Fifth member city sets election on leaving Dallas transit agency

Dallas Area Rapid Transit

Dallas Area Rapid Transit is facing growing pressure after a fifth city will let voters decide whether to end its membership and funding for the agency.

The University Park City Council voted 5-0 Tuesday night to place a measure on the May 2 ballot. 

In November, four of DART's 13 member cities — Plano, Irving, Highland Park and Farmers Branch — opted for elections on withdrawing from the agency, which provides bus, rail and other transit services in a more than 700-square-mile area. 

Ahead of the University Park City Council vote, DART Board Chair Randall Bryant said governance and funding changes are in the works and most of the cities with withdrawal measures on the May ballot have submitted proposals "for consideration to rescind those elections."

"DART does not need any additional cities to call for this election right now to make us understand the severity and the seriousness that this issue is," he said at the council meeting.   

The cities, which can hold withdrawal elections once every six years under Texas Transportation Code, have until March 18 to remove the measures from the ballot. 

If voters agree to withdraw, transit services would cease in the cities, which would still have to contribute sales tax revenue until their financial obligations, including their share of debt payments, are fulfilled, according to Bryant. 

The main reason the cities cited to ditch DART was inequity between their 1% sales tax contributions and transit services they receive.    

A 2024 Ernst & Young report revealed the amount of sales taxes contributed by several DART members in fiscal 2023 exceeded their shares of expenditures for operating, capital, and interest expenses. 

The report showed University Park contributed $6.4 million to DART versus being allocated only $1.8 million in expenses. 

Council Member Phillip B. Philbin said that staying in DART for another six years would result in the city receiving $3 million in services at a cost of $66.5 million as the transit agency plans to ramp up debt sales. 

"In light of the dwindling services that DART has provided in the city of University Park and the increasing debt, the lack of proportionality, and the competitive disadvantage that our membership in DART has caused compared to competitor cities like Frisco and McKinney, I propose that we ask our voters, give our voters the opportunity to withdraw from DART," he said. 

DART plans to issue about $2.5 billion of bonds over the next six years primarily for light rail vehicle and bus replacement, system modernization and remaining project costs from the Silver Line Commuter Rail, according to the agency's emailed response to questions.

The agency had $3.86 billion of senior lien sales tax revenue bonds outstanding as of Sept. 30. It last issued bonds in 2021: $1 billion of tax-exempt and taxable debt in two deals rated Aa2 by Moody's Ratings, AA-plus by S&P Global Ratings, and AAA by KBRA — all with stable outlooks.

For fiscal 2026, which began Oct. 1, DART's budget anticipates $937.5 million in sales tax revenue, up from fiscal 2025's $910.2.

Historically, the five member cities with upcoming withdrawal elections accounted for 29.5% of DART's sales tax revenue.

Rating analysts have said the cities' exodus would subject DART to budget and credit pressures. 

DART took steps last year to address member cities' concerns, including the creation of a General Mobility Program funded with 5% of tax collections that would be available to seven of its member cities that contribute more than they receive in cost allocations from the agency.

DART said it is considering the feasibility of proposals by cities holding withdrawal elections to get an additional 25% of their collections and is supporting governance changes that would require state legislative approval.

The city council in Addison, another DART member, last month narrowly rejected an ordinance on a ballot measure to withdraw. In 1988, member cities Coppell and Flower Mound left DART.