Radford fails in bid for temporary injunction in dispute with Pulaski County over revenue sharing agreement

If granted, injunction would have forced Pulaski County to renew making payments to city

By MIKE WILLIAMS

Patriot Publishing

The continuing dispute between Pulaski County and the City of Radford over a decades-old revenue sharing agreement took another turn Friday.

Following a hearing in Pulaski County Circuit Court, Judge Bradley Finch ruled in the county’s favor on a motion filed by the City of Radford.

The motion sought a temporary injunction in the case, which – had it been granted – would have required the county to resume the revenue sharing payments it stopped making in August 2025.

With the dismissal of the motion, Pulaski County will continue to withhold the payments until a final decision is reached on their original suit.

Back in August, the Pulaski County Board of Supervisors approved a resolution directing County Attorney Tim Kirtner to file suit challenging the validity of the revenue sharing agreement with Radford, which obligated the county to pay a portion of its local sales tax revenue from Fairlawn to the city in perpetuity. Kirtner said the resolution also directed that no further payments be made pursuant to the agreement.

The original agreement was established in 1978 when the county and the city agreed that 28 percent of sales tax revenue collected in a portion of the Fairlawn area would be allocated to the city. In return, Radford’s council would not support petitions filed by county residents in Fairlawn in which they asked Radford to annex that area of the county into the city.

According to the county’s August suit, the Virginia Constitution does not allow counties to incur debt without first holding a referendum to allow voters in the county to decide whether the debt should be incurred. No such vote was held.

Following the August suit, Radford sent a demand letter asking that the county resume making their monthly payments of about $12,000 per month. So far, Radford has gone without six payments totaling $72,000.

According to testimony Friday by City Manager Todd Meredith, Radford also expected to receive another $50,000 in a “true-up” payment – an adjustment made to align estimated payments with actual financial results, putting the amount of money so far not received by Radford at about $122,000.

Radford argued that the amount of money represented an “integral part of revenue” in the city’s general fund, especially because of the city’s tight financial situation.

Meredith described the city’s current cash flow as being “extremely tight,” and said repairs of Hurricane Helene damage at Bissett Park including $12,000 in scoreboard repairs for rec games, damage to pickle ball courts, walking trail lighting and more could not be made. There are also needed repairs on the city’s courthouse HVAC system, among other repairs needed around the city that cannot be done because of the tight finances.

Besides a tight cash flow, Radford is also facing a large debt in money owed to American Electric Power.  The city buys electricity from AEP, then sells it to the city’s electric customers.

According to Meredith, Radford owes AEP between $1.5 million and $2 million a month and currently is four months behind – meaning the city owes AEP between $6 million and $7 million.

Meredith said the city has reduced some 34 positions and currently is short “six or seven” police officers, and there are openings at the fire department, public works and street department.

Meredith, who said he knew “day one” when he accepted the city manager’s job that expense cuts would have to be made, said revenue projections in the city’s last several budgets had been “overly optimistic.”

He also acknowledged that the state’s Auditor of Public Accounts is monitoring the city’s situation to determine if it is “fiscally distressed,” which would result in the state taking over the city’s finances.

The second witness called by Radford’s attorney Mike Bedsaul was former interim City Manager Craig Meadows.

Meadows served in Radford from January to July, 2025.

Bedsaul asked Meadows to describe Radford’s financial situation during his tenure.

“Distressed. Very dire,” he said, adding the city’s significant cash flow problems made it difficult to meet the requirements of the city’s budget.

Meadows agreed that the city was suffering from chronic revenue over-projections for several years leading to shortfalls that required the city to take out two $4 million revenue anticipation notes to sustain operations.

Meadows, who has some 34 years of experience in local government said Radford’s budget situation was, “If not the most challenging [for him] then certainly in the top two or three” due to cash flow concerns and what he called a lack of staff knowledge on how the city’s budget had been prepared in recent years.

During his testimony, Meadows said Radford’s situation could be fixed “over time,” but added that “Radford has a history of not doing that.”

Pulaski County’s lone witness in the hearing was Ann Shawver, an accountant and financial consultant to local governments. She said localitites in Radford’s situation have two options on how to fix the problem.

“They can make cuts or raise revenue,” she said.

Responding to one of Radford’s arguments for the need to receive the revenue sharing funds now because personal property and real estate tax revenues will be months in coming in, Shawver said there are a series of taxes such as the meals tax that Radford can increase by ordinance that will bring the city more revenue sooner over varying lengths of time.

In his final argument, Bedsaul said granting of the city’s motion for a temporary injunction would preserve the status quo in that the revenue sharing agreement has been in place for 47 years.

“It does not create a new burden on Pulaski County,” Bedsaul said, noting, however, not granting the injunction creates a significant burden on Radford City.

Salem attorney Jim Guynn assisted Kirtner in representing Pulaski County. Guynn argued that Radford had not shown evidence of any services not provided by the city due to the revenue sharing funds not coming in.

He also argued that the city had not suffered “irreparable harm” from not receiving the funds from Pulaski County and therefore the temporary injunction should not be granted.

In the end, Judge Finch agreed with that argument and denied the city’s injunction request.