Audit shows Radford City ended FY2024 with negative unrestricted balance; electric and water funds under pressure

Radford City received an unmodified (clean) audit opinion for fiscal year 2024 but city staff and auditors warned the City Council that unrestricted reserves were negative and several enterprise funds have trended downward, leaving the city on a multi‑year path to rebuild reserves.

Corbin Stone, an auditor with Robinson Farmer Cox, told the council the firm issued “what we call an unqualified or unmodified opinion which means we believe the financial statements are correct.” Stone and staff walked council members through fund‑balance shifts, accounting adjustments and a set of management recommendations.

Why it matters: The auditors said unrestricted (available) fund balances were negative by roughly $4.5 million at June 30, 2024, largely because the city used federal American Rescue Plan Act (ARPA) funds in earlier years and then recorded a short‑term revenue anticipation note (RAN) of about $4.5 million that appears on the balance sheet as a liability. At the same time, the city faces roughly $56 million in long‑term obligations, including school debt and retirement/post‑employment liabilities. Stone said the city’s long‑term obligations are “about $56,000,000,” and annual debt service on school debt is roughly “$1.5 to $2,200,000 a year.”

The audit presentation highlighted several specific pressures:

- Electric fund: Net position fell and the fund ran a deficit in FY2024. Stone said wholesale electricity costs rose about 11% in 2023 and about 15% in 2024, contributing to a negative electric net position (the auditors cited roughly a $433,000 negative balance). Council members and staff noted that the city historically transferred about $3–4 million a year from the electric fund to the general fund; those transfers…