RADFORD, Va. – A city in the New River Valley is behind over $6,000,000 in its electrical payments after bringing in less money than expected.
Over the past few years, Radford City has been working in a deficit and has fallen behind in some of its bills.
The issues started when the COVID-19 pandemic hit and the city decided not to raise any utility rates or tax rates, according to Jenni Webb, communications director for Radford City.
“I don’t think there is one thing you can blame sort of pinpoint that we got here,” said Webb. “I think financially the cost of things have gone up as well as we haven’t generated revenue through tax rates and tax rate increases over the past few years.”
One spot of concern for the city currently is its bills from Appalachian Power. The city buys electricity wholesale from AEP, but has fallen behind on multiple payments.
Over time, those payments will accrue interest.
Webb said they attribute the deficit to lower-than-expected revenue.
“Over time we just didn’t make those and so now this council has been very proactive, especially with the guidance of the interim city manager to sort of be like ‘hey we need revenue to operate,’” she said.
Along with recent utility and tax increases, the city adopted a new budget with over a million dollars in cuts to help with spending at the city level.
Webb said they don’t have a timeline set on when the city will be back out of the red, but she is confident the city is on the right track.
“I don’t think this is an overnight fix and so it’s one of those things that took years to get here, and it is going to take years to get out,” said Webb. “Instead of looking back, let’s look forward and look forward to how we can do it well.”
She said they are addressing the debt as utility revenue is available.