Goldsboro hears $14.4M priority capital plan, consultant flags $780K annual shortfall if city borrows $5.8M for vehicles

Goldsboro — The City Council on Dec. 16 received a detailed briefing on the city’s capital improvement plan, debt profile and funding options from Ted Cole of Davenport & Company. Cole said the city is in a stronger financial position than in recent years, carries a Standard & Poor’s AA rating and has built unassigned fund balance to roughly 40% of the general-fund budget in the firm’s peer comparison.

Cole told council members the presentation covered only the tax-supported (general fund) portion of the capital plan; utilities were excluded from the models shown. He said staff and consultants modeled two immediate scenarios: a short-term “rolling stock” financing for vehicles and equipment of about $5.8 million and a funding-level A package of general-fund projects totaling roughly $14.4 million.

The consultant said the city currently has about $21.8 million in outstanding non‑utility debt and that scheduled principal paydowns create capacity to consider new borrowing. Under the rolling-stock scenario — modeled as a five‑year loan at 5% interest — the city would remain within its debt-policy limits, Cole said, but would create a budget shortfall that requires new revenue or reallocations: about $780,000 in fiscal 2026, roughly $670,000 the following year and smaller amounts thereafter. For the broader funding-level A portfolio, the plan assumes roughly $10 million of new debt over several years and roughly $4.3 million of pay‑as‑you‑go cash, and shows a multi‑year budget shortfall that staff would need to address during the FY26 budget cycle.

Cole emphasized the models assumed current-year revenue levels (no built-in revenue growth), though he noted an upcoming county property reassessment could increase tax base values and that the council could choose how to treat any reassessment gains. He also quantified the capital plan’s size in tax-rate terms: funding the current funding‑level A roughly equates to about 7.5 cents on the tax rate under the presentation’s base assumptions (not accounting for reassessment increases).

Mayor Pro Tem and several council members pressed for follow-up details on timing and repayment sources, and asked staff to supply a draft five‑year strategic capital plan and supporting numbers before the statutory January retreat. Finance and staff repeatedly told council the packet contains additional appendices, detailed project lists and the draft CIP and that the items would return for detailed discussion and prioritization at the January retreat.

Why this matters: Council faces tradeoffs between accelerating capital replacements and preserving operating capacity. The presentation showed the city has “capacity” under its policy metrics to borrow, but the practical question is how to find the $600K–$800K a year the models show will be needed to service new debt without cutting existing operations. The council did not take action on the borrowing models at the Dec. 16 meeting; the briefing was intended to inform the January retreat and FY26 budget process.

Quotes "There are several things in the appendix that I don't plan to go through, but it's there as a resource," Ted Cole said. "You're not over‑leveraged. The capacity is there. Now does that mean it's affordable? That's a different question." — Ted Cole, Davenport

"If you decide to issue debt, we may need to reestablish a Moody's rating at that time; that typically takes about a month for their assessment," Cole said in response to council questions.

Ending Cole and staff told council they will return refined funding scenarios at the January retreat and that staff will provide the draft five‑year CIP and recommended priorities in advance so members can review tradeoffs before budget hearings.