Dallas transit agency member city exodus threat grows

City of Addison, Texas

Pressure is building on Dallas Area Rapid Transit as another member city opted to hold a May referendum on exiting the agency.

The Addison City Council, which narrowly rejected the move in December, reversed course in a 5-2 vote on Tuesday to become the sixth of DART's 13 member cities heading to the May 2 ballot.

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

If voters decide 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 DART.

Addison sent $400.5 million to DART between 1984 and 2025 and, if it leaves the agency, would owe an estimated $50.76 million, which could be paid off in less than three years, according to a staff presentation to the city council. 

"I feel like we've given a blank check to DART to write whatever debt they want. We're responsible for it," Council Member Howard Freed said. "So from the financial standpoint, I absolutely think we should pull out of DART." 

Addison's action came after DART last week announced a moratorium on new long-term debt issuance until after the Nov. 3 election.

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.

A DART spokesperson did not immediately respond to a request for comment about Addison's action.

This week, DART said it will hold a March 24 public hearing, as well as community meetings in in February and March, on potential service changes if withdrawal elections succeed. 

The main reason cities cited to ditch DART was inequity between their sales tax contributions and transit services they receive. Historically, the six member 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.

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

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.