The Quiet Option: How Radford Drifted Into Fiscal Distress

Radford did not decide to become a fiscally distressed city. It arrived there by making the same small decision fourteen times. This paper traces that drift through the City of Radford, Virginia's audited financial statements from fiscal year 2011 through fiscal year 2024. Five findings anchor it. The transfer from the municipal electric fund into the general fund is the one constant in the record, present in every audited year. The reserve cushion that transfer was quietly spending collapsed on schedule: unassigned general-fund balance peaked at $3.33 million in FY2013 and fell from there. The wholesale-power cost shock usually offered as the explanation arrived late and explains the timing of the break, not the underlying drift. The books were clean until they were not, and the timing of the audit deterioration lines up with everything else. And public accountability for the structure never reached the dais; residents appear in the record in force only in the spring 2026 budget hearings, after the distress was already set. A control case anchors the central claim: Martinsville runs an almost identical municipal electric utility at almost identical scale without the same outcome, isolating the transfer as the operative lever. This is a diagnostic of cause and sequence, not a menu of remedies; the companion Fiscal Crossroads options analysis prices the paths forward. Built entirely from audited ACFRs, adopted budgets, and the public record, with description and inference labeled separately.