A report released Friday by the credit rating agency Moody's paints a dire picture of the future of Dallas County Schools.
"Dissolution is now a high probability," the report said. "While the terms of the dissolution would allow full or near full recovery for the General Obligation Limited Tax debt, dissolution would challenge the ability to repay the Promissory Notes and related unrated debt."
The report is the latest blow for the troubled school bus agency, which is millions of dollars in debt and is undergoing leadership changes.
Late last month the Texas Attorney General's Office denied DCS an opportunity to restructure its millions of dollars of debt.
The following day, the Texas legislature approved a measure that would let voters decide the agency's future. Last week DCS defaulted on millions of dollars of debt payments.
In response to the Moody's report, Leatha Mullens, interim superintendent of DCS, said "we are carefully examining all options. We are working hard to pay our obligations and do everything we can to protect the assets for taxpayers and employees while continuing services for school districts."
DCS is expected to receive approximately $2 million in state funding at the end of June and July respectively, but Moody's believes that will not be enough money to cover operating expenses and monthly debt payments.
The bill that would put the agency's future to a vote still has to be signed by the governor, but even if voters decided to keep DCS open Moody's believes the district's "liquidity problems and growing inability to pay its obligations increases the potential the district may file for bankruptcy."
If DCS were to shutdown a large school district like Dallas ISD would be in a bind. There is no other agency large enough to handle the amount of Dallas ISD students who depend on the bus to get to school.
The National Education Association's Dallas chapter, which is the union representing DCS employees, believes the agency will get its finances in order. They're hopeful new leadership at DCS can spare the agency from being shuttered.
"We just continue to hope that the leadership will take care of what needs to be taken care for the benefit of the employees and the students," said Sheila Walker, executive vice president of NEA-Dallas. "That's our main goal with NEA-Dallas, is just to stand behind what leadership is doing and hope that they will get things right."