RADFORD, Va. (WDBJ) – The City of Radford met the criteria for fiscal distress. The Virginia Auditor of Public Accounts gave the city that label after Radford had seen years of financial challenges.
Leaders said they are making strides toward long-term stability.
“This year’s budget is balanced with the revenues that are being generated in 2026/2027 as projected without a transfer from reserves and without borrowing any money. That moves us out of that fiscal distress piece alone,” said Radford City Mayor Horton.
Plans to raise real estate taxes, increase water and electric rates, and continue a hiring freeze for 25 positions were part of the solutions discussed Wednesday night.
Proposed rate increases include:
– Increasing real estate tax rate from $0.82 to $0.87
– Increasing minimum water rate from $24.32 to $47.79
– Increasing the electric rate by 5%
Council plans to host a public hearing about the proposed tax and rate increases. They will then vote on the changes later in April.
“If we pull back and we don’t implement these rate increases, it’s going to be more difficult to operate the electrical department,” said Radford City Manager Todd Meredith.
The Virginia Auditor of Public Accounts (APA) recently raised warning flags that the city meets the criteria for fiscal distress under the Commonwealth’s early warning system.
“Every financial expenditure needs to be spent very wisely, very targeted, and have a high impact,” said Meredith.
In December 2025, a report about the city’s finances was released. City leaders admitted to overestimating their annual budgets since 2023. Spending hundreds of thousands more than expected. The financial challenges eventually led to late funding for its public schools.
“We were a little bit worried about our monthly installments that weren’t coming,” Radford City Superintendent Adam Joyce.
The city has taken proactive steps to address the challenges identified in the APA report, including contracting with Brown Edward’s to conduct forensic audit services and hiring new financial leadership.
“ We now have the possibility for additional support from the state to identify where those issues have happened, how we can improve our policies, practices, and procedures, and make changes,” said Radford City Mayor David Horton.
Radford leaders said it has also reduced its outstanding balance with American Electric Power (AEP) from six months to three months.
Although the city is using conservative methods to forecast revenue. Mayor Horton said there are some expenses that the council isn’t in charge of. City manager Todd Meredith agreed.
“Health and human services, some of those other elements, many of those are out of our control. They come to us as a number that someone else has generated and said this is a must spend. It’s not something that is even much of a negotiation,” said Mayor Horton.
Copyright 2026 WDBJ. All rights reserved.