An outside consultant team told the Metropolitan Public Transit Authority on Dec. 18 that transferring assets, liabilities and operations from the City of Charlotte’s transit system to the new authority is feasible but faces material legal and financial constraints.

Catherine Claude Falter of Parker Poe Adams & Bernstein summarized five studies required by the state’s PAVE Act: legal and financial considerations for asset transfer; outstanding debt and collateral; intergovernmental agreements; employee-transfer and HR considerations; and an overall feasibility/advisability assessment. "It is feasible," Falter told trustees, but she repeatedly emphasized key constraints: "There is existing debt associated with the CATS system. That debt cannot transfer. That debt cannot transfer. I'll say that again." The consultant recommended using interlocal agreements and negotiated timelines to bridge assets that cannot move immediately.

Trustees pressed for specifics. A trustee asked whether liability for incidents (for example, if someone were injured on a train) would transfer to the authority if assets were transferred; Falter answered that liabilities exist and that responsibility would need to be determined asset by asset and through negotiated agreements. On timing, Falter reminded the board of two statutory deadlines in the PAVE Act: the study must be published and transmitted by Jan. 1, 2026, and the public body must be stood up by July 1, 2026; the authority still controls the schedule for individual asset transfers.

Trustee Meza raised grant-related concerns, citing roughly $1 billion in federal grants and another $300 million from the state as referenced in the study. Falter said most grant agreements include covenants and usually require federal and state approvals for transfers; she noted the concept of a "designated recipient" for federal grants and that the authority will likely face the same compliance obligations the city does now.

Falter also flagged practical HR issues: the authority will need to address benefits and retirement participation, and the PAVE Act references enrollment in the local government employees retirement system as a consideration. She said much of the implementation will involve negotiating interlocal agreements, identifying collateral and debt-linked assets that cannot transfer immediately, and hiring advisers to manage the transition.

After discussion, the authority voted to adopt and publish the studies subject to added clarifying language that the report does not bind the MPTA to a specific course of action. The motion to publish was moved by a trustee identified in proceedings as Kearns, seconded by Mayor Simmons, and the board recorded a unanimous vote to transmit and publish the report.

The published studies will be used to guide the authority’s follow-up work on negotiations with federal and state grantors, interlocal agreements with the City of Charlotte and other local governments, and asset-by-asset determinations of liabilities and transferability.