Dallas DART (Dallas Area Rapid Transit) has failed to disclose the complete cost of its proposed $2.9 billion light rail bond financing the subject of the August 12 DART election.
If the election passes, DART will issue 30 year bonds to advance the construction schedule of light rail by approximately five years. DART data indicates that the cost of the long-term (30 year) debt financing, through construction opening, would be approximately the same as for the short term (five year maximum) debt approach it would use otherwise. Under the long-term debt scenario, light rail lines that would have been open by 2019 would be open five years earlier — in 2014.
DART claims that the only logical date for comparing the cost of the two approaches is at the dates the light rail lines open, since DART has the ability under the long term debt option to construct other transportation improvements after 2013. By revealing only the costs of their proposal up to 2013, DART is being highly deceptive.
What DART does not disclose is that the additional cost of advancing construction by five years is more than $3 billion. Under the DART proposal, 30-year bonds would be issued as late as 2014, which would mean that payments would extend to 2044.
Under the long-term debt option, DART would pay $6.7 billion in debt service, compared to $3.6 billion under the short-term debt option. It is absurd for DART to represent to the community that the only logical date for comparing the costs of the two programs is the opening date. On the contrary, the only logical date for comparison is when all of the debt has been retired. Moreover, the claim that DART would have more money to build new projects after 2013 is highly misleading. It would have more money than under the short-term option only for a few years. In the long run (through 2044) DART would have $3.1 billion less to build new transit projects under the long-term debt option.
The analysis was performed by Wendell Cox, Senior Policy Analyst for the Texas Public Policy Foundation, a non-profit state policy research institute.
According to Mr. Cox, DART’s representations to the community could be rightly called deceptive. This type of financial disclosure would not be lawful in the private sector, where car dealers, home builders and consumer credit companies are required to reveal the full cost of borrowing.