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Dallas might settle DART dispute by forgoing $21 million in sales tax refund

The city says it has agreed to have $111 million cut to $90 million for causing construction delays during a transit agency project; council vote is needed.

Dallas officials say they could get $21 million less than promised from Dallas Area Rapid Transit to settle disputes over the city causing construction delays during the transit agency’s commuter rail extension project running through Far North Dallas.

Assistant City Manager Robert Perez says Dallas agreed to have its initial $111 million cut to $90 million as part of a mediation process with DART and the North Central Texas Council of Governments. The city agreed to give up $16 million to cover delay costs for the planned Silver Line extension and $5 million to cover project changes requested by the city. Perez told the mayor and city council members in a memo Friday that Dallas could have been on the hook for as much as $43.5 million in delay costs alone.

The decreased payment means Dallas will have to change plans on how to help pay for improved sidewalks, traffic lane markings and other transportation-related projects that the money from DART was earmarked for.

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The Dallas City Council is scheduled to discuss the revised deal during a meeting Wednesday and tentatively plans to vote the following week on whether to accept proposed terms from DART on conditions to get and keep the money.

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“Despite concerns with some language within the [interlocal agreement], Dallas is the only service area city that has not yet approved the ILA,” Perez wrote in a memo Friday to the mayor and city council members.

In February, some council members expressed concern over an earlier draft version of the interlocal agreement with DART due to proposed terms like the transit agency being able to withhold the sales tax money if DART determined a city delayed the construction of DART projects. City Manager T.C. Broadnax during a Feb. 28 committee meeting advised the council not to sign the agreement, saying it was “unfair” that DART would promise to give money and then later threaten to withhold funding as a penalty for unrelated issues.

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DART President and CEO Nadine Lee told council members and city officials during that same meeting that Dallas had cost the transit agency more than $80 million with delays and requested changes to the Silver Line project, including $36 million due to city delays in permit reviews and approvals.

DART’s Silver Line is a nearly $2 billion, 26-mile commuter rail extension planned to run from DFW International Airport to Plano. About 3 miles will run through part of Far North Dallas, but the project has faced opposition from residents and its city c ouncil representative Cara Mendelsohn because of safety and noise concerns over projections that dozens of trains a day will be coming through their neighborhoods. The project is scheduled to be completed by late 2025 at the earliest.

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Dallas’ distribution comes from $234 million in excess sales tax revenue that DART announced last year it would give back to the 13 cities it services to be used for transportation-related projects. Dallas, the largest city covered by DART, is getting the biggest portion of the sales tax refund and appears to be the only city from which DART has threatened to withhold money. The money is largely made up of sales tax collected from the cities between 2019 and 2021.

According to Perez’s memo, Dallas’ plans to use the refund now include spending $10 million on improving sidewalks, $50 million to install ramps to comply with the Americans with Disabilities Act, $2 million to help improve traffic lane markings, $11.5 million for revamped traffic signals along major bus route corridors, $750,000 to study how often DART parking lots are used to consider redeveloping them and $250,000 to pay for a pilot program for K-12 students to use transit for free.

He wrote that the city is planning to add a new allocation, $3 million to pay for ongoing maintenance and studies related to the Dallas Streetcar. The streetcar runs from the Bishop Arts District to downtown, and is owned by the city and operated by DART.

That’s down from plans to spend $15 million on improving sidewalks, $54 million to install ramps to comply with the Americans with Disabilities Act, $6 million to improve traffic lane markings, $19 million for revamped traffic signals along major bus route corridors, $2.8 million to study how often DART parking lots are used to consider redeveloping them and $500,000 to pay for a pilot program for K-12 students to use transit for free.

Perez said the city also plans to give $10 million from the money it’s getting from DART to the North Central Texas Council of Governments, which is planning to give the city $15 million to help pay for a nearly 13-mile hike and bike trail along Five Mile Creek in Oak Cliff.