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City Council

BEL-CON-2025-10-20 October 20, 2025 City Council Regular Meeting City of Bellingham
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The Bellingham City Council held public hearings on two significant items: 2026 revenue projections including a proposed 1% property tax increase, and amendments to accessory dwelling unit (ADU) regulations to comply with state law. The revenue hearing provided detailed economic forecasting showing challenges in sales tax revenue growth and the need for the statutory property tax increase to maintain city services. The ADU ordinance hearing addressed required state compliance but sparked debate over parking elimination and ownership requirements, ultimately being referred to committee for further discussion. The meeting also included budget work sessions for the IT department and library, both facing proposed position eliminations and service reductions. The library will lose Sunday hours and reduce its materials budget by 13%, while IT will eliminate key security and database positions. Two environmental protection measures passed unanimously: establishing a city wetland mitigation bank and adopting an invasive mussel response plan for Lake Whatcom. Mayor Lund reported on recent tribal relations activities and thanked the community for a peaceful weekend demonstration.

**AB 24694 - 2026 Revenue Projections/Property Tax (Public Hearing Only):** - Staff recommendation: 1% property tax levy increase - Council action: Public hearing held, no motion taken (ordinance comes next meeting) - Key details: $782,000 increase including 1% levy plus new construction, would result in approximately $22 increase for $600,000 home **AB 24693 - ADU Ordinance (Referred to Committee):** - Staff/Planning Commission recommendation: Approve with three changes including parking elimination - Council action: Referred to Committee of the Whole 7-0 - Key details: Required by HB 1337, eliminates owner occupancy requirements, allows condominiumization **AB 24703 - Arts Commission Appointment:*…

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**Revenue Projections and Economic Outlook:** Finance staff presented concerning economic indicators including persistent inflation above Federal Reserve targets, declining construction activity affecting sales tax revenue, and a weakening labor market with declining workforce participation. The presentation highlighted the city's reliance on sales tax as the largest general fund revenue source, making it vulnerable to economic downturns. Council members questioned broader economic indicators like inverted yield curves and federal employment impacts on the local economy. **ADU Regulations and Housing Policy:** The ordinance implements state-mandated changes including elimination of owner occupancy requirements and density exemptions, allowing up to four units per lot (six if two are affordable). Significant debate centered on Planning Commission recommendations to …
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**Adam Bellinger** (appeared twice): Questioned property tax mechanics after his assessment decreased 4.1%, supported ADU changes but opposed eliminating parking requirements, citing quality of life concerns and potential neighborhood friction. Requested better departmental performance reporting and contract accountability. **Brian Gas**: Criticized general government spending patterns and lack of accountability, noting his taxes increased 36% over three years. Opposed parking elimination for ADUs, calling it "irresponsible" and warning of safety hazards in dense neighborhoods. Questioned planning department effi…
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**Eric Johnson, on economic uncertainty:** "The economic predictors that we've had in the past don't, it's hard to tell what is, what to trust anymore, I guess, in this unusual time." **Brian Gas, on parking elimination:** "You cannot just blatantly, it just it's irresponsible to just blatantly get rid of parking as if it's just this thing that nobody cares about and that no there's not going to be any repercussions of some little kid who's going to get hit by a car." **Council Member Lilliq…
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**November 3, 2025 Public Hearings:** Three major hearings scheduled for parking ordinance extension (six months), Bellingham Plan adoption (comprehensive plan), and 2026 budget adoption. **Property Tax Ordinance:** Council will vote on the 1% property tax levy ordinance at the next meeting, required by November end for 2026 implementation. **ADU Committee Review:** Committee of the Whole will conduct detailed review of ADU ordinance during daytime session, addressing utility arrangements, impact fees, building envelope limitations, and lot coverage require…

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**ADU Policy Timeline:** Instead of immediate first and second readings, the ordinance will receive committee review before final adoption, allowing deeper examination of parking, utilities, and development standards. **Property Tax Process:** The revenue hearing is complete, setting stage for formal ordinance adoption at next meeting with no substantive changes expected to the 1% increase. **Environmental Protection Framework:** City now has operational framework for wetland mitigation bank and coordinated inva…
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# A Tale of Two Public Hearings: Property Taxes and ADU Reform in Bellingham The Bellingham City Council convened on October 20, 2025, for what would become an evening dominated by two substantial public hearings that capture the city's ongoing balancing act between fiscal responsibility and housing policy innovation. Council President Hollie Huthman presided over the meeting, with all seven council members present in the council chambers at City Hall. Mayor Kim Lund joined remotely from home, contributing her perspective to what would prove to be a consequential evening of municipal governance. ## The Economic Landscape: Revenue Projections and the Property Tax Decision The evening's first major item was a required public hearing on the city's 2026 revenue projections, including the proposed 1% increase to the regular property tax levy. Finance Director Andy Asbjornsen introduced Eric Johnson, Budget & Treasury Manager, who delivered a comprehensive presentation that painted a picture of economic uncertainty and cautious municipal planning. Johnson's analysis began with the broader economic context that shapes Bellingham's financial planning. "After COVID we had a large spike in inflation," he explained, noting how the Federal Reserve's response with increased interest rates had created the intended cooling effect. But the result has been persistent inflation above the Fed's 2% target, creating ongoing economic uncertainty that directly impacts the city's revenue streams. The presentation revealed concerning trends in the city's largest revenue source: sales tax. Johnson showed how sales tax revenue has essentially flatlined, with fluctuations "dipping above and below that green line which has resulted in really a flattening of revenue to the general fund from sales tax." While the city expects to meet its targets, much of the increase in sales tax to the general fund comes from redistributing existing funds rather than genuine growth. Construction activity, traditionally a strong indicator of economic health, tells a mixed story. After a COVID-driven surge in permits in 2021, activity declined through 2024. "We did see that decrease translate to lower sales tax," Johnson noted. However, 2025 has shown a rebound, with construction value and number of units jumping back up, possibly driven by declining interest rates. The housing market data revealed interesting dynamics. Active listings have been increasing, suggesting inventory is "sitting around …
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### Meeting Overview The Bellingham City Council met on October 20, 2025 for their regular meeting, focusing heavily on budget revenue projections and housing policy updates. The council held two public hearings - one on a proposed 1% property tax increase for 2026 and another on changes to accessory dwelling unit (ADU) regulations to comply with state housing laws. ### Key Terms and Concepts **Property Tax Levy:** The amount of property tax revenue that a local government is authorized to collect, set annually by the city council within state-imposed limits. **Accessory Dwelling Unit (ADU):** A secondary housing unit on a single-family residential lot, such as a converted garage or basement apartment, intended to increase housing options. **Owner Occupancy Requirement:** A rule that required property owners to live on-site when renting out ADUs, which the state now prohibits cities from enforcing. **Inverted Yield Curve:** An economic indicator where short-term bond interest rates exceed long-term rates, historically a predictor of recession. **General Fund:** The city's primary operating account that pays for basic services like police, fire, parks, and administration. **Middle Housing:** Housing types between single-family homes and large apartment buildings, including duplexes, triplexes, and fourplexes. **Condominiiumization:** The process of converting rental units into individually owned condominiums that can be sold separately. **Mitigation Bank:** A conservation program where the city can create wetland credits to sell to developers who need to offset environmental impacts. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Hollie Huthman | Council President (Second Ward) | | Hannah Stone | Council Member (First Ward), Public Works Committee Chair | | Kim Lund | Mayor (participated remotely) | | Eric Johnson | Budget & Treasury Manager | | Blake Lyon | Planning & Community Development Director | | Chris Koch | C…
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Budget & Finance Housing Government Operations Bellingham Public Library City Council Planning Commission Whatcom County Adam Bellinger Blake Lyon Brian Gas Daniel Hammill Eric Johnson Hannah Stone Hollie Huthman Lisa Anderson Michael Lilliquist Accessory Dwelling Units Budget Finance Comprehensive Plan Economic Development Housing Policy Lake Whatcom Watershed Middle Housing Parking Property Tax