In the 2006 NC General Assembly Session, a law was passed (Session Law 2006-103/House Bill 2724) amending the Town of Chapel Hill Charter to allow the Town to establish a payments-in-lieu system to collect funds for transit improvements in lieu of requiring roadway construction. With Chapel Hill simultaneously facing constrained budgets and a groundswell of demand for more and higher quality transit, there is an inherent need for additional funding mechanisms. This paper will analyze the appropriateness of collecting payments-in-lieu of road construction to fund the transit system. How can this tool be implemented in Chapel Hill? In order to answer this question, a case study approach is used, examining other municipalities that have implemented similar transit funding tools, and comparing those municipalities and Chapel Hill.