Dallas Area Rapid Transit, TX – Sales Tax Surveillance Report

Rating Summary

The long-term rating reflects Dallas Area Rapid Transit’s (DART) broad sales tax base; the limited volatility of, and consistent growth trend in, pledged sales tax revenue; strong debt service coverage levels; a conservative additional bonds test; and the underlying strength of the Dallas – Fort Worth - Arlington metropolitan statistical area (Dallas MSA) economy.

Offsetting these strengths is the statutory structure of DART which allows its member communities (Members) to put the question of continued participation in DART to their voters every six years. The withdrawal provision presents a substantially greater risk to DART’s ability to sustain service levels rather than the repayment of outstanding debt, given statutory protections requiring continued collection of the sales tax to satisfy a withdrawing Member’s pro rata share of DART’s financial obligations. The withdrawal of Members representing a significant share of sales tax revenues would greatly reduce the…