By DAVID QUESENBERRY
Patriot Publishing
Radford City Council at its December 22nd meeting heard a Mid-Year Manager’s report from Radford City Manager Todd Meredith.
In the report, Meredith reviewed several measures being taken during the current fiscal year to stabilize and strengthen management of the City’s finances for the current and upcoming fiscal year.
Prior Actions by Council
Meredith noted several actions taken by Council concerning the budget prior to the current fiscal year. First was issuing a bond to retire the Revenue Anticipation Note which he described as a “critical first step to getting the City’s cash flows and finances stabilized.”
The second action taken by the City were increases in taxes and fees in several areas of revenues.
A third measure was reduction of general expenditures and payroll through attrition. Since the start of this fiscal year, the City has reduced its payroll by 28 full-time positions.
Meredith said it was important for Council to understand that the financial benefits of revenue increases and expenditure cuts would not be realized for an entire fiscal year. Anticipated revenues or savings from expenditure cuts would not show up fully on the books or in cash flow during the fiscal year, but at the end of the year.
Regarding cash flow, Meredith said the amount of cash a locality has on hand rises and falls at various times during the fiscal year. Normally, the amount of cash is highest at the start and mid-point of the fiscal year due to real estate collections and inter-governmental aid, and lowest at the mid-point of each financial quarter where revenue collection is at a minimum. All communities are required to maintain a required minimum cash-on-hand. A healthy cash flow will have the lowest cash amounts well above the required minimum cash-on hand for the entire fiscal year, he noted.
Based upon both his and staff’s observations, Meredith said it appears that the City of Radford has cash at its low points too close to the required minimum cash-on-hand. If the City’s cash level gets too close to the required cash-on-hand for the fiscal year, it has to be very “strategic and thoughtful” with expenditures or purchases it makes.
The amount of cash must be closely monitored, he said. If the cash drops below the minimum required cash-on hand, then there is a risk of having to borrow money to maintain cash flows.
This is of no benefit to the tax payers he said, because of the interest paid on any unnecessary loans. To prevent this, the City must avoid situations requiring it to borrow funds to maintain cash flows, which Meredith said the City has done this fiscal year.
Actions Taken This Fiscal Year
According to Meredith, several actions were taken after July 1st to strengthen the City’s finances.
The first was managerial review of all spending over $1,000 to ensure that only essential purchases would be made and to maintain cash flows. “If we don’t need it,” he said “We don’t want to buy it.”
Examples of purchases that would be made were water pumps for Water Plant operation and tires for essential vehicles to pass inspection.
“We are only making required purchases to mitigate expenditures,” Meredith said.
A second action taken was payroll reduction. Meredith noted that full-time staff had been reduced by 28 full-time employees. While payroll expenditures were “reeled back,” he reminded Council that capturing the savings would take time and would be realized over the course of the next 12 months.
The City next is working on improving internal operations to gain efficiencies through continuous improvement and lean management. Continuous improvement, he said, was always tending towards quality so if things were done right the first time, they did not have to be reworked, which costs money. Staff is paying attention to quality; how to manage it; how to define it; and how to keep it in control to avoid reworking and costing the taxpayer any more that what is required.
Lean management, he said, requires the City to look at every process; every department; and every process for services or products produced for the citizens of Radford. Meredith said that every single piece of the City’s operation will be looked at to see if they are being conducted as efficiently as possible to ensure that the value of the service reached the citizens.
Another action taken is to support continued economic development objectives. Meredith said that the City needs to grow its way out of the current situation. Even though cash is tight, the City needed to maintain its economic development efforts.
Mentioning the West Radford Commerce Park Project as an example, Meredith said work is underway on a grant from the Virginia Economic Development Partnership to turn the property into a “shovel ready” site to attract industry to the City.
The City, he said, has moved forward with the project keeping it fully funded over the past two quarters of the fiscal year. With the project nearing “shovel ready” status, Meredith said he is excited about the project because he believes that an industry will locate there resulting in creation of jobs and growth for the local economy.
Another economic development strategy is the development of new incentives and initiatives to attract businesses. Currently under development is an incentive mitigating the cost of water and sewer availability fees. Staff, Meredith said, are constantly looking at ways to make doing business in Radford virtually seamless for prospective businesses looking to locate in the City.
Housing developments are the final part of the City’s economic development strategy. Meredith mentioned the 54-home development currently being constructed in the City. More housing will increase the population, which in turn would attract businesses seeking customers. In turn businesses in a community tended to result in more homes being built.
Noting that these trends work in tandem with each other, Meredith said the City needs to support these efforts and had done so.
“We’re continuing to try to grow Radford’s economy the best we know how,” he said, “and we’re trying to market Radford the best way we know how.”
The next measure called for issuing a Request for Proposals (RFP) for a forensic audit of the City’s finances. Meredith said an RFP for audit services had been issued and was available for viewing on the City’s website. The City is working with vendors interested in submitting a bid for the audit. Meredith said he hoped to receive bids in the next few weeks, which would be reviewed and reported back to Council. Meredith said he thought the forensic audit and looking at operations and finances are important. While the past could not be changed, he said, lessons from the past could be learned and applied as the City moved forward.
“We are trying to gather as much information as we can, we’re trying to learn every lesson that we can so that as we move forward, we do it right and do it the right way.”
The City is also engaged in organizational restructuring. Meredith said this involved not only looking at operations, but how the City organization was structured and is it structured to achieve what the Council and citizens want.
The first and immediate need, he said, is to look at the Finance Department to see if the City was getting the financial and accounting information needed to make good financial decisions. The department was reorganized and a Financial Officer position was created. The change he added was already providing better and more accurate financial information.
The final measure taken by the City this fiscal year was to improve budget practices by using data-based decision making. One of the issues noted with previous year’s budgets is the overestimation of revenues. Meredith said it is important when making budget projections to hit revenue and expenditure estimates as closely as possible. If budget projections are not accurate, then a municipality can spend its fund balance down.
Meredith reviewed the impact of using a technique called regression-trend analysis to determine budgeting levels for revenues and expenditures. The technique involves using actual, audited data on expenditures and revenues to project potential levels of revenues and spending for the budget.
Meredith used the example of local sales and use taxes to demonstrate how the data driven trend analysis provides more accurate estimates of revenues. For the upcoming FY 2026-2027 budget, Meredith said that budget projections would use trend analysis and would be based on actual revenues and expenditures. Using overtime expenditures as an example, Meredith said that monitoring the budget during the fiscal year would be critical to ensure that both revenues and expenditure are performing as expected.
The next scheduled meeting of the Radford City Council will be at 7:00 pm on Monday, January 12, 2026 in the Council Chambers of the Radford City Hall at 10 Robertson Street.