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Goldsboro council hears debt, reserves and capital plan briefing ahead of January retreat
Summary
Financial advisers told the Goldsboro City Council the city has rebuilt reserves, has AA-level bond rating standing and capacity to issue limited new debt — but funding the city's $14.4 million priority ("Level A") general-fund capital list will require new annual revenue or reallocation of budgeted dollars.
Goldsboro's City Council received a long-range financial briefing Dec. 16 that framed choices for a planned capital improvement program and flagged a likely budget shortfall if the council funds the top-priority projects without new revenue.
The presentation by Ted Cole of Davenport & Company reviewed the city's credit profile, fund balance progress and modeling of two funding scenarios for the general-fund portion of the capital improvement plan (CIP) that the council will work from at a January retreat.
Cole and city staff said Goldsboro's Standard & Poor's rating is AA and that the city's unassigned fund balance has recovered to about 40% of budget — placing it near the median for AA-rated North Carolina peers. Cole said the city's current tax-supported debt outstanding is roughly $21.8 million and that scheduled principal paydowns create capacity to consider new borrowing.
The staff's first scenario isolates a short-term rolling-stock borrowing to cover recent vehicle and equipment purchases. Cole said that scenario assumes issuing about $5.8 million for a 5-year financing at a conservative 5% borrowing cost; modeled on current budget assumptions the city would need to identify roughly $780,000 of recurring revenue in fiscal 2026 (about $670,000 the following year) to support the added debt service without cutting other operating commitments.
A second scenario models funding the general-fund "Level A" CIP list: roughly $14.4 million of the $55 million in general-fund projects shown in the draft plan. Staff modeling assumed issuing about $10 million in new debt over several years and funding the remainder from cash. Under that pathway, Cole said, the council would face a budgetary shortfall on the order of a couple of million dollars in FY 2026 unless the city applies new revenue sources or reprioritizes items. In the presentation Cole said the modeled shortfall for the Level A general-fund program is equivalent to roughly 7.5 cents on the tax rate if no other revenue changes are assumed.
Why this matters: City staff asked the council to review the material before a planned retreat in January where members will set CIP priorities and give staff direction on funding approaches. The modeling shows Goldsboro is back in compliance with its fund-balance and debt-ratio policies, giving the city room to use debt as a tool — but it does not create recurring revenue to meet additional annual debt-service needs.
Cole: "There are several things in the appendix that I don't plan to go through, but it's there as a resource," he told council members, noting the packet includes detailed assumptions, peer comparisons and debt schedules. He also told the council the Local Government Commission (LGC) will re-review the city's position if the city seeks new rating coverage from Moody's or asks the LGC about debt capacity.
Council members asked about timing for Moody's reassessment, how the unit-assistance list with the LGC affects borrowing, and whether the city should change its fund-balance targets to strengthen its position. Staff said the city can ask Moody's to resume rating work at any time (typically a three- to four-week process) and that improving or formalizing policies would strengthen the city's standing before additional borrowing.
Next steps and context: The council will review these materials again at a retreat in January and, per staff, will receive a draft five-year CIP and a proposed borrowing schedule before deciding whether to authorize new debt. Staff also advised that a reassessment from Wayne County, expected in early 2025, will change taxable values and affect the revenue yield of any change in pennies on the rate.
Ending: The briefing was informational; no borrowing authorization was requested or approved at the Dec. 16 meeting. Council members and staff stressed that debt would be a tool to fund capital priorities, not an automatic step, and that the council must weigh affordability, operating impacts and community priorities at the January retreat.
