Title
Interlocal Agreement to Support the Administrative Start-Up of the Metropolitan Public Transportation Authority
Action
Action:
A. Adopt a resolution authorizing the City Manager, or his designee, to negotiate and execute an interlocal agreement with the Metropolitan Public Transportation Authority (MPTA) to support the administrative start-up of the MPTA,
B. Authorize the City Manager to negotiate and execute all documents and contracts necessary to complete the interlocal agreement and to provide administrative start-up support to the MPTA up to an amount of $4,300,000, and
C. Adopt a budget ordinance appropriating $4,300,000 in fund balance in the CATS Operating Fund for transfer to and appropriation in the CATS Capital Projects Fund.
Body
Staff Resource(s):
Andrea Leslie-Fite, City Attorney
Liz Babson, City Manager’s Office
Explanation
§ The Projects for Advancing Vehicle-Infrastructure Enhancements (PAVE) Act specifies several tasks that the Metropolitan Public Transportation Authority (MPTA) must complete no later than July 1, 2026, including:
- Establishing Board governance policies,
- Developing financial and operational policies,
- Creating Human Resources and Information Technology plans, and
- Creating an asset acquisition timeline and plan.
§ To support the MPTA and PAVE Act requirements that must be fulfilled no later than July 1, 2026, the city proposes to enter into an Interlocal Agreement with the MPTA.
§ Additionally, the city will appropriate $4.3 million in existing fund balance from the CATS Operating Fund to the CATS Capital Projects Fund to support eligible administrative startup costs to ensure the MPTA is positioned for long-term organizational success.
- This fund balance is comprised of existing Article 43 sales tax revenues, which must be used for expenses related to the public transit system, as permitted by the State of North Carolina. The one-percent local sales and use tax approved by voters on November 4, 2025, is not yet levied, and, therefore, is not being used for these expenses.
§ The city will manage the startup contracts and costs on behalf of the MPTA through June 30, 2026. The $4.3 million will begin being utilized for contracts upon appropriation. Eligible administrative and startup costs associated with the initial requirements to be met by July 1, 2026, may include:
- Legal services,
- Accounting and auditing,
- Meeting and administrative expenses,
- Required studies and regulatory filings,
- Directors and Officers/Public Officials insurance,
- Consultants and advisory services, and
- Other reasonable and necessary administrative expenses.
§ This budget allocation is based on six months of CATS’ current fiscal year budget for similar administrative services provided by the city on their behalf.
§ Future Council actions are anticipated to fulfill the city’s and the MPTA’s requirements under the PAVE Act and to further facilitate the establishment of the MPTA and the transition of CATS from a department within the City of Charlotte to the MPTA.
Background
§ On July 1, 2025, the PAVE Act was enacted by the North Carolina General Assembly. The PAVE Act authorized Mecklenburg County to obtain an additional source of revenue to expand and improve roadway systems and public transportation for the Mecklenburg County region by assessing a one-percent local sales and use tax subject to voter approval.
§ On November 4, 2025, Mecklenburg County voters approved the one-percent local sales tax referendum as outlined by the PAVE Act.
§ On December 2, 2025, the Mecklenburg County Board of Commissioners adopted a resolution to levy the one-percent local sales tax effective July 1, 2026.
§ On December 18, 2025, the inaugural MPTA Board Meeting was held, oaths of office were administered to the Board of Trustees, and Board positions were elected.
§ Under the PAVE Act, the Charlotte Area Transit System (CATS), currently a department within the City of Charlotte, will transition to the newly established MPTA.
Fiscal Note
Funding: CATS Operating Fund
Attachments
Attachment(s)
Committee Presentation
Interlocal Agreement - Working Draft
Resolution
Budget Ordinance