2004 Wisconsin Real Estate Peer Exchange Report
September 20 - 24, 2004
Hosted by the Wisconsin Department of Transportation
Bureau of Highway Real Estate
Funded by the Wisconsin Department of Transportation
Research, Development & Technology Transfer Program
Table of Contents
Preparing for the Exchange
Key Observations and Best Practices Discussed
Appendix A: Peer Exchange Agenda
Appendix B: WisDOT Background Information
Appendix C: Survey Results
WisDOT Bureau of Highway Real Estate
September 20 - 24, 2004
WisDOT Background Information
WisDOT Structure and Statistics
- Secretary of Transportation
- 6 Division Administrators
- Various Directors in each Division
- Managers and/or Supervisors report to each Director
Decentralized: Real Estate staffing consists of Central Office Real Estate (Bureau of Highway Real Estate) and Real Estate units in each of 8 District Offices. Central Office and Districts are housed in separate Divisions. Total statewide real estate staff = approximately 110.
Division of Transportation Infrastructure Development
- Central Office Real Estate (Bureau of Highway Real Estate) has 15.5 positions:
- 2 Managers (1 with real estate background)
- 5 Review Appraisers
- 1 Relocation/Property Management Specialist
- 1 Acquisition/LPA Specialist
- 1 Contracting, Plat & R/W Certification Specialist
- 1.5 Financial Specialists
- 1 IT Specialist
- 1 Program Analyst in charge of Program Manual, Performance Measures and SW Training
- 1 Records Manager/Program Assistant
- 1 Surplus Land Coordinator
- C.O. Real Estate is currently a separate Bureau with a vacant Director position. The new reorganization will combine Real Estate into a larger Technical Services bureau of about 85 people that includes:
- Surveying and Mapping
- Geo-technical Section (previously from Construction)
- Pavements Section (previously from Construction)
- Quality Management Section-Aggregate, Chemical & Materials testing (previously from Construction)
Division of Transportation Districts
- District offices are generally comprised of four business areas - Project Development, Technical Services, Systems Planning and Operations and Business Services. Real Estate resides within Technical Services Office, which also includes Environment, Geo-technical, Materials, R/W Plats, Surveys, Utilities, Outdoor Advertising, Pavement Design.
- Each Technical Services Business Area is managed by an engineer or previous business manager
- 6 of the 8 districts have supervisors with real estate backgrounds
- Size of real estate units range from 3 or 4 in the northern districts to 23 in our largest urban district near Milwaukee
Size of State Real Estate Program in FY03
- 80 State real estate projects
- Most projects in Wisconsin do not put federal dollars in the real estate
- $92M real estate costs expended
- 1892 parcels acquired
- 51% of parcels were appraised
- 49% of parcels used appraisal waivers
- 27% of parcels were administratively revised (administrative revision costs were 34% over Offering Prices)
- 7% or 138 parcels were condemned
- 69 or less than 4% of all parcels were appealed
Surplus Land Inventory
- Approximately 2100 surplus parcels in the inventory (approx. 1400 have been sold)
- Approximately 500 are non-surplus (held for future r/w need or non-saleable such as a landlocked parcel)
- A typical average year of sales is approximately 125 parcels at about $2.5M in revenue
- Almost every functional area has a User Group established which consists of at least 1 functional coordinator from CO and each district. These Users Groups meet about twice a year to share best practices, provide training, present unique case studies and recommend policy changes.
- Central Office and District Real Estate and Technical Services management meet quarterly to discuss statewide managerial issues, share best practices, discuss policy changes recommended by Users Groups
Identified Issues in Wisconsin
- Replacement of the Department's real estate management positions with individuals that have no real estate training or experience.
- High-level approval authorities that have been given to these managers and supervisors for administrative and legal settlement decisions?
- All technical guidance, on-the-job training and mentoring falls to the advanced agent level or central office real estate
- Central Office Real Estate is at or below critical mass and its ability to provide "adequate" technical guidance and training is in question
- The Department structure has eliminated virtually any management career paths for our real estate specialists
Wisconsin Statutory Requirements
- An appraisal must be made of all property to be acquired and the appraiser must confer with one of the owners or their personal representative, if reasonably possible.
- The acquiring agency must provide the owner with a full narrative appraisal
- A full before and after appraisal is only required for condemnation purposes. If a parcel must be condemned, the DOT will update or prepare a new appraisal for litigation.
- The acquiring agency must offer to acquire uneconomic remnants concurrently with the required purchase.
- Property must be appraised based on its most advantageous use but only such use as actually affects the present market value
- No compensation for police power action
- Appraisers must ignore any increase or decrease in value prior to evaluation that was caused by the proposed public improvement
- For a partial taking other than an easement, Wis. Statutes require DOT to pay the greater of either the fair market value of the property taken or the sum determined by the difference in the before and after values.
- Damages must be allocated
- If the appraiser determines that the part to be acquired has the potential to be independently saleable, he must make a separate analysis of the part using whatever valuation approaches are appropriate
- Special benefits (an enhanced value which occurs to a "specific" property because of a public improvement) accruing to the property that affect its market value can be considered and used to offset the market value of the property acquired and any severance damages occurring to the property
- Disclosure of Appraisal Reports: Wisconsin law requires DOT to provide to the owner copies of all appraisals prepared by the State for his property. At this point, the law has been interpreted to mean that even completed appraisals that may have been rejected or unapproved by a Reviewer must be presented to an owner.
- Property Owner Appraisals: Wisconsin law allows a property owner to obtain his own appraisal by an appraiser of his choice and will reimburse the owner for the costs of that appraisal as long as it reaches us within 60 days, follows appropriate appraisal guidelines (provided to the owners appraisal) and the appraisers fee is reasonable.
General appraisal practices
- Only one appraisal of each parcel shall be obtained except in those cases where the acquisition presents a complex appraisal or negotiation problem
- If market data is available, the appraiser shall utilize the Sales Comparison Approach. The greater weight is generally given to the Sales Comparison Approach with the other approaches adding further support. Typically there will be few, if any, properties involved with WisDOT's acquisition program that will require use of an income approach. There ought to be enough market data for the appraiser to prepare a Sales Comparison Approach, which would have greater reliability than would the income approach. Discounted Cash flow analysis is a recent variation of the income approach which has some application for valuing income producing portions of property such as sign sites or as a method of estimating damages due to projected rent loss
- A Sales Study must be developed when a project involves a number of parcels and especially when there is a variety of land uses to be appraised.
- A Sales Study should contain a general description of the project area and neighborhood, an analysis of real estate trends and property values, individual sales data sheets for each comparable sale, a summary of market data worked up by each type or classification and a location map showing all sales locations
- A Fencing Cost Guideline is developed and updated each year based on Boeckh's Agricultural Cost Modifier for determining cost of most agricultural fencing. (Attachment A)
- Wisconsin has developed a chart used to estimate contributory value of landscaping changes (Attachment A)
- Wisconsin does not pay for loss of business
- A Project Management Conference between the district and central office should be held prior to the appraisal process to develop a plan for the appraisal and review of the project. Attendees should include the District and CO Reviewers, the District Real Estate Supervisor, the appraiser if already selected and, if appropriate, the relocation agent. Plats and plans should be available and a field inspection of the project is recommended.
- In most instances off premise signs are considered personal property belonging to a sign company and located on a leased site. They are eligible for moving expenses on a relocation claim. (See attachment B for Sign Cost Schedule).
- If a sign cannot be moved or if the sign is non-conforming, the sign is valued and purchased
- If the access change is based on police power, generally no compensation is paid
- Example: The number of access points to the state highway are eliminated, but the owner is left with reasonable alternative access to a side road
- Example: A median is built in front of a commercial property allowing only a right-in or right-out in the after condition
- When access rights are being acquired, the appraiser must consider them in the appraisal
- If changes in access are curable, a cost to cure is often the most appropriate measure of damage
- Internal circuity of travel is a compensable damage
- External circuity of travel may or may not create a decrease in value. The right of access does not include the right to the flow of traffic on a particular highway. If there is a compensable damage, it must be because of the loss of access, not traffic.
Appraisal Review and the Offering Price
- Designated District Review appraisers may review and approve offering prices of non-complex whole or strip appraisals that:
- Were identified or could be identified under the $5000 waiver process
- Abbreviated standard appraisal reports up to $10,000 with damages to the remaining land that do not exceed $2000 and can be logically explained
- All complex appraisals and those that do not meet the above requirements must be reviewed and approved by Central Office Review Appraisers
- District Reviewer qualifications: Must have completed a basic appraisal principles course, must have a minimum of 5 years experience doing the type of appraisal being reviewed. Appraisal certification is preferred but not required
- Central Office Reviewer qualifications: Must have advanced appraisal education including a course in the income approach and must have experience working with all types of reports being reviewed including detailed, complex appraisals. General appraiser certification is preferred but not required.
- The use of fee review appraisers is an option that WisDOT, to date, has not utilized. We do have one retired reviewer that is currently working as a Limited Term Employee.
- It is recommended that a district agent or program assistant do an objective review of the report (before sending to the Reviewer) to check if area and interests agree with the latest plat, check to ensure that owner was offered opportunity to accompany appraiser on inspection, that a certificate of appraisal is included and check for math calculations and typographical errors. (Not often done in today's environment)
- Reviewers should field inspect the appraised property and the comparable sales considered by the appraiser. If field inspection is not made, the file must cite supporting rationale.
- Reviewer does a subjective review of the report to determine if it:
- Is complete in accordance with the State's appraisal specifications
- Follows accepted appraisal principles and techniques
- Contains or makes reference to information necessary to explain, substantiate and document conclusions and estimates of value
- Includes consideration of compensable items, damages and benefits and do not include compensation for non-compensable items under State law.
- Contains an identification or listing of buildings, structure, improvements and other fixture, which are part of the real property.
- Contains the estimate of just compensation and for damages to remaining property in the case of a partial acquisition
- Has considered special benefits
- Has considered if the part taken can be considered as a separate entity
- Has a valid sales comparison approach, has sufficient factual data and verification for each comparable sale and adjustments to sales are logical
- Has a proper allocation of damages
- Has appropriate photographs, sketches, maps, comparable sales sheets and sales location map
- Reviewers may correct/edit a report for minor mathematical or typing errors and supplement it with factual data that has been omitted such as project/parcel number, owner names, location, zoning or present use of subject property or comparables, etc. when such errors or supplements do not affect the final value conclusion.
- The Reviewer will discuss more serious errors or concerns with the appraiser and when appropriate, ask the appraiser to submit corrections or revisions. Significant changes or concerns should be presented to the appraiser in writing and should become a part of the review file
- If the Reviewer and Appraiser cannot agree on the need for a change or if satisfactory revisions/corrections cannot be obtained, the Reviewer then becomes the appraiser and may appropriately increase or decrease the value and must support those changes with the same level of documentation as would be required if the Reviewer were writing the appraisal. When the changes are so extensive that they constitute a new appraisal valuation, a review by another review appraiser is required. An entire new appraisal report is typically not required
Issues Identified in Wisconsin
- Are WisDOT appraisal formats efficient? Are there modifications we would want to make?
- WisDOT struggles with access issues: A clear understanding of when police power applies and when access must be acquired. (Example: internal circuity of travel on a service station that has its access limited or moved so that semi trucks can no longer access pump islands). In Wisconsin, driveway permits can be revoked by DOT. How do other States handle these issues?
- WisDOT struggles with "valuing" off-premise, outdoor advertising signs that cannot be relocated. (We consider them personal property). How do other States handles these issues?
- To date, WisDOT does not pay for loss of business, but that battle gets more difficult every year.
- Our current appraisal contracting process may be hindering our ability to hire the more qualified appraisers.
- There is an inadequate pool of qualified fee appraisers in Wisconsin. Have other States implemented strategies to address this issue?
- WisDOT has not fully required the submission of appraisal reports in an electronically format. Are their any States who are currently requiring electronic appraisal reports? If so, has it had a positive affect on turnaround times for correction submissions? Are there other efficiencies that have been realized from the use of electronic appraisal reports?
Waiver of Appraisal
$5,000 Limit in Wisconsin
- Only exception to the $5,000 limit is the addition of a cost to cure to replace fencing
- Parcels identified for this process must be:
- Have adequate market data available
- Parcels where the highest and best use is the present use and is not changed by the proposed improvement
- Parcels with no severance damages to improvements, where damages to the remainder do not exceed $2000 and where no special benefits have been identified
- The entire process should be done using a single real estate agent.
- Typically the same agent prepares the sales study, determines the nominal valuations, makes the offers and prepares a short format appraisal if an appraisal waiver cannot be obtained. The same agent can continue to act as negotiator, though rapport may be better established using another agent.
- The sales study must be approved by a designated Review Appraiser, though approval can be delegated to a district reviewer who has met qualifications by completing sales study training.
- Sales Studies can be waived by a Reviewer for projects where all payments fall under the amount that has been established as the minimum payment in the district or for the project (minimum payments range from $100 to $500 depending on the district)
- Negotiation by mail is encouraged
- Recommendation: District should prepare at least one appraisal in each size and property type category prior to beginning valuations of appraisal waiver parcels to ensure that the value ranges are supportable
- Review Appraiser and appropriate district rep scope project to:
- Identify nominals based on complexity
- Identify type of fencing if any
- Take additional notes and calculations of any additional items so they are available if needed to convert to an appraisal
- Take at least one photo of the parcel and close-up photos of fencing or other items that might be affected by the acquisition
- Review Appraiser approves sales study
- An allocated summary of all nominal parcel damage amounts is listed on the Nominal Payment Parcel Report. This report establishes offering prices that District Real Estate management must approve before offers are made
- Agent completes the Nominal Payment Parcel-Waiver of Appraisal Form (the waiver valuation) allocating the offering prices that have been approved by District management
- Agent presents the completed valuation to the owner along with the owner's rights brochure
- Owner is informed of his right to have property appraised
- If the owner accepts the valuation, the agent can sign the approval
- If the value is changed as a result of negotiations (still within the $5000 limit), the agent will make a pen and ink change on the form initialed by both owner and agent. Changes are subject to district real estate management approval.
- If owner is unwilling to sign on first negotiation call, the documents are left with owner to further review.
- If owner is unwilling or reluctant to sign on second negotiation call, the agent turns the visit into an appraisal call and asks the owner to accompany him on an inspection of the property
- Agent returns to office and prepares a Short Format appraisal and then follows the normal appraisal review and acquisition processes
Identified issues in Wisconsin's Appraisal Waiver process
- Should WisDOT raise its waiver limit?
- Does Wisconsin require more support and documentation than other States for the appraisal waiver valuation?
- Does Wisconsin require more support and documentation for their short-format appraisals that are used for those parcels qualifying for the appraisal waiver process, but are appraised at the owner's request?
Consultant & In-house Staffing Issues
Background on Consultant Use
What and How Much Gets Consulted Out
From Fiscal Year (FY) 2000 through FY 2003, the average of consultant work has been between 24 percent and 30.5 percent of all real estate work. FY 2003 was the highest percentage year at 30.5 percent and $2,359,213.00 of costs. The vast majority of the contracted work is appraisal work for parcels over $5,000. Contracting of appraisal work is 80-100% across the districts. Districts tend to keep the "Waiver of Appraisal" process, a/k/a "Nominal Value Parcels", in-house. This tendency is causing a gap in experience of staff completing other noncomplex and complex appraisal assignments.
Other work consulted out in increasing rates is acquisition and relocation assistance.
Methodologies for Consulting
The consultant appraisal need is filled by utilizing a special contracting/purchasing process allowed by State Statutes. Private sector appraisers who desire to perform appraisal for Department projects must submit their qualifications and samples of work. They are then rated as qualified/unqualified. If qualified, they are slotted in levels of complexity. Projects are then rated as far as complexity and solicitations go out to the matched, qualified appraisers for interest in bidding on the advertised appraisal assignment. A bidders packet is then sent to the interested bidders. All of the above is handled by use of e-mail, a requirement to be included in this process. Low bid is the established norm for receiving the work, unless there are other extenuating circumstances, such as concern about competing contract work, prior performance evaluations, etc. Penalties of ½ of 1% of fee are charged daily for late delivery of each appraisal. A DOT team is currently revamping the contract formats. The biggest items being changed are: more restrictive minimum qualifications (certified general appraiser license), mandatory courses including eminent domain appraisal theory, and the submission of actual appraisal products reflecting past work pertaining to eminent domain.
Private title companies provide all title search work for WisDOT. The Department's Purchasing Unit solicits all title companies on a bi-annual basis for quotes of their fees to do various types of searches and updates. These fees are set up to be parcel specific and tied to the right of way plats provided. The fees are frozen for the term of the solicitation. Companies state which counties they will perform work in and what the prices are for each county. Work orders are then submitted to the title company in each county whose fees are the low fees and who have done satisfactory work in the past.
Other Real Estate Services
The contracting for acquisition, relocation assistance, property management, and project data entry services is different from above. There are no pre-qualified lists of vendors for these services. Solicitation on a project basis or master contract basis is the norm and handled by each district separately. Firms are rated by employee resumes and experience and training. The most qualified firm then enters into negotiations with the District for the specific acquisition work, etc. needed. If negotiations prove unsuccessful with the most qualified vendor, then negotiations are begun with the second qualified vendor. There are no percentage penalties incorporated into these style contracts. If the consultant does not perform work according to the project schedule and contract completion dates, the State is able to terminate the contract for noncompliance.
However, the district offices have found only 10 firms for these types of services, with a total of 23 "agents" staffing those firms actually available in the entire state. Most of these individuals are geographically restricted, and will not provide services to other districts or statewide. Almost all of the "agents" are recycled among the 10 firms. Almost all are former WisDOT employees, and the firms continue to actively recruit WisDOT employees. Plus these firms are in active competition for contracts by the Locals Units of Government and Utility Companies, which further erodes their ability to fulfill WisDOT contract commitments.
Consultant Qualifications and Training Programs
Other than the appraisal contracting process, consultant qualifications are not regimented.
New real estate agents in the consultant sector are usually hired as junior real estate agents and work along side senior agents. At the same time, they are attending many Appraisal Institute, Wisconsin Real Estate broker/sales licensing classes, International Right of Way Association, and any real estate courses offered through technical colleges.
The contract selection process contains an analysis of the qualifications of the consultants who are identified as working on a particular project. The district offices review and make decisions on use of consultants by matching qualifications, experience, and training to the assignments being contracted.
Real Estate consultants are not required to attend any Department of Transportation led courses. If space allows, they are invited to attend some in-house new agent training courses.
Background on In-House Staffing
WisDOT is organized into a Central Office Bureau of Highway Real Estate Office and eight district real estate units. These district units are located within a Technical Services Section (also containing specialized engineering areas, utility coordination, environmental coordination, right of way plat preparation, and control of outdoor advertising).
Within each real estate unit, the number of real estate staff is dependent upon the real estate program size for that district. The range in size is from two to 16 real estate specialists, plus program support and supervision.
There are currently 58 filled positions statewide in the Real Estate Specialist classification series, including specialist, senior, and advanced.
Standards and Measurements for Agent Productivity and Performance
The Department utilizes a "Real Estate Program Performance Measurement System". A copy of this system is being provided separately.
Four areas of the measurement system pertain to Agent productivity and performance. They are:
- Performance Indicator #1-Property Cost Estimating. Typically, senior or advanced level real estate specialists estimate the total cost of each real estate project just prior to the encumbrance of the needed dollars for contracts, in-house real estate delivery, and parcel costs. For property costs, a satisfactory review limit is defined as estimating within15% over or under actual costs. A review of the project is done if the goal is not reached to identify causes contributing to the variance. A review of estimating methods is also done to help the specialist more accurately estimate future projects. Some of the districts include this performance measure as part of the annual performance evaluation goals for the appropriate real estate specialists.
- Performance Indicator #2-On-Time Project Delivery. Each project is assigned a real estate specialist project manager (or Ad Hoc Agent) whose role is to manage and/or perform activities ensuring timely delivery of the real estate project. Most of the time, that specialist also carries the majority of the workload being performed on the individual project. This indicator states that real estate needs must be at a No. 1 Certification by either the ad date (for advertising the construction proposal) or the let date (open of the bids for the construction proposal). The review limit (goal) is 100% of projects on time. Again, some of the districts include this performance measure as part of the annual performance evaluation goals for the appropriate real estate specialists.
- Performance Indicator #3-Project Delivery (Labor) Cost. Typically, senior or advanced level real estate specialists estimate the delivery costs of each real estate project along with the property cost estimating above. Each parcel receives a complexity level for delivery. A workday matrix identifies labor durations for in-house services for each type of function and various levels of complexity. See "Parcel Type Definitions" and "Real Estate Staffing Matrix" attached as separate documents to this report.
- Performance Indicator #7-Quality Customer Service. The purpose of this indicator is to evaluate customer satisfaction based on the knowledge, helpfulness and responsiveness of our real estate specialists and appraisers-our front line contacts with property owners. Customized surveys are sent out for nominal value parcels (appraisal waivers), appraised parcels, and relocation assistance services. Average customer survey scores at or above 66.7% will be considered "acceptable" and not subject to review. Again, some of the districts include this performance measure as part of the annual performance evaluation goals for the appropriate real estate specialists. See "Acquisition," "Acquisition by Appraisal," and Relocation" Surveys attached as separate documents to this report.
Education and Training of In-house Staff
Real Estate specialists, who are new to State civil service are trained in the following:
- Department of Transportation organizational structures and services.
- Civil service employee rules and responsibilities.
- New real estate agent training including:
- Planning and project development
- A summary of real estate related statutes and regulations
- Uniform Act overview
- R/W engineering using plats and plans
- Sales studies for appraisal waiver parcels
- Appraisal formats and parcel complexities
- Compensable vs. Non-compensable
- Basic negotiation and condemnation
- Basic relocation
- Property management
- IR/WA communication, negotiation, relocation assistance, and other courses as available in Wisconsin. (Out of state travel for training is generally not permitted.)
- Appraisal Institute/technical college appraisal courses pertinent to project appraisal problems.
- Specialized User Groups have been established in appraisal, acquisition, relocation assistance, property management, litigation coordination, and local public agency monitoring. The mission of each user group is to keep abreast of current policies and procedures, help train junior specialists in specialized areas, and recommend changes to procedures as needed.
Applicants for real estate specialist positions provide information on skills, knowledge, education, and prior experience in their application for civil service employment. Job experts rate the applications on a periodic basis as qualified/not qualified. Benchmarks are established to help the job experts.
No licenses or certifications are required to be hired.
Pay coming into State civil service is broad banded. Broad banding allows for flexibility in establishing starting salary upon hire. for entry-level specialists, giving consideration for advanced training, knowledge, skills, and prior experience.
It takes 3-5 years to grow a real estate specialist to "senior" level. The Advanced level is achieved by promotion only and requires consistent responsibilities of a complex nature and coordination of one or more of 4 major real estate functions (Acquisition, Relocation, Property Management, Litigation) or as an Advanced appraiser or Central Office reviewer
Attracting Qualified Appraisers and Negotiators
The core of appraisal expertise in the Department resides with the review appraisers. Due to their workload, they are not available to perform appraisal work of any quantity. Most of the other specialists hired concentrate their efforts on specialized functional areas other than appraisal.
The Department's recent experience in trying to hire experienced appraisers into civil service is that they leave within a short period of time. Identified reasons are low pay and not being assigned to 100% appraisal duties. Other independent appraisers have been hired directly to the Real Estate Supervisor position and are presently staying within civil service.
There is no training ground outside of Government and the International Right of Way Association for the negotiations skill set.
Retaining Technical Expertise and Balancing with Consulting
There are currently 58 filled positions statewide in the Real Estate specialist classification series, including specialist, senior and advanced. That is the lowest staffing level in this class in 12 years. In these 58 positions, 52% (30 positions) of the incumbents are retirement eligible (over 55 years) within the next two years. 40% (23 positions) are eligible in 2004 alone. See chart below for further data. A poll of the Districts indicates that at least 10 of these people will actually retire and vacate a position in the next 12-18 months. This doesn't account for normal attrition otherwise. Several vacancies created by transfers or leaving WisDOT exist already. Governor James Doyle has placed a hiring freeze on all State positions for all State agencies. Currently vacancies, which can be justified to fill, are done so by internal transfer. Qualifications of present non-real estate civil service employees, who desire to transfer into a real estate specialist position, do not necessarily meet the minimum qualifications we have established to hire applicants from the private sector. Training would have to extensive and expensive.
||55+ over in 2004
||55 in 2005
||55 in 2006
|RE Specialist Senior
|RE Specialist Adv.
|RE Mgmt with RE expertise
Contracted labor currently is used as an extension of DOT staff in the Real Estate functions for purposes of work involving appraisals, title, acquisition and relocation activities. Division resource modeling analysis continues to indicate a resource gap for real estate functions. In Wisconsin, as in other mid-western states, there is a shallow pool of "consultants" available for this specialized work. All Districts contract independently to meet their program needs. Frequently the Districts find themselves in direct competition with each other for the same external resources. Also, more often than not, the Districts experience over-commitment by this resource pool, not only in promising to deliver their work within unrealistic timelines in order to get contracts from WisDOT, but in their labor-personnel availability. Many of these firms will identify the same individuals as staff that may operate as subcontractors to them.
- There is a lack of in-house staff available to provide all real estate services.
- There is a lack of in-house expertise to provide appraisal services.
- There is no centralized real estate contracting unit. Districts are competing against each other for service providers.
- The pool of consultants is very limited.
- Consultant pre-qualifications are not well established in all functional areas.
- The low-bidder process is used for some real estate services. Other services are negotiated.
- There is no central real estate training coordinator who would organize and schedule specialized real estate training classes with qualified instructors.
- Wisconsin Governor James Doyle has enacted a statewide hiring freeze.
Local Public Agency Coordination and Staffing in WisDOT
- One LPA coordinator is assigned in each of the eight districts with oversight responsibility comprising a percentage of their time
- Amount of time devoted to coordination varies among the eight districts. Our three larger districts (Madison, Milwaukee and Green Bay) incorporate the aid of consultants to assist in oversight. Average time spent in coordination is shown in the table below.
- Our Central Office position is assigned responsibility for statewide oversight and provision of functional guidance to district LPA coordinators. About 50% of his time is devoted to this functional responsibility.
||+ Consult. Effort
||+ Support Staff
||Total Staff Input
- Coordinator is to be notified of projects potentially requiring purchase of real estate early in project development process.
- May attend public informational meetings on larger or more complex projects.
- Oversee and assist in consultant contractor selection. Ensure that consultant process follows state and federal requirements.
- Review and approve or route Acquisition Capabilities Statements
- Meet with locals at outset of project to provide guidance on process and establish expectations.
- Receives and reviews real estate cost estimate on projects with state or federal funding.
- Prepares a Project Cost Estimate, which includes costs for r/w and delivery, for internal processing.
- Ensure that relocation orders (formal notices of commencement of r/w acquisition) are properly filed.
- Participate in field reviews on larger projects
- Coordinators do not actively perform the utility relocation process, but they must ensure that acquisition of utility rights are addressed.
- On projects with state or federal money in right-of-way, sales studies and appraisals are submitted to our central office reviewer for approval.
- The Coordinator is the approving authority for offering prices on appraisal waiver parcels (<$5,000). The coordinator has discretion to allow the LPA to approve appraisal waiver parcels on projects without state or federal money in right-of-way.
- Meet periodically with LPA during acquisition process. Provide guidance on settlement strategies.
- Review relocation computations and claims or refer to district relocation expert.
- After acquisition is complete, the LPA must provide a Certificate of Right-of-Way documenting that right-of-way was properly acquired.
- Coordinator must review all acquisition documents for correctness and adherence to policy.
- Coordinator certifies status of right-of-way acquisition for construction.
- On projects with state or federal aid in right-of-way, the coordinator will provide the LPA with a checklist of documentation that the LPA must provide in order to receive reimbursement for costs.
Training of LPAs
- Each of the eight districts is responsible for providing periodic training to representatives of their local public agencies.
- Training is undertaken in different manners in different districts. The larger districts present training to a broad audience of LPAs and their consultants on an annual or semi-annual basis and cover requirements of the entire acquisition process.
- One district holds sessions twice a year with a smaller audience made up primarily of county highway commissioners, consultants and municipalities with planned projects. Presentations vary and are confined to certain aspects of the acquisition process.
- The smaller districts provide one-on-one, just-in-time training to local agencies as needed when projects are scheduled.
- In addition, coordinators are members of a "user group" where they meet twice a year among themselves to address LPA coordination concerns and issues and share best practices.
Identified Issues in Wisconsin's LPA Coordination Process
- Is there sufficient staff available to provide an adequate level of oversight, guidance and training to ensure that LPA's are in conformance with policy and law?
- Late notification to coordinator of projects requiring r/w.
Surplus Land Sales
Remnant parcels are identified, inventoried, and updated for status using our statewide Real Estate Automated Data System "READS". At the time of acquisition, or when otherwise identified, a Property Inventory Report is prepared detailing the size and acquisition value of the remnant. This information, along with other pertinent parcel data, is entered into our "READS" database for future tracking, updating, and reporting purposes.
DEPARTMENTAL APPROVAL FOR MARKETING
Prior to the marketing/sale of remnant parcels, approvals must be secured from the District Technical Services, Project Development, Planning, Maintenance, Environmental, and Archaeological units. After these approvals are secured, the sale process may proceed. If federal funds were used to acquire the surplus parcel, approval to dispose of the parcel or remnant must be obtained from FHWA.
VALUATION OF SURPLUS LANDS
Surplus lands are marketed at fair market value. This value will typically be determined through an appraisal. Depending on its complexity, a short format appraisal or market data report may suffice. An appraisal will be the basis of any sale or the recommended minimum acceptable bid for which the land would be sold at public bid.
Wisconsin Department of Transportation (WisDOT) requires a minimum sale price of $500 to at least cover the administrative cost of selling the parcel.
For parcels acquired with Federal Funding:
Parcels with an appraised value of $1,000 or more must be reviewed by a Central Office Review Appraiser.
For parcels acquired without Federal Funding:
Parcels with an appraised value of $10,000 or more must be reviewed by a Central Office Review Appraiser for approval prior to proceeding with the sale process.
Parcels with an appraised value of less than $10,000 may be reviewed by a District review appraiser.
METHODS OF DISPOSAL
Depending upon the characteristics of the surplus parcels, WisDOT typically uses one of the following methods of disposal. WisDOT has full discretion in evaluating a given parcel and choosing a marketing method.
- Public Sale (Sealed Bids)
A public sale is similar to an auction except a sealed bid process is used. The surplus land is conveyed to the highest bidder returning a sealed bid that meets terms and conditions as set forth by the State.
- Public Sale (Auction)
The surplus land is conveyed to the highest bidder meeting the advertised terms and conditions of sale as set forth by the State. This method is used less frequently than the Sealed Bid process.
*Note: Terms and conditions of both public sales and auctions are stated in the bulletins relating to the parcel of land being sold.
- Private Sales
There are occasions when WisDOT determines that marketing to the general public is inappropriate due to parcel characteristics or other circumstances and will market to a limited group, most often to an abutting landowner and sometimes to a local unit of government, if for a public use.
- Broker Sales
Certain parcels are turned over to brokers for the marketing/sale process. These are typically highly valued commercial sites for which brokers may be better qualified to maximize public exposure and revenues.
- Internet Site
WisDOT also maintains an Internet site of all properties currently available for public sale.
The Department of Transportation conveys its surplus lands by Quit Claim Deed. The Governor must approve the sale (if valued at $15,000 or greater) and the approval date is noted on the Quit Claim Deed. Sales of properties with a value of $3,000 to $15,000 require Secretary of Transportation approval, and properties valued under $3,000 may be approved for sale within the district.
Research and Processing
Prior to the mid 1960's, WisDOT had the counties acquire all lands needed for state and federal highways in the name of the county. These lands are being held in trust for WisDOT until such time as WisDOT requests transfer of title to WisDOT for the purpose of property conveyance.
Therefore, prior to any sale of highway lands, the original project, parcel, and type of ownership must be determined. If the property was acquired in the name of the county, conveyance of said lands must be obtained from the county via Order to Convey and Quit Claim Deed documents granting clear title to WisDOT.
The timeframe required for the approval, research, and sale process for any given property may be between two and six months.
Sales Preparation and Buyer's Responsibilities
The Department of Transportation requires that the entire purchase price be tendered before the deed to surplus property is recorded. It will be the buyer's responsibility to secure and/or pay for title insurance and a certified survey map of the surplus parcel, if required, and to perform due diligence typical for a purchaser of property.
Land is sold on an "as is" basis. Failure of a prospective buyer to be fully informed as to the condition and potential use of the surplus property being offered for sale will not constitute grounds for adjustment or withdrawal of a bid or offer to purchase.
The buyer also assumes the responsibility for the payment of any legal special assessments for public improvements such as sewer, water, sidewalks, etc., that may be levied against the property. It is recommended that a prospective purchaser check with the local municipality to secure up-to-date information regarding the parcel. The Department of Transportation will record the deed as soon as possible after closing. Buyer must secure firsthand information concerning the local real estate tax rate, utility service, zoning ordinances and building codes.
Conveyance of surplus lands is often subject to certain restrictions included in the Quit Claim Deed. These restrictions may be included to ensure enforcement of statutes and regulations to protect the integrity of the adjacent highway, protect the health and safety of the public using the highway, preserve the visual appeal or natural beauty of the site, and protect the rights of existing utilities.
Examples of restrictions:
No vehicular ingress or egress allowed between the surplus parcel and the adjacent highway.
All public and private utilities located upon, over or under the surplus parcel shall have the continued right of occupancy and the continued right of ingress and egress for personnel and equipment for the purpose of maintaining or improving their facilities.
Application of a setback that extends 110 feet from the centerline of the highway or 50 feet from the nearer right-of-way line, whichever is furthest from the centerline.
No improvements or structures are allowed between the right-of-way line and the highway setback line. Improvements and structures include, but are not limited to, signs, parking areas, driveways, wells, septic systems, drainage facilities, buildings and retaining walls.
WisDOT may offer other State agencies or government units within the State the first right of acquisition of excess lands if the proposed use is for public purposes. In these cases, the land is sold without competitive bidding. However, WisDOT requires that a Reversionary Clause be added to the deed restrictions.
WisDOT uses two "Reversionary Clauses".
- "Reversionary Clause" which applies to property Sold at fair market value to a public agency.
It is expressly intended and agreed by and between the parties hereto that these lands are conveyed to (Grantee) specifically for the public use and purpose of (Enter the Intended Use of property). If at any time, (Grantee) determines this land or any part thereof is no longer being used for public purposes, (Grantee) shall notify the WisDOT in writing and shall, at no cost to WisDOT, convey said property back to WisDOT. This restriction expires 25 years from (Enter effective date), after which time the (Grantee) is granted full ownership of the property.
- "Reversionary Clause" which applies to property Given to a public agency for a transportation use. (No expiration date)
It is expressly intended and agreed by and between the parties hereto that these lands are conveyed to (Grantee) specifically for the public use and purpose of (Enter the Intended Use of property). If at any time, (Grantee) determines this land or any part thereof is no longer being used for public purposes, (Grantee) shall notify the WisDOT in writing and shall, at no cost to WisDOT, convey said property back to WisDOT.
PARCEL CLOSING PROCESS
Upon completion of the sale process, WisDOT submits the executed Quit Claim Deed to the County Register of Deeds Office to ensure recording. The recorded deed is returned to WisDOT, a copy is retained for WisDOT's file and the original is forwarded to the buyer.
Copies of the transaction are distributed to District Maintenance, Planning (for access purposes), and the Right of /Way Plat Unit (for the required plat updating).
Finally, our automated tracking system, "READS", is updated to reflect the sale data.
District Project Development and Maintenance Departments identify encroachments (private improvements occupying highway right-of-way) and determine whether they may remain by entering into a Lease Agreement, through issuance of a revocable occupancy permit or if a sale of right-of-way is possible. If none of these options are feasible, then removal of the encroachment is required. Leases and Land Sales are referred to Real Estate for follow-up and processing. Maintenance executes removal procedures. Examples of types of leases include agricultural, commercial, airspace, and "Occupancy Agreements" (used for non-profit activities such as grass cutting, gardening, etc.)
WisDOT also leases acquired buildings. Relocation policy dictates that property owners be offered a 30-day free rental period beginning with the date of acquisition. Occupancy may be extended at WisDOT's discretion if requested by the property owner, provided site clearance is not immediately required for the highway improvement project. Typically, rent for the extended occupancy is calculated at one-half of one percent of the acquisition price and remitted on a monthly basis.
It is important that provisions are in place for removal of all site improvements prior to the construction letting. This is accomplished through the following methods:
- Publicly Bid Demolition Contract
- County Day Labor Contract
- Construction Contract Specifications
*Note: Appropriate timeframe is required to avoid possible safety issues if structures remain for an extended period of time.
- Public Sealed Bid Process
*Note: It is Departmental policy, when feasible, to consider the sale of houses or other improvements acquired for highway improvements projects. The buildings may be moved off the site by a professional mover or salvaged. These operations require a Public Sealed Bid process and appropriate insurance and indemnification documentation as well as a performance bond.
Identified Issues in Wisconsin's Property Management Process
- Lack of staff and staff time available to provide the level of oversight required to ensure that all the surplus lands are being marketed timely and efficiently and that they are in conformance with policy and law.
- The requirement by law that any sale over $15,000 is required to have Governor's approval. This step can slow the process considerably.
- Does your State dedicate or deed at no cost to a sole, abutting owner certain small, low value, non-buildable strips of land that are of no use to anyone else and are unsaleable. If so, do you have a maximum value limit? What if they won't accept the dedication?
- How do you handle surplus parcels that DOT owns in easement only (where fee title still lies with the original owner)?
Authority to acquire lands
A "Relocation Order" providing for the laying out, relocation and improvement of a public highway must be approved before WisDOT can approve any offering prices or acquire any interests in land.
- This order is now found on the face of the R/W Plat sheet.
- No Relocation Order is necessary on projects where compensation as estimated by appraisal will be less than $1000 in the aggregate. (Projects under $1000 also do not require a standard r/w plat. Interests can be identified on the construction plan)
¼ Mile Rule
WisDOT may not acquire:
- Land or any interest in land that is not acquired in association with a highway project
- Land or interest in land located more than ¼ mile from highway. (Meaning at least a portion of the land to be acquired must be located within ¼ mi. of the highway or proposed highway.)
WisDOT Early Acquisition Process and FHWA Advanced Acquisition Process
Advanced (Hardships/Protective purchases)
- Same criteria as found in federal regulations
- Must be approved by central office
Early acquisitions (can also be used for hardship and protective reasons)
- State process based on ISTEA requirements
- Can be approved by district management if funding is secured.
- Require less stringent criteria than Advanced Hardships/Protective Purchases
- Cannot be used on projects with federal funding in r/w
*See Attachment for comparison chart of these two processes
Early or Advanced acquisitions can be acquired by use of Eminent Domain when property owner and Department cannot agree on purchase price.
No person can be coerced into agreeing to and signing the agency's offer by having the acquiring agency threaten to stop the acquisition process if property owner is not in agreement.
R/W Plat Process
Typically r/w plats must meet the certain standards laid out by the Department's Surveying and Mapping Bureau.
Exception: For early and advanced acquisitions, when an entire property is being acquired (total take), the district may opt to use a simple sketch or map in lieu of the more traditional r/w plat. The map must contain:
- The Project ID number
- Owners name
- Type of interest required (fee, easement, etc.)
- Total acreage or area of subject
- Subject's property lines
- Township, village, city or county name
- Section, Town and Range
- Certified Survey Map or outlot number, if available
- North arrow
A county plat book map, certified survey map, tax map or subdivision plat may be used as the base vehicle when appropriate. In such cases, the district need only add those items such as the project ID and type of interest that are not already indicated on the map being used.
- Owners must still be given a copy of "The Rights of Landowners Under Wisconsin Eminent Domain Law" and be fully advised of their rights to just compensation based on an appraisal
- An appraisal does not have to be made prior to an acceptance of a donation although for properties of significant value, an appraisal is recommended
- District management has the authority to accept donations. If a land trade is involved, Central Office Real Estate must review and approve
- Districts are advised to be alert for contaminated properties
- When dealing with a property of significant value where an appeal is suspect, it is recommended that a clause be put in a Purchase Agreement stating that if the owner donating the property files an appeal, that both parties agree that the value of the property for purposes of an appeal shall be $xxxx (an amount determined to be the fair market value based on an appraisal)
Temporary Limited Easements (TLE)
- A temporary limited easement (TLE) is considered a land interest and the owner is entitled to all rights under Wisconsin Eminent Domain
- A TLE must be used when the construction requires a temporary use of the land
- TLE's must be shown on the R/W Plat and must be cleared as part of the project's r/w certification
- The document should include a specific date (to be determined by the District RE Management) as to when the easement will expire. The date should not exceed 5 yrs.
- TLE's can be acquired using the Appraisal Waiver process
- TLE's only need to be recorded if the district anticipates a land transfer or if the project will not be constructed in the near future
Construction Permits (CP)
- Another means of securing the right to temporarily use a portion of a property for construction purposes.
- CPs are not considered a land interest and the owner is not entitled to rights under eminent domain such as his own appraisal and appeal rights
- CPs can only be used for temporary needs that are not required for construction. Can only be obtained with the cooperation of the owner. DOT can construct the project without the temporary use of this property
- DOT cannot condemn on a CP
- CPs are often for the benefit of an owner (example: he wants a flatter driveway than was planned and considered acceptable by DOT standards or a better blending of lawn to new curb and gutter)
- Typically CPs are used during construction when the temporary need was not anticipated during negotiations. These are signed by the Project Engineer
- CPs could be used by Real Estate during the negotiation stage if it meets the above criteria.
- CPs are shown only on the construction plan if identified during negotiations.
- CPs are not identified on the R/W Certification and are not recorded
Preparation of Appraisals:
- Wis. Statutes require WisDOT to provide the owner with a full narrative appraisal and a copy of any other appraisal made. (See Appraisal Waiver Process for exception to this policy)
- WisDOT's current appraisal formats seem to meet the "full narrative" intent (that term is not defined in our statutes). The formats provide the owner with a very complete description of the appraisal process used to reach a documented conclusion of the property's market value, contain the appraiser's rationale for determining that value and provide supporting market data.
- Appraisals can be contracted for and completed before the Relocation Order is approved but the Appraisal Review cannot approve an Offering Price until that Order is approved.
Economic and Uneconomic Remnants
If owner is left with an uneconomic remnant, the Department must make a written offer to acquire the remnant (an Alternate Offer in addition to the Offering Price for the land needed for construction)
Not contrary to ¼ mile rule defined above. Department may purchase lands or interests in lands that are located on a single parcel that is completely or partially within ¼ mile of a highway or proposed highway.
Even if Department acquires needed r/w by condemnation, the owner has the right to ask that the uneconomic remnant be purchased. (Request must be in writing)
If parcel is contaminated, Department can require owner to remediate site before acquisition.
The Department will "consider" a request to purchase an economic remnant if it is in the best interests of the state.
- Designated District Reviewers may approve non-complex appraisals of $5000 or less and reports of $10,000 or less with no damages to the improvements and with land severance of $2000 or less
- Central Office Review Appraisers must approve all others
Providing Owner a copy of the State appraisal
Wisconsin law requires that WisDOT present the offering price and a copy of the state's appraisal to the owner(s) at the first negotiation call. The WisDOT Real Estate agent will walk through the report with the owner and explain the appraisers rationale and conclusion of value.
Owners right to obtain own independent appraisal/60 day time-period
Wisconsin law allows the owner to obtain his own appraisal by an appraiser of his choice. In order to be reimbursed for that appraisal, the report must follow specific appraisal guidelines provided to the owners, must be received by DOT no later than 60 days after the initial offer and State's appraisal was presented to the property owner and the cost must be reasonable.
- An appraiser cannot act as the negotiator on a parcel that s/he has appraised unless the approved offering price is $5000 or less. (Note: the same person that appraised the parcel cannot review the report.)
- For acquisitions that meet the $5000 Appraisal Waiver criteria, the agent may turn the negotiation call into an appraisal inspection if an owner requests an appraisal.
Negotiator/Relocation Agent Roles
- Negotiator may serve as relocation agent for a parcel if appropriate. Most districts limit the use of a single agent to residential relocations. Commercial and farm relocation can become problematic.
Preparing for Negotiation
District parcel acquisition file:
Official files are kept in District office. Parcel file should include at a minimum:
- Parcel Checklist or report from Real Estate Automated Data System (READS) indicating key dates and parcel status
- Title search information
- Legal Description
- All appraisal reports
- Indication that pamphlet entitled "The Rights of the Landowners Under Wis. Eminent Domain Law" has been mailed or given to the owner before offer is presented.
- Offering Price letter including:
- An identification of acquired property interest
- Allocation of approved offering price
- A statement of tax proration
- List of tenant-owner improvements/fixtures (leasehold interests are not appraised as a separate entity. It's appraised with respect to its market value as a whole. The value of the tenant owner property will be allocated)
- List of types/quantities of personal property located on remaining property
- Statement saying that just compensation is based on market value and disregards any decrease or increase in the market value caused by the project.
- Appropriate conveyances
- Purchase Agreement, if applicable
- Negotiation Diary
- Other relocation notices
- Closing Statement
- Evidence that owner has paid for the purchase price and expenses incidental to transfer of property (payment request, check, certified mail receipts, etc.)
- Statement to Construction Engineer (A document of any commitments made during the course of negotiations. This form is then given to the Project Engineer)
Contact/Negotiation by Mail
- Make an initial contact with owner by telephone. Follow phone discussion with a confirmation letter detailing all phases of the transaction including sketches, area to be acquired, etc. Recommended that offer be made by certified mail.
Changes to the Original Offering Price
Two ways to accomplish this:
- Creating a new offering price
- This is required when the acquisition size changes or the change adversely affects the remainder)
- The requirement to reinitiate the 60-day time period for an owner to secure an independent appraisal is typically not required if the change is insignificant, the change was made at the request of the owner or the change is a decrease in acreage.
- Through Administrative Revision (Wisconsin's term for Administrative Settlement)
- When there has been no change in the area of acquisition or the impact the acquisition will have on the remaining property
- Reasons for increase via AR could be market based or non-market base rationale such as:
- Cost of project delays
- Issues difficult to value such as access, proximity, change of grade
- Time lapse between initial appraisal and condemnation
- Big divergence in state appraisal and owner appraisal
- Risk of appeal
- Increases processed using the Administrative Revision form and all AR's of any dollar amount can be approved by the District Technical Services Manager or Real Estate Supervisor
- WisDOT Real Estate Agents do all closings
- A Closing Statement must be prepared for any acquisitions requiring deductions, additions or installments and should be signed by the owner
- Proration of taxes is not required for nominal (appraisal waiver) parcels of $5000 or less
- Payment requests are created from our Real Estate Automated Data System (READS) and are sent to Central Office-Real Estate who has it's own financial specialists delegated the authority to audit and process payments. Checks are prepared/cut by the State Treasurer Office
- Checks can be delivered in person or by mail depending on the circumstances
- Once full payment is made, the conveyance documents are recorded in the Office of the Register of Deeds in the county where the parcel is located.
- District management has the discretion of not obtaining partial releases:
- When the acquisition is $10,000 or less and the risk is minimal
- In these low risk situations, the lender must still be named on the conveyance but they do not have to be named on the check
- For acquisitions over $10,000 where there is considerable difficulty and cost associated with obtaining the partial release, the parcel should be acquired by condemnation. Condemnations do not require partial releases.
- If an agreement cannot be reached, the District will send to the owner and all parties of interest, a Jurisdictional Offer to Purchase notice which states the Department's final offer.
- Before issuing the Jurisdictional Offer, consideration may be given to administratively revising the offer (of parcels that have the potential to be appealed) to give the Department more protection in court
- Right to Take Action: An owner may contest the taking by commencing an action in Circuit Court within 40 days from the day of service or date of publication of the Jurisdictional Offer. This action does not prevent the condemnor from proceeding with condemnation.
- Typically the Department must wait 60 days before issuing a Jurisdictional Offer. (Could issue as early as the 40th day if owner states that they have reached the end of negotiation, have either already secured their own appraisal or have chosen not to and wants the district to condemn the parcel
- The owner(s) has 20 days to either accept, reject or ignore the Jurisdictional Offer.
- At the end of the 20 days or upon rejection, the Department then serves the Award of Damage (the legal document that takes title to the property).
Temporary "Right of Entry" Easement
- Used when Department is not able to secure a needed highway interest in time to meet the project's Ad meeting (the date the project is advertised for letting)
- Although Rights of Entry are not intended to be normal practice, WisDOT has been using them rather frequently the past few years in order to meet our lettings. This has become necessary due to expanding programs, decreasing staff resources and unreasonable acquisition timeframes.
- We have just been advised by FHWA that they are "pulling back the reins" and that they will no longer accept the use of Rights of Entry to clear a project except in extreme, infrequent cases. This will affect not only State projects but Local projects as well.
- On very rare occasion and upon approval of FHWA and Central Office real estate, a Right of Entry may be used "prior" to the commencement of negotiations, as in the case of utilities. Because of Wisconsin winters, it is sometimes necessary.
- Prior to authorization to advertise for physical construction of any Federal, State or Local Public Agency project, a PS&E (Plan, Specifications and Estimate) must be approved and the District must submit a Certificate of R/W that ensures:
- All permanent and temporary interests have been acquired and r/w is clear
- All individuals and families have been relocated to DSS housing
- We have 3 acceptable levels of Certification
- Cert 1 project - All rights/interests as shown on r/w plat or construction plan have been obtained including legal and physical possession. Bids can be opened and the project can be awarded to the winning contractor. In this case, the project has "met it's letting".
- Cert 2 project - All lands and improvements have been vacated, and almost all rights have been fully acquired with the exception of a "few" parcels that only have a Right of Entry and follow up is required. Under a Cert 2, bids can be opened and the project can be awarded. Acquisition, however, must eventually be completed for these few parcels and a Cert 1 achieved.
- Cert 3 project: All lands and improvements have been vacated and most rights have been fully acquired or have a Right of Entry. There may be a few remaining parcels where the Jurisdictional Offer (the start of condemnation) has been issued to the owner but the Department must wait out it's 20 day period before taking possession by Award of Damage (condemnation). Or, there may be one or two parcels that are not critical to the initiation of construction and will not be acquired until some time after the letting. These would be put in the Special Provisions to notify the contractor that he must avoid these parcels until acquisition is complete. Under a Cert. 3 project, the bids cannot be opened until acquisition has been completed on those parcels pending condemnation or unless they are noted in the Special Provisions.
- Owners that have reached an agreement and signed a Deed still have 6 months from the date of recording to appeal for higher compensation to the Condemnation Commission or a court of law
- Owners that have been condemned have 2 years from the date of recording of the Award of Damage to appeal for higher compensation
- If the commission or a court reaches a decision on an amount greater than 15% above the Department's highest written offer (typically the amount of the Jurisdictional Offer that was sent at the close of negotiations), then the State must pay all of the owners litigation and attorney expenses. Referred to as Wisconsin's 15% Rule.
Issues Identified in Wisconsin
- Late plat design or incomplete plats at time appraisals are prepared and acquisition is initiated. Results in numerous plat changes and rework.
- Inadequate inclusion and involvement of real estate staff in the design process. As a consequence, minor adjustments to the highway design that could be undertaken to avoid major real estate impacts are either not discovered at all, or do not get discovered until we are well into the acquisition process, resulting in delays and rework.
- Wisconsin's current law requires that property owners must provide to the owner the appraisal upon which the jurisdictional offer is based and a copy of any other appraisal made. This has been interpreted to mean that we have to provide them copies of reports that had not been approved by our reviewers.
- Owner Attorneys have been recommending to their clients that they accept the Department's first offer, sign a deed and then appeal from the deed. That results in the DOT not knowing whether the owner is in disagreement, it doesn't give the DOT the opportunity to see the owner's opposing appraisal and doesn't allow DOT to consider an administrative settlement to give it some added protection in court against the 15% rule.
- DOT has been forced to use increasing numbers of rights of entry in order to meet the construction letting because of tight acquisition timeframes.
- WisDOT's first Design/Build pilot raised many concerns regarding r/w acquisition. It resulted in an unacceptable number of parcels requiring rights of entry and virtually all parcel values being increased through the use of administrative settlements.
- Up to this point, WisDOT has resisted the idea of incentive payments.
- Utility issue: Because of Wisconsin's winter, Utilities often need to start their relocations in late fall in order to have their work completed for a spring letting. Sometimes, because of late plat delivery, real estate doesn't have the necessary r/w acquired for them to start their work. Without securing a Right of Entry "prior" to an appraisal being completed or a near-final plat, WisDOT has "no tools in their toolbox" to deal with this dilemma
- Do any States have the ability to allow agents to make immediate payments to property owners through the use of a District "checkbook" or some other similar process?
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