Radford Council discusses budget options

By DAVID QUESENBERRY

Patriot Publishing 

The Radford City Council at a special budget meeting Monday night, discussed their concerns and options on the proposed budget for FY 2026-2027.

City Manager Todd Meredith reviewed some budget information presented at Council’s last meeting on April 1^st. He said that several factors were driving the budget for the next fiscal year and reviewed them for Council. The budget was current balanced with a real estate tax rate increase from $0.82 to $0.87 per $100 of assessed value. Likewise water rates were proposed to rise $1.00 per 1000 gallons, resulting in a $4.00 per month increase in the minimum charge for 4,000 gallons of usage. Under this proposal, the minimum monthly charge for 4,000 gallons of use would rise from $24.32 to $28.32. Electrical rates were proposed for an increase of 5 percent to keep the Electrical Department operating and provide for the transfer of funds to the General Fund. Overall, twenty-five positions would be “frozen” and not filled in the new budget.

Meredith said the budget was prepared to anticipate a $1.3 million loss in revenue in the Electric Fund caused by Radford University’s switching over to their own COGEN power source. The budget also took into account a revenue loss of $200,000 from Pulaski County not honoring the Revenue Sharing Agreement. As far as unknowns for the budget, he said the City as yet did not have figures from the state at to what they would do concerning raises for constitutional officers and for members of the Department of Social Services. Once these figures were received, the City would either have to fund its portion of the raises or make more budgetary decisions.

As for things the budget would not accomplish, Meredith listed them as follows:

• The budget would not fund all Non-Governmental organizations.
• It would not fund capital needs. The main capital project of $500,000 was for the Electric Fund to replace structures supporting the power lines across New River to Pulaski County.
• The budget would not significantly grow fund balances (reserves).
• It does not reduce the General Funds dependency on transfers from enterprise funds (Water, Electric, Solid Waste)
• It does not increase “stabilization funds” for natural disasters

The proposed budget did provide for a 2 percent cost of living adjustment for employees. It also fully funds the Local Required Effort and the Local Required Match for the City Schools at $5,994,142. The budget works to prevent the loss of fund balances, while providing $90,000 for implementing a continuous improvement and lean management program to assist reduced staff in providing City residents with the expected level of services.

With respect to the proposed $0.87 per $100 real estate tax, Meredith said the increase was not proposed because of the rates in neighboring localities. “The reason the request is in there to raise the real estate tax” he said, “was because of the City’s fund balances. They have been zero, negative. We are trying to grow those at least incrementally, to get the City back financially stable and to get the cash flow stable.” The request for the higher real estate rate he emphasized again was the fund balance and to get the fund balance back for the City. Meredith said that a one cent increase in the property tax rate generated approximately $118,000 in General Fund revenue. The increased rate would result in a $50 increase in real estate taxes annually for every $100,000 in home value. The revenues would be applied to the General Fund to assist it in supporting itself.

An increase of $1.00 in water rates would result in an increase of $4.00 per month in the minimum charge for 4,000 gallons of usage from $24.32 to $28.32. Concerning electric rates, Meredith said the recommendation was for an increase of 5 percent. In addition the customer charge would increase to $20.00 which would result in a lower energy base rate of $98.63. The cost for 1000 kilowatt hours would rise from the current level of $173.02 to $180.39.

The Electric Fund was proposed to spend $500,000 in capital improvements for new steel support structures for the power lines crossing the New River from Pulaski County. Some savings could be recognized by splitting the cost of the project between FY 2027 and FY 2028. Upon learning that the project would also benefit service to Pulaski Co. customers and other out-of-city customers, Council expressed an interest in a possible out-of-city electrical rate for customers outside the city. Meredith said the administration would look into the issue.

After the presentation, Council asked questions concerning individual line items in the budget. Finance Manager Patricia Cox provided Council with details on each inquiry as to what was involved for each questioned line item.

In its general discussion on the budget, Council discussed several cost cutting measures involving reduction of hours of operation for the library and rec center; possible charges for leaf collection and mulching; and outsourcing for sanitation services v. in-house service.

Councilman Guy Wohlford proposed that the real estate tax increase of $0.05 per $100 be reduced by three cents and increase the water rate by another $1.00 per thousand gallons. Wohlford said he thought it was important to get the water rates high enough where the City could qualify for grants for infrastructure repair. He proposed that the increase be spread out over a three year period. Mayor David Horton expressed concern over lowering the real estate rate saying that there were only so many revenue sources for the General Fund. He expressed concern that if an increase of 4 cents or more was not done, this would deny the revenue needed over the next few years to make the General Fund self-sustaining and result in continuing dependence on transfers from enterprise funds. Increase in water rates he thought would be an undue burden on some parts of the City’s population.

Vice-Mayor Seth Gillespie said he supported Wohlford’s proposal. He supported reducing the real estate increase because he said “We’ve done the heavy lifting there. With the budget as proposed over three years that’s a 23 cent increase. That’s significant.” Gillespie said he would like to see where the budget stood with a two or three cent increase in real estate rates; the agreed rate for water; an electric increase of 4 percent; with the cuts and efficiencies previously discussed. “We’ve hit that pretty hard” said Gillespie referring to the real estate tax. “Last year was a 13 cent increase and we have a reassessment on the horizon, and that typically drives up the cost as well.” Gillespie said that being mindful of these two factors led him to agree with Wohlford.

Mayor Horton noted that given changing circumstances the transfers to the General Fund that the City had been relying on had become more questionable, leading to the City getting behind on revenues requiring the real estate tax increases from last year. He asked where did the City need to be regarding real estate taxes to sustain the City.

Gillespie said concerning the proposed water rate, he hated the increases but saw the dire needs of the City’s water system. He felt the proposed water rate was targeted to meet some of the infrastructure needs of the water system rather than just supporting the General Fund. “We have to be building for some of these capital reserve projects. They’re coming so we have to start addressing that.” Mayor Horton agreed, but added that was why there needed to be a buffer for the General Fund. “That’s the hard part” he added.

Councilwoman Jessi Foster said the City needed to bring the revenues in and start creating that equilibrium back or make more sacrifices. She cautioned against further inaction and urged the City to do the “hard work to maintain our City status.”

Councilwoman Kelli Artrip proposed a real estate tax of $0.85 per $100 of assessed value and a $3.00 per 1000 gallon water rate increase with an eye towards moving the proposed rates to a middle value between the rates discussed.

After further discussion and comments, the Council asked the City Manager to research the effects of the proposed changes upon the budget concerning real estate tax rates and water rate increases discussed and present his findings at the next budget meeting.

The next scheduled meeting of the Radford City Council will be a budget meeting at 6:00 pm on Monday, April 13, 2026 to be followed by a regular Council meeting at 7:00 pm. Both meetings will be in the Council Chambers of Radford City Hall at 10 Robertson Street.