By Ken Leiser
Postnet, June 21, 2000

Republished with permission of the St. Louis Post-Dispatch
© 2000 St. Louis Post-Dispatch

The state of Missouri has given initial approval to a $5.3 million loan that would help the struggling Bi-State Development Agency buy new buses and chip away at a gaping budget shortfall next year.

The Missouri Transportation Finance Corp. has signed off on the 10-year, 5.49 percent loan. It now must be approved by the Missouri Highways and Transportation Commission and the Bi-State governing board.

Bi-State would use the $5.3 million as matching funds to help it replace 108 buses. In turn, that would free up money to help Bi-State tackle a $15 million shortfall in next year's budget.

"It is a good start," said Tom Irwin, executive director of Bi-State. "We are happy the folks at the state infrastructure bank have decided to participate with us."

Bi-State commissioners are expected to adopt the agency's 2000-01 budget on June 30.

Irwin is seeking a permanent funding solution to what has become a chronic struggle to balance the agency's budget. In the short term, the agency may have to consider service cuts if more money isn't found.

In the long term, the wobbly funding situation could threaten future MetroLink expansion efforts.

Last month, the East-West Gateway Coordinating Council approved possible MetroLink routes to the north, south and west. The regional planning agency is also studying whether bus rapid transit into south St. Louis County can provide service similar to MetroLink at a fraction of the cost.

In the meantime, consultant Booz-Allen & Hamilton told Bi-State that the agency should better tie the subsidies it receives from St. Louis, St. Louis County and other funding agencies to the services it provides.

Bi-State originally sought an $11 million loan. Highway Commission Chairman S. Lee Kling, president of the infrastructure bank, said the state urged Bi-State to apply for the balance of the money next year.

Kling said the loan represents a departure from the bank's past emphasis on highways. "This is something we wanted to do," Kling said. "We didn't want to do only highway, highway, highway."

Despite Bi-State's chronic budget troubles, he considers the loan a safe one. The transit agency would be required to set aside its payments in reserve each year.