RADFORD, Va. – For the third consecutive year, Radford City Council has approved multiple tax and utility rate increases for residents. On April 28, council members voted to raise property taxes, water bills and electric bills — moves that city leaders say are necessary to build up reserves, stabilize revenues and keep Radford from being absorbed by a surrounding county.
Mayor David Horton acknowledged the burden the increases place on residents but defended the decision.
“While no one likes paying any higher taxes, it helps Radford be more sustainable in the long run and helps us make needed investment in infrastructure and other things throughout our community,” Horton said.
Staying afloat with enterprise fund transfers
Vice Mayor Seth Gillespie said that in recent years, Radford has relied heavily on transfers from its water and electric funds — known as enterprise funds — to prop up the city’s general fund. He said that dependency needs to end.
“We have to be able to find a way where we’re not supplementing the general fund with so much of our enterprise funds,” Gillespie said. “That’s not a one-year fix, a two-year fix. But I think it’s going to be very important for us to have a fiscal, strategic plan.”
Cityhood on the line
Retaining Radford’s status as an independent city is a driving force behind the fiscal decisions. City leaders say losing that status would cost residents more in the long run.
“It’s a source of pride in the whole community,” Gillespie said. “But also, from a cost savings standpoint, it would be more expensive to be in a county. And I think you run the real risk of not having the level of services that we currently have if that were to happen.”
Horton echoed that sentiment, saying independence carries real financial weight.
“Independence is a wonderful thing, but it comes with a cost. And that’s where we’re trying to find that correct balance — so we’re able to make things work within the 10 square miles that we have within this city,” he said.
Unique challenges limit revenue options
Radford faces structural challenges that make growing its tax base difficult. About half of the city is untaxable, largely because of Radford University, along with parks and churches. A state moratorium on cities annexing county land means Radford cannot expand its borders to bring in new taxable property.
“When roughly 50% of your taxable base is non-taxable, it’s hard to generate the revenue that we need to be able to provide the level of services that we do,” Gillespie said.
Horton said the city has no choice but to adapt.
“That’s part of our reality. As we move forward, we have to adapt and adjust to make those things work,” he said.
Multi-pronged approach needed
Horton said tax and fee increases alone will not solve Radford’s financial challenges. He pointed to housing development and economic growth as equally critical pieces of the puzzle.
“There is no one solution to helping Radford continue to move forward,” Horton said. “It can’t just be taxes and fee increases. It can’t just be cuts to the budget. It has to be a multi-pronged approach. And a big part of that is housing and economic growth.”
Gillespie added that maximizing efficiency within city operations will also be essential going forward.
“We can’t always just hit the easy button and increase taxes. We’re going to have to continue to lean out, maximize efficiencies, and I think we’re going to have to have a full investment in economic development,” he said.
Radford qualifies for state expertise to help guide the city through its current period of fiscal distress, and leaders say they are exploring every option to improve the city’s financial position.