Facilities Commission Establishes Center for Alternative Finance and Procurement

The Texas Facilities Commission (TFC) recently announced the establishment of the Center for Alternative Finance and Procurement to “assist governmental entities in the review of proposals, negotiation of interim and comprehensive agreements, and  management  of qualifying projects under Government Code Chapters 2267 and 2268.”

Passed in 2011, Chapters 2267 and 2268 of the Government Code were enacted by the Texas Legislature to encourage the use of public/private partnerships (P3s) by the state and its political subdivisions to develop “qualifying projects,” which include various infrastructure projects as defined by the law. 

The P3 law was presumably passed by the Texas Legislature to serve as enabling legislation that grants additional entities the authority to use P3s.  However, P3s are not new to cities.  In fact, cities have used various legal authorities for many years to develop P3 projects, such as the Dallas Cowboys Stadium in Arlington. 

To use the P3 law, the governing body of a political subdivision, including a city, must “opt-in” to elect to operate under its terms.  Once a city has opted in, the law imposes detailed procedures for the procurement and implementation of a qualifying P3 project.

In 2015, the legislature amended the P3 law to provide, among other things, that the Texas Facilities Commission shall establish the “Center for Alternative Finance and Procurement” to: (1) consult with governmental entities regarding best practices for procurement and the financing of qualifying projects; and (2) assist governmental entities in the receipt of proposals, negotiation of interim and comprehensive agreements, and management of qualifying projects under the P3 law.  

The bill also provides that any guidelines adopted by a governmental entity under Chapter 2267 must include the Center’s role in the review, analysis, or evaluation of the qualifying project.  According to a press release, the Center “will ensure value for taxpayer dollars by establishing best practices and providing assistance in all aspects of planning, procurement, financing, as well as negotiations of contracts and ultimately construction of the projects.”  Samuel Franco has been named the Director of the Center and will be responsible for consulting with stakeholders in both public and private sectors.  Mr. Franco can be reached at Samuel.franco@tfc.state.tx.us.

While the P3 law is an option, cities are authorized by other law to develop P3s.  Each city should consult with local legal counsel to determine which method best suits its needs. 

TML member cities may use the material herein for any purpose. No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas Municipal League. 

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