Section 2: Contract Standards
Authority to Perform Services
The local government and TxDOT may only contract with each
other to perform functions and services that state law authorizes
them to perform. If either party does not have the authority to perform
an act, TxDOT cannot enter into an Interlocal contract to pay a
local government to perform the act for TxDOT. The same is true
for the local government. For example, TxDOT does not have its own
statutory authority to build and operate a library, so TxDOT cannot
enter an Interlocal agreement for a local government to provide
a library for TxDOT, even though that service is a governmental
function.
Approval
An Interlocal contract must be authorized by the governing
body of the local government when required by law. The local government
must provide some proof that the governing body approved entering
into an agreement. This proof is usually in the form of an Ordinance
or Resolution, and it must be incorporated into the Interlocal Agreement
by reference and be attached.
The exception is an Interlocal contract with a municipally
owned electric utility, in which the governing body may establish
procedures for entering into an Interlocal contract that does not
exceed $100,000 without requiring the approval of the governing
body. Tex. Gov’t Code §791.011(d)(1).
Administration
An Interlocal contract may be amended to reflect significantly
changed conditions or mutually agreed changes in scope of work.
If the local government withdraws from the project after the contract
is executed, the local government is responsible for all costs incurred
by TxDOT under the contract.