Ferndale City Council Meeting: Audited FY 2025 Financials and DDA Overview — December 15, 2025

The Ferndale City Council met on Monday, December 15, 2025, for a regular meeting scheduled for 6:00 p.m.; the Mayor called the meeting to order at 6:05 p.m. after the Pledge of Allegiance and roll call. Council unanimously approved the agenda as presented. The meeting then featured two presentations: the annual audit presentation for fiscal year ended June 30, 2025, and a public information presentation about the Ferndale Downtown Development Authority (DDA). The provided transcript contains no public comment, public hearing, or consent-calendar action.

Audit Presentation — FY Ended June 30, 2025

• Aaron Stevens, auditor, presented the city's audited financial statements and single audit. He reported an unmodified opinion on the financial statements, the highest level of assurance, and noted the audit would be filed the following day.
• Government-wide highlights: strong liquidity with current assets covering current liabilities 3.25 times; unrestricted net position was negative due to long-term debt, net pension liability, and net OPEB liability; OPEB is funded at 111%; total net position increased by about $20 million for governmental activities and $2.5 million for business-type activities.
• General fund: total fund balance was just over $10 million at June 30, 2025. Available fund balance — committed ($879,000), assigned (about $9,800), and unassigned ($8.7 million) — totaled roughly $9.6 million, equal to about 33% of expenditures and other financing uses, or about four months of operations, well above the GFOA recommended minimum of 17%/two months.
• General fund revenues were $27.8 million, up about $1.6 million (6%) from 2024; expenditures were $28.7 million, up about $4.2 million (17%). The city added about $1.3 million to fund balance during the year. Property taxes made up 49% of general fund revenue and public safety made up 52% of expenditures.
• Water and sewer fund: total net position was about $30 million; unrestricted net position was $6.7 million, equal to about 94% of operating expenses less depreciation. The unrestricted position rose by $2.986 million, attributed mainly to rate increases and lower expenses. These rates are connected to a five-year lead service line replacement plan that runs through 2027.
• Auto parking fund: total net position was $660,000, but unrestricted net position was negative by about $1.8 million, described as 18.6 months in the hole. Expenses exceeded revenues in each of the past five years. The fund owes $747,809 to the general fund and also has an advance from the general fund. The state's five-year deficit elimination planning period has been reached, so a new plan must be submitted.
• Audit findings: one material weakness (auditor-proposed journal entries material to the statements), significant deficiencies (untimely bank reconciliations and missing supporting documentation), and non-compliance items (parking fund deficit and unfavorable budget variances). The single audit found no material weaknesses or significant deficiencies in federal programs; both CDBG and CSLFRF/ARPA were tested.

Discussion Items

• A councilmember asked whether the auto parking fund's payable to the general fund could be written off to ease its negative position. The auditor responded that enterprise funds are intended to operate on user charges rather than general fund subsidies, but a governing-body-approved transfer or write-off would be possible.
• Council and staff discussed the parking fund's ongoing structural gap. Staff mentioned an internal proposal to shift credit-card processing fees to the end user, saving about $150,000 per year, with a presentation planned for January.
• A councilmember expressed strong concern about overspending budgets, calling it a systemic issue seen for 12 years, and urged stricter encumbrance and budget monitoring. Staff said changes were already underway, including real-time council action for budget amendments and use of BSA Cloud to track encumbrances, and the finance committee would meet more regularly.
• Council also asked what changed for parking revenue since before COVID, including enforcement hours and downtown activity; no definitive cause was identified in the transcript.

DDA Public Information Presentation

• The DDA director presented the first of two required PA 57 public information sessions; a second session was scheduled for the following morning at Sidecar.
• The Ferndale DDA was established July 14, 1981. The district covers about four linear miles and includes more than 350 businesses. Funding comes from a tax increment financing (TIF) district, a roughly 2% DDA millage, Oakland County Main Street funding (nearly $300,000), technical support funding over $17,000 in 2025, and sponsorships.
• The DDA is a Great American Main Street community, first accredited in 2001 and the first in Oakland County to win the Great American Main Street Award.
• Recent activities highlighted included the first Art March, nine summer concerts, downtown trick-or-treating with more than 1,000 pounds of candy, holiday events, business grants, support for more than 20 new businesses, and a planned $700,000+ wayfinding and sidewalk repair project.
• Upcoming priorities include annual accreditation, volunteer recruitment/vision committee, a 3–5 year strategic plan, wayfinding/sidewalk design expected in early spring and construction in early summer, a customer relationship management (CRM) system, and business retention/recruitment.

Key Outcomes

• Council unanimously approved the meeting agenda.
• The audit presentation was informational; the formal "receive and file" action was listed on the consent agenda, but no consent agenda vote appears in the provided transcript.
• No formal votes were taken during the audit or DDA presentations.
• Next steps include a January presentation on parking credit-card fee changes, a new auto parking fund deficit elimination plan, continued finance committee oversight, and a second DDA PA 57 session the following morning.