Bi-State Development bond refinancing to save money, fund safety upgrades

Bi-State Development, operator of the Metro Transit system in the St. Louis, Mo., region, has completed a bond refinancing effort that will produce savings, as well as fund public safety infrastructure improvements.  

Bi-State Development explains the refinancing will generate, in 2019 dollars, $49.1 million in debt service savings over the life of the bonds. Of that savings, nearly $20 million will be made immediately available for improvements aimed at making Metro Transit safer for riders.

“The bond refinancing is a win for taxpayers in the city of St. Louis and St. Louis County and for the Metro Transit system, as we leverage the financial resources generated through this important financial transaction to advance essential public safety upgrades on our transit system,” said Taulby Roach, Bi-State Development President and CEO. “Improving safety and security on the transit system remains our number one priority and, today, we are one step closer to delivering on that priority.”

Specific safety improvements have not been finalized, but several enhancements have been recommended by WSP USA. The consulting firm was hired by East-West Gateway Council of Governments, which is working with Metro Transit and its police partners to identify specific steps to improve rider safety. The enhancements under consideration include security camera upgrades to allow for real-time, remote monitoring by police and public safety personnel and the possibility of limiting points of customer access at MetroLink stations through physical configuration, which Bi-State Development notes would facilitate better monitoring of passengers and enforcement of fare violations by police and Metro Transit public safety officers.

The Bi-State Development Board of Directors, as well as the city of St. Louis and St. Louis County all had to approve the bond refinancing as part of a Fifth Amendment to the existing Memorandum of Agreement between the three entities initially related to Bi-State Development’s construction of the Cross County (MetroLink) Extension. The approvals enabled Bi-State Development to take advantage of the lower interest rates in the current market, which presented the ability to replace $196.8 million of bonds carrying interest rates of 4.5 percent – 5.0 percent with bonds having an effective cost of funds, below 3 percent, resulting in the significant debt service savings.

“The refunding savings result in a dollar-for-dollar increase in support for enhanced security on the Metro Transit system and will avoid the unnecessary expenditure of tax dollars on above market debt costs,” Roach said. “We appreciate the recognition by our funding partners in St. Louis County and in the city of St. Louis that this is a prudent step and we look forward to continuing to work with them, our transit partners in St. Clair County, Ill., our police partners and WSP to make our regional transit system safe.”