FY 2013 Operating and Capital Budget - Metro Transit

Fiscal
Interest
Year Principal Expense
2012 $ 10,120,000 $ 15,348,829
2013 10,531,930 14,829,326
2014 11,185,000 14,216,046
2015 11,775,000 13,618,684
2016 12,400,000 12,983,325
2017-2021 72,236,114 54,464,092
2022-2026 71,848,717 36,031,048
2027-2031 75,435,000 17,820,188
2032-2033 35,835,000 1,366,188
$ 311,366,761 $ 180,677,726
The Mass Transit Sales Tax Appropriation Bonds were collectively issued at premium of
$11,102,583, which is reported in long-term debt. The premium is being amortized as a
reduction of interest expense under the effective interest rate method. At June 30, 2011, the
unamortized premium was $2,065,405. Metro also incurred and deferred $6,191,902 of
issuance costs related to the issuance of the bonds and $436,478 for the remarketing costs. At
June 30, 2011, the remaining balance is $4,007,969.
Series 2002 Debt Service Reserve Fund
To provide further security to the bondholders, the 2002 Bond Trust Indenture specified that a
Debt Service Reserve Fund (DSRF) be created in the amount of $27,975,665 ($28.0 million).
Metro had the option of cash funding this requirement or purchasing an AAA rated surety. A
surety was purchased from Financial Security Assurance Corporation (FSA, now Assured
Guaranty), which at the time of issuance was rated AAA by all three credit ratings agencies.
Assured Guaranty lost its last AAA rating on October 25, 2010, triggering the replacement of
the policy or cash funding the DSRF by October 25, 2011. During 2011, the Metro Board
approved and executed a plan to cash fund the DSRF, by using a combination of capital grant
funding, a loan from the State of Missouri Transportation Finance Corporation (MTFC), and
Metro funds, which was completed by the required date of October 25, 2011.
Series 2005 (Subordinate)
In November 2005, Metro issued $150 million in Subordinate Mass Transit Sales Tax
Appropriation Bonds (Series 2005A) to complete the MetroLink Cross county light rail
extension project, pay certain costs of issuance, and provide funds for interest expense up to
three years. The Series 2005A Bonds are expected to be paid from the revenues received by
St. Louis County and the City of St. Louis from a one-quarter cent mass transit sales tax
annually appropriated for such purposes, but have a subordinate lien on the tax to the Series
2002 Bonds and subsequent bond issues refunding or remarketing the Series 2002 Bonds. (see
below). The Series 2005 A Bonds were initially issued as weekly Variable Rate Demand
Notes, with liquidity to the bondholders provided through a direct pay Letter of Credit (LOC)
which expired on November 2, 2010. The initial rate on the Series 2005A Bonds at closing
was 2.65 percent. On August 1, 2006, to mitigate interest rate risk, Metro converted $100
50