Good morning Radford-
First of all I want to be clear that the following comments are mine and not as a collective piece from Council. Taxes, schools and budgets are probably the heavy topics shared around the water cooler as of late. Last night, my colleagues have started charting a course which I believe is unsustainable for Radford and I fundamentally disagree with their vision. The size and scope of the proposed school projects must be smaller and stretched out. In order to meet the 30 million dollars, which is what the school board has asked of us for, they have neglected to tell you that equates to at least a 22 cent real estate tax rate. This rate is just for infrastructure and not for operations. Whether or not that is a one year jump or multiple years it will be too much for this struggling city. None of the school board members have wanted the responsibility for raising taxes which, as a Councilman, I do not take lightly. I fundamentally do not believe we as a City are in the fiscal position to sustain these large expenditures.
Radford’s downward fiscal trend line has only turned the corner in the past year. We currently have 22 million in debt, which will go to 52 million rather abruptly. Our entire legal borrowing limit is hovering around 80 million. Just two years ago we had a Double AA bond rating, currently we are a single A and with anymore borrowing we will go down to a B rating which will have an impact on our future rates. The bond counsel did share with us we have the capacity to borrow but in the same sentence we do not have the revenue coming in. Just remember that any bond issued would be for 30 years or more. Radford has a 33% poverty rate which is one of the highest in the state. Yes, that includes the University students, but since they make up a large part of our census data and since we include them in our voting, we must include them here. We have an extremely high, school lunch subsidy which tells us the younger generation has less or no disposable money. Our City Manager, in his budget proposal, suggested a 2 cent increase just to meet projections, which should tell the reader we do not have the economic vitality in place. Raising the real estate tax 22 cents will leave no money in future budgets for other departmental needs and or raises for our employees or the 2-3 % inherent growth of government. The happy happy rhetoric has just not made the economy come to fruition.
All of our neighbors pay less than Radford for their electric and soon, much less in property taxes. With the proposed rate of .98 cents plus the transfer from our electric enterprise fund we will be one of the highest in the region. If you were a business why would you come to the most expensive small city, in the State. We should not tax ourselves out of the competitive market. Now having said all of this we are doing diligent work to change these unfortunate dynamics, however nothing is easy and things take a long time. AS I told the REA PAC during my council run, we need to get the economic development piece working before school funding ( I did not get their endorsement** * and we just had a giant set back in the economic development department.
Nothing that I have stated reflects on my belief that during my 30 years in Radford, we have continued to have a top notch school system which is a testament to the dedicated, caring, professional staff and not due to bricks and mortar. My solution is less attractive to my colleagues but I think the more prudent approach is to just address some of what McHarg Elementary school needs. Our bond counsel said an 8 million dollar bond would be roughly a 6 cent tax increase. We could do 3 cents this year and 3 cents next year to pay for 8 million in renovations, maybe not completing all aspects of the project but getting the ball rolling. Once again size and scope are the key components. That would enable us as a City to work towards more projects which would create more revenue in order to pay for more of the needs. This approach is measured and won’t cripple the City and her citizens. We need to eat this apple one bite at a time, chew, swallow and repeat.
Radford City Council