City strug­gles with $77M Cross Char­lotte Trail gap

The Charlotte Observer (Sunday) - - Front Page - BY ELY POR­TILLO ely­por­[email protected]­lot­teob­server.com

How did one of the city’s sig­na­ture projects – a 26-mile pedes­trian and bi­cy­cle trail from Pineville to UNC Char­lotte – end up more than $ 77 mil­lion short, with barely a third of the money needed to com­plete it?

That’s the ques­tion Char­lotte City Coun­cil mem­bers are grap­pling with, af­ter the sur­prise rev­e­la­tion Mon­day that there’s not nearly enough bond money avail­able for the Cross Char­lotte Trail. Now, the plan’s fu­ture is murky, with no clear source of fund­ing to close the gap and no con­sen­sus on City Coun­cil about whether to pro­ceed with a scaled-down ver­sion of the trail.

Coun­cil mem­bers said last week they were “stunned,” “out­raged” and “em­bar­rassed.”

“How could we have got­ten it that wrong? The gap ex­ceeds the to­tal fund­ing for the whole project,” said coun­cil mem­ber Greg Phipps.

“It lit­er­ally was flawed from the be­gin­ning,” said coun­cil mem­ber Tariq Bokhari. “It bog­gles my mind.”

“There’s a lot of fin­ger-point­ing, and no­body re­ally knows what hap­pened,” said coun­cil mem­ber Ed Driggs. “This is a fun­da­men­tal trans­parency is­sue.”

Mayor Pro Tem Julie Eiselt summed up the dif­fer­ence be­tween the city’s ini­tial pro­jec- tions and the cur­rent cost: “I’d call it bad math.”

But there were in­di­ca­tions from the be­gin­ning that more money would likely be needed on top of the $38 mil­lion worth of bonds vot­ers ap­proved in 2014, 2016 and 2018.

“It is anticipated that re­sources in ad­di­tion to the bond pro­ceeds will be re­quired to con­struct and main­tain the trail,” said the 2016 mas­ter plan, posted for the pub­lic to read. How­ever, the plan doesn’t appear to in­clude a to­tal cost to build the Cross Char­lotte Trail (now es­ti­mated at about $116 mil­lion), even though it does in­clude other de­tails, such as

that it would cost about $1.6 mil­lion per year to op­er­ate and main­tain the trail.

And at a bud­get re­treat last Fe­bru­ary, slides shown to City Coun­cil spec­i­fied that cur­rent fund­ing wasn’t enough to fin­ish the trail.

“Cur­rent project funds en­able a con­tin­u­ous trail from Pineville to Mathe­son Av­enue,” the pre­sen­ta­tion said. “Ad­di­tional funds over next three bond cy­cles would be needed to com­plete re­main­ing trail seg­ments.”

Coun­cil mem­bers said they were still sur­prised by how much the city un­der­es­ti­mated the trail’s cost.

“That makes it seem like a glar­ing er­ror was made,” said Phipps, who rep­re­sents part of north­east Char­lotte where there’s no fund­ing to build the trail. “I think peo­ple can ac­cept a mar­ginal cost over­run, but when you get some­thing that high it makes it seem like, ‘Where did those num­bers come from in the first place?’ ”

City Man­ager Mar­cus Jones, who joined Char­lotte staff in 2016, told the Ob­server that ini­tial es­ti­mates were far too low be­cause plan­ners ex­trap­o­lated from Meck­len­burg County’s pre­vi­ous costs to build ear­lier green­way seg­ments in un­de­vel­oped ar­eas. That’s much cheaper than the cost to build a new green­way through de­vel­oped and pop­u­lated neigh­bor­hoods in Char­lotte.

A big­ger prob­lem, Jones said, was that many projects ap­proved dur­ing pre­vi­ous bond cy­cles weren’t ad­e­quately an­a­lyzed to es­ti­mate their full costs. That means about $50 mil­lion worth of unan­tic­i­pated costs have popped up in re­cent years for other projects, Jones said. The big­gest pre­vi­ous ex­am­ple was the new joint com­mu­ni­ca­tions cen­ter for emer­gency re­spon­ders. Last year, city staff told coun­cil that project would re­quire an ad­di­tional $20 mil­lion over its al­ready ap­proved $86 mil­lion bud­get.

“There was no real anal­y­sis given (for) that, no true en­gi­neer­ing, cost de­signs you would do for any projects of that mag­ni­tude,” Jones said of the orig­i­nal joint com­mu­ni­ca­tions cen­ter plan. “That’s what we’re liv­ing through with the Cross Char­lotte Trail. … We have to have en­hanced dis­ci­pline with all of our projects.”

To fix the prob­lem, Jones said he’s taken steps that in­clude a new meet­ing ev­ery three weeks with plan­ning, in­fra­struc­ture and de­vel­op­ment teams, brought in a new bud­get direc­tor and asked the city’s au­di­tor to re­view the city’s fi­nanc­ing and project man­age­ment. The city is also cre­at­ing a 10-year plan to es­ti­mate all of its fu­ture cap­i­tal needs, and re­view­ing fu­ture cap­i­tal projects with more de­tailed en­gi­neer­ing to get a bet­ter sense of their full cost.

“We’re go­ing back to what I would call bud­get­ing 101,” said Jones. “You have to scope a project and get some pre­lim­i­nary de­signs on it be­fore you put what you think is the cost on it. … That is how we should have been do­ing things all along.”

More in­for­ma­tion, in­clud­ing op­tions for how to pay for some seg­ments with “ex­ist­ing pots of money,” will be pro­vided to City Coun­cil at a meet­ing in Fe­bru­ary, Jones said.

‘SOME­BODY GOT THE FOR­MULA WRONG’

It’s clear that many coun­cil mem­bers un­der­stood the Cross Char­lotte Trail had a fund­ing gap of some kind. But they weren’t aware of the to­tal size of the short­fall.

Eiselt re­called hear­ing last year at the re­treat that the city “might have a hard time with that num­ber ($38 mil­lion).” She said she wouldn’t have been sur­prised if staff said a few mil­lion dollars more were re­quired. The Cross Char­lotte Trail has been in the works for more than six years, and costs for land and con­struc­tion have shot up rapidly dur­ing that time.

But Eiselt said com­ing up more than $ 77 mil­lion short is “stun­ning.”

“I don’t think it was on any­one’s radar,” she said.

Phipps said he knew the city needed to find about $10.3 mil­lion for the part of the trail that will pass through the Hid­den Val­ley neigh­bor­hood, north of up­town.

“But the ex­tent of the other short­falls, that was a sur­prise,” he said. “How did we get to this point?”

Driggs said that the city staff should have pro­vided more de­tails about how much money is needed to fin­ish the project, and that they should have done so sooner. He de­scribed a ver­bal warn­ing at the re­treat given by Jones.

“There was no num­ber as­so­ci­ated with it,” Driggs said. “We were kind of off-track and we would need to talk about it. That was the ex­tent of it.”

He also faulted pre­vi­ous bond is­sues for lack­ing clar­ity. For ex­am­ple, the “Vote Yes for Bonds” cam­paign’s de­scrip­tion of the 2016 Cross Char­lotte Trail funds said the money was for “Plan­ning, de­sign and land ac­qui­si­tion for the 26-mile trail that will con­nect the county’s sys­tem of green­ways.”

“No­body said this was a down pay­ment,” said Driggs. “They should have made very clear the $38 mil­lion that was be­ing asked for only rep­re­sented X per­cent of the to­tal cost. … I don’t know if all the facts had been laid bare at the be­gin­ning that vot­ers would have made the same de­ci­sion.”

WHAT HAP­PENS NOW?

The Cross Char­lotte Trail has al­ways been pro­moted as a sig­na­ture green­way for the whole city, giv­ing walk­ers, jog­gers and bi­cy­cle riders an un­in­ter­rupted route from one end of the city to the other. And in ad­di­tion to the 26 miles in Char­lotte, the route would also con­nect to trails in Meck­len­burg and other coun­ties, even­tu­ally giv­ing users ac­cess to about 40 miles of con­tin­u­ous trails.

That would be an achieve­ment for a city that con­sis­tently ranks lower than its peers in ac­cess to parks and green­ways. Other cities have in­vested big in their trails, such as At­lanta, which is build­ing the 22-mile Belt­line en­cir­cling the cen­tral city.

Now, Char­lotte is con­sid­er­ing a much-re­duced plan. The $38 mil­lion that’s avail­able is enough to fin­ish 3 miles of new trail, link­ing ex­ist­ing green­way seg­ments with con­nec­tions be­tween Brandy­wine and Tyvola roads, Sev­enth and Tenth streets and Lit­tle Sugar Creek to McMullen Creek in south Char­lotte.

That would give the city about 18 miles of con­tin­u­ous trails, run­ning from south Char­lotte to just north of up­town, by 2021. An­other 10 miles of planned trail – mostly run­ning north­east through lower-in­come neigh­bor­hoods – would re­main un­funded. In­stead of a ded­i­cated trail, the city would place signs on ex­ist­ing streets, di­rect­ing pedes­tri­ans and bi­cy­clists to the next seg­ment of the Cross Char­lotte Trail.

One hope, city staff said Mon­day, is that pri­vate de­vel­op­ers can be per­suaded or com­pelled to help build the un­funded por­tions of the trail as they re­de­velop land be­tween up­town and Uni- ver­sity City. The city may also be able to pull funds from some ex­ist­ing sources to help close the gap, Jones said.

Brian Leary, pres­i­dent of mixed-use de­vel­op­ment at Cres­cent Com­mu­ni­ties, pre­vi­ously served as CEO of At­lanta Belt­line Inc., the en­tity in charge of build­ing that urban trail. He said the fund­ing for that project in­cludes pub­lic money, fed­eral grants and part­ner­ships with pri­vate com­pa­nies.

“It is a tapestry of fund­ing,” he said. The Belt­line trail is also built on old railbeds, which the city al­ready owned and which were graded and flat. “In Char­lotte’s de­fense, we’re kind of cre­at­ing one from scratch.”

Some City Coun­cil mem­bers said Char­lotte needs to com­plete the parts of the trail that can be fin­ished now, while work­ing to find fund­ing for the rest of it.

“I don’t want to see the project stopped,” said Eiselt, who sug­gested the city look to see what other funds, like money ear­marked for bi­cy­cle in­fra­struc­ture, could be used. “I think we’ve got to move for­ward with the ones we’ve got ready to go or we’ll just be hav­ing the same con­ver­sa­tion in a year.”

Find­ing money in Char­lotte’s bud­get to cover the gap could be tough. The city has in­vested in ma­jor in­fra­struc­ture projects in re­cent years, but largely with the aid of fed­eral, state or other ded­i­cated fund­ing sources: The $1.2 bil­lion Blue Line ex­ten­sion (50 per­cent paid by the fed­eral gov­ern­ment, 25 per­cent by the state, re­main­der from cent lo­cal sales tax), the $150 mil­lion sec­ond phase of the Gold Line street­car (50 per­cent paid by the fed­eral gov­ern­ment, 50 per­cent by Char­lotte), a $110 mil­lion con­ven­tion cen­ter ren­o­va­tion (funded by lo­cal hos­pi­tal­ity taxes).

Some City Coun­cil mem­bers say it might make more sense to pause the Cross Char­lotte Trail project un­til there’s a plan for fin­ish­ing the whole thing. Win­ston said the city should look to other sources, like its tourism fund, to try to make up the gap. Much of that fund is tapped out on projects like the con­ven­tion cen­ter ren­o­va­tion, how­ever, or needed for fu­ture anticipated projects like more sta­dium up­grades for the Carolina Pan­thers.

Bokhari said that even though some of the funded sec­tions of the Cross Char­lotte Trail would run through his district, he’s not ready to ap­prove them, given the abrupt and mas­sive changes.

“We essen­tially have to vote on a brand new vi­sion for this project,” he said. “I’m un­com­fort­able even vot­ing for that un­til I have an un­der­stand­ing of the whole new vi­sion.”

Said Driggs of the Cross Char­lotte Trail’s fu­ture: “I need more in­for­ma­tion be­fore I can even spec­u­late.”

JEFF SINER [email protected]­lot­teob­server.com

City Coun­cil mem­bers said last week they were “stunned,” “out­raged” and “em­bar­rassed” to learn that there’s not enough bond money avail­able for the Cross Char­lotte Trail.

Ob­server file photo

The Cross Char­lotte Trail has been pro­moted as a sig­na­ture green­way for the whole city, an un­in­ter­rupted route for walk­ers, jog­gers and bi­cy­clists. The trail also would con­nect to trails in Meck­len­burg and other coun­ties.

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