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Whatcom County Finance and Administrative Services Committee

WHA-FAS-2025-06-10 June 10, 2025 Budget & Finance Committee Whatcom County
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The Whatcom County Finance and Administrative Services Committee meeting was dominated by a contentious discussion over a $1.5 million behavioral health fund request that exposed deeper structural problems in the county's budget management. Committee members approved ten consent agenda items totaling over $6 million in contracts, but the primary focus was on AB2025-441, an $18.2 million budget supplemental amendment with a net cost of $7 million. The behavioral health funding controversy centered on $1.5 million needed to cover school-based mental health contracts that were not included in the 2025 budget despite being part of three-year commitments made in 2023. Council Member Tyler Byrd raised sharp questions about why the county entered contracts without proper budgeting, marking this as the second fund where such issues have occurred. The discussion revealed that the behavioral health fund is structurally out of balance, with expenses growing faster than revenues. Executive staff acknowledged they had rejected some behavioral health spending requests during budget preparation after identifying the fund would be "legally out of balance." They commissioned an independent consultant, Doug Merryman, to analyze the fund's status. Based on his report, they now feel comfortable moving forward with $1.5 million in additional spending while working on longer-term solutions. The committee also approved a $445,550 flood control zone district budget amendment and updated position titles for the Washington Counties Risk Pool Board. A housing presentation revealed the county's consolidated housing grant decreased from $20.3 million to $18.9 million, forcing difficult decisions about service reductions amid rising costs.

**Consent Agenda Items (All passed 3-0):** - AB2025-416: Northwest ESD substance use prevention services contract, $121,000 - AB2025-423: Cascade Connections developmental disabilities services, $1,661,673 - AB2025-424: Kulshan Supported Employment services, $1,588,773 - AB2025-426: Washington Vocational Services contract, $255,333 - AB2025-427: Work Opportunities services contract, $1,166,120 - AB2025-429: Cascadia Law Group water rights defense contract amendment, $300,000 - AB2025-430: Northwest Brush Busters levee vegetation maintenance, $62,287 - AB2025-43…

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**Behavioral Health Fund Crisis** The most substantive discussion revealed serious structural problems in the behavioral health fund management. Deputy Executive Kayla Schott-Bresler explained that during 2025 budget preparation, they discovered the fund would be "over obligated" and rejected some spending requests, particularly school-based mental health contracts. The county had entered three-year contracts with school districts in 2023 for mental health expansion but failed to properly budget for the ongoing obligations. Council Member Byrd expressed frustration that this represents the second fund where the county contracted for services without adequate budget authority. The behavioral health fund has approximately $6.1 million in current cash balance but faces ongoing structural deficits as labor costs grow faster than revenues. The fund is projected to end 2025 with over $4 million in fund balance, having spent down $3 million in reserves this year. Staff outlined three potential approaches: terminate contracts due to funding reduction, ab…
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**Council Member Tyler Byrd** expressed strong concerns about the pattern of entering contracts without proper budgeting, calling it the second fund where this has occurred. He questioned why the county didn't communicate more clearly with school districts about funding uncertainties and whether the county should pause or terminate problematic contracts. **Council Member Jon Scanlon** focused on procedural questions about the committee's flexibility to modify the budget supplemental after introduction, seeking clarity on what constitutes "material changes" that would require reintroduction versus amendments that could be made during the legislative process. **Council Member Todd Donovan** inquired about services provided to non-public school children and the relationshi…
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**Council Member Tyler Byrd, on contracting without budgets:** "Usually we budget or put the budget first before we go to contract. So yeah, how did that happen?" **Council Member Tyler Byrd, on fiscal management:** "This is now our second fund where, apparently we were just contracting without any idea what we had available to the budget and contract for." **Deputy Executive Kayla Schott-Bresler, on fund capacity:** "We wouldn't put this forward if we were not comfortable. And I think our r…
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- **June 24, 2025:** Finance Committee presentation on behavioral health fund status and long-term solutions - **July 8, 2025:** Working session scheduled to discuss totality of homeless and housing funds - **July 10, 2025:** Behavioral Health Advisory Committee prioritization exercise - **August 7, 2025:** Target date for approval of a…

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After this meeting, the county will have two versions of the budget supplemental ordinance for council consideration, separating the controversial behavioral health funding from other budget amendments. The committee gained clarity that the behavioral health fund can absorb the $1.5 million in the short term but faces longer-term structural challenges requiring policy decisions about service priorities. The flood control zone district budget gained approval for $445,550 in amendments, including $300,000 for water righ…
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# Navigating Budget Pressures and Fund Challenges — Whatcom County's Fiscal Reality Check The Whatcom County Finance and Administrative Services Committee gathered on Tuesday morning, June 10, 2025, for what would become a deeper examination of the county's financial stewardship than the routine agenda suggested. Committee Chair Todd Donovan presided over the hybrid meeting in Council Chambers, joined by committee members Tyler Byrd and Barry Buchanan. Several other council members attended as observers, including Ben Elenbaas, Kaylee Galloway, Jon Scanlon, and Mark Stremler. The meeting revealed tensions between expanding service demands and fiscal constraints, particularly in behavioral health funding — a dynamic playing out across local governments nationwide as they grapple with post-pandemic mental health needs while facing revenue pressures. ## Consent Agenda: Routine Business Moves Forward The committee efficiently approved ten consent agenda items totaling millions in contracts and agreements. These included developmental disability service contracts with providers like Cascade Connections ($1.66 million) and Kulshan Supported Employment ($1.59 million), substance abuse prevention work with Northwest ESD 189 ($121,000), and various operational agreements. The consent items also included a $300,000 contract amendment with Cascadia Law Group for water rights legal defense — a reminder of the ongoing complexities around water allocation in the region. A $910,503 contract amendment with YWCA Bellingham for housing services underscored the county's continued investment in addressing homelessness. Council member Byrd thanked staff member Anne for quickly responding to questions he'd raised the night before, a small moment that highlighted the collaborative relationship between elected officials and county employees in preparing for these meetings. ## The $18.2 Million Budget Amendment: A Tale of Two Challenges The centerpiece discussion focused on ordinance AB2025-441, an $18.2 million budget amendment that, despit…
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### Meeting Overview The Whatcom County Finance and Administrative Services Committee met on June 10, 2025, to discuss a major budget supplemental request and approve multiple contracts. The meeting's main focus was a controversial $18.2 million budget amendment, with particular debate over $1.5 million for behavioral health contracts with local school districts that weren't included in the original 2025 budget. ### Key Terms and Concepts **Budget Supplemental:** A mid-year amendment to the county's adopted budget to authorize additional spending or revenue that wasn't anticipated when the budget was originally approved. **Behavioral Health Fund:** A county fund that pays for mental health and substance abuse services, including contracts with school districts to provide counseling and prevention services to students. **Consent Agenda:** A group of routine agenda items that are voted on together without individual discussion unless a council member specifically requests to pull an item for separate consideration. **Fund Balance:** The amount of money remaining in a fund after all revenues and expenditures are accounted for—essentially the fund's savings account. **Consolidated Housing Grant:** A major state grant that provides funding for homeless services and housing programs in Whatcom County, allocated by the Washington State Department of Commerce. **Mental Health Millage:** A voter-approved property tax that generates revenue specifically for mental health services, with funds going to the Mental Health and Developmental Disabilities Fund. **Economic Development Investment (EDI) Fund:** Also called the Public Utilities Improvement Fund, this fund supports economic development projects including the agricultural research station. **Continuing Appropriations:** Budget authority that automatically carries forward from one year to the next for ongoing contracts and programs. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Todd Donovan | Committee Chair | | Tyler Byrd | Council Member | | Barry Buchanan | Council Member | | Randy Rydell | County Finance Director | | Kayla Schott-Bresler | Deputy Executive | | Aly Pennucci | Deputy Executive | | Joe Fuller | Health Department Program Specialist | | Ann Beck | Health and Community Services Manager | | Kimberly Thulin | Attorney for Council | | Gary Stoyka | Natural Resources Manager | | Melissa Keeley | Human Resources Director | ### Background Context This meeting highlighted a recurring challenge in Whatcom County's budgeting: managing the Beha…
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Budget & Finance Social Services Government Operations AB 2025 379 AB 2025 437 AB 2025 441 Behavioral Health Fund Cascadia Law Group Finance Committee Flood Control Zone District Health Community Services Mental Health Millage Fund Northwest Esd School Districts Washington Counties Risk Pool Whatcom County Aly Pennucci Ann Beck Barry Buchanan Doug Merryman Gary Stoyka Joe Fuller Jon Scanlon Kayla Schott Bresler Kimberly Thulin Melissa Keeley Randy Rydel Todd Donovan Tyler Byrd Behavioral Health Funding Budget Supplemental Consolidated Housing Grant Fiscal Management Flood Control Zone Fund Balance Housing Grants Mental Health Services Risk Pool Board School Contracts Water Rights Adjudication