Radford officials flag insurance spike, staffing risks as they shape FY‑2026 budget

Radford City officials presented a proposed fiscal year 2026 budget totaling $77,262,257 at a May 5 work session and flagged a steep rise in employee health insurance and staffing shortages as the biggest near‑term risks.

The proposed budget covers the general fund, electric fund, water and wastewater, transit, streets, solid waste and an internal service fund. City staff said the general fund budget for 2026 is $33,122,947 with a projected reserve increase of $239,178; the advertised package of possible tax adjustments could add roughly $721,000 if council approves all items. City Manager Craig (presenter) told the council the FY‑2026 budget is balanced as written but that the city still faces a multiyear structural shortfall tied to declining revenue estimates and rising costs.

Why it matters: Department heads said the combination of higher benefits costs and frozen positions threatens service delivery. Several said losing trained staff would be expensive and slow to recover — particularly in electric, police, fire and utility crews — and undermines the city’s capacity to maintain aging infrastructure.

City finance and insurance overview City staff reported that FY‑2026 all‑funds revenue and expense totals are $77.3 million. Craig said 2025 revenues have come in lower than budgeted; the presentation projects 2025 general fund revenues at about $29.7 million against $36.0 million budgeted, and a near‑term shortfall that staff has covered in part with one‑time transfers. He explained the city had previously advertised tax rate ceilings (including a possible 3¢ real estate increase to 82¢) and other options for council consideration.

On employee health insurance, the city said an initial carrier quote showed a 29% spike; after negotiations the increase has been reduced to 14%, which still raises city costs by roughly $638,000. Craig said the administration proposes shifting two‑thirds of that increase to employees and one‑third to the city — about $425,000 borne by employees and about $213,000 by the city — which would raise employee monthly premiums by roughly $100–$300 depending on plan and family status. Craig characterized the insurance change as “a gut punch” that meaningfully complicates the budget.

Staffing and service risks Department…