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 . 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 . 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.
Other agreement types (e.g., Inter-Agency, interlocal, etc.) not listed in the can be found on the CSD webpage.
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
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