Radford Council Begins Budget Discussions
By DAVID QUESENBERRY
Patriot Publishing
Radford City Council began its budget work in earnest at its work session held on Monday, March 3rd, discussing several approaches to and concerns over the budget with the intent of having issues ready for Council action at its March 10th meeting.
Interim City Manager Craig Meadows began the meeting noting that budget issues had come more sharply in focus since the audit presentation at the previous meeting.
“The City has some challenges financially. As I’ve said since I came on board, the issue as I see it, continues to be an issue with a little bit of an imbalance in the budget. A structural imbalance, I think with the way the General Fund in particular, has been done in the last couple of years and it’s an issue with cash flow. The money is available when we need funds to pay bills, it’s just we’ve not been able to match up the funds flow with making all the bills current like we would like to see.”
Meadows said this meeting of Council was an opportunity really “for the Council to try to reach some consensus on areas that you think may merit further attention.”
Mayor David Horton said he wanted to discuss the three budget adjustment strategies mentioned in the July 29th meeting which were: Option A-$946,100 (expenditure reduction and deferrals); Option B-$1,163,457 (5 percent General Fund reduction); and Option C-$2,326,913 (10 percent General Fund reduction). Horton added that following discussions with Meadows it appeared that not as much had been done with these options as Council thought. He felt this would be a good starting point for discussion since these options included savings across all departments, programs and activities.
Meadows said he had reviewed this information with the Department Heads who told him that the amounts listed were items that could be deferred to the later part of the fiscal year. Many items were obligations that had to be paid within the fiscal year, which were not cuts per se. Meadows said his understanding from looking at the items were some could be deferred later in the fiscal year, but they were never taken out of the budget. The budget for this fiscal year did not reflect any of these reductions.
Mayor Horton suggested that the options be reviewed by Department Heads for items that could give some savings including postponing equipment purchases to the next fiscal year. Councilman Guy Wohlford suggested the Department Heads be told to show Council how 5 percent could be taken out of their budget. Vice-Mayor Seth Gillespie, mentioning the negative $4.8 million in unassigned fund balance, cash in the amount of $2 million to $3 million with three outstanding AEP bills and a $4 million note, said there would have to be expense cuts and revenue increases to address the budget and reserves.
Councilwoman Jessi Foster asked what could be done now to address the issue and said that other options were available to a blanket 5 percent reduction. Meadows said the Department Heads informed him that they were already spending only in areas that had to be spent. “The challenge is” he said, “even with that I think there is going to have to be some additional adjustment.”
Foster, expressing some frustration, returned to her question as to what could be done right now. Meadows responded that he had sent out a list with the budget on budget adjustment opportunities looking at issues previously discussed such as reduced hours at city facilities, trash collection and other activities.
Meadows cautioned Council saying “None of these are things are like, yeah that’s what you should do, there are hard choices. Any choice that you make, as I see it is going to be a reduction or a change in service expectation or what citizens have become accustomed to.”
He said currently expenses are very tight and the services that are being paid for were provided. The issue however was on the revenue side in terms of what revenues were coming in to address those services. That was the structural imbalance in the budget for the last couple of years, which he said was like using a credit card to pay part of your expenses, which in this case the “credit card” was use of the RAN (revenue anticipation note.) The expectation for the service level would have to come down a bit to pay for the services, or revenues would have to go up or in some cases both would have to be done to make things work.
Gillespie asked if the $4 million dollar transfer from the Electric Fund to the General Fund for 2025 would be done. Meadows responded that the appropriate accounting entries were being made. Revenues for the Electric Fund were strong. Opportunities to reduce this transfer would be considered for the upcoming budget. While he felt it was important to “right size” the expense side of the budget, the first thing to understand was where the City stood on revenues. It was important to understand what was coming in so staff could determine what Council was willing to do to generate revenues if needed. Once revenues were determined, then staff could balance the revenues and the expenditures. Meadows added that he and the Finance Director would be conducting a review of revenues later this week for this current fiscal year.
Council then began an extensive discussion on what measures could be taken to put into action on Monday night (March 10th) in addressing the finances which included a review of the financial options discussed in July 2024.
Councilwoman Foster asked that the tax rates and levies in other localities be reviewed and how much revenue would be received for an incremental increase in those rates.
Council looked at several areas of city operations for consideration of savings. Those areas were put in a list for consideration by Council on Monday, March 10th.
The list was as follows: eight hours reduction per week in Recreation Center hours and impact on tournaments; eight hours reduction per week in Library hours and effect on funding; list of properties owned by the City for consideration to market; cost per day of drop site operation; cost to eliminate Easter Egg Hunt; cost to support fireworks for July 4th; Aquatics Center, contract wording and per citizen cost; request for proposals for various City services; identify other revenue sources; and list of agency funding.