This section describes the contents of the department's funding
agreement with a local government for a highway improvement or other
transportation project and the responsibilities of the parties to
such an agreement. The department may refuse to enter into an agreement
with a local government that has not previously complied with the
financial obligations under an agreement entered into under this subchapter.
(1) Right of entry. If the local government is the
owner of the project site, it shall permit the department or its authorized
representative to occupy the site to perform all activities required
to execute the work. If the department is the owner of the project
site, it shall permit the local government or its authorized representative
to occupy the site to perform all approved activities required to
execute the work.
(2) Right of way and utility relocations and adjustments.
The local government will provide all necessary right of way and utility
relocations and adjustments, whether publicly or privately owned,
in accordance with §15.55 of this subchapter (relating to Construction
Cost Participation). Existing utilities will be relocated and adjusted
by the local government with respect to location and type of installation
in accordance with the requirements of the department under §21.21
of this title (relating to State Participation in Relocation, Adjustment,
and/or Removal) and Chapter 21, Subchapter C of this title (relating
to Utility Accommodation).
(3) Responsibilities of the parties. The local government
and the department shall identify in the agreement the responsibilities
of each party. Responsibilities assigned to the local government must
comply with subparagraph (A) of this paragraph and have the approvals
required by subparagraph (B) of this paragraph.
(A) Local government performance and management of
projects. For state highway improvement projects and other transportation
projects using state or federal funds, the agreement between the department
and a local government may provide for the local government to:
(i) perform a highway improvement project on the state
highway system using employees under the direct control of the local
government;
(ii) outsource preliminary project engineering and
design, bid opening, contract award, and construction management of
an improvement project for which federal or state reimbursement is
requested;
(iii) contract for highway construction; or
(iv) perform other projects and programs as authorized
by law.
(B) Approval authority. Before a local government may
perform an act described in subparagraph (A) of this paragraph, the
executive director must authorize the local government to perform
that act. The executive director may also approve 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, guardrails, and other
items incidental to the roadway itself, such as signing, pavement
markings, signals, illumination, and traffic management systems.
(C) Conditions. A local government may perform an act
described in subparagraph (A) of this paragraph only if the following
conditions are met:
(i) the local government must commit in the agreement
to comply with all federal, state, and department requirements, standards,
and specifications, and agree to forfeit any claim to federal and
state reimbursement if it fails to comply;
(ii) the project must be authorized by the commission
in the current Unified Transportation Program, Statewide Transportation
Improvement Program, or a specific minute order;
(iii) a project on the state highway system performed
or managed by a local government must be operationally beneficial
to the state;
(iv) a roadway construction project requested by the
local government that is to be on the state highway system, and for
which local management is proposed, must be funded at least 50 percent
from a non-federal and non-state source, unless a lesser percentage
is approved by the executive director;
(v) a project that includes the local government improving
freeway mainlanes on the state highway system must have the express
written approval of the executive director;
(vi) the local government must agree to pay any cost
overruns in addition to its local participation on an off-state highway
system bridge program project for which local management is proposed;
and
(vii) the department must review and approve all plans,
contract awards, and change orders.
(D) Approval. Prior to execution of the funding agreement,
a local government must receive written approval by the executive
director to perform or manage one or more elements of a highway improvement
or other transportation project. In determining whether to recommend
approval or disapproval of a project, the department will evaluate
the following criteria:
(i) availability of department resources to perform
or manage the highway improvement or other transportation project
in an efficient and timely manner;
(ii) the demonstrated 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) the percentage of total project cost to be provided
by the local government;
(iv) the department's determination of cost effectiveness
of local performance of the work as compared to the department's performance
of the project; and
(v) any other considerations relating to the benefit
of the state, the traveling public, and the operations of the department.
(4) Funding arrangement. The agreement will specify
the funding arrangement designated by the department. Funding arrangements
in the agreement shall include any adjustments required by §15.55
of this subchapter. The funding arrangement for drainage construction
costs will be as specified under §15.54(e) of this subchapter
(relating to Construction). Available funding types are as follows:
(A) Fixed price. The fixed price amount will be based
on the department's estimated cost of the work to be performed.
(i) In determining the fixed price amount, the department
will consider:
(I) eligibility of local government requested work
for federal or state cost participation;
(II) the department's experience in performing or managing
the proposed type of work;
(III) the clarity of defining the local government's
proposed work scope and the department's 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.
(ii) A local government is responsible for the fixed
price amount, which is not subject to adjustment unless:
(I) differing site conditions are encountered;
(II) further definition of the local government's requested
scope of work identifies greatly differing costs from those estimated;
(III) work requested by the local government is determined
to be ineligible for federal participation; or
(IV) the adjustment is mutually agreed to by the department
and the local government.
(B) Specified percentage. The local government is responsible
for a specified percentage of actual project costs.
(i) Minimum percentage participation amounts for preliminary
engineering, construction engineering, construction, right of way,
and eligible utilities for various state and federal funding programs
will be designated by the department. In addition to the designated
specified percentages, with this funding type, the local government
is also responsible for the direct cost of any work included in the
project which is ineligible for federal or state participation and
all project costs that are greater than the maximum state and federal
participation specified in the funding agreement between the department
and the local government.
(ii) For federally funded non-construction programs,
the local government is responsible for any required match and for
any work included that is ineligible for federal or state participation.
(C) Periodic.
(i) The executive director may approve a local government
to make periodic payments of its funding share only if:
(I) the periodic payments sought are based on the estimated
cost for the work for which the funds are received and the local government
proposes a schedule to repay the entire amount; 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) In approving a request for periodic 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) needs of the department for delivery of the project
to proceed in advance of receiving local funding participation;
(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.
(D) Off-State Highway System Bridge Program Fixed Amount.
For projects funded in the Off-State Highway System Bridge Program,
the local government is responsible for a fixed amount that is based
on the specified percentage of the estimated direct costs for preliminary
engineering, construction engineering, and construction, and for the
actual direct costs for right of way and eligible utilities. The estimated
direct costs that will be used to establish the fixed amount under
this subparagraph, are based on the department's estimate of the eligible
work at the time the agreement is executed. The local government is
responsible for the estimated direct cost of any project cost item
or portion of a cost item that is not eligible for federal participation
under the Highway Bridge Program, 23 U.S.C. §144 and Highway
Bridge Replacement and Rehabilitation Program, 23 C.F.R. §650
Subpart D. The fixed amount under this subparagraph will be adjusted
through the execution of an amendment to reflect additional costs
resulting from changes made at the request of the local government,
either during preliminary engineering or construction.
(5) Interest. The department will not pay interest
on funds provided by the local government. Funds provided by the local
government will be deposited into, and retained in, the state treasury.
(6) Amendments. In the case of significantly differing
site conditions or other mutually agreed upon changes in the scope
of work authorized in the agreement, the department, and the local
government will amend the funding agreement, setting forth the reason
for the change and establishing the revised participation to be provided
by the local government.
(7) Payment provision. The agreement will establish
the conditions for payment by the local government, including, but
not limited to, the method of payment and the time of payment.
(A) Fixed price. If a fixed price funding arrangement
is used, the fixed price amount is not subject to adjustment, except
as provided for in paragraph (4)(A)(ii) of this section.
(B) Specified percentage.
(i) Upon execution of the agreement or at a later date,
unless periodic payments have been requested by the local government
and approved by the executive director, the local government will
pay, as a minimum, its funding share for the estimated cost for any
right of way and preliminary engineering for the project. Unless periodic
payments have been requested by the local government and approved
by the executive director, the local government, before the department's
scheduled date for construction contract letting, will remit to the
department an amount equal to the remainder of the local government's
funding share for the project.
(ii) 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 will
notify the local government of the amount of the difference and the
local government shall promptly transmit that 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.
(C) Periodic. After a periodically paid 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 will notify the local government of the amount
of the difference and the local government shall promptly transmit
that 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.
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