Title
Consider a memorandum/resolution authorizing the City Manager to enter into an Advance Funding Agreement with the Texas Department of Transportation for the Rancier Project.
Body
DATE: January 20, 2026
TO: Kent Cagle, City Manager
FROM: Andrew Zagars, P.E., City Engineer
SUBJECT: Advance Funding Agreement with the Texas Department of Transportation for the Rancier Project
BACKGROUND AND FINDINGS:
In the fall of 2020, the Texas Department of Transportation (TxDOT) held a statewide call for safety improvement projects on and off the state highway system and encouraged the participation of cities and counties. The purpose of the Highway Safety Improvement Program (HSIP) is to provide funds for eligible construction costs for the road safety projects to facilitate a significant reduction in traffic fatalities and incapacitating injuries on all public roads.
On October 30, 2020, the City of Killeen Public Works Department applied for the Transportation Mobility funding by proposing a project along Rancier Road between State Highway-195 and W.S. Young Drive. In 2020, the Killeen Temple Metropolitan Planning Organization (KTMPO) selected this project for funding and inclusion in the regional Transportation Improvement Plan. The project originally consisted of a five-foot sidewalk along one side of the roadway for the entire length. Since the time of the application, the project has increased in scope and needs the Advance Funding Agreement (AFA) to reflect the current project. The project was originally awarded funding in the Category 7 TxDOT funding. In August 2023, the funding category was revised to be in Category 10 TxDOT funding in the State 2025-2028 Transportation Improvement Plan (TIP). The AFA agreement was drafted and sent to the city from TxDOT. The funding for the agreement is based on the grant application and what was approved. The overall project budget has been updated in the KTMPO plan but is not needed for the AFA agreement as stated by TXDOT.
To proceed with the current grant, TxDOT is requesting that the AFA be completed at this time. The AFA is based on the current project description for the grant. The project has been updated through KTMPO for the regional transportation plan and the update to the AFA is the next needed step for the grant.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
This item conforms to state and local policies.
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
In accordance with the Advance Funding Agreement with the Texas Department of Transportation (TxDOT), Attachment B Project Budget states that the costs will be allocated based on 80% Federal funding and 20% Local Government funding until the federal funding reaches the maximum obligated amount. The Local Government will then be responsible for 100% of the costs. The total estimated cost of the project grant is $3,240,000.00. The Federal participation is $2,592,000.00 and Local Participation is estimated at $648,000.00.
Is this a one-time or recurring revenue/expenditure?
This is a one-time expenditure.
Is this revenue/expenditure budgeted?
No
If not, where will the money come from?
Local funding will be provided by the TIRZ Fund and is anticipated to be appropriated through the FY 2028 budget process as the project advances toward construction.
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
N/A
RECOMMENDATION:
Staff recommends that the City Council authorize the City Manager to enter an AFA with TxDOT for the Rancier Road Project with the understanding that staff will continue to work with TxDOT and KTMPO to update the project to the current scope and timeline.
DEPARTMENTAL CLEARANCES:
Engineering Services
Finance
City Attorney
ATTACHED SUPPORTING DOCUMENTS:
Agreement
Project Budget
Presentation