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APPENDIX C EXAMPLE OF STATE DOT INTERVIEW REPORT 89
State Highway Agency @State Office @District Office The following list of questions has been developed to target specific areas of right-of-way cost estimation, estimate management, and other aspects of the right-of-way process. As mentioned previously, the project team is particularly interested in the right-of-way process as it parallels with the phases of project development. We are primarily concerned with the first four phases which include: Planning; Programming; Preliminary Design; and Final Design. Therefore, as the interview progresses, each question will be discussed in reference to each of the first four phases of project development. In other words, each question will be asked 4 times. The first time a question will be asked as related to the planning phase. The second time it will be asked as related to programming and so on for preliminary design and detailed design. This line or type of questioning will help the team to identify similarities and differences of the right-of-way process as related to the project development process. Additionally, we acknowledge that some questions may not apply to a particular phase; if this is the case, please respond as such. Recall that detailed figures documenting the project development phases referenced above are shown in Attachment A. Contact(s): Senior ROW Agent Senior ROW Agent (North Region) Senior ROW Agent (North Region) Senior ROW Agent (North Region) Overview: ROW Process ***refer to figure provided showing the ROW process in relation to the overall project development process - There are only 3 phases in the ROW process: Project Initiation (Planning, Programming), Permits and Studies (Preliminary Design), PS&E (Final Design) - Planning (with Programming) - Programming is not considered a phase by itself in the process. It takes place at the end of planning and before preliminary design occurs. Multiple alternatives exist during the planning phase. The ROW cost estimate completed at this point usually sets the ROW baseline for the project. - Preliminary Design â a preferred alternative is chosen here based upon cost estimates of design, construction, and ROW per each alternative. After a preferred alternative is chosen the cost estimate is usually updated. 90
- Final Design â appraisals and acquisition occur during this phase. In the perfect world, all acquisition is complete before construction begins. *** Marysville provided the following:  2 copies of completed ROW cost estimates which includes cost data sheets  A ROW cost data sheet request with a cost estimate map  the excel template for their cost estimation process Determining Right-of-Way requirements 1. How are right-of-way requirements quantified for a particular project during each phase of project development? What sources of data are used in determining right-of-way dimensions at each point in project development (e.g. alignments, ROW maps, topographical maps, typical cross sections, land surveys, etc.)? - A cost estimate map is typically provided by the ROW engineers. The cost estimate map consists of an aerial photo of the project area in which each parcel is labeled and ROW boundaries are drawn in. The level of detail shown on the cost estimate map is crucial to producing an accurate cost estimate. - On a parcel by parcel basis, structures (improvements) are identified along with any problems and the market value is applied as determined by the ROW agent. o Market trends are the prime source of assigning value to a property. The ROW agent will contact the tax assessor, realtors in the area, and any other sources. o Field visits and maps such as provided by Google Earth also are used by agents to identify structures, damages, and other potential problems by parcel. o Experience and knowledge of the area is a large indicator for an accurate cost estimate. The best estimators are those that are experienced because they have a feel for property values and other aspects of ROW. o This portion of the estimate is restricted by the amount of time available. o When partial takings, damages must be assessed. - The level of detail of the Cost Estimate Map was emphasized by Marysville to affect the quality and ease of the cost estimate. Estimate Preparation 2. Describe policies, procedures, techniques, and/or standards used in preparing right-of-way cost estimates during each phase of project development? If these policies, procedures, techniques, and/or standards are formally documented (written), can you provide us with a copy or a website location where we can obtain a copy? - Policies and procedures related to cost estimates of ROW can be found in Chapter 4 of the ROW manual. These policies and procedures provide information to the districts but these are only guides by which they estimate ROW. The manual does not provide actual tools for the districts to use. The actual tools and methods are not consistent throughout the districts. 91
- early collaboration of ROW with the PM and Design is encouraged to identify problems at early stages in project development - All the above confirmed by Marysville. They follow the general outline set in the ROW manual. 3. Is historical data (or other data) used as a basis for preparing right-of-way estimates during each phase of project development? How is this data adjusted for time (schedule), location, and other project specific conditions? - historical data is used for support costs which are the man-hours used to complete the estimates - demolition of existing buildings is also estimated by recent historical data - capital costs are based on recent sales in the area (market value) - all the above confirmed by Marysville 4. What elements (e.g. utility adjustments, land use, damages, improvements, relocation assistance, eminent domain proceedings, etc.) are included in a right-of-way estimate prepared during each phase of project development? At each phase, which one element is most difficult to quantify accurately? Which one is the least difficult? What methods and tools are used to quantify each? - All elements above are included in the ROW estimate beginning with Planning. This estimate is updated after programming, during preliminary design and may be updated during Final Design dependent on appraisals. Appraisals are considered more accurate than early estimates and if there is enough increase over the cost estimate the budget may be adjusted through communication with the Project Manager. - Additional elements in ROW estimate: permit costs, support costs - The number of parcels that will go to eminent domain proceedings are also estimated. - Most difficult: highest and best use, damages in partial takings. - Least difficult: relocation assistance program, demolition costs, - each district is responsible for tools and methods to estimate costs - A minimum of two estimates are prepared for a project: Planning and Preliminary Design. - Most difficult: damages, environmental mitigation o there are many unknowns at the estimate level which arenât realized until the appraisal stage of the project - Least difficult: relocation costs 5. How does the DOT address potential environmental issues (e.g. hazardous materials, wetlands, etc.) in right-of-way cost estimates during each phase of project development? - Environmental issues are addressed before a project can be programmed. This is especially the case for projects in the STIP. - There is a division in each district that handles environmental issues for the projects. It seemed that the environmental impacts are not specified until the preliminary design phase; therefore it is not captured in the planning phase estimate. There is a need for 92
environmental impacts to be identified earlier so that mitigation lands can be acquired if necessary and also included in the cost estimate. - Impacts of possible hazardous materials on parcels are usually estimated by the ROW agent doing the estimate to the best of their ability based on the limited information at hand and other indicators. 6. How do you insure that estimates completed during each phase of project development reflect all elements of the required right-of-way (e.g. utility adjustments, land use, damages, improvements, relocation assistance, eminent domain proceedings, etc.)? - The use of a cost data sheet which has an itemized list of costs that apply to the project. Also included in the data sheet is a list of questions pertaining to the ROW including assumptions and limitations. There is a section that summarizes types of parcels to be acquired and types of utility relocations. - Cost areas include: o total acquisition cost (includes acquisition, excess lands, damages, and Goodwill (???)) o utility relocation o relocation assistance o clearance/demolition o title and escrow - There is an example cost data sheet that is in the exhibits portion of Chapter 4 of the ROW manual. - The Marysville district uses an excel spreadsheet that has 3 parts to it and then is summarized by the cost data sheet similar to the one provided by the ROW manual, Ch. 4: o Capital cost estimate which estimates the cost of acquisition by each parcel  includes the complexity of each parcel, damages, utilities, relocation costs, etc.  an escalation rate and contingency factor (usually 20 to 25%) is also applied to the estimate  each involved party signs off on their area of expertise within the cost estimate o Support allocation request which estimates the cost in man-hours to complete the work on the cost estimate(s) and any updates required throughout the project. This is done by a standard WBS that denotes the level of all individuals that may be involved in the cost estimate. o Timeline needed for acquisition which is the time necessary for all appraisals and acquisition beginning from the last map provided. 7. During each phase of project development, is risk considered in the right-of-way estimate? If so, how is risk quantified and applied to the cost estimate? - there is no formal risk analysis done - Contingency of approximately 20-25% is applied to cover cost escalation. 93
- Contingency does not vary from estimate to estimate. It is usually applied by percentage to the aggregate project. There is no methodology for assigning this contingency amount, but early communication with land owners may increase the contingency amount being applied. Estimate Reviews 8. Is a formal review conducted within the DOT at each phase of project development to verify the right-of-way estimate? If yes, go to 8a, otherwise go to 8b. 8a. Do the reviews follow a set of formalized and institutionalized procedures? Does the magnitude of right-of-way cost or right-of-way complexity trigger the review or additional reviews? Please identify these trigger values. What personnel outside of those responsible for preparing the estimate are involved in the review and approval of the estimate? 8b. How does your DOT verify a right-of-way estimate? - The ROW data sheet has a place for a supervisor of ROW, Railroad, and Utilities to sign off on the estimate. - The Deputy District Chief of ROW eventually signs off on the ROW estimate. - Reviews are done on ROW appraisals, but there is not much of a review for cost estimates during early stages of project development. - Following the completion of the ROW data sheet it is circulated to all parties involved in the cost estimate. Each of the parties must sign off that the portion of the estimate completed that affects their department is correct. Estimate Communication 9. Is there a systematic program that is used to standardize right-of-way estimating procedures and train those responsible for assembling the estimates during each phase of project development? What formal mechanisms are used for capturing and transferring knowledge about right-of-way cost estimating techniques? - No, there is no program in place to standardize estimating procedures and train estimators. - There is not systematic program but training is facilitated by those individuals that have the most experience in ROW. The excel spreadsheet serves as a systematic tool that attempts to streamline the ROW estimation process; the general procedure used for cost estimation is outlined within the spreadsheet. 10. Is contact made with the property owners during each phase of project development? If so, what information is communicated to the property owners? Is there an effort to discover potential problems or possible excessive damages that are unforeseen or unknown to the acquiring agency through communication with land owners at this time? 94
- Formal contact is not made with property owners until the appraisal stage during final design. - Public hearings during the Permits & Studies phase (Planning) take place according to state law. - All the above confirmed by Marysville Cost Estimating Management 11. Are differences in right-of-way cost estimates between each phase reconciled? If so, how is the reconciliation performed? - At minimum, two estimates are completed (planning and preliminary design). - The Planning cost estimate is updated during the Preliminary Design phase after a preferred alternative is chosen. The estimate is updated by review of the cost data sheet and supporting estimate information. - All the above confirmed by Marysville. The planning estimate is reviewed based on market conditions, design details, improvements completed since planning estimate, etc. 12. What triggers an update of a right-of-way estimate during each phase of project development? Are estimates updated on a periodic basis, when major design changes occur, or through some other triggering mechanism? - major changes in design trigger an update of the ROW estimate - Review of cost estimates is completed once a year if time and work loads permit. - At minimum, the planning estimate is updated during preliminary design when a preferred alternative is chosen and when any major design changes take place. 13. Is the right-of-way cost estimate updated based upon continuing experience throughout the acquisition process or at each phase of the project development process? For example, the cost of parcels which are acquired early in the acquisition process exceed the estimated values may indicate the same for the remainder of the parcels. - an update occurs during preliminary design after a preferred alignment is selected - yes, an update of the cost estimate (or budget) may occur during final design based on appraisal values if there are significant differences from the cost estimate - All the above confirmed by Marysville 14. If project requirements change and there is a requirement for additional right-of-way, how are these changes and requirements communicated to the personnel responsible for right-of- way cost estimating and acquisition during each phase of project development? Please explain how these changes are implemented by the right-of-way officials? - these changes are communicated through the project manager to ROW, but no formal process for communicating these changes were discussed in the interview 95
- All the above confirmed by Marysville State Laws & Other Factors 15. Are there specific state laws or statutes that affect the ROW process during each phase of project development? If so, please identify such laws and describe each including background and effect on the ROW process. - following the Kelo case decision by the Supreme Court, each land owner is allowed up to $5000 reimbursement towards an independent appraisal. The Kelo case statute may be a source of delay in the acquisition process. Previously, it was easy to predict when a propertyâs acquisition would be complete even if it would go to condemnation because there was a more systematic timeline associated. - state dollars can not be spent towards ROW until environmental clearance has been obtained - laws seem to favor property owners - All the above confirmed by Marysville 16. Are there any other factors that affect the ROW process during each phase of project development (e.g. environmental, social, political; such parameters may apply to the whole state or a particular district or metropolitan area)? If so, please name these and describe each including background and effect on the ROW process. - Environmental mitigation directly affects ROW. Lands may need to be purchased to replace wetlands or other environmentally sensitive lands that are destroyed by highway projects. o A lot of emphasis was placed on environmental by Marysville. The need to know environmental impacts early in the ROW process so that mitigation lands can be included in the cost estimate is essential. Marysville is constantly trying to get numbers from the environmental group earlier. o There are 2 options for environmental mitigation:  Purchase lands, develop land, and maintain perpetually  buy credits from others (this is preferred so that they do not have to develop and maintain the land) - Political influences may affect how funds are prioritized for each project. - Non-traditional project delivery methods, particularly Design Sequencing, make it more difficult to estimate ROW costs. 17. Do state laws allow for the use of acquisition techniques such as advanced acquisition, land consolidation, land exchange, incentives, or other non-standard techniques? If so, are these used and how effective are such techniques? Please include the particular phase of project development where these techniques are applicable. - Advanced Acquisition is limited to hardships or protection buying. - Some projects may meet certain conditions for early acquisition, but all public hearings must still take place and environmental documents must be circulated. This may be a 96
stretch due to the state law pertaining to spending state dollars only after environmental clearance has been obtained. - not discussed with Marysville Other notes: - ROW capital costs and support costs are based on projects, but a lump sum is given to the districts by the CTC by fiscal year. o This lump sum approach offers the districts some flexibility in spending funds. This is the case when a project is delayed, the districts may choose to spend the money allotted to that project on more pressing projects that were not actually programmed at the time budget was submitted to the CTC. o The lump sum is favored over a project by project approach because of changes in design and construction. Lump sum avoids the adjustments required by project to project approach and also avoids further escalation of market values. - Delays to projects include: o environmental o political o community opposition - Market values, even within the district, will vary from area to area. - project managers have come to except the cost escalation involved in ROW, but man- hours estimated to complete the cost estimates have become more crucial - In order to know the estimating process and the market values across the district the job of cost estimator at the Marysville office is a full-time job that has no other responsibilities. - Cost estimates are completed by market value. This differs from appraisals which may be done by the cost or income methods of valuation. - ROW has a huge human factor involved with it. Regardless of the accuracy of your estimate, it is difficult to predict the property owner and what actions they may take and the resources they may have to back up those actions. 97
