43 TAC §15.52
The Texas Department of Transportation proposes amendments
to §15.52, Agreements, concerning federal, state, and local participation
in highway improvement projects.
Transportation Code, Chapters 201-203 and 221-224 provide that the Texas
Transportation Commission is responsible for the construction, maintenance,
and operation of the state highway system, and that money in the state highway
fund, including federal funds, that is available for highway improvement projects
may be spent only by and under the supervision of the department. The department
is required to ensure that all applicable federal and state laws, regulations,
standards, and specifications are complied with in the use of those funds.
Those chapters also authorize local governments to finance the development
and construction of highway improvement projects, and authorize counties and
municipalities to carry out an improvement to the state highway system. Pursuant
to this authority, the commission has adopted §§15.50-15.56, to
specify the roles of federal, state, and local entities in the development
of highway improvement projects.
Due to scarce state highway funding, a limited percentage of highway improvement
needs of the state are currently being met. Cost participation in highway
improvement projects is required of local governments in order to make the
most efficient use of scarce state highway funding. Limited department resources
may also affect the ability of the department to perform or manage a highway
improvement project in an efficient and timely manner.
Allowing local governments that are authorized to finance and construct
highway improvement projects to use employees under the control of the local
government to perform highway improvement projects ("force account"), and
to locally award a contract for and manage the construction of highway improvement
projects will provide alternate funding for these projects, allowing scarce
state highway funding to be used more efficiently, and will allow a number
of projects to be completed more expeditiously. The conditions placed on a
local government's performance of these acts are necessary in order to ensure
that local performance is timely and cost effective, and to ensure that all
applicable federal and state laws, regulations, standards, and specifications
are complied with by the local government.
The amendments to §15.52 allow local governments to assume responsibility
for using force account to perform work on a highway improvement project,
or to award a contract for and manage the construction of a highway improvement
project, except for a project to improve freeway mainlanes on the state highway
system. The local government must agree to comply with all federal, state,
and department requirements, standards, and specifications in carrying out
that work, and to forfeit any claim to federal and/or state reimbursement
if they fail to comply. The project must be authorized by the commission in
the current Unified Transportation Program or by a specific minute order.
A project on the state highway system must be operationally beneficial to
the state and, if a contract is awarded and managed by the local government
for such a project, must be funded with at least 50% of the funds not coming
from federal or state highway funding. The department must review and approve
all plans, contract awards, and change orders related to a highway improvement
project.
In approving the project, the department will consider the previous experience
and capability of the local government in performing the type of work proposed,
the need for expeditious project completion, department resources available
to perform or manage the highway improvement project in an efficient and timely
manner, the cost effectiveness of local performance of the work as compared
to awarding the highway improvement project through the competitive bidding
process, and any other considerations relating to the benefit of the state,
the traveling public, and the operations of the department.
James Bass, Director, Finance Division, has determined that for the first
five-year period the amendments are in effect, there will be fiscal implications
for state government as a result of enforcing or administering the amendments.
The additional costs and reductions in costs resulting from local performance
of a highway improvement project cannot be determined with any specificity
because it depends upon the number and type of projects that local governments
choose to finance and construct. There will be fiscal implications for local
governments as a result of enforcing or administering the amendments. The
additional cost to local governments cannot be determined with any specificity
because it depends upon the number and type of projects that a local government
chooses to finance and construct. There are no anticipated economic costs
for persons required to comply with the amendments as proposed.
Robert Wilson, Director, Design Division, has certified that there will
be no significant impact on local economies and overall employment as a result
of enforcing or administering the amendments.
Mr. Wilson has also determined that for each year of the first five years
that the amendments are in effect, the public benefit anticipated as a result
of the amendments will be to further the department's mission to provide an
efficient and effective process to move people and goods through an increased
efficiency in the use of highway funding and more expeditious development
of highway improvement projects. Any effect on small or micro businesses will
be positive because of the completion of an increased number of highway improvement
projects.
Written comments on the proposed amendments may be submitted to Robert
Wilson, Director, Design Division, 125 East 11th Street, Austin, Texas 78701-2483.
The deadline for receipt of comments is 5:00 p.m. on August 13, 2001.
The amendments are proposed under Transportation Code, §201.101,
which provides the Texas Transportation Commission with the authority to establish
rules for the conduct of the work of the Texas Department of Transportation.
No statutes, articles, or codes are affected by the proposed amendments.
§15.52.Agreements.
When a local government or reservoir agency is responsible for providing
financial assistance for a highway improvement project, the department and
the local government or reservoir agency shall enter into an agreement before
any work is performed. The agreement will include, but not be limited to,
the following provisions of this section.
(1)
Right of entry. If the local government or reservoir agency
is the owner of the project site, it shall permit the department or its authorized
representative access to occupy the site to perform all activities required
to execute the work.
(2)
Right of way and/or utility relocation/adjustments. The
local government will provide all necessary right of way and utility relocation/adjustments,
whether publicly or privately owned, in accordance with §15.55 of this
subchapter (relating to Construction Cost Participation). When specified,
the reservoir agency will provide all necessary right of way and utility/relocation
adjustments, whether publicly or privately owned. Existing utilities will
be relocated and/or adjusted with respect to location and type of installation
in accordance with the requirements of the department as specified in §21.21
of this title (relating to State Participation in Relocation, Adjustment,
and/or Removal) and §21.31 et seq. of this title (relating to Utility
Accommodation).
(3)
Funding arrangement. The agreement will specify the type
of funding share arrangement agreed upon by the department and the local government.
The funding share arrangement shall include any adjustments required by §15.55
of this subchapter. The funding arrangement agreed upon by the department
and the reservoir agency will be as specified under §15.54(f) of this
subchapter.
(A)
Standard. The local government is responsible for all,
or a specified percentage as shown in Appendix A of §15.55 of this title
(relating to Construction Cost Participation), of the direct costs incurred
by the department for preliminary engineering, construction engineering, construction,
and right of way as well as the direct cost for any work included which is
ineligible for federal or state participation. When specified, the reservoir
agency is responsible for all of the direct costs incurred by the department
for preliminary engineering, construction engineering, construction, and right
of way as well as the direct cost for any work included which is ineligible
for federal or state participation.
(B)
Alternate. A fixed price funding arrangement may be used
if requested by the local government and approved by the executive director.
(i)
Definition. Under this arrangement, a local government
is responsible for a firm fixed price which is a lump sum price not subject
to adjustment except:
(I)
in the event of changed site conditions;
(II)
if work requested by the local government is ineligible
for federal participation; or
(III)
as mutually agreed upon by the department and the local
government.
(ii)
Conditions. The department may enter into a firm fixed
price agreement only:
(I)
for projects that include state participation, as shown
in Appendix A of §15.55 of this subchapter; and
(II)
if the fixed price is based on the estimated cost of the
work for which the funds are received.
(iii)
Approval. In approving a request for an alternate funding
arrangement, the executive director will consider:
(I)
requests by the local government to include work which
is ineligible for federal or state participation;
(II)
need for expeditious project completion;
(III)
type of work proposed and the ability to accurately estimate
its cost; and
(IV)
any other considerations relating to the benefit of the
state, the traveling public, and the operations of the department.
(C)
Off State Highway System Bridge Program. For projects funded
in the Off State Highway System Bridge Program, the local government is responsible
for the specified percentage, as shown in Appendix A to §15.55 of this
subchapter, of the estimated direct costs for preliminary engineering, construction
engineering, and construction, and the actual direct costs for right of way
and eligible utilities. The estimated direct costs are based on the department's
estimate of the eligible work at the time of the agreement. The local government
is responsible for the direct cost of any project cost item or portion of
a cost item that is not eligible for federal participation under the Federal
Highway Bridge Replacement and Rehabilitation Program under 23 U.S.C. §144
and 23 C.F.R. §650 Subpart D. The local government is also responsible
for any cost resulting from changes made at the request of the local government,
either during preliminary engineering or construction.
(4)
Interest. The department will not pay interest on funds
provided by the local government or the reservoir agency. Funds provided by
the local government or the reservoir agency will be deposited into, and retained
in, the state treasury.
(5)
Amendments. In the case of significantly changed site conditions
or other mutually agreed upon changes in the scope of work authorized in the
agreement, the department and the local government or reservoir agency will
amend the funding agreement, setting forth the reason for the change and establishing
the revised participation to be provided by the local government or reservoir
agency.
(6)
Payment provision. The agreement will establish the conditions
for payment by the local government or reservoir agency, including, but not
limited to, the method of payment and the time of payment.
(A)
Standard. Following execution of the agreement, the local
government or reservoir agency will pay, as a minimum, its funding share for
the estimated cost of preliminary engineering for the project. Prior to the
department's scheduled date for contract letting, the local government or
reservoir agency will remit to the department an amount equal to the remainder
of the local government's or reservoir agency's funding share for the project.
(i)
When the standard funding arrangement is used, after the
project is completed the final cost will be determined by the department,
based on its standard accounting procedures. If it is found that the amount
received is insufficient to pay the local government's or reservoir agency's
funding share, then the department shall notify the local government or reservoir
agency which shall transmit the required amount to the department. If it is
found that the amount received is in excess of the local government's or reservoir
agency's funding share, the excess funds paid by the local government or reservoir
agency shall be returned.
(ii)
When a fixed price funding arrangement is used, the lump
sum price is not subject to adjustment except as provided for in paragraph
(3)(B) of this section.
(iii)
For projects funded in the Off State Highway System Bridge
Program, the department will determine the final cost after the project is
completed, based on its standard accounting procedures. The department will
notify the local government of any amount due for payment of costs related
to any ineligible items and for changes made at the request of the local government.
The local government shall promptly transmit the required amount to the department.
The department will return excess funds paid by the local government if the
amount received is in excess of the local government's funding share required
by §15.55(c) of this subchapter.
(B)
Alternate. Incremental payments may be made if requested
by the local government and approved by the executive director. When the standard
funding arrangement is used, after the project is completed, the final cost
will be determined by the department based on its standard accounting procedures.
If it is found that the amount received is insufficient to pay the local government's
funding share, then the department shall notify the local government which
shall transmit the required amount to the department. If it is found that
the amount received is in excess of the local government's funding share,
the excess funds paid by the local government shall be returned. When a fixed
price funding arrangement is used, the lump sum price is not subject to adjustment
except as provided for in paragraph (3)(B) of this section. For projects funded
in the Off State Highway System Bridge Program, the department will determine
the final cost after the project is completed, based on its standard accounting
procedures. The department will notify the local government of any amount
due for payment of costs related to any ineligible items and for changes made
at the request of the local government. The local government shall promptly
transmit the required amount to the department. The department will return
excess funds paid by the local government if it is found that the amount received
is in excess of the local government's funding share required by §15.55(c)
of this subchapter.
(i)
Conditions. The department may approve incremental payments
only if:
(I)
the incremental payments sought are based on the estimated
cost for the work for which the funds are received and payment is made in
accordance with the schedule established in the funding agreement; and
(II)
the local government does not have a delinquent obligation
to the department, as defined in §5.10 of this title (relating to Collection
of Debts).
(ii)
Approval. In approving a request for incremental payments,
the executive director will consider:
(I)
inability of the local government to pay its total funding
share prior to the department's scheduled date for contract letting, based
upon population level, bonded indebtedness, tax base, and tax rate;
(II)
past payment performance;
(III)
need for expeditious project completion;
(IV)
whether the project is located in a local government that
consists of all or a portion of an economically disadvantaged county; and
(V)
any other considerations relating to the benefit of the
state, the public, and the operations of the department.
(7)
Termination. If the local government or reservoir agency
withdraws from the project after the agreement is executed, it shall be responsible
for all direct and indirect project costs incurred by the department for the
items of work in which the local government or reservoir agency is participating.
(8)
Responsibilities of the parties.
(A)
Agreement. The agreement shall
identify the responsibilities of each party, including, but not limited to,
preparing or providing construction plans, construction performance, advertising
for bids, awarding a construction contract, and construction supervision.
(B)
Local performance and management
of highway improvement projects.
(i)
Request. If requested by a local government
and approved by the department, an agreement with the governing body of a
local government may provide for:
(I)
the performance by employees under the direct
control of the local government of a highway improvement project, other than
a project to improve freeway mainlanes on the state highway system; or
(II)
the bid opening, award of construction, and
construction management by the local government of a highway improvement project,
other than a project to improve freeway mainlanes on the state highway system.
(ii)
Approval authority. The executive director
may authorize a local government to perform an act described in clause (i)
of this subparagraph. The executive director may delegate the authority to
approve:
(I)
the performance by employees of the local government
of work on a metropolitan highway not maintained by the department; and
(II)
the performance by employees of the local government
of projects or activities appurtenant to a state highway, including drainage
facilities, surveying, traffic counts, driveway construction, landscaping,
signs, lighting, guardrails and other items incidental to the roadway itself
on facilities for which the department is responsible for maintenance.
(iii)
Conditions. A local government may perform
an act described in clause (i) of this subparagraph only if:
(I)
the local government commits in the agreement
to comply with all federal, state, and department requirements, standards,
and specifications, and agrees to forfeit any claim to federal and/or state
reimbursement if they fail to comply;
(II)
the project is authorized by the commission
in the current Unified Transportation Program or by a specific minute order;
(III)
a project on the state highway system performed
or managed by a local government is operationally beneficial to the state;
(IV)
a project on the state highway system for which
a contract is awarded and managed by a local government is funded with at
least 50% of the funds not coming from federal or state highway funding; and
(V)
the department reviews and approves all plans,
contract awards, and change orders.
(iv)
Approval. In approving a request, the executive
director or designee will consider:
(I)
previous experience of the local government
in performing the type of work proposed;
(II)
the capability of the local government to perform
the type of work proposed or to award and manage a contract for that work
in a timely manner, consistent with federal, state, and department regulations,
standards, and specifications;
(III)
need for expeditious project completion;
(IV)
department resources available to perform or
manage the highway improvement project in an efficient and timely manner;
(V)
cost effectiveness of local performance of the
work as compared to awarding the highway improvement project through the competitive
bidding process; and
(VI)
any other considerations relating to the benefit
of the state, the traveling public, and the operations of the department.
[(8)
Responsibilities of the parties. The
agreement shall identify the responsibilities of each party, including, but
not limited to, preparing or providing construction plans, advertising for
bids, awarding a construction contract, and construction supervision.]
[
(A)
Local performance of construction
work.]
[
(i)
Request. If requested by a county or municipality
and approved by the executive director or designee, an agreement with the
commissioners court of a county or the governing body of a municipality may
provide for minor improvement of the state highway system by county or municipal
employees under direct county or municipal control, where minor improvements
are to include:]
[
(I)
projects on a metropolitan highway not maintained
by the department and not contained in the off-state highway system bridge
program; or]
[
(II)
projects or activities appurtenant to a state
highway and including drainage facilities, surveying, traffic counts, driveway
construction, landscaping, signs, lighting, guardrails and other items incidental
to the roadway itself on facilities for which the department is responsible
for maintenance.]
[
(ii)
Approval. The executive director or designee
may authorize a county or municipality to perform minor improvement of the
state highway system, if the county or municipality commits in the agreement
to comply with all federal, state and department requirements and agrees to
forfeit any claim to federal and/or state reimbursement if they fail to comply.
In approving a request from a county or municipality for minor improvement
of the state highway system, the executive director or designee will consider:]
[
(I)
previous experience of the county or municipality
in performing the type of work proposed;]
[
(II)
need for expeditious project completion;]
[
(III)
cost effectiveness of the proposal as compared
to awarding the project through the competitive bidding process; and]
[
(IV)
any other considerations relating to the benefit
of the state, the traveling public, and the operations of the department.]
[
(iii)
Exceptions. The commission may authorize
a county or municipality to perform other than minor improvement of the state
highway system, if those improvements are determined to be in the best interest
of the state, and the county or municipality commits in the agreement to comply
with all federal, state and department requirements and agrees to forfeit
any claim to federal and/or state reimbursement if they fail to comply. In
approving a request, the commission will consider the criteria prescribed
in clause (ii) of this subparagraph.]
[
(B)
Local letting and management
of construction projects.]
[
(i)
Request. A local government may submit a written
request to the department to assume the responsibility for letting, construction,
and construction management of a specific project.]
[
(ii)
Approval. The executive director may authorize
a local government to award and manage a construction contract if:]
[
(I)
the improvement is for a project not on the
state highway system or is for a project on a metropolitan highway not maintained
by the department;]
[
(II)
the project is not in the off-state highway
system bridge program;]
[
(III)
the department lacks the expertise or resources
necessary to award a construction contract in an efficient and timely manner;]
[
(IV)
the local government is found to be capable
of awarding and managing the construction contract in a timely manner consistent
with federal, state and department regulations; and]
[
(V)
the local government commits in the agreement
to comply with all federal, state and department requirements and agrees to
forfeit any claim to federal and/or state reimbursement if they fail to comply.]
(9)
[
(C)
] Acknowledgment. The local
government or reservoir agency must acknowledge in the agreement that while
not an agent, servant, nor employee of the state, it is responsible for its
own acts and deeds and for those of its agents or employees during the performance
of the work authorized in the contract.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State, on June 29, 2001.
TRD-200103716
Richard Monroe
General Counsel
Texas Department of Transportation
Earliest possible date of adoption: August 12, 2001
For further information, please call: (512) 463-8630