New 'pass through' language to curb potential local entity windfalls
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The purpose of pass through financing, he said, is "to provide reimbursement to local governments for the development and construction of specific projects on the state highway system."
"The reason the (pass through) tool was created was to provide a way to fund transportation projects without the state taking on any expense," said Karen Amacker, spokesperson for TxDOT. Amacker said that in 2009, 10 pass through projects valued at $180 million were approved by the agency.
The minute order approved by the Commission has new language that obligates TxDOT to pay a maximum of "10 percent on either side of the negotiated amount in a contract," she said.
The TxDOT spokesperson emphasized that the new language only applies to pass through agreements "not executed yet."
While local government officials balked when they first learned that TxDOT's original proposal might allow for reimbursement only based on actual costs, Amacker said the over and under percentage amount finally adopted was more palatable.
During the Commission meeting, Fort Bend County Commissioner Andy Meyers said that two weeks ago he was at a Commission meeting speaking against the then-proposed minute order on pass through funding agreements. "I'm here today to testify in favor of this particular minute order," said Meyers. "I believe it does protect the state and local government participants from unreasonable risk."
While an underrun in many cases was putting state dollars into local government budgets, Amacker said an overrun would result in the cities being liable for more of the cost of the projects. "They also run a risk of an overrun," she said. "We hope over the long term that it will even out."
