Investigation: Charlotte city emails show real cost of mobility plan is $8 billion more than originally presented

CHARLOTTE, N.C. (WBTV) - Emails obtained by WBTV raise new questions about the cost of Charlotte’s Transformational Mobility Network and whether taxpayers were misled about the total price tag.

Internal emails between City of Charlotte employees show that shortly after the Charlotte Move Task Force recommended the TMN, employees projected the cost of the project would actually be $8 billion more expensive than the estimates previously provided.

Charlotte councilmembers and the public were told the price tag of the TMN could range between $8-12 billion.

But in an email, Special Assistant to the City Manager Shawn Heath wrote the actual cost could be $20 billion.

“The $8-12 billion range from the Task Force Report is just capital costs, when taking operating costs and financing costs into account, I believe the 30-year all-in is more along the lines of $20 billion,” Heath wrote in an email to Planning Director Taiwo Jaiyeoba and CFO Kelly Flannery.

The email from Heath also forecasts that revenues from a sales tax funding the TMN would produce $11 billion over 30 years instead of just $6.5 billion.

City Manager Marcus Jones previously said city staff were working on new estimates but did not give any indication as to how much the financial figures would vary.

WBTV requested the emails from city leaders after Jones made the comments earlier this year.

Other emails reviewed by WBTV also raise questions about how transparent city leaders were with taxpayers and surrounding towns about their financial assumptions for the plan.

In one email, Flannery wrote she would prefer to share new financial assumptions they had discussed, but her plan was thwarted by City Manager Marcus Jones.

“I still contend until we know what we’re doing on the city side it is irresponsible and a waste of time to contemplate external components, the Manager would like a call with the group for me to share our existing ‘model’,” Flannery wrote.

She wrote she would comply “in the spirit of following directions.”

A spokesperson for the city said that Flannery’s email is about internal dialogues between city staffers and was focused on financial modeling, not what information would be shared publicly.

Another email sent by Heath on Feb. 27 proposed a “model that assumes 1% of the sales tax is carved out [in aggregate] for the Towns. What I like about this…it’s low enough that I don’t get concerned that we would be showing something that we might regret later.”

Heath went on to write “the numbers in the illustration are very modest so I don’t think we are taking a big risk by showing them.”

The city and surrounding towns have to work together to determine project priorities and the email from Heath could be viewed as an example of the city holding its cards close to the chest among the partners it has to collaborate with.

At one point, the TMN was the biggest focus among city leaders and elected officials. Former Charlotte Mayor Harvey Gantt led a year long task force to make the recommendation for the massive project that would invest billions in greenways, sidewalks, buses and light rail.

But the plan started hitting speed bumps for a variety of reasons.

Funding for the plan would come from a proposed, countywide, one-cent sales tax. But residents and mayors in towns surrounding the Queen City expressed concern and even opposition to the proposal.

Additionally, delayed census data made a citywide election in November unlikely. The one-cent sales tax would have to be approved by the North Carolina General Assembly and then county voters. But in North Carolina, it is illegal to have a ballot with no candidates and only a referendum issue.

Huntersville Mayor John Aneralla has been one of the most outspoken critics of the plan. In an interview with WBTV, Aneralla said that the new cost estimates uncovered by the WBTV Investigates Team raises questions about affordability.

“We all know that when we have estimates from government, it always tends to be a lot higher, and the question is, how do you pay for these things?” Aneralla said. ”You know the devil is in the details and we still haven’t received all the details.”

Aneralla also said that the carve out proposed for the towns isn’t a selling point for him. Although he is against the idea, Aneralla said that if Huntersville wanted transit funding enough, the town could approach the legislature unilaterally for a sales tax that would stay local.

“I think it was a bad argument to say, ‘hey, we’ll carve out a portion of this’ when already we have a high level of frustration from generating directly improved transit projects in our towns,” Aneralla said.

Part of the frustration from Aneralla and others in northern Mecklenburg County is the failed promise of the Red Line, a light rail system proposed 20 years ago that would link Davidson and Charlotte.

Norfolk Southern controls the rail line where transit officials would want to build the Red Line and, so far, the company has not expressed any interest in sharing the territory.

The emails reviewed by WBTV also show city officials drafted a letter to Norfolk Southern and the North Carolina Railroad Company “hoping to re-engage them on the subject of access for passenger and commuter rail.”

WBTV submitted a record request with the city for Norfolk Southern’s response, but so far there’s no indication if a record exists or not.

However, Aneralla said that after he received a copy of the draft letter he reached out to a representative of Norfolk Southern himself.

“They have no plans to allow any passenger rail adjacent to or on what they call their O-Line,” Aneralla said.

Charlotte city officials say the emails obtained by WBTV are just an example of work-product and having to piece together financial assumptions that weren’t fully fleshed out by the Charlotte Moves Task Force.

In an interview with WBTV, Shawn Heath, who wrote the email about the $20-billion price tag for the TMN, downplayed the numbers he referenced.

“That wasn’t really a formal analysis on my part, just really our first opportunity to start peeling back the onion associated with the task force report and asking questions about the assumptions and the estimates,” Heath said.

Planning Director Taiwo Jaiyeoba claimed that the initial $8-12 billion estimate provided to the Task Force was not misleading.

“Internally we had dialogues not just with ourselves, but also with the Chief Financial Officer and also our Director of Transportation and Transit and said, ‘OK, what works and what doesn’t?’,” Jaiyeoba said.

WBTV also asked for a response from Charlotte City Manager Marcus Jones regarding emails that could indicate the city was not being fully transparent with its partners about costs and financial models for the project.

“As we began to understand the complexities of the scope of the recommendations and develop those strategies, we realized that the initial estimates for both the potential costs and potential revenues were likely low,” Jones wrote in an email. “Rather than rush out with a new set of estimates, I decided that it would be more productive to wait and ensure staff had enough time to do their work so that we feel confident in the numbers and strategies we use moving forward.”

City officials and Jones said that Charlotte councilmembers would be receiving an update on the TMN at their meeting this coming Monday, which would include a new cost estimate.

“On April 7, I informed Council that we were continuing our work and an update on the TMN was scheduled for June. InfraStrategies delivered its preliminary analysis earlier this month and I look forward to Monday’s presentation,” Jones wrote.

Jaiyeoba told WBTV that the new cost estimates won’t be that much different than the original $8-12 billion estimate.

“It’s not going to be wildly different. I wouldn’t say that,” Jaiyeoba said.

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