The Radford City Council will hold a public hearing Tuesday on the proposed fiscal year 2027 budget and consider hikes to its real estate tax and water and electric rates.
The city is currently in “fiscal distress,” according to the Virginia Auditor of Public Accounts. In a March 26 notification, the APA said Radford has struggled to maintain a “structurally balanced budget” because of “overly optimistic revenue projections,” it has a unique tax base that includes Radford University, and the treasurer has an “older, standalone financial system.”
The APA also said that the city was six months behind on payments for wholesale electricity from American Electric Power.
In a March 27 news release, city officials said they had reduced the outstanding balance with AEP to three months and hired a new chief financial officer, assistant finance director and accounts payable clerk. The city is also now using modern software that is coordinated across the departments, the release said.
Mayor David Horton said Thursday that “everything is still very fluid” with the budget proposal.
“We are still getting new information and finding efficiencies,” he said.
The proposed budget, which begins July 1 and ends June 30, 2027, totals $81.77 million. The current budget totaled $77.98 million.
Horton said the proposed spending plan is balanced with the revenue that will be generated during the fiscal year.
“Working with City Staff, we have overhauled the process for estimating revenue and we feel much more confident in our ability to realize those projects. This directly addresses the concerns of the Fiscal Distress early warning program from the Auditor of Public Accounts as the major issues identified have been related to our ability to generate sufficient and sustainable revenue for the City’s needed expenses,” the mayor wrote in an emailed statement.
The exact amounts for the increases in the real estate tax and other fees won’t be determined until Tuesday’s meeting, according to Horton.
The city advertised a real estate tax rate that will not exceed 87 cents per $100 of assessed value because an ad is required to hold a public hearing, he said. Currently, the real estate tax is 82 cents per $100 of assessed value.
The city also said in the ad that the electric rate will not rise higher than a 5% overall increase and the water rate will go no higher than $47 for 4,000 gallons, which is the minimum bill each month, according to the mayor.
But he added that council will not approve rates that are that high for the tax rate and the water rate.
Council member Jessie Foster said in an email that council is “mindful that a tax increase means our citizens have less resources for their homes and families. We don’t take that lightly, but we also have to ensure we have safe water, emergency services, a dependable electric department, paved roads, successful schools, and an increase in reserves.”
The Radford City School Board’s budget, which totals $50.4 million, is part of the overall city spending plan.
Superintendent Adam Joyce said that the budget includes funding for an in-person physics teacher, a new Air Force JROTC program for grades eight through 12, and a raise for all staff from teachers to janitors.
Joyce also pointed out that Radford has the lowest composite index of local ability to pay, or LCI, in the state. The index determines a school division’s ability to pay education costs fundamental to the commonwealth’s Standards of Quality with local funds.
It is calculated based on a locality’s true value of real property, which is weighted at 50%; adjusted gross income, 40%; and taxable retail sales, 10%; plus an adjustment to maintain an overall statewide local share of 45% of the costs and an overall state share of 55%.
In November, nearby Montgomery County’s LCI was 0.4095, Floyd County’s was 0.4272, while Radford’s was only 0.1605, according to the Virginia Department of Education.
“That means that basically the city of Radford is responsible for 16% of the school funding. The city of Radford, for two years in a row now, has had the lowest LCI, which means our locality is responsible for the least funding in the state,” Joyce said.
He added that the school division’s budget is the required local effort.
“We’re not asking for one penny more,” he said.
In 2025, the city missed several monthly payments to the school system, he said.
“I think it’s one of those cases where it got bad before it got better. Last fall was tough on them. In turn, it was tough on us,” said Joyce.
He added that payments have been on time since December, and he believes that the city will soon turn a corner with its financial woes.
Tuesday’s meeting will take place at 6 p.m. in the council chambers at the Radford City Office, 10 Robertson St. View the agenda here.
Correction, 6:15 p.m. April 21: Radford’s real estate tax is 82 cents per $100 of assessed value. The number was incorrect in an earlier version of the story.
