I was wondering what kind of behaviour to have when meeting those creatures as PCs in the city itself? My chars usually kill goblins and kobolds outside the city (off course because they are set to hostile and are monsters) why would it be different when i meet one in town? even if he doesn't look hostile and doesn't attack me my char would like to kill those beasts? Now if i think a bit, i can say that either the guards allowed them to be in town or they simply sneaked in, this questions concerns more the upper sanctuary: do goblins an kobolds are allowed there? or do the char profit from the absence of watchmen/spellguards controlled by players?
thx,