Radford Council Gets Update on City Finances
By DAVID QUESENBERRY
Patriot Publishing
At its December 9th meeting, Radford City Council heard comments from Mayor David Horton and City Manager David Ridpath about the state of the City’s finances in light of the City’s issuing a $4 million revenue anticipation note to address cash flow issues for this fiscal year.
Mayor Horton said the City had been working for several years on its finances to address cash flow and moving in a positive direction. He knew there was interest in the community about how the City was doing and where it was going.
Concerning the City’s financial status, Mayor Horton said that the City would have a fuller picture in a week or two as it accounted for the revenue from the December 5th tax payments. He noted that revenues were stronger and that action had been taken by Council over the last year on revenues and expenditures. The City Manager and his staff had taken action multiple times on expenditures in the budget to try to figure out a way to remain cash flow positive.
There had been challenges, he said mentioning $1 million in damages along the New River area from Hurricane Helene and that there were several “must do today projects” that could not wait six months, twelve months, eighteen months until money came in from the state and federal government, which totaled some $300,000.
This slightly changed what Horton called “the dynamic” moving through the issue. He then asked City Manager Ridpath for his comments on the City finances as it was now and what direction it was going.
Ridpath said that the City’s finances were “leaps and bounds” better as compared to a year ago. The City had made two payments to APCO with one payment remaining. Revenues appeared positive with the City working to maintain $1 million in available funds as often as it could. He said that the City worked backwards from payroll and benefits at any given time to be sure, as revenues come in, that the City could make payroll and then meet all the accounts payable. Ridpath said the City’s accounts payable was current as of the end of last week. He felt pretty good about that point, but added he would feel better once he saw the revenues from the past December 5th tax billing, not counting what may be late or not paid, to make sure those revenues come in as expected.
If revenues were good, he hoped to pay the final APCO bill which would catch the city up to the current billing and, while not making promises, hopefully get a little down on the revenue anticipation note. He said that he did not want to leave things so tight when the Interim Manager took over in January, but he wanted to be sure there was enough funding to carry the City through a few months.
Ridpath said that cuts were initially made in the budget during this past summer. Regarding indirect costs he worked with staff on holding back items that were not necessary until the next year to make sure the position was good. Staff he said had done a “super job” tracking and watching these items. Items were listed as “must do” or “to do” and were checked off a list depending on their status.
Hurricane Helene resulted in $300,000 worth of additional work with possibly another $100,000 of “must do” tasks to be able to get the City back to having the fields in play by springtime and having the picnic shelters ready to go.
One of the biggest issues was Animal Control. Ridpath said Chief Holdaway and the Building Officials had done a great job in dealing with the worst of the situation there by eliminating a building used for Animal Control which is subject to flooding. Within 60 days he said, Animal Control would be moved to its new location which is on somewhat higher ground. In addition, a former garage had been approved for funding by the Department of Agriculture for a potential operations area.
Over the past years, Ridpath said there had been many events including a pandemic and double digit and in some cases triple digit inflation. The effect of these events on people, employment, and particularly the impact on the student population in the City have all together contributed to the challenges facing the City. Ridpath said he hoped the efforts made would move the City forward to a position where it would be positive in the next few months and particularly by July 1, 2025.
Mayor Horton noted that the City had hoped to make payments on the revenue anticipation note in October and December, but that Hurricane Helene had made it challenging. The whole point of having the revenue anticipation note is having cash flow readily available so that the City is able to do the things it needs to do. We do not want to put ourselves “between a rock and a hard place” as noted by Ridpath who was certainly managing that aspect.
He added that Council would continue to work on the issue and was considering extra meetings in January as the City moved into the transition period with the Interim City Manager Craig Meadows. This was to help Council look at everything to see where they are and to try to make sure that pre-budget, Council was getting everything done it could do to address things before getting into the 2025-2026 budget. Horton wanted to point out that nobody had forgotten about it, everybody is still working on it.
Ridpath told Council that the audit for the City was near ready and that an exit interview on the audit had been conducted indicating that there were no material findings. Council will receive the audit in January.
Council heard a presentation from Joe Levine, Executive Director of the New River Resource Authority (NRRA). Levine gave a short overview of the history of the Authority since its formation in 1986 and reviewed annual tonnage figures received from member localities and recycling tonnage. Following a video presentation showing the layout of the facility, Levine took questions from Council members which focused on the Authority’s reserves and a decline in recycling tonnage.
Levine said the Authority under its business plan and annual budget sets aside funds for reserves which are earmarked for specific purposes such as opening or closing disposal areas and equipment expenditures. State financial regulations require the Authority to maintain a $14 million reserve. In addition, the authority has a $2 million reserve for the Ingles Mountain Landfill; a $1 million reserve per the Authority’s articles of incorporation; a $1 million reserve for the Authority; and a building reserve of $6.5 million for capital projects for total reserves of $24 million.
In response to Councilwoman Foster’s questions as to how these reserve amounts are determined, Levine said the Authority is required to have a third party analysis which is reviewed annually and projects what potential needs might be. The results of this analysis are then incorporated into the budget process. In the event of a problem at any site, the NRRA is responsible for any compliance or remediation.
Concerning the drop in recycling tonnage, NRRA Board member Robert Asbury said that the reduction was due in part to the Chinese not taking any more shipments of recyclables from the Montgomery County facility. Levine added that the numbers for recycling were down for other reasons that were as yet undetermined.
In other business Council approved several measures during the session.
Council unanimously approved Ordinance 1811 vacating a portion an alleyway between Eighth Avenue and Ninth Avenue, to allow the addition of the tract to two adjacent properties as requested by the property’s owners.
Council also unanimously approved appropriation Ordinance 1802.16 for $11,033 in funds from the Virginia Litter Prevention and Recycling Grant and Ordinance 1802.17 for a $240,000 donation from the Bowling Trust to the Radford Public Library for books and literacy programs.
In another action, Council considered a resolution for an energy storage services agreement between the City and Lightshift Energy for the installation of a battery energy storage system (BESS) that would provide up to 8 megawatts of stored energy. The installation would recharge during daylight hours and be brought on line during peak electrical loads on the City’s electrical grid.
Director of Utilities Tim Logwood told Council that the installation would be located next to the substation on the DCI property. He said the end of the current contract with APCO would result in the City being responsible for paying PJM market fees and a transmission bill. The project would allow some of the peak load to be offset, resulting in some cost savings from these expenses to the City’s electrical customers.
Cost benefit analysis for a 4 Megawatt system suggested the project could result in savings of $20 million over fifteen years at a cost of $9.1 million for a return on investment in six years. Logwood said that a 4 Megawatt system would be best suited for the City’s electrical grid. Following the presentation, Council unanimously approved the resolution to proceed with the services agreement.
Council also reappointed Robert Asbury to another term on the board for the New River Resource Authority.
The next scheduled meeting of the Radford City Council will be an organizational meeting on January 8, 2025. Council will meet for its next regular meeting at 7:00 p.m. Monday, January 13, 2025 in the Council Chambers of the Radford City Hall at 10 Robertson Street.