought about moving into the >> Anderson.

Sorry. >> Will there still be a um a item code within the budget that we'll be able to look at and see that it says hearing examiner and the cost under finance? >> Um I could always pull that out as part of the monthly report as well.

>> That's a group. >> We have it as a group activity. So it's easily identifiable as to what activity is associated with the hearing examiner and really beyond the the the contract costs or just kind of the um the other um the small uh expenses associated with um that function.

>> I'm thinking of the position itself because it's a contract and that expense. It would just be nice to be able to put our finger on it to see um what that amount is. >> Yeah. I don't know if that would be under position um like where in here where you have all the positions if that's going to be listed there or someplace that we could see what what are they being paid what is this cost us?

>> So the actual hearing examiner the cost that we pay externally for the hearing examiner services. Um and right now that's probably about 90% of what's in the hearing examiner department. Um and we could easily pull that out at any time.

We could pull those expenses. Well, I saw Blake actually. >> I was just going to make want to make sure that we have a point of clarity that the hearing examiner is the contractual piece. The the halftime employee is is not that's not >> Did you think about transferring the hearing examiner into the city council budget?

Because the hearing examiner kind of legally speaking steps in to makes decisions which were formerly made by councils. I mean, it's it's not much more logical. I mean it's slightly more logical than putting in the mayor's office.

Um but I don't know if the finance department makes any sense either because she does not do financial decisions. She does not have authority over our finances and have access to our finances. It's kind of funny but why not shift it into the council?

>> So the hearing examiner contract is not with the finance department. So that that function hasn't changed. We are we are uh removing the identification of the hearing examiner as a department and moving the contract into an operations in a non-EP departmental.

The halftime uh employee provides a lot of support and administrative services for the hearing examiner. And so that function isn't necessarily doesn't have to be 100% hearing examiner. And it technically it's it's in the clerk's part of the finance department.

So that that was when I did when I looked at how other cities handle this, it was almost universally within the clerk's office. And so >> that seemed like the management of records and public meetings and and that seemed like a good fit.

But we can >> No, no. The clerk is weird that it's in finance, but as you say, that is the norm. That is the law. Yeah. Any other questions? >> I have some finance department questions. Um on page 108, >> um I think I'm seeing the whole internal services thing.

Um there used to be under 24 25 actual 1.8 and about 2 million in non-revenue revenues. And what I'm seeing now is above that charges for goods and services goes from like 2.6 3 million up to 4.2. two.

Am I correct in thinking that non-revenue revenues were some of those internal charges and now they show >> I'm on page 108. >> So page 108. So you're looking at the >> revenue half. >> Are you looking at charge for service moving up to 4.3?

>> Yeah. But I'm also seeing non-revenue revenues whatever that is dropping to zero in 2026 and 95,000 2027. So one also confusing part about the uh finance department is that we have the debt service funds ask about those next >> in the department as well and so the governmental uh debt service funds are actually part of the the finance department and so a lot of those non-operating uh non-financial sources are are often transfers going back and forth to the debt service funds to then be able to pay out that year's uh debt principal and interest payments.

Um and so when you look at >> yeah down below which was >> if you 3 million 1.5 or 1.1 >> if you look into if you if you turn the page to page 110 you'll see the actual activity of the of the finance department that have been in the general fund kind of allocated by fund group.

Um, and you'll see a lot of those other expenses are associated with the debt service funds. >> What debts don't show up here in the finance? What debt service? >> Anything associated with water, sewer, storm, or any proprietary funds that have to have their debts associated with that activity.

And so this is really um >> like the new dispatch center that would be here. new dispatch center will end up here. And also a lot of the Pacific Street Operations Centers, the primary the last two debt uh issuances for the the Pacific Street Operations Center.

Also, there was the past Sportslex debt and the PFD debt that is in here as well. Thanks. Any other questions? So getting back to the one pager as you might know too in in 2023 there's that large bump on the right side when you're looking expenses north hit historically that is really the purchasing department coming over from public works over into the finance department at that time that was about another uh million or so jump um in that 2023 um and then uh so that was the the big jump in there and then we've been we've been trying to uh kind of control costs or reduce costs where we can uh throughout the last several years.

So um you'll see it's kind of uh dipped a little bit and then just kind of maintain. Um so our work plan is really to provide uh quality service to both internal external customers. Uh so that's record management, public records request, utility billing, BNO tax collection, cashiering, contracting, purchasing, accounts payable, budgeting, accounting and financial reporting.

all the services we provide to uh a lot of our internal customers but then also our our external customers as we uh work through that the billings and the and the cashiering and purchasing and contracts.

Um we are looking to go live on our new utility billing system. I think the that we're shooting for first quarter of of um is our goal and we're really looking forward to be able to provide a a different service for utility billing uh that hopefully provides a better customer service.

Um and with that we're still working to expand our point of sale system um and be able to provide uh other options, more easier ways to be able to pay the city. So um looking forward to really being able to bring that online.

And I know it's a big lift. There's a lot going on in IT. And so there's a lot of needs in it and a lot of competing resources, but really uh that is that is our goal and really appreciate all the support that it is providing us as long as well as the the big uh tackle of the workday project at the moment as well.

Um is u so there's there's a lot that it is going on right now, but I'm sure Don will be covering that in in a little bit. Uh and then we're also continuing to work on our contract software uh system project.

So that is really getting us to more digital signatures and and the change that's going forward to the voters as well helps us to move forward with that uh process and change that contracting process to make that easier, get us more digital a lot uh save a lot of paper in the process on that as well.

Um I already talked about the point of sale system. So, uh, those are the big things going on, uh, with finance is really a lot of those, uh, things are directly tied to to the our IT projects to try to get things moving or upgraded within our utilities, within our point of sale, and within our contracts.

Um, and other than that, uh, we're kind of, uh, moving along with a lot of the similar services that we provided in the past. Any questions? a broader question. Um maybe not specific to finance, but since you're our clients and overseeing sort of the larger budget, I know it's not in our um the preliminary budget that we're looking at right now, but looking at the 2026 adopted budget, right, the screen that you showed at our last meeting about um sort of our policies, right, related to um city management and depending on where our revenues are, if they're declining or um or rising.

And I was wondering do we have similar policies because we looked at those we can't remember now but in the dist near distant future right reviewing those policies do we have similar policies specifically related to the um reserves and right how and when you get into those.

>> Yeah. Yeah. Those are identified in the in the financial management guidelines as well. And so some key goals as to what we're always shooting for within our within our uh budget process and just as we uh manage the finances of the city.

So those are all all they all are identified. So we have like the 15% target for emergency reserves is the floor and then our goal is really that 18%. >> Um >> so I was wondering I don't expect you to answer now and I know that we have a number of presentations today.

Um, but I would request and I don't know if it's a needs to be a motion or if there would be support from council, but just the budget outlook I want to feel more confident about, you know, when we make that decision to dividend reserves and and not and so whether it would be possible to bring back, you know, a presentation to look at that a little more close >> uh when we budget into reserves or >> Yeah.

And and with that um happy to have that conversation. We we uh the we could revisit the financial management guidelines as well and and how we've kind of worded um that topic of going into reserves and what that looks like from a budget perspective.

uh when we do uh budget into what is expected to be our emergency reserve uh area, then we we need to have a plan within the next three years to be able to correct that and get back to uh our our goals of our of our reserve.

So, at this point, at this point, the plan is really uh moving forward with an RFA and then also adjustments uh if the RFA does not move forward. Um but happy to have uh further discussion of what that might look like.

I should also mention that when we do create the budget book, the the reserves, the beginning reserves that we start this book with are the budgeted as if um the the 26 budget with the expectation that the full extent of the expenses are are used.

And so the reserves are starting at a fully expended 2026 budget ending reserve to be have that beginning reserve. And so when we look at the general fund um starting at about 15 million at this point we do not we don't adjust that number until we do our reappropriations with our change in our beginning uh reserves at that time as well.

And so at this point we we don't anticipate the trending anyway does not show us going into our reserves as projected in uh as budgeted basically because the budget is always an estimated um but through August uh we had done uh better than we had expected.

we're we're slightly to the good, but um as we know in this economy, we we don't know what to expect. And um and when we move into our when we budget items, we want to start with that that ending reserve uh budget base of the 26 ending uh budgeted reserves.

even though we know it's an estimate and it's not likely to come true. Um we only adjust that if we know that something's not going to be reappropriated or if we're very confident that those expenses are not going to be used.

At this point all the departments still have their budget authority and so um we still represent the budget as with the expectation that uh that the full extent of those reserves could be used in 2026.

But um we're at this point trending in a more positive direction um and hoping that we do not end uh with a at this point we're at an $8 million deficit for 2026 and we expect that gap to be smaller than that.

Um, I kind of want I hope I'm not over uh assuming that we share the same concern, but um, you know, we're we're putting a lot of hope that the RFA passes and that's going to help uh, uh, alleviate a lot of the pressure on the budget.

Um I get apprehensive because I understand that you know we budgeted going into the um our reserves and so far things are turning out better than we had um predicted um because we always you know we don't want to go into it all glowing and then have it not be that way.

So I think we're cautious last year thinking we would go into reserves with the hopes we wouldn't. We're doing that again. Um and um if the RFA does not pass and I I'll not make a motion now. We'll see what happens come February, but um I do think that um if it doesn't pass and by June, we're going to have to probably sit down and and re-examine and uh especially if the economics the economy doesn't change around a little bit to um really look at that plan.

How are we going to make the adjustments needed? Um, so we're not in this constant state of um, looking at our reserves. Marilyn, >> um, I would just say that the 2026 um, initial budget didn't have a large deficit.

>> Um, we brought forth a very pretty balanced budget. we've had to bring forth budget amendments including, you know, um the actuals for the increases in our employee benefits that we're paying out midyear.

So, there's been many multi-million dollar adjustments, but the initial starting point for this year's budget was very close to um to being balanced. So, we did not anticipate spending into reserves this year.

That is in part why um we continue to realize that the challenges of escaping the cycles of increasing costs with our fixed revenues uh is very real and um that is why we're calling the question on the RFA.

Can we continue to sustain local government services across all departments the way we've known them and enjoyed them and benefited from them for decades in this community? Or do we need to try a different approach?

And we have cost reduction scenarios identified that we will implement next year if the voters decide that um they do not want to continue to pay to enjoy service delivery in the city the way that they've known it.

Um and so the the future of local government will look different if um if voters decide that they don't want to um move forward in the direction that we're putting forward. Council member, I'll go to person.

>> Thank you. Um, thanks for this line of conversation. Um, I'm really interested. I'm I'm glad to hear, of course, the conversations are happening about essentially two different budgets. Um, I'm assuming that we need to consider, you know, the the hopeful budget as well as the budget that um we'll need to consider if if the RFA doesn't pass.

How I think my question is how how on paper do we want to be about the fact there are two different considerations that we have? Um because I almost want to see those two different budgets. But I also realize that you know six months into next year things could look very different economically as well.

Um, and so I guess what are what are your thoughts, mayor, in particular, about those two different scenarios and how um how on paper do we want to be about them? >> Well, we didn't complete the um trade-off analysis.

Each department's presented several um reduction scenarios for us, but we didn't do the complete trade-off analysis. That would be the process we would start. And I think if we were to put forth that now amongst employees and all departments, it would cause a lot of I think concern and alarm.

And we haven't been able to sit and be thoughtful um and do that as kind of the one city leadership team about really what we would put forth and those hard choices that would be made before us. And so we felt like we wanted to put forth I if we call it the optimistic budget um because it's we don't want to create unnecessary tension and anxiety um and undue stress and burden for the city teams um on what's a hypothetical.

um we'll start that careful deliberation if we're forced to. And also we want to maintain the high levels. You know, we're going to make the case that we think um our ability to deliver services um is in the community's best interest.

And uh I think we've learned at the federal level, it's very easy to go in and make cuts and it's very hard to build back. And so we want to continue to sustain at the high levels we think this community um deserves and um we'll we'll only make the adjustments um and you know we'll make those adjustments if if voters tell us to.

But um for right now we would like to continue to make the investments in Bellingham um the way that the community's known expects us to be delivering as local government. Lopez. >> Well, first just a a reaction to that.

I I I appreciate you don't want to be alarmist. Um, but this is more than a hypothetical. It's a genuine possibility. So, I'm I'm with Holly that it might be useful to be a little more specific, not now, but before the election.

Um, and yeah, you can't just uh present an across the board cuts as a scenario because that wouldn't be the actual scenario. So, it will take work to get to something that isn't just alarmist. Um, I have a technical question.

What you were saying, Andy, didn't make sense to me. With regard to the unspent but authorized expenditures, uh, right now the general fund estimated beginning reserve is 15. I'm I'm on page 15. Uh, 15.5 million.

And as you say, that may not all be spent. Um, and so there'll be a reappropriation. Let's say it's $ 1.5 million. Well, that will then show up as a new expense if it's reappropriated. It will then um the beginning reserve will go up, but so will the expense column go up.

The estimated reserves would probably stay the same because we're not actually creating any new expense. We're just moving when they occur. But that means the days in reserve balance number would actually go up.

And so percentage-wise, the spend down would actually increase. That's what I think reappropriations would do. Am I right? >> In general, a lot of what gets reappropriated is um in the general fund, there generally is not a whole lot of reappropriation.

The big reappropriations tend to be the projects, the large projects that go on within uh public works or parks or those things that are more multi-million dollar projects that really are those large numbers that come forward in the reappropriation.

Often when it comes to contracts, there's um a small number of of planning contracts that will that will go between years. A lot of their contracts go from July to June. And so we often see reappropriations within the plane department, but not a lot of the other departments.

So when we see savings within the general fund, that's generally one-time savings. And um and I think what we've been seeing, what the exercises we've done in the past, what we've been doing this year across all departments is really trying to find every way we can possibly save money now to not impact the future.

And so even with what I've proposed here, um I have two FTE positions that I haven't filled um for for most of the year because I don't want to do that. Trying to save money where we can and just try to maintain as long as we can until we need those positions.

These are these are service levels we'd like to provide additional services, but this is not I'm not the only department that's holding positions open that could be very useful to try to speed things up, be create more efficiency or or be able to meet their needs in a in a in a faster basis.

But all the departments are doing what we can to to just maintain services where they are without without reducing and and saving as much cost currently. Um, and that's why we're we're hopeful that we won't recognize that full expense within the this year.

>> That's really a dollar question though that you have these two unfilled positions and if you don't spend it then it turns out the estimated beginning reserve would be higher because you didn't spend it.

But wouldn't those then reappear as an a reappropriation? Wouldn't that add to the expenses or are those two FTE included in expenses right now even though they're unfilled? Operating budgets are then rebudgeted.

So we don't reappropriate any operating budgets. So any any salary savings from 26 doesn't get rolled into 27. This would be only if we have a contracted encumbered expense that we need to move forward from 26 into 27.

We have a $40,000 contract with some company and it hasn't been spent 26. So we need to reappropriate that into 27. And so that's what gets reappropriated. Um most of what is in the general fund is operations and so 64% of the general fund is uh payroll and personnel and so it's all it's all salaries and wages and benefits is 64%.

So the more of the efforts that we've done with the 60-day pause and and some of those other efforts with payroll are really what helps um maintain that reserve balance within the general fund. And what we're budgeting is really the legal limit.

So this is the legal ceiling that we need to stay within from a budget perspective. So this is where uh all of the calculations of that everything came true. If we had this FTE for the full year, if we had uh all these expenses uh actually expended within that period of time, this is the legal limit that the council is is setting for the general fund for each of the funds.

And so we never expect to reach that legal limit. We from a financial perspective, we all should be managing the funds and doing the best we can to try to find savings within the year and and not look to maximize any of our budgets to try to to reach that legal limit.

>> I appreciate that because officially we're going to be voting to endorse a budget, but what I want to do in my mind is anticipate the actuals knowing that they will be a little bit different. >> Yeah.

And yeah, that's those are two different things and they always are. But then the the new budget, you're saying the the numbers are roughly the same, right? From 26 to 27 not showing growth, but at the same time is the new budget accommodating and taking into consideration all of those adjustments that were needed.

I mean the mayor spoke to the fact that yeah the 2026 budget you know budget was relatively close but then obviously there's been increasing costs for >> benefits and other things that then are calculated into the new projection.

>> Yeah. Yeah. The preliminary budget I believe was about $150,000 different between revenue and expense. So it's the most balanced budget I've I've ever seen um at the city. So it was it was very impressive.

um we've debated what what that um deficit budgeting should look like because this is the legal limit with the expectation that we don't actually maximi maximize to that legal limit. So often when we would budget a $3 million deficit, we would still see those savings and still maybe be to the positive when we're when we're talking about $138 million in expenses.

Uh a few million, there's little things that can really impact that that final number. Um, and so a lot of these savings are are adding up and so we're hopeful that we can still end the year um hopefully above a $20 million beginning reserve.

I don't want to have any um I don't want to promise anything that we can't actually end with but I mean if we were seeing a much uh different economic scenario within our financial numbers currently I think we would be more concerning more concerned going into this budget cycle with these proposals just to confirm that with the um what you're speaking to with respect to reserves and I think it was with respect to the emergency reserves if we cross that threshold and needing that plan for within 3 years of building that back.

But we're at this point we don't have to have that plan yet or was that triggered by >> dipping already? I'm just saying it feels like we're supposed to be in the middle of building back and so to vote to approve a a budget that is going to be dipping further into those reserves feels counterintuitive, right?

But >> at the end of August, we were still above our emergency reserve >> Yeah. >> goal >> of 18%. >> We have not dipped into the emergency reserve yet. >> So that's why we feel more comfortable with this.

But yeah, that's that's the part of actuals um compared to budget and we um need to evaluate budget to get that legal limit so we can really structure that next year and and allocate all those expenses.

a question for council. >> Thanks for going first. >> Break the ice for everyone else. >> All right. Next up is legal. Council already has these, but if anyone doesn't have their packet, you know, Everybody, it's in your pack.

>> Hey, do you know what page your budget's on? >> One more. >> 111 maybe. >> Okay. >> Yeah. Is this yours? You're right. Right. All right. Good morning everyone. >> Morning. >> So I am pleased to be here this morning for my first budget work session to present the uh the budget for the legal department for 2027.

A proposed budget that is. So consistent with the direction we received from the mayor. Uh we are proposing a flat budget for 2027 uh with no increases other than um adjusting numbers for inflation and salary step increases.

We are not proposing to add any additional staff, equipment or software for the legal department budget here in 2027. Um and additionally as Ben spoke about earlier uh there is the the new general services fund where some of the uh revenues for the legal department are going to be coming out of that fund uh rather than straight out of the general fund and that's all reflected in the the numbers that I was referred and you are forced to speak more diligently about than me um for our work plan in 2027.

7 uh consistent with you know our budget of looking it flat we are going to uh continue to provide the same level of services in 27. We're not adding any new programs or services in 27 versus this year.

We will continue to provide legal counsel and representation to the city um on tors land use appeals capital projects uh and specific priority projects. Uh we will continue to challenge federal executive orders and grant conditions uh that attempt to illegal withhold federal funding from the city and our claims process will of course completely will evaluate all claims against the city for damages as well as provide liability insurance and reset services.

On the criminal side, you know, the numbers just continue to increase down there in terms of case loads and things of that nature. So, uh, this year in 2026, uh, we are anticipating nearly 3,000, uh, unique case filings in Bellingham Municipal Court, and we anticipate that being similar in 27.

Uh, and that includes criminal offenses, including DUIs, domestic violence offenses, assaults, and criminal cases. Our uh, criminal prosecution division represent uh, the city in community court, mental health court.

Um, and that's that's pretty much what we're looking at for 202. Happy to answer any questions you might have. Michael, >> uh, thank you. So, uh, question. Um, can you break down the your department into you have I think I think you have two main divisions.

Your civil division and then your your criminal prosecutors and defense division. >> Um, what percentage of each of the two? And you just talked about the criminal costs increasing. I'd kind of like to see a breakdown in like a 10-year trend.

Is our civil expenses kind of just creeping with inflation, but our our criminal prosecutor and defense expenses are an upward trajectory? It'd be nice to see those two divisions and what they've been doing over the last 10 years in terms of necessary budgeting.

>> Yeah, that's a good question. I'd like to say I anticipated that question. I have a chart to show you, but I don't. I will say over the last 10 years I think we've added one position on the civil side and one position and these are attorney positions on the criminal side.

Uh in fact that fourth position has been vacant since April. We're filling it this month which I'm very excited about because they really need some support down there. Um but yeah, we have seven attorneys uh on the civil side.

We have four attorney positions on the criminal side. Uh two support staff on civil, three on criminal. Um, and so I I'm not sure exactly the percentage breakdown between those two. >> Andy, is that an easy thing to do in his department?

Are those things flagged in any way? >> You can see the current split on page >> in terms of FTEES. >> Yeah, so the uh civil division moved into the central services department and then the criminal division is still within the general fund.

>> Sorry, where are we looking? >> Uh, page 112. At the uh bottom of 112 uh you see the central services fund and that is all of the more internal activities of the legal department and then up above still remaining in the general fund is what's um what is not an internal service and so >> okay so I'm looking at this whole upper section 1.2 2 million.

>> Yep. Just look at 2027. >> Yep. >> More. Sorry. That is more the criminal or more of the civil. >> That's the criminal. >> That's the criminal which includes paying for um defense. >> And then down below that >> no where's defense?

>> Public defense is in non-EP departmental. >> It would be nice to know what those trends are because we've been concerned about >> public defense. We can so if that's the question, we can definitely provide you some data on that.

I would say on the prosecutor side, I mean, you can look at just the actual history here going from 2.3 to 2.6 in 2025. I mean, that's like essentially, right? There's not a lot of growth in a bottom line increase there.

So there w there hasn't been much ad on the legal prosecutor anything side but we have seen our public defense costs increase for sure and we will continue to see them increase uh dramatically over the next handful of years until we as we transition to the new case load standards that state supreme court has brought forward and I can pull together the what we've seen for cost increases um but we anticipate over the next several years that it continue to increase dramatically.

A quick follow James, didn't you say that the case load is increasing? >> The case count numbers are increasing. >> I'm talking about the prosecutors in this case. >> Oh, 100. Yeah. Yeah. Yes. >> But we haven't commen.

So we have these case load standards for the public defenders. There are not commensurate case load standards for the prosecutors. So we do anticipate that that will be a ca a a cost that we will have to address as part of rectifying this if when there are more >> when the public defenders have less uh cases they're going to be more able to go to trial on cases and there will be less of the um settling that happens and that will directly impact the case loads or the ability of the prosecutors to carry these high case loads.

My question here isn't on as as important as it is, it's not on case loads and staffing. It's really more on budget trends that I'm I'm looking for. >> Yeah. >> Along those lines though, Deputy Longman, I'm wondering, you know, that's one of maybe several unfunded mandates right from the the state that we're going to face and thinking about the lobby team in the upcoming legislative session.

I'd be interested to know more broadly there are other big sort of things that we identify as unfunded mandate with them. for budget that we could maybe address during the legislative session or at least a topical >> questions for and so the decision I guess you mentioned the split with that new central services fund that part of legal will go into that fund and that's the entire civil side because that seemed to support the entire Yeah.

Yeah. >> His first time. >> One more hard question. >> What? >> You're going to give me a hard question. Give me a hard ball now. >> Thanks. Thank you very much. Uh, human resources is our next contestants.

Pass these. Skip, would you mind? >> Oh, yeah, sure. >> Sitting outside because the camera is right there. I was just copying Jane. >> And so, um, Deborah Dana, human resources director, and the human resources budget is on 102 of the budget.

Um as has been discussed um in detail so far um like other budgets we are maintaining status quo including retaining previous staffing reductions that we took last year as part of the budget exercises related to um the 2026 um budget.

Um this year has seen us um working a lot in regards to the new HCMS platform which is workday and this is taking exhaustive levels of efforts from team members and so in addition to their regular um work and activities we have some employees who are spending seven eight hours a day um dedicated to working on the implementation of that and as a result of those efforts plus maint maintaining regular work duties.

We've really seen um an evolution in the skills and development of some of our team members and um we've also um determined that we are also going to have to kind of re-evaluate how we're doing some of our work and what some of the roles and responsibilities are in regards to the work.

So knowing that we have both of those interests moving forward, we are proposing reallocation of three positions on our team to really recognize the exceptional work, the development, the growth, the professionalism of these individuals.

And so, um, while we think that's an overall minor tweak to our budget as a whole, we think it's really critical and important to recognize the the great and amazing work of these very, very valued employees.

Um as similarly mentioned before um our budget will be moving to the general um fund portion. So I don't think I need to spend more time on regards to that. I know you've had great details in regards to that.

Our 2027 work plan as I indicated will be to complete the transition of the process to move to a more modern and efficient HCMS platform um which is workday. Um we also as I indicated a little bit or alluded to because workday functions very very differently than our current system it is going to innately change kind of the roles and responsibility of our staff.

So um different individuals will have different responsibilities regarding to that and so we will have to definitely assess all roles responsibilities and then really staff needs um with the completion of workday upon implementation to kind of evolve those roles.

We do not imagine our notice does not contemplate adding staff but it's working within the current staff and just really pivoting their roles to meet the needs of the new system. addition, we are currently bargaining um I think five um bargaining agreements.

And so as part of 2027, it would be anticipated that those new agreements will become effective January 1. And so we will be um engaging in all of the efforts required to implement the successor agreements um for the police guild, Watcom dispatchers guild, IAF local 10 and 106s and teachers local 231.

Um, we're also going to continue efforts to provide enhanced leadership training opportunities and um really hoping um that we can begin some more detailed work in regards to the assessment of health care costs.

And so we deeply truly appreciate the addition of the healthcare strategic analysis position that was approved. We are still in process of recruiting for that position. Um, but we are definitely looking forward to the opportunity for somebody inside Bellingham to spend some time doing deep detailed data analytics and some market research and really evaluating what where there might be opportunities for us to find strategies to contain um what we all know are significantly escalating healthcare costs um while still maintaining quality care.

So, we also want to make sure that we still have quality care for our employees. Um, similar to finance, we're going to just really continue the delivery of the normal typical services that we deliver.

So, we're going to continue to provide comprehensive employee support, um, labor relations, payroll, and benefits support to departments and employees across the city. I would know kind of our really significant um achievements for 2026.

While workday is not completed, I do want to acknowledge that I think it has been an accomplishment to get as far as we have. Again, um cannot say enough positive things about >> Do you want to describe what workday is?

>> Yeah. So it's basically an entire new um HAS system or um human capital management system. So it will manage payroll. It will manage like um timekeeping. It has training opportunities and tools related to that.

It will be used to assist with onboarding. So, it's basically that overall technological system um that will be upgraded, new, modernized. We're using a very, very outdated system right now called Pyline.

And so, it's really going to be bringing Bellingham into a modern environment in regards to these technologies. And these tools should be really advantageous to our employees, much more user friendly.

The dashboards are really, really nice. So employees will be able to go in, see what their paychecks look like, what their deductions look like, change their addresses, be able to um submit their timekeeping much more easily.

Hopefully it'll be easier for managers to be able to approve that through those systems. So we really it was really really critical and important for the city to make this transformation. Um High Lane is again a fairly old system.

they are no longer keeping up with things and so absent this we would have been back in really the dark ages as to how we were operating. So hopefully that's helpful. So um we do really see that we've completed what's called the end toend testing portion have run um two um payroll parallel testing scenarios with really really positive results.

So that's super exciting. And um other huge things we've worked on this year is the implementation of the salary study for the 19 um 1937 um which was related to the work that Evergreen did for us. Um also one of the things that I think probably everybody's familiar with is the mayor's introduction of the one city concept a couple years ago.

And so um from that there are basically four city principles that are outlined as part of that. And what the HR department has done is worked in conjunction with the mayor's office to find ways to embed those principles into the city's fabric.

And so um trying to create strategies so employees as they're onboarded, as they're working really understand, um what the principles are. and they include public service as noble work. We do better working together, leading with curiosity and humility and our results matter.

So, we're putting that um early on as we're advertising for positions. It's included in the interview process. We have warm welcome letters for employees as they onboard sort of welcome to the city, here's what to expect.

It discusses that. And so really these efforts are a strategy to help better unify employees and hopefully support more exceptional work on the city as a whole. The other thing we've been working a lot on is leadership development training.

And so everybody that sees this board in this um work room you can see the five dysfunctions of a team which is work done by Patrick Lancion. And so again, the goal is to support really while the city already has I think really exceptional services helping us better collaborate across departments and connect and so we're supporting two trainings in support of that so we can hopefully have common language, common dialogue, common understanding.

Um so there we're offering five behaviors of a cohesive and then secondarily um the EQ advantage um strengthening trust and navigating healthy conflict. Um and so again bringing those one city on those five dysfunctions principles to the city again really helping to enhance um the quality of services and how we operate and work as a as a work overall.

questions. >> Thank you for explaining uh what birthday is. That was my first question. >> And uh so a couple a couple follow-up questions on that. Um when do you expect it will be completed? Um what does what do the staffing hours look like or the roll out after it's completed in terms of support?

Um, did we hire additional Sorry, several. They're all small and related. Okay. Did we hire additional staff to roll out this implementation? Um, and how if so, or was this the situation you said that that there was there's a lot of time um spent was it overtime um >> that that was needed.

Um, and then also just a comment that the employees that have worked on the implementation of this are now probably going to be the best experts that you could have on the the program and so retaining those employees um I think is a a very worthy effort.

So um yeah just >> okay let me let me go ahead and if I miss something let me know. Um so we're anticipating implementation mid December. Um that is the current scheduled implementation. Um, we do have commitments to workday to have staff working multiple weekends immediately preceding that as well as evenings.

Um, so we are trying our best to support the staff in this effort to get it launched. Um, we are really grateful there were some temporary um, positions added to help support the project. Um and so um we will see most of those positions ending around on around the end of December um in regards to that.

So definitely have appreciated the support and that um even though the implementation will cross our fingers occur successfully mid December the work is not done. So that is really the first step. there will be a lot of additional work that is going to be required following that.

Um in addition to that there will be the decommissioning of the current system and so um we are still very much kind of in the middle of the project I think from the HR um perspective and um did that answer anything most yeah I think just an additional comment that some sometimes when you implement a new system there are a lot of anticipated uh a lot of anticipated stress problems need for time that happens after the implementation.

Um, just as all of those little things that you didn't think about come up. Um, and so thinking about, you know, what the staff retention looks like for that. >> Yeah, we really do care about our staff.

We, like I said, they have been amazing and exceptional. They've gone the extra mile over and over and again, we're very dedicated to to maintaining these really quality workers. And every day I say, you know, I I'm constantly saying thank you and it never really feels quite adequate, but um there's just not quite words, but they're they've been really quite amazing and the learning curve has been exceptional.

>> And I kind of was some of the same questions as council member Huffman. Um in my day job I've been over the last 25 years uh participated in the roll out of probably six new data testing um including a complete global uh system from HR to registration to student services.

So I've seen the roll out of really big lifech changing and work changing programs. And um I guess my question was um similar uh the staffing time and availability and what I've learned through all of those experiences.

Uh those expertise and part-time or readjusted positions never fully go away. um they end up having to continue to do support um with reports or I think the last one that we rolled out that was more of a global system, it ended up being three full-time positions that ended up having to be just recognized we need to keep these positions and um I'm kind of wondering um with this type of work, I know HR has a lot to do with the payroll and HR section, but I'm kind of wondering with it, even though I need to talk a little bit later, um there's a lot additional support that came from it.

So, I'm kind of wondering um was there additional positions that direction? We might wait till it talks, but um how much support because I assume we have a contract with the company that owns the software.

How much support um is coming from them and then is that expected to continue? Because there's that externalized that uh institutional support which the company has to provide and then there's more of that internal we have to have specialists because a company's not providing what we need.

Has that analysis basically happened? >> I can answer that in part and then welcome Don to step in if I missed anything. But I think the first thing to know is like internally we know these sorts of changes are significant.

So not only are we relying on the HR team and again I'm really glad you identified the IT team, there are IT experts working and they have been also equally done really amazing work. It's been an amazing collaboration.

And I didn't want to take away Dawn's um steam from recognizing his own staff work, but for example, we're very dedicated to a change management strategy. Have been working a lot on that. We've identified internal change champions within the city to kind of help with that early training.

We'll be working with some of like the major administrative staff who do a lot of work in regards to timekeeping and stuff. So, we're going to be doing a lot of efforts um as we get closer to the project.

We don't want to do it too early so people can't be hands-on because then it's kind of you disconnect. You forget what you've learned. And also, you know, um desk guides, reference guides, other sorts of tools for them to use.

um workday will um provide some services for I believe it's a couple months after the project is completed um that's pretty high level services and so as part of that process and knowing there's a lot more work that's going to be done after implementation we are currently getting prepared to issue an RFP um to solicit uh another um entity that will have expertise and helping guide us through kind of those normal sorts of pitfalls, evolutions, changes that are going to be required post implementation of the system.

You know, once you when you're early implementing, everything is not accomplished. You're really focusing on really key things. The system has a lot of capacities. There's going to be areas we want to explore and expand into to further maximize the use.

And so that's the strategy for um addressing more of the long-term efforts. >> Yeah. >> So that RFP is part of in this budget. That's kind of where I was going that >> at the at the college we ended up with several positions that just became permanent versus externalizing through a contract for that support because the companies they they only go so far.

Two months is kind of surprising for the level of support. I think we got about a year on our contract. Um but yeah, I was wondering is the RFP for that support um in part of this budget or is that something that is expected to be an amendment later or is it an IT type?

>> I'll talk to it. I'll talk about it during my section. >> Okay. And others cross work a lot. >> Yes, we're definitely working one city between it and Yeah. Yeah. >> You mentioned the the current party agreements, right?

probably have been expect to be effective January. Um we can't see that at this point, but will we likely have those contracts in place before this budget is finalized or not? >> Um I mean obviously that's the goal.

We're actively at all of those tables at this point in time and um you know I don't have a crystal ball um to look at. So, I always think there's a mutual goal by both the city and the unions to do their best possible to get those resolved before the end of the year.

Um, that being said, it it definitely is plausible that there may be, you know, agreements that that were not able to close before that, but I think there's a shared interest, a shared goal, and right now, um, very active bargaining going on.

You also mentioned that currently looking to fill that position, right? That's going to look at the um data analytics and sort of market research regarding the healthcare costs. You think also where at or how close we are to >> Yeah.

So we actually had a failed search. Um, so we did previously make efforts to do that and this is a really specialized position and so internally from an HR lens I kind of think of it as a unicorn position because the the needs sets we have are so specific.

So the position has been reposted. We're hoping to be conducting um hopefully we have success, you know, a a strong applicant pool and hopefully we can be looking at candidates um late October um with a goal of hopefully getting somebody on board by the end of November and so we're getting very actively in this process.

>> I feel like that's the right big >> a big piece of work that's really critical to think about sustainability and how to move forward as a city. And so that was my question. It's like how um unique is that working?

Can that be absorbed internally if another you know go is not successful or is it something that rather than an FTE coming in is that you know something that can be contracted out? Are there specialists or like consultants that can can help with that work?

Yeah, that's and that's something we considered um when we thought about this, but we really felt it would be ideal to have that expertise inhouse because this problem obviously isn't going away. Um but yeah, if we still fail this time, we will probably re-evaluate taking a different tact.

But um even to have the capacity to sort of manage that type of consultant contract, we probably need to get past workday um so that HR has that capacity to do that. >> And we did reook at the job description and use the first search as a really informative process.

And so we're really crossing our fingers that we've got it more defined so people better understand what we're looking for. >> Yeah, I know. I think it's so important because when you look at this budget over time, it appears, you know, to kind of be on that hockey stick of growth and you're like, how does that happen?

We've, you know, we've made hard decisions. There's less people, you know, doing the work and they've been on the front of offering some reductions and they're and it's really the cost of benefits that is driving this.

It is health care almost singularly that's responsible despite efforts to cut control costs elsewhere. So it's so important that we figure out better strategies. >> Yeah. >> And to be clear I mean the consultants everybody it's not a Bellingham centric issue.

It's not doing anything out of line. It's just really that national issue. Um, and we're still really competitive with where we're at. It's just the nature of the beast right now. >> Any other questions for nature?

>> Thank you, director. Next up is it Do you need one? >> No. Thank you. >> Good morning, council. Don Berdick, IT director, going over the IT uh services department budget. Uh just looking at the budget overview.

Uh I do want to note a couple things on the graph that uh may be confusing when in relation to the budget book. Uh there's a slice that's IT SD services and GIS admin. that's actually together in as as IT services operating in in the budget book.

Um so and in the past computer infrastructure replacements has been called software and assets or computers and software. So just uh awareness there that those are the two things. Um the budget uh that's the proposed budget is keeping our operational budget uh pretty much dedicated to core services, core staffing, core infrastructure and software services.

Um we we changed our computer infrastructure replacement a few years ago during our the initial um planning. We used to replace computers and um laptops and all of that on a scheduled basis. Um we changed that uh a couple years ago when we started having budget problems and now we just replace them when they fail.

So we run them to the ground um so to speak as part of that. And so there's been significant savings in terms of that hasn't necessarily trickled into the budget because software costs similar to health care costs um continue to increase.

And so we see um oftentimes doubledigit increases in our software costs every time we um do a contract with a lot of our service providers. Our Microsoft contract for example is almost a million dollars.

So um that's significant in in terms of that. These are costs that we cannot. So um the IT services section of this is for the most part staff staffing and just maintaining the operations. Telecom is our phones and supporting our phones including cell phones.

And then the technology replacement section is considered our capital budget. I'll talk a little bit more um about that. And then I know we're going to have a capital section um later in the month. So we'll talk about that.

Um but capital has been trimmed just to primarily focus on the essential projects that we have in place and replacing any end of life systems that we have. We also have a little bit of that budget that's focused on our priority training of like onbase and records management and one drive and artificial intelligence.

Those will be the focuses for 2027. And then we will be operational um we do have funding in our capital budget for operationalizing workday. So to go back a little bit to the workday um conversation we had we the workday project was within the city's uh the IT department's technology replacement uh budget structure.

It has been for the last two years as we ramped up and then in 2026 had that had the core uh implementation and then in 2027 it's considered operational. >> I see. Excuse me. Um, we have a a strong portion of that budget was to reimburse staff labor.

So, as Deborah said, there were some positions added to the HR budget to um recognizing that a certain portion of the staff was going to be dedicated to the project. So those staff were added as temporary and we paid we've been paying for both staff costs through the project as HR staff are working on that project.

We budgeted in the in 2026 that was about $500,000 worth of uh stop um wages and personnel costs related to that. everything that's ITSD on that project and all projects across across the city are paid out of the ITSD services budget.

So we don't budget to the project themselves. We we do that particularly for general fund um projects. Um for 2027 we will be uh operationalizing that. That's again uh adding a certain portion that's about 200,000 for uh to reimburse staff costs within HR and then the remainder of that capital budget um item is for the operationalized uh workday consultant or whoever we end up hiring to help us operationalize that.

And we do anticipate that that may continue on into 28 and 29 um as we as the city kind of develops expertise to operationalize it that support over time for our work plan. We're going to operationalize workday that um that includes uh supporting the integrations, supporting this new consultant, supporting the HR staff um and identifying enhancements as they go.

Uh it's a significant uh lift um and several IT staff will be focused on that. Uh we've had a project going for the last two years of terms of migrating from Mel to Team's phone. Uh next year will probably be the most noticeable year for staff and and the administration as we move more people off of the handsets and onto the actual teams.

the last year has been primarily focused on infrastructure uh some more supporting infrastructure um on the back end to actually support this uh we will just we've just been replacing what is uh aging to the the max like I said uh this also includes a lot of our core switches and departmental switches on on the network so that will be that Andy mentioned the new utility billings and online uh that will be hopefully go live in March.

That is the plan. Anyhow, um new contracts system, a new payment uh payment, pointing of sale payment system, credit card system that was necessary to put in place for the new utility billing system as well.

Um and then a whole bunch of updates. We will continue to work for getting our website accessibility issues going. Um and then uh a num another a number of other uh um updates as well. Um continuously recognizing that um our servers and our and our desktops need to be patched and all of that.

uh we will be we are enhancing our resiliency to the cloud. So one of the projects we will be doing is enabling uh direct access non through the a direct pipeline to our Microsoft um cloud host system and that will allow our city systems to communicate directly to the cloud without having to go to Microsoft cloud without having to go through the internet.

That will be a dedicated pipeline that we hope to have implemented next year. And then we will be looking to complete the GIS modernization that's been going on for the last two years and be looking to update some of those key GIS applications in the cloud such as city IQ, utility lookup and the parks app.

Um and then the and then we will be assessing more of that GIS um functionality in terms of what else will need to be modernized for the next coming years. In terms of accomplishments for um 2026, we implemented a new uh virtual server system uh over at Pox.

So this is actually a pretty exciting enhancement in terms of our resiliency. So it's part of the POC build. There is a data center over at POC and we have our server infrastructure mirrored there and also down at our data center down by the waterfront.

So we are able to switch back and forth. Um this has helped us in terms of just providing updates to the systems all of that. Um the system over at Pox uh stores 125 of our servers that replicated on both side.

Um about two weeks ago we switched from our data center on the waterfront to um the one at POC. Took us just a couple minutes and everybody's been running off of PO as while we do maintenance over there.

So it's really pretty cool that we've been able to do that. It was very intentional once we had the POC building that was able to withstand such a significant earthquake for us to have that resiliency in uh at our own location and in that um just for resiliency and all of that.

Uh we will continue to work on some network replacements and all of that. Uh continue to do citywide uh one drive training. We did a lot of one drive training for staff last year. Um we migrated all of their department share files to one drive cloud and had the staff training along with that.

So that was a a huge lip. We did upgrades for our financial system, our permitting system, our work management system, and our document management system last year, bringing them up to the a modernized uh version level.

Uh we implemented an enterprise justice system. We did some business process updates for the agenda management system. All of you have seen those updates as well. We've done some uh custom solution updates for our custom um built solutions within the city.

So the CADMON uh uh dispatch monitor system and our share our boat inspection system were updated. We did decommissioning on sh our onprim SharePoint. So we are now fully in the cloud with our SharePoint system and we did an implementation of a brand new process and dashboarding system for our project our IT projects.

So we have um built a whole new process for how we onboard projects within it how we categorize them how we rank them and score them so that we are this is in alignment with the one city. So we are it's now not first in first out but it's best value for the city for our projects and we've implemented that.

We pushed out AI guidelines resources and training for staff and we developed a cold storage solution for archiving to collaborate with our city clerk. um we implemented a number of security solutions and updated our security and event management system.

So those are the um our accomplishments for this year and that's the budget overview for this year. Take any questions now just to comment. Wow. Yeah, 30 people that was huge on my budget. >> Thank you.

I always think um it is probably the unsung heroes that makes everything work for whatever entity that they're under. So you guys do a fantastic job and I think sometimes the best testament is that we don't always necessarily know you're there.

Um and that leads me to cyber security. Um I'm curious how many positions do we have that pretty much are focused on cyber security and um is it currently adequate? Uh, I know with I'd like to think it's adequate because obviously systems haven't shut down, but um looking at other municipalities that are really being or governmental agencies that are really being targeted um and unfortunately having uh catastrophic uh temporary shutdowns.

I'm just uh wondering how hardened are systems and staffing in that area and are you seeing trends that that might be an area we need to expand upon? So um we have one dedicated security analyst to the city um and we recognized quite some time ago that that was not enough.

So one of the initiatives of our department has been to distribute the load to everybody. So security is not a singular person responsibility. Security is a responsibility from for not only everybody in IT but everybody that is a technical position.

And so we do regular um outreach. Um as a matter of fact, I believe later this week uh we will be doing an outreach to all technical staff on the anatomy of a cyber security attack and so staff will be learning about that.

Um there has been a disturbing I I am a part of a CISO group for the state. Um and I I regularly attend those virtual meetings and I will say that >> uh chief information security officers of the state of state agencies.

Um thank you. I will say that there has with the advent of AI and and security uh targeted security attacks there has been a shift in the mood of most of those people in the organizations that it's not a matter of if you get attacked it's a matter of when you get attacked and how we will um respond to that.

And with that over the last year, another accomplishment actually that I didn't even mention is we uh in collaboration with public works we did a cyber security audit of the water and sewer treatment plants, the whole SCADA system and came out very very positive in terms of that effort and and along with that was a an incident management plan.

So, we have a city-wide cyber security incident management plan that will go with that. We are now going, one of the projects for later this year or next year will be to update our disaster mitigation plan um to dovetail along with that incident management plan.

And again, it's not a matter of if, it's a matter of when. And that's one of the reasons why all this time we've been focused on finding ways to keep our systems kind of siloed and separated. Noting that there's lots of integration, finding ways to be resilient in terms of putting um our systems or our data in the cloud or things like that.

Um that was the whole purpose of the uh GIS modernization is to be able to be able to mirror mirror a lot of infrastructure recognizing those critical systems. That's part of the whole purpose of of that um secure dedicated secure link that we are bu going to be building.

It's again finding a way to house our stuff in the cloud, how it replicate um just be able to build that resiliency. So again, that's distributing that security posture to all IT staff, all technical staff rather than just having a a single person.

>> Thank you. My little book. >> This isn't really a budget question, but you're here, Don, so I' ask you. I'm asking what about the cyber security issues for law enforcement and for that sensitive data and also for data retention and data security for for example body cam footage is that in your department or is that a police department?

How much are you doing that in your department? It's primarily police. Although, uh, one of the things that we, uh, will be working on later this year and into next year is we have a a a um combined project with our police department on a SEIUS audit.

Um, and that is going to that's the criminal criminal justice information system. So pretty much everything that you described falls under that SEIUS uh umbrella and we will be doing a collaborative effort hiring a consultant and being and doing an audit of all of our SEIUS practices and our information technology related to that.

A lot of that has to do with retention and storage of those records where they are how they're um how secure they are and all of that. questions. >> Do want to recognize that I have two of my staff here, Melissa and Damian.

Um, here, our apps manager and our GIS manager here to watch. >> Wonderful. >> Thank you very much. Thanks, B. >> Melissa, communications is next. Well, um before Melissa uh presents the proposed budget, it's very exciting brand new brand new uh bar graph there.

Uh I just wanted to take a minute that uh you know >> no history >> I mean clearly communications is an important key way um that we're in service um internally across our organization and critically to the community broadly.

And since taking office, we've been continuing to make sustained investments in the resources and the tools and importantly the people that help the community better understand uh what we're doing and that we're showing our work as we go.

And so this just really kind of makes that bigger body of work that we've been doing very real. We're very excited to have Melissa as the new departmental leader and it's broadly um aligns with kind of that one city ethos of service.

So um while um we've had a few key communications resources embedded in department uh embedded within different departments. This really consolidates them and ultimately moves them closer to um more of um like an agency type model where they'll be clients but that way not every department needs its own dedicated FTE to be telling the stories.

There'll be expertise and skills and relationships um across departments uh to help us show our work. So let's take it from here. >> Sure. Um so yeah, you'll see no history in our expenditures over the last years.

We just have um the budget there for 2027. Um like Marilyn said, um this is a new department, but in a lot of ways, this isn't really all new. Um it changes reporting relationships for some of those communications and community engagement staff within departments.

um but they will stay embedded in those departments and will continue to do largely the same work that they have been in the past. Um what this does is change that like we said that reporting relationship and allows us just to be more cohesive as a team.

Um it also provides some opportunities for us to share some of the workload around that citywide work. So that's things like we've talked about before um with council, managing our website, managing social media, thinking about how we're all moving together um in the same direction for some of those goals that we have around being transparent, using more um visual communication, for example.

So this just creates more opportunities for us to be on the same page with that. Um, as we talked about, um, with, uh, director Asby Ornson's presentation, this will be part of that central services fund.

Um, so many of those staff are funded through the general fund, but I want to note that in the budget, the one pager that you have, we've called out those BTB funds, and that's that public access, public education TV funding that we get that will continue to support BTV services.

Um there I just also want to note that there is a slight discrepancy um where that falls um in the one pagers for both IT and communications. You'll see that the BTV funding shows up in the communications to budget in the budget book.

It shows up in it. So we'll get that taken care of, but we're calling it out here just to note that that that BT BTV funding does support some of those um the BTV staff. Um, so those BTV staff are moving from IT into this new department.

Um, I think part of that is recognizing how much that is a communications tool um, more so potentially than it is an IT function. And so it allows us to just be again in better communication, better coordination about um, the services and the strengths that that team provides.

So, in addition to those BTV staff, um obviously myself and the assistant communications director from the mayor's office will be moving into this new department. It will also include the communications and community engagement planner from planning and community development and the new p well new slashnot uh public safety communications manager that largely supports the police department.

Um we are in the middle of um evaluating candidates for that position. So we hope to have news on that um soon. That person in addition just to supporting a lot of the um media relations and other communications functions for the police department will also take the lead on our emergency communications work as well.

Um, and you'll note that uh public works communications and communicate community engagement and outreach staff are not included in the new department. Um, part of that has to do with the size of that team and wanting to give ourselves a little more time to think about if and when and how that work becomes more integrated.

Um, I will say like I you know this this isn't that new. So we all we already work quite closely and I think that that's will obviously continue to be the case. Um, in addition, we're also looking at having some agreements not only with the public works department, but with each of those department directors who have um embedded and dedicated communication staff about how the workload gets shared between departmental priorities and some of those citywide priorities and how we can better share the workload like I said of some of that citywide work.

Uh, so in terms of work plan, not a lot new uh happening. Um staff will continue, like I said, to uh support and manage those department level priorities and communications and engagement work. Um we'll continue managing those citywide platforms and engagement efforts.

Um myself and Kelsey, our assistant director, will continue to specifically the mayor's office communications, but that won't change. Um BTV will continue to still do what it's doing, but um as we've really recognized um the decrease in the television portion of BTV and the emphasis much more on their videography and storytelling and um YouTube and some of the work that they do to support our social media efforts.

Part of what we want to do in 2027 is really take a close look at that and do some strategic planning about what that looks like going forward. Do we need to sort of shift the balance of their work um as that PEG funding continues to decrease?

What's our plan um to think about the future of funding to support that um critical service uh within the city? Um, as Don mentioned, as part of his presentation, we'll also be finalizing the um implementation to comply with the new federal standards around web and digital accessibility.

Um, we've we've had that work plan in place. You may or may not remember the original deadline was April of 2026 this year, and about a week before the deadline, we learned we had a year extension. Um, so there's still a few items on our compliance plan that the year is helpful to have to complete.

Um, we'll also be doing some very dedicated work around emergency communications. We will have an intern um, starting with us in January. This is someone who comes from Coast Guard and as part of their um, exit and retirement from the Coast Guard um, will be placed with us.

This is someone who has experience in emergency communications and will help us just really build out our systems and protocols and practices and do some training for everyone around that. Um, we also want to take some time uh to do a bit of a deep dive into analytics and metrics.

Um, we don't have a great system for regularly tracking the success of our work. So, we want to spend some time really thinking about that in 2027. Um, we need a new digital asset management system. So, we have a ton of great video from BTV.

We have a ton of great photos from that team. We have a ton of great photos and and video that staff take when they're out in the field or for various communications projects. And we want to centralize that and better use those assets to be available to anyone across the city.

Um, and then lastly, I'll just mention um, in 2028, we are tentatively planning for that to be a time when we will move from our current website content management system to a new content management system and which is a a large body of work as I'm sure you can imagine.

And so we want to take some time in 2027 to do whatever cleanup we can. We've begun some of the cleanup of our website, but we want to sort of not port over what we don't need to take into the new system.

So, we'll be doing some evaluation of that and any other preparatory work that will set us up for success in the following year. So, that's all I have to share and I'm happy to answer other questions.

>> Thank you. Um, thank you. um exciting to see uh where this goes in the big picture because communication is um really pretty key to everything we do. uh when you say like a I just kind of smiled because when you said new web system I'm it's a big lift to the move to new platform and I think the big lift often is the legacy information is to make sure that the staff from past is still available and I I think of the the the budget um preliminary budget how that dropped off the web and hopefully it goes back.

I'm wondering with the migration to a a new web platform and deciding what goes and what stays um the retention of past information because of just public information request or people wanting to do a deeper dive into some of the historical decision making.

Um, how do you I know it's hard to say until you have your have you identified the the new uh web platform that you're thinking of migrating to. And second, how do you plan on um keeping that legacy information that may not necessarily be moved over, but having like a list of items that didn't list over that are easily accessible, but people can see what might be available to be able to make those requests and know that it's being retained.

Um that would be yeah an important thing for me in the future as you migrate over >> just give me a a >> insight on what I'm going to be looking for. >> Yeah, I appreciate that. Um so that we haven't identified what that new platform would be or what that new CMS would be.

It will be our a request for proposal process. So um more so we would wanting we would be having the conversations about what are our business requirements, what are the things that we want and need in that new system, building that into you know a request for proposals and then evaluating the folks that um uh submit proposals.

So um there are certainly we call them site in a box. There's a lot of big vendors out there that um many of us have experience with in other places that would certainly be great contenders. So I think we'll have some really great options for that.

Um the nice thing is that also comes with some support, some external support from those vendors. So um we have an amazing uh team who manage our website here and um potentially that could reduce their workload just a little bit.

Um so the second question about what what we take and what we jettison. Um I think there's several different things that we think about there. Certainly public records requirements. We want to make those things that are that we are required to provide that make sense to live on the website.

We want that to be the place that they live. It's easy to find them that way. Um we can certainly look at some of the data that we have about um how much various content is viewed over time. So we look at you know how many views has this had in the past six months, year, two years.

And we've already done some of that calling based on that information. That's not a conver, it's not a decision that we make on our own. I'm not sitting there and thinking about what we need to let go of.

That's a conversation with staff who are the subject matter experts and know that content really well. Um, and then um, in terms of thinking about how to make visible what is no longer there, I think that's something that we can certainly think about.

I don't know what the answer is um, at this moment. I think one thing that we're thinking about and maybe it's you know we can have more conversation as we get closer um but just the cost of like um digital storage.

So making former draft documents like large draft documents from years past available um it probably isn't in our thinking for what's an essential document. um that would be hosted online when we do the migration.

Of course, that could be something that's available by request, but we think about our um the climate costs of our digital footprint in the cloud and trying to to minimize that. So, >> and I'll just add on to that, you know, we we did um last year or the year before we identified that we had nearly 10,000 PDFs in our media library and that slows down our search.

That slows down the functionality of the website. So, we do want to be careful that we aren't overdoing it on some piece of content that's there. Some of it is important to have for a time and so we just need to regularly go through and say, "Okay, that was important for a while.

Now we can get rid of it and keep keep cleaning up that library." >> You don't have to keep everything. >> We don't microfish. >> Maybe I'll still exist somewhere. >> I can go back 40 years and get certain state records.

So uh and that one time you need it. I do miss it. >> So um church I guess my question is related to the and maybe the creation of new department communications department you mentioned that public works not and part of it was the size of the team I believe there exact number but communications staff ined public work.

Um, and so I guess if there's anything else you can share because they're thinking about city approach and the administration, I mean obviously the city council has a communication staff member. Um, but thinking about that as a separate branch of of government, I guess within the administration, there's more you can share about why that decision was made to be public.

>> Yeah, I mean it's many factors. Um certainly just think wanting to be careful as we're creating a new department that we aren't overloading with too much of that um you know storming forming norming sort of work as we're carrying on some really important things like the RFA that's huge project for our team right now.

Um, so just wanting to be really smart about um, how much work is going into the creation of the new department relative to some of the other work that we need to do, I think is part of it. Um, you know, I think just with the size of the team and the way that um, they've really integrated within public works, we just want to take more time to be careful and and thoughtful about what that approach looks like.

So, it's not a it's not a we're sort of agnostic about the decision right now. Um, I would say too that I don't feel that that that it hinders our one city approach to communications. So, like I said, this while it's a new department, we work together so closely already and um I think we have we we will continue to do that even when they are not a part of the team in the next year.

>> I don't know if there's other or if um Joel wants to speak. Joel can speak to it when he's presenting the public works budget a little bit too and follow up on that. I think we'll be I think in large part it's the answer that Melissa gave.

We'll let kind of things norm and um get established this year and be evaluating um are there um assets within that team that make sense to um come over to the department or does um continuing to function the way that they have been make the most sense?

So, >> so this time there's not a dotted line to that department, the reporting and everything else. >> There there's a dotted line. um there has been in the past. So to each of those um manager level staff that are embedded in departments there's been a dotted line relationship to the communications director and there that will continue for public works in 2027.

>> But for now you're saying there the budgeting pieces are questions for communication. Thank you. >> Give it a minute to get the paperwork around. Uh for those that may be following online, the um actual budget one sheet is on page 45 I believe of the packets and then our departmental budget uh overviews on page 97 where it starts.

But as we'll talk about here in a few minutes, um there are a number of different funds within our department that uh show up on slightly different pages. So I'll draw your attention to those. But before I get into the specifics, I just want to acknowledge we have Terara Sundine who's our community economic development manager here, Sammy Lutz who's our housing program manager, uh Chris B is over there in our long range planner man planning manager and uh Kurt Navel is our development service expansion.

So, um directing your attention to the budget one page, you'll see on the um kind of the circle chart in your upper left portion of that the items that show up in blue are more in the community development uh and economic development uh sphere.

And then the um lighter green color um and the dark green color are both part of development services piece. And then that kind of kind of middle shade of green is our um long range planning and planning administration.

So that's kind of how our budget is set up overall. As you look over to the right hand side and you see the bar charts, um, one of the things that Andy alluded to earlier and that you all are probably familiar with at this point is our general fund portion of our budget, which is showing up in the blue colors there, is on the follows the fiscal year that tracks the calendar year, but a lot of our community development dollars are offset.

And so you start to see slight variation uh kind of in those bar charts. The probably most notable thing about that is you see the jump of 26 to the green amount go up uh fairly substantially compared to what last years are.

And that's largely in part because we have about $11 million committed to several uh housing projects that are uh slated to come online. So Unity Village or excuse me, Unity project um over on Unity and Flora Street is one and then there's also another one in Oldtown.

Uh so when we have those amount of anticipated expenditures, you'll see those particular things called out. When you direct your attention down to the budget snapshots, one of the things that I wanted to call out, and you've heard a little bit of conversation about that this morning, is um we like many other departments are trying to kind of maintain uh and keep the lights on and things going at the current levels of services.

Um and so you'll see a reference to current staffing levels being maintained. There are two positions. If you go to page 147 of the budget book, you'll see kind of the position numbers. And I just simply wanted to call out that there are a couple things that you may if you look at that in any great detail, you'll see in the proposed 2027, there's two positions that go from one to zero.

One of which is that you've heard this communications and public engagement manager was in the in the department and now it's being shifted over into the new community uh communications department. And so that's why that position basically is zeroed out from our particular control uh method.

And then you'll see another one down towards the bottom under senior planner which goes from four to three. uh the mayor's office will talk a little bit about that, but that's the um urban transformation specialist where Darby Gallagan was a senior plan and then we move into the responsibilities in the mayor's office.

So, you'll see those from our person uh you know specific department those numbers kind of zero out a little bit um on some of those. We've also had a few things since the budget book was produced where we've had senior oh we've had plans examiners which we have three on the list uh have gotten non-competitive promotions and now are becoming senior plans examiners.

So those will um shift in the year ahead as well. So I just wanted to draw your attention to a few things that have been moving in real time uh with some of those details. We will continue to support um our affordable housing efforts and homeless services.

Um as you know we have about 15 million I reference to the fact that about 11 million of that uh is expected to to go out potentially next year. And then um probably the most notable thing from my perspective and Kurt and I will be working on this as a top priority going into 2027 are the last two bullets on that budget snapshot which is conducting a a fee study to analyze the marketplace and adjust our um fees so that we can reflect current marketplaces and um in addition to that to develop a cost recovery system.

If I I can direct your attention to a little bit more on page 58 of the budget is the in particular is the development services fund. And one of the things that um this will be largely informed by where we go with um where we go with the RFA discussion and where we go with this cost recovery um and market conditions.

So many of you may be aware of the fact that uh you know bu and if you look at some of our housing tracking numbers over the years as we have on our permit dashboard you can see that we've seen a lot of kind of the general economy slowing down that housing production uh marketplace and so we're in the um memory serves me correctly we're in the high 300s.

Um that really gives us an impact to the development services fund. You've heard us talk in the past about um some of the concerns that we have about the number of um permits that are in kind of a ready to issue and hold status.

When you look at the development services fund, you can see that we've had um beginning reserves in the, you know, in the multi-million dollar range of 76 million. And over the last couple years, we've had to really uh dig into that to help support the efforts that we're trying to do.

We don't want, and this really is in keeping with what the mayor's executive orders are, both from the housing side and from the economic development side, is we really want to keep that high level of service and that responsiveness to the community um so that we aren't the impediment to getting those projects done.

Although there's very few levers that we can pull on our side, we can absolutely pull um kind of the time it takes to get through our process, but we don't control uh external funding sources. We don't control supply chains.

We don't control labor market. And so there's a lot of things. We don't control tariffs. So there's a lot of things out there that impact the just overall kind of build scenario. And so, um, in order to minimize the impact on the general fund, we've shifted some of those, um, costs into the development services fund, and we're at the point that's no longer a viable option, uh, and that we're going to need to, uh, look at how we can rebound and recover from that.

The um Bellingham Municipal Code talks about the need to have about a 50% of your operational budget in reserve balance. And so we definitely want to be able to adjust that in in the coming years. And so having the opportunity to have a more um permitting system that reflects those current costs as well as a cost recovery system when we have particular projects that come in and they're going through two, three, four, five iterations of um you know discussion with staff and with community input and involvement.

Uh we want to make sure that that really we can capture the costs that are are associated with that. Um so that uh that's that information. As we shift over a little bit into the work plan, uh many of you are familiar with the fact that uh you know we continue to try to process and and work through projects.

A big push for us in the coming year really is going to be kind of the second and third uh well uh second, third, and fourth bullet points. So, revisions to the development regulations in particular for residential land uses, the update to the critical areas ordinance, and reforming um our title 20 into a unified development code.

All of those are in response to the work that you all helped us get across the finish line with regard to the um comprehensive plan, but we really now need to follow through on delivering on some of the state uh obligations and restructuring some of those things.

We're doing that all with a mind like we did with the um comprehensive plan of making it user friendly, a bit more streamlined. So there's a lot of reorganization that will go into that thinking about it kind of from the from the users perspective.

you will see uh we're going to be taking that to the planning commission on the uh 15th so that they'll begin to see the first touch on what that will look like and then we'll be back to you as the city council on October 19th to walk you through again that first touch.

It really just is anformational item that we'll be presenting to you. So, you can kind of start to see some of that and then you'll start to get more of the details um throughout the balance of the year as we move forward with implementation efforts uh in there.

We're off to a good start um on the landlord tenant advisory work group. We're just one meeting in, so I don't have a tremendous amount to to report at this time. A lot of it was just um setting the tone and tenor getting people introduced to TA there's talking a little bit about that but we'll continue that on a monthly basis and that will go forward um for the the greater part of 2027.

We expect that the the group itself will have kind of its conclusion in the around September time frame and then we'll be working on a final report out for the council and for the community uh to see the benefits of that work.

But again, much of that work is really going to be looking at various different policy implications for setting things out for the future. Um, and so there may be some additional work to come from that.

Another uh key component and and both um Sammy and Tara can speak to this a little bit more is that we know that the affordable housing levy uh is coming up on its conclusion. And so the question for our community is going to be whether or not to renew that um housing levy and and so we'll do some work in preparation for for that effort.

So um and then the last couple things on there that I'll mention this morning are again continue to work with our partner agencies in particular the port and the county to look at really what um the industrial land supply looks like.

I know that's a a work product that uh many of us have been very interested in pursuing and we'll continue to to um work towards that endeavor. And then that also kind of is uh in a similar vein to our work on an an annexation plan strategy and thinking about what the UG components will look like.

Um that's not to say and many of you are aware that we do have to work through and understand uh kind of the overall implications to the challenge to our comp plan. So we we're working to get to the growth management hearing board um in November and so we'll have a better understanding of where that stands and if there's any workload that will come out of that uh that'll come be part of our our work plan in the future.

So I'll stop there and happy to answer any questions and again we've got a number of really knowledgeable subject matter experts in the room to help. >> Thank you very much. >> This is sort of awkward to express.

Um I kind of think I'm asking possible. You mentioned the development services fund uh can be strained. It's cyclical, right? Its revenues go up, but in a downturn when we want to not be the factor which holds it back.

It'd be nice if we had um reserves so it would allow us to remain as active or more active in a downward cycle, right? I'm thinking about that generally in terms of long range planning. Um the whole unified code and uh revising our regulations on on residential land.

It'd be nice if we were out front and going faster on those so that we were never the impediment. Um, you know, you say you were maintaining your current staffing levels, right? So, you can see the the impossible request, the the request I probably make or imply dozen times a year.

How fast can we go on that with the current staffing? And does it make sense to try to go faster to add uh contracted resources or something to move any of that forward? >> Um the challenge with that is you have to then manage those contracts and then you have to get folks up to speed on the subject matter.

we we we drew truly do have exceptionally knowledgeable staff uh that are working on this stuff and um so I don't know that it you know that it'll help us go that much faster. The question is when we get the the ads >> your your your predecessor I think your predecessor uh said that he brought in contracted services he would slot them in sort of at the lower level to free up our subject matter expertise.

I mean, if we had the money, that would be a good way of accelerating it. >> Yeah. And we can certainly talk through different ideas of where that might be applicable of how to do some of those things.

In our the way our department is structured, um, we have the long range folks that are doing a lot of the work on the code development, but we actually have flexibility to pull some of those from kind of the current planning side.

So some of our more senior staff are coming in and assisting with that. So we've tried to load some of that stuff in. Part of what we're trying to also look at is what that does to um projects and and the challenge that we face from a budgetary perspective is the projects as I mentioned are are lowering.

We don't we're not seeing as many. So we're able to shift some of those folks into doing some of that codew writing and that development work. um as it pertains to that, but that's more of a general fund implication, not a uh ability to charge back to a particular project.

So, it's identifying how we're going to pay for those as the, you know, as the particular not opposed to doing that. We've done that uh with respect to a lot of our plans examination and plan reviews where we've added some additional support on the permitting side of that.

But it's the it's the project and code development side that's a little little thing. >> Let me ask it a different way maybe. Um how slow would those projects need to be going to the point where you would start to raise concerns that maybe they do need to be more heavily resourced?

>> The are you talking about the code rewrites >> these long Yeah. these code rewrites. I mean >> general fund >> off. I was just gonna say we just do not have like the resources. We just did a 40 position reduction for this year's budget.

Like we are at the bone, I guess. So, it like there's so many things we want to continue to do to deliver things faster and higher standards for the community that are critical to uh to this great place, but we just we are constantly bumping up against our revenue realities and making those hard trade-offs.

So, I appreciate where you're coming from, Michael, because um like >> this is the budget discussion. >> Yeah, this is but the these are the hard choices. This is the last two years in a nutshell of of some of the hard decisions that we've been having to make.

I'll I'll speak to one other aspect of this and this is something that um Council President Stone mentioned earlier is thinking through some of the uh state lobbying efforts and to be honest with you uh one of the things that I'm particularly interested in is hopefully a chance to catch our breath.

A lot of what you're seeing staff do right now are the result of this legislative decisions that were made in 23, 24, 25. And we and we just quite frankly we just need to we need to catch up. We we need to we're doing a lot of the implementation of the decisions that were in those processes.

And if we keep getting unfunded mandates and doing that kind of stuff, we're just not going to have the capacity to deliver uh in a meaningful way. in a way that I think that our community expects us to do.

And some of these things are not simple, right? We're trying to make big decisions. We're trying to make um things that will impact the you know built environment of our community for for decades uh and generations to come.

And so we're trying to make sure that we do it in a way and the other piece I'll add to this is we we talk a lot internally about the art of simplicity and to be simple is is not always easy. We're trying to think about what those core values are and write code and write development processes that allow us to deliver on that for this community um and try to keep it as simple as possible.

But to think through those different dynamics um is not an easy or or a quick task to do that. Yeah. And said like letters would be shorter if we had more time to um but I look forward I mean you highlighting the the impact of those decisions made by the legislature you know several years ago and how that kicks down and really is unfunded and being able to in hindsight sort of have some measure of the right the time and resources that those heavy lifts have have required from the I think is really important feedback for our um delegation down in Olympia to >> and and one of the things that we are seeing is that with um some of the state efforts to streamline the process, we're getting more into um staff level reviews, administrative non-discretionary kind of permits.

And sometimes the trade-offs you get with that are people feeling like they're being pulled out of the process a little bit more. and then the only avenue is to appeal and then that takes a different dynamic along.

And so we just we're trying to um balance that. We're trying to be respectful of what uh the future may look like when with regard to artificial intelligence and are there ways to streamline and be responsible about some of those efforts and incorporate some of that uh thought process into thinking about our um you know our service delivery models and our staffing levels and the planning.

Thank you. >> Thank you very much. All right, we're nearing the end here for last apartment >> for today. But today's the most marathon day in the distance. >> Yeah. I'll go either way. Um so, uh taking a look at the mayor's office here.

Um I think the primary thing that you will see in the mayor's office is that uh a bit of a staff reorganization here. So, of course, that's the two communications positions going to the communications department.

We're also shifting with uh Janice leaving us from a two deputy model to one. Um and in lie of that other deputy, we've added an executive program manager position. Well, not really added, that was a frozen climate um analyst position that we're reconfiguring into this program manager position to sort of support the mayor's office and mayor of office priorities more generally.

Um, we also, um, as Blake talked about, we have the urban transformation strategist position that is not a new position that is coming up from the planning department, bringing some of her existing workload with her.

Um and then also taking on the new responsibilities associated with that that new position which really acts as um you know this this general uh economic development and uh the uh concierge support for people that are trying to start businesses in Bellingham.

Um and then just general business relations and and getting out there and and letting everybody know that we are open for business. Um, also within the mayor's office, we uh manage a number of contracts um in including the alternative response, domestic violence, um racial equity commission and um we have good amount of climate action dollars.

We also sometimes we'll see our budget spike and those are climate dollars coming in and out. I I would just say um in the elimination of the deputy position that's just a reflection of budget constraints.

The addition of a second deputy when the scope and the portfolio of work that we've done has expanded so much over um you know the last decade or so really felt like we could breathe and had capacity to do a lot more.

Um, and I think there's a time that, you know, this community may want to revisit that decision, but we've made the hard choice uh to save money and resources and eliminate it for now um and unfreeze that program manager.

So, we're still moving work forward. We're still focused on the implementation of that big pile of policy that we have that Blake just spoke to that we have a resource to do that. But um I that was a tough call to make.

So and then if we uh work at our look at our work plan for 2027, we will work to seek long-term fiscal stability through that regional fire authority. So, um, we've been working closely with the fire department on that effort.

That's been a huge body of work for the mayor's office this year and will continue to be. So, um, you know, in the event that it passes, there will be a ton of work to do doing interlocal agreements between the fire authority and the city.

Um, and then in the event that it doesn't pass, there will be a ton of work to do to try and get us back on a fiscal fiscally stable path. Um, we'll continue building strategic capacity for equity and belonging initiatives, climate actions, and health and human services partnerships.

So, those are the action areas of our strategic initiative managers. Um, where we've just seen I I think really great strides in all those areas, having those positions in the mayor's office and being able to bring interdep departmental teams together to address issues and work with the public and other agencies to to really make big moves forward.

Um, we will drive ongoing implementation of the mayor's executive orders on downtown, on the economy, and on housing. We'll continue to emphas continue have continued emphasis on community safety and well-being.

We'll support down a vibrant downtown and expand economic opportunities citywide. continue enhancing and modernizing communications and civic engagement. Communications department really being a big um not an actual big investment because it's not really costing any extra money but a a big investment in organizationally and um continue initiatives promoting efficient, responsive and excellent government.

I wanted to clarify on the budget snapshot side. So that executive program manager that position has not been filled. >> No. >> Um but that was you mentioned the climate position. >> It's been frozen for years.

>> Never filled. >> Right. So that hasn't been filled since um >> No, that's Claire's position was eliminated. This position has existed for several years has never been filled because sort of it got created sort of just before we started having budget issues and we've held it aside ever since.

>> Okay. because and then um the planning community development that position moving over that's already filmed that would come before um but I guess I just wanted to get some clarity on the climate >> work of the city because so seta that's sort of a one person department so is that is this position now sort of on par with like pora and Jason is that Has there been a change in that titling or work?

Is that one of the strategic initiative managers or >> been a change in title? I think in practicality it operates similar to a strategic initiatives manager. Um but there hasn't been a change in title.

And I think one of the things that's unseen but is important to know is we took a look at um my first year in office in particular. It was regular meetings every two weeks to really understand both uh the carbon reduction and resiliency work plans that um um and all the action items on those plans within the climate office.

And then we've gone through um an effort to distribute those and identify which departments do those live or contribute to. So we've gone through this process of embedding climate work throughout the entire organization.

Um acknowledging that it is not the job of one or two people here to implement the actions in our climate action plan. This work belongs to all of us. Um and what are the specific work items where public works has more influence whether that's planning related um whether it's a mayor's officeled action item.

And so, um, we're routinely checking in and making sure that we're all contributing to those climate action plan. So, yeah, >> because otherwise, you don't necessarily see that, right, work show up when that move was made to um, move that position to the mayor's office and sort of be a part of that team, which was prior to your administration, obviously, but um, yeah, just wanted to make sure those pieces weren't lost.

I understand the budget constraints um but want to make sure that climate work is continuing. >> Yeah. And I'd love to just highlight a few of the exciting things I think that are happening in that body of work.

I mean aside from just implementing that throughout the city and having that be front of mind in all the decisions that the city makes. Um, we are on the we are well on our way of using a grant from the Northwest Clean Air Agency to create a new uh community solar array that will be on the water treatment tanks.

Uh, and that's going to produce revenue that will then go into a climate action fund that will be able to reinvest in our community to help people uh reduce their carbon use. So, that's really exciting.

We're also uh well through um development of a program that will be uh an electric car share program that will be rolled out through our community that we'll have several cars available for community members and have a a low income opportunity associated with it.

So that's going to be really cool. So um some really I think awesome stuff happening in that in that arena and um Seth's doing great work and we'll continue at it. Yeah. >> Okay. >> With that, >> this was the first of um three budget sessions that or work sessions that the children will have.

So again, this is a special meeting this morning to cover these budget budget update from the department and we'll have another one at our next meeting on October 19th. But in the interim, we will adjourn then this morning and reconvene this afternoon at 1 p.m.