Dallas County Schools
Dallas County Schools (DCS) is a county school district that provides services to independent school districts. The primary service provided is bus transportation for students in several area districts:Aledo Carrollton-Farmers BranchCedar Hill Dallas DeSoto Highland ParkIrving LancasterRichardson Additional services such as psychological and testing services, school crossing guards and campus security may be contracted by school districts as well but are minor functions compared to providing bus transportation. Funding is provided by a $.01 per $100 assessed valuation property tax levied on Dallas County property (the statutory maximum), state funding and contractual fees for service.Recently DCS has been criticized on several issues including: failing to pick up and deliver students in a timely manner, investing heavily in a stop arm camera program which failed to generate expected revenue and generated a $23 million loss in 2015-2016, several hundred reported incidents of buses running red lights over the last few years, and the recently reported sale and leaseback of land where buses are parked. Sweeping management changes have occurred since these issues came to light including the departure of the Board President and Superintendent. In 2016, DCS’s auditors stated that DCS’s recurring losses “raise substantial doubt as to its ability to continue as a going concern. The Texas Attorney General will not allow DCS to restructure its debt until after the November election. DCS defaulted on debt service due June 1 though management says bondholders were later made whole. Moody’s downgraded DCS’s debt to junk status and issued a negative outlook. DCS’s 2017-2018 budget is unbalanced, showing an $8 million deficit.
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• The district has put a new management team in place for 2017-2018 and believes that it has made big improvements in operations including improved on-time goals. As of the date of this report, management says it is working on a budget amendment.
• Students from several area school districts, including DISD, depend on DCS bus service to transport hundreds of thousands of students. Affected districts do not have a workable plan to provide bus service on their own in a cost effective manner.
• Should the people of Dallas County vote to dissolve DCS, the instructions from the legislature on how to accomplish the dissolution and distribute assets are unclear according to some DCS officials, which could result in delays and lawsuits.
• DCS’s financial condition is quite serious and finance professionals (bond rating agency and external auditor) have expressed doubt as to whether it can survive. The Texas State Legislature also expressed doubt through its bipartisan move to put the matter of DCS’s continued existence to the voters.
• Should the people of Dallas County vote to continue DCS and it subsequently declares bankruptcy, participating districts could experience disruption and additional expense.
• Several DISD Trustees have publicly expressed the opinion that they could provide essential bus service more cheaply than DCS does currently.
• An orderly transition is planned if the proposition fails. A dissolution committee will be formed to manage the existing DCS buses and employees for the remainder of the 2017-2018 school year. After that period, each ISD served by DCS can develop their own plans for bus transportation and other services including managing the buses themselves or hiring another entity to manage the function for them.
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