The Dallas City Council passed a variety of items pertaining to its relationship with Dallas Area Rapid Transit (DART) during Wednesday’s meeting, including a long-standing item to accept funds from DART for use in certain transit-related projects.
The council greenlit an interlocal agreement (ILA) with DART for the distribution of approximately $80 million of funds held by the transit authority, roughly $72 million of which were “excess sales tax funds,” which were collected beyond the anticipated amount. The other $8 million were from the Regional Transportation Council (RTC).
Up to $50 million will be available immediately, while the remaining $30 million will be available following the completion of certain milestones. The $80 million must be “used to complete projects eligible for this funding that will benefit DART’s Public Transportation System or provide Complementary Transportation Services located in Dallas.”
A separate agreement would also provide an additional $10 million to the City of Dallas, meaning that ultimately the City would receive around $90 million.
The final vote was 12 in favor, with council members Adam McGough of District 10, Cara Mendelsohn of District 12, and Gay Donnell Willis of District 13 voting against the ILA. However, the debate carried on for several hours, as the existence and appropriate use of these funds and the terms of the ILA caused considerable controversy.
Part of the disagreement stemmed from the $90 million total being substantially lower than the $111 million DART initially said the City would receive. In March, DART CEO Nadine Lee told the City Council that the delays and late-stage requests from the City for the upcoming Silver Line had cost the organization tens of millions of dollars, as reported by The Dallas Express.
Public speakers criticized DART for alleged financial mismanagement and deceptive practices, pointing to the earlier disagreement over the obstacles with the Silver Line. They urged the City Council to push back against DART and demand more equal terms.
“This has been vetted,” District 6 Council Member Omar Narvaez responded. “We need to get this passed.”
“These are not funds that we can sit around or wait on,” he added, expressing the belief that if the council refused to accept the present proposal, the funds would be in jeopardy. “DART has drawn a line in the sand, saying, ‘Take it or leave it.’”
“This is a proposal to penalize ourselves with our own tax dollars.” Mendelsohn criticized, raising her concerns with the terms of the ILA. “The document is so poorly drafted as to leave the cities exposed to the whims of DART.”
“We are quite simply being targeted,” she claimed, pointing to perceived differences in treatment between Dallas and DART’s other member cities. “We can’t just hold our nose and pass this.”
“If you approve today, you will be risking any dollars because you will be giving away your responsibility and fiduciary duty,” Mendelsohn continued.
Through questions with City staff, Mendelsohn emphasized that a separate memorandum of understanding (MOU) that would not be subject to council approval is still being negotiated to resolve some of the unclear or undefined language in the ILA.
She also called attention to the fact that, according to the ILA, DART holds unilateral authority to determine if Dallas is responsible for delays and has the sole authority to decide whether the City is in good standing.
District 8 Council Member Tennell Atkins asked questions to staff that suggested if Dallas failed to accept the ILA, the dollars on the table would likely be allocated by DART to the Silver Line project anyway.
“We have all these other projects,” Atkins noted, adding that the inflow of funds could help pay for other transportation projects around the City. “In District 8 … we need a whole lot of things.”
“These dollars will benefit us because they were not previously planned expenses,” City Manager T.C. Broadnax explained. “All I know is if we don’t sign the ILA, we won’t get any of the money.”
“At the end of the day, the money is green,” he added.
McGough echoed concerns with the ILA.
“I want to do whatever we can to get as many dollars as we can through this process,” he said. “I believe the issues raised by legal and by certain questioning today are real issues, and I don’t feel comfortable where we are.”
“We want to have things that are enforceable and clear,” McGough continued, noting, “I don’t see that in this ILA. … It’s problematic to the point where I can’t support it.”
District 14 Council Member Paul Ridley asked clarifying questions about the money and noted, “If we want to use it, we have to jump through some hoops.”
Willis then referred to a City-attorney-distributed memo highlighting the “deficiencies” with the ILA and asked Interim City Attorney Tammy Palomino for clarification.
“We presented those concerns to DART for lack of clarity, and DART rejected all of them,” Palomino explained. “They are not negotiating any terms.”
Willis emphasized the belief that the ILA means that DART retains the vast majority of the power.
“Whose money are we talking about today?” District 4 Council Member Carolyn King Arnold asked.
“It’s sales tax, so ultimately, the public’s money,” staff answered.
Arnold urged that the money from DART would benefit her constituents by funding important projects in her district.
“Council members, we cannot push this down the road!” she asserted. “We must come to a resolution around this horseshoe. … Right now, I want the money that we are duly entitled to.”
“Let’s go ahead and pass this and get this done,” she concluded.
District 11 Council Member Jaynie Schultz suggested that DART had made a strategic mistake at the beginning of the process by representing the money as an entitlement instead of a grant opportunity. She said the resolution process was “really a healing process” that will allow DART and the City to “move forward.”
“I decide to trust DART, and I will vote to trust DART,” Schultz added. “Let’s keep it simple, sign the deal, and move on.”
Mendelsohn took the floor again and claimed that there was a risk the City would not receive the money if DART decided against it at a later date.
“Some people want to move forward with a hope and a fantasy that we will get the money,” she said and then asked Broadnax whether he was worried if DART would fail to give Dallas all of the money.
“No,” he answered.
At the end of her time, Mendelsohn asserted, “We will not see this money.”
“I still have grave concerns about the vagaries in this,” Willis added in her second round of comments.
District 9 Council Member Paula Blackmon asked why DART was not at the council meeting to answer questions. Broadnax said that they were not invited.
“There is no partnership … and they can’t even show up,” she said. “That shows me that they don’t care.”
The council voted to suspend the rules to allow Mendelsohn more speaking time.
She pointed out that DART had initially said that the City would receive four times the amount of money negotiators later settled on.
Mendelsohn suggested that such a difference between DART’s claims and the number later settled upon showed that DART had already proven itself not to be an “honest or accurate broker of responsibility” and queried how the City could rely upon them to have the authority under the ILA to determine what the City owes.
She then moved to delay the motion to the first meeting in August following the summer recess, which Willis seconded.
Calling the ILA “the most outrageous thing,” Mendelsohn said, “We need to start over” to secure an agreement more fair to the City.
District 7 Council Member Adam Bazaldua spoke against delaying it, saying that “it seems like the negotiation conversations are done, so I don’t know what that will accomplish.”
“I feel like the words that are coming are not being understood. The ILA is not going to change,” Broadnax said in response to questions from District 1 Council Member Chad West about the possibility of delay. “You might as well ask if a unicorn is going to float in here … There is no more negotiating opportunity.”
“I am sorry he talked to you that way, Chad,” Mayor Eric Johnson said in jest, drawing laughs from both the horseshoe and the audience.
Mendelsohn questioned staff and negotiators once again regarding how a delay might enable more leverage against DART, but they warned against delaying.
Mendelsohn’s motion for delay failed, with four voting in favor and 11 against.
After the motion failed, the final vote to approve the ILA came to the floor and passed.
With the ILA approved, the council voted on a series of six DART-related projects to begin the process. These would advance “Transit-Oriented Development of Property Owned by [DART]” to build housing. (See agenda items 25, 26, 27, 28, 29, and 30 for specifics.)
The City Council had earlier approved appointments for six positions on the DART Board of Directors, which will be held until 2025.
“All of the candidates got interviewed on Monday, and all did an excellent job,” Narvaez said, noting that several of the appointees are returning members while two would be new.
Returning members are Flora Hernandez, Patrick Kennedy, Jon-Bertrell Killen, and Michelle Wong Krause. The new members are D’Andrala Alexander and Enrique MacGregor.
Several council members expressed hope that the acceptance of the ILA would mark the beginning of a new chapter of good feelings between the council and DART.