March 31, 2023

(upbeat music) - [Narrator] This is a production of PBS Charlotte.

- This weekend, Off The Record, more on the CATS' derailment, the transit worker who lost his job because of it, the city council member who says we're making too much of it, and Charlotte City Manager admits he missed it.

Also, we're all seeing a surge property tax values, why some Charlotte neighborhoods are double and triple what they were last year.

Our first look this week at Charlotte Mecklenburg School's budget.

CMS wants more, so teachers can make more, but will they get more?

In politics, Republicans in Raleigh override the Governor's veto for the first time in five years with a little help from some no-show Democrats.

And a North Carolina bank picks up the pieces of a bank failure in California, plus Charlotte Mortgage rates are up, Charlotte home sales are down, and Charlotte City Council looks for federal funding in Washington.

Lots to talk about next, on PBS Charlotte.

(upbeat music) 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 Danielle Chemtob from AXIOS Charlotte.

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

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

Well, we'll start with CATS as we have been doing for the last couple of shows.

I guess we should talk first about the most recent development that came late in the week, questions about what the city manager knew and when he knew it.

I think we've all written about that this week.

I don't know who wants to take first crack at that, but tell us about the news conference with Marcus Jones on Thursday.

- Yeah, so Marcus Jones, the City Manager, had previously said that he was not aware of the derailment that happened in May 2022, which has been a real source of concern and, you know, just really kicked off a lot more scrutiny of CATS.

He said that he didn't know about it until February of this year when Brent Cagle, the interim CEO, got a letter from the NCDOT, basically saying, hey, what's up with your response to this?

And yesterday he had a press conference where he actually read aloud a text message that he got from the previous CEO of CATS on the day of the derailment saying, FYI, we've had a minor derailment.

Marcus Jones said that he did not intend to mislead anyone about this.

He said that, you know, he didn't respond to this text message and he forgot about it until he happened to discover it.

But, you know, I think it raises a lot of questions about transparency for an agency that has, in addition to its operational struggles, really just taken a beating with public trust as this kind of slow drip of problems just keeps dripping and dripping and dripping with more coming out every week lately.

- Genna, I know you've written about this as well this week.

It's one thing for the City Manager to say, I missed it.

I didn't intend to do this.

I guess that's for us, the public and the media, but is that good enough for the city council?

Is that a acceptable explanation from the person who's supposed to be the overseer of CATS ultimately?

- Right, I think one of the reporter's questions on the press conference was, you're talking about accountability, how are you gonna be held accountable for missing this text?

And Marcus Jones said, well, with my situation, it'll ultimately be up to the City Council if they wanna do anything.

But we do know that, or there's someone who reached out to me, a man named Terry Creech, who was a light rail controller who said, he's been fired by CATS for the derailment.

He says, he was the only one, he showed me a termination letter that said he was fired for two safety derailments or safety violations, excuse me, handling the derailment.

But he wasn't informed the day of his shift when the derailment happened, that that vehicle had been taken out for maintenance or that there were any issues with it still.

And so he believes that they just kind of needed someone to put it on and it was him so it's been a little crazy this week.

- Yeah, let me clarify, this wasn't the guy that was responsible for maintenance on that rail car or lack of maintenance.

He wasn't responsible for knowing about the problems with the car before it derailed.

He was just cited and ultimately let go because of what happened after the derailment, what he did or didn't do once the car was off the tracks, correct?

- Yeah, I think the line in the termination letter said something like, "even though you weren't responsible for the derailment, the way you handled it wasn't appropriate," or something like that.

He's under the impression, and that's, of course, you can argue that, he's under the impression that the safety violations were kind of written in rules and he handled it how he could appropriately, but ultimately, he didn't know that there was this wheel issue on this train.

- And one more question that I think I already know the answer to.

What is CATS saying about this?

- CATS has told me that it's really a personnel issue, they can't comment on.

They told me to submit a records request for his personnel file, which I have, and I'm still waiting on that back from the city.

- But it's another thing that CATS can't or won't talk about when it comes to issues of safety, issues of responsibility.

You know, who's to blame or who, you know, who takes responsibility for these issues.

So where do we go from here?

I mean, I don't know that we that's any clearer today than it was in the last couple of weeks, but any sense of, you know, whether or not this is getting to the tipping point that we talk about sometimes where City Council feels they have to do something or they're being forced to do something about this?

- Well, there's a couple interesting things that came out yesterday specifically about that.

One is to this issue of personnel files that Genna mentioned.

Personnel files are not public records under North Carolina law, which is what the city usually says and has been saying about the personnel files of people like CATS' Chief Operating Officer who, Allen Smith, who was placed on unpaid leave around the time this derailment stuff came out.

The city has not commented on that and won't say why.

And yesterday they said he's retiring.

Even though these personnel records are not public records, the city and the City Manager can decide under North Carolina law to release them to the public if there is a compelling reason to restore public trust, to explain to the public what the heck has happened.

They can make that decision and do that.

And we have seen public bodies do that, for example, with Ernest Winston, the former CMS Superintendent, when he left under, was fired under kind of unclear circumstances, the school board ended up saying, hey, you know, release his record.

We gotta explain to people why we took this action.

My colleague, Steve Harrison asked Marcus Jones and City Council Member Ed Driggs yesterday, if they would do that in the case of CATS, to clarify some of these questions, to have some accountability and explain better to the public what happened and who's responsible, and both the City Manager and Council Member Driggs said, "No, we're not gonna do that, we don't think we need to."

So you're not gonna find out what's in those personnel records.

The other thing about how we go forward from here is the $13.5 billion expansion plan that's been in limbo, kind of, you know, for the last few years.

Marcus Jones said that the city, you know, is not going to ask the legislature to authorize a sales tax referendum to fund that plan this year, which, you know, everyone pretty much knew.

But that's just kind of confirming and acknowledging that this plan is really, you know, just sitting in idle right now.

- Danielle, do you wanna weigh in on this?

- Yeah, there's gonna be, you know, I mean, there are gonna be a couple of steps taken.

There's an FTA review of CATS that's gonna happen.

They're suspending the CEO search.

They're gonna, I believe council's gonna have like an oversight committee as well.

But I do think it's also interesting to see how some, at least on council are playing this down.

There was sort of a sentiment expressed by Council Member Driggs, for example, that this was like a regular type of wasn't, you know, a headline event.

It was like a regular type of occurrence that can happen just like buses can break down, which I thought was interesting.

I mean, obviously no one was harmed, which is good, but at the same time, like this was caused by deferred maintenance.

The, you know, the whole light rail fleet has to be replaced now.

So I think it is still raising major questions despite their attempts to downplay it.

- Yeah, I've got a couple of quotes here, I'm sorry, go ahead, Ely, yeah sure.

- Can I make one point on that real quick?

- Yeah, please.

- Ed Driggs said, you know, basically you guys are blowing this all outta proportion.

You know, it wasn't really a derailment, it was a "derailment," you know, the train just came off, it didn't tip over.

It wasn't like in East Palestine, Ohio.

But if you look at the NCDOT's letters to the city, their correspondence after this, they really took the city and CATS to task.

And NCDOT thought this was and is a severe enough ongoing safety issue that they are still limiting all CATS trains to 35 miles per hour, which is, you know, a full 20 miles per hour below their normal maximum speed.

So the NCDOT's CATS Oversight Agency here at the state level, you know, they thought this was a big enough deal that they said, listen, you can't run the trains as fast as you normally do because they might come off the tracks like this one did.

So even though the city appears to be trying to downplay this now, all you have to do is look at the state's response and I think you see, yeah, this is a serious issue.

- Yeah, you look at the safety report from the state as you mentioned, these are quotes that I pulled from an interview that our friends at the "Charlotte Ledger" did with Ed Driggs earlier this week.

He says, "There is no safety issue here, routine maintenance problem," that does not sound like a routine maintenance problem in the eyes of the state.

And as far as coverage being overblown, I mean, you know, we're just reporting what they are or aren't telling us.

I mean, I'm not sure that I understand why city council members would love this issue to go away.

Ed Driggs is the Chairman of the Transportation Committee.

He's probably the most appropriate spokesman for council members right now, but in an election year, this is the kind of thing that every council member is gonna have to essentially answer for, you know, when they're challenged in either the primaries or the regular election, from the voters themselves and from every reporter who's, you know, covering the upcoming city council campaign.

This is not going to go away anytime soon with an election pending, correct?

- What I don't really get is the fact that the city council was left in the dark too.

I mean, I would say they have a reason to kind of be upset or ask these questions as well, if it's true that they didn't know about the light rail derailment until a few weeks ago.

So it's an interesting stance to take is all I'll say.

- Danielle?

- Well, I mean, I just think that, you know, although the city has said that the light rail remains safe, as Ely said, what you can see from the state is that they still consider it to be an ongoing issue.

And I think they've lost a lot of trust.

And so there's people still raising questions like, can we really trust that it's safe when these things continue to come out, when we continue to see that, you know, they're being basically, for example, with the speed limits, I believe we've talked about this on the show before, but they were forced to do that, right?

That was not a voluntary measure that was taken.

So I think there's still a lot of questions about whether it can actually, you know, the information coming out can be trusted, especially for riders.

- Yeah, one other CATS item I wanna touch on kind of related, City Council was in Washington DC this week talking with the federal delegation about legislation that they'd like to see happen.

And they talked about funding, including CATS funding.

You know, we talk about the transit tax and whether or not it'll be on the ballot and how it's needed, but federal funding is also needed for just about everything that CATS does.

It's gotta be a little bit awkward going to Washington as well to ask for funding for expansion of transit and bus service when there are so many issues that those, you know, Congressmen and Senators are reading about in the media in Charlotte regarding those very areas.

I mean, does CATS have to kind of clean house or clean up its house before they can legitimately ask for funding from Raleigh or be competitive for funding on the federal level?

- Yeah, I think it's, yeah, I think that, you know, demonstrating that they've fixed what they already have is going to be key before they go for, you know, big expansion funds.

And that's part of what Marcus Jones is trying to do, I think, with leaving Brent Cagle in place as the interim CEO for at least six months, you know, he said yesterday, "We're not looking for a permanent CEO now, we're suspending that search."

Basically, "We're gonna keep Brent and his team in place to try to stabilize things, clean things up, fix what we've got."

So, it's really tough to see a path forward for Charlotte with this transit expansion on the state or the federal level until they figure out how to manage the system they have much more effectively than they've done for the past few years.

- Yeah, I thought one quote from Brett Cagle, in I think it was the "Observer" article, he talked about it, you know, we've heard about the phrase, culture of silence.

He said, "Maybe it's a culture of just not listening."

And that's a big difference and an important difference.

And again, this does, it's not just a problem in the here and now.

It's a problem that could affect, you know, the future expansion and funding of that expansion of CATS going forward.

It's an important part of life for so many folks in this town who don't have other transportation.

And it's why we're, you know, we spend a lot of time on it each week, and I'm sure we'll keep on spending a lot of time on it until they, you know, come to some conclusions and solutions on this.

We can change gears for a few minutes and talk a little bit about the revaluation that's ongoing right now in Charlotte and Mecklenburg County.

We've talked in in vague terms about how this is gonna raise people's tax bills and property values, but Genna, you wrote this week about some neighborhoods that are, you know, seeing the actual numbers and those numbers are kind of staggering, aren't they?

- Yeah, yeah, definitely.

I talked to a homeowner on Sarah Drive off of South Tryon Street, who's seen their home increase 264%, and it's a home he bought for under a hundred thousand dollars in the 1970s.

So he's worried about that tax bill coming in.

But yeah, it's interesting how we're seeing, because around him in that area of South Tryon, yes, they did see increases, but not to that extreme.

But we're really seeing these kind of homes on the lower end of the price spectrum seeing the biggest jump, a hundred thousand dollars homes now costing $350,000 in this recent reevaluation.

- Well, one of the biggest issues that we saw last time that we're seeing again, is that the crescent of, basically the, you know, as we talk about the Crescent in a wedge many times of poverty and basically that defined kind of race in our city, those are the same neighborhoods that are seeing the biggest increases.

And this is what happened last time too.

And I think there's a lot of public concern about, you know, who is bearing the biggest brunt of the latest revaluation.

Of course, we're gonna have to see where tax rates come down, but most folks, you know, if you have a 300% increase in your value, I mean, there is basically no way you're not gonna have an increase in your tax bill even if, you know, the county decided to lower taxes.

So I think it's just a concern about who's going to be paying for the latest increase and can people afford it if they're on a fixed income, if they're seniors, et cetera.

- Yeah, that map is, you know, there's a wedge of wealth if you will, in the southern part of Charlotte and Mecklenburg a crescent of poverty.

And those are the neighborhoods in that crescent that are seeing the largest percentage increases in neighborhoods that frankly are the ones that can least afford any increase.

You know, we've also seen, and I know that the WFAE's done several stories about how other properties are being valued in different ways.

Golf courses and country clubs was an interesting aspect that we read a little bit about this week.

Again, when you see 200 and 300% increases in neighborhoods, how does that, you know, balance with what we're seeing at places like Quail Hollow Country Club, Ely?

- Well that's been really interesting to see, a lot of the golf clubs in Charlotte saw their revalue or saw their tax values fall in this valuation.

One example is Quail Hollow, as you mentioned, and a lot of the other really nice premier clubs like Carmel, have also seen their values fall.

And you know, what the county says is that, hey, we can't value these like a home because there's not a bunch of comparable sales, people aren't, you know, buying and selling golf courses all the time, so we can't just appraise them.

So the county looks at the income they generate, the profits, and values them, you know, like as if they were a sandwich shop or something based on the forward, the value of their profits going forward, Under that, they say, look, these are not like super profitable enterprises.

Quail Hollow's really nice.

They have PGA events, they're having the PGA championship in 2025, but look, you know, they're not generating a ton of profits.

So they said Quail Hollow is worth just under $10 million.

Now, Quail Hollow sits on about 260 acres of land in the most, you know, one of the most expensive parts of Charlotte.

So if you were to just value that club, as you know, as if it were land that was gonna be sold for a subdivision, it would be worth a lot more.

My colleague Steve Harrison, dug into this a bit, and found that the county and their consultant actually use a six point scale to rate golf clubs, and six is the best, one's the worst.

And they rated Quail as a four, which is basically an average private club.

Now, you know, "Golf Digest" rates Quail Hollow as one of the hundred nicest golf clubs in the US, and you know, the PGA agrees, there have been tens of millions of dollars of improvements in the course for those PGA events in the last few years.

So it kind of, you know, boggles the mind that the county says all of Quail Hollow Club is worth basically about nine houses in Dilworth (Jeff chuckles) if put together.

So the county is talking about reviewing this publicly next week and going in depth and trying to figure out a little more.

County Commissioner Laura Meier has really been kind of raising questions about this and asking for a public hearing.

But where this really matters besides the, you know, head scratching factor, is that commercial properties will be paying less of a percentage share of the overall property taxes this year because commercial properties went up in value less than residential properties as a whole.

So more of that tax burden is going to be shifting from commercial properties, including golf clubs, to people who are seeing their home values increase.

And a lot of them are in the Crescent, as we talked about.

- Yeah, by the way, the increase in commercial values kind of brings the next wave on how it could affect this reval could affect the lowest income folks, and that's in apartment complexes, apartment complexes are considered commercial properties.

They're being hit by about a 41% increase, which is way lower than that 200, 300% increase that Genna wrote about, but that 41% increase in tax and property values is gonna be translated into leases and rental rates in the next 12 to 18 months.

And Danielle, you're nodding there, this is the next wave, the kind of hidden wave that reval is gonna hit folks who don't own property but will still have to pay the, you know, the after effects of higher property values, right?

- Yeah, I mean, you know, we've seen major displacements take place already with a lot of lower, you know, lower cost apartment complexes and maybe aren't necessarily government funded, right, but they're sort of older and so they rent for a little bit cheaper than the big luxury apartments you see.

And we've seen a lot of those get sold over the last couple of years, and I think that this has a potential to, it always has a potential to accelerate it the more you look at, you know, if you're the owner of one of these complexes, how much you have to pay in taxes versus how much income you're generating from the rents.

- Yeah, when we did a story a couple of years ago about the last reevaluation, I mean, we're talking about rents that going, that might go from like $800 a month to $1,200 a month, and that's enough for many families just to have, they've gotta go outside of the city of Charlotte to find somewhere to live at an affordable rate when you see increases like that due to this reevaluation and its effect on rental rates.

Hey, by the way, just to, to kind of as an aside, the median sales price in the Charlotte region for a home in February, $360,000 in the city of Charlotte, $399,000, the median sales price for homes in Charlotte, that's, you know, that in a number, is in a nutshell is the problem I suppose.

- I won't be buying a house anytime soon, Jeff.

- [Jeff] Yeah, maybe collectively we can all chip in and buy one together, okay.

- Well, if we could put together $9 million, we can buy Quail Hollow, apparently.

(everyone laughs) - Alright, well maybe this was one of those GoFundMe things we can start right here, right now, right?

Hey, a couple of other stories I wanna touch on.

The CMS budget proposal is on the table now.

School's asking for 39 million more, a 7% increase from last year from the county, mostly for teacher and principal pay increases, which is hard to argue against unless you're a Mecklenburg County Commissioner who doesn't see enough money to go around.

Anyone wanna just weigh in quickly on the annual budget fight between the county commissioners and the school board?

- Yeah, interim superintendent, Crystal Hill says a lot of this isn't optional, it's to, you know, match state funded raises.

Things like healthcare premiums that have gone up.

We've all seen inflation, but she also says that we really need to be paying teachers more, that we are paying teachers less than some other large districts in North Carolina that we're competing with.

And you know, the bigger dynamic here is that the school is, schools are also asking the county to approve almost 3 billion in bonds, which the county said will probably raise property taxes going forward.

So, you know, there's a lot of asks for more money on the table here and it's gonna be interesting to see how they tussle over that and figure out what they're gonna say yes to.

- And I think, you know, there's a history between the school board and CMS of disputes over the budget, especially when it comes to, you know, the county trying to hold the school system's feet to the fire around the performance issues and the academic gap.

But, you know, of course the school system argues, well, we need this money for teachers because that's what's gonna solve the achievement gap.

So I think it'll be interesting.

We believe they went into formal mediation, was it two years ago, to resolve these negotiations.

So it'll be interesting to see, you know, what, how far that gets this year.

- Yeah, we've got a different board this year, a lot of new members.

I don't know if that'll change the political dynamic or not, but we'll find out over the next couple of weeks.

Speaking of the political dynamic in Raleigh, the first override in five years of a veto by the Governor with the now stronger GOP legislature and the help of some democrats, lot of interesting politics on this issue regarding pistol permits.

Can you touch on that quickly, Ely?

- Yeah, you know, the Governor's veto's been overridden since the first time since 2018.

They needed, the Republicans needed a couple Democrats to either vote with them or be absent to give them a super majority in the House to do that.

And one of the Democrats who was absent for the override vote was Tricia Cotham, a Mecklenburg Representative.

And you know, she kind of drew fury from the party leaders and progressive groups.

Carolina Forward progressive activist group said that she, you know, should resign.

And Cotham said that she has long-Covid and was taking scheduled medical treatment at the time, and that she does not agree with overriding this veto.

You know, going forward it's going to be interesting to see what happens with this same dynamic and with Cotham too on issues like abortion, where we're starting to see bills introduced to increased restrictions.

The Governor will veto those.

But again, we've seen that the override is now definitely back in play for the first time, really, since Democrats broke the super majorities in the legislature.

And really it only takes a couple Democrats not being in the chamber for that veto override to happen.

So keep your eye on this.

I think it's probably going to happen again several more times this session where we're waiting to see is the override gonna happen?

Who's gonna stay with the Dems, who's gonna take a walk?

Who's gonna be absent?

Who's gonna maybe even cross the aisle?

And that's a different dynamic this year than past sessions.

- Yeah, this is veto override number one, but certainly not the last.

Hey, we're out of time, but I do appreciate our panel today joining us for a great discussion on a lot of interesting and important issues this week.

Thanks for joining us at home as well.

You can email your comments and questions to OffTheRecord@wtv.org and we'll see you next time right here on Off The Record.

(upbeat music) - [Narrator] A production of PBS Charlotte.