Radford manager presents balanced FY2027 budget; council votes to advertise higher water, electric and property tax caps

Radford City Manager Todd Meredith presented the fiscal year 2027 proposed budget at a special Radford City Council meeting, calling it “balanced” and outlining a mix of revenue adjustments, cost-saving measures and a new continuous‑improvement program designed to stabilize the city’s finances and address deferred capital needs.

Meredith told the council the FY27 plan is guided by four core values—effectiveness, efficiency, financial sustainability and maintaining independent city status—and relies on zero‑based budgeting and data‑grounded revenue projections. He said staff have already eliminated legacy costs, noting roughly $31,600 in first‑year savings from cutting unnecessary phone and service lines and a $1,400 vendor refund recovered from incorrect sales‑tax charges.

Why it matters: the budget aims to stop erosion of Radford’s fund balances while preserving essential services and restoring modest employee compensation. The plan also confronts long‑deferred capital needs—especially water infrastructure and electric system upgrades—that the city lacks cash to fully address without new revenue or grant funding.

Key proposals and fiscal drivers Todd said the proposed package would be balanced by a combination of modest tax and rate increases, reinvestment of limited enterprise fund growth and continued personnel controls. The council agreed to advertise the following maximums (an advertisement sets a ceiling but does not finalize rates): a five‑cent increase in the real‑estate tax (from $0.82 to $0.87 per $100 assessed value), a 5% overall cap for electric rates, and an advertised water minimum/customer charge ceiling expressed as a target user rate of $47.79. Meredith emphasized the advertised water figure is a legal ceiling to preserve flexibility and to allow the city to qualify for infrastructure grants that use a target‑user benchmark.

On revenue forecasting, Meredith said staff use 10 years of actuals and Excel trend lines with 95% confidence intervals; he cited a sales‑tax forecast of roughly $1.844 million, which he said stood close to a later state estimate and therefore validated the approach.

Deferred capital and enterprise transfers The manager warned that the general fund remains significantly supported by transfers—about $4.9 million in the FY27 proposal—with roughly 78% of those transfers coming from the electric enterprise (approximately $3.7 million). He and councilors flagged that drawing so heavily on enterprise funds reduces those utilities’ ability to fund their own capital maintenance, accelerating deferred maintenance risks. Meredith cited the water system as an example: Radford’s steel storage tanks are roughly 75 years old and he said there had been little preventive maintenance for about 25 years, raising the risk that assets will fail sooner without investment.

Personnel, operating and efficiency measures The FY27 budget preserves 25 frozen positions to hold personnel costs down; Meredith estimated the hiring freeze in recent years saved between $1.5 million and $2 million depending on the final headcount restored. The budget also includes a roughly $90,000 investment to create a lean continuous‑improvement program (Lean Six Sigma green‑belt training) intended to help staff redesign workflows and sustain services at lower staffing levels.

Electric rate design and solar customers Council discussed several electric rate options to achieve a 5% revenue increase while reducing the burden on low‑consumption accounts. Staff proposed raising the fixed monthly customer charge (from about $7.96 to $20 in one scenario) and lowering per‑kWh energy charges so that typical low‑use customers and meter‑maintenance costs are better covered. Staff also noted the complexity of solar net‑metering policy changes while the city transitions wholesale power procurement.

Council action and next steps After discussion, council moved, seconded and voted to advertise the not‑to‑exceed rates (5 cents on real estate, 5% electric and a water advertising ceiling tied to a $47.79 target user rate). Meredith and staff emphasized the advertisement preserves flexibility; any final rate decisions will come after public notification and the required hearings. Council scheduled a follow‑up special meeting for further discussion at 6:00 p.m. on Monday.

Quotations • Todd Meredith, city manager: “It is balanced,” referring to the FY27 proposed budget and describing the package as taking an incremental step toward stronger fund balances. • Todd Meredith on grant eligibility: “Our target user rate is $47.79,” explaining that some infrastructure grants use that benchmark to determine borrower/grant eligibility.

What remains unresolved The FY27 proposal begins to address stabilization but does not eliminate Radford’s dependence on enterprise transfers; councilors flagged the need to develop a multi‑year capital plan, refine water and electric rate structures further, and weigh how to protect existing solar customers if billing rules change. The advertised water ceiling was set to enable further discussion and potential grant eligibility, not as a final, immediate rate increase.

Next procedural steps Council must publish the advertised rates and follow the public‑notice and hearing schedule before adopting final rates. Staff will return with additional data and modeling at the scheduled follow‑up meeting.

Sources: Radford City Council special meeting budget presentation and council discussion (transcript).