Divided opinions set stage for Findlay budget battle

FINDLAY — Findlay City Council will open its annual budget hearings at 4 p.m. Tuesday, with a $130 million spending plan on the table and two sharply contrasting views of the city's financial health. The hearings will be held at the Findlay Municipal Building, 318 Dorney Plaza. About 16 department heads will present spending requests and goals for 2026. Hearings typically run four to five hours and have historically sparked debate over spending cuts, wage increases and capital allocations. The hearings are open to the public and will be livestreamed on the city's YouTube channel: FindlayOhio. The final budget will be adopted in January. Each year, Findlay's budget book begins with letters from the auditor and the mayor, setting the stage for council's review. This year, those messages underscore a growing, sharply divided opinion on the numbers. Auditor Jim Staschiak continues to warn that Findlay's budget has a "structural imbalance," with expenses growing twice as fast as revenues. Staschiak projects $36.2 million in revenue. City administrators have proposed $42.1 million in expenses for 2026, resulting in a $5.9 million shortfall, with another $5.5 million deficit projected in 2027. While carry-forward balances will cover the gap for now, Staschiak said the trend is troubling: General Fund expenses have grown 8.1% annually since 2020, while revenues have grown just 3.5%. At an Oct. 7 pre-budget meeting, he warned council: "January 1 of '24, you started the year with $30 million. Right now, as of today, you're projected at $17.5 [million]. By definition, these are deficits — one's budgeted, one's actual." The city's starting cash balance in 2024 was $30.5 million, and in 2025 it was $26.2 million. Next year, the projected starting cash balance is $21.5 million, including $2.3 million in appropriations returned to the general fund by city departments. He called it a significant drop in the city's cash position. The city's operating deficit for 2025 is expected to be $3.4 million. Staschiak urged council to adopt a long-term forecast model, review whether the 20% capital allocation is adequate, and create contingency plans for "tight budget periods." He also flagged economic risks, including inflation, tariffs and a statewide property tax repeal that could cost Findlay $2–$3 million annually. "You'd be foolish not to have an inflation concern for the budget in '26 or '27," he said. Staschiak continues to argue for tighter spending controls and long-term forecasting to avoid eroding reserves. He says the city is living off its carry-forward balances and needs a plan for leaner years. However, Mayor Christina Muryn is far more optimistic about the city's financial outlook. She says Findlay remains fiscally strong, citing reserves that exceed the city's minimum target of $10 million, plus a $1.9 million Rainy Day Fund and $4.66 million set aside for flood mitigation. Muryn described unbudgeted spending — most notably more than $4 million for the design of the Downtown Recreation Area — as investments and "intentional choices to advance community priorities and deliver long-term value to Findlay residents and businesses." The city's $130 million spending plan represents the total budget across all funds, including water and sewer operations, airport, parking, capital improvements, and restricted accounts such as flood mitigation. By contrast, the $41.2 million operating budget refers only to the General Fund, which covers day-to-day services like police, fire, streets, and administration. While the overall budget includes money earmarked for specific purposes, the General Fund is where council has the most discretion. One of the most contentious issues during the Oct. 7 pre-budget meeting was how much income tax revenue should be directed to the Capital Improvements Fund versus the General Fund. For years, Findlay has followed an 80/20 split, with 80% of net income tax receipts supporting day-to-day operations and 20% reserved for capital projects such as street repairs and infrastructure upgrades. Muryn proposed a change, suggesting the city allocate 10% of income tax revenue to capital improvements but supplement that amount with hotel/motel tax receipts and interest earnings. Muryn argued the approach would provide "more predictability" and keep capital funding near recent levels — about $4.9 million — without pulling as much from the General Fund. "It's really just a different way to skin the cat," she told council. Staschiak argued that capital needs are significant and the city is already behind on infrastructure maintenance. He said council should mathematically determine whether 20% is adequate, given rising costs and avoid reducing capital allocations during a period of structural imbalance. Councilman Josh Palmer, R-7, pushed for a higher share, saying, "I still think we need to increase … I'd make a motion that we put 22% towards capital." That motion failed. Muryn acknowledged the tension between infrastructure needs and operational stability. "We're a service organization," she said. "Investing in our people is our top priority, but we'll continue to stretch every dollar to maintain infrastructure and quality of life." Council voted 6–2 to keep the traditional 80/20 formula for 2026, and said the issue could be revisited midyear if revenue trends allow. Last year, council rejected a proposal to cut the administration's 2025 expense budget by 4% after a heated debate. Staschiak warned then — as now — that projected deficits would push reserves below the minimum required balance. Despite those warnings, council approved wage increases that added $4 million to payroll and adopted a $41.5 million operating budget.