Officials now discussing the formation of local government corporations
In a continued effort to look at interagency partnerships and future expansion, Denton County Transportation Authority officials are discussing the formation of local government corporations.
The corporations would enable DCTA to share funds and resources with other agencies toward projects, but some changes in the bylaws need to be made before board members can even vote on forming such a corporation.
“It’s a pretty big decision to establish a local government corporation,” said DCTA President Jim Cline.
Local government corporations would have a board and could issue bonds, though they could not collect tax revenue, Cline said, adding the bonds could be paid off through other means such as earnings and fare revenues.
“That’s why we see it as one of those important things the board would decide on,” he said. “How it’s established is how it runs and what powers it would have. For some of the bigger decisions we make, it requires not only a majority board present but two-thirds of the financially participating cities. It’s a check in the system for how we do business.”
Cities participating financially include Denton, Highland Village and Lewisville, which pay a portion of their sales tax to DCTA.
“So we brought forth the discussion at the March board meeting, [with] a couple different options,” Cline said.
The first option would apply the voting criteria from the current bylaws to creating or joining a local government corporation. Those bylaws state that there must be five members present for a quorum, as set by state law. A majority vote from that quorum and two of the three representatives from member cities would have to vote in favor in order for it to pass.
The second option would affect only votes on local government corporations and would require a majority of the quorum, plus unanimity among the representatives of the member cities.
The third option also affects only votes on local government corporations and requires a majority of the 14-member board, or at least eight members, plus two of the three member cities’ representatives.
As discussions continued on the three proposals, Dave Kovatch, who represents The Colony, suggested a fourth option.
That option looks a lot like the first but requires the affirmative vote of the majority of the board and two-thirds of the members cities for key agency decisions to be approved, including local government corporations.
Cline said two of the main issues were whether to require unanimity from the member cities and how to define a majority.
“The flavor of the conversation I heard, and there was no vote taken, but there seemed to be positive support for making the LGC [local government corporation] topic one of the special decisions,” Cline said. “The requiring 100 percent, there was some discussion on concern that would be problematic, because it’s hard to do anything in government unanimously.”
Another concern Cline said was increasing the requirement of the number of board members needed for the bigger decisions if there was ever a problem in getting the right number to show up at meetings.
So far, Cline said, “we have had very active board members and no issue getting a solid quorum.”
An example of a local government corporation could be a joint effort between Dallas Area Rapid Transit, the Fort Worth Transportation Authority and DCTA for things like train operations. Cline noted a specific example where DART set up a local government corporation to provide service in Mesquite.
DCTA board President Charles Emery said a local government corporation will be a necessity in the future as DCTA looks to expand services.
To be able to isolate and protect the investment of the three member cities in the A-train corridor, I think it will be a good tool to do that. We searched for years to find some way to protect the legacy investors as we develop the Frisco line and the Interstate 35W corridor,” Emery said.
A local government corporation would have its own separate financing package; that way it wouldn’t involve or jeopardize sales tax, he said.
Cline added that the corporation is not a separate agency, but a separate business unit.
Cline has drawn up all four options for the board to again discuss at the April 25 meeting.
“We were talking about the future of DCTA in a positive way,” Cline said. “How can we protect what we’re doing and expand, because that is the charge we have?”
BJ LEWIS can be reached at 940-566-6875 and via Twitter at @BjlewisDRC.