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Budget and Finance Committee

BEL-BFC-2025-04-28 April 28, 2025 Budget & Finance Committee City of Bellingham 17 min
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Apr
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28
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The Budget and Finance Committee unanimously approved three related budget ordinances that collectively adjust Bellingham's 2025 budget by reconciling estimated versus actual reserve balances, reappropriating unspent funds from the previous budget cycle, and making necessary corrections. The three ordinances work in tandem: the first updates beginning reserve balances using actual 2024 year-end data rather than estimates, the second brings forward $104.6 million in unspent budget authority from 2023-2024, and the third makes $32.9 million in corrections and adjustments. Finance Director Andy Asbjornsen highlighted several financial concerns during the presentation. Two funds - Medic One and Workers' Compensation - now show negative beginning reserve balances despite ending 2024 with positive cash, due to year-end expense accruals. The Medic One fund will receive a new $200,000 interfund loan to maintain positive cash flow, adding to previous loans totaling $1.5 million over three years. The combined effect of all budget adjustments reveals a structural deficit in the General Fund, with expenses of $125.7 million against revenue of $121.1 million - a $4.6 million gap that depletes reserves by 2028 if unaddressed. The city is already discussing 3% budget reductions with department heads and planning for revenue-expense rebalancing in 2026. The committee addressed a clerical error in the reappropriation ordinance, correcting the total revenue figure from $10,331,421 to $10,131,421. All three ordinances advance to the full City Council for final approval.

**AB 24511 - Reserve Balance Reconciliation** - **Vote:** 3-0 approval - **Action:** Updates 2025 budget beginning reserves from estimates to actual year-end calculations - **Impact:** Net increase of $41.4 million in reserve balances - **Key Detail:** Medic One and Workers' Comp funds now show negative beginning reserves due to year-end accruals **AB 24512 - Reappropriation Ordinance (as amended)** - **Vote:** 3-0 approval with amendment - **Action:** Reappropriates $104.6 million in unspent 2023-2024 budget autho…

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**Structural Deficit Concerns** Finance Director Asbjornsen presented the "alligator graph" showing General Fund projections that reveal a growing structural deficit. The 2025 budget now shows $4.6 million more in expenses than revenue, with the gap widening each year until reserves are depleted by 2028. This deficit exists even after all budget adjustments and reflects ongoing pressure from rising operational costs outpacing revenue growth. The administration is already taking corrective action, with Mayor Lund directing department heads to identify potential 3% budget reductions for 2025. Staff emphasized this is part of ongoing efforts to rebalance revenues and expenses, particularly as they develop the 2026 budget. **Fund Health and Interfund Loans** Two enterprise funds are struggling financially. The Medic One fund, despite providing emergency medical services, cannot generate sufficient revenue to cover costs and is requesting its second interfund loan in three years. The fund borrowed $1.5 million previously and now needs an additional $200,000 to…
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No public testimony was provided during this committee meeting, as budget committee sessions typically do not include public comment periods.…
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**Andy Asbjornsen, on structural deficit concerns:** "This right here represents about a $4.6 million deficit that continues to grow out into the future. And by 2028, it depletes the reserves." **Andy Asbjornsen, on proactive measures:** "We are already discussing with the department heads going through a 3% exercise on what those potential reductions could look like with even the 2025 budget." **Andy Asbjornsen, on Medic One fund challenges:** "With that one remaining f…
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- Full City Council consideration of all three budget ordinances at the April 28, 2025 evening meeting - Continued monitoring of Medic One and Workers' Compensation fund performance - Department he…

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After this meeting, the city's 2025 budget will reflect actual rather than estimated beginning reserve balances, incorporate $104.6 million in carryforward spending authority from the previous budget cycle, and include $32.9 million in necessary corrections and adjustments. The Medic One fund gained authorization for up to $200,000 in…
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# Budget and Finance Committee Works Through Complex Financial Reconciliation The Bellingham Budget and Finance Committee convened Monday afternoon for what proved to be a highly technical session, methodically working through three interconnected budget ordinances designed to reconcile the city's financial position as it transitions from 2024 actuals to 2025 projections. Chair Lisa Anderson joined remotely while Council Members Dan Hammill and Michael Lilliquist attended in person, tackling over $100 million in budget adjustments with the assistance of Finance Director Andy Asbjornsen. The meeting represented the culmination of a two-week review process that began April 14th, when the committee postponed action to allow more time to digest the mathematical complexity of the reconciliation process. "It's fairly a lot of math involved here. It's fairly complicated, and we appreciate the time to be able to take a longer look at it," Hammill noted as he opened the session. ## Meeting Overview The April 28th session focused exclusively on three budget ordinances that work in concert to update Bellingham's 2025 budget. The meeting lasted just 17 minutes but addressed significant financial adjustments totaling over $140 million across multiple city funds. Finance Director Asbjornsen guided the committee through the technical details while committee members asked clarifying questions and ultimately approved all three measures unanimously. What made this meeting notable was both its technical complexity and its revelation of underlying fiscal pressures. While the ordinances themselves were largely procedural — updating estimates with actual figures and carrying forward authorized but unspent projects — they highlighted a concerning structural deficit in the city's general fund that officials are already working to address. ## Reconciling Estimates with Reality: The Reserve Balance Adjustment The first ordinance tackled what Finance Director Asbjornsen characterized as "…
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Budget & Finance Government Operations AB 24511 AB 24512 AB 24513 Budget Finance Committee Finance Department General Fund Medic One Workers Compensation Fund Andy Asbjornsen Daniel Hammill Eric Johnson Lisa Anderson Michael Lilliquist Budget Finance Contract Settlements Interfund Loans Medic One Fund Reappropriation Reserve Balances Salary Corrections Structural Deficit Workers Compensation