Ferndale Approves Plan for Auto Parking Fund Deficit Elimination
(Crystal A. Proxmire, Jan. 29, 2026)
Ferndale, MI – The City of Ferndale voted Monday to approve a deficit elimination plan for Auto Parking Fund, following several years of a negative fund balance after the construction of “the dot” mixed-use parking deck.
The State of Michigan requires the submission of a plan which would eliminate the deficiency within five years. According to the plan, in 2025 operating revenue was $2,596,339, while total expenditures (including bond principal, interest, and general fund advance balance and interest) being 2,929,957.
The plan includes three strategies to bring the account into compliance:
1. Reducing expenditures: This has largely been accomplished through recent Council action to include credit card processing fees as part of the transaction fee for customers. Some smaller reductions will also be necessary during the FY27-FY29 triennial budget setting process.
2. Increasing revenue: Revenue adjustments will be considered and voted on as part of the triennial budget setting process. Staff will provide comparable data for other area parking systems in combination with a formal rate recommendation.
3. Forgiving a portion of interfund debt: Through a separate action City Council may consider forgiving a portion of the $2M debt that was issued from the General Fund to the Auto Parking Fund in 2020. To-date approximately $500k has been paid off. The debt still due to the General Fund for this liability is directly accounting for the negative fund balance. The plan calls for a minimum of 35% forgiveness on annual payments due under a new five year plan.
The plan includes details, stating “The City will continue its strategy for alternating annual increases to hourly parking and monthly permit parking fees with a larger one-time increase in FY27 of 6.9% to hourly fees. The City will also implement cost reduction measures such as the passthrough of credit card processing fees. The City will annually forgive a portion of the debt payment due to the General Fund which cannot be funded from net revenue of the fund, totaling at minimum 35% of the current principal balance remaining over a new five year repayment schedule.”
While submission of the plan was approved, each action item in the plan will require it’s own vote of the council. Council does have flexibility to look for other ways to address the deficit.
Construction of the dot started in 2020, with the COVID pandemic causing a pause in construction. It also delayed the rentals of the ground-level retail spaces as the state was on lock-down. Numerous financial challenges came about during construction.
Plans for the dot had also called for the construction of apartment units on the side of the structure which were intended to help cover the costs, but never came to fruition. When asked for an update about this, City Manager Colleen O’Toole told council she would look into it.
View the Deficit Elimination Plan here.
Learn more about the dot here.
