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2004 Wisconsin Real Estate Peer Exchange Report

Appendix C

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

Final Report

Table of Contents

Summary

Objectives

Participants

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
Peer Exchange
September 20 - 24, 2004

Appendix C

Peer Exchange Planning: Survey Results

2004 BHRE Peer Exchange

State Survey Results

The following survey was sent out to the Research Advisory Council listserv in May 2004. Responses are included in the table that follows.

WisDOT is organizing a peer exchange for its real estate programs. Would you please ask the appropriate person in your agency to respond to the brief questions below and send the responses to: kimberly.linsenmayer@dot.state.wi.us

  1. Has your department made significant changes to any of your real estate program procedures in the last 5 years?
    If so, which program areas were affected?

  2. Do you feel your department employs "best practices" in the following real estate program areas (yes, partially, no):
    Valuation Methodologies (appraisals, nominal valuation, etc.)
    Use of Consultants (qualifications, quantity, training)
    Use of In-House Staff (training, productivity, retention)
    Property Management (surplus land sales, air space leases, etc.)
    Litigation (pre-trial settlement strategies, mediation processes)
    Local Public Agency (LPA) programs (administration, grant programs)?


  3. Are you interested in improving your procedures in the following program areas (definitely, maybe, no)?
    Valuation Methodologies (appraisals, nominal valuation, etc.)
    Use of Consultants (qualifications, quantity, training)
    Use of In-House Staff (training, productivity, retention)
    Property Management (surplus land sales, air space leases, etc.)
    Litigation (pre-trial settlement strategies, mediation processes)
    Local Public Agency (LPA) programs (administration, grant programs)?

  4. Have you ever hosted a peer exchange for your highway real estate program?

  5. Additional Comments

State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange?

New Jersey

Nicholas J. Monahan, Jr.
Director, Division of Right-of-Way

(609) 530-2360
(609) 530-2624 (fax)

Nick.Monahan@dot.state.nj.us

The most significant changes within the ROW program were made approximately 7 years ago when NJDOT went to a project management environment. At the time we adopted a team concept in each district office, with "generalist as opposed to specialist" agents. Oversight by Headquarters staff was dramatically reduced, as were the number of signoffs to complete tasks. Administrative settlement authority was granted to field staff based upon their job level. Since that time we have been adapting to that system and incorporating minor process & organizational changes as the need becomes apparent.

Valuation methodologies - Yes. In addition to a $10,000 appraisal waiver (seeking an increase to $25,000), we utilize fee reviewers, as well as abbreviated report formats wherever possible.

Consultants - have always utilized fee appraisers (now approaching 98% of our appraisal volume), using title companies to a limited extent. Now in the process of adopting a policy of using full-service ROW consultant firms on targeted projects. In-house staff - Our ROW Division has been hit significantly over the past five years by retirements and normal attrition. Although we have requested authority to conduct a comprehensive staffing effort, budgeting conditions have limited our ability in this regard. Training of staff in the areas of acquisition, appraisal & relocation is accomplished via a number of IRWA and Appraisal Institute type courses given each year, along with internal workshops.

Property Management - No. Although we are looking at securing a GIS capability for tracking real estate inventory. This system will most likely be blended with a document management/database system to be designed and implemented this next fiscal year.

Litigation - Limited use of mediation on high-risk cases. Since New Jersey is a "bona fide" negotiations State, with full disclosure of appraisals to property owners, we exercise a very close working relationship with our Attorney General's office all during the acquisition process. The actual volume of cases proceeding to trial is low (less than 5%). Administrative and legal settlements are used whenever justified by the circumstances.

Local Public Agency - Nothing of a "best practice" nature in this regard.

We are always interested in taking advantage of opportunities to improve our overall program.

No, we have not hosted a peer exchange. Subject to NJDOT senior management approval, we would be willing to participate in such an effort for Wisconsin DOT if asked.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange? Additional Comments

Maryland

Thomas G. Heimiller

Real Estate Administration Manager
Office of Real Estate

Maryland State Highway Administration

707 N. Calvert St. M-303
Baltimore, MD 21202

theimiller@sha.state.md.us

Phone: 410-545-0418
Toll Free: 1-888-204-4245
Fax: 410-209-5050

Yes

Most recently we have had significant changes to our surplus land sales operation. The affects of this have not totally played out yet and the process is still evolving.

We have also started greater use of "mobile" acquisition teams to do state wide work in support of our 7 district offices. This has called for the cross training of our HQ's support staff to do acquisition work and led to greater flexibility in meeting our program demands with going to consultants for direct acquisition activities.

Valuation Methodologies--Yes

Use of Consultants--Partially

Use of In-House Staff--Yes

Property Management--Yes/Partially

Litigation--Yes

Local Public Agency (LPA) programs--Yes

Yes to all.

Thank you for the opportunity to respond to your questionnaire. Maryland has participated in a "peer exchange" for over 30 years with the other states within Region III (Maryland, Delaware, Virginia, West Virginia and Pennsylvania) along with FHWA. An annual meeting is held with each state acting as host in rotation. This year it will be hosted by Virginia. In the past we have had both federal and state participation from outside of the region.

As mentioned above the Region III meetings have provided a very useful forum for the exchange of information and ideas between the five states involved and any others who wish to attend. Beside the main line right of way topics of acquisition, relocation assistance, property management and appraisals, we also have sessions for utility engineers and legal topics. Over the past 10 years we have seen a growing participation by local public agencies and even consultants.

Please contact me if you would like any additional information. My staff and I would glad to share any information we have on how our meetings have been set up etc.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange?

Maine

Ray Quimby

ray.quimby@maine.gov

Yes.

Virtually all areas. We eliminated Right of Way as a separate organizational division and spread the employees out over three functional classification based Programs in the Bureau of Project Development.

Valuation Methodologies--Yes. We use four levels of appraisal reporting standards, a waiver format; value finding format; short form format and full narrative. The bulk of our acquisitions (80%) are under the waiver threshold limit so simple formats predominate in Maine.

Use of Consultants-Partially. Over the last 5 years, we've expanded the use of consultant services from just appraisal to include negotiations, relocation and property management. Appraisal review will remain in house as a quality check. Consultant appraisers have to be Certified General, and relocation/acquisition consultants are predominately DOT or FHWA retirees. In the last year, our use of consultants peaked with about 50 % of the workload being delivered by consultant services. Due to financial constraints, we're now delivering more work in house. We don't provide formal training for consultants.

Use of In-House Staff--No. Training for in-house staff has been primarily OJT, Appraisal Institute and IR/WA Courses. Our experience has been bringing people in entry level positions and "institutionalizing" them as one of our manager puts it, is superior to bringing the expertise in all trained. As an example, we hired several Certified General appraisers and have had many, sometimes heated, discussions relative to USPAP vs. the Uniform Act. Productivity of In house however, staff is compatible or exceeds consultant services. Retention has been and will continue to be a problem as the number of rungs on the right of way career ladder are reduced and the classifications, particularly at the entry level become more generic. The philosophy here is moving towards "generalist" and away from specialists, making retention of right of way skills a challenge. While this works in a "waiver" environment, it doesn't build the skills necessary to deliver the larger, more complex takings.

Property Management-Yes.

Litigation--Partially. We have a two-step process with a quasijudical review being done prior to Superior Court, and most cases are settled before going to Court. Given the low value nature of most of our takings, I think our system works reasonably well. (pre-trial settlement strategies, mediation processes)

Local Public Agency (LPA) programs--No. We're not staffed adequately to administer the Right of Way component of LPA programs.(administration, grant programs)?

I'd answer this question by prioritizing. The area most in need of improvement is Use of In House staff, next is LPA's them Legal and Consultants.

No.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange?

Washington

Gerry Gallinger

Director, Real Estate Services

Washington State Department of Transportation

360-705-7305 - voice
360-951-9656 - cell
360-705-6811 - fax

galling@wsdot.wa.gov

Yes

We have delegated total administrative settlement authority to our regions.

Valuation Methodologies--Yes

Use of Consultants--Partially

Use of In-House Staff--Yes

Property Management--Yes

Litigation--Yes

Local Public Agency (LPA) programs--Yes

Valuation Methodologies--Yes

Use of Consultants--Yes

Use of In-House Staff--Yes

Property Management--Yes

Litigation--Yes

Local Public Agency (LPA) programs--Yes

No.

California

Jeff Grigg, Director, Property Services

jgrigg@highways.gov.sk.ca

Yes.

Yes.

Valuation Methodologies--Appraisals performed in accordance with the Appraisal Institute of Canada and the International Right of Way Association.

Use of Consultants--Limited use for independent appraisals related to expropriation.

Use of In-House Staff-- In-house staff include AACI and IRWA designations and courses. Retention and productivity is excellent.

Property Management--Yes consistent current practices and guidelines for sales and leases are applied.

Litigation--Saskatchewan has the lowest percentage of expropriation within Canada and compensation has always been resolved without litigation through formal mediation.

Local Public Agency (LPA) programs--The Public and Private Rights Board offers mediation services at no cost to the owner.

Valuation Methodologies-No
Use of In-House Staff-No
Litigation--N/A

No.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange?

Louisiana

Pamela Leon

RE Acquisition Chief

(225) 237-1225

PamLeon@dotd.louisiana.gov

Because of decreasing staff numbers, our section is having to rely more and more on outsourcing acquisition activities. This puts us in a position of having to train consultants and then monitor their activities and provide technical assistance.

One significant change has been the introduction of a new Real Estate application that integrates data collection from all participants in the process - Real Estate Management, staff agents and review appraisers and consultants. This system allows real time data collection and access and is a great aid in project management.

We also instituted a Joint Review Process several years ago, which coordinates input from design, environmental, real estate professionals when preliminary right of way maps are available. This enables us to pinpoint design and right of way problems at an early stage, when they can be corrected in a more timely manner.

Valuation Methodologies--Yes

Use of Consultants--Partially

Use of In-House Staff--Yes

Property Management--Partially

Litigation--Yes

Local Public Agency (LPA) programs--Partially

Valuation Methodologies--maybe

Use of Consultant--definitely

Use of In-House Staff--maybe

Property Management--maybe

Litigation--maybe

Local Public Agency (LPA) programs-- maybe

Yes. Several years ago, Louisiana and Arkansas did a peer review of their appraisal processes.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange? Additional Comments

Nebraska

Randy Needham

Right of Way Manager

Nebraska Department of Roads

rneedham@dor.state.ne.us

We have made what I would describe as incremental improvements over the last five years, the sum total of which might be described as significant. All programs were affected.

We try to employ "best practices" in all areas.

Definitely in all areas

No.

 

Virginia

L.S. 'Sam' Hester

L.Hester@VirginiaDOT.org

Yes. Property Management, Relocation, Appraisal, The Right of Way and Utilities Management System (RUMS) and Acquisition.

Valuation Methodologies - Yes (Methodologies)

Use of Consultants - Yes

Use of In-House Staff - As much as is allowed by Human Resource Policy and Procedures.

Property Management - Yes

Litigation - Yes

Local Public Agency (LPA) programs --Yes -The Right of Way and Utilities Division is responsible for the oversight of the acquisition program when administered by LPA's. Funding Agreements between VDOT and LPA's are normally administered by the Local Assistance Division.

Valuation Methodologies - Yes

Use of Consultants - Yes

Use of In-House Staff - Yes

Property Management - Yes

Litigation - Yes

Local Public Agency (LPA) programs - Yes

Yes - The Mid-Atlantic Federal/State Highway Conference and the AASHTO Sub-Committee for Right of Way and Utilities.

We at VDOT feel that we have a strong Right of Way and Utilities Program; however, we are always open for suggestions on how to improve.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange? Additional Comments

Indiana

Alan Curson

Acquisition Assistance Manager

Land Acquisition Division

317.233.9146

ACURSON@indot.state.in.us


Yes. Appraising, Buying, Relocation, Property Management, Local Public Agencies.

Valuation Methodologies - No

Use of Consultants - Qualifications: YES, Quantity: YES, Training: NO

Use of In-House Staff - Yes

Property Management - Yes

Litigation - Yes

Local Public Agency (LPA) programs --Yes

Valuation Methodologies - Definitely

Use of Consultants - Appraising: Definitely, Buying: Definitely, Relocation: Maybe

Use of In-House Staff - Maybe

Property Management - Maybe

Litigation - Definitely

Local Public Agency (LPA) programs - Definitely

No

Training of consultants takes a great deal of time. With the anticipated increase in workload, new, inexperienced agents will require training.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange?

Missouri

John Martin, Right of Way Liaison

Missouri Department of Transportation

john.martin@modot.mo.gov

573-526-4534

Missouri has a Quality Assurance Review program that examines all right of way functions. QAR uses teams to review files, appraisals and reports to measure compliance with policies and procedures, and discover and disseminate best practices to all districts. Teams include district staff that is familiar with the function under review, by traveling to other districts. This allows district interaction and idea sharing. Although the actual work can be dull and uninspiring, the team members appreciate the opportunity to interact with peers.
Over the years, the QAR has evolved to more specific topics. For example, earlier we might do full reviews of Standard Format (most complex) appraisals. Later we would do a more focused look at the Highest and Best Use analysis and/or other specific areas of the appraisal format.
The 2004 QAR will attempt to quantify the reasons for condemnation, and quantify differences in appraisals prepared for right of way acquisition, compared to appraisals prepared for MoDOT's legal counsel. Missouri's Property Management is currently under reorganization. Missouri's successful Mediation program is about 5 years old.

Valuation Methodologies - Yes
Use of Consultants -

Missouri has a reasonably good application/approval/evaluation process for individual appraisers and an application/approval process for negotiators. Missouri is weak in dealing with out of state corporate providers. A current low work volume and the historic low quality of consultant provided services limits Missouri's interest in expanding consultant services at this time. Consultant training could be improved.


Use of In-House Staff -

Missouri has an excellent training program to accommodate a well established career ladder for right of way personnel. Productivity is considered typical. Retention is considered strong.

Property Management -

Missouri draws a lot of attention and criticism in this area, so we are developing a comprehensive database of land inventory, and reorganizing the disposal process.

Litigation -

Missouri has a very successful mediation program.

Local Public Agency (LPA) programs -

Missouri's St. Louis district has a very large and extremely well managed local roads program. Right of way and LPA programs for the rest of the state would be typical. Statewide, there is an excellent network of liaisons that work closely with LPA's in engineering, funding and other areas.

Valuation Methodologies - Definitely

Use of Consultants - No

Use of In-House Staff -Maybe

Property Management - Definitely

Litigation - Definitely

Local Public Agency (LPA) programs - Maybe

Missouri's FHWA office hosted a peer exchange within a year ago, and it was very beneficial.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange?

Mississippi

Response from Lockett Peyton

lpeyton@mdot.state.ms.us

Direct further comments to

Daniel B. Smith ROW,

Division Administrator

Value finding of up to 10,000 for uncomplicated, land only appraisals; Appraisal staff will provide comparable sales, Review appraiser will provide the 3 specific sales for each property identified as meeting value finding criteria; Acquisition Agent will pick the sale as most comparable and or utilize the range of values the sales indicated and compute the just compensation. The offer will be made based upon value finding using latitude to negotiate price and close the transaction. If requested the property will be appraised. We are going through a learning curve on this and the 2 projects we have worked I would deem a success. Our pitfalls have been we identified 60 to 70 percent of the parcels for value finding and property owners requested appraisals on about half of those we did not initially appraise. So our appraisal team stayed on the job much longer than we had anticipated. However, out of 120 parcels we had 14 condemnations, and 14 out of 60 on the other, design and title issues were about half of these condemnations. I still think this was successful, because we are putting forth a good effort to negotiate with the property owner.

Valuation Methodologies - YES

Use of Consultants -

Qualifications, YES, Quantity & Training - Partially

Use of In-House Staff -

Training YES, Productivity YES, Retention NO, Salary issues

Property Management - Partially, limited by State Law

Litigation - Yes

only about 5% of our condemned parcels actually go to trial, have had little success using mediation, we negotiate through our legal counsel.

Local Public Agency (LPA) programs - YES

Valuation Methodologies - Always

interested

Use of Consultants -Maybe

Use of In-House Staff - Yes

Property Management -YES

Litigation - Maybe

Local Public Agency - NO

No not to my knowledge


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange?

North Dakota

Don H. Wolf

dwolf@state.nd.us

No.

Valuation Methodologies - Yes

Use of Consultants - Yes

Use of In-House Staff - Yes

Property Management - Yes

Litigation - Yes

Local Public Agency - Yes

Valuation Methodologies - No
Use of In-House Staff - Yes
Litigation - No

No.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange?

Ohio

Douglas S. Maitland

Manager, Acquisition Services Section

ODOT, Office of Real Estate

(614) 466-6802

dmaitlan@dot.state.oh.us


Yes, Ohio DOT has some significant changes. In particular, the real estate program is utilizing consultants with more frequency as in-house staffing has been downsized and acquisition work has increased. Consultants are used for all aspects of acquisition including project management, titles, appraisal, appraisal review, negotiations, closings and relocation. There has been a learning curve as we utilize consultants and attempt to have a quality product delivered in a timely manner. We find scoping to be very important. In our opinion, scoping includes both contracting language as well as face-to-face meetings frequently during a project. In general, the more upfront scoping that is done, the less problems at the end of a project.
Continued on next page.

NOTE: Ohio DOT is always looking for a better way. The QAR process mandates that best practices be identified and communicated. We also have meetings with relocation experts (staff and consultants), appraisal experts (staff and consultants), with the Attorney General's Office and with the state real estate managers several times a year to review current practices, to identify problem areas and to discuss new and better ways to do things.
Valuation Methodologies

Yes - best practices have been identified and have been implemented into the procedures manual. In particular, is a template for a before and after valuation format that has been developed and has decreased quality problems. Appraisals are not "bottle necking" in review with the frequency that they once did before the template.
Use of Consultants

Yes - best practices are continually evolving. We have qualification requirements for all fee consultants performing acquisition functions. These pre requisites are at times "beefed up" when we are confronted with quality control problems. We do offer training through out the year. However, down sizing of Central Office Real Estate has impacted our ability to deliver training with the frequency that is needed. This is a problem that we have identified and are currently working on solving.
Use of In-house staff

Yes - we are always rating the performance of in-house staff. We always send out "Property Owner Opinion Surveys" to determine weak areas. Training, as indicated before, is offered, but not at the frequency that is needed. Employee retention is an issue in Ohio. Fee consultants are always offering our better people job opportunities and we do have turn over. This turn over definitely impacts competency, training needs and managerial oversight.

Continued on next page.

These program areas are the same as in No. 2. The answer to this question is yes, Ohio DOT is always looking for better ways to improve efficiencies and quality.

No.


State and Contact Significant Changes in last 5 years? Employ best practices in specified program areas? Interested in improvement? Ever hosted a peer exchange?

Ohio (continued)

Douglas S. Maitland

Manager, Acquisition Services Section

ODOT, Office of Real Estate

(614) 466-6802

dmaitlan@dot.state.oh.us

Over the last 5 years and even beyond, Ohio DOT has decentralized its real estate functions and given more authority to its Regions and Districts. Quality control is reviewed by Quality Assurance reviews (QAR's), we have made local public agencies (LPA's) more self-administrating. Currently, we are focusing more and more on project management issues and are attempting to increase training in the various acquisition functions to increase the quality of the acquisition product and still maintain an expedient project delivery process.

Property Management

Yes - we are pro active with surplus land sales and have recently won a national award from AASHTO at the Seattle conference. We are active in leasing cell tower sites that exist in our right of way.
Litigation

Yes - we are pro active with litigation. When we first started utilizing fee consultants to manage some projects, the appropriation rate was at 50% of numerous projects, while in-house projects were around 15%. We met with the consultants and told them that they would be rated based on their appropriation rates. Since that time, there is no significant differences in appropriation percentages. We have an annual Law Day once a year that bring attorneys from the Transportation Section of the Attorney General's Office together with in-house project managers and appraisers to review litigation strategies. We have researched mediation, but litigation law in Ohio does not encourage mediation and as a result, there is no benefit for an owner to mediate a settlement. However, with this said, we do settle most appropriation cases before trial.
Local Public Agency Programs (administration, grant programs)

Yes we have some pro-active LPA programs and we won a national award from AASHTO last year. This program is called the CEAO Task Order and makes funding available at Ohio DOT's cost so that LPA's can utilize consultants to perform acquisition services on small projects.

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