Radford City to advertise budget and proposed tax and fee increases after managers flag multi‑million revenue shortfalls

Radford City Council agreed to advertise the proposed fiscal 2026 budget and upper limits for several taxes and fees after interim City Manager Craig Meadows told the council the city faces recurring revenue shortfalls that must be addressed to keep the general fund balanced.

Meadows said the city’s recent detailed review showed selected revenue lines — notably real estate taxes, sales and use taxes, charges for rescue services, state and federal health-and-welfare reimbursements — have consistently trailed budget estimates, producing gaps that have prevented the city from rebuilding reserves. “We have to place the advertisement for the public hearing,” Meadows said, adding the council must set advertised upper limits for the real‑estate tax and utility fee changes before the public notice is posted.

The council agreed to advertise an upper threshold of 82¢ per $100 of assessed value for the real estate tax (the interim manager proposed 79¢; Councilmember Foster asked that 82¢ be advertised as a possible maximum). Meadows and council members described that 10¢ would generate roughly $1.2 million; the additional 3¢ to reach 82¢ would generate about $360,000. The advertised limit is only an upper bound: the council may set a lower rate after the public hearing but cannot adopt a higher one than advertised.

Why it matters: Meadows told the council the general fund for fiscal 2025 shows a large net shortfall when compared with earlier budgets and that persistent overestimates on a handful of revenue lines left the city unable to rebuild reserves. He said the FY2026 proposal reduces the city’s general fund spending compared with the current year while relying on revised, more conservative revenue estimates. If the advertised rates are approved after the public hearing and readings, staff said the FY2026 budget would be balanced on paper, but would not erase the current multi‑million dollar shortfall accumulated in prior years.

Key proposals and financial detail - Real estate tax: staff proposed increasing the rate from 69¢ to 79¢ per $100 of assessed value to generate roughly $1.2 million; council authorized advertising up to 82¢ as the upper threshold for consideration at public hearing. Meadows noted past budgets estimated real estate tax receipts at about $8.8–$8.9 million but collections have trended closer to $7.5–$7.9 million in recent years. - Solid waste fee: staff proposed increasing the residential solid‑waste fee from $22 to $25 annually; Meadows said each $1 of a solid‑waste fee change generates about $40,000 in revenue, so the $3 increase would produce roughly $120,000. He also said a one‑time leaf collection charge, if implemented, would generate about $80,000 based on current residential accounts. - Water and wastewater rates: the proposal raises both water and wastewater by $4 per 4,000 gallons (water from roughly $20.32 to $24.32; wastewater from $32.48 to $36.48), a combined increase of about $8 per month for a household using 4,000 gallons. Meadows said most customers use 4,000 gallons or less and that the proposed rates still fall below many neighboring localities’ current rates. - Other local taxes and fees to advertise: council agreed to advertise upper thresholds for prepared‑meals tax at 6.5%, hotel‑occupancy tax at 8.5%, cigarette tax at 41¢ per pack (up from 40¢), and personal‑property tax at $2.55. Staff will list these rates in the public‑notice advertisement so they can be considered at the hearing. - Budgets and totals: Meadows reported the citywide total for all funds in the presentation was about $77.36 million; he identified the general fund for FY2025 as roughly $36.02 million and said the FY2026 proposal reduces general‑fund spending to about $33.1 million (a decrease the presentation described as roughly 8.1%). He cautioned that some numbers were still being refined and that staff would circulate updated reports to directors and constitutional officers.

Actions, staffing and near‑term steps - Hiring freeze: the city will impose a 90‑day freeze on filling vacant positions while staff refine fiscal‑year numbers; Meadows said he is not prepared at this point to recommend eliminating key positions but the freeze will pause new hires while the city reassesses. - Capital purchases: the FY2026 proposal eliminates general‑fund capital purchases except where required; managers said lease‑purchase or debt packaging could be used if a capital need is unavoidable and later amended into the budget. - Property sales: Meadows said he included a placeholder of $250,000 in projected FY2026 revenue tied to potential sales of city‑owned property and that staff would follow up after council members toured several parcels. - Collections, delinquency and timing: council members asked about the timing of state and federal payments (March and June quarterly payments were noted) and when those receipts would post to the general ledger; staff said some receipts had arrived but not all had been posted and that they expected more clarity by mid‑April. - Potential cashwork: Meadows said the council should expect the city will likely need a revenue anticipation note in FY2026 to manage cash flow while addressing longer‑term deficits; he emphasized that the advertised FY2026 budget is balanced based on conservative revenue projections but does not by itself eliminate accumulated prior shortfalls.

Votes and calendar - Remote participation: the council unanimously approved a motion allowing Councilmember Guy Wolford to participate remotely for the work session. (Mover and seconder not identified in the transcript.) - Advertising and schedule: council members agreed to advertise the budget and the proposed upper thresholds for taxes and fees; staff indicated a public hearing would be scheduled (the transcript records the council’s schedule references the public hearing on the 14th with first reading thereafter and a second reading seven days later). Final votes on rates and budget will occur after the advertised public hearing and the required readings.

Discussion and council remarks Craig Meadows and multiple council members described the situation as difficult but stressed the work session’s purpose was to present a conservative, achievable budget and to give the public an opportunity to comment. “We have to right‑size this budget,” Meadows said. Mayor Jesse (first name only in the transcript) told residents the council was trying to balance preserving services with the city’s fiscal constraints and said, “we’re gonna have to pay to be Radford City.” Several council members said they wanted to consider being more aggressive on some rates, while others urged caution because many Radford households are financially vulnerable.

What happens next Staff will circulate updated revenue and expenditure reports to department directors and constitutional officers, pursue additional expense reductions where feasible, and present more detailed revenue comparisons at a special meeting next Monday at 6 p.m. The council will hold the advertised public hearing and then proceed with readings and votes required to adopt the budget. Staff said they will continue work on collections and will provide commissioners (Treasurer and Commissioner of the Revenue) and department reporting at upcoming meetings.

Ending Council members and staff emphasized the meeting was one step in a multi‑week process. Meadows and the mayor urged residents to review the advertised proposals, attend the public hearing and provide feedback; staff stressed the council may set a lower adopted tax rate than the advertised cap but may not adopt a rate higher than the advertised upper threshold.