In 2000, the TxDOT Contract Services Division (CSD) introduced an optimized format for AFAs with LGs. The format consists of two model agreements that together form a system for implementing a combined TxDOT/LG agreement: in order for TxDOT to spend funds or other resources on a transport project with a local government (LG), a written contract must first be concluded between the parties. In the case of TxDOT, an Advance Funding Agreement (AFA) is the most widely used type of contract to develop projects with LGs. If TxDOT is under contract with another party, usually a private company, for a well-defined good or service such as engineering plans, environmental studies or asphalt for a highway, a purchase contract is used. However, the AFA is not a purchase contract. The AFA is an agreement under which TxDOT and LG award participation in a traffic improvement project. The AFA allows TxDOT and LG to “together” ensure the implementation of a particular project. An AFA for a voluntary project includes cash or other resources that voluntarily contribute to a project on the national motorway system. LGs can sign these agreements as long as they pay 100% of the project costs or 100% of a “discrete element” of a project and there is no required correspondence from the state or federal state. A discrete element is a task that is separate or not related to other tasks in the project and can be performed independently of other tasks. There is no minimum or maximum dollar amount for these agreements.
When negotiating AFAs, the TxDOT-Bezirksamt must first check with the Finance Department (FIN) whether LG has an outstanding balance due to the state. In most cases, balances must be paid before other financing agreements can be concluded. The MAFA sets the general conditions of the relationship and cites the federal and regional laws governing agreements with LGs. The LG formally adopts a MAFA through formal measures of its Board of Directors and agrees that its terms and conditions of sale are respected for all local projects implemented between TxDOT and LG, unless a specific exception is made in an LPAFA. The signing of a MAFA is due to the need for both parties to negotiate and verify the standard contractual terms whenever they wish to conclude an LPAFA. Mafa does not set the costs or workload of individual projects. Mafa also has no set termination date and is not in effect until terminated by TxDOT or LG. The MAFA/LPAFA system is an efficient contract system that simplifies most local project agreements and significantly reduces their physical size and processing time. It also forms the basis of the provisions contained in the traditional “long” AZAs described below. . . .