Radford council wrestles with FY27 budget, weighing taxes, water and electric rate options

Radford City Council held a special meeting to review the proposed fiscal year 2026–27 budget, focusing on advertised rate changes and ways to reduce costs before the public hearing and readings later this month.

City Manager Todd opened the review with a summary of the budget’s main drivers: “the real estate tax rate... is being proposed to go from 82¢ to 87¢,” a $1 per 1,000-gallon increase to the water rate (the city’s 4,000-gallon minimum would rise from $24.32 to $28.32), and a recommended 5% increase in electric revenue achieved through a higher customer charge and a lower energy base rate. He told the council the electric fund currently transfers roughly $3.9 million annually to the general fund and that the city expects about $1.3 million in lost electric revenue if Radford University brings a cogen plant online.

The advertised real estate increase is intended, Todd said, to begin rebuilding negative fund balances. He noted: “for every 1¢, it’s a $118,000 in the general fund,” a figure staff used to explain the revenue effect of each penny of tax change.

Council members pressed staff for alternatives that would reduce the immediate burden on residents while advancing long-term fiscal stability. Several members, including Council member Kelly, said they were wary of steep increases to utility rates because those costs fall harder on renters and lower-income households. Kelly said, “I do feel like we have increased the real estate significantly over the past few years,” and proposed a mix of smaller real estate increases and larger, phased water increases to qualify for grant funding for infrastructure.

Staff provided context for the water proposal: each $1 per 1,000-gallon increase would produce an estimated $447,000 in revenue, and the city’s target user rate for grant eligibility is about $47.79 per month. Council discussed phased options — for example, lowering the advertised real estate increase by a few cents while raising water by $2–$3 per 1,000 gallons over multiple years — and asked staff to run scenarios showing the net effect on transfers and capital reserves.

Council also discussed one large capital item in the electric budget: a roughly $500,000 project to replace several engineered river-crossing structures damaged by woodpeckers. Staff proposed phasing that work across two fiscal years to reduce the single-year impact, and members asked whether a targeted out-of-city customer charge could recoup costs from users outside Radford’s limits. Todd said staff would examine out-of-city rates and the feasibility of passing costs consistently to customers living outside the city.

Other line-item questions included a data-entry correction to an animal control figure (a department-level error that should read approximately $1,600 rather than $16,000), projected voting machine upgrade costs (vendor estimates of $5,000–$7,000 per unit for eight machines), municipal building HVAC repairs (about $65,000), and the condition of the solid-waste truck fleet. On sanitation, staff said key cost drivers include tipping fees and equipment replacement; council requested service-life data for the fleet to inform whether rate changes or outsourcing are warranted.

Mayor closed remarks by underscoring the tradeoffs the council faces: “I don’t like raising these rates either,” she said, noting the goal is to balance affordability with sustainable fund reserves and the city’s ability to maintain basic infrastructure and services.

Next steps: council asked staff to model combinations of smaller real estate increases and stepped water increases, the fiscal effect of holding additional frozen positions, and phased timing for the electric capital project. The public hearing and first reading of the budget are scheduled for April 21, with a second reading on April 28; council may revise advertised rates between readings. Staff and council encouraged public comment at upcoming meetings and by email in advance of the hearing.