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City staff warns TxDOT's split of I-35 CapEx delays construction and raises city financial risk
Summary
City staff told the Mobility Committee that TxDOT split the I-35 Capital Express Central project into two bid packages, delaying most city-funded construction to 2029 while asking the city to consider earlier commitments for cap decks; finance staff said a draft AFA shifts cost-overrun risk to the city.
City transportation staff told the Mobility Committee that TxDOT has separated the I-35 Capital Express Central project into an advanced construction package and an ultimate construction package, a change that pushes major construction work and most city-funded 'cap and stitch' elements into 2029 while accelerating a decision calendar for city commitments.
The committee heard from Transportation & Public Works Director Richard Mendoza and Transportation Officer Michelle Marks that the advanced package is slated to be let in 2027 and the ultimate construction package 'which would include city-funded horizontal cap decks and other betterments' is expected to go to bid in 2029. Marks told the committee that TxDOT is asking the city to indicate whether it wants cap decks included in the initial bid package by May 2026.
Why it matters: staff noted the scheduling shift creates a 'waterfall' of impacts on city milestones, and financial services cautioned that committing earlier, when design is at roughly 30%, increases the risk of cost escalation. A financial services representative summarized the concern bluntly: "The City's risk profile has increased," and said a draft Advanced Funding Agreement (AFA) currently makes the city responsible for cost overruns and does not give the city a formal role in TxDOT design, delivery or permitting.
City staff and finance outlined the trade-offs: including cap decks in the initial TxDOT bid may secure better construction pricing, while waiting to make commitments until later design stages (60% design is expected in 2027) could reduce the city's exposure to unknown cost escalation and change-order fees. Staff said change orders remain an option but are likely to be more expensive than inclusion in the initial bid.
Staff also reported the City previously approved an AFA authorization of roughly $104,000,000 for roadway support elements; payment timing, contingency sizing and the structure of draws (including a potential SIB loan) will require further analysis. In prior staff materials, payment schedules showed a 15% initial payment in 2026 with larger payments later; staff said those dates may need renegotiation given TxDOT's new schedule.
Council members asked whether the city is required to commit in May 2026 and whether a change-order approach would be feasible; staff reiterated that the May date is TxDOT's request to include caps in the initial design/bid package but that councils could add decks later via change orders, at likely higher price. Staff said they will return with a March work session to present funding and financing options, and one-on-one briefings with council members are planned leading up to that session.
The committee did not take formal action on deck inclusion at the meeting; staff said further analysis and negotiation with TxDOT will continue and that council decisions on any AFA and drawing a SIB loan will be presented when more refined cost estimates are available.
