Radford Council adopts $77 million fiscal 2025-26 budget, raises tax and fee rates

Radford City Council on Tuesday adopted its fiscal year 2025-26 budget and approved ordinances setting tax rates and fees that together aim to stabilize the city’s finances.

The council approved Ordinance 18-15, the fiscal 2025-26 budget, and separately adopted Ordinance 18-13 setting tax rates and Ordinance 18-14 setting fees and rates. The package raises the advertised real estate tax rate to $0.82 per $100 of assessed value, increases the personal property tax marginally to $2.55, boosts the prepared meals tax from 5.5% to 6.5%, raises hotel occupancy tax from 8% to 8.5%, and increases several utility and service fees including water/sewer and solid waste.

City staff presented the budget as a “living document” and said the package reflects a mix of new revenues, spending adjustments and one-time transfers to begin rebuilding reserves. The all-funds proposed budget for fiscal 2026 was presented at roughly $77.26 million before adjustments; after changes discussed during the review process staff reported a revised total in the same general range and projected roughly $1.0–1.2 million increase in general fund reserves from the changes described by staff.

Finance and budget details

Craig (staff member) told the council the budget reflects multiple changes made in recent weeks and emphasized ongoing monitoring: “A budget is a living document,” he said, adding the city will provide monthly financial reporting so council can track trends and request course corrections as needed. Staff said some revenue estimates were revised downward to be conservative and several departments’ expenses were held flat unless contractually required.

Key numeric changes and clarifications given at the meeting include: - Proposed all-funds total presented earlier in the process: $77,262,257 (staff noted adjustments made afterward). - Proposed real estate tax: increase from $0.79 to $0.82 per $100 of assessed value (advertised rate). - Proposed personal property tax: increase from $2.54 to $2.55. - Prepared meals tax: increase from 5.5% to 6.5%. - Hotel/occupancy tax: increase from 8.0% to 8.5%. - Water and sewer: a $8 monthly increase for the example cited (from $52.80 to $60.80 for a 4,000-gallon billing). - Solid waste fee: increase from $22 to $25 per month. - Local elected officials’ pay: council agreed to reduce their salaries by 10% for the upcoming fiscal year. - Personnel actions: a hiring freeze on vacant positions (staff said seven positions were currently open) is expected to generate roughly $1 million in savings over the next year if vacancies persist. - Employee health insurance: the city agreed to increase its contribution by about $106,000 to cover higher insurance costs. - Regional jail: an $86,000 adjustment was made to reflect the jail’s budgeted request to the city. - School funding: the school board offered a $500,000 transfer from its capital reserve to the city to help close a funding gap; staff said that reduced a previously noted shortfall to about $109,000.

Staff noted one planned revenue increase — a one-cent rise in the cigarette tax — could not be implemented because the Commonwealth caps that tax at $0.40, costing the city roughly $3,000 in projected revenue.

Impacts on a typical household

Using staff’s example of a homeowner with a $250,000 assessed value, the combined effect of real estate, water/sewer and solid waste increases was presented as about $457 per year (about $38 per month). For a $150,000 house staff estimated about $195 per year in increased real estate tax alone under the new rate.

Council action and votes

The council voted on the ordinances in sequence. Roll-call votes on the ordinances were unanimous among members present: Miss Artrip, Mr. Gillespie, Mr. Wolford, Miss Foster (participating remotely) and Mayor Horton each voted yes on Ordinance 18-13 (tax rates), Ordinance 18-14 (fees and rates) and Ordinance 18-15 (fiscal year 2025-26 budget). An earlier procedural motion to allow Miss Foster to participate remotely was approved by voice vote.

Council discussion and next steps

Council members acknowledged the difficulty of the budget process, the mix of cuts and revenue increases and the likelihood this will be a multi-year effort. A council member summarized the package as a necessary step that “stops the bleeding” but does not fully resolve long-term fiscal challenges. Staff said the budget materials will be forwarded to the commissioner of revenue and the treasurer as the next administrative steps.

After adopting the budget, the council moved into a closed session to continue a separate personnel process. The motion to enter closed session cited Virginia Code § 2.2-3711(A)(1) for discussion of prospective candidates for employment.

Ending

Council members and staff thanked each other and members of the community for participation during what they called an intensive review process. Staff and council said they will monitor revenues and expenditures closely and return to council with monthly financial reports and any adjustments if projections diverge from actual results.