22. Primary Interlocal Agreement for Implementation and
Fulfillment of the Projects for Advancing
Vehicle-Infrastructure Enhancements Act
Action:
A.
Adopt a resolution approving and ratifying an interlocal agreement between the City of
Charlotte and the Metropolitan Public Transportation Authority for their joint undertaking
and implementation of requirements to fulfill obligations under the Projects for Advancing
Vehicle-Infrastructure Enhancements Act, and
B.
Authorize the City Manager to negotiate and execute all documents and contracts, including
for transfer and expenditure of funds necessary to implement and fulfill the city’s
obligations under the Projects for Advancing Vehicle-Infrastructure Enhancements Act and
the interlocal agreement.
Staff Resource(s):
Andrea Leslie-Fite, City Attorney
Lina James, City Attorney’s Office
Liz Babson, City Manager’s Office
Shawn Heath, City Manager’s Office
Explanation
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Effective July 1, 2026, the Projects for Advancing Vehicle-Infrastructure Enhancements (PAVE) Act
requires the City of Charlotte to transfer its transit operations to the Metropolitan Public
Transportation Authority (MPTA). Because the parties recognize the benefits of a phased transition
and share a desire for a smooth transition, the city will operate the transit system through the
transition period, which is anticipated to extend through December 31, 2026.
The Primary Interlocal Agreement is intended to address critical items that require mutual agreement
to begin the initial phase of operations on July 1, 2026, and create a long-term plan for the transfer
of assets and repayment of debts.
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The Primary Interlocal Agreement is divided into three phases:
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Phase One: Begins July 1, 2026, and is anticipated to end on December 31, 2026. During this
phase, the city will continue to operate the transit system with the MPTA’s governance and
policy oversight. The MPTA will continue to establish the infrastructure, systems, and
approvals necessary to own and operate a public transportation system and to employ staff
that support its operations.
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Phase Two: Anticipated to begin on January 1, 2027, and anticipated to end on June 30,
2027. During this phase, the city may provide some shared services in support of the
operation of the public transportation system to ensure a smooth transition.
Phase Three: Anticipated to begin July 1, 2027, and anticipated to end once (i) all CATS
debt has been repaid, (ii) all grant requirements have been satisfied, and (iii) all assets have
been transferred to the MPTA. During this phase, the city and the MPTA will operate
independently except to address outstanding debt obligations, grant requirements, and the
transfer of encumbered assets.
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On June 10, 2026, the MPTA Board of Trustees unanimously adopted and ratified the Primary
Interlocal Agreement, which will be submitted by the MPTA to the North Carolina General Assembly
by June 30, 2026, to ensure all PAVE Act requirements are satisfied. The Agreement will become
effective on July 1, 2026.
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Additional agreements between the city and the MPTA are anticipated prior to the conclusion of
Phase One and Phase Two.
Under Interlocal Cooperation law, Article 20 of Chapter 160A of the North Carolina General Statutes,
the city and MPTA are authorized to enter into interlocal agreements for the joint cooperation and
exercise of powers and the performance of governmental functions, including to perform jointly any
function that they have the power to perform alone, or to contract with one another to perform
any governmental function that they have the power to perform alone, and to enter into contracts
to specify the details of these joint undertakings, including the transfer to and expenditure of funds
collected by any participating unit of government to another consistent with the parties’
