Already gifted lumps of coal in its figurative stocking, the city of Radford could soon be placed on the naughty list by the state auditor of accounts.
In a Nov. 12 “fiscal distress monitoring notification” to Mayor David Horton and City Manager Todd Meredith, Auditor of Public Accounts Staci Henshaw noted that her office has been monitoring Radford’s fiscal health since 2022.
At that time, Radford showed some troubling symptoms — such as pandemic-driven declines in student population and tax revenues from its biggest employer, Radford University, along with a $14.5 million loan for school capital renovations for McHarg Elementary — but its leadership had implemented “financial policies and budgetary strategies to move forward and improve the city’s financial position.”
Since then, though, the situation has worsened. Radford had to take out a $4 million loan in 2023 that it hadn’t begun to repay as of May. The city also owes millions in back payments to American Electric Power.
Henshaw has asked the city to respond by Wednesday with additional information and financials to determine if Radford is in “fiscal distress,” a determination that could lead to state-funded assistance for professional accounting consultants and expertise.
If so designated, Radford would be only the third city in such straits since the APA first began monitoring in 2017.
“The response regarding the Auditor of Public Accounts notice is one we will be sharing at our next City Council meeting [on Dec. 22],” Horton wrote in an email to Cardinal News. “We have had several conversations regarding the City with representatives from the APA to have a better understanding of the notice, what it means, and how we move forward. More information will be available following our upcoming meeting.”
Questions over funding for schools, jail, 911
APA’s letter is the latest in a string of financial woes for the city.
After receiving none of its city funding during the first quarter of this fiscal year, the Radford School Board in October filed a Virginia Freedom of Information Act request to find out when it might get paid.
“It was at the advice of our attorney,” explained school board Chair Gloria Boyd. “We just wanted to know, what is supposed to be the schedule?”
In past years, the city had made payments on a monthly basis, but started to become erratic in 2024-25, according to the FOIA. In July, August, September and October of 2024, the schools were paid each month, said Boyd, but November’s payment came Dec. 11, December’s was received in March, January’s in April, February’s and March’s in May, and April’s and May’s in June, which was the last payment the schools received prior to its FOIA.
Boyd said the school system also wanted information on its $1.2 million capital reserve fund that is kept by the city. “We wanted to know that money was secure and set aside,” she said. “It does not appear that it is set aside. There is one general treasury. It’s on a ledger but it’s in the general treasury, which means it may or may not be there, but that remains to be seen.”
Boyd did say that on Nov. 20, the city paid the schools its $1.2 million appropriation for the first quarter — July, August and September — and made its October payment on Dec. 11.
“I’m a retired teacher, I taught 27 years, I have a teacher’s heart and I will always be an advocate for teachers and education, no matter what,” Boyd said. “We are not in danger of not being able to meet our budget needs, but we do have to plan and we’re getting ready to go into the next budget preparation plan. Of course we want to feel secure about the future.”
Horton, the mayor, disputed the notion that the city was late in its disbursement.
“There is no requirement that the city provide funds daily, weekly, monthly, quarterly, semi-annually or on any set schedule,” he wrote. “As such, the city was not late regardless of how the school system may have requested funding. Please research this topic with regard to other systems in Southwest Virginia for comparison. For the record, $1.9 million has been disbursed to RCPS in November and December, as we had discussed providing over the course of the fall when we met multiple times with RCPS administration.”
The school division isn’t the only partner that’s been late in getting paid, according to Pulaski County Administrator Jonathan Sweet. As treasurer of the New River Valley Regional Jail Authority, Sweet said Radford had been “many months behind on their jail bill. They did make payment to catch up the arrears. However their last payment was late, but they’re currently up to date.”
Richard Chidester, chairman of the regional jail authority, described Radford as “a small fish in the jail’s ocean,” accounting for just $868,335 of the jail’s $26 million budget. Late payments aren’t unusual, Chidester added, given the timing of bills being sent out and the verification process by local governments to ensure they’re paying the appropriate amount based on their inmate population.
A potential consolidation of a 911 emergency call center with Pulaski County has been another possible casualty of Radford’s financial situation. In 2023, the two governments signed a letter of intent to “a proposed consolidation of the County of Pulaski, Town of Dublin, Town of Pulaski, and City of Radford’s Public Safety Answering Points (PSAPs), commonly called 9-1-1 Centers.”
Operational savings were to be generated by the consolidation, but about $2 million to $3 million in upfront funding was needed to renovate and equip the new center, said Chris Akers, executive director of the Pulaski County Joint 911 Communications Center. “That’s kind of when things fell apart,” Akers said. “We were still looking to move forward, but there was a change in administration at the city and that’s when things went away from looking at the consolidation option.”
Horton wrote that the concept for a combined 911 call center is still a possibility, but “it simply has not moved forward at this time. Radford is considering all options available in this area.”
These issues add to those that Cardinal News reported in November after Pulaski County filed a lawsuit seeking to end a decades-long deal with Radford to pay a portion of Fairlawn’s sales taxes to the city in exchange for the city not annexing the Pulaski County community.
In response, Radford City Attorney Michael Bedsaul said: “The current financial challenges faced by the City have been well publicized. …. The County has had 47 years to challenge the Agreement. Why, after this period of years, would the County select this moment to unilaterally cease revenue sharing? The City can only conclude that this decision was made in an effort to intentionally inflict irreparable harm to the City.”
Town-gown relations
According to former city councilman Keith Marshall, the city has been the one inflicting irreparable harm on itself.
In 2018, Marshall lost the mayoral race to Horton and, at the time, planned to step away from local politics and government. The city was in good financial shape, he said.
“And then round about [2023] I started hearing about some serious financial issues for the city of Radford, which kind of surprised me,” Marshall said.
He filed his own Freedom of Information Act request and became so perturbed at what he found that he launched a podcast, “One More Round.” He initially envisioned a handful of episodes. Last week marked his 81st.
Especially troubling for Marshall was the city’s — and Horton’s — relationship with Radford University.
With limited land available for development in Radford, and its largest employer being tax-exempt as a public university, the town and gown relationship with RU at times has been fraught.
In 2023, the RU Foundation cut the ribbon to The Highlander Hotel, and under a Radford Economic Development Incentive, the city reimbursed the foundation for a portion of its real estate, lodging and meals taxes — an amount that came to $150,198.73 in 2023 and $128,687.37 in 2024.
“The mayor of the city of Radford is an employee of Radford University,” Marshall said. “He’s an assistant dean. He’s in administration, and there were emails and negotiations with him personally, things that he got involved with, as far as some incentives that the university got. And those things really bothered me, and I wanted to get that information out there.”
Asked about a conflict of interest, Horton jumped into the ring himself for a rhetorical round against his former political opponent.
“Regarding personal opinion pieces such as podcasts or online posts — they are just that — opinion and often inaccurate,” Horton wrote. “The Highlander Hotel is an asset in many ways for our community, including revenue generation as it is the single largest tax generating facility in the city. The REDI grant program is a city initiative offering real estate tax rebates to encourage new development, like the Highlander Hotel project, benefiting the city’s economy and workforce development.”
He noted that the city was unable to offer the grant this fiscal year.
“Finally regarding any conflict of interest with my employment at Radford University, I have worked closely with legal [counsel] exploring all potential issues … [and] I have followed the guidelines established by the Virginia Conflict of Interest and Ethics Advisory Council. As an elected official, we are asked to participate in a wide range of activities and must be certain that we follow the guidelines with advice from experts instead of simply attempting to interpret complex rules and laws on our own. In every matter, I have sought this advice. Any claims to the contrary are demonstrably false.”
Marshall doesn’t ascribe malfeasance to Radford’s situation. Between the McHarg Elementary renovation, the economic downturn from the pandemic, other spending on public parks and amenities and so on, “I think they just spent up their money. I don’t think they saw it coming and, you know, and they haven’t caught up since, right?”
In addition to the APA notice, the Radford City Council also recently hired a new chief financial officer and issued a request for proposals for forensic audit services in hopes that 2026 is a happier new year.