Municipal Fiscal Health Disputed Over Shady Grove Housing Subsidies
BY CAREY MORGAN
FINDLAY — Amid fractured split votes and an aggressive debate over a massive reduction in municipal cash balances, the Findlay City Council moved forward Tuesday with a series of controversial tax incentives and high-density rezoning measures, prompting intense pushback from residents.
The contentious session exposed sharp ideological divisions within the council regarding the city’s true economic health. It also sparked a public outcry over state legislative hurdles that critics say protect local officials from being held accountable by voters at the ballot box.
The primary point of friction centered on the proposed Shady Grove development, an ambitious 40-acre project encompassing a multi-phase, 480-unit apartment complex carrying estimated construction costs near $94.5 million. Despite lingering neighborhood concerns over infrastructure strain and traffic, the council’s Finance Committee advanced a recommendation to implement a post-1994 Community Reinvestment Area tax abatement.
The terms of the proposal grant a hefty 75% property tax exemption spanning 15 years to developers. Strikingly, under this framework, local schools are slated to receive absolutely no funding from the abated value.
The committee's recommendation barely advanced, squeezing through on a narrow 3-2 vote. Council members Josh Preston, Dan DeArment, and Reed Needles voted in favor of the tax break, while members Dan DeLong and Rodney Phillips voted against it.
A closely related piece of legislation, Ordinance 2026-76, which establishes development agreements with Casto Communities and Sunshine Hospitality Group, similarly divided the chamber. The measure passed the committee on a 4-1 vote, with DeLong serving as the lone dissenter.
The tension peaked during the old business portion of the meeting when local activist Patricia "Patty" Klein took the podium. Klein delivered an unyielding statement rebuking the city's continuous push toward multi-family high-density expansions. She revealed that a grueling, 24-day grassroots petition drive aimed at forcing a public referendum on recent high-density rezoning actions had officially fallen short.
"Even the United States Men’s National Soccer Team—made up of some of the nation’s most skilled athletes—recently fell short in its quest on the international stage," Klein said. "Likewise, a united team of Findlay citizens poured everything they had into an extraordinary effort to give their neighbors a voice."
Klein described the immense physical and operational challenges that volunteers encountered while trying to hit their targets.
"This was no ordinary petition drive—it was a race against an unforgiving clock, where every signature meant the difference between having a voice and being shut out entirely," Klein told council members. "Through intense summer heat, pouring rain, and countless hours of sacrifice, volunteers knocked on doors, stood outside businesses, attended community events, and worked tirelessly for 24 days."
She noted that while the community's signature collection would have easily cleared Ohio's former 10% threshold, it was ultimately neutralized by the far more restrictive mandates of House Bill 96, which raised the baseline for municipal referendums to an exhaustive 35% signature requirement.
"The experience demonstrated that the issue is not a lack of public support—it is a law that has effectively taken the people’s voice away," Klein stated. "The increase to a 35% signature requirement under House Bill 96 has effectively silenced that right. A constitutional right that cannot realistically be exercised is no right at all."
Klein strongly urged the city council to fulfill its duty to defend democratic processes by formally petitioning state lawmakers to reinstate the historic 10% target.
"I respectfully ask Findlay City Council to stand with its citizens, advocate for meaningful referendum reform, and help restore a process that gives ordinary Ohioans a realistic opportunity to participate in their own government," Klein said.
The council's prioritization of corporate tax breaks and commercial expansions came at a uniquely uncomfortable moment. Immediately following the submission of the city's popular annual financial report, City Auditor Jim Staschiak delivered a blunt critique of municipal spending patterns, triggering a direct clash with other lawmakers over whether the city is running a structural deficit.
DeArment defended the current administration, stating that the city had balanced its budget for three consecutive fiscal years from 2023 through 2025 according to modified accrual summary statistics provided by state-contracted auditors. He minimized a massive decline in the city's reserves, arguing that a $12 million reduction in the carryover balance was merely the result of four discrete, one-time council decisions made outside the operational budget. According to DeArment, these investments included a legally mandated $2.9 million corporate tax refund, a $1.6 million fire truck purchase, $2 million for flood remediation accounts, and $5.5 million dedicated to downtown park design.
Staschiak aggressively rejected that narrative, warning that the accrual-based metrics mask structural financial problems.
"The budget is in deficit. It's in deficit operationally as well as overall," Staschiak countered. "These numbers you're looking at come from they're summary numbers from the state contracted auditor who's putting them together and they're modified accrual. Your budget is in deficit."
Staschiak noted that cash-basis budgeting is what the state requires to determine an accurate snapshot of financial equilibrium. He called attention to a steep decline in actual liquid capital.
"Our cash balances have fell from above $30 million to a projected $14 million this year," Staschiak said. "If you regularly overspend your revenue year after year after year, you are regularly deficit spending."
Despite warnings of a shrinking general fund, the council moved rapidly on its legislative agenda. Lawmakers approved Ordinance 2026-64, an emergency measure authorizing the city to advertise for bids and finalize contracts for the Midwest roadway Extension project. Staschiak indicated that language was appended to the Casto development agreement in an attempt to allow the city to claw back those infrastructure expenditures down the road.
The council gave no indication that it intends to pause its multi-family zoning adjustments, nor did it take immediate legislative action on Klein's request to challenge the state's referendum law.
