Dallas school system wins historic $6.24 billion bond election

Dallas Independent School District won voter approval on Saturday for its massive $6.24 billion bond proposal, while Dallas Area Rapid Transit retained two of the three cities with ballot measures on dropping their funding for the agency's services.

Texas ballots were bursting with a revised $82.57 billion of local government bonds, up from an initial $78.48 billion, which had set a record high for a May election, according to Texas Bond Review Board data. Cities, counties, school districts, and other issuers in the Lone Star State are allowed to head to the ballot box for general obligation bond authorizations twice a year: in May and November.

Municipal utility and other development-related districts accounted for about 83% of bonds on this May's ballots.

Dallas ISD's four-part proposal marked the largest bond referendum in the state's history, according to Eduardo Ramos, the district's deputy superintendent of business services, who said the debt will be sold over a 10-year period, starting with the issuance of about $650 million to $750 million of bonds in mid- to late-January 2027.

That deal by the state's second-largest public school system will include a voter-approved $143.34 million refunding to replace the backing of outstanding debt secured by the district's maintenance and operations property tax fund with a GO pledge, he added.

"We are thankful to our voters for their overwhelming support of our students and public education," Ramos said in an email. "Their investment in all students will impact this city for generations to come."

Ahead of the bond election, Fitch Ratings in March downgraded the district's underlying rating a notch to AA with a stable outlook, citing an elevated long-term liability burden that could grow with voter approval of additional debt. Bonds issued by Dallas and other school districts receive triple-A ratings under the Texas Permanent School Fund's bond guarantee program.

DART's member cities will dip to 12 from 13 after Highland Park voters opted to withdraw from the transit agency, while voters in Addison and University Park decided to stay. Three other cities previously cancelled their withdrawal elections, which were largely driven by an inequity between their sales tax contributions and transit services received, after reaching agreements with DART.

Highland Park, which historically accounted for 0.65% of DART's sales tax revenue, will lose transit services later this month, but will remain on the hook for its share of the agency's outstanding debt.

"The future of North Texas will be shaped by the cities that choose to move forward with DART," DART Board Chair Randall Bryant said in a statement. "We are focused on expanding this system with partners who recognize that transit drives economic growth, connects people to opportunity, and strengthens communities."

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.

Fort Worth voters reportedly passed the city's six-part, $845 million bond package, while Arlington ISD announced approval for about $469 million of the $501 million of bonds it was seeking. The school district said it will establish a bond oversight committee and consult with financial advisors to devise a bond program schedule.

In Round Rock, north of Austin, voters rejected a charter amendment backed by the city's firefighters' union to boost fire department staffing and response times, according to counties' unofficial election results. The city had pegged the cost of additional firefighters and fire stations, along with operational costs over eight years, at $228.2 million.