RADFORD – City leaders and citizens were recently presented with an audit presentation of last fiscal year’s financial position of the City of Radford. While there is much work to be done, Mayor David Horton says the audit showed several bright spots for the city, including low unemployment and a growth trend he says he hopes will continue.
“Financially we have an excellent consumer base with our full-time residents and our students here to help drive our local economy,” Horton said recently via e-mail. “We are so fortunate compared to many in our region to have such an engine in our City.”
“A challenge is that there are periods of time where fewer people reside in Radford and those days can be lean for many businesses, but we are hoping to address that through increased participation in Radford from residents of the region and guests who visit our fair city,” he continued.
The audit report, completed by city staff and reviewed by Robinson Farmer Cox Associates, says while Radford is experiencing the pains of a sluggish economy like many localities, conservative spending and relatively low unemployment are helping the city’s position.
“The City’s unemployment rate is currently 3.3% and has a workforce of 8,423,” states the report. “Radford, like many communities throughout the Commonwealth and the United States, continues to feel the effects of a sluggish economy and changing consumer trends. State and local trends reflected weak consumer spending, slow private investment, increased cost of providing services and stagnant revenues. As a result, revenue projections and expenditures are constantly re‐evaluated to minimize the overall impact on the established budget to preserve the financial health of the city and its services. Reorganization, conservative spending, and modest growth have minimized the impact on households and businesses, as well as maintained the low cost of services.”
Horton said he is appreciative of city staff’s budgetary work.
“I am very appreciative of the work of David Ridpath and the city staff to have handled the budget process so well and that the audit report was outstanding. We are in better shape as a city, but the information presented on Wednesday was a reflection of where we were in June 2018 and not where we are today,” Horton said. “Over the coming weeks I think we will be presented with information that shows Radford beginning to rise once again, albeit not quite as quickly as any of us would like. We have a renewed sense of possibility and optimism that should move us forward in the coming months and years.”
According to the audit report, “net position may serve over time as a useful indicator of a government’s financial position.”
“In the case of the City of Radford, assets exceeded liabilities by $58,280,549 at the close of the FY2018 fiscal year,” ereads the report. “By far the largest portion of the City of Radford’s net position (94.3%) reflects its investment in capital assets (land, buildings, machinery, equipment, and infrastructure); less any related debt used to acquire those assets that is still outstanding. “
The city reduced expenses last fiscal year over the previous year as well.
“Expenses for governmental activities totaled $29,159,019 for the year, which is down 9.28% from the previous year, largely due to a reduction in capital contributions to the School Board of approximately $2.3 million,” the report reads. “A two percent cost‐of‐living adjustment was made to salaries in FY 2018. Health insurance premiums decreased 12.4 percent. Rates from the Virginia Retirement System had a combined decrease of 3.9% from FY 2017. “
Public Safety expenses – including police, fire, hazmat, EMS, jail and juvenile detention operations, building official, code enforcement, and GIS – makes up the largest portion of governmental expenses at 29.5 percent, which was up one-half percent over the previous year.
Funding for education is the second largest portion of expenses at 18.75 percent. According to the audit report, the amount transferred to the School Board in the 2018 fiscal year was $5,156,024, which included $42,382 in capital contributions.
Expenses for Public Works are the next biggest expense of the City’s governmental activities, coming in at 10.6 percent. That category includes expenses for street paving and maintenance, as well as maintenance of general buildings and engineering.
Health & Welfare expenses make up 9.75 percent of governmental expenses. The largest expense in this category is Comprehensive Services Act (CSA) expenses and the Department of Social Services. According to the city, “CSA costs have decreased significantly due to three reasons: There was a record number of children in the foster care system in the previous year, the number of children coming into care has decreased and DSS received an additional position that has allowed more time to focus on adoption or other permanent placement.
One area of revenue that has remained basically flat for years is property tax revenue, due partly to the fact that the property tax rate has stayed the same since 2010. According to the audit report, “the property tax classification comprises approximately 30.5 percent of total revenue generated by governmental activities and includes real estate taxes, local portion of personal property taxes, and public service corporation taxes.”
“Property tax rates have remained level since 2010, the report reads. “Personal property taxes saw modest growth of 5.1 percent [in fiscal year 2018] while real estate saw a 0.6 percent decrease.”
Other revenue highlights include:
Capital grants and contribution increased significantly due to FTA and State transit capital funding increases during the current fiscal year.
Interest on bank accounts has been making a steady comeback since 2014 and has returned to pre‐2010 levels as the city accounts are earning a higher interest rate than previous years.
Payments from business‐type activities increased by 7.7 percent due to an increase in the payment in lieu of tax charge during the current fiscal year.
Net transfers from other funds decreased $544,920. $5,329,932 was transferred from the Electric Fund to Governmental Activities.
Horton says he hopes the future will allow for growth opportunities for the city.
“Radford has excellent leadership among our city staff who have weathered a challenging period where there were more cuts than growth. We hope to begin to reverse that trend to provide support for their continued efforts – fuel for our engine to maximize its potential for growth,” he said. “I am proud to serve with the outstanding leaders on City Council and throughout the boards and commissions in Radford where we are looking to a bright future with many excited citizens helping to push us forward. While there will be challenges we will face, together there is nothing we cannot overcome and our days ahead are indeed bright.”
