Chapter 2: Advance Funding Agreements

Section 1: Overview

Description of an AFA

An Advance Funding Agreement (AFA) is a negotiated contract between TxDOT and a local government, another state agency or another state where both parties agree to a funding arrangement to contribute funds, labor, raw materials, or land, in order to develop or maintain a highway project required by 43 TAC §15.55.
A local government may be a:
  • city,
  • county,
  • river authority,
  • independent school district,
  • municipal utility district,
  • other local governmental agency,
  • private or public utility company,
  • railroad, or
  • other political subdivision of this state, or special district that has the authority to finance a highway improvement project.

Comparison to a Typical Procurement Contract

In a
typical
 procurement contract, TxDOT pays another party for a single, well-defined procurement such as land, a good, or service. For example, if a project needs plans, specifications, and estimates (PS&E), TxDOT will enter into a procurement contract with an engineering firm to do the work.
In an AFA, TxDOT and a local government will conduct separate "typical" procurements for each of the tasks assigned to them by the AFA. Each item of work must be identified and the party responsible for accomplishing that work must be clearly stated in the agreement.

Authority

TxDOT may construct and maintain a comprehensive system of state highways and public roads. Tex. Transp. Code §201.103.
TxDOT may use federal funds for public road construction. Tex. Transp. Code §§ 222.031, 222.034.
A local government may finance and TxDOT may accept funding for the construction of public roads. Tex. Transp. Code §§ 222.051, 222.052, 222.053.
TxDOT is authorized to regulate the placement of public utilities along state highways. Tex. Transp. Code ch. 203, subch. E.
TxDOT is authorized to administer the Transportation Alternatives Program to provide funding for a variety of alternative transportation projects. 43 TAC ch. 11, subch. F.
TxDOT is authorized to administer the Transportation Alternatives Set-Aside Program to provide funding for a variety of alternative transportation projects. 43 TAC ch. 11, subch.G.