Overhaul pondered for north central Texas mass transit

Bloomberg News

Mass transit in north central Texas is in flux as Dallas Area Rapid Transit tries to prevent the potential loss of nearly half of its member cities and calls emerge to take a more regionwide approach to accommodate future population growth.

Projections that the Dallas-Fort Worth area will add 3.7 million residents by 2050, as well as threats to DART's future from disgruntled members, are providing fuel for regionalization.

"We're on the verge of a major redirection with regard to how transit should be provided in the region," Michael Morris, transportation director at the Metropolitan Planning Organization's Regional Transportation Council, said at the north central Texas group's Thursday meeting on options to aid DART.

Since November, Plano, Irving, Highland Park, Farmers Branch, University Park, and Addison set May elections on withdrawing from DART, which uses 1% sales tax contributions from its 13 member cities to provide bus, rail and other transit services in a more than 700-square-mile area.

The main reason cities cited to ditch DART was inequity between their sales tax contributions and transit services they receive. Historically, the six cities with upcoming withdrawal elections accounted for 32% of DART's sales tax revenue, which is expected to total $937.5 million in fiscal 2026.

DART is not alone in facing an election day reckoning. In a January report, Moody's Ratings said signs of a significant, broad-based reduction in political support for mass transit could shift its stable outlook for the sector to negative. 

"The outcomes of 2026 ballot measures — such as the San Francisco Bay Area transit regional ballot measure, Oregon referendum to repeal state-approved transportation tax increases, and city-level initiatives in Texas to exit the Dallas Area Rapid Transit — will be important indicators of voter sentiment," the report said.

After a flurry of actions last week aimed at addressing DART members' funding and governance concerns, officials from Irving and Plano, the agency's two biggest sales tax contributors after Dallas, signaled their elections could be reconsidered.

Recent actions "show significant progress toward a compromise," DART said in a statement Friday.

"Adoption of these proposals by all parties provide a path forward for a stronger, more
cohesive regional public transit system," the statement said.

Working with feedback from some of the cities, DART devised a plan that included reallocating about $360 million back to its members over a six year period, according to Randall Bryant, who chairs DART's Board of Directors.

The RTC on Thursday approved $75 million over five years to aid DART. 

"What I'm trying to do is save my agency," Bryant said ahead of the council's vote on an amended motion that also allocated funding for projects for the sprawling Dallas-Fort Worth metroplex's other two transit agencies — Trinity Metro in Tarrant County and the Denton County Transportation Authority. 

The RTC's plan includes exploration of a regional commuter rail authority, a move officials said could free up $100 million to $150 million for DART.

Dallas Area Rapid Transit

"More conversations are needed with Trinity Metro and DCTA about how they would fit into that system, but a regional mobility authority has more opportunities as the collective to bring in additional revenue sources, focus on expansion projects or some of the big capital projects." Karla Windsor, a senior program manager, said at the meeting.

Meanwhile, Arlington Mayor Jim Ross, an RTC member, said he is urging the council to explore the feasibility of a technology-based transit authority for the region. Arlington, the region's largest city unaffiliated with a transit agency, is actively engaged with autonomous vehicles and is about to launch a pilot program on air taxis, according to Ross.

"I don't think that fixed-route busing is going to be the answer from here until eternity and eventually we're going to have to look at more innovative ways of getting people around the North Texas region," Ross told The Bond Buyer, adding that "the future is more in line with the Jetsons than the Flintstones." 

If there is interest, the next step would be to look at technology-based options and funding possibilities, he said.

"The traditional modes (of transportation) may not be good for every community that's there, and I think that's what you're seeing now with member cities and how they're looking at their return on the investment for their involvement with DART," Ross said.

As for DART governance changes, the Dallas City Council on Wednesday approved a resolution to give up its majority representation on DART's governing board. 

"Under the proposed model, Dallas would hold 45% of the voting share and seven board seats, while ensuring that every member city retains representation on the DART Board and that no single city controls a majority of seats," a statement from the city said. "These principles reflect Dallas' good-faith effort to preserve a strong, collaborative system for the entire region."

Governance changes require approval by the Texas Legislature, which next meets in 2027.

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

In January, DART announced a moratorium on new long-term debt issuance until after the Nov. 3 election to ease concerns by its members, who would still be on the hook for paying off their share of any outstanding debt if their voters opt to quit the agency.

DART has said it 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 service that launched in October.

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, AA-plus by S&P Global Ratings, and AAA by KBRA — all with stable outlooks.