- Briefing Room
The U.S. Highway 63 project highlights the role of transportation corporations, an organizational structure used to improve the efficiency of delivery for some road projects.
For decades, residents of Kirksville in north central Missouri wanted to expand a 22-mile stretch of U.S. Highway 63 between Macon and Kirksville from two to four lanes. In 1992, the Highway 63 project as well as several others across the State were included in a Statewide Improvement Plan. However, in 1998, the Missouri Department of Transportation (MoDOT) deferred many of these planned projects, including Highway 63, until 2020 or later due to funding constraints. 440 1
Kirksville citizens sought to move the project forward. The Kirksville Area Chamber of Commerce met with leaders from MoDOT and the Missouri Highway and Transportation Commission, forming a Highway 63 Taskforce. The Missouri Highway and Transportation Commission was willing to pursue the project if local sources of funding could be found. In 1999, with the cooperation of MoDOT, the Missouri Highway and Transportation Commission, the citizens of Adair and Macon Counties, and other interested parties, the Highway 63 Transportation Corporation was created as a vehicle to help mobilize funding for and speed implementation of the project. 2
Once established, the transportation corporation issued a request for proposals, to which more than 10 engineering and construction firms responded. The winning bid was developed by Koch Performance Roads, Inc. In November of 2001, the transportation corporation presented the proposal along with a pledge that it would seek a one-half percent increase in sales tax to provide up to 30 percent of the project's total cost to the Missouri Highway and Transportation Commission, which subsequently endorsed the plan. 3 In April 2002, the Kirksville City Council held a referendum on whether to increase the sales tax by one-half percent for 10 years to help fund the highway expansion. The ballot initiative was overwhelmingly successful, receiving 78.9 percent of the vote. 4
On May 3, 2003, more than 600 residents brought shovels to the groundbreaking site, kicking off the construction of their new highway. 5 The ribbon-cutting ceremony took place at four locations along the highway - Macon, Atlanta, La Plata and Kirksville - and the new lanes opened to the public in October 2005, signaling on-time completion. 6
The Legal Framework
The legal framework for the creation of a transportation corporation was in place well before the start of this project. The 1990 Missouri Transportation Corporation Act allowed localities to form non-profit quasi-governmental agencies called "transportation corporations" to develop and oversee transportation projects. After the Highway 63 Taskforce recommended that the rights granted in the legislation be exercised, the Highway 63 Transportation Corporation was established in April 2000. The corporation's members included jurisdictions that would benefit from the project, including the Kirksville Area Chamber of Commerce; the city of Kirksville; Adair, Macon, and Schuyler counties; and the cities of Macon, Atlanta, and La Plata. 7 The Highway 63 Transportation Corporation would continue to operate until all funds from the sales tax had been collected, expended, and accounted for; all debts paid; and its business finalized. 8
The key market consideration was the impact of market conditions on expected sales tax revenues. Since the sales tax revenues were used to back debt for the project, a financial feasibility study conducted early in the project development process forecasted the adequacy of sales tax revenues. 9 If sales taxes were not sufficient, the corporation had access to some State grants. So far, sales tax receipts reached their targets in every year of the project.
Project costs were $37.4 million. Roughly 30 percent of the project cost was covered by sales tax revenues of approximately $11.5 million, which were used to meet debt obligations. The remaining funding was provided by the Missouri Highway and Transportation Commission. The sales tax revenues were collected by the city of Kirksville and paid through the Highway 63 Transportation Corporation, giving taxpayers confidence that the funds were only dedicated to the project. Sales tax revenues began coming in before construction. The duration of the sales tax was 10 years, ending in 2013. 10
Successful local partnerships were critical in allowing this project to be implemented effectively. Following is a list of the project partners:
One of the key elements that helped make this project successful was the willingness of Kirksville residents to move it forward. Voters approved the half-cent sales tax increase by an overwhelming 78.9 percent majority, highlighting the strength of local support for this project.
Highway 63 Transportation Corporation
The formation of the Highway 63 Transportation Corporation was one of the elements that allowed this project to ultimately come to fruition. Members of the general public formed a non-profit corporation that served as a quasi-governmental agency, partnering with and sharing roles with MoDOT and contracting services with a private firm. The Highway 63 Transportation Corporation was unusual in that it assembled resources, sped up project management, and allowed each partner to focus on its area of responsibility. 11 The transportation corporation was not a funding tool per se but a technique to accelerate the project timetable by overseeing and promoting the project and helping secure project funding.
1 Vadali, Using the Economic Value Created by Transportation to Fund Transportation.
2 FCP3, "The Highway 63 Transportation Corporation."
3 FCP3, "The Highway 63 Transportation Corporation."
4 Kristine Williams, Alternative Funding Strategies for Improving Transportation Facilities: A Review of Public Private Partnerships and Regulatory Methods, prepared by the Center for Urban Transportation Research (CUTR) for the North Carolina Department of Transportation, December 2006, https://www.cutr.usf.edu/oldpubs/Fairshare%20Report.pdf.
5 FCP3, "The Highway 63 Transportation Corporation."
6 FCP3, "The Highway 63 Transportation Corporation."
7 Vadali, Using the Economic Value Created by Transportation to Fund Transportation.
8 "Highway 63 Transportation Corporation," Truman State University Pickler Memorial Library Archives, http://library.truman.edu/manuscripts/H3-Hiway%2063.asp.
9 Vadali, Using the Economic Value Created by Transportation to Fund Transportation.
10 Vadali, Using the Economic Value Created by Transportation to Fund Transportation.
11 FCP3, "The Highway 63 Transportation Corporation."