Funding Overruns

General
One provision of the AFA between a LG and TxDOT includes the funding responsibilities of each party to the AFA. State, federal and local funding responsibilities are specified as well as the funding type (fixed price or specified percentage). Each party’s funding obligation is limited to the values indicated in the agreement unless it is the party responsible for cost overruns or an amendment to the AFA is executed in writing by both parties.
Federal Requirement
  1. There are no specific federal regulations concerning funding overruns. FHWA executes a FPAA with TxDOT on all federally funded projects.
State Requirement
  1. 43 TAC §15.52
    – Requires a written agreement between TxDOT and a LG when the LG is providing financial assistance for a highway improvement project. One of the provisions of the AFA is the funding responsibilities of each party to the agreement.
  2. 43 TAC, Chapter 5
    – Provides for agreements between TxDOT and other entities that include funding arrangements and responsibilities:
  3. 43 TAC, Chapter 5, Subchapter E
    – Pass-through Fares and Tolls;
  4. 43 TAC, Chapter 5, Subchapter H
    – Transportation Development Credit Program; and
  5. 43 TAC, Chapter 5, Subchapter G
    – Private Activity Bonds.
Required Practices
The
LGPM Guide
includes the LG and TxDOT responsibilities related to project funding overruns. In general, for projects with state or federal funds, the LG must follow the terms of the project AFA executed between TxDOT and the LG.