City Considers Selling Parking Lots & Parking Fund to DDA

By, Crystal A. Proxmire


At the April 7, 2010 City Council special budget meeting the Downtown Development Authority (DDA) submitted a proposal to lease with the option to buy the city-owned parking system – including all public parking lots, meters and equipment, parking permit program, and revenue in the Auto Parking Fund.  Council did not make any decisions at the meeting, other than to consider it along with their other budget debates.


DDA Director Cristina Sheppard-Decius-  joined by head of the DDA Parking Committee Brian Kramer (owner of Rosie O’Gradies and the new Diablos), Veronica Lujic (owner of State of the Art Custom Framing), Jacki Smith (owner of Candle Wick Shoppe), and Steve Selvaggio (owner of Western Market) - presented arguments as to why the DDA should take over management of the parking system, which is now owned by the City.  Their goal is to build a new parking deck in the Central Business District, with the first choice location being in the Withington parking lot.


Currently the Department of Public Works maintains city lots, The Ferndale Police Department writes the parking tickets, the court enforces the tickets and collects fines and fees and the City Council has authority over operational decisions such as parking meter rates, ticket prices, and permit parking costs and issuance.


The DDA’s proposal is not available online as of press time, although readers can check The City of Ferndale website for the information in the coming days.


The proposal includes:


-          A commencement date of July 1, 2010

-          Base rent of 10% of all revenue from parking meters, passes, fines will be paid to the City of Ferndale on a quarterly basis.  The minimum yearly rent will be no less than $100,000 a year.  10% does not include any revenue from proposed parking deck)

-          Term: ten year lease with three (3) five year options

-          Leased premises: 14 lots throughout the City of Ferndale

-          DDA agrees to maintain the leased premises and to set aside 10% of revenue not including proposed parking deck into a capital improvement account used to maintain the parking lots and spaces

-          The parking lots and spaces will continue to be owned by the City of Ferndale so no personal and/or property taxes will be due.  Insurance will continue to be carried under the City of Ferndale and if any additional fees are charged the DDA will agree to pay increase.

-          DDA will have the right to purchase parking lots and parking spaces between commence date and termination lease at a TBD (To be determined) price

-          City will terminate the Auto Parking Fund or transfer ownership of fund to DDA and transfer 100% of Auto Parking Fund Reserves to the DDA at FYE 2010.

-          DDA will assume control over all assets

-          All payment-in-lieus and valet fees will continue to go to the DDA.

-          15% of Auto Parking Fund will no longer be directed to The Ferndale Police DDA will set up cashier office at DDA offices to sell passes, collect tickets etc.

-          Meter collection and parking passes managed and processed by DDA Board

-          Pricing of parking meters, tickets, parking passes developed and approved by DDA Board, all pricing to be competitively priced.

-          Rental of all parking spaces for construction, events and temporary uses will be directed to DDA for approval.

-          City of Ferndale will terminate and/or replace employees being paid under the budget of the auto parking fund.  The DDA will hire and/or contact staff

-          DDA will plow all leased parking space



“We foresee organizational shift in operations and this is where the DDA can help,” she said.  “We have a vested interest that impacts the sustainability of the Central Business District.” Sheppard-Decius pointed out that other cities have DDA-owned parking systems, including Traverse City, Ann Arbor and Petoskey. 


She said that the DDA Board of Directors unanimously agreed to move forward with ownership plans, and aims to build a deck in 3-5 years based on increased revenue within the system under their management.  Other plans include going green by using bike enforcement officers, replacing parking meter heads with a concentric digital system for easier enforcement, increasing parking rates, and management of a residential parking permit system.


Bruner said that the sale of the parking system to the DDA “would be cost negative to the general fund,” meaning that the City would lose about $80,000 a year after the $100,000 rent is paid by the DDA, mainly because there would no longer be a 15% contribution to the Police Department.  But he asked the DDA to make a proposal that would help solve the parking problem, which the City has not been able to do.


The DDA presentation said that the DDA Board could approve a contract at their May 13 meeting, with the City Council making their vote on May 24, and ownership taking place July 1.


In addition to the parking proposal, the DDA presented their annual budget to Council.  Their revenue is expected to be $583,675 with expenses of $548,045.  Revenue over expenses is $35,630. 


Mayor Craig Covey questioned a pay increase for the department’s contractual full-time employee.  “I see a 3% increase in wages in contract position, but I’d ask that the DDA keep in mind that we are asking other departments to make cuts,” he said.  Sheppard-Decius said that the contractual increase was to give the worker more hours, not a higher hourly rate.

Bruner had requested that the DDA contribute $24,850 to the City to help with administrative expenses, although Sheppard-Decius said that she did not include that in the DDA budget because “I think that what we contribute is more time, investment and planning.  It might not necessarily be financial.  I think if you invest in Downtown it helps create stability for the city.”  She proposed that the extra money be reserved for office modification to handle parking program administration, extra staffing for parking management, future capital improvements in the CBD, and increased staffing for appearance review.


Sheppard-Decius also presented DDA accomplishments over the past fiscal year, including:

-$4,244,798 in Downtown Reinvestment

-27 new businesses with a net gain of 13

-participation in 25 special events

-The Preserve America Wayfinding grant which will provide new signage around downtown


-BUILD program through which the DDA gives up to $15,000 to those willing to build new construction, such as Diablo’s TexMex restaurant which is expected to open by May 1.

-launching a Facebook, Twitter and Linkedin page

-Ferndale First

-FernNet, which is a networking group for business owners

-Ignite, a program connecting those who are thinking of starting a business

-upcoming business guide.



Previous stories on the budget and parking issues….


City, Fire and Police Give their Sides in Budget Talks – April 4, 2010


Public Forums to Discuss Parking – Feb. 1, 2010


Parking Fines Go Up, Other Changes to Come – Jan. 1, 2010



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