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Ferndale redeems 2016 UTGO bond, reduces FY26 debt millage
Summary
The Ferndale City Council authorized redemption of the series 2016 unlimited tax general obligation bond (approx. $3 million outstanding) and approved a reduced FY26 debt millage, lowering resident tax bills by an estimated $75–$100 annually in year one.
Ferndale City Council authorized the early redemption of the city’s 2016 unlimited tax general obligation (UTGO) bond and approved a revision to the city’s FY26 tax levy that reduces the city’s debt millage rate.
City staff and council said the city can use fund balance reserves to pay the roughly $3 million aggregate balance on the 2016 bond. Paying the bond off now will eliminate future interest payments and let the council reduce the amount levied in the debt millage for fiscal year 2026 by 0.7528 mills. City officials estimated the reduction equates to a net savings of about $75 to $100 per year for typical residential tax bills in the first year after the change.
Why it matters: The council framed the action as an opportunity to lower the debt-service burden on residents and to keep promises made during recent tax discussions. Staff said the move will use a substantial portion of the city’s reserve balance, but that the net effect is a long-term cost saving for taxpayers and better fiscal positioning for future infrastructure needs.
Council discussion clarified that the debt millage is distinct from the operating millage voters approved earlier this year; the debt millage is restricted to servicing outstanding bonds and is recalculated annually to reflect outstanding principal and interest. The action was presented as a follow-up to finance analysis provided by the city manager and finance director.
Next steps: The council adopted the revised tax levy form (Form L-4029) to reflect the lower debt millage. Staff said the change will be implemented for FY26 tax billing and that related water-rate resolutions were adjusted to reflect the new millage amount where relevant.
