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Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide (2023)

Chapter: Acquisition of Utility Property Interests and Utility Relocation Reimbursements

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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
×
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
×
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
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Suggested Citation:"Acquisition of Utility Property Interests and Utility Relocation Reimbursements." National Academies of Sciences, Engineering, and Medicine. 2023. Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27138.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

10 Project Delivery Phases Figure 1 is a generic depiction of the project delivery process used in the design-bid-build project delivery method, showing major phases and functional area activities. The major phases shown are the following: • Planning is the phase in which the state DOT identifies the purpose and need for a project. It is also the phase in which the state DOT identifies the needs of the project and develops a preliminary scope. • Preliminary design is the phase in which the state DOT analyzes project alternatives and conducts the environmental review, which leads to the selection of a project alignment and the production of an approved environmental document. The environmental review is frequently called the National Environmental Policy Act review process. • Final design is the phase in which the selected alternative is fully designed and plans, speci- fications, and estimates (PS&E) and a bid package are prepared so that the project can be advertised. • Letting is the phase in which the project is advertised for bids and a contractor is selected. • Construction is the phase in which the project is constructed, at the end of which the high- way opens to traffic. • Post construction is the phase in which the project is closed out. Major activities by functional area are the following: • Planning and programming: Project planning, scoping, programming, and execution of agreements with third parties and scope updates. • Design: Alternative analysis, value engineering (if warranted), development of schematics, detailed design, and PS&E assembly. • Environment: Evaluation of environmental impacts, public outreach, preparation of envi- ronmental documents, and environmental commitments (which could extend past project closeout). • Right-of-way: Real property research, preparation of draft right-of-way plans, preparation of final right-of-way plans, relocation assistance, and real property acquisition. • Utilities: Utility coordination, utility investigations, utility conflict management, utility design, and utility construction. • Construction: Letting, construction, and project closeout. • Project management: Project management throughout all phases of project delivery. Figure 1 assumes the following design-level milestones: • 0 percent: Beginning of the preliminary design phase (i.e., when the project is authorized for project development). Acquisition of Utility Property Interests and Utility Relocation Reimbursements

Acquisition of Utility Property Interests and Utility Relocation Reimbursements 11   • 30 percent: End of the preliminary design phase, when the proposed alignment has been selected and the project schematic completed. • 60 percent: Milestone within detailed design in which the detailed horizontal and vertical alignments are in place, and critical design elements such as hydraulic design have been completed. • 90 percent: Milestone within detailed design in which the project design is complete except for a few details, and the focus changes to the preparation of the PS&E assembly and the bid package. • 100 percent: End of the nal design phase in which the PS&E assembly and the bid package are completed. Two critical milestones are environmental approval and right-of-way authorization. Figure 1 shows environmental approval occurring at around 30 percent design, which FHWA recom- mends for most projects. e right-of-way authorization is the authorization to start acquir- ing right-of-way, which requires environmental approval and the nal right-of-way plans to be in place. e project delivery process in Figure 1 applies to a typical project that goes through all phases of development, including right-of-way acquisition and utility relocations. For this type of project, an environmental assessment (EA) or an environmental impact statement (EIS) may be necessary. In practice, most projects are categorical exclusion projects that do not require an EA or an EIS. For these projects, it is common for several phases of project development to be waived or consolidated and for the environmental approval to occur much later than at 30 percent. Alternative Analysis, Value Engineering, Schematics Environmental Impacts, Public Outreach, Environ. Document Utility Coordination, Utility Investigations, Utility Conflict Management, Utility Design, Utility Construction Final Right-of-Way Plans, Real Property Acquisition, Rel. Assistance Design, PS&E Assembly Letting Construction Planning Preliminary Design Final Design Letting Construction Post Const. Planning Linkages Planning, Scoping, Programming Environmental Commitments Real Property Research, Draft Right-of-Way Plans Agreements, Scope Update Project Management 60% 90% 100%30%0% Project Closeout Design Level Environmental Approval Right-of-Way Authorization Project Delivery Phases Fu nc tio na l A re as Planning and Programming Design Environment Right-of-Way Utilities Construction Project Management Figure 1. Typical project delivery process for design-bid-build projects. (Courtesy of the Texas A&M Transportation Institute.)

12 Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide Based on information provided by state DOT officials, some 32 percent of DOTs receive envi- ronmental approval at 30 percent design, 45 percent receive it at 30–60 percent design, and 23 percent receive it at or after 60 percent design. These trends are not categorical or prescriptive and should only be used as a general reference. In Figure 1, draft right-of-way plans are prepared during preliminary design. Right-of-way plans are finalized after environmental approval during the final design phase. Except for early or advance acquisitions, right-of-way acquisitions can start only after environmental approval. In practice, state DOTs structure and label their project delivery phases in a variety of ways. As an illustration, Table 1 lists a sample of state DOTs and how they label their project delivery process phases. Authority to Acquire Replacement Right-of-Way or Additional Land for Utility Relocations State DOTs fall into one of three categories: • State DOTs with the authority to acquire replacement right-of-way or additional land for utility relocations that use it regularly. At these state DOTs, utility owners can also acquire replacement right-of-way. Normally, the state DOT’s preference is for the acquisition to be handled by the state. Many states that acquire replacement right-of-way note benefits, includ- ing, but not limited to, more control over project schedules and reduced risk of delay. To acquire replacement right-of-way, states either purchase the right-of-way in the name of the utility owner or purchase the right-of-way and then convey it to the utility owner. • State DOTs with the authority to acquire replacement right-of-way or additional land for utility relocations that do not use it regularly. Common reasons to prefer utility owners acquire replace- ment right-of-way on their own include that utility owners have more flexibility (e.g., by being able to offer more compensation to property owners than the state DOT), that utility owners do not have to conform to Uniform Act requirements, that utility owners retain eligibility for future relocation reimbursements, and more bureaucratic hurdles exist for the state DOT. • State DOTs without the authority to acquire replacement right-of-way or additional land for utility relocations. At these state DOTs, utility owners are responsible for acquiring replace- ment right-of-way on their own. State Agency Project Delivery Phases or Milestones Colorado Colorado Department of Transportation Scoping and programming, preliminary design, design, construction Georgia Georgia Department of Transportation Concept development, preliminary design, final design, construction Kansas Kansas Department of Transportation Phase I (discovery phase), Phase II (preliminary design), Phase III (final design), Phase IV (letting), and Phase V (construction) Montana Montana Department of Transportation Scoping, design, right-of-way, construction South Carolina South Carolina Department of Transportation Planning, preliminary design, final design, construction South Dakota South Dakota Department of Transportation Project authorization and scope, field surveys, preliminary design, final design, letting, construction Texas Texas Department of Transportation Planning and programming, preliminary design, environmental, right-of-way and utilities, PS&E development, letting, construction Washington Washington State Department of Transportation Planning and scoping, preliminary engineering, final design and contract documents, construction Table 1. Project delivery phases at sample state DOTs.

Acquisition of Utility Property Interests and Utility Relocation Reimbursements 13   Reimbursement Eligibility for Utility Relocations Throughout the country, if a utility facility occupies private property and has a property interest or if the utility facility has a prior interest and the project needs that utility facility to be relocated, the utility relocation is reimbursable. If a utility facility occupies the state right-of-way by permit and the utility facility needs to be relocated, in many cases the utility relocation is not reimbursable. Beyond this basic scenario, a wide range of practices exists among states for what constitutes eligibility for reimbursement. Factors include, but are not limited to, the following: • Type of project (e.g., federal aid, state, local). • Type of utility by use (i.e., public utility, private utility). • Type of utility by ownership (i.e., publicly owned, privately owned). • Type of utility service (e.g., water, sewer, electric, communications, oil and gas). • Utility owner size (e.g., large or small utility owners). • Utility facility location (e.g., state highway right-of-way, city or county right-of-way). Table 7 in NCHRP Web-Only Document 360 lists state DOTs according to their practices for reimbursing utility relocations. Procedures for Acquiring Utility Property Rights Scenarios and Cases The procedure for acquiring utility property rights depends on multiple factors, including, but not limited to, the following: • Property interests associated with utility facilities (e.g., utility easement, property in fee simple). • Policy for claims of prescriptive right. • Type of property interest the state DOT acquires for a project (e.g., fee simple, highway easement). • Characteristics of utility facilities (e.g., transmission versus distribution, active versus inactive). • Characteristics of utility conflicts and resolution strategies (e.g., remain in place, relocate within the highway right-of-way, replacement easement, shared utility easement). This guide assumes a generic situation in which a state DOT is acquiring adjacent property in fee simple, and an active utility facility exists on that property. This circumstance is the most common situation that state DOTs encounter. However, readers should note that state DOTs also deal with situations in which the state DOT obtains a highway easement instead of acquiring the adjacent property in fee simple. Three general scenarios that state DOTs often face include the following: • Utility easement. This scenario assumes the state DOT is acquiring adjacent property in fee simple, and an existing utility facility is located on that property by easement. This situation is the most common scenario. This guide describes three typical cases: – Case 1: Utility facility does not need to be relocated. – Case 2: Utility facility is relocated within the highway right-of-way. – Case 3: Utility facility is relocated outside the highway right-of-way. • Claim of prescriptive right. This scenario assumes the state DOT is acquiring adjacent property in fee simple and an existing utility facility is located on that property, but the utility owner is claiming a prescriptive right.

14 Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide • Utility property in fee simple. is scenario assumes the state DOT is acquiring adjacent property from a utility owner in fee simple. If the property is unoccupied, the state DOT typi- cally uses the real estate process to acquire the property interest. If a utility facility also exists on the property, the state DOT evaluates whether the utility process applies. is guide does not focus on the generic situation in which utility facilities exist within the right-of-way, recognizing that the most common method of accommodation is via a utility per- mit that does not carry a property interest for which reimbursement is oen well established. However, readers will note that some utility facilities can occupy the highway right-of-way via an existing easement, raising concerns about acquisition of the utility property interest and reim- bursement eligibility that are similar to when the utility facility occupies private property by easement. In other situations, the utility facility might no longer have a property interest, but a prior right condition exists that makes relocating the utility facility reimbursable. Some of the elements and features in the following sections also apply to these situations. Utility Easement Case 1 (Utility Facility Does Not Need to Be Relocated) As Figure 2 shows, Case 1 applies if the utility facility is not in conict with project features and does not need to be relocated. It also applies to minor adjustments for which a reimbursable utility agreement is not necessary. For minor adjustments that a utility owner can handle without seeking reimbursement, it is common to use an accommodation or encroachment permit (either new or by amending a permit the utility owner already had for a connecting existing facility inside the highway right-of-way). Because the utility facility is allowed to remain in place, important issues to examine include whether to acquire the easement interest and how to handle prior rights in the future. At most state DOTs, future utility relocations are reimbursable, provided prior rights are documented. Proposed right-of-way Proposed right-of-way Proposed edge of pavement Existing edge of pavement Proposed edge of pavement Existing right-of-way Existing right-of-way Existing edge of pavement Highway centerline Existing utility easement Existing utility facility remains in place Existing utility easement Figure 2. Utility Easement Case 1 (utility facility does not need to be relocated).

Acquisition of Utility Property Interests and Utility Relocation Reimbursements 15   However, state DOT forms might also stipulate that future utility relocation reimbursements be handled in accordance with the laws and procedures at the DOT at the time of the relocation. Common practices to handle the easement interest include not pursuing any additional action, using an instrument such as a joint use agreement or similar agreement, and using a subordina- tion agreement or similar agreement. In some cases, the state DOT acquires the property interest from the utility owner. Each option has advantages and disadvantages, as summarized in Table 2. Utility Easement Case 2 (Utility Facility Is Relocated Within the Highway Right-of-Way) As the two examples in Figure 3 show, Case 2 applies if the utility facility is in conflict with project features and is relocated within the highway right-of-way. It also applies to adjustments in place that will need a utility agreement so the utility owner can be reimbursed (e.g., extending a pipeline encasement from the old right-of-way line to the new right-of-way line or deepen- ing the utility facility to meet minimum cover requirements). These adjustments are frequently necessary to conform to utility accommodation requirements even if the utility facility is not in conflict with project features. Important issues to consider in this case include whether to acquire or extinguish the ease- ment interest from the utility owner at the original location, whether to transfer the original easement or grant a new easement to the utility owner at the new location, and how to handle prior rights in the future. At most state DOTs, future utility relocations are reimbursable provided Potential Strategy Advantages Disadvantages and Risks No additional action • Simple. • Minimum time or resources required. • Opportunity lost to document property interests properly. • Difficulties and inefficiencies managing the right-of-way (e.g., for permitting, maintenance, future projects). • Does not document whether future relocations are reimbursable. Joint use agreement, utility permit, or similar • Memorializes occupancy of the right-of-way by the current utility owner or operator. • the existing utility facility. • Establishes roles and responsibilities of the parties. • Does not necessarily clarify property interests. • Does not necessarily stipulate whether future relocations are reimbursable. • Usually not a recordable instrument. • Time and resources required. Subordination agreement or clause • Memorializes occupancy of the right-of-way by the current utility owner or operator. • the existing utility facility. • Establishes roles and responsibilities of the parties. • Clearly documents the subordinate role of the utility property interest in relation to the superior right of the state DOT. • More likely to be a recordable instrument. • Does not necessarily clarify property interests. • Does not necessarily stipulate whether future relocations are reimbursable. • Higher risk of utility owner refusing to sign subordination agreement compared to a joint use agreement. • Time and resources required. Quitclaim deed to extinguish easement • Extinguishes easement interest (if recorded). • Perception by utility owner of not receiving fair compensation. • Unwillingness of utility owner to sign quitclaim deed. • Time and resources required. Deed • Extinguishes easement interest. • Compensates utility owner. • Recordable instrument. • Lack of clarity if easement is extinguished through deed from fee holder. • Time and resources required. Memorializes location and attributes of • Lower project cost if no compensation is involved. • Simple form requiring minimum time and effort to prepare, execute, and record. Memorializes location and attributes of Table 2. Potential strategies for Utility Easement Case 1 (utility facility does not need to be relocated).

16 Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide Example 1 Example 2 Proposed right-of-way Proposed right-of-way Proposed edge of pavement Existing edge of pavement Proposed edge of pavement Existing right-of-way Existing right-of-way Existing edge of pavement Highway centerline Existing utility easement Existing utility facility to be removed Proposed relocated utility facility Proposed right-of-way Proposed right-of-way Proposed edge of pavement Existing edge of pavement Proposed edge of pavement Existing right-of-way Existing right-of-way Existing edge of pavement Highway centerline Existing utility easement Existing utility facility to be removed Existing utility easement Proposed relocated utility facility Proposed tie-in Proposed tie-in Proposed bridge foundation Figure 3. Utility Easement Case 2 (utility facility is relocated within the highway right-of-way).

Acquisition of Utility Property Interests and Utility Relocation Reimbursements 17   prior rights are documented. However, if the state DOT has compensated the utility owner for the easement at the original location, the utility facility might no longer be eligible for prior rights. Common practices to handle the easement interest are maintaining the easement at the original location, transferring the easement to the new location, extinguishing the property interest, and acquiring the easement interest from the utility owner. Additional practices are using an instrument such as joint use agreement or similar type of agreement and using a subordination agreement or similar type of agreement. Each option has advantages and dis- advantages, as summarized in Table 3. With any of these strategies, a utility relocation agreement is used to reimburse the utility owner for eligible utility relocation costs. Potential Strategy Advantages Disadvantages and Risks Maintain property interest at the original location • Simple. • Less time or resources required compared to other strategies. • • Perpetuates an easement encumbrance with no operational or functional use. The original location would be impractical to keep as an operational easement. • Creates confusion for establishing reimbursement eligibility based on prior interests for future utility relocations. Joint use agreement, utility permit, or similar • Memorializes occupancy of the right-of-way by the current utility owner or operator. • relocated utility facility. • Establishes roles and responsibilities. • Does not necessarily clarify property interests. • Does not necessarily stipulate whether future relocations are reimbursable. • Usually not a recordable instrument. • Time and resources required. Subordination agreement or clause • Memorializes occupancy of the right-of-way by the current utility owner or operator. • Memorializes location and attributes of relocated utility facility. • Establishes roles and responsibilities of the parties. • Clearly documents the subordinate role of the utility property interest in relation to the superior right of the state DOT. • More likely to be a recordable instrument. • Does not necessarily clarify property interests. • Does not necessarily stipulate whether future relocations are reimbursable. • Higher risk of utility owner refusing to sign subordination agreement compared to a joint use agreement. • Time and resources required. Transfer easement to new location • Documents the intent to extinguish the original easement. • Documents the intent to establish the property interest at the new location. • Facilitates management of the right-of-way (e.g., permitting, future relocations). • Legal sufficiency of the document is questionable if it is not recorded. • Perpetuates an easement encumbrance of the right-of-way. Quitclaim deed to extinguish existing easement • Extinguishes easement interest at the original location (if recorded). • Lower project cost if no compensation is involved. • Simple form requiring minimum time and effort to prepare, execute, and record. • Does not document status or property interest at the new location. • Perception by utility owner of not receiving fair compensation. • Unwillingness of utility owner to sign quitclaim deed. • Time and resources required. Deed • Extinguishes easement interest at the original location. • Compensates utility owner. • Recordable instrument. • Lack of clarity if easement is extinguished through deed from fee holder. • Time and resources required. Utility relocation agreement • Documents eligible utility relocation costs. • Documents utility relocation plans, relocation schedule, and cost estimate. • Does not necessarily clarify property interests if proper provisions or companion documents are not included. • Does not replace utility permit to memorialize occupancy of the right-of-way. Memorializes location and attributes of Can make it unclear to the state DOT what its property interests are within the right-of-way. Table 3. Potential strategies for Utility Easement Case 2 (utility facility is relocated within the highway right-of-way).

18 Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide Example 1 Example 2 Proposed right-of-way Proposed right-of-way Proposed edge of pavement Existing edge of pavement Proposed edge of pavement Existing right-of-way Existing right-of-way Existing edge of pavement Highway centerline Existing utility easement Existing utility facility to be removed Proposed relocated utility facility Proposed replacement easement Proposed right-of-way Proposed right-of-way Proposed edge of pavement Existing edge of pavement Proposed edge of pavement Existing right-of-way Existing right-of-way Existing edge of pavement Highway centerline Existing utility easement Existing utility facility to be removed Existing utility easement Proposed tie-in Proposed relocated utility facility Proposed replacement easement Proposed bridge foundation Figure 4. Utility Easement Case 3 (utility facility is relocated outside the highway right-of-way). Utility Easement Case 3 (Utility Facility Is Relocated Outside the Highway Right-of-Way) As the two examples in Figure 4 show, Case 3 applies if the utility facility is in conict with project features and is relocated outside the highway right-of-way. In most situations, the utility facility is relocated to a replacement easement where the utility owner obtains the property

Acquisition of Utility Property Interests and Utility Relocation Reimbursements 19   interest, either because the utility owner acquires the replacement easement on its own or because the state DOT acquires the replacement easement. This case also applies if the state DOT acquires additional land and accommodates the utility facility. Important issues to consider in Case 3 include whether to acquire or extinguish the easement interest at the original location from the utility owner and who should acquire the replacement easement (utility owner or state DOT). If the state DOT acquires the replacement easement, the agency should decide whether to acquire a replacement easement on behalf of the utility owner or whether to acquire a replacement in the name of the state and then transfer it to the utility owner. Common practices for handling the existing easement interest are maintaining the easement at the original location, extinguishing the property interest, and acquiring the easement interest from the utility owner. Practices for acquiring the replacement easement are reimbursing the utility owner for the cost to acquire the replacement easement as a line item in the utility agree- ment, acting as an agent to the utility owner to acquire a replacement easement in the utility owner’s name, and acquiring a replacement easement in the name of the state and then transfer- ring this interest to the utility owner (frequently using a quitclaim deed after construction ends). Each option has advantages and disadvantages, as summarized in Table 4. Claim of Prescriptive Right This scenario assumes the state DOT is acquiring adjacent property in fee simple and an exist- ing utility facility is located on that property, but the utility owner is claiming a prescriptive right. In general, state DOTs do not recognize prescriptive right claims against the state. Practices vary more in the case of claims against private property. For example, some state DOTs do not accept prescriptive right claims from utility owners and require utility owners to submit documentation providing evidence of a compensable property interest. Other state DOTs accept prescriptive right claims in certain situations (e.g., by accepting an affidavit from a utility owner indicating the location and time of the occupancy). In most cases, state DOTs that accept prescriptive right claims do so only to establish utility relocation reimbursement eligibility, not to accept or establish a property right. Escalation It is uncommon for utility owners to refuse to release their property rights to state DOTs. However, utility owners impeding coordination throughout the easement process can have a significant impact on a DOT’s capability to deliver projects on time. State DOTs use a variety of strategies to prevent such delays, including keeping utility owners informed throughout the process, engaging utility owners earlier in a meaningful way, and enforcing rules requiring par- ticipation and response by certain dates. Escalation of the utility coordination process is usually sufficient to convince utility owners to cooperate with the DOT. In other cases, the state DOT has the authority to penalize a utility owner by reducing the reimbursement by specific amounts if the utility owner has failed to relocate promptly. Other tools include recovering additional costs incurred by the state DOT, denying further permits until the noncompliance is resolved, and using the power of eminent domain. A disadvantage of using the real estate process in an adversarial way is that the state DOT’s responsibility then switches to the identification of cost-to-cure damages, which might not nec- essarily result in the most effective utility conflict resolution strategy for the utility owner. The utility process enables the parties to coordinate in a cooperative way more likely to result in a satisfactory resolution for both parties.

20 Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide Potential Strategy Advantages Disadvantages and Risks Maintain property interest at the original location • Simple. • Less time or resources required compared to other strategies. • • Perpetuates an easement encumbrance with no operational or functional use. Subordination agreement or clause • Documents the subordinate role of the utility property interest at the original location in relation to the superior right of the state DOT. • More likely to be a recordable instrument. • Perpetuates an easement encumbrance with no operational or functional use. The original location would be impractical to keep as an operational easement. • Risk of utility owner refusing to sign subordination agreement. • Time and resources required. Quitclaim deed to extinguish existing easement • Extinguishes easement interest at the original location (if recorded). • Lower project cost. • Simple form requiring minimum time and effort to prepare, execute, and record. • Unwillingness of utility owner to sign quitclaim deed. • Time and resources required. Deed • Extinguishes easement interest at the original location. • Compensates utility owner. • Recordable instrument. • Adds procedural steps compared to the option of including replacement easement cost in the utility agreement. • Time and resources required. Utility relocation agreement • Documents eligible utility relocation costs. • Documents utility relocation plans, relocation schedule, and cost estimate. • Documents cost of replacement easement. • Does not necessarily clarify property interests if proper provisions or companion documents are not included. • Utility relocation schedule depends on utility owner’s effectiveness acquiring a replacement easement. • Risk of replacement easement cost being too high if state DOT does not require utility owner to submit an updated cost estimate immediately prior to acquiring the replacement easement. Replacement easement on behalf of utility owner • State DOT controls the schedule. • State DOT controls the cost to acquire the replacement easement. • Time and resources required. • Risk of project delays if utility owner does not request that state DOT acquire the replacement easement early. • Use of the power of eminent domain may not be possible. Replacement easement in the name of the state and then transfer to utility owner • State DOT controls the schedule. • State DOT controls the cost to acquire the replacement easement. • Use of the power of eminent domain. • Time and resources required. • Risk of project delays if utility owner does not request that state DOT acquire the replacement easement early. • Additional steps to transfer excess property interest to utility owner. Land interest outside highway right-of-way • Flexibility to accommodate utility facilities when the highway right-of-way is limited. • Difficulty acquiring land interests if space outside the highway right-of-way is limited. • Difficulty managing the land interest if utility facilities occupy the space haphazardly without consideration for other current (or future) utility facilities. Can make it unclear to the state DOT what its property interests are within the right-of-way. Table 4. Potential strategies for Utility Easement Case 3 (utility facility is relocated outside the highway right-of-way).

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The relocation of utility facilities during transportation construction projects can include complex negotiations that are subject to state and federal statutes, as well as agency and utility business practices, which can add cost, time, and potential delay to project delivery.

NCHRP Research Report 1054: Acquiring Utility Property Interests and Reimbursing Utility Relocation Costs: A Guide, from TRB's National Cooperative Highway Research Program, presents a guide to assist state departments of transportation assess the state-of-practice of utility relocations, identify the major factors influencing time and cost for utility relocations, and identify methods to improve the utility relocation experience.

Supplemental to the report is NCHRP Web-Only Document 360: Acquisition of Utility Property Interests and Compensation Practices for Utility Relocations.

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