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MoDot Announces $250M Road and Bridge Bonds

Sat January 20, 2001 - Midwest Edition
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A total of $250 million in bonds that will expedite completion of bridge and highway projects were available for purchase beginning Dec. 5, 2000 by the Missouri Highways and Transportation Commission.

The bonds are rated double-A by all three major rating agencies. The syndicate account is being managed by Salomon Smith Barney and George K. Baum & Company.

Priority projects will be started as much as three years sooner than initially planned as a result of the bond financing, which was made possible by legislation approved by the General Assembly in 2000. The legislation provided authority for issuance of bonds of up to $250 million.

The bonds made available in December were in $5,000 denominations. Bonds may be obtained from any brokerage firm with offices in Missouri. Details about the bonds are contained in the prospectus issued by the commission, copies of which are available from the brokerage firms.

“This is an important step to speed up much-needed bridge and highway work,” said S. Lee Kling, chairman of the Highways and Transportation Commission. “We appreciate the efforts of the late Gov. Carnahan and the General Assembly to approve bond financing for these improvements. The projects being expedited with these funds are under way or will be started before the end of this fiscal year in June.”

The law requires projects funded with the first $250 million in bonds to be chosen from the five-year program, which is the Missouri Transportation Department’s schedule for constructing improvements during the next five years. The geographic distribution of bond-financed projects depended on the locations of improvements that could easily be moved up in the schedule.

Henry Hungerbeeler, MoDOT director, said bond financing helps bring much-needed projects into service faster but this type of funding is not a long-term solution for Missouri’s transportation needs due to the fact that it mortgages future tax revenue.

“These projects are beneficial for Missourians and the costs of bond financing are offset to a certain extent by avoiding higher construction costs in the future,” Hungerbeeler said. It should be emphasized as well that revenue from bonds is not new money. It must be paid back with interest from available revenue.

“The long-term solution for meeting Missouri’s growing transportation needs is a commitment by the state to make more resources available for bridges, highways and other types of transportation. Otherwise, as needs outstrip revenue, less money can be spent on system improvements and more will have to be spent on rehabilitating and reconstructing existing structures,” he said.

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