3.5 Project Funding

This section discusses activities involved in identifying potential design and construction funding sources including state, federal, and outside sources. Outside sources could include local governmental entities, other public agencies, and private sources. Typically, federal funds are not available to functional classifications of rural minor collectors and local roads. However, this rule does have exceptions including bridge projects, Transportation Alternatives projects, Recreational Trail projects, HSIPT projects and other exceptions.

3.5.1 Design and Construction Funding

The UTP is used to authorize funds for planning, development and construction activities for highways, public transportation, aviation, state and coastal waterway and rail projects.
Twelve specific purpose UTP categories of funds have been established by state legislation and commission policy for highway transportation programs, as listed below in
Table 3-3
. Funding for each category is determined by the Commission and then programmed for projects that match eligible funds, based on a project’s type and characteristics. Projects are selected by MPOs, Districts, certain TxDOT Divisions, or the TTC depending on the category.
Categories are either allocation programs or project specific. Refer to the STIP and UTP documents for more information regarding how projects are programmed.
Table 3-3: UTP Funding Categories
UTP Funding Categories
1
Preventive Maintenance and Rehabilitation
2
Metropolitan and Urban Area Corridor Projects
3
Non-Traditionally Funded Transportation Projects
4
Statewide Connectivity Corridor Projects
5
Congestion Mitigation and Air Quality Improvement
6
Structures Replacement and Rehabilitation (Bridge)
7
Metropolitan Mobility and Rehabilitation
8
Safety
9
Transportation Alternatives Set-Aside Program
10
Supplemental Transportation Programs
11
District Discretionary
12
Strategic Priority

3.5.2 Local Government Project Funding Agreements

Project funding agreements are used when other entities participate in funding project development along with TxDOT or make improvements within the State Highway System ROW. When LG funding is involved, it may be directed toward preliminary engineering, construction, ROW, utility relocation costs, maintenance or any other project expense.
For LG projects, refer to TxDOT’s
Local Government Policy Manual
 and the
Local Government Project Management Guide
 for details on LG project funding agreements.
Funding for LG projects are constrained by the funding limitations of the specific funding categories discussed in
Section 3.5.1
. For example, if LG requests work outside of the scope of Category 6 funding, the LG is responsible for the cost of that work.
Funding agreements state the entity responsible for performing the various project activities. The available project funding agreements and the applicability of each in varied situations are indicated in
Table 3-4
. Contact the specific Division referenced below for additional information and procedures for obtaining required agreements and permits. Additional discussion on Advanced Funding Agreements (AFA), State Letter of Authority (SLOA) and Federal Project Authorization Agreement (FPAA) as they pertain to LG projects follows (
AFA, SLOA and FPAA also pertain to non-LG projects as well
):
  • AFA
    – an AFA is the form of contract most frequently used for development of projects with LGs. The AFA is an agreement under which TxDOT and the LG allocate participation in a transportation improvement project. The AFA defines the scope of work, labor and material resources, and funding participation to be contributed by each party necessary to accomplish a transportation project
  • SLOA
    - the SLOA is a Notice to Proceed or an authorization to commence work issued by TxDOT on all LG projects whether the work is competitively bid or performed by the LG. Up to three SLOAs may be required and issued during the course of the project.
  • FPAA
    – up to three FPAAs may be required and issued along with the SLOA during the course of the project (if federal funds are used). The FPAA is required in addition to the SLOA for all federally funded projects (it is not required for projects that only include local and/or state funds). The primary function of this form is to obligate federal funds for the project by phases. By completion of the FPAA, federal funds are authorized through an agreement between FHWA and TxDOT for reimbursement of eligible costs. The FPAA is required prior to TxDOT issuing a SLOA for each phase of a project that includes federal funds..
Bridge specific AFAs are available for bridge work to local structures.
Table 3-4: Agreements and Permits
Agreement/Permit Type
Type of Entity
Donation Agreement
Driveway Permit
Municipal Maintenance Agreement
Landscape Maintenance Agreement
Multiple Use Agreement (MUA)
Local On-System Agreement (LOSA)
Voluntary Advance Funding Agreement (VAFA
Advance Funding Agreement (AFA)
Brief descriptions of allowable improvement types by agreement type
Private entity funded for improvements such as deceleration lanes /signals. Constructed by private entity contractor or TxDOT and maintained by TxDOT.
Provide improved access between edge of State roadway and adjacent property line
Defines construction and maintenance responsibilities for roadways on State Highway System within municipal limits of cities
Defines construction and maintenance responsibilities for landscaping on State Highway System within municipal limits of cities
Authorizes local government to construct and maintain facilities within TxDOT ROW at local government's expense
Local government funded for improvements such as decelaration lanes /signals. Constructed by Local Government and maintaned by TxDOT
Local government funded improvement project being performed by TxDOT such as construction change order
An improvement project being jointly performed, funded, or maintained by TxDOT and/or a local government
District/Division "Owner" of Agreement
Contract Services (CSD
Districts
Maintenance (MTN)
Maintenance (MTN)
Maintenance (MTN)
Contract Services (CSD)
Contract Services (CSD)
Contract Services (CSD)
Entity entering agreement with TxDOT
Private Entity
X
X
City
X
X
X
X
X
X
X
Other Local Government
X
X
X
X
X
Available funding sources
FHWA or TxDOT
N/A
N/A
X
Private Entity
X
X
N/A
N/A
City
X
N/A
N/A
X
X
X
X
Other Local Government
X
N/A
N/A
X
X
X
X
Entity managing/performing construction
TxDOT
X
X
X
X
X
Private Entity
X
X
City
X
X
X
X
X
X
Other Local Government
X
X
X
X
Entity responsible for maintenance
TxDOT
X
X
X
X
X
X
Private Entity
X
City
X
X
X
X
X
X
X
Other Local Government
X
X
X
X
X
Link to location of information
Contact CSD when initiating a Donation Agreement
Driveway Permits
Municipal Maintenance Agreement
Landscape Maintenance Agreement
Mulitple Use Agreements
Contact CSD when initiating a LOSA
Contact CSD when initiating a VAFA
Contact CSD when initiating an AFA
Other agreement types (e.g., Inter-Agency, interlocal, etc.) not listed in the
Table 3-4
can be found on the CSD webpage.
Table 3-5
indicates which funding type (fixed price or specified percentage) is recommended based upon the category of work, who is managing the work and whether the project is on or off the state highway system or is a non-construction project. If the AFA proposes a funding type that is not aligned with the recommendation in the chart, special approval by the executive director or their designee is required. For more information on funding types, refer to TxDOT’s
Local Government Projects Policy Manual
.
For all LG projects, coordinate with TPD – Local Government Programs staff
Table 3-5: Recommended Funding Type Chart
Who is Managing the Work Item
Category of the Work Item?
Recommended Funding type for LG Participation
Who is Managing the Work Item
Category of the Work Item?
Recommended Funding type for LG Participation
Who is Managing the Work Item
Category of the Work Item?
Recommended Funding type for LG Participation
On-System
Off-System
Non-Construction
TxDOT Managed
ROW Acq
Fixed
TxDOT Managed
ROW Acq*
Spec %
TxDOT Managed
Plng Study
Fixed
Utl Reloc*
Fixed
Utl Reloc**
Spec %
Traf Mgmt
Fixed
Env
Fixed
Env
Spec %
Air Quality
Fixed
Design
Fixed
Design
Spec %
LG Managed
Plng Study
Spec %
Constr.
Fixed
Constr.
Spec %
Traf Mgmt
Spec %
Service Proj.
Spec %
O/S Bridge
Fixed
Air Quality
Spec %
LG Managed
ROW Acq
Spec %
LG Managed
ROW Acq
Spec %
Utl Reloc
Spec %
Utl Reloc
Spec %
Env
Spec %
Env
Spec %
Examples of Non-Construction projects:
  • Traffic Management:
    • Freeway incident management
    • ITS
  • Air Quality:
    • Transit, van pool, ride share
    • Clean vehicles
Design
Spec %
Design
Spec %
Constr.
Spec %
Constr.
Spec %
* TxDOT is not authorized to purchase ROW for anything other than state highway projects.
** Agreement for minimum local contribution towards the cost of reimbursable utilities(Agreement to Contribute ROW Funds); For guidance on individual AFAs for voluntary utility relocations (joint bid utilities) see TxDOT's Utility Manual.
Execute AFAs at the beginning of project development to ensure that the responsibilities of each party and their funding responsibilities are agreed to before incurring preliminary design costs, which could include review time completed by professional staff.
Execute LOSA prior to District approving project plans and specifications and prior to authorizing LG construction activities within the state ROW.
  • Coordination:
  •  District planning staff
  •  District driveway coordinator – driveway permits
  •  District maintenance staff
  •  Director of TPD
  •  TPD – Local Government Programs staff
  •  TPP staff
  •  FIN staff
  •  Contract Services Division (CSD) staff – Donation agreements, LOSA, VAFA, AFA, workflow diagrams
  •  Maintenance Division (MTN) staff – driveway permits SOP, municipal maintenance agreements, landscape maintenance agreements, multiple use agreements
  •  BRG project manager – consult on bridge AFAs (not the same as the long form AFA)
  • Tools to use:
  • Available training:
  •  CTR110 – Advance Funding Agreements
  •  LGP101 – Local Government Project Procedures Qualifcation for TxDOT
  •  LGP102- Local Government Projects Construction Administration
  •  PLN302 – Highway Program Funding
  •  PLN308 – Federal-Aid Highways 101
  •  TCC327 – Bridge Preservation Guide
  •  TPD101 – Overview of Project Development & Delivery at TxDOT
  •  TPD302 – TxDOTCONNECT Funding Lines Demo
  •  TPD333 – TxDOTCONNECT Managing the District/Division Program
  •  TPD359 – TxDOTCONNECT Advance Funding Agreements