Radford City Council Enacts Budget Cuts

By DAVID QUESENBERRY

Patriot Publishing

Following a lengthy discussion on their current budget, the Radford City Council, at its budget work session on Monday, March 10th, reduced the current FY 2025 budget by $941,000.

Interim City Manager Craig Meadows said staff had been taking a look at reductions in the current FY 2025 budget in addition to working on the upcoming FY 2026 budget. In meetings with staff, he said that the Department Heads were committed to helping council identify areas to make things work.

“It’s not a matter of council vs. staff” he said. “The health and well-being of the city is what we’re all trying to address.”

Meadows said the three options for budget reductions presented last fall were more in the way of deferrals for spending funds at a later time. He said he returned the options to the department heads and requested them to identify areas that could be “taken away” from the current budget. In response, the department heads identified several areas for reduction this fiscal year. Meadows cautioned council that some of the reductions were needs that would have to be addressed in a budget at some point in the future.

Meadows said staff had identified a total of $941,000 of expenses from all funds that could be removed from the current budget. General Fund reductions totaled $816,000 with the largest areas for reduction being Public Works at $325,000 (paving) and Information Technology at $229,000. The Water/Sewer fund had cuts totaling $10,000 which Meadows noted was low because of breaks and other challenges the department had. The Electric Fund’s reduction was $115,000.

Meadows said he would be reviewing revenues in the utility funds and noted that the utility rate increases council approved last year were trending as they should. As to the issue of future rate increases, he said he was very concerned that there was room for additional revenues to get the utility funds back where they needed to be. Meadows said he still had concerns over the General Fund because several revenue line items were not trending where they needed to be.

Mayor David Horton asked if street maintenance would be affected by the Public Works reduction. Meadows said it would not. On Information Technology, Horton asked if there was a risk the city could not use its existing technology. Meadows said the city could continue with the present system in the short term for a time, but it would have to be addressed and it could not be deferred. He said that amount ($229,000) would show up in the next year’s budget.

Horton then asked Tim Logwood, Director of Electric Utilities if that department still had the capacity to deal with its operations with the cuts. Logwood said that it did and that the cuts were made from equipment, deferred maintenance and deferred material purchases.

Vice-Mayor Seth Gillespie asked if the increase in fund revenues were not enough to make up the difference between revenues and expenses. Meadows said even if revenues covered expenses, the city still had the $4 million note outstanding. He said that at the end of January, all funds had positive revenues over expenditures which meant that all expenses were covered. However, it did not account for paying the $4 million revenue anticipation note.

Regarding cash flows, Meadows noted that the city still had three AEP bills outstanding and he did not see the city’s funds deteriorating, but it was not making significant headway either.

Councilwoman Jessi Foster asked of the reductions presented, how many of those costs would be in the next budget? Meadows said electrical equipment purchases that had been deferred would be in the next budget. Reductions he added could reach a point where departments either reduce services or try to operate in a more challenging environment. The city had some significant capital needs in many areas that were going to have to be built into the budget over the next several years either through revenues or issuing debt. Mayor Horton suggested a special council meeting be held in April just for discussing capital needs.

Gillespie asked in looking at revenues, for example what a tax increase of 10 cents would look like. Meadows replied the issue could not be solved just using revenues and that any measures would have to include expenditure reduction.

He said in local government, you should compare yourself with your neighbors and look at the services you’re providing as compared to neighboring localities. Meadows said that he had a slide prepared of tax rates of independent cities who, like Radford, had their own electrical utilities and provided comparable services. What was needed in addressing the City’s finances was to find out how to reach a balance through revenues and adjustments to expenses to make things work.

Meadows said that working out the City’s finances could not be accomplished in one year and that he anticipated that the City would need another revenue anticipation note in FY 2026. The budget issue had to be addressed using revenues and expenditures. He said if he was told by council that rates could not be raised and it had to be done with cuts, Meadows said that choices would involve “programs, projects and people.” Given that city programs were already “lean,” he told council that “you’re going to quickly get into people.”

Meadows then showed slides comparing Radford’s real estate tax rate over the last ten years and current real estate tax rates for several localities in the NRV of which Radford was the lowest at $0.69. In another slide, the property tax rates of six independent cities with electrical departments were compared with Radford. All the communities listed had higher property tax rates ranging from Danville at $0.83 to Manassas at $1.26. One issue that required further research was how much money was transferred by these communities from their electric funds.

Council then went back to discussing the proposed $941,000 in cuts for the current fiscal year. Discussions involved adjustments in Recreation Center hours; fireworks; drop center hours; library hours; use of the Aquatics Center; the Easter Egg Hunt and leases and contracts.

Councilwoman Foster said, “I think this is going to have to be twofold. It’s going be in that the rates going up on a lot of the services, which I’m sure going to see. We are like the lowest in every category and it’s not sustainable, but we also have to tighten our belts. So, it’s not either/or. I think we have said this to Craig and most departments. This is not an either/or situation. We’d like to see a combination of both of those things, tightening our belts and also we absolutely have to increase revenue. There is no way around it.”

After further discussion concerning labor costs and festivals, Council unanimously approved a motion to delay the Easter Egg Hunt and Fourth of July celebration for this year, but to look at those items in the future. Foster suggested that an effort be made to get sponsorships and donations for next year. Meadows informed council that the city had received a $25,000 donation for the fireworks display.

Council unanimously approved a motion to authorize $941,000 in budget reductions for FY 2025, with the provision that staff would continue to look for additional savings and notify council if problems came up.

Council also reduced the hours of operation of the Recreation Center from 89 hours to 81 hours per week.

Council next received a report on the AEP issue. Meadows said the reason the city’s electric rate had increased was the rise in cost of wholesale power that the city purchased from AEP. The city was currently looking at other providers which might save some money beginning in mid-2026.

In the last six months of FY 2024 from January back to August, the city paid almost $8.2 million in wholesale power costs. For the same six months for this current year, from January back through August, the cost for wholesale power to the city was almost $10 million, a cost increase of nearly 21 percent.

Mayor Horton emphasized that these increases were on top of increases of 26 percent from two previous years and explained to those present that for many years, funds were transferred from the Electric Fund to help the General Fund. That margin of profit from the Electric Fund was squeezed by current circumstances to the point it is almost gone. Noting the City’s lower rate for electricity, Horton said that it gave the city an advantage in recruiting new businesses, but increases could hamper the city’s ability to attract new firms.

The city’s budget calendar was amended to have a budget work session on March 17, 2025 with presentation of the draft FY 2026 budget on Monday, March 24, 2025. Both sessions will be held in the Council Chambers of the Radford City Hall at 10 Robertson Street.

Citizens Protest Potential Changes for City Library

By DAVID QUESENBERRY

Patriot Publishing

Eighteen citizens spoke before the Radford City Council on Monday night in support of the city library by opposing any reduction in the hours the facility would be open.

Citizens spoke about the many ways that the library was an asset to the community by offering services and programs such as English language training and Literacy NRV. The library provided a “safe space” for students after school as well as a place for community activities. Others had concerns on the impact of reduced hours on youth and adults since the library was a community center which filled a need in the city.

Following the citizen comments, council members shared some of their thoughts on the situation. Councilman Guy Wohlford said, “We’re very conscious of the situation we’re in and we’re going to give critical consideration to everything we do to try to solve the problems of our finances in the city.”

Councilwoman Kelli Artrip said, “As city council members, one of the huge tasks we have on our common ground is to make sure we stay a city, to make sure we can provide the services. We are in a current situation where there is nothing off the table.”

Councilwoman Jessi Foster thanked those who contacted her saying, “One thing that was so apparent to me is that everyone grasped that there is a larger issue. We need to drive more revenue and we are taxed with tough decisions.”

Vice-Mayor Seth Gillespie said, “We’re willing to talk, we’re willing to listen and at the end of the day we do have to make some tough decisions. We are all committed to doing what it takes to save this city, knowing that there’s going to be some short-term pain for what we hope is going to be long-term gain.”

Mayor David Horton thanked the audience for their attendance at the meeting. He said, “This is your place and your concerns and we’re here voicing those, listening to those, working on those and trying to make the decisions to steer us through these challenging times.”

In final budget action, Council approved a four hour per week reduction in the library’s hours. Council based its decision on a recommendation by Councilwoman Foster whose research showed Radford ranking high in per capita library expenditures and average hours of operation.

In other business, council approved Ordinance 1813 renewing Shentel’s franchise for digital services. Council also approved a special use permit for a duplex at 2016 Fourth Street; accepted a bid from E.C. Pace of $557,846 for sidewalks for the East Main Street Sidewalk Project; and approved Appropriations Ordinance 1802.22 for $3.5 million in state grant funds from the Virginia Ready Sites Program for the West Radford Commerce Park.

Council has scheduled its next budget work session for Monday, March 17, 2025 at 6:00 p.m. Council will also meet at 5:30 p.m. on Monday, March 24, 2025 for the presentation of the initial draft of the FY 2026 budget. Both meetings will be in the Council Chambers at Radford City Hall on 10 Robertson Street.