With the most recent water, electric and real estate tax rate increases approved, the Radford City Council hopes its decisions will prevent a reversion to a neighboring county.
The council on Tuesday reaffirmed an initial vote from April 21, agreeing to the 2026-27 increases: 2 cents on the real estate rate, from 82 cents to 84 cents per $100 of assessed value; 5% on electric bills; and $3 on each 1,000 gallons of water. It is the third straight year of multiple increases passed on to city residents.
Council members acknowledged that tax and rate increases will likely remain a part of future budget strategy. Radford is in “fiscal distress,” and it qualifies for state expertise to help guide it through its troubles, the Virginia Auditor of Public Accounts notified the city in March.
A main problem is the city’s reliance on transfers from the water and electric accounts — known as enterprise funds — to balance its general fund budget. The city has no reserves to cover improvement projects or unexpected costs.
Councilwoman Jessie Foster was the lone no on the votes to approve the increases. She favored another penny increase in the real estate tax, saying she doesn’t believe the next budget does enough, particularly as the city tries to stay independent.
“We’re either going to have to start dealing with this stuff preventatively, or we’re going to be in crisis mode, which is going to be more expensive,” she said.
Responding, councilwoman Kellie Artrip said she’s appreciative of Foster’s willingness to speak her mind and that “maybe we should have” raised tax rates and fees more in the past.
“I think on the other side of that is we have raised them a bunch and I’m physically struggling on what to do … knowing that we will more than likely have to raise them again next year, and forgive us, how many years after that?” she said.
City manager Todd Meredith told the council during Tuesday’s meeting that the real estate tax rate would need to be raised another 40 cents — to generate about $5 million — in order to eliminate the reliance on enterprise fund transfers. If Radford’s real estate rate were to increase by that amount from the 84 cents, it would be higher than the city of Roanoke’s — and one of the highest in the state.
But, with Tuesday’s decisions, the 2026-27 budget will be the first in several years that will be balanced from the city’s resources, should there be no hiccups. The city had to borrow money in the past due to its fiscal predicament.
The reasons Radford got to this point include using its reserves to balance the budget for years while not increasing tax rates or fees, as well as business closings and the fact that almost half of its property is tax-exempt, owned by Radford University and the city. Council members have also said they were not always aware of the severity based on budget numbers presented in the past.
The problems raise the question of whether Radford would be better off giving up its independent city status to become a town in either Montgomery County or Pulaski County.
City officials have made their opinions clear that Radford should do all it can to remain a city.
Meredith, who began as city manager last summer, addressed that during Tuesday’s meeting.
He said the cash flows have improved in recent months, but there has to be more efficiency if the city is to stay independent.
In the newly adopted budget, the city is making several million dollars in personnel cuts and job freezes across departments, and it’s put off projects, such as the north New River crossing. Meredith is also implementing the Lean Six Sigma continuous improvement model. That’s a data-driven methodology to cut costs, streamline processes and better customer satisfaction. Meredith said he is a ranking Lean Six Sigma “green belt,” or project leader.
The council approved $90,000 in the $80.1 million 2026-27 budget to begin implementing that initiative.
“I’m excited to get a team built,” Meredith said, adding that he believes the process will improve the city government on a day-to-day basis.
Also moving forward, the city is conducting several audits, and should the governor and legislative committee approve an improvement plan for Radford based on the “fiscal distress” designation, state-paid consultants could help as well.
There is not a specific timeframe for a decision on a support plan, state Auditor of Public Accounts Staci Henshaw wrote in an email this week. The last time that state office made such a recommendation, a decision was made 90 days later, Henshaw wrote. Based on that, a Radford plan could move forward by late spring to early summer.
Vice Mayor Seth Gillespie, who is running for mayor this year, said he hopes the city will get that state help. He also said the council should begin work with the city administration on financial plans for the next five years. That would include a commitment to sustainable economic development.
“The answer cannot simply be to just increase taxes to generate revenue,” he said.