Council hears budget briefings on public-safety fleets, electric demand project and water risks

The Kinston City Council reconvened May 21 for an educational session on FY26/27 budget issues and heard multi-department briefings that outlined several high-cost capital pressures.

Public-safety fleet: Captain Jason Lee said several fire department vehicles exceed recommended service lives and recommended a 5–7 year staggered replacement cycle; he said a new fire truck costs about $1.2 million and that improving the department’s ISO Public Protection Classification from Class 2 toward Class 1 could reduce insurance premiums for property owners. Police Chief Keith Goyette reported a 74-vehicle fleet with many marked and unmarked units past industry service-life thresholds and proposed replacing 12 vehicles per year (9 marked, 3 unmarked) at an estimated annual outlay of roughly $750,000 including outfitting. The FY26/27 manager’s recommended budget includes funding for eight replacement vehicles to be paid from appropriated fund balance.

Electric peak-demand project: Public Services Director Steve Miller described wholesale electric costs that include demand charges tied to monthly peak load. With customer participation in load reduction diminished, the city has unused capacity it still pays for. Miller outlined a project to install city-side generators to shed 10,000 kilowatts of peak demand at an estimated capital cost of $11 million, projecting about $1.8 million in annual net savings and a payback period of roughly six years. He said equipment lead times are about two years and an engineering agreement (under $200,000) would be presented on a future agenda.

Water risks and lead service lines: Miller said staff physically inspected 9,731 of roughly 11,500 services and found no lead pipe; 1,768 services with galvanized pipe were flagged and may require replacement under EPA rules unless staff can validate prior records. If replacement for an estimated 3,200 services is required, Miller said costs could be $12–$13 million spread over 2028–2037 (~$1.2M/year). Miller also warned that the city’s wholesale water supplier, WASSA, projects a PFAS-driven rate increase from $4.00 to $6.00 per 1,000 gallons by 2030, which could create a $2.8 million annual shortfall and potentially require a roughly 30% water-rate increase in 2030 or phased increases earlier.

Finance context: Finance Director Donna Goodson reviewed general fund revenue projections (~$34.29 million for FY26/27), recommended a written fund-balance policy targeting a 50% minimum of annual expenditures, and cautioned that pending state legislation could reduce transfers from the municipal electric utility (currently ~$2.3–$2.4M), which would create a material budget gap.

Council members asked clarifying questions during and after the presentations. Staff said additional agenda items will be brought forward for formal action and that project financing options are under consideration.