The Watershed Fund Slush Fund

The Finding in One Sentence

The City of Bellingham spent $24,469,800.90 buying private property through the Watershed Fund between 2020 and 2025, acquiring at least 55 separate parcels from named property owners — and there is zero evidence of public discussion, council vote, or community input on any individual purchase.

The 10-year picture

The Watershed Fund's revenue history is now documented year-by-year on /funds/bellingham-watershed (extracted from the City of Bellingham's Adopted Budget Books, FY2015–FY2024, with FY2022–2024 audited actuals from the 2026 Prelim):

2025 alone shows $11.3M in land purchases against an estimated $7.5M of revenue — meaning the fund spent roughly 1.5× its annual inflow that year, drawing down accumulated reserves. The 2015–2019 spending pattern has not yet been tied to specific parcels — that's the next PRR pull.

How the money flows

Step 1 — Collection (hidden in plain sight)

Every water customer in Bellingham pays a Watershed Protection charge on their bill. In 2025, this is approximately $13/month per household. It's a dedicated line item — ratepayers cannot opt out.

Step 2 — Appropriation (blank check)

The 6-Year Capital Plan contains exactly one line item for the entire Watershed Fund:

WS0A1 — "Watershed Acquisitions Annual"
Year 1: $8,000,000 · Years 2-6: $3,000,000/year each
Total: $23,000,000 over 6 years

That's it. One line. No parcel numbers, no property descriptions, no prioritization criteria, no acquisition plan. Just "Watershed Acquisitions Annual" — $8 million, please.

Step 3 — Spending (behind closed doors)

The PRR data shows 98 land acquisition transactions totaling $24.5M, purchasing at least 55 named properties through title companies. The purchases range from $275 (title searches) to $3.9 million (Nielsen Bros). Where are the council votes, public hearings, or community inputs for any of these?

The evidence of silence

• 495 Bellingham meeting transcript files searched for property owner names, "Watershed acquisition," project codes (WS113, WS094…). Zero matches.
• 246 meeting briefings in the HubDB database covering 2025-2026 council and committee meetings. 141 documents mention "watershed" in general context (water quality, environmental programs); zero contain discussion of specific property acquisitions.
• 23 years of CAFR text (1999-2023) reviewed. The 1999 CAFR mentions asking voters to approve bonds. The 2002 CAFR notes "land purchases in the Lake Whatcom watershed." The 2008 CAFR discloses a $6.04M Water/Sewer Revenue Bond for "acquisition of real property in the watershed." From 2009 onward, the watershed section progressively shrinks. By 2019, it's a generic one-paragraph reference. No individual acquisitions are ever named.

The acceleration

The spending is increasing rapidly — 2025 alone was $11.3 million in land purchases, 19 properties in one year, averaging $595K each:

The B&O tax on top

Fund 411 also pays approximately $2 million in B&O tax back to the General Fund (2020-2025). So ratepayers pay a watershed charge, the City uses 85% to buy private property with no public discussion, and then taxes the fund another $2M to support the General Fund.

What's missing — the governance questions

Who decides which properties to buy?

The capital plan says "Watershed Acquisitions Annual." It does not identify which parcels are targeted, what criteria are used to prioritize, who makes the purchasing decisions, whether appraisals are independent, or whether prices are at, above, or below market value.

Where are the council authorizations?

Washington State law (RCW 35A.11.010) requires council authorization for real property acquisitions. This typically happens through ordinance or resolution, listed on the consent agenda, with a public hearing for purchases above certain thresholds. We found no evidence of individual purchase authorizations in any available meeting record. Council may approve them in closed (executive) session under RCW 42.30.110(1)(b) for real estate negotiations — which means $24.5 million in ratepayer-funded land purchases are being approved behind closed doors.

Where is the acquisition plan?

Most watershed protection programs publish a watershed management plan identifying priority parcels, an acquisition strategy with conservation goals, regular public reports on properties acquired, and maps showing the growing public land portfolio. None of this appears in the budget, CAFR, capital plan, or any public meeting record we've reviewed.

What happens to the land after purchase?

The PRR data shows the City buys properties. But: are they logged and then left as forest? Transferred to other agencies? Used for any public purpose beyond "watershed protection"? Is any of this land in the urban growth area where it could be developed for housing?

The core argument

The Watershed Fund operates as a de facto slush fund because:

1. Revenue is compulsory — every water customer pays, no opt-out
2. Spending is pre-authorized — the capital plan gives an annual blank check
3. Individual purchases are not publicly discussed — no meeting record we can find shows debate over specific parcels
4. There is no published acquisition plan — ratepayers can't know what they're buying or why
5. The fund is taxed — $2M in B&O goes to the General Fund, meaning some of your "watershed" money funds general government
6. The amounts are enormous — $24.5M in 5 years, $11.3M in 2025 alone

Property Tax Records Confirm the Scale

Whatcom County Assessor records — independent of the City's own budget documents — allow us to track every parcel COB has acquired in the Lake Whatcom watershed since 2005. The data covers all 11 tax code areas (TCAs) in the Lake Whatcom Water and Sewer District service boundary, the geographic footprint of the watershed.

COB is now the single largest landowner in the watershed, having grown from 716 acres across 45 parcels in 2005 to 2,786 acres across 172 parcels in 2025 — a net gain of more than 2,000 acres over 20 years.

WA State DNR shed approximately 1,600 acres over the period; COB and Whatcom County Parks were the recipients. Kimberly-Clark's commercial timber holdings — 30 acres in 2005 — are essentially gone from the rolls, transferred into conservation ownership.

Geneva UGA: Developable Land Pulled Off the Market

The sharpest finding is in TCA 1015 — the Geneva Urban Growth Area southeast of Bellingham, where your address reads "Bellingham WA" even though properties sit outside city limits. COB grew from 11 parcels (19 acres) in 2005 to 28 parcels (108 acres) in 2025 within this TCA alone. The zoning breakdown of those 28 COB-owned parcels today:

• UR3 / UR (Urban Residential, 3–4 du/ac): 5 parcels, ~19 acres — land the UGA explicitly designates for housing development, capable of supporting roughly 57–75 units at minimum density. Permanently off the market.
• R5A (Rural 1du/5ac): 14 parcels, 21 acres
• RF (Rural Forestry): 1 parcel, 50.5 acres — the large block acquired around 2013
• ROS (Recreation and Open Space): 7 parcels, 9 acres

A single 50-acre Rural Forestry parcel appears to have been acquired in 2013 — the year COB's TCA 1015 acreage jumped from 25 to 75 acres in a single roll year. No individual purchase was named in council meeting records reviewed for this investigation.

Source: Whatcom County Assessor annual MDB exports, 2005–2025, compiled in the Real Record tax_owner_history database. Data reflects assessed roll year; actual deed dates may differ by one year.

1. All Bellingham City Council ordinances/resolutions authorizing watershed land acquisitions, 2000-2025 — This will reveal whether council approved individual purchases or gave blanket authorization.
2. Watershed acquisition plan or priority list — If one exists, it should be a public document.
3. Appraisal reports for all WS-prefix projects — Shows whether the City is paying market value.
4. Maps of all watershed-acquired properties — Shows the geographic pattern.
5. Executive session minutes — RCW 42.30.110 requires minutes even for closed sessions; the topics discussed must be noted.
6. Public Works Director reports to Council — May reference acquisitions even if not formally voted on.

This investigation draws on (1) Public Records Request response S032350-112625.xlsx with 1,613 utility-fund expenditure transactions 2020-2025, (2) the Bellingham Chart of Accounts, (3) the 6-Year Capital Plan, (4) Comprehensive Annual Financial Reports 1999-2023, (5) 495 Bellingham meeting transcript files for the 2025-2026 period, and (6) 246 council and committee meeting briefings from the same period.

Real Record renders the published spending pattern as documented in the source materials; we don't editorialize the policy outcome. The numbers, transaction-level detail, and silence in the meeting records are reproduced from primary sources — the conclusion that this constitutes a "de facto slush fund" follows from the structural pattern (compulsory revenue + pre-authorized spending + no individual-purchase governance + no published plan), which the public record does not contradict.