(theme music) - [Announcer] This is a production of PBS Charlotte.

- This week on Off the Record, (upbeat music begins) light rail safety problems months after a Blue Line train goes off the tracks.

Why didn't CATS tell us or their boss, or city council earlier?

Council members also moving forward this week on 4-year terms, and outdoor drinking in some Charlotte neighborhoods.

A bad week for banking, why some Charlotte bank stocks are tanking because of a bank failure in California.

Plus, a truce between CMS in the town of Mint Hill over new charter schools.

The last weekend for free Saturday parking in Uptown and South End.

The first weekend at Mecklenburg, homeowners are getting new property revaluations.

And... Is Michael Jordan selling the Charlotte Hornets?

Lots to talk about next on PBS Charlotte.

(upbeat music fades) And from our PBS Charlotte Studios near historic Plaza Midwood, I'm Jeff Sonier.

And we're Off the Record talking about the stories you've been talking about this week.

And if you watch the news, read the news and listen to the news, well, you'll recognize the names and faces around our virtual table.

Ely Portillo from WFAE, Genna Contino from the Charlotte Observer, and Tony Mecia from the Charlotte Ledger.

You can also join the conversation from home or on your phone.

Just email your questions and comments to OffTheRecord@wtvi.org.

Well, a long list of stories to talk about this week, but honestly, we may not get to all of them because of the one big story that everybody's talking about this week.

Charlotte's Transit System, CATS, hitting what you might call the trifecta of bad publicity this week.

Questions about safety, about accountability, about transparency after the public and city council are just now finding out about a safety problem on the Blue Line that's apparently been kept secret for almost a year.

Ely, you write a lot about the transit system and we talk a lot about the transit system on this show.

Why don't you get us started this week on everything that's going on at CATS right now?

- Sure.

So on Monday, the city council got an update from Brent Cagle, who's the interim CEO of the Charlotte Area Transit System.

This was kind of an update on operational challenges and organizational review that they've had underway.

But kind of in the middle of some bureaucratic speak.

Cagle disclosed that in May, 2022, there was a derailment of a CATS train with passengers on it in South Charlotte.

And he told counsel that in the aftermath of this derailment, they found that an axle bearing had, the seal had cracked, all the grease had come out.

And because of this, it overheated and seized up, and the axle stopped spinning, which caused the train to jump the tracks.

Now that's bad, could have been worse.

No one was hurt.

The train didn't tip over.

But what they found afterwards was that all 42 of the light rail trains that they have in their fleet have this same defect and could be vulnerable to this same fault.

So kind of a big, big piece of news to drop there.

In February, CATS instituted a 35-mile per hour speed limit on all of the Blue Line trains.

They also took the eight highest mileage trains out of service as a precautionary measure.

So now you've got these safety questions, this speed limit imposed, old trains being pulled out of service, and nobody was told any of this until Monday's meeting.

When the derailment happened last year, CATS just said that there was a mechanical problem with a train and that there would be a bus bridge in place for a few hours while they dealt with it.

So really, this was the first that anyone in the public heard about this.

And that is, I think, pretty concerning, and especially given the range of challenges CATS has had over the past couple of years.

And some of the ongoing issues we've seen, I think, calls for cause for some real hard questions about how this agency is being run and held accountable.

- Genna, you cover the city council on a regular basis.

How did council members react to this information?

My understanding is that Brent Cagle, the acting CEO of CATS, said he didn't know about it himself until he got a report from safety inspectors at the state council.

I'm just curious how they reacted to this latest, in an ongoing, set of troubling circumstances at CATS.

- Yeah, so Brent Cagle, the interim CEO of CATS informed the council, like Ely said, during that council meeting on Monday.

And I would say the initial reaction was kind of silence in the room.

(Jeff laughing) I only joined the Observer in May of 2022, so I was like furiously searching.

I was like, "Did we have a derailment that I didn't know about?"

And I was checking our coverage and things like that.

But yeah, the initial reaction, I think, Councilman Ed Driggs spoke first and he was like, "Well, why is the city footing the bill if it's a manufacturing issue?"

And that's when Brent Cagle basically said, "Well, they're out of warranty and now that falls on us."

And then I know Renee Johnson was like, "I didn't know about this.

Did the rest of you guys know about this?

This is very concerning."

So that was kind of council's, - Yeah.

initial reaction while they were on the dais on the record.

(chuckling) - I will say they were mostly, I thought, pretty nonplussed by the whole thing.

The media had a lot more questions, but really, except for those two reactions that Genna mentioned, I was watching that meeting and nobody else really even talked about it.

They wanted to talk about things like whether CATS and CMS can combine some bus operations, how we are planning for different aspects of transit system expansion.

But except for those two reactions, it really just kind of sailed on like there was not a major piece of news dropped there.

My colleague, Steve Harrison, spoke yesterday with Lee Altman, who is a county commissioner, who's on the Metropolitan Transit Commission.

And she didn't hold back.

She said that, "This is an outrage.

The response has been outrageous.

Not disclosing it to the public in a timely manner was," in her words, "Beyond the pale."

So, there was really (Jeff laughing) a lot more of that coming from Lee on the Metropolitan Transit Commission, which also oversees CATS.

Really not much reaction from council.

- I didn't watch that council meeting, so I don't know exactly how they reacted, except for how you describe it.

It raises the question though, maybe they didn't wanna talk about it.

Maybe this is just the latest thing that yeah, I mean, you can't avoid these kinds of issues, but it almost sounds like council doesn't want to, doesn't wanna talk about these issues 'cause they don't really have an answer right now on how to solve some of what's going on at CATS.

- Yeah, I mean, it's really just sort of one more thing, Jeff.

We've talked here over the last several months just sort of recurring problems, one after the other.

You have management turmoil.

You have bus drivers almost going on strike.

You have labor types of issues.

Ridership is down in this post-COVID era that we're in.

And Uptown isn't back to where it was.

You have fewer people now, a lot fewer riding buses.

So it's sort of one...

The hits just keep on coming for CATS (Jeff laughing) and it's, I guess, the charitable view could be that the city council... Look!

We have day-to-day managers, they have professionals in there running it.

And council's role is to supervise, but you don't really see a lot, as Ely said and Genna said.

You're not seeing a lot of questions, at least asked publicly about some of these issues, although my guess would be in private, they're a little more outspoken.

- Yeah.

Especially a public safety issue.

We're talking about serious, potentially serious safety problem on the Blue Line that one unmentioned, really covered up, if you want to use that terminology, for almost a year.

And the state didn't hold back on those problems.

It was the state inspectors that really put this into perspective on how serious the problem was and what the risks were.

Again, it kind of raises the whole question of accountability and transparency.

A safety problem is bad.

A safety problem that's being kept secret from the public and is it being addressed in a real meaningful manner that satisfies state inspectors, makes it even more troubling, I suppose.

- Yeah, the state did not hold back in their correspondence with CATS, which was also disclosed this week.

They said that there were unacceptable hazardous conditions here, that CATS' plans for mitigation were unclear and insufficient.

And they also noted that CATS had questioned the need for this 35 mile per hour speed limit or resisted implementing it.

- [Jeff] Hmm.

- And in the end, it appears that the State Department of Transportation actually ordered CATS to implement this 35 mile per hour speed restriction.

The fastest these cars can go is about 55.

They usually go around maybe 45 or so.

So the state actually stepped in and said, "No, you have to limit them to 35 because they all have potentially, these axles that could seize up and lead to derailment.

And basically, if you're only going 35 and you come off the tracks, you got a lot better chance of stopping the train - [Jeff] Yeah.

safely than if you're going 55.

- Which again is troubling.

Why isn't CATS self-policing?

Why aren't they instituting these safety measures in the interim instead of resisting them on the advice of safety inspectors?

A lot of this, I guess, dates back to the old leadership that in large measure is gone from CATS now.

Is is that ultimately, is that why we took so long for us to find out about this?

Again, a lot of the folks that were in charge when this happened aren't in charge anymore.

They're gone.

But a lot of folks knew about this at CATS as well, and it just raises the question of, why aren't they being more transparent with issues that truly affect the traveling public, affect the people that are using their facilities?

It does sort of make you wonder, what else is there that we don't know about.

- Yeah.

(laughing) - And if they didn't have a new interim CEO, a new leadership, and the state didn't call them out for these problems with the light rail, mechanical issues with the bearings, would we have ever known about this?

Or would CATS just sort of, - Yeah.

"Oh, just started running the trains at 35 miles an hour," and nobody really catches on.

It's sort of mind boggling and it is, I think, they do have some new leadership over there, but sort of makes you wonder, is there anything else under the hood that we haven't been told?

- Genna?

Were you gonna say something?

- Yeah, I was just gonna say, right now, I don't know if this has been said and if it has, I'm sorry, but CAT's top three, the CFO, COO and CEO positions are all, they don't have permanent fillings right now.

We saw CEO, John Lewis, announce resignation in October of last year.

We saw another top executive be announced that he was put on administrative leave with no pay just a couple of weeks before we find out about this light rail thing.

So it definitely opens a lot of questions to... Who knows what?

Why didn't Brenton Cagle know?

And why didn't the public know?

- Yeah, and I don't know what's worse.

Is it worse that things are being camouflaged from even the CATS bosses, when it comes to safety and important issues?

Or that city council seems not to be asking harder questions than need to be asked?

- Yeah.

Yeah.

There's a lot to unpack here.

It's just, it's really, as a taxpayer.

- I will say that I talked to the chair of the Transit Services Advisory Committee, who told me they have been raising issues about light rail safety for a while.

- Yeah.

CATS often tweets about, maybe an equipment malfunction on the train, or it's delayed for a service issue.

And they've kind of brought those issues to the table and haven't gotten clear answers yet.

And no one had mentioned a derailment to them over the past 10 months, - Yeah.

when they knew about this, - Right.

when they asked about safety.

- Yeah, there's lots of, - Yeah.

there's lots of opportunities, there's lots of structure set up within the CATS organization for this kind of information to be brought forward, to be addressed publicly for folks to weigh in on.

None of that seemed to work this time around.

And that's some... That's as troubling as the train's not working properly, I suppose.

- Jeff, the other question here that's sort of really, that I find kind of interesting is, what is the role of the City Manager here, Marcus Jones?

- Yeah.

- He's the day-to-day manager of these of these issues.

Did he know anything?

What did he know?

He's sort of a, it's interesting, because he's kind of a quiet figure.

He's not very outspoken.

You don't hear...

He does not give a bunch of press conferences.

But he's sort of the guy in between the city council and CATS.

CAT's reports, at least in part to him.

- [Jeff] Yeah.

- It would be nice to know, it'd be nice for him to come out and say, "Well, what did you know?

And when did you know it?

And what else is going on here?"

I think there's a lot more questions.

And I'm hopeful that we'll get some of the answers and people will keep asking the right questions.

- Yeah.

- Yeah, and just to step back for a second to the bigger context, you know, Jeff.

- Right.

- You had mentioned maybe city council just doesn't want to talk about this so much right now.

Like, "Okay, let's just move on."

If you look at where we were a few years ago, we were talking, we were unveiling the Charlotte Moves plan in this community.

And we were seeing 13 billion plans, expand Light Rail, getting ready for the new sales tax, 1-cent sales tax push.

None of that's happened.

And the city - Right.

has kind of been forced to really pull back now.

So it's even harder to imagine going to Raleigh and asking the legislature for a 1-cent sales tax, for more light rail, when you've got these really big problems unfolding on the Blue Line right now.

So I think in that bigger context, that shows you some more of, "Yeah, probably."

That does not help the sales tax discussion with Raleigh.

- Yeah.

Again, it raises the whole competence issue, and transparency too.

This is obviously perhaps the most serious example of an ongoing problem.

CATS would come to City Council talking about Blue Line or the goal line of project without ridership numbers, or they would come to the council talking about the new transit center uptown.

But with conflicting, apparently, goals regarding underground versus above ground.

This is just the latest in a long series of unfortunate incidents.

And again, it kind of goes back to the leadership, I suppose.

And that's something that council is gonna have to address soon that they've got a vacancy, as Genna mentioned, at most of the top positions right now as far as permanent replacements.

Where they go next is really gonna determine the future of the system, I suppose.

- Yeah.

When you have your top three jobs vacant.

- Yeah.

- That's gonna be a big question mark.

And I think it was worth noting that when he started his remarks, Brent Cagle, who has run the city's airport before, he's a deputy assistant city manager, he's had a lot of big jobs in this city, he said, two or three times, "I'm the interim CEO.

I want to emphasize, "Interim."

(Jeff chuckling) I just want to emphasize and note, I'm the interim."

(both laughing) He made that clear.

- Yeah, it's the, I don't know.

We talk about CMS superintendent being a thankless job.

It may drop down to number two now, with the head of CATS being the job that nobody really wants right now because of all the issues.

Someone will take it at some point.

And again, we spent more time than we normally do on one topic, but I think it's something that we needed to talk about this weekend.

If the past is any suggestion of the future, we'll be talking about it again going forward.

Another thing council did talk about this week was 4-year terms.

And I'm guessing CATS will be a campaign issue come this fall.

I'm not sure I would want to be campaigning on four years instead of two with this as part of my record.

But Genna, can we talk a little bit about where we stand on these 4-year terms, council expanding how long they serve and how many council members will be serving in the future?

- Yeah, so City Council has proposed a change to their form of government, governance, excuse me, where their terms would be four years instead of two years.

Those terms would be staggered, and they would add on an eighth district, but keep the number of at-large seats.

There has been some criticism that's arisen from this, saying that, "Oh, adding another district seat without taking an at-large seat will result in a bunch of tiebreaker votes."

Right now the council's at an odd number, which makes that a little better when it does come for ties like that.

Another criticism was that district representatives would be able to hold their seats while running at-large and still kind of have a safe spot on council.

But yeah, ultimately, it will be up to the voters.

I think next month and during an April meeting, council's supposed to vote to put this as a referendum on the ballot this November.

But they had a public hearing for it on Monday during this crazy council meeting where we heard about all the CATS news.

(both laughing) And only one person spoke in opposition.

So I think, Jeff, you were saying earlier, we'll really hear - Yeah.

what the public thinks in November.

- Yeah, one person at the public hearing.

But a couple of weeks ago we heard from Hugh McColl and former Mayor Richard Vinroot on this issue.

We didn't talk about it back then and we're actually on hiatus for a couple of weeks.

But anybody wanna weigh in on how influential voices like that might impact the voters come fall?

Both the former mayor and the former CEO of Bank of America, saying 4-year terms were a bad idea.

And again, don't add a council member district if you're not gonna take away an at-large seat.

That would seem to be a pretty strong recommendation against this proposal that could stay in the mind of the voters, I suppose.

- Yeah, I think, Jeff, if you look at the history of some votes on this, I think the county has proposed this in the past and it's been voted down.

It's something that is, I think, a little bit of a tougher sell to voters.

You're basically increasing the job security of city council members, and the idea of having them go every two years is that they're more responsive to the voters if they have to face the voters every two years.

Now council members, they don't like running election campaigns - Yeah.

every couple of years.

They say it's distracting.

They want to get into the... And having longer terms will allow them to - Yeah.

really understand issues better, that sort of thing.

So I think there is gonna be some sort of wide skepticism and you never know what the voters are gonna do, but certainly, you have some prominent names, as you mentioned, and former Mayor Vinroot and Hugh McColl coming out and saying, "This is not what we need.

This is not a great idea."

- Yeah.

- Yeah, and this is gonna be an off-year election.

- Right.

- Turnout is always low in those, mid-teens maybe if we're going by historical standards for turnout.

So you could have 12%, 15% of voters deciding this on the November ballot.

So I think influential voices like that will have more of a say - Yeah.

than they would in a high turnout presidential year ballot.

And there's also gonna be potentially up to $3 billion worth of school bonds - Yeah.

on these ballots so that's another thing that is gonna have a lot of energy and attention around it.

So I'm not sure what the odds look like, but it's gonna be a big year - Yeah.

for referenda, - Yeah.

which we don't always get here.

- I know a couple of weeks ago when council first decided to move forward on this plan, even council was split on the idea.

So obviously, there's no consensus on the council itself, let alone in the community or among some influential political leaders.

So yeah, again, November will tell.

Council also talked about social districts, appropriately on St. Patrick's Day Week.

I know this is something that's already going on in other North Carolina cities.

Quickly, can we talk about what council has, what the process that council has begun, when it comes to the idea of having a drink on a public sidewalk in some of Charlotte's more popular neighborhoods?

- Yeah, so two...

The city has received its first two applications for social districts, which like you were saying, would allow people to take their drink outside of the bar and within a predetermined boundary, you can drink outside, you can have that open container.

So Plaza Midwood Merchants Association applied to be a social district, which of course is kind of in East Charlotte, right East of uptown.

- Yeah.

- And then Guild Brewing in the lower South End neighborhood also applied.

I don't know if they just applied for directly around their brewery, - Mm-hmm (affirmative).

or if it would be kind of that whole neighborhood area.

I think we'll find out more about that in the coming weeks once the city council votes to approve those applications and we'll have our vote for social districts in Charlotte.

I think Charlotte's different than Raleigh where they could have, "Oh, our downtown area is gonna be the social district."

- Right.

- Charlotte has a lot of areas that could be considered social districts (Jeff laughing) that people would wanna drink and be social.

- Yeah, Wilmington's another place where everything's kind of centered in one location.

Charlotte, not quite like that.

By the way, if they do the Plaza Midwood district, I hope it reaches to our studios 'cause we're not that far, right?

(all laughing) - That would make these tapings a lotta fun.

- I was gonna say, you guys... - Bloody Mary Fridays, right Jeff?

- You guys may wanna come in instead of staying and doing the show from home then.

Hey Tony, you wrote about bank stocks this week, in particular, Truist, suffering from the bad publicity that the California banks are putting out right now regarding bank failures, in particular, regional banks.

Can you talk about why a Charlotte Bank would be directly or indirectly affected by something going on out west like that?

- Yeah, I mean it's really the entire banking sector.

You're seeing all bank stocks really in the last week plus have have been down.

There's a lotta concern about the health of our financial system and what bank might be next, and it's sort of unsettling for a lot of investors.

And depositors are seeing people move money around to banks that they perceive are safer.

There's some questions about some of these regional banks.

Do they have the financial stability and the financial wherewithal to weather this type of environment?

So it hits those smaller banks a little bit harder because I think people are not, people are a little bit worried that in those cases, are their deposits really safe and is it smarter to put your money in Bank of America or a larger bank - Yeah.

if you know that the federal government is not gonna allow to fail.

So you are seeing some of that.

Bloomberg News reported this week, that Bank of America had received about $15 billion in new deposits coming in since the collapse of Silicon Valley Bank.

So a lot of questions about the health of the banking sector.

The federal government is working on it.

A lot of the banks are trying to support each other and make sure that it doesn't spread, but of course you never really know what's gonna happen.

- Yeah.

- It's amazing how one or two, a couple of banks on the west coast with problems that can cascade across the country and affect an entire sector, including Banktown, North Carolina.

Free meter parking on Saturday is about to end.

If you're going uptown this weekend.

Take advantage of it while you can.

This seems to be an unpopular move on the part of the city, and they're not doing it for money purposes.

Anyone wanna weigh in quickly on why this is happening now and how that may change folks coming into Uptown and South End for the weekend?

- Yeah, the city has said that there's more demand for parking.

Excuse me.

(clearing throat) So they're going to start charging at the meters as well.

I think a few people will be disappointed here, but Charlotte's been wanting to move up to the big leagues of cities forever.

- Yeah.

- And I grew up outside DC.

Try parking there, downtown, (Jeff laughing) on a Saturday afternoon for free.

Not happening.

- Yeah, I thought it was interesting.

The city says that a lot of folks are hogging those parking spaces on the weekend, parking on a Saturday morning and leaving it there until a Sunday night.

And this will open up those spots to more folks, as the day goes on through the weekend.

Couple of other quick stories... James Polk Park is about to become Hugh McColl Park, a $10 million makeover that's gonna be mostly privately funded.

This is being spearheaded by Central City Partners.

CMS and Mint Hill, a truce over publicly funded charter schools.

The last of the four towns that were in opposition with CMS that have finally kind of broken bread and will go forward.

CMS will continue to expand schools in those towns, Mint Hill, the last one on that list.

And Michael Jordan apparently putting the Hornets on the block.

It comes from a reliable source at ESPN.

Thoughts on the hornets under new ownership?

In this case, not a basketball person, but a couple of what, hedge fund managers, finance folks in the not too distant future?

- Yeah.

They're financial folks.

Michael Jordan widely believed, or at least in the conversation, for being the greatest basketball player of all time, but his record as an owner - Yeah.

of the Bobcats that later became the Hornets, is not as distinguished.

They've had I think three winning seasons under his ownership, made the playoffs only twice, when a lotta teams make the playoffs in the NBA.

The good news, I think, for Michael Jordan, is that the value of the team has increased dramatically - Yeah.

from about 280 million, when he bought the majority stake in 2010, to an estimated 1.7 billion now.

So it doesn't look like he's gonna be hurting for money.

So I guess, so that's good.

- Yeah, the team itself was in better financial position now than it was when he took over, obviously, not maybe so much on the basketball court.

And one other just fact that the Panthers, when they were sold by Jerry Richardson, they were also sold to someone who was a minority owner in the NFL.

So I'm not sure if that portends what the future of the Hornets will look like and any comparisons to the future of the Panthers, but we'll wait and see if this deal goes through, as predicted by ESPN, and who those new owners ultimately will be.

We're actually outta time.

I'm glad we got a chance to at least touch on most of our stories and especially, the one big story that really needed talking about.

We'll talk more about it I'm sure, as this show progresses week-to-week.

In the meantime, thanks gang for joining us this morning.

Thank you for joining us at home as well.

If you've got questions or comments about what we're talking about this weekend, just give us, send us an email at OffTheRecord@wtvi.org.

Thanks for joining us and again, we'll see you next time, right here on Off the Record.

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