Mar 11, 2024 - News

DART unveils franchise fee-free scenario bus cuts

Illustration of a bus seen through the view of binoculars.

Illustration: Brendan Lynch/Axios

DART has created two budget scenarios that will be necessary if Des Moines City Council does not increase franchise fees on gas and electricity before the end of May, with one outlining specific bus service cuts.

Why it matters: City Council has already agreed to contribute $3.5 million more over the next two fiscal years.

  • But DART chairperson and WDM Mayor Russ Trimble tells Axios it's still not enough to overcome inflationary constraints in the agency's $42.2 million operating budget.

Catch up fast: DSM is already assessing the max property tax rate for DART services allowed under state law — just over $8.4 million in the current fiscal year.

  • Trimble says that funding falls short of the city's expected contributions per a 2019 agreement.

Follow the money: Even with DSM's maxed property tax collections and the extra contributions City Council recently allocated to DART, the agency still faces a growing budget shortfall of between $1.2 million and nearly $4.7 in each of the next three fiscal years that begin in July.

  • DART is asking City Council to additionally increase its existing franchise fee from 5% to as much as 7.5% to avoid the harshest cuts.

Zoom in: DSM collects around $13 million a year under the current franchise fee rate with the money going to its general fund — not to DART.

Driving the news: Without the potential franchise fee allocation, most routes would have peak weekday frequency reductions starting in November — some going hourly rather than every 30 minutes.

  • DART's entire system would shut down an hour earlier.
  • All weekend service would run hourly.
  • And the D-Line downtown shuttle would be eliminated.

Inside the room: The DSM Transportation Safety Committee — a citizen advisory group appointed by City Council — unanimously approved a resolution last month recommending an increase to the franchise fee.

Yes, but: The committee has no jurisdiction to recommend funding. Its members were reminded of that but still chose to pass the resolution, city manager Scott Sanders wrote in a statement to Axios.

  • "We gave it all the consideration it was due," Sanders wrote.

What they're saying: Trimble tells Axios he doesn't believe there's enough support among DSM City Council members to increase the franchise fee for public transportation.

  • Mayor Connie Boesen didn't specifically respond to Axios' questions about the council's support for a franchise fee.
  • The city's two-year extra allocations are intended to help the agency improve its operations in coming years, she said in a statement.

The intrigue: City officials and groups like the Polk County Taxpayers Association have previously argued that franchise fees are preferred over property taxes partially because virtually every utility user pays them.

  • Many nonprofit groups like churches and hospitals are exempt from paying property taxes.
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