Radford leaders say general fund behind schedule; utilities rates, advertising deadlines discussed

Interim City Manager Craig Meadows told the Radford City Council on March 17 that the city’s general fund is running a year‑to‑date deficit and that the council must decide quickly whether to raise utility or tax rates to shore up reserves.

Meadows said revenues through February totaled a little over $21,000,000 while expenditures for the same eight months were about $22,000,007.50, leaving a roughly $1,650,000 shortfall; he also noted that the city has a $3,959,000 revenue anticipation note (RAN) and that, overall, “the general fund really is trending down about 5,600,000.0, year to date through February.”

Those shortfalls have driven the council discussion about potential revenue actions and timing. Meadows outlined the city’s four main funds and recommended the council first verify that all collected revenues have been posted in the city’s accounting system before adopting further changes.

City finance and utility figures presented by Meadows:

- General fund: Revenues through February just over $21 million; expenditures about $22,000,007.50; shortfall of roughly $1.65 million. The presentation did not reflect the removal of a $941,000 item the council approved at a prior meeting. Meadows said quarterly receipts expected in March and June may reduce the gap but will not eliminate it on their own.

- Revenue anticipation note (RAN): Approximately $3,959,000 included in general‑fund revenues.

- Water and wastewater fund: Revenues about $4.1 million and expenses about $3.8 million through February (net about $300,000). Meadows warned the fund’s unrestricted net position at the end of the prior fiscal year was only $32,800.

- Solid waste fund: Revenues about $1.1 million and expenses about $900,000 through February (net roughly $200,000); reserves at the end of FY24 were negative about $52,000.

- Electric fund: Revenues about $18.4 million and expenses about $11.7 million through February as reported; the expense side did not reflect three outstanding American Electric Power (AEP) wholesale bills totaling about $5.3 million. Meadows reported the city received a fourth AEP bill on Thursday and staff were working to process payments to reduce outstanding liabilities.

Meadows and council members discussed factors affecting collections and projections, including declines in student population, recent restaurant closures, the growth in online sales tax collections, and unusually cold weather in December and January that drove up electric use. He said some revenue lines appear lower than budgeted—real estate and personal property taxes were more concrete, while sales and use taxes and meals taxes require trend analysis.

On utilities and potential rate changes, Meadows showed peer comparisons: Radford’s combined water and sewer bill for 4,000 gallons is roughly $53 a month versus about $67 in Blacksburg and as high as $105 in Dublin. Meadows noted that Radford’s rates are low compared with neighbors and that raising rates will be a multi‑year process to rebuild reserves and address deferred capital maintenance.

Meadows gave examples of revenue sensitivity: every $1 increase in the city’s sanitation fee was estimated to generate between about $2,400 and $3,800 a month (estimates varied by billing method); he cautioned the council that exact revenue yields for sales and meals taxes are best estimated from multi‑year trends and that any advertised rate must account for legal advertising requirements.

Timing and process: Meadows explained legal advertising rules for rate changes (advertisements must run twice, no fewer than seven and no more than 28 days apart) and said staff aim to have recommended utility rates and options for the council within two weeks. He said utility fund budgets would be presented at the council’s next meeting (utilities next Monday), with the goal of having a decision to advertise rates by the March 31 meeting so an increase could take effect May 1 (or, if necessary, June 1). Meadows said real estate and personal property tax changes cannot be implemented mid‑year and must wait for the normal billing cycle.

Council members repeatedly emphasized balancing the need to generate revenue with the household impact of changes, particularly on electric bills after several months of unusually high wholesale costs. Councilors discussed possible short‑term measures (billing averages, customer assistance plans) and longer‑term steps (multi‑year rate plans, grant pursuit), and asked staff to provide specific “option A/option B” proposals that show the effect on average customer bills and on fund reserves.

Other points noted in the meeting:

- Helene cleanup costs were discussed; staff estimated expenditures to date at roughly $600,000 (approximate).

- The city’s East Main project phase mentioned in the meeting has already gone out to bid, and Appalachian Regional Commission grant match rules are under review.

- Meadows reiterated the limits on using electric fund balances to cover the general fund and urged caution about relying on one‑time transfers to cover structural shortfalls.

The council closed the formal discussion by voting to go into closed session under Virginia law to discuss personnel matters. Mayor (name not specified) moved that the council enter closed session “for discussion consideration, or interviews of prospective candidates for employment, assignment, appointment, promotion, performance demotion, salaries, disciplining, or resignation of a specific public officers, appointees, or employees of any public body, evaluation or performance of departments or schools of public institutions of higher education where such evaluation will necessarily involve discussion of the performance of specific individuals,” citing Virginia Code section 2.2‑3711(a)(1). The motion was seconded and approved by voice vote; council members answered “aye” and no opposition was recorded.

Meadows told the council he would provide advertised rate options with average‑bill estimates, and staff agreed to present utility fund budgets at the next meeting and the general fund budget the following week so the council could finalize tolerances before any public advertisements.