City had evidence of CATS safety issues, shortcomings in months-old audits

CHARLOTTE, N.C. (WBTV) - A joint investigation from WBTV and Axios Charlotte reveals many of CATS’ surprise disclosures to city council about new problems were already known to the transit agency. Three separate audits of CATS completed in the last year identify more than 30 shortcomings the organization is now scrambling to fix, impacting taxpayers and the people who rely on bus and light rail service.

One of the audits specifically calls out the city for not following through on previous recommendations, stating “If this was completed prior, this may not have still been an issue.”

The City of Charlotte now expects an off-schedule Federal Transit Administration audit of CATS to cast light on the agency’s deficiencies. The Metropolitan Transit Commission previously requested the city hire a third-party company to investigate how the organization reached its dysfunctional state, as well as look into a May light rail train derailment.

Over the past several months, CATS’ interim CEO Brent Cagle has shared with council members revelations about CATS, which he says he only learned of since stepping into the role. CATS is overdue for maintenance of light rail vehicles, replacing around 100 overage buses, and inspections for light rail bridges and parking garages.

Cagle has attributed the mounting list of problems to a “culture of silence.” He indicated that employees were too afraid to speak up about delayed maintenance and other offenses. Three top executives departed the agency in recent months.

Some of the issues that have recently come to light in news reports and city council meetings were already identified in months-old documents. Other problems date back years with no actionable steps taken to fix them. Axios and WBTV reviewed three separate audits reviewing CATS’ practices.

For example, just this month, interim CEO Cagle revealed that CATS was sometimes only scheduling one controller in the rail control center at a time instead of two, creating “unsafe working conditions,” according to NCDOT.

But NCDOT reported back in August that CATS was frequently operating the rail control center with just one person, according to its personnel schedules. That means a single employee has been managing the movements of both the Blue Line light rail and the Gold Line streetcar at the same time — not to mention both rail yards — for months now.

Staffing shortages

In the 2022 audit, NCDOT also noted that CATS had no back-up plans for when a controller was absent or in the case of an emergency response situation.

Staffing was also an issue for CATS during NCDOT’s 2019 audit.

Many departments were experiencing worker shortages last year. Positions were either vacant or frozen, the audit states. In interviews, CATS employees told NCDOT management was attempting to address the known shortages “within the bounds of their authority levels.”

The NCDOT audit states the staffing levels in the Rail Operations Control Center “are not adequate.” Follow up investigations from NCDOT reveal the problem was never addressed by CATS.

The issue of insufficient staffing was raised again by NCDOT after the train derailment in May, when it was revealed only one controller was on duty at the time of the accident. In April, NCDOT told CATS it must shut down the light rail and streetcar if it cannot adequately staff the rail control center.

Safety

In the NCDOT audit, CATS was also found in violation of not reporting safety events to the state and FTA within the required two-hour window. Of 41 incidents over three years, CATS failed to report six — or 15% — within the timeframe. Leadership told NCDOT it was retraining employees on the procedures.

A WBTV Investigation previously revealed the number of reportable safety incidents investigated by CATS police didn’t match with the number reported to the FTA.

The FTA audit found numerous issues with CATS’ preventative maintenance practices after asking for records for three Blue Line light rail cars and three Gold Line street cars.

CATS reported that all three street cars and one light rail vehicle were out of service. Preventative maintenance records for the two remaining light rail cars were incomplete and did not include dates of service. The city followed up with records later that closed the FTA finding.

CATS is working to catch up on overdue inspections of its parking garages and light rail bridges, but audits show there were more failures related to inspections. CATS only had documentation to show it inspected 46% of rail vehicles before they went out for service during a week in April and a week in June.

Also, during the state audit, NCDOT checked behind CATS workers after they inspected grade crossings. The state found defects the city employees had missed. For example, at University Pointe Boulevard, one-way lights needed to be realigned. At West Tremont Avenue, vegetation was blocking the view of signals and lights were off aim.

The NCDOT audit recommended that CATS be more forthcoming about safety with the Metropolitan Transit Commission, its policy board. It advised the chief safety and security officer to present to the commission monthly and create a “safety report card.”

The train derailment happened May 22. Three days later, on May 25, the MTC met, but there was no mention of the derailment. City council members said they did not find out about the derailment until March — 10 months later.

“Safety needs to be a standing agenda item at each monthly meeting,” the NCDOT audit states.

CATS Contracts

Failures of CATS to properly manage contracts were prominent in both the FTA review and Grant Thornton audit. Grant Thornton’s review was requested by the City after Charlotte’s internal audit team found contractors were being overpaid.

WBTV has previously reported on a lack of supplies and equipment resulting in buses staying out of service for months.

The audit from Grant Thornton found CATS had a backlog of 142 procurement orders and “3-4 (temporary employees) are needed to work through the existing backlog.”

The problem was so extensive that Charlotte’s bus operations division, which is run by a contractor, was placing orders then seeking contract approval after the fact in order to avoid the backlog and get equipment quickly.

The audit and other city records show CATS was routinely late paying vendors leading to disputes about how much was owed.

The FTA found problems in almost every contract they reviewed between CATS and an outside contractor.

The audit found three procurement files didn’t include a price analysis comparing all of the bids from different vendors for the contract.
Required FTA clauses were missing in six of the seven contract files.
CATS didn’t provide mandatory bus safety testing records for the electric buses it purchased in 2021.

The contract and procurement problems identified in the audits are indicative of the greatest challenge currently facing CATS.

For years, CATS budgeted a maintenance overhaul of the Blue Line cars but never executed the contract. Now, the city is working with the manufacturer to get the repairs completed as quickly as possible without interrupting service.

Culture

Since the departure of former CATS CEO John Lewis, city leadership including City Manager Marcus Jones have emphasized rebuilding a better culture in the organization.

The Grant Thornton audit found that many of CATS’ problems were related to lack of clear structure in the agency that extended to City Manager Marcus Jones’ office.

The review found “city-wide organizational charts do not provide clear lines of authority, as well as an uncertain culture.” The first recommendation from the audit requested the City Manager’s Office to take steps to improve the procurement process and change the culture of the office.

Last year, City Manager Marcus Jones hired an outside contractor to review the CATS organization. But the audit shows the Grant Thronton team called for the same review more than four years ago.

“This recommendation is very similar to the one provided by Grant Thornton in the February 2018 report,” the audit reads.

“If this was completed prior, this may not have still been an issue.”

City Response

In response to this report and questions from WBTV and Axios Charlotte, a city spokesperson sent the following email.

While not all work has been done, City CATS leaders have already begun to address some concerns within past audits. For example, regarding matters around procurement and working with CATS finance, an interim CATS CFO was appointed who knows the city and understands the function of CATS while focusing on valuing our employees. With all the work ahead, CATS will update City Council and the MTC on work plans to address identified issues.

Mr. Cagle has committed to transparency with the community, employees and contractors within CATS. Over these last few months, Mr. Cagle has learned a lot and is sharing that information. Mr. Cagle has said before that we may not understand the past CATS leadership thought process, but we must act now with the information we are learning.

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