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 this week said 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.
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“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 projections 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 three 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 University 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 1/2-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.”