News & Press: Member Update

ACEC Texas Member Update - April 21, 2020

Tuesday, April 21, 2020  
Posted by: Michael Hancock
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ACEC Texas: COVID-19

April 21, 2020

Senate Agrees on $484 Billion in Additional Relief Funding

The U.S. Senate has reportedly come to an agreement on a new COVID-19 relief package totaling $484 billion. The Senate is scheduled to approve the legislation as soon as Tuesday afternoon, with the House expected to take a vote later this week. Last week, we reported on the $349 Billion in small business relief funding afforded by the Paycheck Protection Program (PPP) under the CARES Act that had been exhausted. The new relief package provides approximately $310 billion in additional funding that will go towards the PPP to help small businesses. Funding for hospitals and testing for the virus are also reportedly included.

Please continue to utilized ACEC National’s Coronavirus Resource Center for regular federal updates by clicking on the following link: ACEC Coronavirus News and Updates.


TxDOT Administrative Qualifications Process – Dan Purvine

The following information regarding the TxDOT administrative qualifications process was authored by Dan Purvine with A/E Clarity on behalf of ACEC Texas:

I hope that all of you are doing well as we work through the COVID-19 crisis. I have been in recent discussions with TxDOT about the administrative qualifications (AQ) process and submittal of 2019 overhead rates and supporting information. I thought it would be helpful to provide an update and highlight some key areas to focus on in preparing your submittal package. Key items to note are as follows:

Submittal deadline – TxDOT is not currently planning to change the submittal deadline for 2019 overhead rates, so if your firm is on a calendar year, the AQ package will be due by June 30. As has been communicated in the past few years, early submittal is highly encouraged.

CPA audited rates
– The requirement for firms having a CPA audit of their overhead rate to provide copies of the CPA’s workpapers has been eliminated. This requirement had been added earlier this year, but has now been removed. TxDOT may still request copies of selected workpapers or an explanation of the CPA’s testing for specific risk areas identified in the AQ review process. Firms are encouraged to discuss with TxDOT any issues regarding CPA workpapers. My recommendation is to provide an explanation of the CPA testing performed to address any specific risk areas identified by TxDOT, to help the reviewers to evaluate the adequacy of the CPA’s testing.

Bonus plans
– As you’re probably aware, TxDOT will have a specific focus this year on bonus allowability, including a review of A/E firm bonus plans. This was a significant topic of discussion at the training I provided in February, hosted by ACEC Texas, as well as training sessions I’ve presented in the last two years with Roy Gonzales from TxDOT. The most important points to note are as follows:

  • If you pay bonuses, you are required to have a written bonus plan that includes the information listed in the best practices guidance of AASHTO Audit Guide section 7.11. This requirement was incorporated into the Texas Administrative Code (TAC) about a year ago.
  • It may be necessary to provide some additional documentation of your employee performance evaluation and bonus-setting process. I strongly encourage you to be proactive by documenting this in advance of your AQ submittal. Specifically, document how you establish performance goals, measure employee performance, and use that information to establish bonuses. You may want to consider submitting that information along with your bonus plan in your AQ package.
  • TxDOT will be reviewing both the bonus plan and other information supporting how bonuses are established, to evaluate whether bonuses meet the FAR requirement that they are properly supported based on employee performance and do not include profit distributions to owners.

If you encounter issues during the AQ review process, you should contact Roy Gonzales directly, at . For questions or clarification on any of the items noted here, feel free to contact me at . Wishing you a successful AQ submittal!

Comptroller Hegar Issues Statement on Oil Plunge

Following Monday’s historic decline in oil prices, Comptroller Glenn Hegar issued the following statement: “Today’s market activity was unprecedented and likely indicative of very limited storage capacity. May contracts traded well into negative territory as the market prepares to shift focus to June contracts. While down somewhat, June contracts traded in a relatively stable range. While this unprecedented volatility is concerning, the greater impact to Texas will come if demand remains historically low for a prolonged period of time and supply gluts continue to strain storage capacity.

“Severance tax reductions would primarily affect the state’s Rainy Day Fund and State Highway Fund, and to a lesser extent general revenue available to meet budget needs.Contraction in the energy industry also will affect other sources of tax revenue, including sales and franchise taxes.

“The Texas budget is based on the average price of oil in each year of the biennium, thus daily market activity doesn’t significantly affect revenues, which are forecast based on average prices rather than spot prices or prices for specific futures contracts. That being said, given the historic nature of today’s market moves, we are carefully monitoring trading as June contracts come into focus. Should prices remain depressed over a long period of time, we anticipate the impact will be reflected in a reduction in the revenue forecast we'll be releasing in July."

ACEC Texas has been tracking tax revenue collections and forecasting provided by the Comptroller’s office and the potential impacts to infrastructure funding. As new data becomes available, we will keep members updated on funding projections.

CAMPO Approves Funding, Delays Deferred Projects Vote for I-35 Project

The Capital Area Metropolitan Planning Organization (CAMPO) Transportation Policy Board held a special meeting on Monday to discuss the list of potential projects to be deferred to help meet their financial commitment towards the I-35 Capital Express Central project. The project deferrals are a result of CAMPO’s $633 million commitment to the I-35 project, which would add two non-tolled managed lanes in each direction along I-35 for an 8-mile stretch of the interstate. CAMPO was expected to take a vote on funding and local projects to defer at their Monday meeting. However, following a MEMO from TxDOT’s Austin District Engineer stating more discussion and analysis is needed, CAMPO decided to approve the $633 million project funding commitment and delay the vote on the specific projects to defer until their June 8th meeting. The Texas Transportation Commission is expected to vote on securing the $4.3 billion in funding needed for I-35 on April 30th.

To view the list of projects and other documents from CAMPO’s meeting, please click on the following link:
CAMPO Transportation Policy Board Special Meeting – April 20, 2020.

For regular industry news and updates regarding COVID-19,
please visit the ACEC Texas and ACEC National
webpages by clicking on the following:

ACEC Texas: COVID-19

ACEC National: COVID-19

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ACEC San Antonio Chapter Meeting-08/19/20