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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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Suggested Citation:"Appendix B - Survey Results." National Academies of Sciences, Engineering, and Medicine. 2014. Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices. Washington, DC: The National Academies Press. doi: 10.17226/22252.
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B-1 A P P E N D I X B Results—State Departments of Transportation General Observations Figure B-1 summarizes the distribution of state DOT participants by office location and responsibility. In total, 58 percent of participants were participants from headquar- ters, with the remaining 42 percent of participants represent- ing field offices. Of all participants, 25 percent were directors, 61 percent were managers (including participants who did not select any of the other two categories but, from the responses provided, appeared to have a managerial position), and the remaining 14 percent were support staff. These results indi- cate the survey had ample participation from field offices and that a wide range of participants across hierarchies responded to the survey. (Note: The survey included the option for par- ticipants to differentiate between regions and districts as a mechanism to identify an intermediate level between head- quarters and districts. However, the differentiation ended up being unnecessary because state DOTs use a wide range of names to designate non-headquarters locations.) Of the 38 state DOTs represented in the survey, 19 state DOTs had one participant, 7 state DOTs had two participants, 7 state DOTs had 3–4 participants, and five state DOTs had five or more participants. One state DOT had 15 participants. The average number of participants per state DOT was 2.7. Although the range in the number of participants per state DOT means there is some bias in the data, it is important to take into consideration the following: • Some state DOTs decided to disseminate the survey manu- ally (e.g., by printing the survey instrument from the web- site) and gather feedback from their various offices before responding to the online survey. Presumably, this could be an indication that, at least in some cases in which there was one participant per state, the response included feedback from more than one individual and/or office. • After removing three states that had the largest number of responses per state (California, Minnesota, and Ohio, totaling 33 responses), the research team produced a sec- ond set of summary tables and charts for the remain- ing 71 records. Although there were differences between the original set of results and the (reduced) modified versions, the trends were strikingly similar. A significant difference was in relation to the perception of higher- than-average condemnation rates when consultants or other partner agencies conduct real property acquisitions. For this item, removing the three states with the largest number of responses caused the item to be ranked much lower in the chart than when those states were included in the tabulation. There were also differences regarding the perception of the need for urgent changes to laws and regulations. However, these differences are not significant given that the overall response rate for this question was already low even without removing any state from the tabulation. Survey participants were primarily involved in the acquisi- tion of real property (Figure B-2). This result was not surpris- ing given the vested interest of right-of-way professionals in the research and its results. Involvement was also substantial in activities such as legal, utility coordination, planning and programming, and preliminary design. Survey participant involvement in other project development and delivery phases (particularly environmental, design, letting, and construction) was relatively minor. Involvement in real property acquisition activities covered the entire spectrum, from appraisals to pay- ments (Figure B-3). Interestingly, only a few participants were involved in preparing right-of-way maps, surveying, or right- of-way staking activities. The responses classified as “other” in Figure B-2 and Figure B-3 corresponded to a variety of cases, ranging from “worked in all of the above in the past” to “demolition, clearance/property management” and “litigation and property management.” Survey Results

B-2 Figure B-1. Distribution of state DOT participants by office location and responsibility. Note: The total number of entries was 118, which was larger than the number of state DOT participants. Some participants marked more than one cell, possibly indicating multiple levels of responsibility or geographic location. Figure B-2. Involvement of state DOT participants in project development and delivery process activities.

B-3 Issues and Challenges Figure B-4 summarizes the responses in relation to the per- ceived level of impact of major issues that state DOTs face while acquiring real property for transportation projects. In the fig- ure, the darker the color means the higher the perception of impact. The impact scale is from 1 (least impact) to 5 (most impact). For convenience, rows are sorted by the frequency of responses when grouping the total number of responses asso- ciated with impact levels 3, 4, and 5. However, it is interesting to note that sorting rows by grouping responses associated with impact levels 4 and 5 would have produced a similar graph. As Figure B-4 shows, close to 80 percent of participants indi- cated the highest impact was due to changes to parcels late in the design phase and due to lack of involvement of right-of- way staff during design. Not involving right-of-way person- nel in earlier phases (planning and programming, preliminary design, and environmental process) as well as during utility coordination was also perceived as having a major impact. Changes to parcels late in the design phase and lack of involve- ment of right-of-way staff during design are critical issues, par- ticularly considering the push at many state DOTs to accelerate and/or compress the design phase in an effort to shorten the development and delivery of transportation projects. Respondents also pointed to staffing issues as having a major impact, including difficulty to hire and retain staff with adequate real property acquisition experience and staff turn- over. Respondents further highlighted that a significant issue Figure B-3. Involvement of state DOT participants in real property acquisition.

Figure B-4. Level of impact of major issues related to real property acquisition at state DOTs.

B-5 they face is the lack of public-sector real property experience among consultants. A significant issue that resonated with many survey par- ticipants across the country was external entities (e.g., law firms advising property owners not to negotiate as a tactic to obtain more money during condemnation proceedings). The perceived level of impact of this issue was similar to the lack of involvement of right-of-way personnel during pre- liminary design. Interestingly, survey participants did not believe that external entities advising property owners to divide their property into smaller parcels as a tactic to obtain more money from the state DOT was a major issue. Survey participants indicated an important issue was requirements in state laws or regulations requiring steps in the real property acquisition process beyond those required by the Uniform Act. However, only about 35 percent of par- ticipants thought this issue was major (i.e., associated with impact levels 4 or 5). Inadequate cost estimates for real property acquisition was an issue that resonated with survey participants. However, the level of impact resulting from inadequate cost estimates was not as high as other issues state DOT participants believed to be more pressing. One way to interpret this result is that poor cost estimates tend to affect divisions, sections, and individu- als who deal with project funding issues much more so than other units within the agency that provide technical services but are not as involved in project funding considerations. A significant number of survey respondents (who represented primarily real property functions within their agencies) might belong to this second category. Unfortunately, the sur- vey did not ask what level of responsibility individual respon- dents (as well as their corresponding sections or divisions) had regarding real property acquisition budgets. Interestingly, participants did not find difficult-to-use databases or information systems documenting real prop- erty acquisitions and transactions to be a major issue. One way to interpret this result is that officials might find prob- lems with their current databases and information systems, but given the choice about where to improve or streamline processes, they would probably select other areas to tackle first (e.g., areas related to internal communications with other units within the agency, staffing needs, cost estimates, and laws and regulations). Other issues identified by participants as having an impact while acquiring real property for transportation projects included the following: • Project funding uncertainty, including delays in passing state budget. • Inadequate timeframe to accomplish the work. • LPAs frequently do not have the required skills or knowl- edge to follow regulations mainly because of inexperience and understaffing. • Poor quality of right-of-way maps. • Arbitrary number of appraisals assigned to one appraiser. • Required legislative contract review process and central office approval can cause it to take months to get apprais- als assigned to contract appraisers. • Fee appraisers are not familiar with how just compensation is established. • Inadequate time to present the written offer to a property owner before condemnation. • Amendment to state constitution that makes the state responsible for potential property owner legal fees in con- demnation proceedings. The result is an increase in the number of inverse condemnations prior to the environ- mental process being complete. Figure B-5 provides a listing and classification of real prop- erty acquisitions that state DOTs consider particularly prob- lematic (e.g., in terms of time and cost). In the figure, colors provide an indication of a major real property acquisition phase or process (e.g., the darkest color means appraisal and the light- est color [white] means coordination with other stakeholders [e.g., LPAs]). Readers should note that the color sequence does not imply a business process sequence (e.g., not all real prop- erty acquisitions involve condemnation proceedings). Rows are sorted by the total number of responses received for each type of acquisition state DOTs considered particu- larly problematic. For example, the total number of responses received in connection with the acquisition of operating rail- road interests was 230 (including 44 responses associated with appraisals, 62 responses associated with negotiations, and so on). In general, the higher the number associated with each phase or process, the more problematic that phase or process can be. A similar consideration applies to the total number of responses. A limitation of this question, as designed and implemented in the survey, was that the question did not ask respondents about the number or relative frequency of different types of real property acquisitions. As a result, it was not possible to ascertain whether the responses were an indication of real property acquisitions that were (structurally) more problem- atic than other types of acquisitions, regardless of number of acquisitions, or whether other factors (such as frequency) played a role. For example, if a state DOT did not deal with federal land acquisitions (or if this type of acquisition only happened rarely), this type of acquisition would likely not have been marked as particularly problematic. This consideration aside, Figure B-5 indicates that state DOTs are having issues with certain types of real property acquisi- tions, particularly railroad interests (either operating or aban- doned). Acquisitions of non-residential (developed) property and acquisitions involving outdoor advertising sign interests also tend to be problematic. Overall, partial acquisitions tend

B-6 to be more problematic than full acquisitions. Acquisitions in developed areas are more problematic than acquisitions in undeveloped areas. Additional comments that respondents provided included the following: • GSA is very slow to respond to state requests to acquire property. GSA does not share its own appraisal with the state, even though the state provides its appraisal to the federal government. GSA is slow to transfer property for federal-aid highways even though no transfer of funds is needed. Federal land acquisition appraisals follow the Uniform Appraisal Standards for Federal Land Acquisitions (also called the yellow book), which can take significantly more time to prepare. Coordination with other state and federal agencies on federal land acquisitions seems to take a particularly long time. • Some tribes are no longer interested in the state acquiring a permanent easement. Other issues include allotments, sovereign nation status, cultural differences, and conflict- ing priorities. Tribal (and federal) negotiations take longer due to the amount of approvals and steps in the process. • Utility relocations can be problematic, taking years to com- plete and close. Fortunately, the state can proceed with an entry agreement from many of the utility owners. • Railroads are particularly difficult to deal with and are often nonresponsive until a suit has been filed. Experience with Outsourcing Real Property Activities Respondents were asked about lessons learned from out- sourcing real property activities (e.g., in terms of costs, real property delivery, coordination with other stakeholders, con- Figure B-5. Particularly problematic real property acquisitions at state DOTs.

B-7 tracting). A total of 72 participants answered this question. A summary of verbatim comments, ideas, and suggestions, grouped by major topic as much as possible, follows. • Appraisals: – Consultants make more mistakes than state DOT staff, but can be helpful and flexible. Finding qualified appraisers is a challenge. One lesson when hiring outside appraisers is to get them in the same room and explain the policy and procedures for determining items such as uneconomic remnants, reasonableness of access, when access has to be acquired, when it is police power, and what to look for in permits. This strategy ensures an adequate base knowl- edge and consistency to prevent review appraisers from having to struggle with last-minute changes. – Outsourcing typically results in poor- to fair-quality work. Appraisals are typically deficient in content, com- parable research is not adequately conducted or docu- mented, value conclusions are unreliable, and damages are usually not supported. It takes longer to issue the right-of-way certification. – Appraisal review needs to remain in-house. Both turn- key and specific activities are valid models for outsourc- ing. Manuals and flowcharts need to be up-to-date as a prerequisite to outsourcing. A well-written scope is critical to project success. Ongoing regular status meet- ings with the consultant are also critical. – Consultants are often not properly trained in appraising property for transportation projects, which often include partial acquisitions. Accelerated project delivery sched- ules result in reduced lead-time and increased cases of condemnation. – The state only outsources appraisals. The process works well. • Rapport with property owners: – Most outsourced projects tend to be small projects. Con- tract acquisition firms do not work with landowners in the same way as the internal staff does. Contractors have a tendency to summarize negotiations as reaching an impasse when more negotiations may be appropriate. Internal state DOT staff are more inclined to be more patient and deliver a better product. – Contractors from out of state lack some credibility with property owners. – Our district has a limited number of in-house staff, which makes it necessary to outsource real property activities. Some landowners do not appreciate consultants as inter- mediaries. They would prefer to deal directly with the state. Appraisal services are good candidates for con- sultants (although can be expensive). It is probably not worth the expense for low-value acquisitions. • Experience with LPAs: – Experience in working with LPAs when they hire con- sultants is not positive. There is a tendency by LPAs and their consultants to cut corners and not follow estab- lished policy, procedures, and statuses. It is very difficult to coordinate with consultants. Early involvement, clear expectations, accurate scopes of work in cooperative agreements and contracts, quality management plans, progress reviews, and closeout activities are crucial. – Allowing LPAs to perform real property activities has proven to be difficult and inefficient due to the lack of knowledge and expertise by LPA staff and their consultants. – Survey activities and document preparations (e.g., right-of-way maps, purchasing documents) are more difficult for consultants to perform. – The state does not outsource real property activities except when an LPA sponsors the project. In this case, the LPA hires consultants for real property activities. Consulting fees are generally higher than state-furnished real property services. – The state chose not to have consulting contracts with defined completion dates. This decision resulted in lower production rates. Consultants require a great deal of oversight, which makes it problematic when an LPA (or state agency) with no or little real property experi- ence hires a consultant to assist with their program. • Workload: – Difficulty in coordinating with other units within the state DOT. – Close coordination and frequent meetings are necessary to ensure that activities are progressing properly. – Many times, state DOT staff has to complete the process or take the case to condemnation. One of the problems in this case is the lack of history and documentation. – Outsourcing relocation activities does not lessen the load of the agency because of the need to oversee the work by consultants. Consultants frequently do not work effectively against the letting schedule, particularly in cases where a displaced person fights the relocation (then it is necessary to spend the same amount of staff time if not more in working with the consultant and the displaced person). – Previously, the state outsourced some of the title work, with mixed results. The state has now hired a quality attorney who does all of the title work accurately and on time. Outsourcing relocation and direct purchase does not work well. More time is spent training, reviewing, and correcting than should be necessary. It generally takes a significant amount of staff time to oversee consultants. – It is advisable to require an experienced project manager for each project, consider the cost of lost productivity of

B-8 internal staff up front if an inexperienced consultant is used, reserve the right to approve each individual work- ing for the consultant, and monitor the progress of the project closely at regular intervals. – Working with consultants has been effective to relieve internal workloads. There have been problems when outsourcing an entire real property acquisition project. • Costs: – It is not cheaper to outsource. Communication is more cumbersome and time consuming. Internal staff is much more efficient and economical. – Appropriation rates are higher. Costs to acquire are also higher, particularly with respect to labor costs. Real prop- erty acquisition costs are comparable. Quality appears to have been sacrificed for speed. – Outsourcing real property functions is an effective method to accomplish high-peak workloads. Generally, unit costs have increased when outsourced. Maintaining quality through outsourcing can be challenging. It is critical to set up a systematic performance measurement system to perform objective, consistent reviews of appraisal work. – Our state has a large supply of qualified consultants to conduct appraisals, appraisal reviews, negotiations, and relocation assistance. Consultants lack expertise for pre- paring right-of-way maps. Based on data from the early 2000s, costs using consultants were slightly higher. How- ever, the amount of time spent supervising and train- ing consultants, as well as reviewing their work, did not really provide relief to the internal staff. As a result, the total cost was twice as much as if the state DOT had done the work internally. – In our district, in-house work usually costs less and is more accurate due to specialization in the type of appraisal problem requirements. – Initial proposals from consultants tend to be com- petitive. In some cases, contract modifications due to revisions, scheduling, and other factors drive costs up significantly. It is advisable to negotiate a time extension as opposed to a cost increase if possible. – Some increase in the number of condemnations. Con- demnation costs have increased. • Other: – Contracting issues are forcing small firms out of busi- ness while larger firms tend to get all the work. Assigning all the work to a few consultants defeats competitiveness and results in higher costs with lower quality. – Our district only outsources title search and some appraisal work. We do not outsource negotiations, acqui- sitions, or relocation assistance. – Current contracts provide for a poor incentive structure that encourages rapid parcel delivery versus accuracy and fairness. – When a company is selected to be in the pool (three-year contracts with annual renewal), part of the rating pro- cess includes reviewing and approving the resumes of all individuals. The state also has the ability to approve or deny any new hires. An in-depth knowledge of the firms and their staff enables the opportunity to select the right firm for a particular job. The cost is higher than using internal resources, but the result is usually quality service and on-time delivery. Outside agents interact with inter- nal right-of-way staff to ensure timely project delivery. – Lack of eminent domain experience. Performance Measures Figure B-6 summarizes responses with respect to what per- formance measures should be in place to monitor the effective- ness of the real property acquisition process. The results are placed in a descending order by the total number of responses received for each type of performance measure state DOTs con- sidered to be in place or needed. Overall, Figure B-6 indicates that state DOTs consider all the performance measures listed as being important (even the performance measure with the lowest number of responses, staff turnover rate, was selected by 59 participants). Nonetheless, the two most popular per- formance measures were number of parcels or real property interests to acquire and time to complete critical activities. Beyond these basic measures, state DOTs were particularly interested in measures such as difference between adminis- trative settlement amount and approved appraisal, number of properties acquired by negotiation, number of properties acquired by condemnation proceedings, and number of prop- erties acquired or in possession prior to letting. Additional verbatim comments and suggestions provided by respondents included the following: • Lead-time is often so short that it is not possible to inter- act with property owners and other stakeholders effectively and fairly. A tool to measure the quality of work compared to the cost of delivery in a compressed project develop- ment environment is needed. Costs have increased over the last 5 years due to the new way projects are delivered. • Planned, allocated, and expended work versus resources. Related measures would include productivity indexes that take into consideration elements such as input/resources, output/services, quality, time, and ratio of direct to indi- rect (overhead) work and costs. • Organizational effectiveness of having the right people in the right place at the right time. • Even though performance measures (such as those shown in Figure B-6) are used for data comparison, reporting, and management, “performance” should not be a driver, par- ticularly for measuring items such as staff turnover, budget,

Figure B-6. Performance measures to monitor effectiveness of real property acquisition process.

B-10 and effectiveness of training. Because of staff shortages, imposing performance measures on overworked right-of- way agents would be unsuitable and unfair. Changes in Laws and Regulations to Streamline Real Property Processes Figure B-7 summarizes responses with respect to laws and regulations that state DOTs thought required urgent changes to streamline the real property acquisition process, more spe- cifically, the Uniform Act and 49 CFR 24 (at the federal level) and laws and regulations (at the state level). In Figure B-7, each row represents the number of survey participants who thought it was urgent to change laws and regulations. For example, with respect to relocation assistance, the number of participants who indicated the need for urgent changes was 14 (Uniform Act), 10 (49 CFR 24), 9 (state law), and 12 (state regulations). It is worth noting that the online survey instrument was dissemi- nated to stakeholders in 2011, i.e., before MAP-21 was signed into law in July 2012. As a result, the survey did not capture MAP-21 amendments to the Uniform Act and 49 CFR 24. Overall, the response rate for the question about the urgency to change laws and regulations was very low. Even for the area with the highest number of responses overall (relocation assistance), the response rate was only around 11 percent. This trend could be an indication that partici- pants (a) did not believe changing laws and/or regulations was urgent, or (b) may not have been familiar with specific provisions in the laws and regulations to the point that respon- dents could indicate with absolute certainty what (if any) urgent changes were needed. From the additional comments, ideas, and suggestions provided by participants, it appears a substantial number of participants did not believe there was an urgent need to change laws or regulations. Condemnation proceedings ranked high compared to other topics when rows were sorted according to the total number of responses provided. However, as Figure B-7 shows, participants clearly indicated the need was in relation to state laws and regulations (23 and 15 responses, respectively), not the Uniform Act or 49 CFR 24 (3 and 2 responses, respec- tively). It is worth noting that although the Uniform Act and 49 CFR 24 mention condemnation proceedings, the reference is quite brief and not prescriptive, i.e., they do not describe in detail how to carry out condemnation proceedings. Like- wise, some responses pointed to an urgent need for changes in the Uniform Act and 49 CFR 24 in relation to mediation before condemnation proceedings and property manage- ment. However, neither topic is covered in the Uniform Act or 49 CFR 24. (Note: 23 CFR 710 covers property manage- ment topics.) In any case, for both of these topics, the need for changes at the state level was considerably higher than at the federal level. For completeness, Figure B-8 shows the same responses as in Figure B-7, except that rows are sorted accord- ing to the total combined number of responses concerning the Uniform Act and 49 CFR 24. A summary of additional verbatim feedback provided by respondents follows: • Laws and regulations are efficient now. We continue to work at the administrative level to improve our data man- agement. • There is no need for “urgent” changes in laws or regula- tions. Real property acquisition problems have always been an inadequate design or right-of-way plans (< 30 percent design stage) and not enough time to acquire the real prop- erty. Typically, the state legislature and design engineers establish the date when the project will be advertised for construction. The right-of-way office should have an input on the advertisement date. • The current system works well if there is enough lead-time (16 months) to complete real property acquisitions. The issue is receiving the project limits in a timely manner and limiting changes in design that result in changes to the new real property being acquired. • The department is pressured to accelerate the acquisition of real property so that the project can be certified and construction can start. The Uniform Act and existing state laws are designed to protect property owners. Amending these laws would speed up construction at the cost of great personal burden to property owners and a greater cost to the project. • There is no need to change laws or regulations. Govern- mental agencies need to respect the right of property own- ers to receive just compensation for takings and to prove the public purpose need for the takings. Agencies can still be innovative and try new processes in completing real property acquisition processes in accordance with both federal and state laws. • Streamlining should not equal loss of property rights and the right to due process. Appraising properties without the plans being complete is streamlining but does not allow for due process. We should work toward following the regula- tions we have and treating people fairly. To streamline the overall process, the process of getting a project ready for right-of-way authorization should be looked at as much as the real property acquisition process itself. Respondents were also asked what specific changes would need to be introduced in laws and regulations to streamline real property processes. A summary of the feedback provided follows, grouped by major categories. • Before the environmental document is approved: – 23 CFR 710 needs to be changed to allow for greater flexibility in federal spending on real property when the environmental process is not complete.

Figure B-7. Laws and/or regulations requiring urgent changes to streamline real property processes.

B-12 Figure B-8. Laws and/or regulations requiring urgent changes to streamline real property processes (sorted by total number by adding Uniform Act and 49 CFR 24). – It should be possible to start real property acquisition activities prior to the completion of the environmental process if the new real property is not anticipated to have negative environmental impacts. • Appraisals and waiver valuations: – Minimum appraisal amounts need to be raised. – There is a need to increase the ability to exercise appraisal waivers for properties under $25,000. – Require outdoor advertising companies to share data with appraisers or default to a national valuation stan- dard. Many appraisers have no idea how to appraise billboards. Outdoor advertising companies resist shar- ing data needed to produce a competent report. – Review appraisers are required for integrity, but there must be a better way that does not clog the system or rubber stamp inadequate and inconsistent appraisal practices. • Negotiations: – There is a need for a law that requires property owners to negotiate in good faith during the direct purchase pro- cess. Property owners are frequently advised by attorneys not to negotiate with the agency with the expectation they will receive more money during condemnation. – There is a need for streamlined, consolidated proce- dures instead of 20 pages of directions for each type of settlement. In our agency, there is also a need for admin- istrative support to assist with typing forms. Real estate personnel are not trained for this activity, and the result is many clerical errors in paperwork, which then need to be corrected at the district level and/or the central office, wasting valuable time. – There is a need to be able to perform negotiated univer- sal settlements. – In our state, there is a need to eliminate the requirement for a 30-day “holding” period between reaching a pur- chase agreement and the actual closing. – Allowing condominium owner associations to repre- sent and sign for all interested parties when the state DOT is acquiring condominium real property would substantially reduce or eliminate the need to obtain

B-13 individual signatures. The associations could manage this process for the benefit of all unit owners rather than the state DOT having to spend many months reaching each individual owner. Payments could be made to the association for disbursement to individual owners. • Relocation: – Noncompliance with income and/or citizenship proof should clearly negate eligibility for any benefits and should trigger police powers to remove persons and per- sonal property from the real property being acquired. – There is a need for the ability to pay for right-of-entry in the case of low-impact, low-value temporary easements. – In our state, there is a need to streamline relocation stage requirements so the plans can be developed with less staff time. The state code is much more specific than the U.S. code and needs to be revised and updated. – Raise the $10,000 limit on the reestablishment expense payment for business relocations. – Relocation benefits for businesses need to be expanded and improved to encourage businesses to reestablish locally instead of moving to other cities, states, or nations. The relocation program needs to be turned into a “jobs creator” instead of a “jobs killer.” This program also needs to be simplified to expedite payments and facili- tate relocating people and businesses. There is also a need to eliminate any “going-out-of-business” payments and encourage the reestablishment of businesses with larger reestablishment payments. – In our state, there is a need to increase the amounts for relocation and court costs available to property owners and business owners, given the long-term implications for those affected with the relocation. – Owners and/or occupants of residential dwellings are fairly compensated and receive adequate relocation ben- efits. However, small business owners do not receive the same level of benefits. We have tried to enact legislation to increase payments, but have not been successful. The Uniform Act needs to be amended to increase benefits. • Condemnation: – During mediation, when the state raises its offer, the new offer should become the new highest written offer used to calculate the 15% fees. – There should be a mandatory mediation period before a property acquisition can proceed to condemnation. In our state, many cases are resolved faster (compared to waiting for the trial date) through the use of the mediation tool. – There is a need for a law that limits the time spent on a condemnation action. The longer a condemnation action is unsettled, the more interest is earned on the outstanding settlement. – In our state, there is a need to revise the statute that an appraisal must be performed before starting con- demnation actions. The change should be to perform a valuation (thus in alignment with the Code of Federal Regulations). There is also a need to change the eligibil- ity for attorney fees. – There needs to be a uniform appraisal standard for con- demnation that must be followed by all entities with the power of eminent domain as well as expert witnesses on both sides. The result will be more uniform court deci- sions and more uniform appraisal scoping and reporting for eminent domain, which will reduce costs associated with trial preparation for every potential use instead of the most probable uses. – In our state, there is a need to update the expropriation act regarding timeframes for filing actions and interest on decisions. – In our state, it is currently necessary to conduct two levels of review prior to the initiation of condemnation actions. This requirement adds several months to the process. – There is a need to reduce lead times for court proce- dures in condemnation cases and to hold property owners accountable for missed field meetings as these meetings require significant preparation and lead-time. – Our state law requires the state to be responsible for virtu- ally all expenses incurred by both state and the property owner during condemnation proceedings. This situa- tion makes it difficult to settle out of court and increases costs because there is no incentive for a property owner to negotiate. – There is a need to reduce the legal interest accruing on condemnation claims (currently 8 percent per year). – There is a need for a change in the way attorneys are appointed to handle the legal aspects of a project. In our state, attorneys are appointed by the governor and the attorney general. Unfortunately, appointments cause delays and additional costs due to inexperience in emi- nent domain law by the appointed attorney. • Other: – Changes are needed in the area of certifications. – There is a need for more flexibility in certifying projects as well as better definitions regarding design-build proj- ect certifications. – In our state, the state DOT should become the lead agency, with all other state and local agencies adopting the state DOT policies as a guideline. The state already has training and certification requirements in its budget prior to providing federal aid to others. – When the development portion of a project is state- funded, it is possible to reduce the project development cycle by completing many activities simultaneously (while following the Uniform Act). However, when fed- eral dollars are used for development, activities are car- ried out more sequentially, slowing down the delivery.

B-14 – The 2005 changes to 49 CFR 24 have not been imple- mented in our state in either statutes or administrative code, resulting in conflict between federal and state requirements. – In our state, there is a need to implement civil service changes to support enhanced staff expertise capabilities. This is partly due to a lack of recognition of required real property skill sets. – Possession-and-use agreement interest rate needs to be lowered from its current 12%, thereby reducing the number of condemnations. – The state needs to have the ability to keep funds from the sale of surplus properties and conduct minimal improvements to maximize the value of the property. – In our state, it is currently required to have paper copies of a wide range of documents, such as summary reviews, appraisal reviews, and so on. This is unnecessary. – There is a need to contract out title and closing work. – There is a need to remove the requirement for transpor- tation commission approval before selling or conveying surplus parcels. In certain surplus property situations, it would also be advisable to relax the requirement for a “fair market value.” Business Practices Participants were asked what business practices at their agency (whether or not required by current laws or regula- tions) would likely result in significant streamlining of real property processes. A total of 52 participants provided feed- back. A summary of this feedback follows, grouped by major categories. • Internal coordination: – Coordinate with right-of-way personnel to avoid changes in the project design before property acquisi- tion activities start. – Make sure that design personnel completely identify and finalize the project construction limits 18 months before the project letting date. – Involve right-of-way and utility coordination personnel earlier in the process. – Release right-of-way funding as early as possible. – More effective communications with other agency units before construction starts. – Keep right-of-way staff involved in the development process of all projects regardless of size. – Conduct regular project meetings to track the progress in the acquisition of parcels. – In our state, real property acquisition and property management are two separate units. There is a need to merge the units or improve information sharing. – Conduct meetings with officials from other districts or regions at least once a year to ensure consistency of practices throughout the state. • Appraisals and waiver valuations: – Implement administrative reviews on appraisals instead of (or before) full technical reviews. An administrative review could still result in a full technical review of the appraisal in question if warranted. – Raise the limit on appraisal waivers. – Raise the waiver valuation threshold. – Consider accepting certain low-impact business risks; for example, simplify legal descriptions for acquisitions less than $10,000, allow districts to establish just com- pensation for acquisitions less than $10,000, and allow a district manager to issue checks to property owners for low-value acquisitions (e.g., < $1,000). For proper- ties that are already on the market, allow the agency to certify the value and make a written offer based on an evaluation of the asking price. • External coordination and negotiations: – For off-premise billboards, amortize out nonconform- ing billboards, treat signs as personal property, and con- demn the leasehold interest as part of the entire parcel. – Provide better mechanisms for acquiring railroad and pipe line property. – Provide better mechanisms for utility owners to move their facilities expeditiously at their own cost. – Pay for utility relocations as part of the project cost (for certain projects). The utility facility must be relocated prior to the construction letting or as part of the state contract. Paying for utility relocations as part of the project cost has resulted in more cooperation from util- ity owners for the submission of plans and estimates. Another benefit has been a reduction in the number of construction delays due to utility conflicts. – Provide better mechanisms for working with GSA in acquiring surplus federal lands and better mechanisms for acquiring land held in trust for Indian tribes by the Department of the Interior. – Make all federal agencies honor agreements and not can- cel projects after the project has been federally approved and the real property has been acquired. – Remove the requirement for a real estate license to con- duct negotiations. – Hold grantors accountable for project delays or increased costs when they fail to appear at critical meetings. • Staffing: – Implement more equitable pay levels to attract more qualified right-of-way professionals and support staff. – Hire real estate managers and supervisors who have eminent domain experience.

B-15 – Become more aware and informed of the multiple posi- tions and roles within the division. – Procure appraisal and appraisal review services through a method other than a low-bid process. – Use on-call consultants, which reduces the need for more frequent consultant bid and selection cycles. • Use of technology: – Improve the accuracy in the calculation of property areas by design engineers. Errors in the calculation of property areas are the cause of many revisions, which delay the appraisal process. – Implement a comprehensive, geospatial-enabled land management system. – The enterprise use of GIS and databases would be highly beneficial. – Develop visualization tools to illustrate the impacts of improvements to property and utility owners. • Other: – Acquiring property for highway purposes should carry the ability to control or deny direct access to the high- way as part of the property acquisition. There should be no separate evaluation of access rights. – Develop a procedure for low-risk, low-cost temporary easements in developed areas in situations when it is necessary to replace the existing sidewalk at the outer edge of the existing right-of-way. – Find a way for the state DOT to use the revenue gener- ated by land sales. – Expedite the process to prepare a resolution of necessity prior to starting activities. The current process is time consuming, expensive, and repetitive. – Use federal funds to acquire real property prior to the environmental clearance. – Provide better right-of-way plans. Currently, there are numerous plan changes throughout the acquisition process. – Plan and develop projects within a reasonable period of time. – Move more approval authority to the local level. Unique Processes Participants were asked what unique processes existed at their agency in addition to the requirements in the Uniform Act, and what impact those processes had on their ability to manage the real property process effectively. A total of 44 participants provided feedback. A summary of this feed- back follows, grouped by major categories. • Improvements in efficiency—appraisals: – We scope the project with the appraiser and the reviewer. Parcel impact notes are completed before the scope, and all issues are documented at that time. The appraiser and the reviewer discuss issues before the appraisal is written. There is an open door policy between the appraiser and the reviewer at all times during the appraisal process to help lessen problems when the appraisal is reviewed. – We have a standardized appraisal form with descrip- tions of the information needed for each section. New agents report this is a great tool while they are in train- ing. It gives them direction about where to seek infor- mation and allows them to work more independently. – We can use a cost estimate not based on a full appraisal, which is prepared by a licensed appraiser, to make offers on simple, small acquisitions under $20,000. This strat- egy has been very helpful. The owner is always given the option to have the property appraised. • Improvements in efficiency—incentives and payments: – Incentive offers on certain corridors where costs and/or time savings are anticipated to result. The initial offer made to a property owner is based on an approved appraisal, but also has an amount added to the estimate of just compensation, which is based on a cost avoid- ance strategy. To ensure a net positive benefit it is nec- essary to compare projects that use the incentive offer against projects that do not. – Recent legislation provided additional compensation for residential and commercial properties where relo- cation is needed. – We allow a generous threshold for administrative settle- ments at the division level. • Improvements in efficiency—other: – Giving regions full control, unlimited administrative settlement authority has proven extremely beneficial for project delivery. One of the results has been a very low condemnation rate (less than 5 percent of all acquisitions). – One-agent concept in which one right-of-way agent is the point of contact with the property owner for most aspects related to an acquisition, including appraisal, negotiations, and relocation assistance. – We have a senior right-of-way agent assigned to every transportation project. This agent is a member of the design team, attends public meetings, and ensures the project is cleared on time to meet bid date requirements. We also involve our FHWA realty specialist early when we know a problem exists that will require a conditional clearance or a federal land transfer. – Going green for a paperless environment (including recording, submitting, and tracking files and docu- ments) has streamlined our process and made it more efficient and reliable. – The agent is required to complete an onsite inspection of comparable dwellings selected for each residential tract. The Uniform Act suggests that comparable dwellings are

B-16 available and examined. We go a step further and physi- cally conduct an inspection. – The biggest single advantage is the power to use com- missioner orders to administratively take land held by local agencies for transportation purposes. • Inefficiency issues—appraisals: – Sharing appraisal with property owners has benefits but increases the time to complete appraisals and reviews. – A recent amendment to our state constitution has taken away some of our flexibility in using waiver valuations. – We can only assign 10 appraisals to an appraiser at a time. It is inefficient for the appraiser and the review process. • Inefficiency issues—relocations: – In our state, the comparable replacement property law is more stringent than federal law for commercial prop- erty acquisitions. Unfortunately, the federal govern- ment has allowed pipeline operators to proceed under federal condemnation law and ignore state law. – State laws and regulations pertaining to low-income and illegal alien status cost money and slow the acquisi- tion and relocation process. – We provide business replacement payments. We are also required to provide a comparable replacement business property, which takes significant staff time, particularly when there is litigation involved. However, because no two businesses are alike, a strategy to streamline this pro- cess would be to allow businesses to hire a firm under professional services to develop their replacement site, thus removing the requirement for the state DOT to pro- vide a replacement site. This strategy would also free up staff time in the review and search for replacement sites. • Inefficiency issues—other: – Due to money constraints, all decisions must be made at the highest levels creating scheduling problems. – In our organization, there are too many silos because of the level of specialization within the staff. The result is too many hand-offs and limited succession planning. More staff cross-training is necessary and change the process so that, for instance, one person or a group should be able to write legal descriptions. – Our outdoor advertising law is a nuisance and too com- plex. Any delay is satisfactory to advertising sign com- panies. There must be a better way. – Our state law requires selling surplus property at the appraised market value. It is not possible to sell at auction with a minimum bid of an amount below the market value. The result is no bidders when the market is not in an appreciation trend. – We are required to use a pre-selected list of attorneys for titles and closings rather than contracting these services. This process tends to delay closings. – Management of mineral interests is too complex. Strategies and Innovative Approaches Participants were asked what strategies or innovative approaches their agency had implemented or planned to implement to streamline the real property process. A total of 52 participants provided feedback. A summary of this feed- back follows, grouped by major categories. • Appraisals and waiver valuations: – Valuing non-complex, low-value properties using county assessment data instead of having an appraisal completed. – Use of $25,000 appraisal waivers. – Appraisal waivers for uncomplicated partial acquisi- tions (< $25,000) has somewhat streamlined the real property process. I would not advocate a higher dollar threshold for this type of acquisitions. – We are conducting a pilot on higher waiver of appraisal and conflict of interest levels. • Incentives and payments: – Payment incentives for relocation and acquisition. – We have two FHWA-approved, project-specific, limited- term pilot studies for using financial incentives to vacate residential and business properties. – We had a pilot for relocation assistance incentives when the housing market was such that people were bidding to buy homes. – We had a recent change in legislation to allow $50,000 for business relocation reestablishments. We are currently using a $20,000 waiver for non-complex acquisitions. – Making offers by mail on uncomplicated tracts has had some success. Until recently (unfortunately funding stopped), we used to have a right-of-way seminar every year, and we invited LPAs and state DOT staff. Topics included changing regulations and areas that cause problems in the real property process. – On a pilot design-build project, we have used right-of- entry easements for a nominal dollar amount, which are offered to property owners after the official offers of compensation are made. The purpose is to gain imme- diate possession of the new real property while negotia- tions are proceeding. In our experience, most property owners do not object to the project, just the money being offered for the property, making it possible to proceed with the right-of-entry easements to allow the project to proceed while negotiations are being conducted. • Use of technology: – Involvement in several FHWA initiatives, including the Every Day Count Initiative, peer exchanges, and visualization in real property. Other initiatives include developing a utility database and GIS interface and par- ticipation in NCHRP Project 08-55. – Computer programs for all real property functions. – Integrated right-of-way mapping systems.

B-17 – Red line adjustments of appraisals: Minor appraisal adjustments in CAD-generated deed descriptions. • Temporary easements: – Our state is implementing a streamlined process in situ- ations that only involve temporary easements. This pro- cess allows a field agent to complete the acquisition with one face-to-face meeting. The initial contact is made by phone to review the land title and other property infor- mation. All remaining pre-acquisition activities are also completed prior to the first visit when the written offer is presented to the property owner. – We are implementing a temporary easement acquisition process. • Other: – We are looking at getting our appraisers hired earlier in the process. On projects where the corridors are straight- forward, we will be completing as many preliminary real property activities as possible before completing the environmental process (understanding that real prop- erty negotiations cannot proceed until the environmen- tal document is completed and approved). – This agency has streamlined the development process by including representatives from all areas on the project team. That has caused the right-of-way group to stream- line activities to ensure we meet project schedules. – One-agent appraise-acquire, draft purchase orders up to $10,000 (one-call process). – Development of relocation options available to displaced persons prior to making eligibility offers. It involves pre- liminary planning by using information learned at the interview with property owners prior to computations for replacement housing payments. – We piloted the NHI Business Relocation Course in our state in the last few years. We also put in place a process approved by FHWA to deal with negative equity situa- tions for homeowners. – Decentralized signing authority, approval, and accep- tance of acquisition documents. – In our state, we are currently going through a complete rewrite of our project development process guidelines. Training and Professional Development Participants were asked what kind of training and profes- sional development the state DOT offers to staff members who work on real property activities. A total of 61 partici- pants provided feedback. A summary of feedback provided by participants follows, grouped by major categories: • In-house training: – We have a rigorous in-house training and participate in peer exchange meetings and programs. Outside trainers are frequently not familiar enough with laws and regu- lations in our state. These trainers need support within the state as an element of the training program ahead of time and at the presentation. – We offer multiple in-house training courses for agency staff, LPA staff, and consultants at a nominal fee. These courses are pre-approved for continuing education credits for real estate and appraisal licensing in our state. Low costs encourage agencies with small budgets to take advantage of the training. Low costs also attract many right-of-way professionals for continuing education credits. – In our state, we offer over 20 different classes in topics related to real property and utilities. All the classes were developed and are taught by state DOT staff. – Most of our training focuses on the appraisal process. We have two different training programs for new hires (a two-week academy and a one-week academy). Other training is offered when funding is available, which has been substantially reduced recently. – Our agency offers a wide range of training courses in real property, including titles, appraisals, appraisal reviews, acquisition, closings, property management, project management, and cost estimating. There are tiered courses within the various disciplines. – Our state offers formal training in every aspect of the real property acquisition and property management programs. State-certified appraisal and appraisal review courses are also conducted and offered simultaneously to state DOT and private fee appraisers. One-on-one, task-specific training is also conducted on an as-needed basis. – We have an approved real property educational program, which allows us to cross train employees. We also have a course on reading plans, which we use for all employees. – Our agency offers training in all real property areas. We would like to offer a basic overall class to be held yearly to accommodate new employees. Our agency also has a career path development program, which is a great tool for professional development. – We have a development program for new employees. At one time, our agency offered an annual workshop for right-of-way personnel, but it was discontinued. – Our state offers a considerable number of training opportunities, including project process, CAD, word processing, and automation. We also have an annual event for right-of-way professionals (approximately ¹/³ state, ¹/³ local agencies, and ¹/³ consultants) that includes appraisers, engineers, attorneys, land surveyors, and so on. An annual survey technical workshop deals with topics such as CAD, files, and so on. We have also sponsored a limited number of employees pursuing their master’s degrees.

B-18 – We have an annual right-of-way conference for internal and external staff. – We have a relocation user group that meets twice a year. The meetings cover topics such as training, case studies, policy and procedural changes, and presentations on topics that are of interest to agents, such as current lend- ing practices and problems, litigation, and home inspec- tion problems. We also host teleconferences twice a year. Recently, we developed a course on basic residential relo- cation procedures. – We offer discipline-specific workshops on topics of cur- rent need. We also have a program whereby headquarters or regional staff go to other regions needing training and work on existing projects for mentoring on the job. – We offer in-house training sessions, technical user groups, and reimbursement for IRWA training ses- sions. We also have a centralized data bank for upcom- ing training sessions. • External training: – FHWA webinars, which are useful to keep staff informed of current and innovative practices, could be used for real property activities. – Our agency offers a right-of-way certification program. Through one of the universities in the state, we offer a class on procedures for relocation assistance. – We offer classes through sources such as IRWA, NHI, FHWA, and local colleges. We encourage staff to take advantage of at least 1–3 training opportunities per year. – We get some IRWA classes usually taught by a trainer from out of state who is not familiar with our rules or regulations. Classes are also boring or not sufficiently interesting. – NHI courses, IRWA courses, and Appraisal Institute trainings. – We provide flexibility in relation to training needs for employees. We also provide tuition assistance and license renewal. – Our agency has a real estate services training coordina- tor. Classes and seminars include professional organiza- tions, internal state DOT training, FHWA training, as well as individual training at the regional level. • Other: – We need to offer training, but agents are short-staffed to do project work. There is no funding for outsourced training programs. Most project work is outsourced. – Most training and professional development is driven by sharing internal expertise. The current administra- tion is cutting back on out-of-state travel to national programs. – In-house workshops are currently on hold, although the department has many new employees who would ben- efit from these workshops. Property Management Practices Involvement of survey participants in property manage- ment activities was quite significant (Figure B-9). Participa- tion in what is traditionally considered property management (i.e., leases, disposal of surplus property, and disposition of improvements) was particularly strong. By comparison, par- ticipation in activities that are outside the traditional realm of property management (e.g., access management and per- mitting, financial assessments, and management of mineral rights) was relatively minor. Figure B-10 summarizes the responses in relation to what kind of real property state DOTs acquire for transportation projects. Not surprisingly, most participants indicated their state DOTs acquire properties in fee simple for transporta- tion projects. Frequently, state DOTs also acquire right-of- way access rights. Easements from a variety of stakeholders (such as private owners or LPAs) are also quite common. Much less frequently, although still common, is the acquisi- tion of real property that excludes mineral, oil, or gas rights. Not very common is the use of leases for transportation projects. Additional feedback provided by respondents indicates that state DOTs also use agreements with other agencies (e.g., federal agencies and tribal governments), as opposed to ease- ments or acquisition in fee. Likewise, it is common to use leases and aerial easements with railroads. Figure B-11 summarizes responses in relation to what kind of uses state DOTs allow on state property or right-of- way. In the figure, the darkest color represents an allowed use that also produces revenue for the state. The lightest non-white color represents a non-allowed use. The inter- mediate color represents an allowed use that does not pro- duce revenue to the state. In Figure B-11, rows are sorted according to the combined number of responses associated with allowable uses (whether revenue generating or not). It is worth noting that sorting rows using a different category would produce drastically different graphs. For example, a graph that sorts rows by the number of responses associated with revenue-producing uses would show leases at the top of the graph. As Figure B-11 shows, the most common use allowed is driveways, followed by utility installations and a variety of other uses (mainly leases). In the case of utilities, consider- ing that utility installations are so prevalent along trans- portation corridors in the U.S., it was somewhat surprising that the number of responses regarding utility installations that are allowed on state right-of-way was not higher. How- ever, this is not a fatal flaw. The reason is that many factors play a role in the decision to allow utility facilities on the state right-of-way, including type of utility, type of corridor, and type of installation (e.g., crossing versus longitudinal),

B-19 defeating the purpose of attempting to categorize use by considering only two broad categories (i.e., allowed versus not allowed). The number of responses regarding the use of outdoor advertising signs (revenue producing) on the right-of-way was surprising. According to the responses provided, the following states allow outdoor advertising signs (revenue- producing) within the right-of-way: California, Colorado, Florida, Mississippi, Nevada, New Jersey, New York, Ohio, Oklahoma, Rhode Island, Virginia, and Wisconsin. This information would need to be confirmed. One respondent clarified that outdoor advertising signs are allowed on non- active (i.e., excess) rights-of-way for legal settlement pur- poses only. Another respondent indicated the state has filed an application with FHWA to allow changeable message sign (CMS) advertisements on active rights-of-way and billboards at maintenance operation facilities. A summary of additional comments and ideas provided by survey participants follows: • All uses are reviewed on a case-by-case basis. • Some uses are allowed both for revenue and non-revenue. • Longitudinal utility facilities, with the exception of fiber optic lines, are not allowed on controlled-access or inter- state highways. • State law allows for the longitudinal installation of fiber optic lines on interstate highways. The companies would have to pay a yearly fee for this use. • Sometimes utility installations are allowed longitudinally within the right-of-way. • Longitudinal utilities are allowed on highways, but not within controlled-access freeways. In recent years, the state ended a new, but potentially profitable, longitudinal fiber leasing program. Access to the right-of-way is now free. Figure B-9. Involvement of state DOT participants in property management.

Figure B-10. Real property interests normally acquired for transportation projects.

Figure B-11. Uses normally allowed on state property or right-of-way.

B-22 • The first solar lease in our state is currently under negotia- tions. We also consider wind generators. However, the only proposal reviewed so far was considered unacceptable on safety grounds. • Our state is developing a solar energy generation policy (revenue generating) at this time. • We have acquired right-of-way corridors where we have no money for construction. We use joint use agreements with the former property owners and allow them to use the property for agricultural purposes. We have been clear- ing improvements located in the acquired right-of-way for these future corridor projects. • Our state submitted an application to FHWA to allow CMS advertisements within active right-of-way and billboards at maintenance operation facilities. • Outdoor advertising signs are allowed on non-active (excess) right-of-way for legal settlement purposes only. • Parking and other uses are allowed (non-revenue) by revo- cable occupancy permit. Data Management Platforms Figure B-12 summarizes responses in relation to the type of data management platforms that state DOTs use for property management purposes. In the figure, the darker the color, the more prevalent the use of a specific data management plat- form. In addition, rows are sorted by the cumulative number of responses regardless of intensity of use. Overall, the results in Figure B-12 are not surprising. In general, office applications such as spreadsheets, word pro- cessors, and desktop databases are commonly used tools. Server-based databases are also common, reflecting a trend throughout the transportation industry, in which the use of this type of databases is increasing for a variety of applications. Legacy systems are not common (also reflecting a trend in the industry toward the replacement of this type of platform with more modern tools). The use of web-based mapping tools is common, reflecting the increasing acceptability of this type of platform to support a wide range of applications, including property management. Although it was not surprising, it was nonetheless interest- ing to note that CAD and GIS platforms were not as com- monly used for property management applications as other data management platforms. Additional feedback provided by respondents consisted mainly of names of databases or systems their agency has implemented (or is implementing) to support a variety of real property functions, not just property management. A number of references in the literature provide documenta- tion about these databases and systems. Figure B-13 summarizes the responses in relation to the perceived level of impact of major issues that state DOTs face while conducting property management issues. In the figure, the darker the color means the higher the perception of impact. The impact scale is from 1 (least impact) to 5 (most impact). For convenience, rows are sorted by the frequency of responses when grouping the total number of responses associated with impact levels 3, 4, and 5. However, it is interesting to note that sorting rows by grouping responses associated with impact lev- els 4 and 5 would have produced a similar graph. As Figure B-13 shows, more than 50 percent of partici- pants indicated the highest impact was due to difficult-to-use databases or information systems documenting real property assets. This issue is consistent with the previous observation about the relatively poor levels of penetration of data man- agement platforms such as CAD and GIS to support property management functions. Difficulty in tracking and monitoring the use of property and real property assets was also high- lighted as having a significant impact. Participants also indi- cated that one of the most significant issues affecting a state DOT’s ability to manage the state real property effectively was illegal or unauthorized encroachments. Additional feedback from participants included a par- ticipant who highlighted that in the past, it was possible for officials to place holds on excess properties without justifi- cation. The result was properties with long-term holds that should have been sold as surplus properties. The state has now implemented a property retention review program that has aided in the disposal of excess properties and served as a mechanism for determining the reason and justification to keep other properties. Results—Consultants General Observations Figure B-14 summarizes the distribution of consultants who participated in the survey according to their geographic range. Of the 24 participants, 12 participants (or 50 percent) operate at the national level, 7 participants (or 29 percent) operate at the regional level, and the remaining 5 participants (or 21 percent) operate at the state or local levels. As in the case of the state DOT survey, most consultants who participated in the survey were primarily involved in the acquisition of real property (Figure B-15). In fact, the distri- bution of areas of involvement in the project development and delivery process for state DOT officials (Figure B-2) and consultants (Figure B-15) was very similar. Involvement in real property acquisition activities covered the entire spec- trum, from appraisals to payments (Figure B-16).

Figure B-12. Data management platforms used for property management purposes.

Figure B-13. Major property management issues at state DOTs.

B-25 Figure B-14. Geographic range of consultant activities. Figure B-15. Involvement of consultant participants in project development and delivery process activities.

B-26 Issues and Challenges Figure B-17 summarizes the responses in relation to the per- ceived level of impact of major issues that consultant clients face while acquiring real property for transportation projects. In the figure, the darker the color means the higher the per- ception of impact. The impact scale is from 1 (least impact) to 5 (most impact). For convenience, rows are sorted by the frequency of responses when grouping the total number of responses associated with impact levels 3, 4, and 5. As Figure B-17 shows, almost 90 percent of participants indicated the highest impact was due to changes to parcels late in the design phase and due to lack of involvement of right-of- way staff during design. Not involving right-of-way person- nel in earlier phases (planning and programming, preliminary design, and environmental process) as well as during utility coordination was also perceived as having a major impact. A significant issue that resonated with survey participants was external entities (e.g., law firms advising property owners not to negotiate as a tactic to obtain more money during con- demnation proceedings). The perceived level of impact of this issue was similar to the lack of involvement of right-of-way personnel during the design phase. Participants also thought that external entities advising property owners to divide their property into smaller parcels as a tactic to obtain more money from the state DOT was an important issue, although not as critical as advising property owners not to negotiate. Overall, responses from consultants were similar to those expressed by state DOT participants. A major exception was staffing. Although state DOT respondents pointed to staffing issues as having a major impact, particularly with respect to staff turnover and lack of public-sector real property experi- ence among consultants, consultants who participated in the survey ranked these issues much lower. However, both state Figure B-16. Involvement of consultant participants in real property acquisition activities.

Figure B-17. Level of impact of major issues related to real property acquisition highlighted by consultants.

B-28 DOT officials and consultants indicated that difficulty to hire and retain staff with adequate real property acquisition expe- rience was a critical issue. Other issues identified by consultants as having an impact while acquiring real property for transportation projects included the following: • It takes time for the state DOT decision-making process. There is also a lack of urgency when a problem occurs. • Giving work to consultants who do their own “thing,” do not understand the role of proper documentation in pub- lic work, and rush to get the job done rather than getting the job done right. • State constitutions and statutes are providing more restric- tions on taking as an overreaction to the Kelo Supreme Court decision on takings for private purposes. These restrictions result in additional costs if attorney fees must be paid. Inverse condemnations are increasing in some areas prior to agencies being prepared for the acquisition phase. Figure B-18 provides a listing and classification of real prop- erty acquisitions that consultants consider particularly prob- lematic (e.g., in terms of time and cost). As in the case of the state DOT survey (Figure B-5), colors provide an indication of a major real property acquisition phase or process (e.g., the dark- est color means appraisal and the lightest color [white] means coordination with other stakeholders [e.g., LPAs]). However, color sequence does not imply a business process sequence. In Figure B-18, rows are sorted by the total number of responses received for each type of acquisition that consul- tants considered particularly problematic. Overall, responses by consultants are very similar to those expressed by state DOT officials, particularly in relation to certain types of acquisi- tions (e.g., railroad interests—operating or abandoned—and outdoor advertising sign interests). There were some differ- ences; for example, state DOT officials ranked non-residential, developed acquisitions higher than consultants did, but these differences did not appear to be major. A similar consideration would apply in the case of partial acquisitions, full acquisi- tions, and uneconomic remainders. Figure B-18. Particularly problematic real property acquisitions according to consultants.

B-29 Additional comments that consultants provided included the following: • Partial acquisitions resulting in residential and/or business displacements. • Lack of utility relocation plans prior to initiating acquisi- tion activities can result in late identification of residential and/or business displacements. • The sheer size of a business and the time it takes to locate and contract a replacement site, as well as relocating the business with the least amount of impact to it. This pro- cess takes an incredible amount of time to plan and exe- cute. Sometimes, project timelines do not consider this factor appropriately. • Timeliness with any condemnation, occupied parcels, fed- eral lands, and tribal lands. Changes in Laws and Regulations to Streamline Real Property Processes Figure B-19 summarizes the responses with respect to laws and regulations that consultants thought required urgent changes to streamline the real property acquisition process, more specifically, the Uniform Act and 49 CFR 24 (at the federal level) and laws and regulations (at the state level). In Figure B-19, each row represents the number of survey par- ticipants who thought it was urgent to change laws and regu- lations. For example, with respect to relocation payments, the number of participants who indicated the need for urgent changes was seven (Uniform Act), six (49 CFR 24), five (state law), and five (state regulations). As in the case of the responses by state DOT officials (Fig- ure B-7), consultants identified relocation payments and relocation assistance as areas in which changes are most urgently needed. Overall, the response rate for the ques- tion about the urgency to change laws and regulations was low. Even for the area with the highest number of responses overall (relocation payments), the overall response rate was around 24 percent. There were also areas in which responses by consultants were different from those expressed by state DOT officials. For example, state DOT officials ranked appraisals much higher than consultants did. Conversely, consultants ranked real property program administration and preparation of parcel maps and documentation much higher than state DOT officials did. As in the case of the state DOT responses, consultants highlighted a need to change state laws and regu- lations in relation to condemnation proceedings. Interest- ingly, some consultants mentioned the need to change the Uniform Act and 49 CFR 24 in connection with mediation before condemnation proceedings, even though this topic is not covered in the Uniform Act or 49 CFR 24. Additional feedback provided by consultants included the following: • The regulations in our state should be rewritten to parallel the federal regulations. Now, we need to look at every area of relocation and decide whether federal rules or state rules are better for the displaced person. • Low-value, non-complicated appraisals should not require a formal appraisal review. A qualified agency staff person or consultant should be able to conduct the review based upon his or her experience. • Our state should offer to pay for landowner’s appraisals (many states do) as long as the appraiser is pre-certified by the agency. Disclosure of sale prices would be helpful. • Restrictions on appraisals contribute to the length of time required and inability to use waivers. • Business relocation benefits are inadequate to address the financial impact created. • Change the statutory $10,000 maximum reestablishment payment. This could be done by amending the Uniform Act or the state law. However, if changed by the latter, only entities with programs that use 23 CFR 710 (FHWA) may be reimbursed for any amount approved over $10,000. Currently, FTA grantees must pay any additional amount required by state law with local, non-matching funds. • There should be a way to create a monetary hold to address environmental issues in a property. Currently, if a property has environmental issues, the only recourse an agency has is to go to trial. • There is a need for a central point of contact with LPAs, as well as a central point of contact for feed payments. • There is a need to move away from per-parcel fee contracts for real property services to professional services contracts. • There is a need to mandate staff training before accepting real property acquisition results. • There is a need to mandate coordination of land acquisition and relocation with the design and construction process to minimize public relations and political repercussions. • There is a need for a global settlement option based on actual claims or appraisal estimates. • The comparable dwelling methodology should be broad- ened to include the state schedule method. • There is a need for more specific guidelines on income documentation requirements (for residential relocations), as well as a need to address loopholes involving persons who are not legally present in the U.S. (particularly in mixed household situations). There is a need to remove the 90-day occupancy requirement loophole. Training and Professional Development Participants were asked what kind of training and profes- sional development consultants offer to their staff members

Figure B-19. Laws and/or regulations requiring urgent changes to streamline real property processes, according to consultants.

B-31 who work with state DOT clients in real property activities. A total of 20 participants provided feedback. A summary of the feedback follows: • Internally, we train our appraisers to meet all appraisal and state DOT requirements. • Our company offers in-house training programs, as well as IRWA classes and other third-party educational offerings. • We have in-house training, IRWA courses, and state DOT- presented courses. • Training provided by the state DOT. • IRWA courses, state real estate commission courses. • As a certified IRWA facilitator, one of the services our com- pany provides is training for agency and consultant staff. • Through IRWA, I facilitate over 25 different courses. • None. The state fees are not sufficient to allow the com- pany to cover training expenses. • IRWA and NHI classes. • IRWA and Appraisal Institute classes. Property Management Involvement of survey participants in property manage- ment activities was significant (Figure B-20). Participation in what is traditionally considered property management (i.e., records management, encroachment enforcement, disposi- tion of improvements, and leases) was strong. By compari- son, participation in activities that are outside the traditional realm of property management (e.g., financial assessments and management of mineral rights) was relatively minor. Overall, responses are somewhat similar to those expressed by state DOT officials. However, there are some differences (e.g., consultants are less involved in the disposal of surplus property). Figure B-20. Involvement of consultant participants in property management activities.

Next: Appendix C - Integrated Transportation Project Development and Delivery Process Phases and Activities »
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TRB’s National Cooperative Highway Research Program (NCHRP) Report 771: Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices provides improved, integrated real property procedures and business practices in the project development and delivery process. The report also provides suggestions to improve property management practices. The report is accompanied by a CD-ROM that contains an integrated model of the transportation project development and delivery process, including a real property acquisition and relocation assistance model and reference work schedule.

The CD-ROM is also available for download from TRB’s website as an ISO image. Links to the ISO image and instructions for burning a CD-ROM from an ISO image are provided below.

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