City employee compensation increased 42% since 2022, to $133M

Nearly 40 Bellingham employees make more than $200,000

Employee compensation costs for the City of Bellingham skyrocketed to more than $133 million in 2024 — an increase of about 42% from 2022, according to a Cascadia Daily News analysis of public records.

These costs are contributing to the budget crisis that has the city facing a $10 million deficit for 2026.

“We are transitioning from a small city to a mid-sized city, and there’s some growing pains that go along with that,” Bellingham Mayor Kim Lund said.

The number of employees making more than $100,000 has increased dramatically — from 484 people in 2022 to 675 people in 2024, while those earning more than $200,000 rose from 11 to 38 people. Total staff increased over that period from 1,017 full-time employees to 1,129. An additional 14 positions were added in 2025.

In September, Lund proposed reducing costs by eliminating more than 40 jobs — most of which are vacant or frozen.

Lund remains the top-salaried employee at the city. Lund makes roughly $237,000 plus benefits, which is less than Whatcom County Executive Satpal Sidhu, but still more than Gov. Bob Ferguson, who makes closer to $219,000.

The county pays an additional $49,128 for Lund’s benefit package, most of which is for health benefits.

[ Read more: Because of overtime pay, 21 of the 25 highest paid employees in the city work for the fire department ]

The mayor is among nine city employees, not with the fire department, who received more than $250,000 in total compensation in 2024. These include the city attorney, police chief, deputy police chief, finance director, planning director, public works director, parks and recreation director, and municipal court judge.

Deputy Police Chief Donald Almer made the list because of retirement-related payouts, totaling about $70,000 for unused sick and vacation time.

“We have great people doing the work, and I think the salaries are commensurate with the scope of responsibilities and the work that they do,” Lund told CDN.

Roughly 70% of revenue for local governments goes toward labor, explained Eric Johnson, a partner with Columbia Policy Advisors and a former director of Washington State Association of Counties. This includes wages, health care benefits, retirement benefits, and an assortment of other costs incurred to attract and retain staff.

The city spent $34.8 million on benefits in 2024, up about $10 million from 2022.

Baseline increases to these costs, and a 3% cost-of-living increase, are exceeding revenue growth for the city.

“That’s been very problematic,” Johnson said.

Non-union city employees — including the mayor — received a 3% cost-of-living adjustment this year. For example, that means Planning and Community Development Director Blake Lyon received a raise of about $6,000.

The raise is aligned with the negotiated adjustment settled with unions and is designed to “mitigate salary compression between management and the employees they oversee,” explained Melissa Morin, the director of communications and community relations for the city.

Additionally, there are opportunities for “step raises” for these positions based on length of service and performance.

These wages are far above a living wage for the county.

Two working parents with a single child need to each make at least $52,540 a year to secure a living wage in Whatcom County, according to the MIT Living Wage Calculator. If only one parent is working, they need to make $85,000 a year.

“In city government, it’s those city employees who are providing the services and without them, parks don’t get mowed, streets don’t get repaired, the water system doesn’t work — your sewage system isn’t going to function,” said Candice Bock, the director of government relations at the Association of Washington Cities.

“Those people are providing really critical services, and you want a skilled workforce that’s really committed to the community.”

In September, Lund chose not to take the cost-of-living increase for 2026, asking her department heads to join her. All department heads confirmed they would follow the mayor’s lead.

The move is designed to show “our commitment to achieving some of the challenges in this structural imbalance and in the budget and leading by example,” Lund said.

Employee retention

The Bellingham location premium, which increased the city’s competitiveness for talent, is not as compelling a piece of the hiring package as it once was, explained deputy administrator Forrest Longman.

“I think everybody was paid a little bit less, because people really, really wanted to be in Bellingham,” Longman said. “As we’ve seen work-from-home grow as an option for people, I think it’s been a little bit less compelling.”

Longman said the city has done a series of salary studies for various union bargaining groups to get salaries “back up to market.”

Local government salary comparisons are increasingly being done to include private sector positions for people with similar expertise and qualifications, rather than only across governments, Johnson noted.

The question remains: How does a local government stay competitive when revenue sources can’t keep pace with workforce demands, particularly salary increases, health care and cost of retirement, which is driven by the state.

One way this is being done is getting employees to think about their total compensation package — not just wages, said Johnson.

“Sometimes cities, counties, the state, we offer more robust health care packages,” Johnson said, noting that local governments often have better paid leave packages for employees, too.

While Lund recognizes that labor costs are significant for the city, she is also aware “there are extraordinarily high costs to organizational turnover.”

“The value of retaining staff is significant,” concurred Johnson, noting that failing to retain staff until at least the five- to seven-year range means a drop in productivity down to 60% to 80%.

While “affordability challenges continue to escalate,” the city is finding ways to connect to purpose and the value of serving the city, Lund said.

Isaac Stone Simonelli is CDN’s enterprise/investigations reporter; reach him at isaacsimonelli@cascadiadaily.com; 360-922-3090 ext. 127. For confidential tips, email isimonelli@proton.me.