Agenda No. 2.
CITY COUNCIL MEMORANDUM
| City Council Meeting: | May 12, 2026 |
| Department: | Engineering |
| Subject: | Resolution 26-R-063 - Authorizing DCIP; DEAGG; and AAMPO funding applications for the Lower Seguin Road Reconstruction Project (B.James/K.Woodlee/J.Nowak) |
BACKGROUND
Previously, Council authorized applying for Defense Community Infrastructure Program (DCIP) and Defense Economic Adjustment Assistance Grant (DEAAG) grants to help fund construction of the Lower Seguin Road project. Both of those applications were unsuccessful in securing funding. Our consultant and Staff has had a "debrief meeting" with DCIP grant personnel and received valuable information on how to improve our application and increase the project's ranking in the program. Our consultant and Staff have a similar "debrief meeting" schedule with DEAAG personnel to get feedback on improving our DEAAG application. In addition to the "debrief meetings," our consultant and Staff has had meetings with base personnel; done additional research into both grant programs; and participated in webinars to further help refine and improve the applications. The next funding call deadline for the DCIP grant program is June 25th. and the next DEAAG funding call will be later this year. Council approval is needed in order to re-apply for funding from both of these programs.
In addition to these funding sources, funding may also be available for the project from the Alamo Area Metropolitan Planning Organization (AAMPO). A few years ago, the City submitted the Lower Seguin Road Reconstruction project and some other Master Thoroughfare Plan route projects to AAMPO for inclusion in their unfunded project list, so AAMPO is aware of this project and the City's intention to develop this project. By making this request, it was also assumed that the City would request funding for the project from AAMPO at a future time. Final design for the project is nearing completion and Right-of-Way acquisition is expected to start later this month for the project, resulting in the project being closer to "shovel ready" than before. The next funding call for AAMPO projects hasn't been announced yet, but is anticipated later this year. DCIP and DEAAG funding can be combined with AAMPO funding. AAMPO projects typically require a minimum of a 20% funding match from the applicant. Funding secured from DCIP and/or DEAAG could be used as part of this 20% match, or to over-match the project under AAMPO's process, increasing the ranking in AAMPO selection process. Council approval is needed to apply for AAMPO funding.
DCIP and DEAAG funding do have time limits on the funding. DCIP funding must be spent within five years of being awarded. Staff and our consultant are confident the project can be constructed within five years. DEAAG funding must be spent within two years of being awarded. The DEAAG application is geared towards funding key elements of the project, such as undergrounding of overhead wires in the flight zones. These elements can be constructed separate from the main project construction. Because of this, staff and our consultant are confident that the funding can be spent within the time limit. AAMPO funding is typically allocated when the project is ready for it - when the project is under construction. As the project is getting close to being "shovel ready," our consultant and Staff feel it is appropriate to request AAMPO funding now.
GOAL
The goal of Resolution 26-R-063 is Council Authorization for the City Manager to sign and submit funding applications for the DCIP grant program; the DEAAG grant program; and AAMPO.
COMMUNITY BENEFIT
The Lower Seguin Road Reconstruction project will widen the street to the secondary arterial roadway sections shown in the City's Master Thoroughfare Plan; provide a traffic signal and other improvements at the Randolph South Gate entrance; improve drainage; and provide a stronger pavement section capable of supporting the vehicle loading on the street. These improvements will provide a smoother driving surface and allow traffic to move more efficiently on Lower Seguin Road. The signalization and other improvements at the Randolph South Gate will provide improved access to the base and help support Randolph's mission. Securing DCIP,DEAAG, and/or AAMPO funding will significantly reduce the out-of-pocket costs of the project to the City and allow the improvements to be completed more quickly. The project directly supports the Strategic Goal of Infrastructure Investment and the objective of development and maintenance of transportation infrastructure.
SUMMARY OF RECOMMENDED ACTION
Staff recommends Council authorization for the City Manager to sign and submit DCIP; DEAAG; and AAMPO funding applications for the Lower Seguin Road Reconstruction project.
FISCAL IMPACT
The current estimated cost for the project is approximately $22,000,000, including overhead costs of $3,800,000 paid for by the General Fund including salary of City Staff Engineers and Inspectors. The Capital Improvements Plan (CIP) adopted for FY 2025-26 shows project costs of $18,200,000 for design, land acquisition and construction. From the 2024 bonds, staff has $15,000,000 and anticipates receiving another $3,200,000 from the proposed bond sale later this year for a total funding of $18,200,000. With no external funding, this project can be completed as currently identified in the CIP.
In order to better fund the CIP projects, staff is applying for aid from the DCIP, DEAAG, and AAMPO for Lower Seguin Road Reconstruction. Any grant awards would reduce the bond funding required for this project and allow the City to shift those bond funds to other street projects. This would help staff accelerate projects that were delayed based on limits of available funding with no increase in the tax rate.
With the current funding and planned additional funding, there is ample funds available to cover the local match requirements for AAMPO funding. This funding source would require the city to pay for land acquisition, design, but only 20% of construction. This opportunity could net the city $10,892,000 of additional funding if awarded.
There isn’t a local match identified for the DCIP or DEAAG funding program. The DEAAG funding is intended to provide funding to “close a funding gap” for construction of a project with a maximum funding amount of $5 million. The DCIP program has a much higher maximum funding amount, and the previous application requested $20,000,000 (no match required) for the project. For this funding request, staff will likely request a smaller amount to make the project more competitive and increase the likelihood of an award.
These programs can be combined if multiple requests for funding are approved. Depending on the award criteria of assigning expenses made prior to the award, this project could be funded entirely from external sources and the $18,200,000 of city bond funds could go toward future or unfunded street projects without raising taxes.
RECOMMENDATION
Approve Resolution 26-R-063