Comprehensive Annual Financial Report - Metro Transit

2011Comprehensive AnnualFinancial ReportBi-State Development Agencyof the Missouri-IllinoisMetropolitan DistrictFor the year endedJune 30, 2011

Comprehensive AnnualFinancial ReportFiscal Year Ended June 30, 2011Bi-State Development Agencyof the Missouri-Illinois Metropolitan DistrictSt. Louis, MissouriVincent C. Schoemehl, Jr.ChairmanBoard of CommissionersJohn M. NationsPresident &Chief Executive OfficerFinance Division

Introduction SectionBi-State Development Agencyof the Missouri-Illinois Metropolitan DistrictDBA “Metro”Table of ContentsTable of Contents .................................................................................................................... iLetter of Transmittal………………………………………………………………………………... iiiCertificate of Achievement for Excellence in Financial Reporting ....................................... xiiiBoard of Commissioners ..................................................................................................... xivExecutive Officers/Financial Officers and Other Support Personnel……………………. ...... xvOrganizational Chart ........................................................................................................... xviFinancial SectionReport of Independent Auditors .........................................................................................1Management’s Discussion & Analysis ...............................................................................3Basic Financial StatementsCombined Statements of Net Assets ...............................................................................11Combined Statements of Revenues, Expenses andChanges in Net Assets .................................................................................................13Combined Statements of Cash Flows .............................................................................14Fiduciary Activities – Retirement Medical Plan ................................................................16Notes to Combined Financial Statements .......................................................................17Footnote 1: Significant Accounting Policies .............................................................17Footnote 2: Cash, Cash Equivalents and Investments ............................................23Footnote 3: Restricted Assets ..................................................................................26Footnote 4: Fair Value of Financial Instruments .......................................................27Footnote 5: Capital Assets .......................................................................................28Footnote 6: Liability, Claims, and Litigation ..............................................................29Footnote 7: Compensated Absences .......................................................................31Footnote 8: Revenue Recognition ............................................................................31Footnote 9: Finance Obligations Under Lease .........................................................32Footnote 10: Long-Term Debt ..................................................................................36Footnote 11: Pension Plans .....................................................................................44Footnote 12: Grants and Assistance ........................................................................53Footnote 13: Interfund Balances ..............................................................................55Footnote 14: Operating Agreement ..........................................................................55Footnote 15: Joint Venture Agreement ....................................................................56Footnote 16: Fuel Hedge ..........................................................................................56Footnote 17: Commitments and Contingencies .......................................................56Footnote 18: Conduit Debt Obligations ....................................................................57Footnote 19: Subsequent Events .............................................................................57Required Supplemental InformationSchedule of Funding Progress – OPEB Plan ..................................................................59Schedule of Funding Progress – Pension Plans .............................................................60

Bi-State Development Agencyof the Missouri-Illinois Metropolitan DistrictDBA “Metro”Table of Contents (continued)Other Supplemental SchedulesCombining 2011 Schedule of Net Assets ........................................................................61Combining 2011 Schedule of Revenues, Expenses andChanges in Net Assets .................................................................................................63Combining 2011 Schedule of Cash Flows .......................................................................65Combining 2010 Schedule of Net Assets ........................................................................67Combining 2010 Schedule of Revenues, Expenses andChanges in Net Assets .................................................................................................69Combining 2010 Schedule of Cash Flows .......................................................................70Statistical SectionStatistical Introduction ......................................................................................................73Operating DataCombined Schedules.......................................................................................................74General Agency ...............................................................................................................75Gateway Arch Tram System ............................................................................................76Gateway Arch Parking Facility .........................................................................................77Gateway Arch Riverfront Attractions ................................................................................78St. Louis Downtown Airport .............................................................................................79Transit ..............................................................................................................................80Capital Assets ..................................................................................................................81Capital Assets Statistics by Function ...............................................................................82Net Assets by Operating Organization ............................................................................83Continuing Disclosure RequirementsGateway Arch Parking Facility .........................................................................................84Bi-State Transit SystemHistorical Sources and Operating Expenses .......................................................85Historical Sources and Uses by Mode .................................................................86Prop M Sales Tax and Appropriations .................................................................87Use of Prop M Sales Tax .....................................................................................88Ridership and Farebox Recovery ........................................................................89Mileage Trends ....................................................................................................90Personnel Data ....................................................................................................91Transit Fares ........................................................................................................92Gateway Arch Activities and Ticket Prices ...........................................................93Regional StatisticsRegional Population.........................................................................................................96Regional Per Capita Personal Income .............................................................................97Regional Unemployment Rate .........................................................................................98Regional Top Businesses ................................................................................................99ii

October 26, 2011Vincent C. Schoemehl, Jr., andMembers of the Board of CommissionersBi-State Development Agency of theMissouri-Illinois Metropolitan District (d/b/a METRO)Gentlemen:State law requires that governmental agencies publish within six months of the close of each fiscalyear a complete set of financial statements presented in conformity with U.S. Generally AcceptedAccounting Principles (U.S. GAAP) and audited in accordance with U.S. Generally Accepted AuditingStandards by a firm of licensed certified public accountants. Pursuant to that requirement, we herebytransmit the Comprehensive Annual Financial Report of the Bi-State Development Agency of theMissouri-Illinois Metropolitan District (dba Metro) for the fiscal year ended June 30, 2011.This report consists of management’s representations concerning the finances of Metro andmanagement assumes full responsibility for the completeness and reliability of all the informationpresented in this report. To provide a reasonable basis for these representations, management hasestablished a comprehensive internal control framework designed both to protect the Agency’s assetsfrom loss, theft, or misuse and to compile sufficient, reliable information for the preparation of Metro’sfinancial statements in conformity with U.S. GAAP. Because the cost of internal controls should notoutweigh the benefits, Metro’s controls are designed to provide reasonable rather than absoluteassurance that the financial statements will be free from material misstatement. As management, weassert that, to the best of our knowledge and belief, this financial report is complete and reliable in allmaterial respects.The independent audit involved examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements; assessing the accounting principles used and significantestimates made by management; and evaluating the overall financial statement presentation. Theindependent auditor concluded that there was a reasonable basis for rendering an unqualified opinionthat Metro’s basic financial statements for the fiscal year ended June 30, 2011, are fairly presented inconformity with U.S. GAAP. The independent auditor’s report precedes the Management Discussionand Analysis (MD&A) in the financial section of this report.iii

The independent audit of the financial statements of Metro was part of a broader, federally mandated“Single Audit” designed to meet the special needs of the federal grantor agencies. The standardsgoverning Single Audit engagements require the independent auditor to report not only on the fairpresentation of the financial statements, but also on the government’s internal controls andcompliance with legal requirements, with special emphasis on internal controls and legal requirementsinvolving the administration of federal awards. These federally mandated reports are available in theAgency’s separately issued Single Audit Report in conformity with the provisions of the United StatesOffice of Management and Budget Circular A-133. Under this provision, the Federal TransitAdministration (FTA) is the cognizant agency for Metro.Basic Financial Statements. These statements include net assets as of June 30, 2011, and June30, 2010; statements of revenues, expenses, and changes in net assets; and statements of cashflows for the years ended June 30, 2011, and June 30, 2010.U.S. GAAP requires that management provide a narrative introductory overview and analysis toaccompany the basic financial statements. This letter of transmittal is designed to complement theMD&A and should be read in conjunction with it. Metro’s MD&A can be found immediately afterthe report of the independent auditors.Financial PoliciesBanking and Investment. Agency policies direct the investment of all operating, self-insurancerestricted, capital and debt service funds of all entities of the Bi-State Development Agency notexpressly controlled by Revenue Bond Trustees. The preservation of funds is the firstconsideration in determining the investment of Agency cash. Thereafter, the highest yieldconsistent with safety is required, provided the maturities are short enough to maintain operationalliquidity. Banks and other financial institutions are selected for investments only on a competitivebasis. The number of demand-deposit, non-interest bearing accounts is kept to the minimum foroperational efficiency and safety. It is the Board of Commissioners (the Board) intent to have themajority of the available funds invested in local institutions, provided the institutions meet theminimum credit standings set out below and yields are competitive.Financial Reporting Policy. It is the practice of the Agency to prepare quarterly financial resultsof each operating company and to distribute these results to the Board. The reports shall include:Balance Sheets and Operating Statements in Budget comparison format; Cash Receipts andDisbursement Schedules; Cash Flows Statement; Active Capital Expenditure Report in Budgetcomparison format; Aged Receivables Report; Personnel Status Report; and a summary ofnoteworthy deviations in the above reports.Budget Process. The annual budget serves as the foundation for Metro’s financial planning andcontrol. All enterprises are required to submit expenditure requests in preparation for a new fiscalyear budget. These requests are used as a starting point for budget development. The preparationand approval of the annual budget is both an internal and external process. The proposed budget isinitially presented to the Board for approval. It is subsequently reviewed by the Public TransportationCommission in St. Louis County, the Ways and Means Committee of the Board of Aldermen in St.Louis City, and the St. Clair County Transit District in Illinois. For the Gateway Arch, the National ParkService must also approve the annual budget.iv

Sources of Local Match Funding for Capital and Operating Budget.The predominant sources of revenue include appropriation of regional sales taxes from the City of St.Louis and St. Louis County, federal grant funds, funds from the Illinois Department of Transportationand the St. Clair County Transit District, State of Missouri subsidies, passenger fares, and auxiliaryincome. These revenues are broken into jurisdictions:Illinois Sources. There are two primary sources for funding from Illinois: CapitalContributions from the State of Illinois and St. Clair County Transit District and payments fortransit services from St. Clair County Transit District. The Illinois Department of Transportation(IDOT) is authorized to provide capital assistance to Metro for capital grants, covering up to100 percent of the local share requirement. Historically, IDOT usually provides the full localmatch for capital projects located in Illinois, buses used to provide service in Illinois, and ashare of the capital projects that benefit Illinois customers, but are located in Missouri.Effective January 1, 1995, St. Clair County adopted an additional ½ cent countywide sales tax.The revenue from this tax can be used only for capital projects, debt service or operating andmaintenance costs related to MetroLink light-rail systems. St. Clair County Transit Districtcontracts with Metro for bus and light rail service and Alternative Transportation Service (ATS)maintenance.Missouri Sources. Funding for Missouri projects comes from the City of St. Louis, St. LouisCounty and the Missouri Department of Transportation (MoDOT). The City of St. Louis andSt. Louis County collect revenue from ½ cent and ¼ cent local sales taxes. Beginning thisfiscal year with the passage of Prop A, St. Louis County collects an additional ½ cent and theCity of St. Louis collects an additional ¼ cent. Both the City and the County appropriate all oftheir receipts from the ¼ cent sales tax to Metro. The City of St. Louis appropriates virtually allof its revenues from the ½ cent sales tax and Prop A to Metro. St. Louis County splits revenuecollected from the ½ cent sales tax between Metro and County road and bridge projects. Theyalso appropriated $39.5 million of the Prop A funds to Metro, of which $3 million was set asidefor future capital projects. Excluding Prop A, the County appropriated approximately $34.0million and $34.8 million to Metro in FY 2011 and FY 2010, respectively. From FY 2002through FY 2008, the County’s ½ cent sales-tax appropriation to Metro was indexed with theConsumer Price Index. At least 2 percent of the appropriations to Metro from the ½ cent salestax must be used for transportation for developmentally disadvantaged persons. The balanceis usually required to fund Missouri operations. MoDOT provides Metro with limited operatingand FTA discretionary capital assistance.Agency ProfileHistorical Overview. The Bi-State Development Agency (Agency) was established on September20, 1949, by an interstate compact passed by the state legislatures of Illinois and Missouri andapproved by both governors. The compact was approved by the U. S. Congress and signed byPresident Harry S. Truman on August 31, 1950. A 10-member Board of Commissioners sets policyand direction for the Agency. The governor of Missouri appoints five commissioners and the CountyBoards of St. Clair and Madison Counties in Illinois appoint five. All commissioners must be residentvoters of the prospective state and are appointed to terms of up to five years. The compact createdan organization that has broad powers with the ability to plan, construct, maintain, own and operatebridges, tunnels, airports and terminal facilities; plan and establish policies for sewage and drainagefacilities and other public projects; issues bonds and exercise such additional powers as conferredupon it by the legislatures of both states.v

In its first years, the Agency participated in or conducted several studies that included acomprehensive plan for development of the Missouri-Illinois Metropolitan District, a survey of chemicaland biological pollution of the Mississippi River, and an exhaustive study of the St. Louis Countysewer problem that contributed to creation of the Metropolitan St. Louis Sewer District. The Agencyhas also sponsored a coordinated interstate-highway planning action related to surveying highwaysand expressways. The most significant project undertaken in the early years was the construction ofa 600-foot wharf at Granite City, Illinois, in 1953.The diverse organization we know today as Metro began in 1962 when the Agency was asked to fundand operate the tram system that would carry visitors to the top of the Gateway Arch Monument. A$3.3 million revenue bond issue was completed in July 1962 and the Agency’s relationship with theGateway Arch began. An agreement was reached in October 1962 that the Agency would assist inreopening Parks Metropolitan Airport in Cahokia, Illinois. After a series of approvals and resolutions,the Agency purchased the Airport in 1964 for $3.4 million. In July 1999, the Board of Commissionersrenamed it St. Louis Downtown Airport. The Agency entered public-transit service in 1963 when itpurchased and consolidated 15 privately owned bus and streetcar lines through a $26.5 million bondissue. The Agency issued a $10.0 million revenue bond in 1986 for construction of the Arch ParkingFacility, a multi-level, 1,241 parking-space parking facility located on the grounds of the JeffersonNational Expansion Memorial. In July 2001, the Agency purchased the Becky Thatcher and TomSawyer Riverboats and barges to preserve the St. Louis Riverfront experience.Public Mass TransitToday, Metro is best known for providing public transit services. Metro’s main purpose is to operatethree modes of transportation service: MetroBus, MetroLink light rail, and Metro Call-A-Ride demandresponseservice. Metro’s largest union, the Amalgamated Transit Union Division 788, representsbus, rail and van operators, and maintenance and clerical employees. The International Brotherhoodof Electrical Workers Locals 2 and 309 represents electricians. In fiscal year 2011 (July 1, 2010 toJune 30, 2011), Metro carried 43.0 million customers and operated 26.0 million revenue miles ofservice in a 558 square-mile service area that includes the City of St. Louis and St. Louis County inMissouri, and St. Clair, Madison and Monroe counties in Illinois.Bus service. Metro has operated its bus network since 1963 and MetroBus remains the largestcomponent of the multi-modal system.Light rail. Construction of the light-rail system began in the late 1980s. A 37.9-mile alignment wasconstructed in two stages between Lambert International Airport and Shiloh, Illinois. The first stagewas opened July 1993. It quickly became one of the most successful light-rail systems in the UnitedStates. In August 2006, MetroLink opened the Cross County extension south to Shrewsbury,Missouri, creating a total of 46 miles of light-rail track.Demand response. Metro Call-A-Ride began a demand-response service in 1988 primarily toprovide transit access to customers with disabilities who are unable to use fixed-route service. Withthe opening of the Transit Access Center in February 2004, Metro partnered with the WashingtonUniversity Occupational Therapy Program to provide interviews and functional assessments todetermine paratransit eligibility through Americans with Disabilities Act (ADA) for Metro Call-A-Rideservices. These services were taken in-house in 2006. Both the vehicle expansion and assessmentprogram are designed to ensure Metro meets the federal mandate of full ADA compliance.vi

Business EnterprisesAll other operating entities fall under Metro’s Business Enterprises organization. The Gateway Archhas enjoyed significant success and is the most recognized landmark in the St. Louis region. It is oneof the most-visited national memorials, attracting three million visitors annually. The Arch ParkingFacility provides parking to visitors of the Gateway Arch, riverfront and Laclede’s Landing. GatewayRiverfront attractions operate the Becky Thatcher and Tom Sawyer Riverboats, a heliport and bikerentals. The St. Louis Downtown Airport is a full-service aviation center located within eight minutesof downtown St. Louis that has grown to be the third-busiest airport in Illinois behind Chicago’s twocommercial airports.The table below provides additional business information. Of particular note, the MetroLink pockettrack completed in Fairview Heights, Illinois, in October 2008 increased the amount of light-railservice. On March 30, 2009, a service reduction affected all statistics for the fourth quarter of 2009.Since the miles added by the pocket track were greater than the miles reduced in the fourth quarter, itgives a false appearance of an upward trend for MetroLink in 2009. While the State of Missouri cameto Metro’s aid, in August 2009, with a promise of ARRA funds that allowed a partial restoration ofservice, the majority of service reductions remained in effect until June 28, 2010, negatively affectingnearly the entire 2010 fiscal year. Service levels were put back in phases and by August 2010 thesystem was at pre-reductions levels.vii

Statistical DataThree Year Trend ComparisonData as of June 30,Data Measurement 2009 2010 2011Budgeted PersonnelTotal employees 2,189 1,926 2,097Collective bargaining agreement employees % 77% 76% 77%Metro Transportation SystemService area square miles 449 579 558 *Metro BusFleet size – total vehicles 449 412 432Passenger trips 32,679,788 24,256,126 26,215,139Revenue miles 16,938,053 16,082,275 18,198,927Farebox recovery 22.3% 20.7% 19.9%Metro LinkFleet size – total vehicles 87 87 87Passenger trips 19,423,931 15,828,981 16,209,098Revenue miles 3,398,923 2,913,199 3,147,407Farebox recovery 28.5% 30.4% 27.8Demand responseFleet size – total vehicles 129 147 144Passenger trips 665,137 545,606 568,419Revenue miles 4,903,975 4,616,903 4,626,716Farebox recovery 4.8% 4.2% 4.7%Business EnterprisesGateway Arch tram rides 861,522 840,296 842,066Gateway Parking vehicle transactions 258,567 272,258 271,589Riverfront Attractions passengers 95,834 105,887 76,230St. Louis Downtown Airport aircraft movements 116,316 116,267 93,443St. Louis Downtown Airport based aircraft 300 297 305Source: Annual Performance Indicators*Service area decreased despite increased service due to the cancellation of bus runs to JeffersonCounty and Gray Summit.Factors Affecting Financial Condition Local EconomyThe information presented in the financial statements is perhaps best understood when it isconsidered from the broader perspective of the economic environment in which Metro operates.Metro is funded by a combination of regional sales taxes, service contracts, passenger fares, federalfunds, advertising, investment and auxiliary revenues. Business Enterprises primarily generatesoperating revenues through business segment operations.St. Louis is a diverse economic environment, but it is not immune from broader economic trends.Major employers in the region include healthcare, supermarkets, and universities and they haveremained stable. St. Louis is the world headquarters for 21 Fortune 1000 companies includingviii

Emerson Electric, Express Scripts and Monsanto. (See page 99 in the statistical section for St. Louismetro area major employers.)The St. Louis region is located near the geographic and population center of the nation and hasaccess to four modes of transportation; air, rail, road, and water. We have four interstate highwaysand four interstate highway linkages. Lambert International Airport, a dozen regional airports andMetroLink provide options for local commuting. St. Louis is one of the nation’s largest rail centers andis home to six Class I railroads and several smaller industrial lines, along with Amtrak service. St.Louis, the second largest inland port, offers more than 100 docks and terminal facilities servingapproximately 2,500 barges annually.The annual average 2010 unemployment rate of 10.0 percent fell to 9.0 percent in June 2011 in theSt. Louis, MO-IL Metropolitan Statistical Area (MSA), but was still significantly higher than the 2008annual average of 6.4 percent. (See annual unemployment rates by county in the StatisticalSection of this document.) While national home sales showed some improvement over the pastyear, improved home sales in the St. Louis region came with deflated home prices.Regional sales taxes are the largest source of subsidy for public transportation in Missouri.Unemployment clearly impacts sales taxes as illustrated by the fall of retail sales. The regionexperienced some recovering in sales taxes at the end of FY2011. Sales tax collections increased by3.0% in St. Louis County between 2011 and 2010 and also increased in the City of St. Louis by 1.5%over the same period. While trending upward, sales taxes are still considerably below levels prior to2008. With the State of Missouri experiencing economic budget pressures due to declining revenues,the state has reduced its operating subsidy to the Agency almost entirely providing support under$200,000 in FY2011.The economic climate has also impacted Business Enterprise units. In recent years, the GatewayArch, Arch Parking Facility, Riverboats, and the St. Louis Downtown Airport have experienced mixedchanges in business volume. The St. Louis Downtown Airport has been affected by the sloweconomy and the Riverboats have been plagued by high flood waters, forcing them to close forbusiness during portions of their busy season.ix

St. Louis Metro Area Economic Statistics2011StatisticU.S. RankingPopulationSt. Louis Metropolitan Area (including St. Louis City) 2,812,896 18 thSt. Louis City (only) 319,294Trade and IndustryLargest U.S. Inland Port n/a 2 ndLargest U.S. Rail Center n/a 3 rdMost Logistics friendly (of 362 largest metropolitan areas) n/a 2 ndWorld’s 2,000 Largest Public Companies (Forbes magazine) 11 n/aAmerica’s Largest Private Companies (Forbes magazine) 7 n/aFortune 500 (headquarters) 10 n/aLiving Costs (of 20 largest U.S. metropolitan areas)Most Affordability Housing n/a 2 ndLowest Cost of Living n/a 1 stBusiness Cost (of 22 US metros exceeding 2 million population)Lowest cost of doing business (KPMG LLP) n/a 6 th(Source: St. Louis RCGA; U.S Census Bureau)Year in ReviewThe Agency’s 30-year strategic plan, “Moving Transit Forward” was developed to document afiscally responsible, community-driven vision for restoring, enhancing, and expanding the MetroTransit System. Regional support for public transportation was overwhelmingly demonstrated bySt. Louis County voters with passage of a ½ cent sales tax April 6, 2010 to restore prior servicecuts and support future system improvements. St. Louis City had passed a similar tax in 1997contingent on reciprocal tax passage in St. Louis County; therefore, additional tax collections forpublic transportation occurred in St. Louis City as well.In 2011, the Agency began taking the actions outlined in “Moving Transit Forward” designed topromote regional economic development, strengthen Metro Transit as a vital regional asset,provide quality transit access to more people, improve service to low-income, elderly, and disabledresidents, and include projects that are cost-effective. Immediate action outlined in the strategicplan included service restoration, planning of bus rapid transit (BRT) and the next MetroLinkextension. The Agency restored services in a phased approach beginning June 2010 andcontinuing through November 2010. System ridership has increased 5.8 percent over FY 2010.The Agency is pursuing federal grants to study, plan and design BRT and the next MetroLinkextension. Financial stabilization of the system also allows Metro to focus and promote a strongcomprehensive capital program which includes revenue vehicle and equipment replacement,infrastructure maintenance, information technology modernization, transit development, andhealth, safety and security projects. Long-term actions will include future construction andoperation of BRT and the pursuit of federal and state resources to provide future expansionopportunities for MetroLink.With the exception of the Parking Facility, all other Business Enterprises entities have experiencedlower service levels in 2011 as compared to 2009 due to the impact of the recession. (See threeyearstatistical data chart above.) Despite the poor economy, the St. Louis Downtown Airport has59 thx

moved forward with the dedication of its new fire house and emergency management facility inJanuary 2011. The project was funded through a $5 million ARRA grant. The establishment of apermanent home for the fire department is one of the factors which will allow the Downtown Airportto attract larger commercial craft. Since 2008, the fire department had been housed in an emptyhangar; and prior to 2008, the airport relied upon neighboring fire districts to serve their needs.Key management and Board of Commissioner changes occurred in FY2011. These changes mark anew era for the Bi-State Development Agency as focus turns to transit oriented development andregional partnerships that can ultimately strengthen the St. Louis Metropolitan region. In September2010, the Board hired John M. Nations as President and CEO. Mr. Nations, who served as a threetermMayor of Chesterfield, MO, was also a key spokesman and important member of the diversecoalition in St. Louis County which helped pass Prop A. Metro also hired a Vice President ofEconomic Development, John Langa. Michael Buehlhorn, a new commissioner representing thestate of Illinois, has previously served as Executive Director of the Metro East Park and RecreationDistrict, as a member of the Technology Advisor Group for the City Arch River Foundation and, likeMr. Nations, has served as a Mayor of Swansea from 1985 to 2003. He also currently serves as thePresident of the Epilepsy Foundation of Greater Southern Illinois for both the Bellville and MountVernon chapters.Awards and AcknowledgementsMetro and Metro personnel received a number of awards and acknowledgements during FY2011.The following represents the most outstanding recognitions:• President and CEO, John Nations, was honored by the University of Missouri – St. Louis at its20 th Annual Founders dinner with a 2011 Distinguished Alumni award.• Senior Vice President and COO, Ray Friem was recognized by the FTA as the Region VIITransportation Manager of the Year.• Bus Driver Brian Alexander received an award for heroism from the City of East St. Louis. Mr.Alexander was on his bus route when he saw a house on fire, stopped and went to the aid ofthose inside the house. He helped four children and their mother to safety.• Michael Mavrogeorge, St. Louis Downtown Airport Fire Chief, received the “Airport FireRescue Achievement Award” from the American Association of Airport Executives.• Metro received the second place award from the International Association of PublicParticipation for the innovative program used by Metro to create the region’s first 30-year longrange plan, using community partnerships and working with the East-West Gateway Councilof Governments.• For FY 2010, The Government Finance Officers Association of the United States and Canada(GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting for the 15 thconsecutive year in a row to Metro for its comprehensive annual financial report (CAFR). TheCertificate of Achievement is a prestigious national award recognizing conformance with thehighest standards for preparation of state and local government financial reports. A Certificate ofAchievement is valid for a period of one year only.xi

• For the FY2010, the Government Finance Officers Association of the United States and Canadaawarded a Distinguished Budget Presentation Award for the fifth year to Metro for its operatingand capital budget. The award recognizes the high standards of preparation of state and localgovernmental budgets. In addition, the GFOA also recognized Metro with an award for SpecialPerformance Measures in regards to the budget document.Metro thanks each of the governing bodies providing the support and resources necessary to preparethis report, including the States of Missouri and Illinois, the City of St. Louis, St. Louis County, and theTransit District of St. Clair County. We also extend our sincere appreciation to the independentauditing firm of RubinBrown for their assistance.Interim Chief Financial Officerxii

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Board of CommissionersIllinoisMichael BuehlhornDavid A. DietzelTreasurerFonzy ColemanTadas KicielinskiJeffery WatsonMissouriVincent C. Schoemehl, Jr.ChairKevin S. CahillSecretaryLewis L. McKinneyDr. Richard LaBoreHugh Scott, IIIxiv

Executive OfficersJohn M. NationsPresident and Chief Executive OfficerRaymond A. FriemSenior Vice PresidentTransit OperationsJennifer S. NixonSenior Vice PresidentBusiness EnterprisesMelva R. PeteVice PresidentHuman ResourcesDebra EricksonVice PresidentInformation Systems ManagementDee Joyce-HayesGeneral CounselKathy S. Klevorn,Chief Financial Officer (Acting)and ControllerChris Poehler,Senior Vice PresidentEngineering and New System DevelopmentAdella JonesVice PresidentGovernmental Affairs and community RelationsLarry B. JacksonVice President, Procurement, Inventory andSupplier DiversityJohn LangaVice PresidentEconomic DevelopmentFinancial and Other Support PersonnelMark CarrollDirectorTreasury ServicesRandy S. McGuireDirectorPassenger RevenueKent SwaglerDirectorCorporate ComplianceMark VagoDirectorBudgeting and General AccountingJames CaliDirectorInternal AuditCraig S. MacdonaldDirectorRisk Management and SafetyTracy L. BeidlemanDirectorProgram Development, Capital Budgetand Grantsxv

Metro Organizational Chart Board ofCommissionersPresident & CEOInternal AuditExecutive OfficeGeneral CounselEconomicDevelopmentTransitOperationsEngineering andNew SystemsHumanResourcesProcurement,Inventory Mgmt &Supplier DiversityFinanceInformationTechnologyGovernment AffairsBusinessEnterprisesBusTransportationSecurityEngineeringHumanResourcesManagementInventoryManagementRiskManagementand SafetyInformationTechnologyCommunications& CommunityRelationsGateway ArchRailTransportationCustomerServiceArts in TransitBenefitsProcurementTreasuryServicesOffice ServicesGateway ArchParkingFacilityParatransitPlanning andSystemsDevelopmentLaborRelationsSupplierDiversityPassengerRevenueRiverfrontAttractionsVehicle andFacilitiesMaintenanceADA ServicesWorkforceDiversity andEEOProcurementAdministrationAccountingand OperatingBudgetSt. LouisDowntownAirportMaintenanceof WayOperationsAdministrationCapital Budgetand GrantsMarketingFinanceAdministrationxvi

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictFinancial SectionFor the Years Ended June 30, 2011 and 2010

Independent Auditors’ ReportBoard of CommissionersBi-State Development Agency of theMissouri-Illinois Metropolitan DistrictWe have audited the accompanying combined financial statements of the business-type activitiesand the aggregate remaining fund information of Bi-State Development Agency of the Missouri-Illinois Metropolitan District (Metro) as of and for the years ended June 30, 2011 and 2010. Thesecombined financial statements are the responsibility of Agency management. Our responsibility is toexpress opinions on these combined financial statements based on our audits.We conducted our audits in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the combined financialstatements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the combined financial statements. An auditalso includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall combined financial statement presentation. Webelieve that our audits provide a reasonable basis for our opinions.In our opinion, the combined financial statements referred to above present fairly, in all materialrespects, the respective financial position of the business-type activities and the aggregateremaining fund information of Bi-State Development Agency of the Missouri-Illinois MetropolitanDistrict as of June 30, 2011 and 2010, and the respective changes in financial position and cashflows, where applicable, thereof for the years then ended, in conformity with accounting principlesgenerally accepted in the United States of America.As discussed in Note 12 to the basic combined financial statements, the operation of Metro isdependent upon Metro's ability to obtain sufficient operating assistance. While resources exist tomeet present obligations, revenues derived from operations are not adequate to meet the expensesof continued operation without such operating assistance.

Board of CommissionersBi-State Development Agency of theMissouri-Illinois Metropolitan DistrictIn accordance with Government Auditing Standards, we have also issued our report dated October26, 2011, on our consideration of Bi-State Development Agency of the Missouri-Illinois MetropolitanDistrict’s internal control over financial reporting and on our tests of its compliance with certainprovisions of laws, regulations, contracts, grant agreements and other matters. The purpose of thatreport is to describe the scope of our testing of internal control over financial reporting andcompliance and the results of that testing and not to provide an opinion on the internal control overfinancial reporting or on compliance. That report is an integral part of an audit performed inaccordance with Government Auditing Standards and should be considered in conjunction with thisreport in considering the results of our audit.The Management’s Discussion and Analysis and Schedule of Funding Progress for the PensionPlans and Other Post Employment Benefit Plan, as listed in the accompanying table of contents, arenot a required part of the combined financial statements but are supplementary information requiredby accounting principles generally accepted in the United States of America. We have appliedcertain limited procedures, which consisted principally of inquiries of management regarding themethods of measurement and presentation of the required supplementary information. However, wedid not audit the information and express no opinion on it.Our audits were conducted for the purpose of forming an opinion on the combined financialstatements. The introductory section, statistical section and supplemental schedules, as defined inthe table of contents to the Financial Section, are presented for purposes of additional analysis andare not a required part of the combined financial statements. The supplemental schedules havebeen subjected to the auditing procedures applied in the audit of the combined financial statementsand, in our opinion, are fairly stated in all material respects in relation to the combined financialstatements taken as a whole. The introductory section and statistical section have not beensubjected to the auditing procedures applied in the audit of the combined financial statements and,accordingly, we express no opinion on them.October 26, 20112

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictManagement’s Discussion and AnalysisJune 30, 2011 and 2010The following represents the Management Discussion and Analysis (“MD&A”) of the financialactivities and performance of the Bi-State Development Agency (“Metro”). The MD&Aprovides the reader with an introduction and overview to the basic financial statements ofMetro for the fiscal years ended June 30, 2011 and 2010. The information contained in thisMD&A should be considered in conjunction with the information contained in the letter oftransmittal found in the introductory section.Following this MD&A are the financial statements of Metro together with the notes andcombining financial schedules that are essential to providing a full understanding of Metro’sfinancial performance.FINANCIAL HIGHLIGHTSKey financial highlights for 2011 are as follows:• Total assets decreased $95.4 million or 6.3% from fiscal year 2010.• Metro's total assets exceeded liabilities (net assets) by nearly $ 658.6 million as of June 30,2011, $70.7 million of which are unrestricted net assets and are available to meet Metro'songoing obligations.• Total net assets decreased $33.9 million, or 4.9% from the prior year.• Total operating revenues increased $1.3 million, or 2.1% from the prior year.• Total operating expenses increased $16.9 million, or 5.8% from the prior year.• Total non-operating revenues increased $10.2 million, or 5.4% from the prior year.• Total non-operating expenses decreased $15.3 million, or 32.7% from the prior year.• Capital contributions consist of Federal, State of Illinois, and local capital contributionstotaling $44.3 million for fiscal 2011, representing an increase of $17.5 million, or 65.3%from prior year.Key financial highlights for 2010 were as follows:••Total assets decreased $232.6 million or 13.3 percent from fiscal year 2009.Metro’s total assets exceeded liabilities (net assets) by nearly $692.6 million as of June30, 2010, $82.4 million of which are unrestricted net assets and are available to meetMetro’s ongoing obligations.• Total net assets decreased $61.4 million, or down 8.1 percent from the prior year.• Total operating revenues decreased $2.1 million or 3.4 percent.• Total operating expenses decreased $9.3 million or 3.1 percent.• Total nonoperating revenues decreased $14.6 million or 7.2 percent.• Total nonoperating expenses increased by $7.3 million or 13.5 percent.• Capital contributions consist of Federal, State of Illinois, and local capital contributionstotaling $26.8 million for fiscal 2010, representing a decrease of $1.8 million or 6.2 percentdecrease from 2009.3

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictManagement’s Discussion and AnalysisJune 30, 2011 and 2010BASIC FINANCIAL STATEMENTS - OVERVIEWMetro’s basic financial statements are comprised of fund financial statements and notes tothe financial statements. This report also contains other supplementary information inaddition to the basic financial statements.Fund financial statements. A fund is a grouping of related accounts that is used to maintaincontrol over resources that have been segregated for specific activities or objectives. All ofthe funds of Metro are proprietary funds.Proprietary funds. Metro maintains one type of proprietary fund to account for its financialactivities. A proprietary fund is one that has profit and loss aspects. The two types ofproprietary funds are internal service funds and enterprise funds. Enterprise funds are usedby Metro to account for the General Agency, Gateway Arch Tram, gateway Arch ParkingFacility, Gateway Arch Riverboats, St. Louis Downtown Airport and Bi-State Transit SystemFunds.Fiduciary Fund. Metro maintains one fiduciary trust fund to account for the assets of the Bi-State Development Agency OPEB Trust Fund.The basic financial statements start on Page 11.Notes to the financial statements. The notes provide additional information that is essentialto provide a full understanding of the data in the proprietary fund financial statements. Thesenotes begin on Page 17 of this report.Other information. In addition to the basic financial statements and accompanying notes,supplementary information is provided concerning combining schedules for both fiscal years.Following the supplementary information is a statistical section. The statistical sectionincludes operating data and required continuing disclosure requirements.FINANCIAL ANALYSISAs noted in the financial highlights, Metro’s total assets exceeded liabilities (net assets) by$658.6 million as of June 30, 2011. The most significant portion of Metro’s net assets isreflected in its investment in capital assets, such as building and improvements, revenueproducingvehicles, improvements and equipment.Statements of Net Assets: These statements present information on all of Metro’s assetsand liabilities, with the difference between the two reported as net assets. Over time,increases or decreases in net assets may be a useful indicator of whether the financialposition of Metro is improving or deteriorating. Information on all Metro funds is detailed inthe combining schedules found in the supplemental section. The table below, which ispresented in thousands, provides a summary of Metro’s net assets at fiscal yearend for 2011compared to 2010 and 2010 as compared to 2009.4

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictManagement’s Discussion and AnalysisJune 30, 2011 and 2010(in thousands) 2011 2010 Incr (Decr) % Change 2009 Incr (Decr) % ChangeAssetsNon-capital assets $ 294,671 $ 346,659 $ (51,988) -15.0% $ 525,780 $ (179,121) -34.1%Capital assets 1,124,557 1,167,998 (43,441) -3.7% 1,221,482 (53,484) -4.4%Total assets 1,419,228 1,514,657 (95,429) -6.3% 1,747,262 (232,605) -13.3%LiabilitiesCurrent liabilities 64,078 61,319 2,759 4.5% 118,697 (57,378) -48.3%Long-term liabilities 696,519 760,771 (64,252) -8.4% 874,640 (113,869) -13.0%Total liabilities 760,597 822,090 (61,493) -7.5% 993,337 (171,247) -17.2%Net AssetsInvested in capital assets 548,481 576,917 (28,436) -4.9% 650,862 (73,945) -11.4%Restricted net assets 39,431 33,263 6,168 18.5% 12,730 20,533 161.3%Unrestricted net assets 70,719 82,387 (11,668) -14.2% 90,333 (7,946) -8.8%Total net assets 658,631 692,567 (33,936) -4.9% 753,925 (61,358) -8.1%Total liabilities and net assets $ 1,419,228 $ 1,514,657 $ (95,429) -6.3% $ 1,747,262 $ (232,605) -13.3%Total assets amoun ted to $1.42 billion as of June 30, 2011, as compared to $1.51 billion and$1.75 billion as of June 30, 2010 and 2009, respectively. Non-capital assets primarily consistof unrestricted and restricted cash and investments. Non-capital assets decreased $51.9million between 2011 and 2010 and decreased $179.1 million between 2010 and 2009.Accordingly, combined capital assets including construction in process decreased $43.4million between 2011 and 2010 and decreased $53.5 million between 2010 and 2009. Totalassets decreased by $95.4 million between 2011 and 2010 and decreased by $232.6 millionbetween 2010 and 2009. The variance between 2011 and 2010 and between 2010 and 2009assets is primarily related to the termination of capital lease agreements of $64.7 million and$186.8 million, respectively.Metro’s total net assets decreased $33.9 million and decreased $61.4 million respectively,between 2011 and 2010 and between years 2010 and 2009. The changes in net assets for2011 and 2010 are primarily the result of depreciation.Total liabilities decreased $61.5 between 2011 and 2010 and decreased $171.2 millionbetween 2010 and 2009. The variance results from the termination of capitallease/leaseback agreements.Statements of Revenues, Expenses, and Net Assets: Total operating revenues increased$1.3 million and decreased $2.1 million, respectively, between 2011 and 2010 and between2010 and 2009. Transit passenger revenues accounted for $46.0 million and $44.6 million in2011 and 2010 respectively representing 74.6 percent of total operating revenues for 2011and 73.7 percent for 2010. The overall increase in Transit operating revenues is related to afull year of service restoration by Metro Transit. In 2011, Metro ridership growth is 5.8percent higher than 2010. The last fare increase approved by the Board of Commissionersoccurred in January 2009.Total operating expenses increased $16.9 million between 2011 and 2010 and are related toservice restoration. The $9.3 million decrease in expenses between 2010 and 2009 are thenet result of a Missouri service cut partially reversed by State of Missouri emergency aid.5

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictManagement’s Discussion and AnalysisJune 30, 2011 and 2010The largest factors affecting 2009 were partial year transit service reductions requiringpersonnel reductions March 30, 2009. The last salary and wage adjustment impacting mostof the organization occurred in 2009. Salaries and wages were frozen in 2010 and 2011;therefore, changes in the wages and benefits line are attributed to expansion or reduction ofthe transit system between 2009 and 2011. Large components of benefits include medicaland pension related costs which have trended upward. The number of casualty and liabilityclaim have been favorable over the three-year period due to an aggressive safety program;However the cost of each claim has risen as medical costs rise. Wages and benefitsrepresent the largest expense category (see chart on page 7).Total non-operating revenues consist primarily of Federal Section 5307 funds, Missouri andIllinois operating assistance and City of St. Louis and St. Louis County ¼ and ½ cent andrecently authorized ½ cent (Prop A) and ¼ cent (Prop M2) sales taxes from St. Louis Countyand City for FY2011. In 2010, total grants and assistance revenues were positively impactedby a one-time award of $8.0 million from the State of Missouri and negatively impacted bydeclining sales tax revenues from St. Louis County and the City of St. Louis. St. Clair Countyassistance increased in 2010 due to additional Illinois service. Total grants and assistancerevenues in 2009 were impacted by CMAQ and MODOT grants to help alleviate congestionduring the I-64 highway rebuilding program. Interest revenue was $28.0 million in 2009,decreased to $16.4 million in 2010 and decreased to $598 thousand in 2011. The 2011 and2010 decreases were related to the termination of capital lease/leasebacks, while 2011 wasalso impacted by low interest rates on investments.A key component of non-operating expenses consists of interest expense incurred fromcapital lease activity and Mass Transit Sales Tax Appropriation Bonds totaling $22.9 millionand $43.2 million for 2011 and 2010, respectively. The favorable change in interest expenserelates to the termination of capital lease/leasebacks. Also included in the non-operatingexpense category are contributions to outside entities. Contributions to outside entitiesincluded $2.1 million, $1.3 million and $1.8 million in 2011, 2010 and 2009, respectively.Fiscal years 2011, 2010, and 2009 were also impacted by contributions to shelteredworkshops of approximately $1.1 million, $1.0 million, and 1.3 million, respectively, whichrepresents a legal obligation of approximately 2.0% of the St. Louis City and County ½ centTransportation Sales Tax. A lawsuit with Union Station Partners was settled in 2010 for $1.6million.See the following table, which is presented in thousands.6

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictManagement’s Discussion and AnalysisJune 30, 2011 and 20102011 2010 Incr (Decr) % Change 2009 Incr (Decr) % ChangePassenger and service revenues $ 57,403 $ 56,924 $ 479 0.8% $ 59,498 $ (2,574) -4.3%Other 4,438 3,617 821 22.7% 3,179 438 13.8%Total operating revenues 61,841 60,541 1,300 2.1% 62,677 (2,136) -3.4%Wages and benefits 153,788 146,358 7,430 5.1% 149,602 (3,244) -2.2%Services 26,675 23,279 3,396 14.6% 25,094 (1,815) -7.2%Materials and supplies 32,209 28,950 3,259 11.3% 30,058 (1,108) -3.7%Casualty and liability costs 6,193 5,095 1,098 21.6% 3,914 1,181 30.2%Utilities, leases, and other general expenses 10,338 9,729 609 6.3% 12,438 (2,709) -21.8%Depreciation and amortization 78,297 77,216 1,081 1.4% 78,773 (1,557) -2.0%Total operating expenses 307,500 290,627 16,873 5.8% 299,879 (9,252) -3.1%Operating loss (245,659) (230,086) (15,573) 6.8% (237,202) 7,116 3.0%Grants and assistance 197,185 172,080 25,105 14.6% 174,767 (2,687) -1.5%Interest income 598 16,388 (15,790) -96.4% 27,759 (11,371) -41.0%Other 1,162 261 901 345.2% 777 (516) -66.4%Total non-operating revenues 198,945 188,729 10,216 5.4% 203,303 (14,574) -7.2%Interest expense (22,897) (43,247) 20,350 47.1% (53,616) 10,369 19.3%Contribution to outside entities (2,110) (1,255) (855) -68.1% (1,771) 516 29.1%Legal settlement - (1,550) 1,550 100.0% - (1,550) -100.0%Gain (loss) on capital lease termination (6,489) - (6,489) -100.0% - - 0.0%Gain (loss) disposition of assets 2 (734) 736 100.3% 1,320 (2,054) -155.6%Total non-operating expenses (31,494) (46,786) 15,292 32.7% (54,067) 7,281 13.5%Loss before contributions (78,208) (88,143) 9,935 11.3% (87,966) (177) -0.2%Capital contributions 44,272 26,785 17,487 65.3% 28,553 (1,768) -6.2%Change in net assets (33,936) (61,358) 27,422 44.7% (59,413) (1,945) -3.3%Total net assets, beginning of year 692,567 753,925 (61,358) -8.1% 813,338 (59,413) -7.3%Total net assets, end of year $ 658,631 $ 692,567 $ (33,936) -4.9% $ 753,925 $ (61,358) -8.1%FY 2011 Passenger and Service RevenueTransitpassengerrevenue82.6%Gateway Arch9.4%St. LouisDowntownAirport2.0%GatewayParking3.0%GatewayRiverfront3.0%Other generalexpenses3.3%Casualty andliability costs2.0%FY 2011 Operating ExpenseDepreciation25.5%Services8.7%Materials andsupplies10.5%Wages andbenefits50.0%CAPITAL ASSETS AND DEBT ADMINISTRATIONMetro’s investment in capital assets for all funds amounted to $1.12 billion, net ofaccumulated depreciation. This investment includes capital asset categories shown in thetable below. The decrease in Metro’s capital assets for the current fiscal year was $43.47

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictManagement’s Discussion and AnalysisJune 30, 2011 and 2010million or 3.8 percent. Additional information regarding capital assets can be found inFootnote 5 of the financial statements.2010 Additions Deletions, 2011Ending and Retirements, EndingBalance Transfers & Transfers BalanceConstruction in Progress $ 10,977,175 $ 8,102,821 $ (1,554,369) $ 17,525,627Land 101,799,314 132,138 - 101,931,452Capital Assets 1,858,208,966 28,052,342 (1,144,286) 1,885,117,0221,970,985,455 36,287,301 (2,698,655) 2,004,574,101Less: Accumulated (802,987,047) (78,291,213) 1,261,574 (880,016,686)DepreciationCapital Assets, net $ 1,167,998,408 $ (42,003,912) $ (1,437,081) $ 1,124,557,4152009 Additions Deletions, 2010Ending and Retirements, EndingBalance Transfers & Transfers BalanceConstruction in Progress $ 7,099,465 $ 16,830,540 $ (12,952,830) $ 10,977,175Land 104,859,352 403,839 (3,463,877) 101,799,314Capital Assets 1,852,270,560 23,256,077 (17,317,671) 1,858,208,9661,964,229,377 40,490,456 (33,734,378) 1,970,985,455Less: Accumulated (742,747,381) (77,236,072) 16,996,406 (802,987,047)DepreciationCapital Assets, net $ 1,221,481,996 $ (36,745,616) $ (16,737,972) $ 1,167,998,4088

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictManagement’s Discussion and AnalysisJune 30, 2011 and 2010Included in the FY 2009 ending balance of $1.22 billion are assets having a cost of $12.4million and a net book value of $0.3 million that were available for sale at June 30, 2009.There were no such assets available for sale as of June 30, 2010 and 2011.Major capital asset additions during the current fiscal year included the following:• St. Louis Downtown Airport Fire House of $5.4 million• St. Louis Downtown Airport Runway extension of $1.7 million• Metro Bus vehicles of $7.6 million• North Hanley Parking Lot and Bus Loop of $1.5 million• Remaining interest in Meridian Garage of $5.9 millionLease TransactionsMultiple events have occurred between 2009 and 2011 as it relates to leases. In FY2010,Metro early terminated its 1997 Facilities Lease\Leaseback and one tranche (F1) of its 2001Railcar Lease\Leaseback. These leases were in technical default due to credit downgradesof two insurance companies that provided payment guaranties in the transaction. Metro madea termination payment to the lease investor to close the transactions. At June 30, 2010,Metro reached a tentative agreement with the lease investor to cure the lease defaultpertaining to the remaining tranches (C1, C2) of the 2001 LRV Lease. The transactionclosed in February 2011, at which time Metro purchased the collateral, in the form of U.S.Treasury securities, in the agreed upon par amount of $8.7 million. The St. Clair CountyTransit District, which participated in the lease, paid for approximately 75% of the collateral.In November 2010 Metro made an offer to the 1995 LRV lease investor to early terminatethe transaction for the market value of securities in the Lease Investment Account(approximately $20 million), plus an additional payment of approximately $2 million, to bringthe total offer to $22 million. The investor accepted the offer and the transaction closed onNovember 30. Metro’s out of pocket termination expense, including the termination paymentand fees were approximately $2.2 million. Metro also recognized a loss on a previouslyreported market gain of the securities of $6.5 million. Metro no longer has any exposurerelated to lease transactions. Additional information on Metro’s leases can be found inFootnote 9 on page 35.Long-term DebtBetween FY2009 several events related to long-term debt have occurred. In October 2009,Metro terminated the swap by making a net termination payment of $9.9 million. InNovember 2009, Metro issued $97.2 million Series 2009 Mass Transit Sales TaxAppropriation Bonds to refund the $75 million Series 2002 A variable rate bonds, terminatetwo interest rate swaps, create a DSRF of $9.1 million and purchase a bond insurance policyand pay costs of issuance for the bonds. In October 2010, Metro refunded the $150 millionSeries 2005 Bonds through a $145.2 million plus (premium of $4.7 million) issue of MassTransit Sales Tax Appropriation Bonds. Significant details of debt can be found in Footnote10 page 37.9

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictManagement’s Discussion and AnalysisJune 30, 2011 and 2010ECONOMIC FACTORSA number of economic factors have impacted Metro over the last two years. The impact ofthese economic factors is masked by the service reductions and service restorations, whichskew and complicate useful year to year comparisons.One of the key economic impacts in the last two years has been the fluctuating price ofdiesel. The price of fuel peaked over $4 per gallon early in FY 2009. Since that time, itdecreased to a more moderate range of over $2 per gallon during 2010 before returning toover $3 a gallon in 2011. This change has affected our fuel purchase price and our fuelhedge program. The decrease in the price per gallon has made driving a personal vehiclemore attractive than a mass transit alternative to the more elastic segment of our customerbase.The portion of our rider base depending on mass transit to commute to and from work hasbeen diminished by the metropolitan area’s increased unemployment. The number onereason people use mass transit in the greater St. Louis metropolitan area is to get to work.According to a Metro survey, approximately 49% of all bus riders and 58% of all MetroLinkriders utilize mass transit to get to and from work. In the fourth quarter of FY2011, amoderate increase in consumer spending was reflected in the upturn of sales tax receipts bynearly 3% from St. Louis County, and an increase of 1% in sales tax revenue from the City ofSt. Louis. This modest improvement has not returned Metro to levels consistent with pre-2009 sales tax collections.Current events at the federal level have created uncertainty in expected federal grant fundingfor FY2012. Metro has been advised that federal grant reductions may occur for next year.BUDGETAnalysis of economic factors and trends are essential to understanding the state of Metro andits budget. For fiscal year 2012, the Board of Commissioners approved an operating budgetincluding depreciation of $330.8 million and a three-year capital program totaling $481.2million.REQUESTS FOR INFORMATIONThis financial report is designed to provide an overview to all parties or individuals with aninterest in Metro’s finances. Questions concerning any of the information provided in thisreport or requests for additional financial information should be addressed to the FinanceDivision, Bi-State Development Agency, 707 N 1st Street, Mail Stop 154, St. Louis, MO63102. The telephone number to the Finance Division is 314-982-1547. The email addressis Finance@MetroStLouis.org. This report and its contents are available on the web atwww.MetroStLouis.org/About/FinancialInformation/AnnualReports.aspx.10

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictCombined Statements of Net AssetsAs of June 30, 2011 and 20102011 2010AssetsCurrent assetsCash and cash equivalents $ 42,211,633 $ 37,338,589Restricted cash and cash equivalents 57,101,692 86,607,526Investments 8,002,452 10,639,700Restricted investments 73,075,738 34,342,403Accounts receivable 2,275,393 2,578,716Restricted accounts receivable 60,611 48,585Federal, state and local operatingassistance receivable 17,002,402 9,155,842Materials and supplies 7,401,570 5,985,482Prepaid expenses, deferred charges andother current assets 1,566,948 257,685Total current assets 208,698,439 186,954,528Non-current assetsInvestments held to paycapital lease / leaseback liabilities 78,676,413 151,680,821Depreciable capital assets, netof accumulated depreciation 1,005,100,336 1,055,221,919Land 101,931,452 101,799,314Construction in progress 17,525,627 10,977,175Other non-current assets, net of accumulated amortizationof $2,868,609 and $2,541,635 respectively 7,295,456 8,023,449Total non-current assets 1,210,529,284 1,327,702,678Total assets 1,419,227,723 1,514,657,20612See Accompanying Notes to Combined Financial Statements(continued)11

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictCombined Statements of Net AssetsAs of June 30, 2011 and 20102011 2010LiabilitiesCurrent liabilities payable from unrestricted assetsAccounts payable 8,398,987 5,604,349Accrued expenses 17,891,410 18,218,221Other current liabilities 3,266,416 2,212,802Total current liabilities payable fromunrestricted assets 29,556,813 26,035,372Current liabilities payable fromrestricted assetsAccounts and retainage payable 2,703,366 1,936,677Accrued interest 6,521,604 5,892,913Self-insurance liability 11,546,420 9,935,971Current portion of long-term debt 10,800,000 10,295,000Current portion of capital lease /leaseback obligations 2,949,633 7,223,349Total current liabilities payable fromrestricted assets 34,521,023 35,283,910Total current liabilities64,077,836 61,319,282Non-current liabilitiesOther post-employment benefits 39,193,000 31,569,002Long-term self insurance liability5,628,555 5,157,562Long-term debt569,241,793 583,735,931Capital lease / leaseback obligations 75,711,808 140,058,183Other non-current liabilities 6,743,843 250,521Total non-current liabilities 696,518,999 760,771,199Total liabilities 760,596,835 822,090,481Net assetsInvested in capital assets, net of related debt 548,480,654 576,916,647RestrictedCooperative agreement 8,498,350 6,440,449Revenue bond indenture 1,384,696 1,364,725Mass transit sales tax bond indenture 20,811,654 21,058,862Capital lease obligations 8,736,150 4,399,289Unrestricted 70,719,384 82,386,753Total net assets $ 658,630,888 $ 692,566,725________See Accompanying Notes to Combined Financial Statements312

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictCombined Statements Revenues, Expenses andChanges in Net AssetsAs of June 30, 2011 and 2010320112010Operating revenuesPassenger and service revenuesOther$57,402,4044,438,274$56,924,3573,616,928Total operating revenues61,840,67860,541,285Operating expensesWages and benefitsServicesMaterials and suppliesCasualty and liability costsElectricity, telephone, leases, and other gen expensesDepreciation and amortization153,787,83726,675,44032,209,1036,193,15510,337,61578,296,734146,358,08923,278,75528,949,9635,094,7339,729,13377,216,621Total operating expenses307,499,884290,627,294Operating loss(245,659,206)(230,086,009)Non-operating revenues (expenses)Grants and assistanceState and local assistanceFederal assistanceInterest incomeInterest expenseContributions to outside entitiesLegal settlementGain or (loss) on disposition of assetsLoss on capital lease terminationOther non-operating revenues (expenses), net170,832,33326,352,771598,011(22,896,561)(2,110,270)-1,770(6,488,743)1,161,748134,521,21837,559,07816,388,285(43,246,576)(1,254,513)(1,550,000)(734,525)-260,141Total non-operating revenues (expenses)167,451,059141,943,108Loss before capital contributions(78,208,147)(88,142,901)Capital contributions44,272,31026,785,009Change in net assets(33,935,837)(61,357,892)Total net assets, beginning of year692,566,725753,924,617Total net assets, end of year$658,630,888$692,566,7254See Accompanying Notes to Combined Financial Statements13

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictCombined Statements of Cash FlowsFor the years ended June 30, 2011 and 20102011 2010Cash flows from operating activitiesReceipts from customers $ 62,143,997 $ 60,791,542Payments to employees (146,494,966) (136,246,074)Payments to vendors (61,621,912) (64,169,884)Payments for self-insurance (4,107,397) (5,673,111)Net cash used in operating activities (150,080,278) (145,297,527)Cash flows from non-capital financing activitiesOperating assistance received 190,162,659 173,429,305Contributions to outside entities (1,945,639) (1,254,513)Nonoperating contributions 1,161,748 260,141Net cash provided by non capital financing activities 189,378,768 172,434,933Cash flows from capital and related financing activitiesAcquisitions of capital assets (34,311,371) (22,479,895)Proceeds from long-term debt - 97,220,000Payments of long-term debt (15,005,000) (4,245,548)Payment to terminate variable rate debt - (75,000,000)Payment to terminate SWAP - (9,875,000)Cost of issuance - (2,757,117)Funds paid as part of capital lease termination (2,104,426) (4,140,079)Interest paidContributed capital(21,293,590)44,272,310(21,226,899)26,785,009Legal settlement and fees - (1,550,000)Net cash used in capital and related financing activities (28,442,077) (17,269,529)Cash flows from investing activitiesPurchases of investments (113,833,880) (90,471,164)Proceeds from sale of investments 77,746,666 59,819,848Interest received 598,011 264,687Net cash used in investing activities (35,489,203) (30,386,629)Net decrease in cash and cash equivalents (24,632,790) (20,518,752)Cash and cash equivalents, beginning of year 123,946,115 144,464,867Cash and cash equivalents, end of year $ 99,313,325 $ 123,946,115______________________See Accompanying Notes to Combined Financial Statements(continued)14

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictCombined Statements of Cash FlowsFor the years ended June 30, 2011 and 20102011 2010Reconciliation of operating loss to net cashused for operating activitiesOperating loss $ (245,659,206) $ (230,086,009)Adjustments to reconcile operatingloss to net cash used for operating activitiesDepreciation and amortization78,296,734 77,216,621Changes in assets and liabilitiesReceivables Materials and suppliesPrepaid expenses, deferred charges andother current assets303,323(1,416,088)(1,215,965)250,257(193,393)(71,994)Accounts payableOther current liabilitiesAccrued expensesOther post employment benefits liabilitySelf-insurance liability2,630,0057,602,291(331,129)7,623,9992,085,758(1,938,503)(8,143)2,193,0137,919,002(578,378)Total adjustments 95,578,928 84,788,482Net cash used for operating activities $ (150,080,278) $ (145,297,527)Supplemental Disclosure ofCash Flow InformationNon-cash Activities:Unrealized gain on investment heldto pay capital lease/leaseback liability $ - $ 6,787,676Interest rate swap termination liability - 575,200Payments of capital lease obligationInterest accrued on capital lease obligation22,932,0006,757,352202,891,95516,123,598Interest earnings on investments held topay capital lease/leaseback liability 4,560,766 9,491, 546Remarketing of 2005 debt 145,290,000 -Loss on 1995 capital lease termination 6,488,743 -5See Accompanying Notes to Combined Financial Statements15

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictFiduciary ActivitiesRetirement Medical PlanStatement of Fiduciary Net AssetsAs of June 30, 2011 and 2010Bi-State DevelopmentAgency OPEB TrustTrust Fund2011 2010AssetsInvestments:Money Market $ 6,084,361 $ 3,079,196Total Assets $ 6,084,361 $3,079,196Net AssetsHeld in trust for OPEB benefits $ 6,084,361 $ 3,079,196Statement of Changes in Fiduciary Net AssetsFor the years ended June 30, 2011 and 2010Bi-State DevelopmentAgency OPEB TrustTrust Fund2011 2010AdditionsContributions:Employer contributions $ 3,000,000 $ 3,079,196Interest / dividends 5,138 -Capital gains 27 -Total Additions 3,005,165 3,079,196DeductionsBenefits paid - -Change In Net Assets 3,005,165 3,079,196Net Assets Held In Trust For Pension Benefits -Beginning Of Year 3,079,196 -Net Assets Held In Trust For Pension Benefits -End Of Year $ 6,084,361 $ 3,079,196_____________________See Accompanying Notes to Combined Financial Statements16

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 20106 1. Significant Accounting PoliciesThe accompanying combined financial statements of the Bi-State Development Agencyof the Missouri-Illinois Metropolitan District (“Metro”) are prepared in conformity withaccounting principles generally accepted in the United States of America applicable tostate and local governments as prescribed by the Governmental Accounting StandardsBoard (“GASB”). The following is a summary of the more significant policies.Financial Reporting EntityThe basic financial statements encompass all proprietary functions for which Metro isresponsible. These functions include: General Agency, Gateway Arch Tram System,Gateway Arch Parking Facility, Gateway Arch Riverfront Attractions, St. Louis DowntownAirport, and the Transit System.Additionally, Metro evaluated whether there were any potential component units whichshould be included in these financial statements based on the following criteria: financialaccountability, access to resources, responsibility for debts and deficits, and fiscalindependence. No potential component units were identified, nor is Metro a componentunit of any other entity or government. The City of St. Louis, Missouri, the Missouricounties of St. Louis, St. Charles and Jefferson, the Illinois counties of Madison, St. Clair,and Monroe and the States of Illinois and Missouri have limited decision-making authorityover Metro and have limited responsibility for Metro's debts or deficits except as providedin the Memorandum of Agreement.Fund AccountingMetro maintains its accounting records on the basis of funds. A fund is a fiscal andaccounting entity with a self-balancing set of accounts. Cash and other financialresources, together with all related liabilities and residual equities balances and changestherein are segregated for the purpose of carrying on the specific activities or attainingcertain objectives in accordance with special regulations, restrictions or limitations.The fund financial statements provide information about Metro’s funds, including fiduciaryfunds. Separate statements for each fund category – proprietary and fiduciary – arepresented. The emphasis of fund financial statements is on the enterprise funds.All funds used in accounting for the financial operations of Metro are enterprise funds orfiduciary funds. For financial reporting purposes, Metro is considered a single enterprisefund in which all subsidiary enterprise funds are combined and interfund transactions areeliminated. Metro is required to adopt a balanced budget; however, it is not required toadopt legally enforceable budgets and does not adopt such budgets.17

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010New Accounting Standards• GASB Statement No. 54, Fund Balance Reporting and Governmental Fund TypeDefinitions, was issued in March 2009 and is effective for periods beginning after June15, 2010. The objective of this Statement is to enhance the usefulness of fundbalance information by providing clearer fund balance classifications that can be moreconsistently applied and by clarifying the existing governmental fund type definitions.This Statement establishes fund balance classifications that comprise a hierarchybased primarily on the extent to which a government is bound to observe constraintsimposed upon the use of the resources reported in governmental funds.• GASB Statement No. 57, OPEB Measurements by Agent Employers and AgentMultiple-Employer Plans, was issued December 2009 and is effective for periodsbeginning after June 15, 2011. This Statement amends Statement No. 45,Accounting and Financial Reporting by Employers for Postemployment Benefits OtherThan Pensions, to permit an agent employer that has an individual-employer OPEBplan with fewer than 100 total plan members to use the alternative measurementmethod, at its option, regardless of the number of total plan members in the agentmultiple-employer OPEB plan in which it participates.• GASB Statement No. 59, Financial Statements Omnibus, was issued June 2010 andis effective for periods beginning after June 15, 2011. The objective of this Statementis to update and improve existing standards regarding financial reporting anddisclosure requirements of certain financial instruments and external investment poolsfor which significant issues have been identified in practice.• GASB Statement No. 60, Accounting and Financial Reporting for Service ConcessionArrangements, was issued November 2010 and is effective for periods beginning afterDecember 15, 2011. The objective of this Statement is to improve financial reportingby addressing issues related to service concession arrangements (SCAs), which are atype of public-private or public-public partnership.• GASB Statement No. 61, The Financial Reporting Entity: Omnibus—an amendment ofGASB Statements No. 14 and No. 34 was issued November 2010 and is effective forperiods beginning after June 15, 2012. The objective of this Statement is to improvefinancial reporting for a governmental financial reporting entity.• GASB Statement No. 62, Codification of Accounting and Financial ReportingGuidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements,was issued December 2010 and is effective for periods beginning after December 15,2011. The objective of this Statement is to incorporate into the GASB’s authoritativeliterature certain accounting and financial reporting guidance that is included in thefollowing pronouncements issued on or before November 30, 1989.• GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources,Deferred Inflows of Resources, and Net Position, which establishes guidance forreporting deferred outflows of resources, deferred inflows of resources, and net18

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010position in a statement of financial position. The provisions of this Statement areeffective for financial statements for periods beginning after December 15, 2011.GASB Statements Numbers 57 and 59 do impact Metro. Management has notdetermined the impact of the remaining statements on the combined financialstatements.Enterprise FundsMetro’s enterprise funds are used to account for operations that are financed andoperated in a manner similar to private business enterprises.The business purposes of the various enterprise funds of Metro are as follows:• General Agency Fund - performs certain developmental activities and acts as theadministrative head of Metro;• Gateway Arch Tram System Fund - operates and maintains the transportation systemwithin the Gateway Arch in accordance with a cooperative agreement with the UnitedStates Government as discussed in Note 13 (Operating Agreement);• Gateway Arch Parking Facility Fund - operates and maintains the parking garage atthe Jefferson National Expansion Memorial Park in acc ordance with a cooperativeagreement with the United States Government as discussed in Note 13;• Gateway Arch Riverfront Attractions – owns, operates and maintains both the TomSawyer and Becky Thatcher Riverboats docked along the Mississippi River just belowthe Gateway Arch;• St. Louis Downtown Airport Fund – owns, operates and maintains the St. LouisDowntown Airport and an adjacent business park located in Cahokia, Illinois; and• Transit System Fund – owns, operates and maintains the St. Louis metropolitan areamass transportation system which includes MetroBus, MetroLink and Metro Call-A-Ride services.Fiduciary FundThe fiduciary funds are used to account for assets held by Metro as a trustee or as anagent for others and which assets cannot be used to support its own programs. Metro’strust fund is the Bi-State Development Agency Other Post Employment Benefits Trust.Basis of AccountingMetro follows the accrual basis of accounting and uses the economic resourcesmeasurement focus for all of its enterprise funds and fiduciary funds. Revenues arerecognized when earned and expenses are recognized at the time liabilities are incurred19

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010regardless of the timing of related cash flows. Under GASB Statement No. 20,Accounting and Financial Reporting for Proprietary Funds and Other GovernmentalEntities That Use Proprietary Fund Accounting, Metro applies all applicable GASBpronouncements and Financial Accounting Standards Board (“FASB”) Statements andinterpretations issued on or before November 30, 1989, unless these pronouncementsconflict with or contradict GASB pronouncements. Metro has also elected to apply allFASB statements and interpretations issued after November 30, 1989 except for thosethat conflict with or contradict GASB pronouncements.Estimates and AssumptionsThe preparation of the financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities; thedisclosure of contingent assets and liabilities at the date of the financial statements; andthe reported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates.Cash and Cash EquivalentsMetro pools all cash for investment purposes when most beneficial. Each fund hasequity in the pooled amount. Investment earnings are allocated to each individual fundon the basis of their investment or equity in the pooled amount. Metro considers allhighly liquid investments readily convertible into cash with original maturities of threemonths or less to be cash equivalents. Metro carries all cash equivalents at cost, whichapproximates fair value.InvestmentsWhen beneficial, Metro pools funds for investment purposes. For pooled investments,investment earnings are allocated proportionately according to each fund’s equity in theinvestment. Metro’s investments consist of collateralized repurchase agreements; TripleA rated money market funds, collateralized certificates of deposit, and U.S. Treasury andU.S. Government Agency securities. Investments maturing in less than one year arecarried at amortized cost, which approximates fair value. Investments maturing in overone year are carried at fair value. Metro determines fair value to be the amount at whichfinancial instruments could be exchanged in a current transaction between willingparties, at quoted market prices.Materials and SuppliesMetro transit inventories of materials and supplies are recorded at cost, using the movingweighted average method and are expensed when inventories are consumed inoperations. Business Enterprise inventory counts are completed midyear toaccommodate seasonality and maritime regulations. Purchases made between themidyear inventory count and fiscal yearend are expensed as incurred.20

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Capital AssetsCapital assets, which include property, plant, equipment, and infrastructure assets, arerecorded at cost, when acquired or constructed. Capital assets are defined by Metro asassets with an initial, individual cost of more than $5,000 and an estimated useful life of 3years or more. Improvements to existing plant and equipment, which extend the usefullives of the related assets, are capitalized. Donated capital assets are recorded at theirfair value at the time of donation. Expenditures for maintenance and repairs are chargedto expense as incurred. When capital assets are retired or otherwise disposed of, thecost of the assets and the related accumulated depreciation are removed from theaccounts and gains and losses on disposals are recorded. Prorated shares of theproceeds from the sale of property and equipment, which were acquired with federal orstate funds, are returned to the United States Department of Transportation – FederalTransit Administration or the related state Department of Transportation, respectively.Depreciation and AmortizationDepreciation of capital assets is calculated using the straight-line method over theestimated useful lives of the assets. The estimated useful lives are as follows:YearsAirport runways and related facilities 15-25Buildings and improvements 15-25Gateway Arch tram facilities15-25Riverboats and barges15-20Light rail structures and improvements 12-30Autos and trucks5-10Buses, vans, light rail and other revenue vehicles 3-25Furniture, fixtures, computers and other equipment 3-10Self-insurance LiabilityLiabilities for workers' compensation, employee medical and dental insurance claims, andpublic liability and property damage claims are recognized as incurred on the basis of theestimated cost to Metro upon resolution.Workers’ compensation benefits are awarded as appropriately determined bygovernmental authority in each state in which Metro operates. Estimated liabilities forinjury and damage claims and medical and dental insurance claims are charged tooperations in the year the claim events occur; estimated liabilities for outstanding claimsare made by management.Self-insured liabilities are reported when it is probable that a loss has occurred and theamount of the loss can be reasonably estimated. Liabilities include an amount for claimsthat have been incurred, but not reported.21

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Since self insured claims depend on such complex factors as inflation, changes in legaldoctrines, and damage awards, the process used in computing claims liability does notnecessarily result in an exact amount. Claims liabilities are evaluated on a case-by-casebasis and are re-evaluated periodically to take into consideration historical experience ofrecently settled claims, the frequency of claims, and other economic and social factors.Derivative Financial InstrumentsMetro also utilizes commodity hedging to reduce the volatility in fuel costs. Hedgingtechniques are traditionally used to limit exposure to price fluctuations. Managementrecognizes that fluctuations in fuel prices could have a negative impact on Metro’sfinancial affairs. Accordingly, Metro entered into futures contracts in order to hedge thisexposure.Metro adopted GASB Statement No. 53, Accounting and Financial Reporting forDerivative Instruments (GASB 53). GASB 53 requires the gain (loss) on the sale of fuelhedges to be recorded in the Statement of Revenues, Expenses, and Changes in NetAssets. The change in fair value of the derivative is recorded as a deferred inflow/outflowin other current assets/liabilities, as appropriate. The investment in derivative instrumentsis recorded in the Statement of Net Assets as part of current assets/liabilities and othernon-current assets/liabilities, as appropriate. The deferred outflow and investment as ofJune 30, 2011 are valued at $1.2 million. The deferred outflow and investment as ofJune 30, 2010 are valued at $0.2 million. See note 16 to the financial statements.Operating Revenues and ExpensesOperating revenues and expenses generally result from providing services in connectionwith Metro’s ongoing operations. Revenues are recorded as income in a mannerconsistent with the timing of the provided service. The principal operating revenues ofthe various funds of Metro are as follows:• General Agency Fund – interfund charges for management services;• Gateway Arch Tram System Fund – charges to tourists for admissions to attractionsat the Jefferson National Expansion Memorial and rentals;• Gateway Arch Parking Facility Fund – charges to customers for parking fees;• Gateway Arch Riverfront Attractions Fund – charges to tourists for riverboatexcursions along the Mississippi and memorabilia sales;• St. Louis Downtown Airport Fund – charges to customers for aviation and runwayservices provided, including hangar rentals and fuel;• Transit System Fund – fares charged to passengers for public transportation,advertising, and rentals.22

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Operating expenses include the cost of services, administrative expenses anddepreciation expenses on capital assets. All revenues and expenses not meeting thisdefinition are reported as non-operating revenues and expenses.Capital Grants and AssistanceAll capital grants and assistance are recorded in the accounting period in which theybecome earned and measurable. Unrestricted, irrevocable operating assistance grantsare recorded as non-operating income. Capital grants and assistance that are restrictedto use for payments of debt service or acquisitions of capital assets are recorded ascapital contributions in the Statement of Revenues, Expenses and Changes in NetAssets.ReclassificationsCertain reclassifications have been made to the prior year’s financial statements toconform to the current year presentation.2.Cash, Cash Equivalents and InvestmentsCash, cash equivalents and investments of Metro are presented on the combinedstatements of net assets as restricted cash and cash equivalents and restrictedinvestments, as discussed in Note 3 (Restricted Assets, page 26), and as unrestrictedcash and cash equivalents and investments. Deposits and investments are segregated,in this footnote, based upon GASB Statement No. 3, Deposits with Financial Institutions,Investments (including Repurchase Agreements), and Reverse Repurchase Agreements,as amended by GASB Statement No. 40.Cash on HandCash on hand, which includes petty cash, working funds (including funds in ticketvending machines) and undeposited receipts, was $721,026 and $753,302 at June 30,2011 and 2010, respectively.Cash DepositsAt June 30, 20011 and 2010, the carrying amounts of Metro’s deposits were $16,428,309and $11,792,392, respectively, and the bank balances were $18,587,484 and$13,182,409 respectively.Custodial Credit Risk. Custodial credit risk is the risk that in the event of a financialinstitution failure, Metro’s deposits may not be returned. Metro’s banking and investmentpolicy authorizes the use of demand deposit and interest bearing bank accounts, andcertificates of deposit. The policy specifies that bank deposits exceeding FDIC insurancecoverage be collateralized with U.S. government or agency securities, or be guaranteedby a surety carrying the highest rating of a nationally recognized credit ratingorganization. As of June 30, 2011, Metro’s bank total bank balance was $18,587,484.23

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Of this total, $5,475,459 was guaranteed by FDIC insurance, including through provisionsof the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Of theremaining balance of $13,112,025, $12,419,769 was collateralized with securities heldin a joint custody account at the Federal Reserve Bank, and $692,256 was collateralizedwith securities held in a segregated account with a third party custodian.InvestmentsAs of June 30, 2011 and 2010, Metro had the following investments and maturities:June 30, 2011Investment MaturitiesFair Value Overnight 2-90 days 90-365 days 1-5 years + 5 yearsMoney Market Funds& Other Broker Accounts $ 50,686,419 $ 50,686,419 $ - $ - $ - $ -Repurchase Agreements 31,857,413 31,857,413 - - - -U.S. Treasury Bills 32,983,200 - 14,249,722 18,733,478 - -U.S. Treasury Notes 2,002,656 - - - 2,002,656 -U.S. Treasury STRIPS 2,404,747 - 2,404,747 - - -Government Agencies:FHLB Discount Notes 23,997,488 - 19,999,216 3,998,272 - -FHLB Bonds 15,529,217 - - 1,005,720 14,523,497 -FCB Bonds 4,502,065 - - - 4,502,065 -Investment Contracts:AIG 21,574,915 - - - - 21,574,915FSA 57,101,499 - - - - 57,101,499Total $ 242,639,619 $ 82,543,832 $ 36,653,685 $ 23,737,470 $ 21,028,218 $ 78,676,414June 30, 2010Investment MaturitiesFair Value Overnight 2-90 days 90-365 days 1-5 years + 5 yearsMoney Market Funds& Other Broker Accounts $ 66,813,082 $ 66,813,082 $ - $ - $ - $ -Repurchase Agreements 35,385,402 35,385,402 - - - -U.S. Treasury Bills 14,991,849 - 9,497,113 5,494,736 - -U.S. Treasury STRIPS 2,398,427 - - - 2,398,427 -Government Agencies:FHLB Discount Notes 26,578,765 - 15,997,900 10,580,865 - -FHLB Bonds 9,015,309 - - 5,004,373 4,010,936 -FCB Bonds 2,001,875 - - - 2,001,875 -RTC STRIPS 19,031,267 - - - - 19,031,267Investment Contracts:AIG 76,558,551 - - - - 76,558,551FSA 56,091,003 - - - - 56,091,003Total $ 308,865,530 $ 102,198,484 $ 25,495,013 $ 21,079,974 $ 8,411,238 $ 151,680,821All of the Investment Contracts shown above are related to Metro’s Finance ObligationsUnder Lease, as discussed in Note 9.At June 30, 2011 and 2010, Metro’s fiduciary activities had the following investments andmaturities:24

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010June 30, 2011Investment MaturitiesFair Value Overnight 2-90 days 90-365 days 1-5 years + 5 yearsMoney Market Funds $ 6,084,361 $ 6,084,361 $ - $ - $ - $ -June 30, 2010Investment MaturitiesFair Value Overnight 2-90 days 90-365 days 1-5 years + 5 yearsMoney Market Funds $ 3,079,196 $ 3,079,196 $ - $ - $ - $ -Interest rate risk. Interest rate risk is the risk that the fair value of an investment willdecline as interest rates increase, and if it is sold before its maturity a loss will result.Metro’s investment policy specifies that all funds may be invested in maturities that matchanticipated obligations to a maximum of five years. The policy is not applicable torestricted investments or collateral securities related to lease finance obligations or bondindentures, for which investment maturities are generally matched to specific debtamortization requirements. Due to the short duration of the majority of Metro’s non-leaseor bond related investments at June 30, 2011 and 2010, interest rate risk is notsignificant to Metro.Credit risk. Credit risk is the risk that the financial counterparty will fail to meet its definedobligations. Metro’s investment policy authorizes the unlimited purchase of directobligations of the U.S. Government or its agencies, repurchase and reverse repurchaseagreements, commercial paper, banker’s acceptances, and money market funds.Repurchase and reverse repurchase agreements are entered into only with pre-approvedcredit-worthy banks or dealers, and a written repurchase agreement is completed foreach bank or dealer. Metro’s investment policy limits investments in commercial paper,negotiable (uncollateralized) certificates of deposit, and banker’s acceptances to the toptwo ratings issued by nationally recognized credit rating organizations, and further limitsthese instruments to five million per issuer. The policy also stipulates that money marketfunds used have over $500 million in assets and carry the highest rating issued by anationally recognized credit rating organization. The policy is not applicable to restrictedinvestments, or collateral securities related to lease finance obligations or bondindentures. Provisions of the lease agreements or bond indentures stipulate thatfinancial counterparties have and maintain the highest rating issued by a nationallyrecognized credit rating organization. If the counterparty does not maintain the requiredrating it is required to collateralize the investment with securities which carry the highestrating issued by a nationally recognized credit rating organization. (In the case of theinvestment contracts listed above, the rating requirement is applicable to the senior debtrating of the issuer of the contract; the contracts themselves are not rated separately.)As of June 30, 2011, Metro’s non-lease related money market funds and other brokeraccounts were in the amount of $50,686,419. Of this amount, $49,445,351 wasdeposited in twelve different institutional money market funds, $1,045,064 was depositedin a trading account with Metro’s energy commodities broker, and $196,004 wasdeposited in the Illinois Funds, a state run money market investment pool. Of the money25

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010market fund balance, the $23,481,890 was deposited in two different money fundsmanaged by Black Rock; $8,551,946 was deposited in five different money fundsmanaged by Columbia Funds or Merrill Lynch, both owned by Bank of America-MerrillLynch; $8,100,353 was deposited in a money market fund managed by UBS Financial;$7,229,152 was deposited in three different money market funds managed by FederatedInvestors; and $2,082,010 was deposited in a money market fund managed by Dreyfus.All institutional money market funds and investment pools used had the highest rating ofStandard and Poor’s, Moody’s, or Fitch Rating Services. For all money market fundsand investment pools, net asset value equals reported fair value. The Illinois Funds aremanaged by the State Treasurer of Illinois, per provisions of state statute.As of June 30, 2010, Metro’s non-fiduciary, non-lease related money market funds andother broker accounts were in the amount of $66,813,082. Of this amount, $65,766,011was deposited in eleven different institutional money market funds, $645,404 wasdeposited in a trading account with Metro’s energy commodities broker, and $401,667was deposited in the Illinois Funds, a state run money market investment pool. Of themoney market fund balance, $50,464,603 was deposited in six different money marketfunds managed by Columbia Funds, Merrill Lynch, or Black Rock, all owned by Bank ofAmerica-Merrill Lynch; $9,086,607 was deposited in a money market fund managed byUBS Financial; and $4,132,660 was deposited in two different money market fundsmanaged by Federated Investors. All institutional money market funds and investmentpools used had the highest rating of Standard and Poor’s, Moody’s, or Fitch RatingServices. For all money market funds and investment pools, net asset value equalsreported fair value. The Illinois Funds are managed by the State Treasurer of Illinois, perprovisions of state statute.Custodial Credit Risk. Custodial credit risk is the risk that, in the event of the failure ofthe counter-party, Metro will not be able to recover its investments or collateral securitiesthat are in possession of an outside party. Metro’s investment policy specifies that allinvestments be delivered to Metro’s securities safekeeping agent and held in the name ofMetro. The policy is not applicable to restricted investments or collateral securitiesrelated to lease finance obligations or bond indentures, which generally are held in trustaccording to specific provisions of the lease agreement or bond indenture. As of June30, 2011 and 2010, Metro’s investment safekeeping agent held all of Metro’s non-leaseor bond related investments in treasury securities or government agency securities inMetro’s name. As of June 30, 2011, and 2010, collateral for repurchase agreements waseither being held by Metro’s agent or by the financial counterparty in a segregatedcustomer account in the name of Metro. Metro’s investment policy specifies that collateralfor repurchase agreements with a term of longer than 14 days be placed in joint custodywith Metro at the Federal Reserve Bank or other third party custodian. No repurchaseagreements in effect at June 30, 2011 or 2010 had a term of longer than 14 days.3. Restricted AssetsAt June 30, 2011 and 2010 the following assets were restricted to the purposes for whichthe funds were created.26

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 20102011 2010Restricted AssetsRestricted accounts receivable $ 60,611 $ 48,585Restricted under Cooperative Agreement 8,498,350 5,940,449Restricted under Revenue Bond Indenture 1,485,001 1,377,619Sales tax capital 13,758,415 13,836,415Self-insurance 16,537,890 14,809,358Capital lease obligations 87,397,590 151,680,821Mass transit sales tax bond indenture 27,320,364 34,129,623Other 53,856,233 56,501,712Total Restricted Assets $ 208,914,454 $ 278,324,5824. Fair Value of Financial InstrumentsThe following table presents the carrying amounts and estimated fair values of Metro'sfinancial instruments at June 30, 2011 and 2010. The fair value of a financial instrumentis defined as the amount at which the instrument could be exchanged between willingparties in a current open market transaction.2011 2010Carrying Fair Carrying FairValue Value Value Value(in millions)(in millions)Financial liabilitiesTotal long-term debt $ 570.7 $ 577.2 $ 583.7 $ 586.9The carrying amounts shown in the table are included in the Combined Statement of NetAssets under the indicated captions.The following methods and assumptions were used to estimate the fair value of eachclass of financial instrument:Total debt: The fair value of Metro's total debt is estimated based on the quoted marketprices for similar issues or by discounting expected cash flows at the rates currentlyoffered to Metro for debt of the same remaining maturities, as advised by Metro'sbankers.27

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 20105. Capital AssetsCapital asset activity for the year ended June 30, 2011 was as follows (in 000s):Totals Additions Deletions, TotalsJune 30, and Retirements, June 30,2010 Transfers & Transfers 2011Capital AssetsBuildings and improvements $ 170,117 $ 5,201 $ (199) $ 175,119Airport runways 24,745 1,729 - 26,474Arch parking 9,947 - - 9,947Riverboats and barges 4,176 - - 4,176Light rail, right-of way, facility and improvements 1,224,565 9,472 - 1,234,037Revenue vehicles 303,427 7,630 (321) 310,736Autos & trucks 9,350 646 (15) 9,981Furniture, fixtures equipment & intangibles 111,882 3,504 (740) 114,646Total capital assets 1,858,209 28,182 (1,275) 1,885,116Accumulated DepreciationBuildings and improvements (122,372) (4,612) 197Airport runways (18,990) (777) -(126,787)(19,767)Arch parking (9,065) (348) - (9,413)Riverboats and barges (1,694) (244) - (1,938)Light rail, right-of way, facility and improvements (401,027) (43,448) 125 (444,350)Revenue vehicles (152,680) (17,412) 191 (169,901)Autos & trucks (6,740) (655) 9 (7,386)Furniture, fixtures equipment & intangibles (90,419) (10,795) 740 (100,474)Total accumulated depreciation (802,987) (78,291) 1,262 (880,016)Net capital assets 1,055,222 (50,109) (13) 1,005,100Land 101,799 132 - 101,931Construction in progress 10,977 8,103 (1,554) 17,526Total net capital assets $ 1,167,998 $ (41,874) $ (1,567) $ 1,124,55728

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Capital asset activity for the year ended June 30, 2010 was as follows (in 000s):Totals Additions Deletions, TotalsJune 30, and Retirements, June 30,2009 Transfers & Transfers 2010Capital AssetsBuildings and improvements$ 168,047 $ 2,008 $ 62 $ 170,117Airport runwaysArch parking23,5289,9471,217---24,7459,947Riverboats and barges 4,189 1 (14) 4,176Light rail, right-of way, facility and improvements 1,218,529 7,098 (1,062) 1,224,565Revenue vehicles 300,227 6,273 (3,073) 303,427Autos & trucks 7,588 720 1,042 9,350Furniture, fixtures equipment & intangibles 107,793 5,939 (1,850) 111,882Assets for sale12,423 - (12,423) -Total capital assets 1,852,271 23,256 (17,318) 1,858,209Accumulated DepreciationBuildings and improvements (117,907) (4,465) - (122,372)Airport runways (18,185) (805) - (18,990)Arch parking (8,667) (398) - (9,065)Riverboats and barges (1,459) (245) 10 (1,694)Light rail, right-of way, facility and improvements (358,805) (43,244) 1,022 (401,027)Revenue vehicles (138,991) (15,673) 1,984 (152,680)Autos & trucks (5,149) (1,640) 49 (6,740)Furniture, fixtures equipment & intangibles (81,433) (10,767) 1,781 (90,419)Assets for sale (12,151) - 12,151 -Total accumulated depreciation (742,747) (77,237) 16,997 (802,987)Net capital assets 1,109,524 (53,981) (321) 1,055,222Land 104,859 404 (3,464) 101,799Construction in progress 7,099 16,831 (12,953) 10,977Total net capital assets $ 1,221,482 $ (36,746) $ (16,738) $ 1,167,9986.Liability, Claims and LitigationMetro is exposed to liability for bodily injury and property damage; liability for financialloss suffered by employees and others as a result of decisions and judgments made byMetro; and physical damage to and loss of its property.Metro self-insures and adjusts:(1) Third party bodily injury or property damage liability claims up to $5 million peroccurrence(2) Employment practices liability claims up to $5 million per wrongful act(3) Workers compensation claims up to $1 million each accident or each employee fordiseaseUnder Missouri law, on August 8, 2005, Metro became entitled to Sovereign Immunity fortorts except for negligent acts or omissions by Metro employees relating to the operationof motor vehicles while in the scope of their employment and injuries caused by29

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010dangerous conditions of Metro property. For the calendar year 2011, Metro’s liability forthese claims is limited to $381,759 any one person in a single accident or occurrenceand $2,545,062 for all claims arising out of a single accident or occurrence.Metro purchases primary insurance for first party property or business interruption losssubject to a $100,000 per occurrence deductible for direct damage and a $250,000 peroccurrence deductible for transit vehicle collision, upset or derailment.Annually, Metro purchases Excess Liability insurance with an annual aggregate limit of$65 million for claims whose value exceeds the maximum of $5 million per occurrencecovered by the self-insured retention. In fiscal year 2011, Metro added $65 millionexcess coverage in aggregate limits in the Excess Liability insurance program for Errorsand Omissions Liability, Employment Practices Liability and Employee Benefit Liability.Claim settlements/judgments have not penetrated into the attachment point of ExcessLiability or Excess Workers Compensation insurance during any of the past five fiscalyears.Loss occurrences are reported to the excess insurance carriers when it is determinedthat a loss is likely to exceed fifty (50) percent of the Self Insured Retention or if a bodilyinjury is categorized as severe (fatality, multiple persons injured in one occurrence, brainor spinal injury, major amputation). When a third party liability or workers compensationclaim is either made against Metro or when there is sufficient reason to believe thatMetro may be liable for the loss, a dollar amount is reserved for that claim (i.e. a casereserve is established). Case values are adjusted as the claims develop. Total casereserves are evaluated by an independent actuary who develops the total liability to beincluded in the financial statements.Changes in the balances of self-insured claims liabilities at June 30, 2011 and 2010 areas follows:Injury, Damage and Workers' Employee Medical Total Self-InsuredPersonal Liabilities Compensation and Dental Liabilities2011 2010 2011 2010 2011 2010 2011 2010Balance:At beginningof fiscal year $ 6,239,726 $ 7,497,059 $ 5,389,807 $ 5,011,239 $ 3,464,000 $ 3,163,613 $ 15,093,533 $ 15,671,911Add:Current year claimsand changesin estimate 4,719,913 1,400,543 4,584,241 3,978,455 23,634,284 23,913,543 32,938,438 29,292,541Less:Claim payments (3,158,921) (2,657,876) (4,091,900) (3,599,887) (23,606,175) (23,613,156) (30,856,996) (29,870,919)Balance:At endof fiscal year $ 7,800,718 $ 6,239,726 $ 5,882,148 $ 5,389,807 $ 3,492,109 $ 3,464,000 $ 17,174,975 $ 15,093,533In the opinion of Metro’s management, the estimated liabilities for all unsettled injuryclaims, workers' compensation benefits, and employee medical and dental insurance30

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010claims at June 30, 2011 and 2010 are adequate to satisfy all claims for events that haveoccurred through those respective dates. At June 30, 2011 and 2010, Metro held$16,537,890 and $14,809,357 respectively, in cash, cash equivalents, and investmentsdesignated for payment of these claims.The lag payout of medical and dental claims average approximately eight weeks;therefore, all of the June 30, 2011 and 2010 balance of $3.5 million for medical anddental liability is expected to be paid the following year. At June 30, 2011 and 2010,management estimates approximately $8.1 million and $6.5 million, respectively, of theworkers’ compensation and casualty liabilities are payable within one year. Of the $8.1million payable at June 30, 2011, $5.6 million relates to casualty and $2.5 million relatesto workers’ compensation. Of the $6.5 million payable at June 30, 2010, $4.5 millionrelates to casualty and $2.0 million relates to workers’ compensation.There was a recovery for business interruption (BI) insurance in June 2010 for $815,769.This amount represents incurred costs and lost profits related to a cable brake at the St.Louis Gateway Arch tram. The broken cable required the tram in the southern leg to beinoperative from July 22, 2007 through December 31, 2007. The entire amount of the BIrecovery is included in other non-operating revenues.Metro is also the defendant in several lawsuits arising from matters other than workerscompensation and personal injury litigation. These matters principally relate to,environmental cleanup, breach of contract, and alleged violations of equal protection andcredit protection requirements. In the opinion of management, including its GeneralCounsel, the ultimate resolution of these matters is not likely to have a material effect ofthe Metro’s financial position.7.Compensated AbsencesSubstantially all employees receive compensation for vacations, holidays, illness, andcertain other qualifying absences. The number of days compensated in the variouscategories of absence is based generally on length of service. Compensated absences,which have been earned but not paid, have been accrued in the accompanying financialstatements.8.Revenue RecognitionPassenger FaresPassenger fares are recorded as revenue at the time services are purchased andrevenue passes through the farebox. Sales of monthly passes, ten two-hour passes, 30-day passes and other tickets types are also recorded as revenue at the time ofpurchase.Sales of University passes, Universal passes and Student Tickets, which are valid for aspecific academic semester, are recorded initially as deferred revenue. Sales arerecognized as income at the end of each month, with the amount recognized in each31

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010month determined by prorating the total contract amount over the number of months ofthe contract.Sales TaxesState and local sales taxes are imposed on the purchase price of tangible personalproperty and taxable services sold. These taxes are forwarded to the State of MissouriDepartment of Revenue either monthly or quarterly depending on the sales volume ofthe vendor. The Missouri Department of Revenue distributes the local sales taxcollected back to the applicable city and county. The regional subsidy to Metro isgenerated from a portion of the local City of St. Louis and St. Louis County sales taxescollected. These funding jurisdictions distribute the sales tax subsidy that has beenobligated via the annual budget and appropriation process to Metro or the Bond Trustee,as applicable.9.Finance Obligations Under LeaseOn October 1, 1995, Metro entered into a transaction to lease thirty (30) Series 1000light rail vehicles (LRVs) to investors (the “headlease”) and simultaneously sublease theLRVs back (the “sublease”). Metro entered into similar transactions on August 26, 1997,leasing four of its Missouri facilities (DeBaliviere Facility, Brentwood Facility, Main RepairFacility and MetroLink Yards and Shops). Additionally, Metro entered into similartransactions on August 30, 2001, and November 29, 2001, leasing thirty-four of its Series2000 and Series 3000 LRVs.1995 Lease/Leaseback of 30 LRVsAt closing, the Series 1000 LRVs had a fair market value of approximately $63.0 million.As part of the LRV headlease, Metro received a prepayment equivalent to the net presentvalue of the headlease totaling approximately $63.0 million. With the prepayment, Metropurchased investments sufficient to make the payments under the sublease.Approximately $52.7 million was deposited in a Guaranteed Investment Contract (GIC),with American International Group (AIG), a large AAA rated insurance company.According to the terms of the GIC, AIG committed to pay the debt portion of the subleaseobligations and repurchase options. In addition, $6.8 million was invested in obligationsof the Resolution Trust Corporation (RTC), a U.S. Government Agency. Theseobligations were STRIP (zero coupon) securities, in the par amount of $22,932,000,which at maturity (2017), was sufficient to pay the remaining equity portion of thesublease obligation and exercise the repurchase option.Terms of the lease stipulated that the GIC provider maintain a credit rating of at leastBBB. In 2008, AIG was downgraded from AAA. This caused a liquidity crisis for thecompany, since it required that AIG post collateral for its obligations. To avert the failureof the company, in September 2008, the Federal Reserve provided an $85 billion creditfacility to the AIG, in exchange for 80% ownership of the company.32

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Concerns regarding the exposure to AIG were such that the Metro Board authorized thatthe lease be terminated, provided that the cost was reasonable. In November 2010,Metro made an offer to the lease investor to terminate the lease for the market value ofRTC Strip securities in the Investment Account, (approximately $20 million) plus anadditional payment of approximately $2 million, to bring the total offer to $22 million. Theoffer was accepted, and the transaction closed on November 30, 2010. Metro alsorecognized a loss of approximately $6.5 million on a previously reported market gain ofthe RTC securities.1997 Lease/Leaseback of Transit FacilitiesIn 1997, Metro prime leased its Brentwood and DeBaliviere Bus Facilities, Main RepairShop, and MetroLink Light Rail Facility to Bi-State SPVI Trust. Bi-State SPVI Trustleased the Facilities to State Street Bank and Trust. State Street subleased the Facilitiesto Bi-State SPVII Trust. Bi-State SPVII Trust subleased the Facilities to Metro. Thefacilities were leased for various periods, the last repurchase option occurring in 2018.The four facilities had a fair market value of approximately $92.3 million. As part of thehead lease, Metro received prepayments equivalent to the net present value of the headlease obligations which totaled approximately $68.4 million. Approximately $57.6 millionwas deposited with AMBAC Asset Funding to pay the debt portion of the subleaseobligation and exercise the lease repurchase option. In addition, $7.2 million wasinvested in a Guaranteed Investment Contract (GIC) with AMBAC Capital to satisfy theremaining equity portion of the sublease obligation. Metro received approximately $3million as net proceeds from the transaction. The lease was fully defeased at closing, inthat all future lease payments were guaranteed by future income from lease investmentagreements. AMBAC Assurance Company guaranteed the payments of AMBAC Assetand AMBAC Capital, and also provided a surety policy for the transaction. Provisions ofthe lease agreement provided that if AMBAC’s credit rating was downgraded, that thepayment agreements be collateralized and the surety policy be replaced. AMBAC wasdowngraded initially in November 2008 and then received further downgrades in 2010,eventually receiving a Caa2 (“extremely speculative”) rating from Moody’s in July 2010.Upon initial downgrade in November 2008, AMBAC Assurance Corporation transferredcollateral to the Collateral Agent with respect to the GIC.In October 2009, AMBAC initiated discussion with Metro on early termination of the 1997Lease. Subsequently, Metro entered into termination negotiations with the leaseinvestor, who was also the investor in the F1 Tranche of the 2001 LRV Lease (seebelow). The investor offered to terminate the lease at a substantial discount from theaccreted value of their future revenue from the lease, provided that Metro also terminatethe F1 Tranche of the 2001 Lease. Metro accepted these terms. The transaction closedon December 15, 2009. AMBAC made a termination payment to Metro for the GICreflecting the current value of the investment contract. Metro also received proceeds fromthe securities in the F1 payment obligation account (see below). With these funds, plusan additional amount, the required termination payment was made to the investor forboth transactions. Due to the investor being involved in similar negotiations with othertransit agencies, the termination agreement provides that Metro not disclose the specificamount of this payment. Management believes the amount of the payment was33

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010reasonable, was significantly below the maximum exposure in the transactions, and didnot materially affect Metro financial results for the year (FY’10). The charge wasrecorded as interest expense in the financial statements for the prior year.2001 Lease/Leaseback of 34 LRVsWith respect to the Series 2001 Lease/Leaseback of 34 LRVs, Metro entered into threetranches: F1 and C1 dated August 30, 2001 and then C2 dated November 30, 2001.The F1, C1 and C2 tranches involved transactions for seven (7), twenty-three (23) andfour (4) LRVs, respectively. With respect to the F1 and C1 tranches dated August 30,2001, the thirty LRVs at closing had a fair market value of $120.0 million. Metro receiveda prepayment equivalent to the net present value of the headlease obligations totalingapproximately $120.0 million. Approximately $93.6 million was deposited with PremierInternational Funding, to partially meet Metro’s rent obligations under the sublease and toset aside funds to enable Metro to exercise its repurchase option. Financial SecurityAssurance Company, Inc. (FSA, now Assured Guaranty), rated Aa3 by Moody’s, andAA+ by Standards and Poor’s, guarantees, through a surety policy, the payments underthe agreement with Premier International Funding. Approximately $16.5 million wasdeposited with AIG (Equity Payment Undertaker) to meet Metro’s remaining paymentobligations under the F1 and C1 subleases and to set aside funds to enable Metro toexercise its repurchase options. The AIG downgrade referenced above triggered aprovision within the Participation Agreement requiring Metro to replace the paymentundertaker or substitute acceptable lease collateral. Additionally, a downgrade of FSA inNovember 2008 triggered a lease provision requiring Metro to replace the surety policy.With respect to the F1 payment obligation, On June 10, 2009, Metro terminated theagreement with AIG and deposited securities sufficient, at maturity, to meet Metro’sobligations under the sublease. As noted above, upon early termination of the F1Tranche of the 2001 Lease, in December 2009, the securities were sold and theproceeds used as part of the required termination payment. The St. Clair County TransitDistrict (SCCTD, one of Metro’s funding partners), which participated in the lease,contributed approximately 70% of the termination payment of the F1 Tranche.With respect to the C2 Tranche, the four light rail vehicles at closing had a fair marketvalue of $16.0 million. Metro received a prepayment equivalent to the net present valueof the headlease obligations totaling approximately $16.0 million. Approximately $12.9million was deposited with Premier International Funding to partially meet Metro’s rentobligations under the sublease and to set aside funds to enable Metro to exercise itsrepurchase option, if Metro chooses to do so. FSA provides a surety policy, to guaranteethe payments under the agreement with Premier International Funding. Approximately$ 1.8 million was deposited with AIG-Matched Funding Corporation (“Equity PaymentUndertaker”) to meet Metro’s remaining rent obligations under the sublease and to setaside funds to enable Metro to exercise its purchase option.Due to the credit rating downgrades of AIG and FSA, Metro was placed in technicaldefault with regard to the C1 and C2 Tranches. However, the lease investor agreed towaive enforcement of default remedies while cure negotiations took place.34

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010At June 30, 2010, Metro had reached a tentative agreement with lease investor to curethe lease default pertaining to the C1 and C2. The agreement called for Metro to pledgeadditional collateral to the investor, equal to a percentage of the investors’ future revenuefrom the transaction. Due to complexities involved in negotiating specific terms of theagreement, the transaction did not close until February 2011, at which time Metropurchased collateral, in the form of U.S. Treasury securities, in the agreed upon paramount of $8.7 million. The collateral amount will be returned in entirety to Metro (andthe SCCTD) at the end of the lease. Additionally, the collateral will be marked to marketannually, and any portion of the collateral amount exceeding the specified amount will bereturned to Metro. Conversely, if the market value of the collateral falls below thespecified amount, Metro will be required to deposit additional collateral. It is expectedthat as the investors’ future revenue amount declines as the lease termination dateapproaches, the collateral amount will be reduced. The collateral will also be returned ifAIG and FSA re-establish the required credit rating. The SCCTD, paid for approximately70% of the collateral, of which approximately $6.1 million was unpaid at June 30, 2011.Under the various lease transactions still outstanding, Metro maintains the right tocontinued use and control of the assets through the end of the leases and is required toinsure and maintain the assets.All of the leases discussed above have been recorded as capital leases for accountingpurposes. The following table highlights pertinent information on the subleases for 2011:1995 2001Transaction Transactions TotalSublease balances, 6/30/10 $ 70,801,721 $ 76,479,811 $ 147,281,532Interest accrued in 2011 2,196,622 4,956,210 7,152,832Lease payments and reductions (72,998,343) (2,774,580) (75,772,923)Total sublease balances, 6/30/11 $ - $ 78,661,441 $ 78,661,441Purchase option dates January 2025Sublease termination dates January 2025The following table highlights pertinent information on the subleases for 2010:35

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 20101995 1997 2001Transaction Transaction Transactions TotalSublease balances, 6/30/09 $ 70,034,940 $ 93,891,905 $ 170,123,048 $ 334,049,893Interest accrued in 2010 5,215,550 3,038,205 7,869,839 16,123,594Lease payments and reductions (4,448,769) (96,930,110) (101,513,076) (202,891,955)Total sublease balances, 6/30/10 $ 70,801,721 $ - $ 76,479,811 $ 147,281,532Purchase option dates February 2017 January January 20252013, 2017 andand 2018 January 2027Sublease termination dates February 2018 January January 20252013, 2017 andand 2018 January 2027The following is a schedule by fiscal year of future lease payments and purchase optionpayments, to the extent they are exercised, and interest expense for the abovetransactions as of June 30, 2011:Payments2012 $ 2,949,6332013 1,927,5052014 3,472,8442015 -2016 - 2020 -2021 - 2025 217,541,616Total future lease payments 225,891,598Less amount representing interest (147,230,157)Net obligation at June 30, 2011 $ 78,661,44110. Long-Term DebtDebt and capital lease obligations at June 30, 2011, consisted of the following:36

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 20102010 2011Amortization,Beginning Payments and Ending Due WithinBalance Borrowings Other Adjustments Balance One YearCapital Lease Obligations $ 147,281,532 $ 7,152,832 $ (75,772,923) $ 78,661,441 $ 2,949,633Subordinate Mass Transit Sales TaxAppropriation Bonds, Series 2005 A 150,000,000 - (150,000,000) - -Mass Transit Sales Tax AppropriationBonds, Series 2002 A, B, C 321,016,761 - (9,650,000) 311,366,761 10,120,000Plus: Unamortized debt premium 3,125,984 - (1,060,579) 2,065,405 -Less: Deferred amount on remarketing - - (781,244) (781,244) -Mass Transit Sales Tax AppropriationBonds, Series 2007 20,820,000 - - 20,820,000 -Plus: Unamortized debt premium 34,405 - (1,480) 32,925 -Mass Transit Sales Tax AppropriationBonds, Series 2009 97,220,000 - - 97,220,000 -Less: Unamortized debt discount (208,724) - 7,136 (201,588) -Mass Transit Sales Tax AppropriationBonds, Series 2010 A - 75,000,000 75,000,000 -Less: Deferred amount on refunding - - (349,402) (349,402) -Bonds, Series 2010 B - 70,290,000 - 70,290,000 -Plus: Unamortized debt premium - 4,712,945 (1,175,009) 3,537,936 -Less: Deferred amount on refunding - - (349,402) (349,402) -Gateway Arch Parking Facility RevenueRefunding Bonds, Series 1997 2,045,000 - (645,000) 1,400,000 680,000Less: Unamortized debt discount (22,495) - 12,897 (9,598) -Debt and capital lease obligations $ 741,312,463 $ 157,155,777 $ (239,765,006) $ 658,703,234 $ 13,749,633Debt and capital lease obligations at June 30, 2010, consisted of the following:2009 2010Amortization,Beginning Payments and Ending Due WithinBalance Borrowings Other Adjustments Balance One YearMissouri TransportationFinance Corporation Loan $ 2,306,077 $ - $ (2,306,077) $ - $ -Capital Lease Obligations 334,049,893 16,123,594 (202,891,955) 147,281,532 7,223,349Subordinate Mass Transit Sales TaxAppropriation Bonds, Series 2005 A 150,000,000 - - 150,000,000 -Mass Transit Sales Tax AppropriationBonds, Series 2002 A, B, C 396,016,761 - (75,000,000) 321,016,761 9,650,000Plus: Unamortized debt premium 4,240,251 - (1,114,267) 3,125,984 -Mass Transit Sales Tax AppropriationBonds, Series 2007 20,820,000 - 20,820,000 -Plus: Unamortized debt premium 35,885 - (1,480) 34,405 -Mass Transit Sales Tax AppropriationBonds, Series 2009 - 97,220,000 - 97,220,000 -Less: Unamortized debt discount - (212,867) 4,143 (208,724) -Interest Rate Swaps 9,299,800 - (9,299,800) - -Gateway Arch Parking Facility RevenueRefunding Bonds, Series 1997 2,660,000 - (615,000) 2,045,000 645,000Less: Unamortized debt discount (41,003) - 18,508 (22,495) -Debt and capital lease obligations $ 919,387,664 $ 113,130,727 $ (291,205,928) $ 741,312,463 $ 17,518,349Arch Parking Facility Revenue Refunding BondsThe construction of the Gateway Arch Parking Facility was financed through the April 29,1986 issuance of revenue bonds (1986 revenue bonds). On February 10, 1997, Metroissued $8,110,000 of revenue bonds at 3.9 percent to 5.875 percent (“1997 revenuebonds”). The proceeds from the 1997 revenue bonds were used to redeem all of theprevious outstanding revenue bonds. The 1997 revenue bonds are not a general37

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010obligation of Metro, but rather are collateralized by future operations of the garage as wellas the debt service reserve. According to the indenture under which the revenue bondswere issued, the Gateway Arch Transportation Facilities fund must maintain a debtservice reserve at the required balance of $790,686. The indenture and resolutionsunder which the bonds were issued also specify certain restrictive covenants. Thesignificant covenants include not taking action to make the bonds private activity bonds,as defined by the United States Tax Code, and having specified operating profits inexcess of 150 percent of the next year’s debt service requirement and the debt servicereserve. As of June 30, 2011, Metro was in compliance with these covenants.Long-term debt principal and interest maturities subject to mandatory redemption for thebonds are as follows:FiscalInterestYear Principal Expense2012 $ 680,000 $ 58,9472013 720,000 17,626$ 1,400,000 $ 76,573Bus FinancingIn July, 2000, Metro borrowed $11,143,000 from the State of Missouri TransportationFinance Corporation (MTFC) to provide the local share requirement for federally fundedmulti-year bus replacement procurement. Metro received $5,267,589 and $5,476,682 onJuly 2000 and July 2001, respectively. Metro received its final installment on the loan of$ 398,729 in October 2001. The first, second, and third loan draws accrued interest at5.49%, 4.64% and 4.64%, respectively. Metro agreed to make equal monthly paymentsof principal and interest to amortize the loan. The MFTC also required that Metro depositapproximately one year’s debt service in an interest bearing escrow account as securityfor the loan.In addition to the annual payment, on September 28, 2009, Metro made an early payoffof the MTFC loan. The payoff amount was $756,755 and will result in savings in interestexpense to Metro of approximately $85,000. There was no pre-payment penalty, and thepayment did not result in a net gain or loss. The amount in the escrow account wasreleased back to Metro.38

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Mass Transit Sales Tax Appropriation BondsSeries 2002In November 2002, Metro issued $414 million in Mass Transit Sales Tax AppropriationBonds to finance the design, engineering, acquisition of equipment and construction ofthe 8.2 mile Cross County MetroLink Extension. The Series 2002 A, B and C Bonds areexpected 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 (“Proposition M Sales Tax”) annuallyappropriated for such purpose.The $100 million Series 2002A Bonds were originally issued as weekly Variable RateDemand Notes. The notes had a weekly put feature which provided the investor anopportunity to redeem the bonds. In the event the bonds were redeemed and anotherbuyer could not be found for them, Metro entered into a stand-by bond purchaseagreement with a large bank. In exchange for a fee, the bank agreed to buy any unsoldbonds. Due to events related to the global credit crisis which began in summer 2007,approximately $75 million of the Series A Bonds were put back to the stand-by bondpurchase provider, beginning in September 2008 through February 2010. Terms of thebond purchase agreement provided that Metro makes early amortization on any suchbonds. Consequently, in March, 2009, Metro remarketed $25 million of the Series A asfixed rate bonds at rates between 4.5% and 5.2%, maturing in 2019 – 2023. Theremaining $75 million of the Series A Bonds were refunded in November 2009 with theSeries 2009 Bonds (see below).The $313,305,000 Series 2002B bonds bear interest at rates of 3.05 percent to 5.25percent, with maturities beginning fiscal year 2009 through fiscal year 2033. InDecember 2007, Metro refunded the first two principal payments of the Series 2002BBonds (due 2009 and 2010) with the Series 2007 Refunding Bonds (see below).The $816,760 Series 2002C Capital Appreciation Bonds accrete interest at 4.125 percent(maturing October 2012,) 4.75 percent (maturing 2017) and 5.25 percent (maturing 2022)with a value of $1,855, 000 at maturity.Long-term debt principal and interest maturities subject to mandatory redemption for thebonds are as follows:39

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010FiscalInterestYear Principal Expense2012 $ 10,120,000 $ 15,348,8292013 10,531,930 14,829,3262014 11,185,000 14,216,0462015 11,775,000 13,618,6842016 12,400,000 12,983,3252017-2021 72,236,114 54,464,0922022-2026 71,848,717 36,031,0482027-2031 75,435,000 17,820,1882032-2033 35,835,000 1,366,188$ 311,366,761 $ 180,677,726The 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 areduction 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 $6,191,902of issuance costs related to the issuance of the bonds and $436,478 for the remarketingcosts. At June 30, 2011, the remaining balance is $4,007,969.Series 2002 Debt Service Reserve FundTo provide further security to the bondholders, the 2002 Bond Trust Indenture specifiedthat 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 anAAA rated surety. A surety was purchased from Financial Security AssuranceCorporation (FSA, now Assured Guaranty), which at the time of issuance was rated AAAby all three credit ratings agencies. Assured Guaranty lost its last AAA rating on October25, 2010, triggering the replacement of the policy or cash funding the DSRF by October25, 2011. During 2011, the Metro Board approved and executed a plan to cash fund theDSRF, by using a combination of capital grant funding, a loan from the State of MissouriTransportation Finance Corporation (MTFC), and Metro funds, which was completed bythe required date of October 25, 2011.Series 2005 (Subordinate)In November 2005, Metro issued $150 million in Subordinate Mass Transit Sales TaxAppropriation Bonds (Series 2005A) to complete the MetroLink Cross county light railextension project, pay certain costs of issuance, and provide funds for interest expenseup to three years. The Series 2005A Bonds are expected to be paid from the revenuesreceived by St. Louis County and the City of St. Louis from a one-quarter cent masstransit sales tax annually appropriated for such purposes, but have a subordinate lien onthe tax to the Series 2002 Bonds and subsequent bond issues refunding or remarketing40

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010the Series 2002 Bonds. (see below). The Series 2005 A Bonds were initially issued asweekly Variable Rate Demand Notes, with liquidity to the bondholders provided through adirect pay Letter of Credit (LOC) which expired on November 2, 2010. The initial rate onthe Series 2005A Bonds at closing was 2.65 percent. On August 1, 2006, to mitigateinterest rate risk, Metro converted $100 million of the Series 2005A Bonds to a rate of3.95% for a 38-month period ending October 1, 2009. On October 1, 2009, the $100million Series 2005 thus converted were remarketed as weekly Variable Rate DemandNotes. The Series 2005 Bonds were refunded with the Series 2010 Bonds (see below).Series 2007In December 2007, Metro issued $20.82 million in Mass Transit Sales Tax AppropriationRefunding Bonds (Series 2007) to advance refund the 2009 and 2010 principal paymentsof the Series 2002B Bonds, totaling $18.1 million. A Debt Service Reserve in the amountof $2.08 million was established at the time of the bond sale. The net proceeds of $18.49million were deposited in an irrevocable trust with an escrow agent to provide for thepayment of principal and interest of the aforementioned Series 2002B bonds. The Series2007 Bonds are expected to be paid from the revenues received by St. Louis County andthe City of St. Louis from a one-quarter cent mass transit sales tax annually appropriatedfor such purposes. The bonds bear interest at rates of 5.00 percent to 5.25 percent andmature in fiscal year 2034.As a result of the refunding, Metro increased its total debt service requirements by$29.31 million, which resulted in an economic loss of $3.21 million. As of June 30, 2011,all of the defeased debt had been retired.The bonds were collectively issued at a premium of $38,224 that is recorded in long-termdebt. The premium is being amortized as a reduction of interest expense. At June 30,2011 the unamortized premium was $32,925. Metro incurred and deferred $276,296 ofcosts related to the issuance of the bonds. At June 30, 2011, the remaining balance is$237,997.Long-term debt principal and interest maturities subject to mandatory redemption for thebonds are as follows:41

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010FiscalInterestYear Principal Expense2012 $ - $ 1,074,4252013 - 1,074,4252014 - 1,074,4252015 - 1,074,4252016 - 1,074,4252017-2021 - 5,372,1252022-2026 - 5,372,1252027-2031- 5,372,1252032-2034 20,820,000 2,686,063$ 20,820,000 $ 24,174,563Serie s 2009In October 2009, the Executive Committee of the Metro Board of Commissionersauthorized the issuance of $97.2 million in Mass Transit Sales Tax Appropriation Bonds.The transaction closed on November 9, 2009. Metro issued a total of $97,220,000 infixed rate serial and term bonds at an average rate of 4.97%. The bonds were issued ata discount. The discount amount of $213,454 is being recognized over the 30 year termof the bonds. The amount unrecognized at June 30, 2011 was $201,558. The bondproceeds were used as follows:• Approximately $75 million was used to refund the remaining $75 million of the $100million par Series 2002A Variable Rate Bonds.• Approximately $9.9 million was used to terminate (net) two interest rate swapsMetro had in connection with the Series 2002A Variable Rate Bonds.• Approximately $9.1 million was used to create a Debt Service Reserve Fund for thebonds.• The balance of approximately $2.5 million was used to purchase a bond insurancepolicy ($1.6 million), for the underwriters discount ($.45 million), and to buy othercosts of issuance (.55 million). The total cost of issue of $2,486,000 is beingdeferred over the 30 year term of the bonds. At June 30, 2011 the remainingbalance was $2,347,910.• The deferred amount of refunding was approximately $839,000. This amount isbeing deferred over the original remaining life of the Series 2002 A Bonds. As ofJune 30, 2011, the remaining balance was approximately $781,000.42

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010FiscalInterestYear Principal Expense2012 $ - $ 4,767,9752013 - 4,767,9752014 - 4,767,9752015 - 4,767,9752016 - 4,767,9752017-2021 - 23,839,8752022-2026 8,555,000 23,302,4632027-2031 10,035,000 20,620,9062032-2036 31,745,000 17,835,9192037-2040 46,885,000 4,376,875$ 97,220,000 $ 113,815,913Series 2010 (Subordinate)In October 2010, the Executive Committee of the Metro Board of Commissionersauthorized the issuance of $145.2 million in Mass Transit Sales Tax AppropriationBonds. The bonds were issued to refund the $150 million Series 2005 Bonds (seeabove). The Series 2010 Bonds are expected to be paid from the revenues received bySt. Louis County and the City of St. Louis from a one-quarter cent mass transit sales taxannually appropriated for such purposes, but have a subordinate lien on the tax to theSeries 2002 Bonds and subsequent bond issues refunding or remarketing the Series2002 Bonds.The transaction closed on October 14, 2010. The 2010 bonds were issued in two series:• The $75,000,000 Series 2010A Variable Rate Bonds. The Series 2010A Bondswere initially issued as weekly Variable Rate Demand Notes, with liquidity to thebondholders provided through a direct pay Letter of Credit (LOC) issued by J.P.Morgan Chase Bank, whose senior unsecured debt is currently rated Aa3, A+, andAA- by Moody’s, S&P, and Fitch, respectively. The LOC expires in October 2013.The Series 2010A Bonds mature in fiscal year 2035. The bonds had an initial rateof .27%. The average weekly rate during the fiscal year was .24%.• The $70,290,000 Series 2010B Fixed Rate Bonds. The Series 2010B Bonds wereissued as 4% coupon bonds maturing on October 15, 2013. The bonds were issuedat a price of $106.25 for a total premium of approximately $4.71 million, making theeffective yield on the bonds 1.70%. The premium will be amortized over the threeyear term of the bonds. The unamortized premium at June 30, 2011 was$3,537,936.43

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010• The cost of issuance for the Series A and B Bonds was approximately $687,000. Thiscost was not funded with bond proceeds and is being deferred over three years. Asof June 30, 2011, the remaining balance was $534,456.• The deferred amount of refunding was approximately $898,000. This amount wasallocated equally to the Series A and B Bonds and is being deferred over the life ofthe Series 2010 A Bonds. As of June 30, 2011, the remaining balance wasapproximately $349,000 for both the 2010 A Bonds and 2010 B Bonds.The Series 2002B Bonds are callable beginning in October 2013, provided marketconditions are favorable. Metro is anticipating an overall restructuring of the Series2002B Bonds as well as the Series 2010 Bonds in 2013. It is expected that such arestructuring will also address the 2002 DSRF requirement (see above).FiscalInterestYear Principal Expense2012 $ - $ 2,819,4102013 - 2,811,6002014 70,290,000 2,811,600$ 70,290,000 $ 8,442,610InterestFiscal Year Principal Expense2012 $ - $ 67,5002013 - 67,5002014 - 67,5002015 - 67,5002016 - 67,5002017-2021 - 337,5002022-2026 - 337,5002027-2031 - 337,5002032-2035 75,000,000 222,288$ 75,000,000 $ 1,572,28811.Pension PlansMetro sponsors four defined benefit pension plans. As fiduciaries for the plans, theBoard of Commissioners is required to appoint trustees to an administrative pensioncommittee for each plan; oversee the funded status and trustee administration; and44

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010approve plan amendments, benefits, funding and investment policy guidelines. TheBoard of Commissioners authorizes the trustees of the pension committees toadminister, construe and interpret the pension plans in a uniform and nondiscriminatorymanner. The trustees of the pension committees are authorized to determine eligibilityfor benefits under the plans and to construe the plans terms as well as administer theplan assets. There are no separate audited GAAP-basis reports for the pension plans orthe OPEB plan.The Pension Plan for Salaried Employees of Metro is a noncontributory single employerdefined benefit pension plan for salaried employees (“Salaried Plan”). All Metro full-timesalaried employees are eligible to participate in the Salaried Plan. Employees who retireafter attaining the normal service retirement age as defined in the plan, provided theemployees have five years of credited service, are entitled to normal retirement benefits,payable monthly for life, based upon final average monthly earnings and years ofcredited service. Final average monthly earnings are the employee’s average monthlyearnings for the three consecutive Plan years preceding cessation of employmentproducing the highest average. Participants who have attained age 55 and completedten years of credited service may retire and receive reduced benefits. The Salaried Planalso provides death and disability benefits. The amortization periods for the plans areclosed.All Metro full-time employees who are included in one of the collective bargaining unitsrecognized by Metro are required to participate in the applicable Union Plan. The UnionPlans are contributory single employer defined benefit pension plans. Participants mustsatisfy minimum age and service requirements for retirement and are eligible for adeferred vested pension if they leave the service of Metro with at least 10 years creditedservice. The Union Plans are as follows:1) Bi-State Development Agency Missouri-Illinois Metropolitan District and Division 788Amalgamated Transit Union, AFL-CIO Employees’ Pension Plan and Agreement(“788 O&M Plan”)2) Bi-State Development Agency Missouri-Illinois Metropolitan District and Division 788,Clerical Unit, Amalgamated Transit Union, AFL-CIO Employees’ Pension Plan andAgreement (“788 Clerical Plan”)3) Bi-State Development Agency Missouri-Illinois Metropolitan District and Locals No. 2and No. 309 of the International Brotherhood of Electrical Workers Employees’Pension Plan and Agreement (“IBEW Plan”)The 788 O&M Plan members are eligible for full retirement benefits at (a) age 65, (b) thecompletion of 25 years of credited service or (c) age 55 with 20 years of credited service.Participants who have attained age 55 with 15 years of credited service may retire andreceive reduced benefits.Under the 788 Clerical Plan, members are eligible for retirement benefits at (a) age 65with 10 years of credited service or (b) the completion of 25 years of credited service.45

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Participants in the Clerical Unit Plan who have attained age 55 with 15 years creditedservice may retire and receive reduced benefits.The IBEW Plan members are eligible for retirement benefits at (a) age 65 with 12 yearsof credited service or (b) the completion of 25 years of credited service.All Union employees are required to make plan contributions by payroll deduction eachweek. If a union employee leaves the employment of the Agency prior to being eligible toreceive a monthly benefit, he or she is eligible for a refund of contributions. Uponretirement, employees are entitled to a monthly pension benefit, payable for life. TheUnion Plans also provide survivor and disability benefits.Each plan has an annual actuarial valuation that includes financial statements andrequired supplementary information for that plan. The actuarial valuation is publiclyavailable. Those reports may be obtained from the Benefits Section, Bi-StateDevelopment Agency, 707 North First Street, Mail Stop #125, St. Louis, MO 63102, or bycalling 314-982-1471.Total Metro covered payroll for plan years ending in 2011 and 2010 was $80,991,850and $82,519,393, respectively. Below are the total employees and retirees coveredunder the Salaried Plan for plan years ending May 31, 2011 and 2010 and for the UnionPlans for plan years ending March 31, 2011 and 2010.46

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Union PlansSalaried Plan 788 O&M 788 Clerical IBEW Total2010 2009 2010 2009 2010 2009 2010 2009 2010 2009Retirees andBeneficiaries 273 248 987 950 61 61 6 7 1,327 1,266Vested Long-TermDisability Claimants 10 8 7 10 - - - - 17 18Terminated Vested 182 145 20 36 2 2 2 3 206 186Terminated Non-Vested(due refund) - - 21 - - - 1 - 22 -Fully Vested Active 283 280 620 595 33 31 14 12 950 918Non-Vested Active 178 180 581 624 19 21 40 43 818 868Total Participants 926 861 2,236 2,215 115 115 63 65 3,340 3,256Funding Policy, Annual Pension Cost and Actuarial AssumptionsFor the Salaried Plan, Metro contributes the actuarially recommended contribution(ARC). For the Union Plans, Metro has agreed within each collective bargainingagreement, to fund a portion of the ARC. For the 788 O&M and IBEW plans, Metro funds70% of the ARC. For the 788 Clerical plan, Metro funds 68% of the ARC. The remainingpercentages of each plan’s ARC are funded from the employee contributions. Followingis Metro's annual pension cost for the current year and related information for each plan.47

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Union PlansSalaried Plan 788 O&M 788 Clerical IBEWActuarial valuation dateJun 01, 2010 Apr 01, 2010 Apr 01, 2010 Apr 01, 2010ContributionsEmployee none $ 1,887,988 $ 98,975 $ 52,741Employer 2,803,934 4,953,503 223,550 122,475Total contributions made $ 2,803,934 $ 6,841,491 $ 322,525 $ 175,216Contribution rates (as percentof covered payroll)Employee 0.0% 3.6% 5.9% 1.8%Employer 11.0% 9.4% 13.4% 4.2%Employer Annual Pension Cost $ 2,803,934 $ 4,953,503 $ 223,550 $ 122,475Actuarial cost methodProjected Unit Entry Age Entry Age Entry AgeCredit Cost *Amortization method 30 years, * Level dollar, Level dollar, Level dollar,Level dollar, if fixed period fixed period fixed periodgreater than $0Closed Closed Closed ClosedRemaining amortization period na 23 years 24 years 25 yearsAsset valuation methodExpectedReturn Methodw/o Phase-inExpectedReturn Methodw/o Phase-inExpectedReturn Methodw/o Phase-inExpectedReturn Methodw/o Phase-inActuarial assumptions:Investment rate of return 7.50% 7.25% 7.25% 7.25%Inflation rate of return 3.50% 3.50% 3.50% 3.50%Projected salary increases 4.50% 4.50% 4.50% 4.50%Post-retirement benefit increases 0.00% 0.00% 0.00% 0.00%* Effective Jun 01, 200448

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Three-Year Trend InformationTrend information relating to the annual employer pension cost, percentage of annualemployer pension cost contributed and the net pension obligation, for each plan, for the mostrecent years for which information is available is as follows:For the Annual Percentage NetYear Ending Pension of APC PensionJune 30, * Cost (APC) Contributed ObligationSalaried Plan 2009 $ 2,234,053100% -2010 $ 2,803,934100% -2011 $ 1,924,940100% -788 O&M Plan 2009 $ 4,854,000100% -2010 $ 4,953,503100%-2011 $ 5,393,748100% -788 Clerical Plan 2009 $ 216,471100% -2010 $ 223,550100% -2011 $ 241,798100% -IBEW Plan 2009 $ 125,842100% -2010 $ 122,475100% -2011 $ 134,199100% -Note: 2011 APC to be made in the subsequent fiscal year.* The above pension costs are based upon annual actuarial valuations.49

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Funding Status and Funding ProgressAs of the latest actuarial valuation date for each plan funding progress is as follows:Salaried Plan 788 O&M Plan 788 Clerical Plan IBEW PlanPercent Funded 83.0% 55.3% 55.5% 71.1%Actuarial Accrued Liabitlity $ 56,933,387 $ 168,931,028 $ 10,601,527 $ 2,319,562Actuarial Value of Assets $ 47,226,544 $ 93,422,609 $ 5,887,209 $ 1,649,706Unfunded Actuarial AccruedLiability (UAAL) $ 9,706,843 $ 75,508,419 $ 4,714,318 $ 669,856Covered Payroll $ 25,286,621 $ 51,185,202 $ 1,632,280 $ 2,887,747Ratio of UAAL to CoveredPayroll 38.4% 147.5% 288.8% 23.2%The schedule of funding progress, presented as required supplementary information(RSI) following the notes to the financial statements, presents multiyear trend informationabout whether the actuarial value of plan assets are increasing or decreasing over timerelative to the actuarial accrued liability for benefits.Other Post-Employment BenefitsIn addition to the pension benefits described above, Metro provides other postemploymenthealth care benefits to all employees who meet retirement requirements andprovide an employee share of premiums. The benefits for union retirees are determinedby contractual agreement and the benefits for salaried retirees represent a voluntarypayment. As of June 30, 2011 and 2010, 1,120 and 1,107 union and salaried retirees,respectively, met those requirements.Three plan options are offered, and retiree contributions are three-tiered based onretirement date. The retiree contributions range from $2 per month Tier 1 Economy Plancoverage to $304 per month for family Tier 3 Premium Plan coverage. Metro reimbursesa minimum of eighty percent of the amount of validated claims for medical andhospitalization costs incurred by retirees and their dependents.For each retiree eligible for Medicare, Metro’s Plan coordinates benefits with Medicare.Expenditures for post-employment health care benefits are recognized as retirees reportclaims and include a provision for estimated claims incurred but not yet reported (IBNR)to Metro. In addition, some retirees are included in health maintenance organizations forwhich Metro pays fixed premiums.Plan DescriptionMetro Self-Insured Comprehensive Medical Plan is a single-employer healthcare plan.Metro provides healthcare benefits to retirees, their spouses and their eligibledependents, and life insurance benefits to its retirees.50

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Funding PolicyNormal annual costs of the plan are funded by employer and retiree contributions that arepay-as-you-go financing requirements. Metro established a trust for future other postemploymentbenefits (OPEB) funding above the pay-as-you-go methodology. For fiscalyears 2011 and 2010, Metro expenses under the pay-as-you-go methodology were $7.0million and $6.8 million, respectively. Metro’s actual contributions under the pay-as-yougomethodology have been favorable as compared to the actuarial estimate for the pasttwo years.The contribution requirements of plan members and Metro are established and may beamended by the Board of Commissioners. The required contribution is based uponprojected pay-as-you-go financing requirements, with an additional amount to prefundbenefits as determined annually by Metro. For the fiscal year 2011, Metro contributed$10.0 million to the plan, including $7.0 for current annual costs and an additional $3.0million to prefund benefits. For the fiscal year 2010, Metro contributed $9.9 million to theplan, including $6.8 for current annual costs and an additional $3.1 million to prefundbenefits.Annual OPEB Cost and Net OPEB Obligation.Metro’s annual OPEB cost (expense) is calculated based on the annual requiredcontribution of the employer (ARC), an amount actuarially determined in accordance withthe parameters of GASB No. 45. The ARC represents a level of funding that, if paid onan ongoing basis, is projected to cover normal cost each year and amortize anyunfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.The following table shows the actuarial assessment of Metro’s annual OPEB cost for theyear and the changes in Metro’s net OPEB obligation. The following table is inthousands.20112010Annual required contribution $ 18,078 $ 18,078Interest on net OPEB obligation 1,578 1,029Adjustment to annual required contribution (1,986) (1,274)Annual OPEB cost (expense) 17,670 17,833Contributions (10,046) (9,914)Increase in net OPEB obligation 7,624 7,919Net OPEB obligation—beginning of year 31,569 23,650Net OPEB obligation—end of year $ 39,193 $ 31,56951

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Metro’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,and the net OPEB obligation for 2011 is as follows (dollar amounts in thousands):Fiscal YearEndedAnnualOPEB CostPercentage of AnnualOPEB Cost ContributedNet OPEBObligation06/30/08 $18,157 36.7% $11,50106/30/09 $18,157 33.1% $23,65006/30/10 $18,078 54.8% $31,56906/30/11 $18,078 55.5% $39,193Funded Status and Funding ProgressIn the July 1, 2009, the most recent actuarial valuation date, the plan was 1.6 percentfunded. The actuarial accrued liability for benefits was $191.2 million and the actuarialvalue of assets was $3.1 million, resulting in an unfunded actuarial accrued liability(UAAL) of $180.2 million. Covered payroll amounted to $83.7 million and the unfundedactuarial accrued liability as a percent of covered payroll is 215.3%.The schedule of funding progress, presented as required supplementary information(RSI) following the notes to the financial statements, presents multiyear trend informationabout whether the actuarial value of plan assets are increasing or decreasing over timerelative to the actuarial accrued liability for benefits.Actuarial Methods and AssumptionsActuarial valuations of an ongoing plan involve estimates of the value of reportedamounts and assumptions about the probability of occurrence of events far into thefuture. Examples include assumptions about future employment, mortality, and thehealthcare cost trends. Amounts determined regarding the funded status of the plan andthe annual required contributions of the employer are subject to continual revision.Actual results are compared with past expectations and new estimates are made aboutthe future.Projections of benefits for financial reporting purposes are based on the substantive plan(the plan as understood by the employer and the plan members) and include the types ofbenefits provided at the time of each valuation and the historical pattern of sharing ofbenefit costs between the employer and plan members to that point.In the July 1, 2009, actuarial valuation, the projected unit credit cost method was used.The actuarial assumptions include a 5.0% discount rate of return (net of administrativeexpenses), and an annual healthcare cost trend rate of 8.10% in 2009 and grading downto 4.7% in the year 2085 and each year thereafter. The UAAL is being amortized as alevel dollar amount over 30 years. The remaining amortization period at July 1, 2010,was 27 years.52

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 201012. Grants and AssistanceFederal Aviation Administration Capital Improvement GrantsCapital improvement projects for airport engineering and construction costs at the St.Louis Downtown Airport are funded by capital improvement grants from the FederalAviation Administration and the Illinois Department of Aeronautics. The St. LouisDowntown Airport provides additional funds from operational revenues.Capital and Operating Assistance GrantsMetro receives federal and state capital assistance grants for undertaking of urban masstransportation capital improvement projects. Additionally, beginning in fiscal year 1999, aportion of the capital assistance grants may be used for fleet maintenance. The terms ofthe capital assistance grants require that a portion of the project costs be funded locally.The local share of the capital assistance grants has been funded by grants from the Stateof Illinois and by application of local Missouri sales tax appropriations. Metro receivesthe following type of assistance grants.Federal Transit Administration -- Metro is the recipient of several Federal TransitAdministration Assistance Grants awarded by the United States Department ofTransportation under the Federal Transit Act of 1964, as amended.State of Missouri -- In 1996 the Governor of the State of Missouri approvedtemporary transit operating assistance grant funding through the MissouriDepartment of Transportation. Metro began receiving this assistance in July 1996.The grant was renewed for fiscal year 2011. There was an additional $8.0 millionawarded from the state of Missouri in 2010 due to service reductions.Illinois Department of Transportation Grants -- The Illinois Department ofTransportation is authorized under provisions of Illinois Revised Statutes, Chapter127, Section 49 through 51 and Illinois Revised Statues, Chapter 127, Section 701(“Illinois Acts”) to provide capital assistance to Metro. Metro uses a portion of theIllinois capital assistance grants to meet local share requirements on certainfederal transit administration capital improvement projects.Sales Tax AppropriationsThe Missouri Legislature has authorized certain cities and counties to levy a 1/2 centsales tax to be used for transportation purposes. Missouri law does not require thatrevenues from the ½ cent sales tax be paid directly to Metro, but authorizes the collectingagencies to appropriate such revenues for transportation purposes. A minimum of twopercent of any appropriation for public mass transportation must be passed through tothe St. Louis Office of Mentally Retarded/Developmentally Disabled Resources (“CityBoard”) and Productive Living Board for the Developmentally Disabled (“County Board”).Sales tax receipts that are passed through to the City and County Boards are recorded53

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010as operating assistance, and the corresponding expense is recorded as a contribution tooutside entities in the statement of revenues and expenses of Metro.Additionally, a 1/4 cent sales tax Prop M was established. This tax is restricted to masstransit use and is forwarded to Metro based upon annual appropriations from the City ofSt. Louis and St. Louis County.St. Louis County voters passed Prop A ½ Cent Sales Tax in April 2010. Passage of thistax triggered collection of a ¼ Cent Prop M2 Sales Tax passed by the City of St. Louisvoters in 1997. Metro began receiving appropriated ½ cent from St. Louis County Prop Aand a ¼ cent from the City of St. Louis Prop M2. Both are restricted for mass transit use.The Agency has restricted a total of $13,758,415 and $13,836,415 in 2011 and 2010,respectively, of previously unrestricted sales tax operating assistance, which is recordedin the restricted Sales Tax Capital Account. These restricted funds will be used for thepurchase or construction of new transportation equipment or facilities.Temporary advances for operating purposes are allowed from the restricted Sales TaxCapital fund, to be repaid when Federal, state or local operating assistance is received.Advances allowed for environmental clean-up activities for non-operating properties areto be repaid from the proceeds from the sale of the non-operating assets.Illinois CountiesMetro contracts with the St. Clair County Transit District to provide public masstransportation services for the Illinois Counties of St. Clair and Monroe. The contractspecifies the amount of services to be provided, and the method of reimbursement foroperating costs associated with the services provided in these counties.Operating DeficitsMetro has experienced losses before depreciation and capital contributions since 2005.Metro’s ability to fund the costs of continued operations is dependent upon thecooperation and operating assistance from other governments. While resources exist tomeet Metro’s present obligations, revenues from operations alone are not adequate tomeet the expenses of continuing operations without such assistance.54

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 201013.Interfund BalancesThe interfund receivable and payable balances as of June 30, 2011 and 2010, are asfollows:2011 2010Interfund Interfund Interfund InterfundReceivables Payables Receivables PayablesCurrent PortionGeneral Agency $ 1,122,191 $ 988 $ 554,681 $ 1,161Gateway Arch Tram System - 362,473 7,696 157,346Gateway Arch Parking Facility 12,174 106,637 54,252 -Gateway Arch Riverfront 36,896 371,124 88,693 110,868St. Louis Downtown Airport 79,001 - 449,838 171,283Bi-State Transit System 424,443 833,483 - 714,502Total current $ 1,674,705 $ 1,674,705 $ 1,155,160 $ 1,155,160These balances, which track cash activity between funds, have been eliminated in theaccompanying combined financial statements, but are included in the supplementaryschedules.14. Operating AgreementsAccording to a cooperative agreement (“Agreement”) dated May 14, 1962, as amended,with the United States Government acting through the National Park Service, Metroagreed to construct and operate a transportation system (“Tram”) in the Gateway Arch.According to the Agreement, Metro will operate the Tram until January 1, 2013, and is toreceive a monthly management fee. The monthly management fee is based upon thecurrent month's estimate of operating results. The United States Government retainslegal title to the Tram. Upon termination of the Agreement, Metro is required to transfer tothe United States Government all remaining assets from the operations of the Tram afterdischarge of all liabilities.Through the Agreement, Metro constructed and operates a 1,200 space parking facilityon the Jefferson National Expansion Memorial site. The United States Governmentretains legal title to the Gateway Arch Parking Facility. Metro is required to establishparking rates, fees and charges to operate and maintain the parking garage and to paydebt service on the Arch Parking Facility Revenue Refunding Bonds, Series 1997. Upontermination of the Agreement, Metro is required to transfer to the United StatesGovernment all assets remaining from the operations of the parking facility after thedischarge of all liabilities.55

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 201015. Joint Venture AgreementOn June 12, 2007, Metro opened a 1,200 car parking facility (Meridian Garage) at theBrentwood I-64 MetroLink Station that had been constructed in conjunction with a privatedeveloper. The joint venture is organized under the Uniform Missouri Condominium Actof Missouri. Initially, Metro’s portion consisted of two-thirds of the non-retail portion of theparking facility.On December 16, 2010, Metro purchased the remaining one-third interest in the MeridianGarage for $5.85 million. Metro pays a management fee to a property manager tooversee the property and its day to day operations. Metro also pays for expenses relatedto the upkeep of the garage.16. Fuel HedgeMetro has adopted GASB 53 to account for their investment in oil future contracts tohedge against the volatility in diesel fuel prices. Because the fuel hedge is an effectivehedge as defined by GASB 53, the unrealized gain (loss) on the fuel hedge is reported onthe Statement of Net Assets as an investment and a deferred inflow/outflow. Thehedging instruments affected are weekly fuel hedge contracts with a notional amount of42,000 gallons each with an index of New York Harbor Heating Oil #2 as listed on theNYMEX. There were 71 and 114 open contracts at June 30, 2011 and 2010,respectively. On average, it costs Metro $32 to acquire a fuel hedge contract. Theaggregate fuel hedge contracts cover a rolling 18-month period.Basis risk. Metro is exposed to basis risk on its fuel hedge contracts because the futurefuel purchases are based on a pricing point different from the pricing point at which thefuture contracts are expected to settle (New York Harbor Heating Oil #2).There is no termination or interest rate risk.17. Commitments and ContingenciesExpenditures financed by State and Federal grants are subject to audit by the grantingagencies to verify compliance with conditions of the grants. Management believes thatMetro is in compliance with the terms of such grants and that no significant liability willarise from audits previously performed or to be performed.In the ordinary course of business, a number of claims and lawsuits arise from individualsseeking compensation for personal injury, death, and/or property damage resulting fromaccidents occurring in the operation of the system. In addition, Metro has been namedas a defendant in a number of lawsuits relating to personnel and contractual matters.Management does not believe that the outcome of these claims will have a materialadverse effect on Metro’s financial position. However, in the event of an unfavorableoutcome in one or more of these matters, the impact could be material to Metro’sfinancial position or results of operations.56

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 201018. Conduit Debt ObligationsFrom time to time, Metro has been associated with the issuance of IndustrialDevelopment Bonds and Special Facility Revenue Bonds to provide financial assistancefor the acquisition and construction of facilities deemed to be in the public interest.Special Facility Revenue BondsFor the construction of the second phase of the MetroLink system, Metro utilized fundsprovided by the proceeds from three special revenue bond issuances. These bonds arenot general obligations of Metro. The bonds are to be repaid by a party other than Metro.Accordingly, the bonds are not reported as liabilities in the accompanying financialstatements. The following is a description of the three special facility revenue bondissuances:St. Clair County MetroLink Extension Project Bonds, Series 1998 A – The $48,550,000Series 1998 A Bonds, issued July 1, 1998, are special, limited obligations of Metro,payable solely from certain project payments to be made by the Metro East TransitDistrict of St. Clair County (the “District”), pursuant to the Project Financing, Construction,and Operation Agreement dated July 1, 1998 (“Project Agreement”) between the Districtand Metro. These bonds mature serially. On September 26, 2009, St. Clair CountyTransit District deposited cash with the Trustee to legally defease the bond issue.St. Clair County MetroLink Extension Project Refunding Revenue Bonds, Series 2004 –The $5,590,000 Series 2004 Bonds, issued April 15, 2004 are special, limited obligationsof Metro, payable solely from revenue and other sources provided in the indenture, andare not general obligations of Metro. These bonds mature serially in varying amountsthrough 2028. The Series 2004 bonds provide funds to refund a portion of the Series1998 A bonds on July 1, 2004 through July 1, 2008. As of June 30, 2011, $5,435,000remains outstanding.St. Clair County MetroLink Extension Project Refunding Revenue Bonds, Series 2006 –The $39,155,000 Series 2006 Bonds, issued December 20, 2006 are special, limitedobligations of Metro, payable solely from revenue and other sources provided in theindenture, and are not general obligations of Metro. These bonds mature serially invarying amounts through 2028. The Series 2006 bonds provide funds to refund a portionof the Series 1998 A bonds on July 1, 2009 through July 1, 2028. As of June 30, 2011,the entire amount was outstanding.19.Subsequent EventsSeries 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) becreated in the amount of $27,975,665 ($28.0 million). Metro had the option of cashfunding this requirement or purchasing an AAA rated surety. A surety was purchasedfrom Financial Security Assurance Corporation (FSA, now Assured Guaranty), which atthe time of issuance was rated AAA by all three credit ratings agencies. Assured57

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Guaranty lost its last AAA rating on October 25, 2010, triggering either the replacementof the surety or cash funding the DSRF by October 25, 2011. In March 2011, the MetroBoard approved a plan to cash fund the DSRF by the required date using a combinationof capital grant funding, a loan from the State of Missouri Transportation FinanceCorporation (MTFC), and its own funds.58

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictRequired Supplementary InformationJune 30, 2011Schedule of Funding Progress - OPEB PlanActuarialValuationDateActuarialValue ofAssetActuarialAccruedLiability (AAL)UnfundedAAL(UAAL)FundedRatioCoveredPayrollUAAL as aPercentage ofCovered Payroll7/1/20076/30/2010$ - $ 168,631,000$ 3,079,196 $ 191,323,000$$168,631,000188,244,0000.0%2.0%$$89,419,83583,700,315-188.6%-224.9%59

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictRequired Supplementary InformationJune 30, 2011Schedules of Funding Progress - Pension PlansActuarial Actuarial Accrued Unfunded UAAL as aActuarial Value of Liability (AAL) AAL Funded Covered Percentage ofValuation Asset =-Entry Age (UAAL) Ratio Payroll Covered PayrollDate (a) (b) (b – a) (a / b) (c) ((b – a) / c)Salaried Plan6/1/2005 $ 40,281,552 $ 39,850,200 $ (431,352) 101.1% $ 27,630,438 -1.6%6/1/2006 $ 42,880,931 $ 42,280,212 $ (600,719) 101.4% $ 25,601,698 -2.3%6/1/2007 $ 44,751,281 $ 43,192,896 $ (1,558,385) 103.6% $ 25,417,682 -6.1%6/1/2008 $ 47,677,929 $ 46,380,318 $ (1,297,611) 102.8% $ 25,645,092 -5.1%6/1/2009 $ 48,126,959 $ 47,280,017 $ (846,942) 101.8% $ 25,465,982 -3.3%6/1/2010 $ 47,226,544 $ 56,933,387 $ 9,706,843 83.0% $ 25,286,621 38.4%788 O&M Plan4/1/2005 $ 90,066,198 $ 138,783,821 $ 48,717,623 64.9% $ 48,808,651 99.8%4/1/2006 $ 94,032,935 $ 142,175,988 $ 48,143,053 66.1% $ 48,763,512 98.7%4/1/2007 $ 97,050,487 $ 151,535,366 $ 54,484,879 64.0% $ 49,474,125 110.1%4/1/2008 $ 99,123,171 $ 149,889,177 $ 50,766,006 66.1% $ 54,380,281 93.4%4/1/2009 $ 95,099,820 $ 154,636,364 $ 59,536,544 61.5% $ 52,442,843 113.5%4/1/2010 $ 93,422,609 $ 168,931,028 $ 75,508,419 55.3% $ 51,185,202 147.5%788 Clerical Plan4/1/2005 $ 6,503,985 $ 9,175,867 $ 2,671,882 70.9% $ 1,740,167 153.5%4/1/2006 $ 6,593,288 $ 9,266,506 $ 2,673,218 71.2% $ 1,747,260 153.0%4/1/2007 $ 6,652,726 $ 9,714,392 $ 3,061,666 68.5% $ 1,652,019 185.3%4/1/2008 $ 6,603,485 $ 9,995,819 $ 3,392,334 66.1% $ 1,702,916 199.2%4/1/2009 $ 6,117,313 $ 10,137,473 $ 4,020,160 60.3% $ 1,671,299 240.5%4/1/2010 $ 5,887,209 $ 10,601,527 $ 4,714,318 55.5% $ 1,632,280 288.8%IBEW Plan4/1/2005 $ 839,041 $ 1,634,761 $ 795,720 51.3% $ 2,001,896 39.7%4/1/2006 $ 924,183 $ 1,878,842 $ 954,659 49.2% $ 2,081,142 45.9%4/1/2007 $ 1,126,783 $ 1,787,944 $ 661,161 63.0% $ 2,512,973 26.3%4/1/2008 $ 1,407,149 $ 1,722,667 $ 315,518 81.7% $ 2,804,130 11.3%4/1/2009 $ 1,521,939 $ 2,151,016 $ 629,077 70.8% $ 2,939,269 21.4%4/1/2010 $ 1,649,706 $ 2,319,562 $ 669,856 71.1% $ 2,887,747 23.2%(1) Not applicable prior to June 1, 2004, the aggregate actuarial cost method does not identify or separately amortize unfunded actuarial liabilitiesChanges to prior year reports are based on the latest actuarial reports.60

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Net AssetsJune 30, 2011AssetsCurrent assetsCash and cash equivalentsRestricted cash and cash equivalentsInvestmentsRestricted investmentsAccounts receivableRestricted accounts receivableInterfund accounts receivableFederal operating assistance receivableFederal, state and local operatingassistance receivableMaterials and suppliesPrepaid expenses, deferred charges andother current assetsGeneralAgency$ 247,407425,278--150,820-1,122,191---18,446$GatewayArchTramSystem1,715,706702,2462,003,3427,998,35091,609-----400$GatewayArchParkingFacility1,372,5781,485,001--975-12,174---200$GatewayArch St. Louis TotalRiverfront Downtown TransitInterfundAfterAttractions AirportSystemTotals Eliminations Eliminations18,928---5,000-36,896--42,320267$81,718154,658--65,394-79,001-8,75966,52011,844$38,775,29654,334,5095,999,11065,077,3881,961,59560,611424,443-16,993,6437,292,7301,535,791$42,211,63357,101,6928,002,45273,075,7382,275,39360,6111,674,705-17,002,4027,401,5701,566,948$ - $-----(1,674,705)----42,211,63357,101,6928,002,45273,075,7382,275,39360,611--17,002,4027,401,5701,566,948Total current assets 1,964,142 12,511,653 2,870,928 103,411 467,894 192,455,116 210,373,144 (1,674,705) 208,698,439Non-current assetsInvestments held to paycapital lease / leaseback liabilitiesDepreciable capital assets, netof accumulated depreciationLandConstruction in progressOther non-current assets, net ofaccumulated amortization-14,721----1,566,112----636,351-32,7304,712-2,267,460----16,353,7074,542,564748,621105,31578,676,413984,261,98597,388,88816,744,2767,185,42978,676,4131,005,100,336101,931,45217,525,6277,295,456-----78,676,4131,005,100,336101,931,45217,525,6277,295,456Total non-current assets 14,721 1,566,112 673,793 2,267,460 21,750,207 1,184,256,991 1,210,529,284 - 1,210,529,284Total assets 1,978,863 14,077,765 3,544,721 2,370,871 22,218,101 1,376,712,107 1,420,902,428 (1,674,705) 1,419,227,723(continued)61

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Net AssetsJune 30, 2011Gateway Gateway GatewayArch Arch Arch St. Louis TotalsGeneral Tram Parking Riverfront Downtown Transit Interfund AfterAgency System Facility Attractions Airport System Totals Eliminations EliminationsLiabilitiesCurrent liabilities payable from unrestricted assetsAccounts payable $ 165,450 $ 340,698 $ 55,307 $ 10,320 $ 15,431 $ 7,811,781 $ 8,398,987 $ - $ 8,398,987Accrued expenses 120,931 46,143 4,105 97,384 65,743 17,557,104 17,891,410 - 17,891,410Other current liabilities - 50,346 12,516 113,596 3,210 3,086,748 3,266,416 - 3,266,416Interfund accounts payable 988 362,473 106,637 371,124 - 833,483 1,674,705 (1,674,705) -Total current liabilities payable fromunrestricted assets 287,369 799,660 178,565 592,424 84,384 29,289,116 31,231,518 (1,674,705) 29,556,813Current liabilities payable from restricted assetsAccounts payable and retainage payable - 227,511 - - - 2,475,855 2,703,366 - 2,703,366Accrued interest - - 12,894 - - 6,508,710 6,521,604 - 6,521,604Self-insurance liability - - - - - 11,546,420 11,546,420 - 11,546,420Current portion of long-term debt - - 680,000 - - 10,120,000 10,800,000 - 10,800,000Current portion of capital lease /leaseback obligations - - - - - 2,949,633 2,949,633 - 2,949,633Total current liabilities payable fromrestricted assets - 227,511 692,894 - - 33,600,618 34,521,023 - 34,521,023Total current liabilities 287,369 1,027,171 871,459 592,424 84,384 62,889,734 65,752,541 (1,674,705) 64,077,836Non-current liabilitiesOther post employment benefits 425,278 202,246 87,413 231,264 207,029 38,039,770 39,193,000 - 39,193,000Long-term self-insurance liability 300 1,381 16,240 48,521 71,053 5,491,060 5,628,555 - 5,628,555Long-term debt - - 710,402 - - 568,531,391 569,241,793 - 569,241,793Capital lease / leaseback obligations - - - - - 75,711,808 75,711,808 - 75,711,808Other non-curent liabilities - - - - - 6,743,843 6,743,843 - 6,743,843Total non-current liabilities 425,578 203,627 814,055 279,785 278,082 694,517,872 696,518,999 - 696,518,999Total liabilities 712,947 1,230,798 1,685,514 872,209 362,466 757,407,606 762,271,540 (1,674,705) 760,596,835Net AssetsInvested in capital assets, net of related debt 14,720 1,566,113 (730,919) 2,267,460 21,644,892 523,718,388 548,480,654 - 548,480,654RestrictedCooperative agreement - 8,498,350 - - - - 8,498,350 - 8,498,350Revenue bond indenture - - 1,384,696 - - - 1,384,696 - 1,384,696Mass transit sales tax bond indenture - - - - - 20,811,654 20,811,654 - 20,811,654Capital lease obligations - - - - - 8,736,150 8,736,150 - 8,736,150Unrestricted 1,251,196 2,782,504 1,205,430 (768,798) 210,743 66,038,309 70,719,384 - 70,719,384Total net assets $ 1,265,916 $ 12,846,967 $ 1,859,207 $ 1,498,662 $ 21,855,635 $ 619,304,501 $ 658,630,888 $ - $ 658,630,88862

Total non-operating revenues (expenses) 1,145 (1,223,111) (14,635) 243 1,346 168,686,071 167,451,059 - 167,451,059Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Revenues, Expenses and Changes in Net AssetsFor the Year Ended June 30, 2011Gateway Gateway GatewayArch Arch Arch St. Louis TotalsGeneral Tram Parking Riverfront Downtown Transit Interfund AfterAgency System Facility Attractions Airport System Totals Eliminations EliminationsOperating revenuesPassenger and service revenues $ - $ 5,426,927 $ 1,722,005 $ 1,719,556 $ 1,162,864 $ 47,496,596 $ 57,527,948 $ (125,544) $ 57,402,404Interfund administrative fees 2,300,344 - - - - - 2,300,344 (2,300,344)Other 437,028 (27,373) 59,962 66,410 211,400 3,690,847 4,438,274 - 4,438,274Total operating revenues 2,737,372 5,399,554 1,781,967 1,785,966 1,374,264 51,187,443 64,266,566 (2,425,888) 61,840,678Operating expensesWages and benefits 1,590,581 1,315,997 370,402 1,050,819 826,773 148,633,265 153,787,837 - 153,787,837Services 1,014,601 701,739 422,812 288,802 79,173 24,168,313 26,675,440 - 26,675,440Materials and supplies 19,384 144,231 29,590 401,843 125,385 31,488,670 32,209,103 - 32,209,103Casualty and liability costs - 30,372 28,403 151,209 49,529 5,933,642 6,193,155 - 6,193,155Interfund administrative charges - 589,057 142,557 - 68,730 1,500,000 2,300,344 -(2,300,344)Electricity, telephone, leases, & other general exp 180,596 918,469 81,674 272,122 174,511 8,835,787 10,463,159 (125,544) 10,337,615Depreciation and amortization 7,209 750,852 365,282 264,846 1,418,004 75,490,541 78,296,734 - 78,296,734Total operating expenses 2,812,371 4,450,717 1,440,720 2,429,641 2,742,105 296,050,218 309,925,772 (2,425,888) 307,499,884Operating income (loss) (74,999) 948,837 341,247 (643,675) (1,367,841) (244,862,775) (245,659,206) - (245,659,206)Non-operating revenues (expenses)Grants and assistanceState and local assistance - - - - - 170,832,333 170,832,333 - 170,832,333Federal assistance - - - - - 26,352,771 26,352,771 - - 26,352,771Interest income 1,145 14,003 2,244 243 328 580,048 598,011 - 598,011Interest expense - - (114,093) - - (22,782,468) (22,896,561) - (22,896,561)Contributions to outside entities - (1,237,084) 97,214 - 1,018 (971,418) (2,110,270) - (2,110,270)Gain or (loss) on disposition of assets - (30) - - - 1,800 1,770 - 1,770Loss on capital lease termination - - - - - (6,488,743) (6,488,743) - (6,488,743)Other non-operating revenue (expense) - - - - - 1,161,748 1,161,748 - 1,161,748beforecontributions (73,854) (274,274) 326,612 (643,432) (1,366,495) (76,176,704) (78,208,147) - (78,208,147)Capital contributions - - - - 2,770,537 41,501,773 44,272,310 - 44,272,310Change in net assets (73,854) (274,274) 326,612 (643,432) 1,404,042 (34,674,931) (33,935,837) - (33,935,837)Total net assets, July 1, 2010 1,339,770 13,121,241 1,532,595 2,142,094 20,451,593 653,979,432 692,566,725 - 692,566,725Total net assets, June 30, 2011 $ 1,265,916 $ 12,846,967 $ 1,859,207 $ 1,498,662 $ 21,855,635 $ 619,304,501 $ 658,630,888 $ - $ 658,630,88863

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Cash FlowsFor the Year Ended June 30, 2011Gateway Gateway GatewayArch Arch Arch St. Louis TotalsGeneral Tram Parking Riverfront Downtown Transit Interfund AfterAgency System Facility Attractions Airport System Totals Eliminations EliminationsCash flows from operating activitiesReceipts from customers $ 551,627 $ 5,362,369 $ 1,781,034 $ 1,785,966 $ 1,383,022 $ 51,405,523 $ 62,269,541 $ (125,544) $ 62,143,997Payments to employees (1,451,151) (1,251,702) (364,904) (1,007,981) (766,863) (141,652,365) (146,494,966) - (146,494,966)Payments to vendors (1,176,866) (2,259,521) (700,741) (946,205) (432,762) (56,231,361) (61,747,456) 125,544 (61,621,912)Payments for self-insurance - (35,372) (24,163) (143,767) (145,105) (3,758,990) (4,107,397) - (4,107,397)Receipts (payments) from inter-fund activity 1,732,660 (376,234) 6,158 312,053 130,825 (1,805,462) - - -in)operating activities (343,730) 1,439,540 697,384 66 169,117 (152,042,655) (150,080,278) - (150,080,278)Cash flows from noncapital financing activitiesOperating assistance received - - - - 1,368,587 188,794,072 190,162,659 - 190,162,659Contributions (to) from outside entities - (1,072,453) 97,214 - 1,018 (971,418) (1,945,639) - (1,945,639)Non-operating contributions - - - - - 1,161,748 1,161,748 - 1,161,748Net cash provided by (used in)noncapital financing activities - (1,072,453) 97,214 - 1,369,605 188,984,402 189,378,768 - 189,378,768Net increase (decrease) incash and cash equivalents,operating and non-operatingfinancing activities $ (343,730) $ 367,087 $ 794,598 $ 66 $ 1,538,722 $ 36,941,747 $ 39,298,490 $ - $ 39,298,490(continued)64

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Cash FlowsFor the Year Ended June 30, 2011GeneralAgencyGatewayArchTramSystemGatewayArchParkingFacilityGatewayArchRiverfrontAttractionsSt. LouisDowntownAirportTransitSystemTotalsInterfundEliminationsTotalsAfterEliminationsNet increase (decrease) incash and cash equivalents,operating and non-operatingfinancing activities$(343,730)$367,087$794,598$66$ 1,538,722 $36,941,747 $39,298,490$-$39,298,490Cash flows from capital and related financing activitiesAcquisitions of capital assetsPayments of long-term debtFunds paid as part of capital lease terminationInterest paidContributed capital-----(97,784)----(120,439)(645,000)-(101,197)------(4,444,684)---2,770,537(29,648,464)(14,360,000)(2,104,426)(21,192,393)41,501,773(34,311,371)(15,005,000)(2,104,426)(21,293,590)44,272,310-----(34,311,371)(15,005,000)(2,104,426)(21,293,590)44,272,310Net cash provided by (used in)capital and related financing activities - (97,784) (866,636) - (1,674,147) (25,803,510) (28,442,077) - (28,442,077)Cash flows from investing activitiesPurchases of investmentsProceeds from sale of investmentsentInterest received--1,145(14,783,042)14,549,70014,003(1,240,588)2,339,4512,244-243--328(97,810,250)60,857,515515580,048(113,833,880)77,746,666746 666598,011---(113,833,880)77,746,666746 666598,011Net cash provided by (used in)investing activities 1,145 (219,339) 1,101,107 243 328 (36,372,687) (35,489,203) - (35,489,203)Net increase (decrease) in cashand cash equivalents (342,585) 49,964 1,029,069 309 (135,097) (25,234,450) (24,632,790) - (24,632,790)Cash and cash equivalents, beginning of year 1,015,270 2,367,988-1,828,510 18,619 371,473 118,344,255 123,946,115 - 123,946,115Cash and cash equivalents, end of year $ 672,685 $ 2,417,952 $ 2,857,579 $ 18,928 $ 236,376 $ 93,109,805 $ 99,313,325 $ - $ 99,313,32565

for) operating activities $ (343,730) $ 1,439,540 $ 697,384 $ 66 $ 169,117 $ (152,042,655) $ (150,080,278) $ - $ (150,080,278)Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Cash FlowsFor the Year Ended June 30, 2011Gateway Gateway GatewayArch Arch Arch St. Louis TotalsGeneral Tram Parking Riverfront Downtown Transit Interfund AfterAgency System Facility Attractions Airport System Totals Eliminations EliminationsCash flows from operating activitiesOperating income (loss) $ (74,999) $ 948,837 $ 341,247 $ (643,675) $ (1,367,841) $ (244,862,775) $ (245,659,206) $ - $ (245,659,206)Adjustments to reconcile operatingincome (loss) to net cash provided by(used for) operating activitiesDepreciation and amortization 7,209 750,852 365,282 264,846 1,418,004 75,490,541 78,296,734 - 78,296,734Change in assets and liabilitiesAccounts and notes receivables 114,600 (37,182) (934) - 8,759 218,080 303,323 - 303,323Interfund accounts receivable (567,510) 7,696 42,078 51,797 370,837 (424,443) (519,545) 519,545 -Materials and supplies - - - 2,859 835 (1,419,782) (1,416,088) - (1,416,088)Prepaid expenses, deferred charges andother current assets (2,440) (403) (198) (268) (57,733) (1,154,923) (1,215,965) - (1,215,965)Accounts payable 40,155 (488,002) (165,882) (5,452) 2,385 3,246,801 2,630,005 - 2,630,005Other current liabilities - (6,680) (584) 19,422 820 7,589,313 7,602,291 - 7,602,291Interfund accounts payable (174) 205,127 106,637 260,257 (171,283) 118,981 519,545 (519,545) -Accrued expenses 24,059 13,349 (12,710) 3,588 9,504 (368,919) (331,129) - (331,129)Other post employment benefits liability 115,370 50,946 18,208 39,250 50,406 7,349,819 7,623,999 - 7,623,999Self-insurance liability - (5,000) 4,240 7,442 (95,576) 2,174,652 2,085,758 - 2,085,758Total adjustments (268,731) 490,703 356,137 643,741 1,536,958 92,820,120 95,578,928 - 95,578,92866

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Net AssetsJune 30, 2010AssetsCurrent assetsCash and cash equivalentsRestricted cash and cash equivalentsInvestmentsRestricted investmentsAccounts receivableRestricted accounts receivableInterfund accounts receivableFederal, state and local operatingassistance receivableMaterials and suppliesPrepaid expenses, deferred charges andother current assetsGeneralAgency$ 705,363309,907--265,419-554,681--16,005$GatewayArchTramSystem973,9231,394,0659,540,83754,427-7,696---$GatewayArchParkingFacility1,480,550347,9601,098,863-41-54,252---$GatewayArch St. Louis TotalRiverfront Downtown TransitInterfundAfterAttractions AirportSystemTotals Eliminations Eliminations18,619---5,000-88,693-45,179-$214,850156,623--74,153-449,8381,377,34567,35511,279$33,945,28484,398,971-34,342,4032,179,67648,585-7,778,4975,872,948230,401$37,338,58986,607,52610,639,70034,342,4032,578,71648,5851,155,1609,155,8425,985,482257,685$------(1,155,160)---$37,338,58986,607,52610,639,70034,342,4032,578,71648,585-9,155,8425,985,482257,685Total current assets 1,851,375 11,970,948 2,981,666 157,491 2,351,443 168,796,765 188,109,688 (1,155,160) 186,954,528Non-current assetsInvestments held to paycapital lease / leaseback liabilitiesDepreciable capital assets, netof accumulated depreciationLandConstruction in progressOther non-current assets, net ofaccumulated amortization-21,930----1,845,205-374,005--897,919-10,48310,233-2,532,306----10,567,7724,542,5644,398,27048,147151,680,8211,039,356,78797,256,7506,194,4177,965,069151,680,8211,055,221,919101,799,31410,977,1758,023,449-----151,680,8211,055,221,919101,799,31410,977,1758,023,449Total non-current assets 21,930 2,219,210 918,635 2,532,306 19,556,753 1,302,453,844 1,327,702,678 - 1,327,702,678Total assets 1,873,305 14,190,158 3,900,301 2,689,797 21,908,196 1,471,250,609 1,515,812,366 (1,155,160) 1,514,657,206(continued)67

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Net AssetsJune 30, 2010Gateway Gateway GatewayArch Arch Arch St. Louis TotalsGeneral Tram Parking Riverfront Downtown Transit Interfund AfterAgency System Facility Attractions Airport System Totals Eliminations EliminationsLiabilitiesCurrent liabilities payable from unrestricted assetsAccounts payable $ 125,297 $ 664,069 $ 221,186 $ 15,771 $ 13,045 $ 4,564,981 $ 5,604,349 $ - $ 5,604,349Accrued expenses 96,872 32,793 16,815 93,796 56,239 17,921,706 18,218,221 - 18,218,221Other current liabilities - 57,025 13,100 94,174 2,390 2,046,113 2,212,802 - 2,212,802Interfund accounts payable 1,161 157,346 - 110,868 171,283 714,502 1,155,160 (1,155,160) -Total current liabilities payable fromunrestricted assets 223,330 911,233 251,101 314,609 242,957 25,247,302 27,190,532 (1,155,160) 26,035,372Current liabilities payable from restricted assetsAccounts payable and retainage payable - - - - 890,395 1,046,282 1,936,677 - 1,936,677Accrued interest - - 12,895 - - 5,880,018 5,892,913 - 5,892,913Self-insurance liability 300 6,380 12,000 41,078 166,630 9,709,583 9,935,971 - 9,935,971Current portion of long-term debt - - 645,000 - - 9,650,000 10,295,000 - 10,295,000Current portion of capital lease /leaseback obligations - - - - - 7,223,349 7,223,349 - 7,223,349Total current liabilities payable fromrestricted assets 300 6,380 669,895 41,078 1,057,025 33,509,232 35,283,910 - 35,283,910Total current liabilities 223,630 917,613 920,996 355,687 1,299,982 58,756,534 62,474,442 (1,155,160) 61,319,282Non-current liabilitiesOther post employment benefits 309,905 151,304 69,205 192,016 156,621 30,689,951 31,569,002 - 31,569,002Long-term self-insurance liability - - - - - 5,157,562 5,157,562 - 5,157,562Long-term debt - - 1,377,505 - - 582,358,426 583,735,931 - 583,735,931Capital lease / leaseback obligations - - - - - 140,058,183 140,058,183 - 140,058,183Other non-curent liabilities - - - - - 250,521 250,521 - 250,521Total non-current liabilities 309,905 151,304 1,446,710 192,016 156,621 758,514,643 760,771,199 - 760,771,199Total liabilities 533,535 1,068,917 2,367,706 547,703 1,456,603 817,271,177 823,245,641 (1,155,160) 822,090,481Net AssetsInvested in capital assets, net of related debt 21,931 2,219,209 (1,136,598) 2,532,306 19,508,606 553,771,193 576,916,647 - 576,916,647RestrictedCooperative agreement - 6,440,449 - - - - 6,440,449 - 6,440,449Revenue bond indenture - - 1,364,725 - - - 1,364,725 - 1,364,725Mass transit sales tax bond indenture - - - - - 21,058,862 21,058,862 - 21,058,862Capital lease obligations - - - - - 4,399,289 4,399,289 - 4,399,289Unrestricted 1,317,839 4,461,583 1,304,468 (390,212) 942,987 74,750,088 82,386,753 - 82,386,753Total net assets $ 1,339,770 $ 13,121,241 $ 1,532,595 $ 2,142,094 $ 20,451,593 $ 653,979,432 $ 692,566,725 $ - $ 692,566,72568

Total non-operating revenues (expenses) 37,181 (488,485) (155,237) (4,085) 94,035 142,459,699 141,943,108 - 141,943,108Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Revenues, Expenses and Changes in Net AssetsFor the Year Ended June 30, 2010Gateway Gateway GatewayArch Arch Arch St. Louis TotalsGeneral Tram Parking Riverfront Downtown Transit Interfund AfterAgency System Facility Attractions Airport System Totals Eliminations EliminationsOperating revenuesPassenger and service revenues $ - $ 5,421,501 $ 1,755,106 $ 2,438,349 $ 1,190,076 $ 46,229,398 $ 57,034,430 $ (110,073) $ 56,924,357Interfund administrative fees 2,209,741 - - - - - 2,209,741 (2,209,741)Other 447,745 (31,920) 34,896 64,508 190,598 2,911,101 3,616,928 - 3,616,928Total operating revenues 2,657,486 5,389,581 1,790,002 2,502,857 1,380,674 49,140,499 62,861,099 (2,319,814) 60,541,285Operating expensesWages and benefits 1,330,690 1,304,411 385,910 1,194,801 818,469 141,323,808 146,358,089 - 146,358,089Services 599,322 868,298 465,255 415,636 8,298 20,921,946 23,278,755 - 23,278,755Materials and supplies 16,543 167,658 24,521 582,667 120,386 28,038,188 28,949,963 - 28,949,963Casualty and liability costs - 37,991 30,502 142,838 51,318 4,832,084 5,094,733 - 5,094,733Interfund administrative charges - 597,491 143,196 - 69,054 1,400,000 2,209,741 -(2,209,741)Electricity, telephone, leases, & other general exp 162,233 786,726 70,141 283,874 192,305 8,343,927 9,839,206 (110,073) 9,729,133Depreciation and amortization 7,320 392,188 411,411 294,367 1,297,391 74,813,944 77,216,621 - 77,216,621Total operating expenses 2,116,108 4,154,763 1,530,936 2,914,183 2,557,221 279,673,897 292,947,108 (2,319,814) 290,627,294Operating income (loss) 541,378 1,234,818 259,066 (411,326) (1,176,547) (230,533,398) (230,086,009) - (230,086,009)Non-operating revenues (expenses)Grants and assistanceState and local assistance - - - - - 134,521,218 134,521,218 - 134,521,218Federal assistance - - - - 52,900 37,506,178 37,559,078 - - 37,559,078Interest income 7,081 13,974 711 278 415 16,365,826 16,388,285 - 16,388,285Interest expense - - (155,948) - - (43,090,628) (43,246,576) - (43,246,576)Contributions to outside entities (5,000) (292,216) - (100) - (957,197) (1,254,513) - (1,254,513)Gain or (loss) on disposition of assets - (210,243) - (4,263) - (2,070,019) (2,284,525) - (2,284,525)Other non-operating revenue (expense) 35,100 - - - 40,720 184,321 260,141 - 260,141beforecontributions and transfers 578,559 746,333 103,829 (415,411) (1,082,512) (88,073,699) (88,142,901) - (88,142,901)Capital contributions - - - - 5,472,680 21,312,329 26,785,009 - 26,785,009Change in net assets 578,559 746,333 103,829 (415,411) 4,390,168 (66,761,370) (61,357,892) - (61,357,892)Total net assets, July 1, 2009 761,211 12,374,908 1,428,766 2,557,505 16,061,425 720,740,802 753,924,617 - 753,924,617Total net assets, June 30, 2010 $ 1,339,770 $ 13,121,241 $ 1,532,595 $ 2,142,094 $ 20,451,593 $ 653,979,432 $ 692,566,725 $ - $ 692,566,72569

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Cash FlowsFor the Year Ended June 30, 2010Gateway Gateway GatewayArch Arch Arch St. Louis TotalsGeneral Tram Parking Riverfront Downtown Transit Interfund AfterAgency System Facility Attractions Airport System Totals Eliminations EliminationsCash flows from operating activitiesReceipts from customers $ 389,045 $ 6,193,122 $ 1,789,977 $ 2,503,410 $ 1,371,890 $ 48,544,098 $ 60,791,542 $ - $ 60,791,542Payments to employees (1,226,515) (1,252,218) (377,389) (1,124,901) (759,886) (131,505,165) (136,246,074) - (136,246,074)Payments to vendors (817,503) (1,275,773) (388,526) (1,352,079) (363,377) (59,972,626) (64,169,884) - (64,169,884)Payments for self-insurance - (38,191) (30,502) (172,424) (80,781) (5,351,213) (5,673,111) - (5,673,111)Receipts (payments) from inter-fund activity 1,797,880 (879,451) (183,288) 60,599 (342,262) (453,478) - - -in)operating activities 142,907 2,747,489 810,272 (85,395) (174,416) (148,738,384) (145,297,527) - (145,297,527)Cash flows from non-capital financing activitiesOperating assistance received - - - - (1,372,431) 174,801,736 173,429,305 - 173,429,305Contributions to outside entities (5,000) (292,216) - (100) - (957,197) (1,254,513) - (1,254,513)Non-operating contributions 35,100 - - - 40,720 184,321 260,141 - 260,141Net cash provided by (used in)non-capital financing activities 30,100 (292,216) - (100) (1,331,711) 174,028,860 172,434,933 - 172,434,933Net increase (decrease) incash and cash equivalents,operating and non-operatingfinancing activities $ 173,007 $ 2,455,273 $ 810,272 $ (85,495) $ (1,506,127) $ 25,290,476 $ 27,137,406 $ - $ 27,137,406(continued)70

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Cash FlowsFor the Year Ended June 30, 2010Gateway Gateway GatewayArch Arch Arch St. Louis TotalsGeneral Tram Parking Riverfront Downtown Transit Interfund AfterAgency System Facility Attractions Airport System Totals Eliminations EliminationsNet increase (decrease) incash and cash equivalents,operating and non-operatingfinancing activities $ 173,007 $ 2,455,273 $ 810,272 $ (85,495) $ (1,506,127) $ 25,290,476 $ 27,137,406 $ - $ 27,137,406Cash flows from capital and related financing activitiesAcquisitions of capital assets - (6,232) (10,483) - (4,211,118) (18,252,062) (22,479,895) - (22,479,895)Proceeds from long-term debt - - (615,000) - - 97,835,000 97,220,000 - 97,220,000Payments of long-term debt - - (137,441) - - (4,108,107) (4,245,548) - (4,245,548)Payment to terminate variable rate debt - - - - - (75,000,000) (75,000,000) - (75,000,000)Payment to terminate SWAP - - - - - (9,875,000) (9,875,000) - (9,875,000)Cost of issuance - - - - - (2,757,117) (2,757,117) - (2,757,117)Funds paid as part of capital lease termination - - - - - (4,140,079) (4,140,079) - (4,140,079)Interest paid - - - - - (21,226,899) (21,226,899) - (21,226,899)Contributed capital - - - - 5,472,680 21,312,329 26,785,009 - 26,785,009Legal Settlements- - - - - (1,550,000), (1,550,000), - (1,550,000), Net cash provided by (used in)capital and related financing activities - (6,232) (762,924) - 1,261,562 (17,761,935) (17,269,529) - (17,269,529)Cash flows from investing activitiesPurchases of investments - (12,546,384) (1,098,863)- (76,825,917) (90,471,164) - (90,471,164)Proceeds from sale of investments - 8,000,000 - - - 51,819,848 59,819,848 - 59,819,848Interest received 7,081 13,974 711 278 415 242,228 264,687 - 264,687Net cash provided by (used in)investing activities 7,081 (4,532,410) (1,098,152) 278 415 (24,763,841) (30,386,629) - (30,386,629)Net increase (decrease) in cashand cash equivalents 180,088 (2,083,369) (1,050,804) (85,217) (244,150) (17,235,300) (20,518,752) - (20,518,752)-Cash and cash equivalents, beginning of year 835,182 4,451,357 2,879,314 103,836 615,623 135,579,555 144,464,867144,464,867Cash and cash equivalents, end of year $ 1,015,270 $ 2,367,988 $ 1,828,510 $ 18,619 $ 371,473 $ 118,344,255 $ 123,946,115 $ $ 123,946,11571-

for) operating activities $ 142,907 $ 2,747,489 $ 810,272 $ (85,395) $ (174,416) $ (148,738,384) $ (145,297,527) $ - $ (145,297,527)Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSupplemental InformationCombining Schedule of Cash FlowsFor the Year Ended June 30, 2010Gateway Gateway GatewayArch Arch Arch St. Louis TotalsGeneral Tram Parking Riverfront Downtown Transit Interfund AfterAgency System Facility Attractions Airport System Totals Eliminations EliminationsCash flows from operating activitiesOperating income (loss) $ 541,378 $ 1,234,818 $ 259,066 $ (411,326) $ (1,176,547) $ (230,533,398) $ (230,086,009) $ - $ (230,086,009)Adjustments to reconcile operatingincome (loss) to net cash provided by(used for) operating activitiesDepreciation and amortization 7,320 392,188 411,411 294,367 1,297,391 74,813,944 77,216,621 - 77,216,621Change in assets and liabilitiesAccounts and notes receivables (58,700) 803,541 (25) 554 (8,784) (486,329) 250,257 - 250,257Interfund accounts receivable (393,650) (7,696) (40,092) (38,223) (433,656) 285,100 (628,217) 628,217 -Materials and supplies - - - (8,610) 5,221 (190,004) (193,393) - (193,393)Prepaid expenses, deferred charges andother current assets 297 324 101 60 (45,705) (27,071) (71,994) - (71,994)Accounts payable (39,703) 524,007 169,370 1,206 (782) (2,592,601) (1,938,503) - (1,938,503)Other current liabilities - 22,578 1,920 (62,560) (1,122) 31,041 (8,143) - (8,143)Interfund accounts payable (18,210) (274,264) - 98,822 160,448 661,421 628,217 (628,217) -Accrued expenses 10,832 (38) (10,965) 18,901 3,868 2,170,415 2,193,013 - 2,193,013Other post employment benefits liability 93,343 52,231 19,486 51,000 54,716 7,648,226 7,919,002 - 7,919,002Self-insurance liability - (200) - (29,586) (29,464) (519,128) (578,378) - (578,378)Total adjustments (398,471) 1,512,671 551,206 325,931 1,002,131 81,795,014 84,788,482 - 84,788,48272

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictThis part of the Bi-State Development Agency’s comprehensive annual financial report presentsdetailed information as a context for understanding what the information in the financialstatements, note disclosures, and required supplementary information says about Metro and theregion’s overall financial health.The Bi-State Development Agency is made up of the General Agency, Transit System, GatewayArch Tram System, Gateway Arch Parking Facility, Gateway Arch Riverfront Attractions, and St.Louis Downtown Airport. Financial trends, revenue capacity and operating information aresummarized by company. That information can be found between pages 74 - 83. Sales taxhistory, statistical data and fares are included on pages 85 - 95. These pages help the readerassess trends, capacity and operating information for enterprises within the Bi-State umbrella.Debt capacity information can be found on page 84. This information helps the reader assessaffordability of the Agency’s current levels of outstanding debt and the ability to issue additionaldebt in the future. Demographic and economic information are covered from pages 96-99.These schedules help the reader understand how the information in the financial report relatesto the services Metro and other enterprises provides and the activities it performs.Operating DataCombined Schedules ...................................................................................................... 74General Agency .............................................................................................................. 75Gateway Arch Tram System ........................................................................................... 76Gateway Arch Parking Facility ........................................................................................ 77Gateway Arch Riverfront Attractions ............................................................................... 78St. Louis Downtown Airport ............................................................................................. 79Transit ............................................................................................................................. 80Capital Assets ................................................................................................................. 81Capital Assets Statistics by Function .............................................................................. 82Net Assets by Operating Organization ............................................................................ 83Continuing Disclosure RequirementsGateway Arch Parking Facility ........................................................................................ 84Bi-State Transit SystemHistorical Sources and Operating Expenses ....................................................... 85Historical Sources and Uses by Mode................................................................. 86Prop M Sales Tax and Appropriations ................................................................. 87Use of Prop M Sales Tax .................................................................................... 88Ridership and Farebox Recovery ........................................................................ 89Mileage Trends .................................................................................................... 90Personnel Data .................................................................................................... 91Transit Fares ....................................................................................................... 92Gateway Arch Activities and Ticket Prices .......................................................... 93Regional StatisticsRegional Population ........................................................................................................ 96Regional Per Capita Personal Income ............................................................................ 97Regional Unemployment Rate ........................................................................................ 98Regional Top Businesses ............................................................................................... 9973

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictCombinedOperating DataLast Ten Fiscal Years2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Operating Revenue $ 64,266,566 $ 62,861,099 $ 65,034,953 $ 63,564,805 $ 61,262,650 $ 57,011,223 $ 52,610,920 $ 47,645,950 $ 47,571,299 $ 45,264,249Operating Expenses beforedepreciation 231,629,038 215,730,487 223,465,022 223,279,686 192,847,467 184,907,414 180,171,392 176,665,815 169,297,612 163,230,908Operating Incomebefore depreciation (167,362,472) (152,869,388) (158,430,069) (159,714,881) (131,584,817) (127,896,191) (127,560,472) (129,019,865) (121,726,313) (117,966,659)Depreciation & Amortization 78,296,734 77,216,621 78,772,634 80,511,757 79,482,148 75,827,253 60,154,410 59,262,404 57,565,408 53,711,315Operating Loss (245,659,206) (230,086,009) (237,202,703) (240,226,638) (211,066,965) (203,723,444) (187,714,882) (188,282,269) (179,291,721) (171,677,974)Non-operating Income (Loss)* 167,451,059 141,943,108 149,235,917 133,588,479 120,028,092 80,740,168 74,392,170 135,416,985 110,911,734 121,968,493Net Loss $ (78,208,147) $ (88,142,901) $ (87,966,786) $ (106,638,159) $ (91,038,873) $ (122,983,276) $ (113,322,712) $ (52,865,284) $ (68,379,987) $ (49,709,481)Total Assets $ 1,420,902,428 $ 1,515,812,366 $ 1,742,467,017 $ 1,799,061,177 $ 1,851,291,747 $ 1,928,553,566 $ 1,899,368,842 $ 1,987,435,846 $ 1,943,148,636 $ 1,498,920,383Capital Assets $ 1,124,557,415 $ 1,167,998,408 $ 1,221,481,994 $ 1,262,784,721 $ 1,205,360,863 $ 736,699,794 $ 775,118,793 $ 799,636,685 $ 824,505,270 $ 963,700,144Capital Assets asPercent of Total Assets 79.1% 77.1% 70.1% 70.2% 65.1% 38.2% 40.8% 40.2% 42.4% 64.3%Restricted Assets $ 208,964,455 $ 278,324,532 $ 455,063,217 $ 448,778,272 $ 456,181,014 $ 497,357,948 $ 524,144,564 $ 724,337,298 $ 853,424,513 $ 468,664,448Restricted Assets asPercent of Total Assets 14.7% 18.4% 26.1% 24.9% 24.6% 25.8% 27.6% 36.4% 43.9% 31.3%Total Debt $ 658,703,234 $ 741,312,463 $ 919,387,664 $ 910,026,424 $ 897,567,063 $ 893,442,078 $ 750,369,483 $ 739,998,096 $ 746,086,185 $ 14,461,330Population St. Louis Metro Not yet available 2,469,761 2,488,718 2,476,450 2,477,945 2,467,633 2,456,263 2,442,410 2,430,288 2,417,075Debt per capita $ 300 $ 369 $ 367 $ 362 $ 362 $ 305 $ 303 $ 307 $ 6*Includes Interest Income and Interest ExpenseSource of data: Audited Financial Statements74

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictGeneral AgencyOperating DataLast Ten Fiscal Years2011201020092008200720062005200420032002Operating Revenue$2,737,372$2,657,486$2,829,264$2,886,803$2,545,657$2,671,168$2,414,464$2,337,621$1,996,362$1,630,454Operating Expensesbefore depreciation2,805,1622,108,7882,354,7982,881,8392,444,2982,575,7852,045,7341,994,7321,526,9921,580,431Operating Income (Loss)before depreciation(67,790)548,698474,4664,964101,35995,383368,730342,889469,37050,023Depreciation & Amortization7,2097,3205,2386,4787,7834,3484,6644,6642,9621,260Operating Income (Loss)(74,999)541,378469,228(1,514)93,57691,035364,066338,225466,40848,763Non-operating Income (Loss)*1,14537,181(616)15,98718,60913,324(8,019)(22,491)(236,875)(193,312)Net Income (Loss)$ (73,854) $578,559 $468,612 $14,473 $112,185 $104,359 $356,047 $315,734 $229,533 $(144,549)Total Assets$1,978,863$1,873,305$1,248,486$831,316$552,924$479,501$770,164$1,567,004$1,254,118$2,750,280Capital Assets$14,721$21,930$29,249$14,728$21,207$5,106$9,455$14,119$18,783$4,724Capital Assets asPercent of Total Assets0.7%1.2%2.3%1.8%3.8%1.1%1.2%0.9%1.5%0.2%Restricted Assets$425,278$309,907$-$-$-$-$-$-$-$-Restricted Assets asPercent of Total Assets21.5%16.5%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%*Includes Interest Income and Interest ExpenseSource of data: Audited Financial Statements75

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictGateway Arch Tram SystemOperating DataLast Ten Fiscal Years2011201020092008200720062005200420032002Operating Revenue$5,399,554$5,389,581$5,434,647$4,616,115$5,456,055$5,573,097$4,701,634$4,193,574$4,364,876$4,171,063Operating Expensesbefore depreciation3,699,8653,762,5753,602,3063,588,4373,227,2903,287,3853,342,3683,262,9123,071,0573,454,189Operating Income (Loss)before depreciation1,699,6891,627,0061,832,3411,027,6782,228,7652,285,7121,359,266930,6621,293,819716,874Depreciation & x Amortization750,852392,188493,842435,381451,645512,383502,849525,994432,110565,185Operating Income (Loss)948,8371,234,8181,338,499592,2971,777,1201,773,329856,417404,668861,709151,689Non-operating Income (Loss)*(1,223,111)(488,485)331,283(1,344,938)(296,438)224,01448,668(25,894)(3,921,873)77,030Net Income (Loss)$(274,274)$746,333$1,669,782$(752,641)$1,480,682$1,997,343$905,085$378,774$(3,060,164)$228,719Total Assets $ 14,077,765 $ 14,190,158 $ 13,119,509 $ 11,500,373 $ 12,298,141 $ 10,925,276 $ 8,977,518 $ 8,236,659 $ 7,366,754 $ 10,670,592Capital Assets $ 1,566,112 $ 2,219,210 $ 2,815,408 $ 3,304,483 $ 3,611,923 $ 3,951,292 $ 4,368,491 $ 4,404,933 $ 4,787,436 $ 8,049,085Capital Assets asPercent of Total Assets 11.1% 15.6% 21.5% 28.7% 29.4% 36.2% 48.7% 53.5% 65.0% 75.4%Restricted Assets $ 8,700,596 $ 5,940,449 $ 1,341,834 $ 1,284,807 $ 1,242,764 $ 1,048,000 $ 1,048,000 $ 1,048,000 $ 616,325 $ 771,305Restricted Assets asPercent of Total Assets 61.8% 41.9% 10.2% 11.2% 10.1% 9.6% 11.7% 12.7% 8.4% 7.2%Adult TicketsChildren TicketsTotal Tickets for Year612,796229,270842,066618,332221,964840,296662,259199,263861,522597,854150,163748,017706,312176,681882,993719,212192,503911,715697,289192,123889,412713,108193,840906,948712,614194,033906,647717,855193,338911,193Ticket increase/decreasePrior YearPassengers to Date1,77039,226,260(21,226)38,384,194113,50537,543,898(134,976)36,682,376(28,722)35,934,35922,30335,051,366(17,536)34,139,65130133,250,239(4,546)32,343,291(33,405)31,436,644Source of data: Monthly ticket sales reports, daily passenger reports and audited financial statements*Includes Interest Income and Interest Expense76

1 Includes interest income and interest expense2 Revenue bonds were refunded April 1, 1986 for the amount of $10,170,000. Amount includes discount on bonds.3 Revenue bonds were refunded February 19, 1997 for the amount of $8,110,000. Amount includes discount on bonds.Source of data: Audited financial statementsBi-State Development Agency of theMissouri-Illinois Metropolitan DistrictGateway Arch Parking FacilityOperating DataLast Ten Fiscal Years2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Operating Revenue$1,781,967$1,790,002$1,679,692$1,866,533$1,886,059$1,805,593$2,052,642$2,028,371$1,729,089$1,850,873Operating Expensesbefore depreciation1,075,4381,119,5251,083,3081,123,1171,042,4911,089,5541,079,2751,028,9131,025,690990,679Operating Incomebefore depreciation706,529670,477596,384743,416843,568716,039973,367999,458703,399860,194Depreciation & Amortization365,282411,411417,153430,697450,953464,522458,911459,750452,337427,616Operating Income x (Loss)341,247259,066179,231312,719392,615251,517514,456539,708251,062432,578Non-operating Income (Loss) 1(14,635)(155,237)(372,611)(89,745)(142,156)(188,177)(279,361)(318,192)(361,069)(344,830)Net Income (Loss)$326,612$103,829$(193,380)$222,974$250,459$63,340$235,095$221,516$(110,007)$87,748Total Assets $ 3,544,721 $ 3,900,301 $ 4,213,154 $ 4,951,024 $ 5,272,709 $ 5,475,903 $ 5,945,412 $ 6,475,924 $ 6,725,670 $ 7,255,023Capital Assets $ 669,081 $ 908,402 $ 1,301,561 $ 1,708,861 $ 2,127,747 $ 2,545,448 $ 2,995,308 $ 3,437,261 $ 3,864,634 $ 4,122,385Capital Assets asPercent of Total Assets 18.9% 23.3% 30.9% 34.5% 40.4% 46.5% 50.4% 53.1% 57.5% 56.8%Restricted Assets $ 1,485,001 $ 1,446,823 $ 1,412,310 $ 1,380,231 $ 1,363,296 $ 1,346,509 $ 1,318,141 $ 1,298,469 $ 1,291,865 $ 1,308,198Restricted Assets asPercent of Total Assets 41.9% 37.1% 33.5% 27.9% 25.9% 24.6% 22.2% 20.1% 19.2% 18.0%Long Term Debt 2,3 $ 710,402 $ 1,377,505 $ 2,003,997 $ 2,595,282 $ 3,151,681 $ 3,668,537 $ 4,161,114 $ 4,624,662 $ 5,064,409 $ 5,480,638Vehicle Transactions 271,589 272,258 258,567 295,957 287,803 266,214 295,427 295,534 297,635 327,47477

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictGateway Arch Riverfront AttractionsOperating DataLast Ten Fiscal Years2011201020092008200720062005200420032002Operating Revenue$1,785,966$2,502,857$2,196,793$2,517,023$2,958,007$3,237,248$3,000,745$2,810,959$2,466,468$1,685,541Operating Expensesbefore depreciation2,164,7952,619,8162,498,7232,831,5932,796,9623,059,8572,879,3452,747,4622,151,4681,632,128Operating Incomebefore depreciation(378,829)(116,959)(301,930)(314,570)161,045177,391121,40063,497315,00053,413Depreciation & Amortization264,846294,367298,639302,212291,490267,266185,690146,309133,291127,524Operating Income (Loss)(643,675)(411,326)(600,569)(616,782)(130,445)(89,875)(64,290)(82,812)181,709(74,111)Non-operating Income (Loss)*243(4,085)191,20015,97813,890(370)459(16,817)7,772-Net Income (Loss)$(643,432)$(415,411)$(409,369)$(600,804)$(116,555)$(90,245)$(63,831)$(99,629)$189,481$(74,111)Total Assets $ 2,370,871 $ 2,689,797 $ 3,027,423 $ 3,397,494 $ 3,966,849 $ 4,175,293 $ 4,173,799 $ 2,294,348 $ 2,229,341 $ 2,078,482Capital Assets$2,267,460$ 2,532,306$ 2,830,934$ 3,131,135$ 3,375,387$ 3,588,094$ 3,582,453$ 1,761,661$ 1,737,517$ 1,793,062Capital Assets asPercent of Total Assets95.6%94.1%93.5%92.2%85.1%85.9%85.8%76.8%77.9%86.3%Restricted Assets$ -$ -$ -$ 77,363$ -$ -$ -$ -$ -$ -Restricted Assets asPercent of Total Assets0.0%0.0%0.0%2.3%0.0%0.0%0.0%0.0%0.0%0.0%Number of PassengersNumber of CruisesDays of Operation76,230816224105,8871,02223495,8341,009244107,5881,087248140,2901,384278168,7381,460286163,7521,463273170,0641,470284156,9501,462277109,9291,166235*Includes Interest Income and Interest ExpenseSource of data: Audited financial statements78

Operating Loss (1,367,841) (1,176,547) (962,527) (719,732) (379,634) (842,931) (678,509) (881,719) (801,109) (1,026,114)Non-operating Income (Loss)* 1,346 94,035 (251,493) 33,467 37,769 21,051 7,914 (13,712) 24,543 3,336Net Loss $ (1,366,495) $ (1,082,512) $ (1,214,020) $ (686,265) $ (341,865) $ (821,880) $ (670,595) $ (895,431) $ (776,566) $ (1,022,778)Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictSt. Louis Downtown AirportOperating DataLast Ten Fiscal Years2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Operating Revenue $ 1,374,264 $ 1,380,674 $ 1,507,623 $ 1,495,237 $ 1,400,736 $ 1,272,522 $ 1,218,983 $ 1,069,398 $ 1,003,287 $ 927,810Operating Expensesbefore depreciation1,324,101 1,259,830 1,547,503 1,173,577 997,097 974,270 904,505 901,373 836,273 839,675Operating Incomebefore depreciation50,163 120,844 (39,880) 321,660 403,639 298,252 314,478 168,025 167,014 88,135Depreciation & Amortization 1,418,004 1,297,391 922,647 1,041,392 783,273 1,141,183 992,987 1,049,744 968,123 1,114,249Total Assets $ 22,218,101 $ 21,908,196 $ 16,439,975 $ 14,728,367 $ 13,508,462 $ 13,849,228 $ 14,212,035 $ 14,305,383 $ 15,242,829 $ 15,860,906Capital Assets $ 21,644,892 $ 19,508,606 $ 15,653,501 $ 13,554,538 $ 12,513,295 $ 13,028,692 $ 13,672,726 $ 13,942,238 $ 14,977,334 $ 15,507,516Capital Assets asPercent of Total Assets 97.4% 89.0% 95.2% 92.0% 92.6% 94.1% 96.2% 97.5% 98.3% 97.8%Restricted Assets $ 154,658 $ 156,623 $ 156,623 $ 43,443 $ - $ - $ - $ - $ - $ -Restricted Assets asPercent of Total Assets 0.7% 0.7% 1.0% 0.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Avg. monthly-based aircraft (1) 305 297 300 269 253 260 263 253 250 240Total Operations (2) 93,443 116,267 116,316 110,987 128,530 156,866 166,959 171,858 165,882 165,370Fuel Sales (gals.) (3) 1,729,770 2,029,738 2,061,238 2,150,071 2,233,119 2,207,545 2,367,233 2,101,253 1,676,342 1,767,699(1)Number of aircraft stored in owned or leased hangars or outside ramp(2)Takeoff or landing recorded by the tower; movements when the tower is closed are not included(3)Number of gallons of aviation fuel purchased from Airport during the year*Includes Interest Income and Interest ExpenseSource of data: Audited financial statements, Monthly Activity Report79

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictTransitOperating DataLast Ten Fiscal Years2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Operating Revenue $ 51,187,443 $ 49,140,499 $ 51,386,934 $ 50,183,094 $ 47,016,136 $ 42,451,595 $ 39,222,452 $ 35,206,027 $ 36,011,217 $ 34,998,508Operating Expensesbefore depreciation 220,559,677 204,859,953 212,378,384 211,681,123 182,339,329 173,920,563 169,920,165 166,730,423 160,686,132 154,733,806Operating Income (Loss)before depreciation (169,372,234) (155,719,454) (160,991,450) (161,498,029) (135,323,193) (131,468,968) (130,697,713) (131,524,396) (124,674,915) (119,735,298)Depreciation & Amortization 75,490,541 74,813,944 76,635,115 78,295,597 77,497,004 73,437,551 58,009,309 57,075,943 55,576,585 51,475,481Operating Income (Loss) (244,862,775) (230,533,398) (237,626,565) (239,793,626) (212,820,197) (204,906,519) (188,707,022) (188,600,339) (180,251,500) (171,210,779)Non-operating Income (Loss)* 168,686,071 142,459,699 149,338,154 134,957,730 120,396,418 80,670,326 74,622,509 135,814,091 115,399,236 122,426,269Net Income (Loss) $ (76,176,704) $ (88,073,699) $ (88,288,411) $ (104,835,896) $ (92,423,779) $ (124,236,193) $ (114,084,513) $ (52,786,248) $ (64,852,264) $ (48,784,510)Total Assets $ 1,376,712,107 $ 1,471,250,609 $ 1,704,418,470 $ 1,763,652,603 $ 1,815,692,662 $ 1,893,648,365 $ 1,865,289,914 $ 1,954,556,528 $ 1,910,329,924 $ 1,460,305,100Capital Assets $ 1,098,395,149 $ 1,142,807,954 $ 1,198,851,341 $ 1,241,070,976 $ 1,183,711,304 $ 713,581,162 $ 750,490,360 $ 776,076,473 $ 799,119,566 $ 934,223,372Capital Assets asPercent of Total Assets 79.8% 77.7% 70.3% 70.4% 65.2% 37.7% 40.2% 39.7% 41.8% 64.0%Restricted Assets $ 198,198,922 $ 270,470,730 $ 452,152,450 $ 445,992,428 $ 453,574,954 $ 494,963,439 $ 521,778,423 $ 721,990,829 $ 851,516,323 $ 466,584,945Restricted Assets asPercent of Total Assets 14.4% 18.4% 26.5% 25.3% 25.0% 26.1% 28.0% 36.9% 44.6% 32.0%*Includes Interest Income and Interest ExpenseSource of data: Audited financial statements80

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictCapital Assets2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Capital AssetsBuildings and Improvements $ 175,119 $ 170,117 $ 168,047 $ 160,956 $ 160,511 $ 157,273 $ 156,949 $ 155,024 $ 147,691 $ 141,920Airport Runways 26,474 24,745 23,528 23,691 21,852 21,807 22,296 22,297 21,612 21,152Arch Parking 9,947 9,947 9,947 9,947 9,947 9,947 9,950 9,950 9,950 9,950Riverboat and barges 4,176 4,176 4,189 4,189 4,103 4,103 3,600 1,990 1,892 1,856Light rail, right of way, facility and improvements 1,234,037 1,224,565 1,218,529 1,200,218 1,194,818 680,692 683,682 681,182 671,984 596,749Revenue Vehicles 310,736 303,427 312,650 306,907 310,202 303,590 280,986 271,337 264,931 277,277Autos and trucks 9,981 9,350 7,588 7,588 7,387 6,715 6,339 5,574 5,825 5,032Furniture, fixtures equipment, and intangibles 114,646 111,882 107,793 98,026 92,224 71,586 83,105 70,367 62,050 59,190Total Capital Assets 1,885,116 1,858,209 1,852,271 1,811,522 1,801,044 1,255,713 1,246,907 1,217,721 1,185,935 1,113,126Accumulated DepreciationBuildings and ImprovementsAirport RunwaysArch ParkingRiverboat and bargesLight rail, right of way, facility and improvementsRevenue VehiclesAutos and trucksFurniture, fixtures equipment, and intangiblesTotal Accumulated Depreciation126,78719,7679,4131,938444,350169,9017,386100,474880,016122,37218,9909,0651,694401,027152,6806,74090,419802,987117,90718,1858,6671,459358,805151,1425,14981,433742,747112,09317,5478,2691,214316,024141,6665,21469,541671,568104,60416,8747,871965273,987130,7365,89261,191602,12099,82116,3137,473727231,002115,4044,52649,929525,19594,74815,9727,078514193,794105,6183,67256,406477,80289,64715,2106,680347169,07793,2883,08945,573422,91183,65014,4616,282185149,08975,8612,93734,407366,87277,70514,1115,88490126,92180,7612,51230,340338,324Net Capital Assets 1,005,100 1,055,222 1,109,524 1,139,954 1,198,924 730,518 769,105 794,810 819,063 774,802LandConstruction in progress101,93117,526101,79910,977104,8597,099103,61319,218100,36031,82890,373549,73090,438443,76275,415340,40474,646140,51169,638119,260Total Net Capital Assets $ 1,124,557 $ 1,167,998 $ 1,221,482 $ 1,262,785 $ 1,331,112 $ 1,370,621 $ 1,303,305 $ 1,210,629 $ 1,034,220 $ 963,700Source of data: Audited Financial Statement* Accumulate depreciation was not segregated by category in 2000.81

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictCapital Asset Statistics by Function and Program2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Revenue VehiclesMetroBus 376 358 438 418 399 432 439 463 477 473MetroLink (cars) 87 87 87 87 87 83 71 65 65 65Demand Response Call-A-Ride vans 116 116 126 114 118 119 119 120 101 78579 561 651 619 604 634 629 648 643 616Passenger StationsMetroBus 7 7 7 7 7 6 5 5 3 -MetroLink 37 37 37 37 37 28 28 28 28 2644 44 44 44 44 34 33 33 31 26EscalatorsMetroBus 2 2 2 2 2 1 1 1 - -MetroLink 8 8 8 8 8 8 8 8 8 810 10 10 10 10 9 9 9 8 8ElevatorsMetroBus 1 1 1 1 1 - - 1 - -MetroLink 18 18 18 18 18 12 12 12 12 1219 19 19 19 19 12 12 13 12 12Maintenance FacilitiesMetroBus 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.9MetroLink 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0Demand Response 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.16.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0MetroLink Light RailTrack (miles) 96.3 96.3 96.3 96.3 96.3 81.0 81.0 81.0 81.0 74.0Crossings 25 25 25 25 25 24 24 24 24 23Park and Ride Lots 19 19 19 19 19 16 16 16 16 16Riverfront AttractionsRiverboats 2 2 2 2 2 2 2 2 2 2Heliport Barge 1 1 1 1 1 1 (Acquired in 2006)Bicycles 36 32 24 31 33 33 (Acquired in 2006)Source of data: Audited Financial Statements, annual NTD report and annual operating budget* Information not available for this time period.82

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNet Assets by Operating OrganizationGeneral AgencyNet AssetsInvested in capital assetsRestrictedUnrestricted$201114,720-1,251,196$201021,931-1,317,839$200929,251-731,960$200814,728-277,871$200721,207-256,920$20065,106-160,836$20059,456-411,741$200414,120-1,312,806$200318,783-992,409$20024,7242,384,835Total General Agency net assets$1,265,916$1,339,770$761,211$292,599$278,127$165,942$421,197$1,326,926$1,011,192$2,389,559Gateway Arch Tram SystemNet AssetsInvested in capital assetsRestrictedCooperative agreementUnrestricted$1,566,1138,498,3502,782,504$2,219,2096,440,4494,461,583$2,815,4081,242,7648,316,736$3,304,4831,242,7646,157,879$3,611,9231,242,7646,603,080$3,951,2921,242,7644,783,030$3,902,0851,048,0003,223,555$4,404,9341,048,0001,815,621$4,787,436500,0001,602,345$8,049,0851,900,860Total Arch Tram net assets$12,846,967$13,121,241$12,374,908$10,705,126$11,457,767$9,977,086$8,173,640$7,268,555$6,889,781$9,949,945Gateway Arch Parking FacilityNet AssetsInvested in capital assetsRestrictedRevenue bond indentureUnrestricted$(730,919)1,384,6961,205,430$(1,136,598)1,364,7251,304,468$(175,847)1,349,697254,916$(179,823)1,340,678461,291$(303,957)1,347,659355,470$96,9581,325,967(274,211)$(2,551,058)1,295,3682,417,284$(2,092,147)1,273,5742,105,073$(1,664,775)1,264,9941,464,765$(1,358,253)2,533,244Total Arch Parking Facility net assets$1,859,207$1,532,595$1,428,766$1,622,146$1,399,172$1,148,714$1,161,594$1,286,500$1,064,984$1,174,991Gateway Arch RiverboatsNet AssetsInvested in capital assetsRestrictedUnrestricted$2,267,460-(768,798)$2,532,306-(390,212)$2,830,934-(273,429)$3,131,135-(164,261)$3,375,388-192,289$3,588,093-96,139$1,935,971-1,528,543$1,774,541-144,909$1,737,517-268,682$1,793,06223,656Total Arch Riverboats net assets$1,498,662$2,142,094$2,557,505$2,966,874$3,567,677$3,684,232$3,464,514$1,919,450$2,006,199$1,816,718St Louis Downtown AirportNet AssetsInvested in capital assetsRestrictedUnrestricted$21,644,892-210,743$19,508,606-942,987$15,653,501-407,924$13,554,537-922,939$12,513,295-853,983$13,028,694-662,486$15,530,762-(1,427,651)$15,922,373-(1,750,043)$14,950,781-103,721$15,507,516(1,599,079)Total St Louis Downtown Airport net assets$21,855,635$20,451,593$16,061,425$14,477,476$13,367,278$13,691,180$14,103,111$14,172,330$15,054,502$13,908,437Transit SystemNet AssetsInvested in capital assetsRestrictedMass transit sales tax bond indentureCapital lease obligationsSIB Loan CollateralUnrestricted$523,718,38820,811,6548,736,150-66,038,309$553,771,19321,058,8624,399,289-74,750,088$629,708,5034,127,6984,463,6011,546,00080,895,000$666,125,5293,421,333-1,546,000112,181,112$737,621,053(265,806)-1,546,000134,096,255$823,823,907(331,831)-1,546,500105,325,740$932,784,613(89,542)-1,546,50080,625,275$977,185,922(46,124)-1,543,360136,660,202$883,057,73119,246-1,543,360220,010,993$925,242,680169,824,469Total Transit System net assets$619,304,501$653,979,432$720,740,802$783,273,974$872,997,502$930,364,316$1,014,866,846$1,115,343,360$1,104,631,330$1,095,067,149TotalNet AssetsInvested in capital assetsRestrictedCooperative agreementRevenue bond indentureMass transit sales tax bond indentureCapital lease obligationsSIB Loan CollateralUnrestricted$548,480,6548,498,3501,384,69620,811,6548,736,150-70,719,384$576,916,6476,440,4491,364,72521,058,8624,399,289-82,386,753$650,861,7501,242,7641,349,6974,127,6984,463,6011,546,00090,333,107$685,950,5891,242,7641,340,6783,421,333-1,546,000119,836,831$756,838,9091,242,7641,347,659(265,806)-1,546,000142,357,997$844,494,0501,242,7641,325,967(331,831)-1,546,500110,754,020$951,611,8291,048,0001,295,368(89,542)-1,546,50086,778,746$997,209,7431,048,0001,273,574(46,124)-1,543,360140,288,568$902,887,473500,0001,264,99419,246-1,543,360224,442,915$949,238,814-----175,067,985Total net assets$658,630,888$692,566,725$753,924,617$813,338,195$903,067,523$959,031,470$1,042,190,902$1,141,317,121$1,130,657,988$1,124,306,799Source of data: Audited Financial Statement83

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictContinuing Disclosure RequirementsGateway Arch Parking Facility Debt ServiceSeries 1997, Dated February 1, 19972011 2010 2009 2008 2007 2006 2005 2004 2003 2002Debt Service CoverageCalculationTram Passenger & Interest Revenue $ 5,440,928 $ 5,435,476 $ 5,492,757 $ 4,929,387 $ 5,806,998 $ 5,771,658 $ 4,721,207 $ 4,165,639 $ 4,391,484 $ 4,248,093Parking Facility Service & InterestxRevenue 1,724,249 1,755,818 1,700,257 1,979,563 2,026,642 1,908,645 2,092,525 2,061,304 2,060,610 1,910,633Total Revenue 7,165,177 7,191,294 7,193,014 6,908,950 7,833,640 7,680,303 6,813,732 6,226,943 6,452,094 6,158,726Arch Tram Expensesbefore depreciation 3,699,865 3,762,575 3,602,306 3,588,437 3,227,290 3,287,386 3,342,369 3,261,378 3,071,057 3,454,189Parking Facility Expensesbefore depreciation 1,075,438 1,119,525 1,083,308 1,123,117 1,042,491 1,089,554 1,079,276 1,028,913 1,025,690 990,679Total Operating Expensesbefore Depreciation 4,775,303 4,882,100 4,685,614 4,711,554 4,269,781 4,376,940 4,421,645 4,290,291 4,096,747 4,444,868Required Deposits to Debt ServiceReserveFund and Renewal & Replacement Fund - - - - - - - - - -Available for Debt Service 2,389,874 2,309,194 2,507,400 2,197,396 3,563,859 3,303,363 2,392,087 1,936,652 2,355,347 1,713,858Principal Payment 645,000 615,000 585,000 550,000 530,000 505,000 485,000 465,000 435,000 420,000Interest 101,197 137,441 168,448 202,769 229,819 259,896 273,280 308,623 322,456 344,206Total Debt Service Requirement $ 746,197 $ 752,441 $ 753,448 $ 752,769 $ 759,819 $ 764,896 $ 758,280 $ 773,623 $ 757,456 $ 764,206Debt Service Coverage Percentage 320% 307% 333% 292% 469% 432% 315% 250% 311% 224%Required Debt Service CoveragexPercentage 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%Parking Rates & FeesHalf-hour User Fee $ 0.75 $ 0.75 $ 0.75 $ 0.75 $ 0.75 $ 0.75 $ 0.75 $ 0.75 $ 0.75 $ 0.75Daily Maximum $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00Lost Ticket Fee (Per Day) $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00Early Bird Rate (6:00-8:30 am) $ 4.00 $ 4.00 $ 4.00 $ 4.00 $ 4.00 $ 4.00 $ 4.00 $ 4.00 $ 3.00 $ 3.00Monthly Rate $ 60.00 $ 60.00 $ 60.00 $ 60.00 $ 60.00 $ 60.00 $ 60.00 $ 60.00 $ 50.00 $ 50.0084

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictContinuing Disclosure RequirementsMetroLink Cross County Extension ProjectMass Transit Sales Tax Appropriation BondsSeries 2002 A B CHistorical Sources of Operating Funds & Operating Expenses of the Agency's Transit System for 10 Year Period213594360SourcesOperating RevenueOperating Expenses2011$ 51,187,443 $201049,140,499 $200951,386,934 $200850,183,094 $200747,016,136 $200642,451,595 $200539,222,452 $200435,206,027 $200336,011,217 $200234,998,508(before depreciation)Operating Loss220,559,677204,859,953212,378,384211,681,123182,339,329173,920,563169,920,165166,730,423160,686,132154,733,806(before depreciation)Depreciation/AmortizationOperating Loss(169,372,234)75,490,541(244,862,775)(155,719,454)74,813,944(230,533,398)(160,991,450)76,635,115(237,626,565)(161,498,029)78,295,597(239,793,626)(135,323,193)77,497,004(212,820,197)(131,468,968)73,437,551(204,906,519)(130,697,713)58,009,308(188,707,021)(131,524,396)57,075,942(188,600,338)(124,674,915)55,576,585(180,251,500)(119,735,298)51,475,481(171,210,779)Nonoperating (Expense)State & Local/Grants & AidFederal/Grants & AidInterest IncomeInterest ExpenseOther (Expense)170,832,33326,352,771580,048(22,782,468)(6,296,613)134,521,21837,506,17816,365,826(43,090,628)(2,842,895)144,340,11530,374,78227,660,598(53,423,933)386,592143,177,26829,542,59727,511,986(52,200,718)(13,073,403)134,582,96725,110,18729,323,349(39,004,628)(29,615,457)109,657,37517,682,86328,483,814(19,879,845)(55,273,881)130,931,72719,381,53827,686,065(33,395,842)(69,980,981)115,497,27615,176,38526,477,096(17,489,574)(3,847,092)109,624,41715,603,44126,849,943(32,404,543)(4,274,022)104,188,82715,553,87619,541,568(14,785,933)(2,072,069)Net Loss$ (76,176,704) $(88,073,699) $(88,288,411) $(104,835,896) $(92,423,779) $(124,236,193) $(114,084,514) $(52,786,247) $(64,852,264) $(48,784,510)Total Assets $ 1,376,712,107 $ 1,471,250,607 $ 1,709,740,584 $ 1,763,652,603 $ 1,815,692,662 $ 1,893,648,365 $ 1,865,289,914 $ 1,954,654,604 $ 1,910,329,924 $ 1,480,899,450Capital Assets(net of accumulated depreciation) $ 1,093,395,149 $ 1,142,807,954 $ 1,198,851,341 $ 1,241,070,976 $ 1,309,462,751 $ 1,347,502,856 $ 1,278,677,171 $ 1,187,069,195 $ 1,008,834,239 $ 934,223,372Capital Assets asPercent of Total Assets 79.4% 77.7% 70.1% 70.4% 72.1% 71.2% 68.6% 60.7% 52.8% 63.1%Restricted Assets $ 198,198,922 $ 270,470,730 $ 450,478,970 $ 445,992,428 $ 453,574,954 $ 494,963,439 $ 521,778,423 $ 721,990,829 $ 851,516,323 $ 466,584,945Restricted Assets asPercent of Total Assets 14.4% 18.4% 26.3% 25.3% 25.0% 26.1% 28.0% 36.9% 44.6% 31.5%Source of data: Audited financial statements85

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictContinuing Disclosure RequirementsMetroLink Cross County Extension ProjectMass Transit Sales Tax Appropriation BondsSeries 2002 ABCHistorical Sources and Uses of Agency Funding for Transit System Operations2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Operating RevenuePassenger/TMA Revenue $ 47,496,596 $ 46,229,398 $ 48,932,760 $ 47,216,455 $ 44,750,654 $ 40,213,115 $ 37,798,724 $ 33,442,204 $ 33,384,302 $ 32,849,363Auxiliary Operating Revenue 3,690,847 2,911,101 2,454,174 2,966,639 2,265,482 2,238,480 1,423,728 1,763,823 2,626,915 2,149,145Total Operating Revenue 51,187,443 49,140,499 51,386,934 50,183,094 47,016,136 42,451,595 39,222,452 35,206,027 36,011,217 34,998,508Subsidized Revenue1/2 Cent Sales Tax 49,962,163 50,273,831 56,952,344 66,217,859 60,379,237 52,685,665 60,939,124 59,123,335 55,435,252 51,284,528Prop M Sales Tax 34,147,336 36,905,547 47,980,938 42,162,375 46,141,227 28,540,616 44,275,090 26,448,984 24,714,198 20,257,050Prop A & M2 Sales Tax 41,154,707 - - - - - - - - -St. Clair County Transit District 39,992,390 33,680,825 32,300,857 27,140,198 22,974,904 23,779,109 21,315,331 25,503,484 24,945,209 26,071,329Madison County Service Agreement 10,978 11,009 10,321 - 11,800 - (891) 128,166 163,617 206,900State of Missouri 1,038,117 9,644,028 3,180,822 2,865,831 1,365,830 1,365,830 1,365,832 1,365,832 1,365,833 3,956,219Paratransit Contracts 3,753,095 3,765,177 3,692,723 3,709,164 3,604,360 3,117,357 2,812,244 2,623,270 2,771,040 2,183,463Planning and Demonstration 160,000 160,000 160,000 100,000 108,800 100,000 159,996 160,008 160,000 159,996Other Miscellaneous Grants/Assistance 613,547 80,801 62,111 981,840 (3,191) 68,798 65,000 144,198 69,268 69,342Total State and Local Assistance 170,832,333 134,521,218 144,340,116 143,177,267 134,582,967 109,657,375 130,931,726 115,497,277 109,624,417 104,188,827Federal Assistance 26,352,770 37,506,178 30,374,783 29,542,597 25,110,187 17,682,863 19,381,538 15,176,385 15,603,441 15,553,876Total Subsidized Revenue 197,185,103 172,027,396 174,714,899 172,719,864 159,693,154 127,340,238 150,313,264 130,673,662 125,227,858 119,742,703Non-operating RevenueInvestment Income 311,439 242,228 1,672,321 5,267,467 7,464,643 8,111,012 4,897,416 26,388,547 26,849,943 19,541,568Miscellaneous Non-Operating Revenue 1,161,748 184,321 188,765 1,156,915 2,448,372 1,313,537 157,484 (2,656,483) (2,683,663) -Gain (Loss) Disposition of Assets 1,800 (2,070,019) 1,319,571 (9,809,306) 222,640 (55,043,324) (52,394,180) (41,903) (412,826) (912,429)Non-Cash items 268,609 16,123,597 22,647,002 31,066,170 20,604,642 20,372,802 22,788,649 88,679 - -Total Non-operating operating Revenue 1,743,59614,480,127480, 127 25,827,659 27,681,2, 24630,740,297 (25,,245,973) (24,550,631) 23,778,840 23,753,454,18,629,139Total Operating, Subsidized, andNon-operating Revenue 250,116,142 235,648,022 251,929,492 250,584,204 237,449,587 144,545,860 164,985,085 189,658,529 184,992,529 173,370,350Operating ExpenseMetroBus 139,636,148 128,366,639 131,195,292 131,815,407 113,042,970 112,113,151 110,356,165 109,957,908 106,784,414 105,873,204MetroLink 61,823,507 56,806,893 61,183,985 59,423,466 50,943,218 43,706,844 42,294,842 39,359,562 38,863,916 35,408,847Metro Paratransit 18,846,522 19,480,473 19,897,088 20,302,600 18,192,371 18,166,701 17,276,583 17,412,952 15,037,803 13,451,755Cross County Capital Costs 253,499 205,947 102,019 139,649 160,770 (66,133) (7,425) - - -Total Operating Expense 220,559,676 204,859,952 212,378,384 211,681,122 182,339,329 173,920,563 169,920,165 166,730,422 160,686,133 154,733,806Non-operating ExpenseContributions to Outside Entities 971,418 957,197 1,121,745 13,242,664 31,032,404 1,544,095 17,744,282 1,148,706 1,177,533 1,159,640Interest Expense 22,513,859 26,391,830 23,253,309 24,524,973 17,224,316 (522,959) 2,991,231 4,753,799 24,978,424 14,785,933Total Non-Operating Expense 23,485,277 27,349,027 24,375,054 37,767,637 48,256,720 1,021,136 20,735,513 5,902,505 26,155,957 15,945,573Total Expense before Non-Cash Items 244,044,953 232,208,979 236,753,438 249,448,759 230,596,049 174,941,699 190,655,678 172,632,927 186,842,090 170,679,379Non-Cash Items 82,247,893 91,512,742 103,464,465 105,971,340 99,277,317 93,840,354 88,413,921 69,811,849 63,002,703 51,475,481Total Operating and Non-operating Expense 326,292,846 323,721,721 340,217,903 355,420,099 329,873,366 268,782,053 279,069,599 242,444,776 249,844,793 222,154,860Income (Loss) before Capital Contributions $ (76,176,704) $ (88,073,699) $ (88,288,411)$ (104,835,895) $ (92,423,779) $ (124,236,193) $ (114,084,514) $ (52,786,247) $ (64,852,264) $ (48,784,510)86

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictContinuing Disclosure RequirementsMetroLink Cross County Extension ProjectMass Transit Sales Tax Appropriation BondsSeries 2002 A B CProp M Sales Tax Historical Collections2011 2010 2009 2008 2007 2006 2005 2004 2003 2002St. Louis County Collections $ 37,411,985 $ 36,281,970 $ 38,968,769 $ 41,263,334 $ 41,111,836 $ 40,420,713 $ 39,608,364 $ 38,919,979 $ 38,086,584 $ 38,390,400Annualized Growth Rate (%) 3.1% -6.9% -5.6% 0.4% 1.7% 2.1% 1.8% 2.2% -0.8% 0.4%Amount Distributed $ 37,411,985 $ 36,281,970 $ 38,968,769 $ 41,263,334 $ 41,111,836 $ 40,420,713 $ 39,608,364 $ 38,919,979 $ 38,086,584 $ 38,612,807Collections Distributed 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.6%City of St. Louis Collections $ 8,508,373 $ 8,614,250 $ 9,012,168 $ 9,269,702 $ 9,183,525 $ 8,900,484 $ 8,661,930 $ 8,463,271 $ 8,620,106 $ 8,829,171Annnualized Growth Rate (%) -1.2% -4.4% -2.8% 0.9% 3.2% 2.8% 2.3% -1.8% -2.4% -4.4%Amount Distributed $ 8,508,373 $ 8,614,250 $ 9,012,168 $ 9,269,702 $ 9,183,525 $ 8,900,484 $ 8,661,930 $ 8,463,271 $ 8,620,106 $ 8,829,171Collections Distributed 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Transportation Sales Tax - Half Cent Sales Tax Historical Collections2011 2010 2009 2008 2007 2006 2005 2004 2003 2002St. Louis County Collections $ 75,585,123 $ 73,196,044 $ 77,299,636 $ 83,009,748 $ 82,298,340 $ 80,970,303 $ 79,256,020 $ 77,917,153 $ 76,147,583 $ 76,623,211Funds Withheld (3,952,134) (3,639,635) (3,510,933) (3,813,434) (5,046,641) (4,224,990) (4,678,520) (4,076,535) (3,295,584) (2,577,442)Net Collections $ 71,632,989 $ 69,556,409 $ 73,788,703 $ 79,196,314 $ 77,251,699 $ 76,745,313 $ 74,577,500 $ 73,840,618 $ 72,851,999 $ 74,045,769Annnualized Growth Rate (%) 3.3% -5.3% -6.9% 0.9% 1.6% 2.2% 1.7% 2.3% -0.6% 0.2%Amount Distributed $ 33,921,222 $ 34,778,192 $ 39,500,000 $ 48,480,000 $ 47,400,000 $ 45,300,000 $ 44,100,000 $ 42,800,000 $ 41,900,000 $ 40,900,000Collections Distributed 44.9% 47.5% 51.1% 58.4% 57.6% 55.9% 55.6% 54.9% 55.0% 53.4%St. Louis City Collections $ 17,442,567 $ 17,204,164 $ 18,069,678 $ 18,569,330 $ 18,388,355 $ 17,576,780 $ 17,335,410 $ 16,790,142 $ 17,255,114 $ 17,663,070Funds Withheld (667,311) (682,528) (617,333) (831,469) (619,118) (391,115) (496,085) (467,527) (278,383) (267,478)Net Collections $ 16,775,256 $ 16,521,636 $ 17,452,345 $ 17,737,861 $ 17,769,237 $ 17,185,665 $ 16,839,325 $ 16,322,615 $ 16,976,731 $ 17,395,592Annnualized Growth Rate (%) 1.4% -4.8% -2.7% 1.0% 4.6% 1.4% 3.2% -2.7% -2.3% -4.5%Amount Distributed $ 16,775,256 $ 16,521,636 $ 17,452,345 $ 17,737,861 $ 17,769,237 $ 17,185,665 $ 16,839,325 $ 16,322,615 $ 16,976,731 $ 17,395,592Collections Distributed 96.2% 96.0% 96.6% 95.5% 96.6% 97.8% 97.1% 97.2% 98.4% 98.5%Retail Taxpayers 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002St. Louis County Unavailable 22,313 22,394 22,644 23,093 23,279 22,960 23,116 22,252 22,751City of St. Louis Unavailable 8,610 8,647 8,746 8,948 9,008 8,614 8,594 8,235 8,46887

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictContinuing Disclosure RequirementsMetroLink Cross County Extension ProjectMass Transit Sales Tax Appropriation BondsSeries 2002 A B C & Series 2007 (Senior Lien)Series 2005 A (Subordinate Lien); Series 2009Use of 1/4 cent Prop M Sales Tax by the AgencyFiscal Year Ending June 30 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Beginning Balance $ 55,872,902 $ 64,774,613 $ 65,729,424 $ 57,128,337 $ 56,291,987 $ 53,883,268 $ 60,678,021 $ 63,731,940 $ 127,784,886 $ 137,894,882Gross Receipts $ 45,920,358 $ 44,900,879 $ 47,980,937 $ 50,533,036 $ 50,295,361 $ 49,321,197 $ 48,270,294 $ 47,383,250 $ 46,706,690 $ 47,441,978Debt Service* 33,072,327 29,956,542 27,764,584 27,892,427 26,429,699 22,326,272 19,855,670 19,512,877 10,887,319 -Net Receipts to Metro 12,848,031 14,944,337 20,216,353 22,640,609 23,865,662 26,994,925 28,414,624 27,870,373 35,819,371 47,441,978Interfund Transfer $ 7,129,645 $ - $ - $ - $ - $ - $ - $ - $ - $-Prop M2 for Capital 2,537,883 - - - - - - - - -9,667,528 - - - - - - - - -Operating Expenditures $ 12,591,070 $ 22,832,179 $ 20,240,698 $ 19,667,621 $ 29,287,786 $ 26,994,925 $ 28,414,624 $ 26,448,984 $ 24,714,198 $ 20,257,050Capital Exp / Interest Earned 12,769,295 1,013,869 930,466 (5,628,099) (6,258,474) (2,408,719) 6,794,753 4,475,308 75,158,119 37,294,924Net Expenditures $ 25,360,365 $ 23,846,048 $ 21,171,164 $ 14,039,522 $ 23,029,312 $ 24,586,206 $ 35,209,377 $ 30,924,292 $ 99,872,317 $ 57,551,974Cumulative Balance $ 53,028,096 $ 55,872,902 $ 64,774,613 $ 65,729,424 $ 57,128,337 $ 56,291,987 $ 53,883,268 $ 60,678,021 $ 63,731,940 $ 127,784,886Debt ServiceSeries 2002 A , B , C (SeniorLien) $ 25,544 , 104 $24, 463 , 109 $22, 043 , 136$ 22, 228 , 147$ 20, 209,609 $ 19,552 , 690 $19, 855 , 670 $19, 512 , 877 $ 10, 887 , 319$-Series 2007 (Senior Lien) 1,074,425 1,074,420 1,074,420 268,606 - - - - - -Series 2009 (Senior Lien) 4,767,975 3,072,695 - - - - - - - -Total Senior Lien $ 31,386,504 $ 28,610,224 $ 23,117,556 $ 22,496,753 $ 20,209,609 $ 19,552,690 $ 19,855,670 $ 19,512,877 $ 10,887,319 $-Series 2005 A (Subordinate Lien) $ 151,514 $ 1,346,318 $ 4,647,028 $ 5,395,674 $ 6,220,090 $ 2,773,582 $ - $ - $ - $-Series 2010 A (Subordinate Lien) 1,413,610 - - - - - - - - -Series 2005 B (Subordinate Lien) 120,699 - - - - - - - - -Total Debt Service $ 1,685,823 $ 1,346,318 $ 4,647,028 $ 5,395,674 $ 6,220,090 $ 2,773,582 $ - $ - $ - $-Total Debt Service $ 33,072,327 $ 29,956,542 $ 27,764,584 $ 27,892,427 $ 26,429,699 $ 22,326,272 $ 19,855,670 $ 19,512,877 $ 10,887,319 $-Debt Service Coverage RatioSenior Debt 146% 157% 208% 225% 249% 252% 243% 243% 429%Senior and Subordinate 139% 150% 173% 181% 190% 221% 243% 243% 429%Maximum AnnualRequired Debt Coverage 120% 120% 120% 120% 120% 120% 120% 120% 120%*Debt Service:- Under the Series 2002 Trust Indenture, all 1/4 cent Prop M Sales Tax receipts appropriated by the sponsors, St. Louis City and St. Louis County, are paid, monthly, directly to the Bond Trustee.- The Bond Trustee intercepts, from the monthly City and County receipts received, estimated amounts necessary to satisfy debt service on the senior and subordinate bonds.- The Trustee remits, monthly, all remaining Prop M funds to Bi-State.Source: Bi-State Development Agency88

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictContinuing Disclosure RequirementsMetroLink Cross County Extension ProjectMass Transit Sales Tax Appropriation BondsSeries 2002 A B C (Cross County Extension Bonds)Series 1998A (St. Clair County Extension Bonds)Transit System Ridership Statistics2011 2010 2009 2008 2007 2006 2005 2004 2003 2002System-Total 42,992,656 40,630,713 52,768,856 53,766,733 50,943,196 48,585,648 46,505,507 45,644,096 46,025,179 47,661,333MetroBus 26,215,139 24,256,126 32,679,788 33,370,847 31,561,602 32,526,207 30,181,263 30,452,477 30,605,866 32,448,702MetroLink 16,209,098 15,828,981 19,423,931 19,696,094 18,717,725 15,391,319 15,648,233 14,509,522 14,843,969 14,680,213Call-A-Ride 568,419 545,606 665,137 699,792 663,869 668,122 676,011 682,097 575,344 532,418System/Avg Weekday 137,248 129,591 167,952 173,156 165,228 154,336 148,548 146,457 147,660 154,766MetroBus 84,977 78,596 107,370 109,182 104,245 108,034 99,796 100,366 101,172 108,122MetroLink 50,282 49,083 58,272 61,573 58,663 43,997 46,417 43,728 44,539 44,821Call-A-Ride 1,989 1,912 2,310 2,401 2,320 2,305 2,335 2,363 1,949 1,823St. Clair Phase II * 2,238,408 2,210,993 3,757,791 3,632,160 3,801,244 3,013,314 2,798,659 2,592,743 2,407,334 2,013,017Cross County ** 2,165 ,338 1,954,519 5192,476,391 2,551,421 2,092,688 Service as of August 28, 2006Farebox Recovery by Mode40%30%20%10%MetroBusMetroLinkCall-A-RideSystem0%2011 2010 2009 2008 2007 2006 2005 2004 2003 2002MetroLink ridership for 2010 was revised to correct software issues.*Includes Emerson Park Station through Shiloh-Scott Station in Illinois.**Includes Skinker Station through Shrewsbury Station in Missouri.89

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictContinuing Disclosure RequirementsMetroLink Cross County Extension ProjectMass Transit Sales Tax Appropriation BondsSeries 2002 A B C (Cross County Extension Bonds)Series 1998A (St. Clair County Extension Bonds)Transit System Mileage Statistics2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Passenger Miles TraveledMetroBus 108,371,786 125,838,680 136,173,327 122,820,571 123,459,339 129,193,853 120,504,037 122,165,676 130,646,641MetroLink (Train) 136,857,181 156,712,446 143,815,869 137,439,468 119,769,526 117,724,578 127,210,168 124,972,634 126,728,607Call-A-Ride 5,052,421 6,510,904 6,847,815 6,743,382 6,425,864 6,486,403 6,152,308 5,166,356 4,871,624System - 250,281,388 289,062,030 286,837,011 267,003,421 249,654,729 253,404,834 253,866,513 252,304,666 262,246,872Vehicle Revenue MilesMetroBus 18,198,927 16,082,275 16,938,053 17,529,352 17,012,635 16,445,757 16,434,183 16,701,630 17,011,460 17,882,058MetroLink (Train) 3,147,407 2,913,199 3,398,923 3,393,520 3,230,926 2,375,807 2,392,183 2,610,259 2,644,861 2,658,837Call-A-Ride 4,626,716 4,616,903 4,903,975 4,908,341 5,015,158 5,151,109 5,176,795 5,128,572 4,485,452 4,165,823System 25,973,050 23,612,377 25,240,951 25,831,213 25,258,719 23,972,673 24,003,161 24,440,461 24,141,773 24,706,718Vehicle Revenue HoursMetroBus 1,328,276 1,168,685 1,247,124 1,300,269 1,252,467 1,227,514 1,151,787 1,072,409 1,079,047 1,117,319MetroLink (Train) 131,404 116,975 137,754 141,951 135,134 92,050 86,321 86,695 90,064 91,070Call-A-Ride 300,373 290,620 322,410 307,362 295,618 299,838 303,706 307,132 269,957 246,251System 1,760,053 1,576,280 1,707,288 1,749,582 1,683,219 1,619,402 1,541,814 1,466,236 1,439,068 1,454,640Number of Vehicles (active fleet at end of each fiscal year)MetroBus 376 358 438 418 399 432 439 463 477 473MetroLink (cars) 87 87 87 87 87 83 71 65 65 65Call-A-Ride 116 116 126 114 118 119 119 120 101 78System 579 561 651 619 604 634 629 648 643 616Passenger Miles Traveled (PMT) is a measure of service consumed by transit users. This measure tracks the distance traveled by each passenger. For example, the distance from the time a passenger boards untilthe passenger gets off the vehicle. PMT is the cumulative sum of the distances ridden by each passenger. FY 2011 passenger miles were unavailable as of time of printing. Source: National Transit Database.Vehicle Revenue Miles are the miles traveled when the vehicle is in revenue service. Source: Metro Performance Indicators, Fiscal Year Ended June 30, 2011.Vehicle Revenue Hours are the hours traveled when the vehicle is in revenue service. Source: Metro Performance Indicators, Fiscal Year Ended June 30, 2011.90

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictBudgeted Positions(Using Current Organization)WeightedAverage*FY11 FY10 FY09 FY09 FY08 FY07 FY06 FY05 FY04 FY03 FY02Transit by Function :Transit OperationsADA 7 6 8 8 7 6 5 6 4 4 4Bus Operators 826 728 610 852 846 833 844 875 874 836 853Bus Operations Support 71 66 109 75 75 70 71 71 71 76 71Facility Maintenance 31 31 31 32 28 29 18 19 17 17 17Light Rail Operators 95 89 90 109 102 101 70 70 71 75 76Light Rail Operations Support 39 32 50 39 39 39 30 30 30 30 30Maintenance of Way 123 118 122 124 127 126 111 103 102 105 97Paratransit Operators 202 202 204 228 223 234 239 240 223 206 184Paratransit Operations Support 49 49 66 51 46 45 46 47 47 47 39Research and Development 38 38 40 41 41 46 45 46 49 47 47Security 33 33 35 35 31 31 20 15 6 5 5Vehicle Maintenance 336 295 312 335 334 336 335 348 360 360 348Transit Operations Administration 2 2 2 2 1 1 1 2 1 2 2Total Transit Operations 1,852 1,689 1,679 1,931 1,900 1,897 1,835 1,872 1,855 1,810 1,773Finance 87 83 88 90 88 85 86 86 90 94 90Engineering and New Development 20 20 26 26 22 22 13 9 11 - 2Human Resources 18 17 20 21 21 19 20 21 20 18 14Marketing 6 7 7 7 6 6 5 5 4 5 3Procurement 53 53 57 60 58 60 49 48 51 51 54Information Technology 44 43 42 42 36 37 34 35 36 36 35Communications 5 6 5 4 4 4 4 4 4 4 4Capital Positions 12 8 8 8 6 8 87 64 62 50 51Total Transit by Function 2,097 1,926 1,932 2,189 2,141 2,138 2,133 2,144 2,133 2,068 2,026Executive Services 16 14 16 16 19 19 19 14 13 16 21Gateway Arch 11 11 11 11 6 6 7 10 10 10 9St. Louis Downtown Airport 11 11 11 11 8 8 8 9 9 5 5Gateway Arch Parking Facility 6 6 6 6 6 6 6 6 6 6 6Riverfront Attractions 14 14 15 15 19 19 19 18 16 16 14Total All Companies 2,155 1,982 1,991 2,248 2,199 2,196 2,192 2,201 2,187 2,121 2,081During 2006, the Cross County corridor was opened for revenue service. Employees from capital programs moved to the operating positions in transit service support and security. Overall, 87 moreoperating positions were required for the Cross County extension. Utilizing cost efficiencies in other areas, the Agency was able to absorb most of the additional positions for Cross County. In FY 2007and 2008, minimal position increases were needed to cover the operational needs of the Cross County extension. In the FY 2009 Board Approved Budget, an increase in service required additionalvehicle operators, security, and operational support. However, due to funding issues in March 2009, Metro experienced a major service reduction. Even though this did not go through a formal budgetamendment, Metro feels that the budgeted personnel for 2009 demonstrates an incorrect position count. To clarify Metro's personnel for FY 2009, we are adding a weighted personnel count to representthe first nine months of 2009 as the budgeted amounts and the last three months of 2009 as the 2009 service reduction personnel amounts. The funding issue continued with the FY 2010 budget, but byAugust 2009, Metro received temporary funding that enabled a partial service restoration. With this one-time funding, Metro took an amended budget to the Board of Commissioners. FY 2011 reflects acomplete restoration of revenue service, phased in to allow time to hire and train new operators and other personnel for maintenance of the restored service.Source of data:Bi-State Development Agency, Financial Planning and Budgeting Department, July 201191

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictTransit FaresFare Type as of August 1, 2011Seniors, Children, &Customers withDisabilities*MetroBus Fare $ 2.00 $ 1.00MetroBus Fare with Multi-Use Transfer $ 2.75 $ 1.35MetroLink One-Ride Ticket $ 2.25 $ 1.10Metro Two-Hour Pass $ 2.75 $ 1.35Metro Two-Hour Pass from Lambert Airport w/transfer $ 3.75 $ 1.85Metro One-Day Pass (may not be used for Call-A-Ride or special services) $ 7.50 $ 7.50Metro Two-Hour Pass (Book of 10) $ 27.50 $ 13.50Metro Weekly Pass $ 23.50 $ 23.50Metro Monthly Pass $ 68.00 $ 34.00Metro 10 Ride Student Tickets with Multi Use Transfer (available only from participating schools) $ 19.00 $ 19.00Metro 7 day pass (available only at some ticket machines) $ 23.50 $ 23.50Metro 30 day pass (available only at some ticket machines) $ 68.00 not availableMetro Combo Pass (sold only at MetroRide Downtown and MetroRide Clayton Centers) $ 88.00 $ 88.00Metro College Semester Pass $145.00 not availableCall- A-Ride (Per Zone – non-ADA trips up to 5 miles/each each add'l mile $1.30) $ 13.00 $ 13.00Call-A-Ride (ADA Eligible Trips) $ 4.00 $ 4.00Adults*Seniors, Children and Customers with DisabilitiesSeniors (age 65+) with proper ID (Metro's Reduced Fare Card (Elderly).Customers with Disabilities must present either a Metro Reduced Fare Permit or Metro ADA Paratransit Permit to ride for the reduced fares.Children are those aged 5-12, and proof of age may be requested (younger than age 5 ride free).Historical Base Passenger FareMetroBus MetroLinkFY99 – 00 $0.75 $0.75FY 01 $1.00 $1.00FY02 – 04 $1.25 $1.25FY05 $1.50 $1.50FY06 $1.65 $1.75FY07 – 08 $1.75 $2.00FY09 Present $2.00 $2.2592

Ticket prices are:Adults: $7.00 Youth (ages 3 to 15): $2.50Ticket prices are:Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictGateway Arch RiverfrontActivities and Ticket PricesGateway ArchArch Tram RideThe largest national monument in the United States and highest point in downtown St. Louis City is at the top of the Gateway Arch at 630 feet, where on a clear day,you can see a distance of up to 30 miles. Looking West, you’ll have a breathtaking view of downtown St. Louis. Looking East, you can see the Mississippi River andIllinois.The entrance to the south leg of the Gateway Arch features life in St. Louis as it was during the 1800s, returning to a time when the St. Louis Riverfront was bustlingwith steamboats, fur traders and merchants.The entrance to the north leg of the Gateway Arch takes you back to the year 1965 showing what it was like for the construction workers fitting into place the finalpiece of the Arch.Ticket prices are:Adults: $10.00 Youth (ages 3 to 15): $5.00"Monument to the Dream" Documentary FilmThis award-winning film documents the construction of the Gateway Arch, right up to when the last piece was put into place.Giant-Screen Movies"Lewis and Clark: Great Journey West" is narrated by Jeff Bridges and follows Lewis and Clark as they explore the uncharted lands of the Louisiana Purchase and beyond.Adults: $7.00 Youth (ages 3 to 15): $2.50Museum of Westward ExpansionThe National Park Service preserves the experience of the expansion into the West with glimpses of Indian and pioneer life of the Old West.Admission: Free93

Ticket prices are: All: $62.00"Sunday Brunch Cruise": Cruise the St. Louis skyline while enjoying a festive Sunday brunch and Dixieland music.Reservations required. Adults: $38.00 Children (ages 3 to 12): $18.00"Oktoberfest Cruise": Authentic German buffet enjoyed on Sundays inOther Specialty Cruises available seasonally with varying prices. Gateway Arch Riverboats are available for special events.Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictGateway Arch RiverfrontActivities and Ticket PricesGateway Arch RiverboatsSightseeing Cruise"One-hour Cruises": Paddle wheelers Tom Sawyer and Becky Thatcher view the St. Louis skyline, historic Eads Bridge and the GatewayArch while the Captain provides a lively narrative about the history of the river and St. Louis.Reservations required. Adults: $14.00 Children (ages 3 to 15): $8.00"Lock and Dam Cruise": Travel through the Mississippi River Lock and Dam system, includes a buffet and music. ( 5.5 hour cruise.)Ticket prices are: All: $46.00"Kimmswick Cruise": Cruise to or from the riverside town of Kimmswick, which is known for its shopping, antiques, and the famous Blue Owl Restaurant. Passengers are allowed time to browsethe town and enjoy lunch at the Blue Owl (included), with return to the Arch by motorcoach.Dinner Cruises"Skyline Dinner Cruise": Enjoy this two and a half hour night cruise listening to riverboat style jazz and enjoying fine dining as the riverboat travels the Mississippi River viewing the St. Louisskyline, historic Eads Bridge and the Gateway Arch.Reservations required. Adults: $38.00 Children (ages 3 to 12): $15.00Entertainment Cruises"The "Blues Cruise" is a 3-hour evening cruise during the summer, presenting the area's most popular Blues bands, concessions, and a cash bar.Reservations required. Per Person: $18.00 Select Thursdays, June through October"Majic 104.9 Cruises": Dance and dine (light hors d'oeuvres) while cruising the St. Louis skyline and enjoying music by a live disk jockey from radio Majic 104.9.Reservations required. Per Person: $21.00 Fridays, May through OctoberCorporate/convention functions Weddings Reunions More94

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictGateway Arch RiverfrontActivities and Ticket PricesGateway Arch Riverfront Bike RentalsThe Bike Rental site is found on the riverfront below the Grand Staircase of the Gateway Arch. Helmets and trail maps are included with every rental with biking accessories and snacks beingavailable for purchase. Ride leisurely along the Bike St. Louis Trails, the newly restored Riverfront Trail, or experience the sights and sounds of St. Louis, including the City Museum, UnionStation and the Gateway Arch.Bike rental prices vary dependent on the rental, starting at $15.00 for 2 hours.Gateway Arch Riverfront Helicopter ToursThese helicopter tours accommodate 2-3 passengers with the tour office located on the St. Louis riverfront directly below the Gateway Arch Grand Staircase.regulated.Tours pricing starts at $35.00 per person.Flown by certified pilots and FAA95

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictBi-State Service Area Population2010 2009 2008 2007 2006 2005 2004 2003 2002 2001IllinoisSt. Clair County 270,056 263,617 262,291 261,708 260,919 260,067 259,123 258,486 257,440 256,093Madison County 269,282 268,457 268,078 266,483 265,303 264,309 263,443 263,224 260,926 260,227Monroe County 32,957 33,236 32,804 31,591 31,876 31,040 30,491 29,742 29,051 28,314Illinois total 572,295 565,310 563,173 559,782 558,098 555,416 553,057 551,452 547,417 544,634MissouriSt. Louis City 319,294 356,587 354,361 344,764 353,837 352,572 350,705 348,039 347,252 347,954St. Louis County 998,954 992,408 991,830 1,004,048 1,000,510 1,004,666 1,007,723 1,011,781 1,014,896 1,016,724St. Charles County 360,485 355,367 349,407 348,844 338,719 329,940 320,459 311,961 303,525 295,046Jefferson County 218,733 219,046 217,679 220,507 216,469 213,669 210,466 207,055 203,985 201,462Missouri total 1,897,466 1,923,408 1,913,277 1,918,163 1,909,535 1,900,847 1,889,353 1,878,836 1,869,658 1,861,186Total Bi-State Service Area 2,469,761 2,488,718 2,476,450 2,477,945 2,467,633 2,456,263 2,442,410 2,430,288 2,417,075 2,405,820Sources of data:2001 through 2007 data: St. Louis Regional Chamber & Growth Association (RCGA), July 20082008 through 2009 data: U.S. Census Bureau, July 20102010 data: 2010 US Census96

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictPer Capita Personal Income by Region2009 2008 2007 2006 2005 2004 2003 2002 2001 2000MissouriSt. Louis City $ 32,026 $ 32,214 $ 30,494 $ 29,588 $ 27,903 $ 27,311 $ 27,052 $ 26,831 $ 26,450 $ 25,329St. Louis County 52,214 54,343 52,576 50,845 46,968 45,680 44,034 42,454 40,415 40,723St. Charles County 38,494 39,383 37,885 36,585 34,786 33,525 32,741 31,397 30,701 30,480Jefferson County 32,617 33,408 31,843 30,684 29,261 27,925 27,493 26,628 25,983 25,054IllinoisSt. Clair County $ 35,112 $ 35,437 $ 34,095 $ 32,298 $ 30,663 $ 29,723 $ 28,784 $ 27,874 $ 26,654 $ 25,414Madison County 35,811 36,218 34,724 32,998 31,542 30,514 30,149 28,984 27,881 26,729Monroe County 39,521 40,355 38,955 36,536 34,411 34,183 32,496 31,734 32,023 31,008St. Louis, MO-IL (MSA) $ 40,728 $ 41,823 $ 40,247 $ 38,805 $ 36,449 $ 35,434 $ 34,461 $ 33,356 $ 32,195 $ 31,746United States average $ 39,635 $ 40,166 $ 39,392 $ 37,698 $ 35,424 $ 33,881 $ 32,271 $ 31,462 $ 31,145 $ 30,318The Bi-State region experiences an ongoing increase in per capita income by county/city until in 2009, when per capita income decreased in our region and in theUnited States as an average. However, only St. Louis County has consistently been above the St. Louis, MO-IL MSA and the United States average per capitaincome.Per capita personal income was computed using Census Bureau midyear population estimates.Debt per capita * $ 369 $ 367 $ 362 $ 362 $ 305 $ 303Debt as a percentageof total income 0.91% 0.88% 0.90% 0.93% 0.84% 0.86%* See page 71. Information not aviable prior to 2003.Sources of data:U.S. Department of Commerce, Bureau of Economic Analysis, July 2011 (2010 statistics unavailable)97

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictAnnual Average Unemployment Percentage Rate in Bi-State Service AreaMissouriIllinois2010 2009 2008 2007 2006 2005 2004 2003 2002St. Louis City 11.7 11.7 7.8 7.0 6.9 8.1 9.0 8.6 7.9St. Louis County 8.9 9.0 5.9 4.9 4.6 5.2 5.5 5.2 4.7St. Charles County 8.1 8.6 5.4 4.1 3.9 4.0 4.2 4.2 3.9Jefferson County 9.9 10.6 6.8 5.1 4.8 5.3 5.6 5.2 5.0St. Clair County 10.9 10.9 7.9 6.3 5.8 6.2 6.7 6.9 6.4Madison County 9.8 10.2 6.8 5.6 4.9 5.4 5.9 6.1 5.7Monroe County 7.8 7.8 5.4 4.4 3.9 4.2 4.2 4.6 4.2Bi-State region average 9.6 9.8 6.6 5.3 5.0 5.5 5.9 5.8 5.4United States 9.6 9.3 5.7 4.8 4.6 5.1 5.5 6.0 5.8Since 2004, the Bi-State region has shown a higher unemployment rate than the United States average, until this year when we have fallen lower than the national average.St. Louis City has consistently held the highest rate in the region with the exception of St. Clair County being higher than St. Louis City in 2008, while St. Charles County inMissouri has had the lowest until in 2009 and 2010 when Monroe County in Illinois was lowest. In the Bi-State region in 2010, 1,297 jobs have been lost due to masslayoffs. Major companies such as Macy's Inc., KV Pharmaceutical, Boeing, Sears, ARAMARK, President Casino, and many more have either closed or laid off employees.The area saw a monthly average of 35,046 unemployed people, giving the region an average unemployment rate of 9.6% in 2010.The states of Missouri and Illinois have many programs to help combat high unemployment rates in the Bi-State region. One Illinois program is EDGE (EconomicDevelopment for a Growing Economy). This is a tax credit program intended to help level the playing field when competing for new job creating projects. The EDGEprogram tax credits allows firms relocating or creating new jobs in Illinois to reduce labor related costs. In Missouri, the Quality Job Act is a tax incentive program thattargets the creation of high quality jobs for new business projects. Both states create a favorable business climate in the Bi-State region by also offering loan programs,grants, and other tax assistance for new and expanding businesses.Sources of data:Missouri Department of Economic Development, Missouri Economic Research and Information Center, July 2011Illinois Department of Employment Security, Local Area Unemployment Statistics: LAUS, July 2011Missouri Rapid Response : WARN, Mass Layoffs, July 2011Illinois Department of Employment Security, MLS, Mass Layoff Statistics, July 2011St. Louis Regional Chamber & Growth Association (RCGA), July 201198

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictBi-State Region Top Businesses by Employee CountAs of January, 2011Employer* Employees % of Region Workforce by Bi-State Service Area**:1 BJC Healthcare 24,882 2.0% Missouri2 Boeing Defense, Space & Security 15,600 1.2% St. Louis City 156,8633 Washington University in St. Louis 13,483 1.1% St. Louis County 509,0674 SSM Healthcare 12,548 1.0% St. Charles County 193,1935 Scott Air Force Base 12,344 1.0% Jefferson County 115,1786 Schnuck Markets, Inc. 10,951 0.9% Total Missouri 974,3017 Wal-Mart Stores Inc. 10,800 0.9%8 St. John's Mercy Health Care 8,926 0.7% Illinois9 AT&T Communications Inc. 8,900 0.7% St. Clair County 124,85810 United States Postal Service 7,872 0.6% Madison County 138,701Total 126,306 10.1% Monroe County 18,528Total Illinois 282,087Total Bi-State Region 1,256,388The Bi-State region is home to 19 Fortune 1000 companies, 11 of which are in the Fortune 500. Express Scripts, Emerson Electric, MonsantoCompany, Peabody Energy, and Ameren Corporation are only a few. It is also home to many of the nation's largest privately held companies such asEdward Jones, Schnuck Markets Inc, and Enterprise Rent-A-Car. This region was ranked as the 6th most cost-competitive location among 22 U.S.metros with populations exceeding two million in a March 2010 study by KPMG LLP (which factored in cost of labor, energy, taxes, and office space).Note: Information has only been tracked since 2006. A nine-year prior comparative is not available.Sources of data:* St. Louis Business Journal, December 2010** St. Louis Regional Chamber & Growth Association (RCGA), July 201199

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