Radford City Council Gets Proposed Budget

By David Quesenberry

Patriot Publishing

The Radford City Council at its special meeting held Wednesday evening, got its first look at the proposed budget for Fiscal Year 2026-2027.City Manager Todd Meredith reviewed the proposed balanced budget.

For FY 2026-2027, the total proposed budget for the City of Radford is $79,179,807. The budget is broken down as follows: General Fund, $35,380,494; Streets, $3,254,201; Transit, $3,894,212; Water/Wastewater, $7,394,250; Electric Utility, $27,499,650; and Solid Waste, $1,757,000. The Internal Service budget of $967,326, was not included in the budget total, but represented an amount that was allocated within all the other funds of the budget.

Transfers to reserves in the proposed budget were as follows: Water/Wastewater $209,080; Electric $865,804; and Solid Waste $32,213. No transfer to reserves were anticipated for the General Fund, which Meredith described as a “break even budget.” He reviewed the recommended fund balance (reserves) for each of the funds noting that having the reserves for the General Fund at 10 percent of the budget was part of the City’s Financial Policy. Other recommended reserve balances as a percentage of budget were Water/Wastewater, 25 percent; Electric, 35 percent; and Solid Waste 25 percent. Meredith emphasized that reaching these reserve goals would have to be done in steps over several budget cycles and couldn’t happen overnight.

Meredith then reviewed the breakdown of the General Fund’s revenues and transfers from other funds. The largest source of revenue was General Property Taxes 38 percent, followed by Other Local Taxes, 17 percent; State and Federal revenues, 20 percent; and Transfers 14 percent. Meredith that the Transfer portion of revenue was too large and should be about 5 percent of total revenue. The reason for reducing this source of revenue was that the General Fund would be impacted severely if it depended on transfers of revenue from enterprise funds that experienced a drop in demand for services. For FY 2026-2027, the General Fund would receive $4,783,067 from the Electric, Water/Wastewater and Solid Waste funds combined to remain balanced.

General Fund expenditures in the new budget totaled $35,380,494. The largest expense is Public Safety at $10,719,953 followed by Education at $7,320,466. Other expenditures in the General Fund were as follows: General Administration, $4,502,526; Parks & Recreation, $2,997,054; Judicial Administration, $2,180,484; Non-Departmental, $1,435,651; Public Works, $1,441,445; and Community Development, $468,896.

Meredith noted there were several factors that were driving the budget for the upcoming fiscal year. The budget as balanced would require an increase in the real estate tax rate from $0.82 to $0.87 per $100 of assessed value. Water rates would increase by $1.00 per 1,000 gallons. For a customer using 4,000 gallons, this would increase the minimum charge per month from $24.32 to $28.32. Meredith said electrical rates would be increased by 5 percent to maintain the solvency of the Electrical Department and to provide the revenue for the transfer to the General Fund. The City would maintain 25 “frozen positions”. Filling these positions would cost the City between $1 million and $2 million.

Additional factors influencing the budget included the loss of $1.3 million in electric revenue due to Radford University switching to their own COGEN power source and the loss of approximately $200,000 due to Pulaski County not honoring the Revenue Sharing Agreement.

 

In light of the proposed increases, the City’s minimum charge for 4,000 gallons per month of $28.32 remained lower than that of other New River Valley communities and Pulaski County. The proposed real estate tax rate of $0.87 per $100 remained under the levels for the cities of Galax and Salem and the combined town/County rates of communities in Montgomery, Pulaski, and Giles counties. The increase in real estate tax would add approximated a $50 dollar annual increase per $100,000 of home value.

Concerning the proposed electrical rates, Meredith recommended that the 5 percent rate be implemented along with an increase in the customer charge to $20.00. This would actually reduce the increase to 4.2 percent by reducing the base rate energy charge. Under the current rates, the cost of 1000 kilowatt hours for a residence is $173.02 while under the recommended rates the charge would be $180.30.

Meredith noted for Council what would and would not be done with the proposed budget. The proposed budget did not accomplish the following:

• Still not funding all the non-government organizations (NGOs)
• Does not fund capital needs.
• Does not significantly grow fund balances.
• Does not reduce the General Fund’s dependency on transfers from enterprise funds.
• Does not increase stabilization funds for natural disasters, etc.

The budget did do the following:

• Two percent cost of living salary increase for employees.
• Fully funds the school’s Local Required Effort (LRE) and Local Required Match (LRM) in the total amount of $5,994,142.
• Prevents erosion of fund balances.
• Invests approximately $90,000 to reorganize and create a continuous improvement and lean management program (lean six sigma training).

After extensive discussion on the proposed rates, Council voted to advertise a five cent increase in the real estate rate; a five percent increase in electricity rates; and a water charge of $47.79 for use of 4,000 gallons.

The next meeting of the Radford City Council will be at 6:00 p.m. Monday, April 6, 2026 in the Council Chambers of the Radford City Hall at 10 Robertson Street.