What the Foundry Took From Radford (Part 1 of 2)

This is part one of a two-part series by Tommy Turner, originally published by Cardinal News. Read Part 2 →

The council chamber in Radford holds about sixty people when it is full, and on a Monday night in April 2017, it is not full. A budget hearing on a spring Monday does not draw a crowd. Five seats at the front, a podium in the middle for anyone who wants to speak and mostly empty chairs.

Mayor Bruce Brown has a prepared statement in front of him, and when his turn comes, he reads it in an even voice. He is not a man built for performance. What he reads into the record that night is closer to an accountant's memo than a speech.

"I am unable to support the proposed budget as it continues a trajectory that is not sustainable," he says. "Simply put, we remain on a path that draws too heavily from our reserves."

He keeps going, plainly. Years earlier, as Brown tells it, the council made a decision that seemed sound at the time: to feed the city's general fund with profits from the municipal electric utility. He tells the room that power got more expensive after deregulation in 2008 and 2009. He tells them the foundry on West Main Street closed at the end of 2013 and took the city's single largest electricity customer with it. He gives them the running total. The fiscal year now ending will finish about $1.5 million in the red. The budget on the table assumes another $3.5 million pulled from reserves to balance the next one. At that pace, he says, the city's reserves across all funds will drop to roughly $5.5 million.

Then he reaches for the number he wants them to keep. The city's budget reports that 54% of Radford's real estate is exempt from property tax; Brown estimated 60% in 2017.

Here is the thing Brown is describing, in plainer terms than he uses. Radford is a city that cannot tax enough of its own ground to pay for itself, so it went into the electricity business and ran its government on the markup. For a while, that worked the way a crown works. It made a small place sovereign, able to fund its own schools and its own police on the spread between the power it bought wholesale and the power it sold to its residents. A crown built from electric load depends on someone buying the load, and the biggest buyer had just gone cold.

The vice-mayor speaks next, a retired Virginia Tech professor named Dick Harshberger, and he agrees. He says this is not a sustainable budget. He says he would vote for a tax increase. He says the city is below where it ought to be on reserves.

Then the council votes. Three in favor: Gropman, Marshall, Turk. Two against: Harshberger and Brown. The budget passes, three to two.

Brown's statement goes into the minutes. So does the vote. The minutes go onto the city's website, where they sit, in sequence with everything that came before them and everything that came after, for nine years before anyone outside the building reads them as a warning.

To understand what Brown meant about the foundry, you have to go back to a building most of Radford only ever called "the foundry," as if there had only ever been one.

There had been four, depending on the year and the paperwork. Pipe Foundry. Special Foundry. Radford Foundry. New River Foundry. In one form or another, they had been pouring iron on the same ground at 1701 West Main Street, on the bank of the New River, since the 1890s. By 2000, the operation belonged to Intermet Corporation, which had bought it in 1986 and ran it as New River Castings. About a thousand people worked the site.

At half past nine on the night of Sunday, March 5, 2000, natural gas collects in the basement of the plant. About a hundred people are inside. The gas finds a flame. The blast throws twenty-foot flames over the building and takes out a wall of the main structure. Fire Chief Lee Simpkins describes mass destruction across an area the size of a ballfield and puts the damage above $30 million.

Three workers die. Curtis Grooms is 29, from Floyd County. Debbie Sheppard is 37. Karen Anderson Hamilton is 35, and her husband Douglas is on the floor that night too, the two of them married only six months. He walks out. Her body is brought out of the rubble days later.

The state eventually fines the company $761,000, the largest workplace-safety penalty in Virginia history to that point.

The plant rebuilds. The iron pours again, and it goes on doing the other thing nobody outside city hall thinks about when they think about the foundry. It keeps buying electricity from the City of Radford, in industrial quantities, and the markup on that power keeps flowing into the budget that pays for the town. The foundry was two things at once that almost no one held in mind together. It was where people went to work and sometimes did not come home. It was also, quietly, part of how the city balanced its books. The same furnaces did both.

The iron does not pour much longer. In 2008, Intermet files for bankruptcy, and in 2009, it moves to close the New River Foundry. In 2010, Virginia Casting Industries buys the shuttered facility and promises to bring it back, pledging 300 jobs and a $9.1 million investment. Governor McDonnell's office puts up a $600,000 grant, and the city matches it with a $600,000 electric-utility credit. VCI never reaches three hundred jobs. In March 2012, it sells the plant to Grede Holdings.

Grede has owned the place about 60 days when, at a quarter past midnight on Sunday, May 27, 2012, a melting furnace loaded with molten iron lets go. The blast throws a four-by-eight-foot sheet of metal through the roof. This time, no one is hurt.

In September 2013, Grede gives notice. Twenty-eight salaried workers on a Tuesday, 234 hourly workers on Wednesday. In December, the furnaces go cold for good.

What the town could not feel, because it does not arrive on any single day, was the other thing leaving: the city's largest electricity account, and with it, the biggest single source of the markup the general fund had been living on. The crown lost a stone, and the drawdown it began would take nine years to reach the floor.

Radford is ten square miles on the New River, and it cannot grow. Virginia law freezes the borders of its independent cities. Inside those ten square miles sits Radford University, exempt from property tax on a large share of the most valuable land in town. Just outside the line sits the Radford Army Ammunition Plant, a federal facility that pays the city nothing. The arsenal gives Radford its name. It does not give Radford its budget.

So the city did the math, as a cornered small place does. If you cannot tax enough of your ground, you find another stream. The spread between wholesale and retail electricity became the backbone of the general fund. By the year Brown stood up to read his statement, the transfer from the Electric Fund to the general fund was just over $4 million — more than a fifth of all the electricity the city sold.

Every quotation, vote, figure and date is drawn from public records published by the City of Radford, the Virginia Auditor of Public Accounts, the Federal Audit Clearinghouse, and the Virginia Department of Labor and Industry, and from contemporaneous reporting by The Roanoke Times and Cardinal News.