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Right of Way Quality Managment System - The Journey of Five States

Performance Indicators for the States

Overview

People have come up with a number of different ways to attempt to measure whether quality processes are in place at an organization. The most widely accepted approach is to measure quality through data evaluation and interpretation. Data that relate which specific processes and to measure quality are referred to as performance indicators. Service performance indicators involve measuring the effectiveness, capability, and efficiency of the process.

Both internal and external quality measurement tools are available to assist a ROW division in evaluating quality improvements. Internal quality management tools can include internal customer survey forms forwarded by the ROW division to the design or construction divisions. These survey forms might ask questions of the design group that pertain to the construction advertising date and the effectiveness of interagency communications. Example questions may include:

  1. Did ROW inform design personnel of the status of processes involving any difficulties?
  2. Did ROW provide efficient and effective communication?
  3. How could ROW serve the design division more effectively?

Once these internal customer survey forms are reviewed and evaluated, an improved process might be designed to meet the agency's overall goals. Other internal surveys could be established, such as Pennsylvania's organizational climate survey of ROW employees, employee suggestion boxes, agency e-mails, or input obtained from continuous improvement meetings. For internal performance indicators to be effective, employees must have an open forum to recommend process improvements. Other internal performance indicators are achieved through quality assurance audits and management reviews, as well as through direct measurements of performance indicators (e.g., time or cost).

One especially important external indicator is the external customer survey form. The customer survey will indicate how well employees are working and the effectiveness of the ROW division process overall. An example response would be, "Mr. Smith of the ROW division was very kind and considerate. However, I am upset that you have known about the road project for 10 years and you are only giving me 90 days to respond." In this case, it is obvious that the ROW employee is performing well, although the process may require modification. Sometimes a process cannot be changed without passing new rules or regulations. Maybe a letter to Mr. Smith earlier in the project would have helped, or perhaps regular project updates could have been provided to inform Mr. Smith of the upcoming project.

It is important to examine external customer survey forms for both positive and negative input, which should be shared with the ROW team. Negative input is the critical external performance indicator, because continuous improvement focuses on identifying problems to effect process improvements through a problem-solving approach. Process changes based on external customer input must be communicated throughout the agency, as well as to the customer.

Collecting appropriate data for use as performance indicators means understanding the processes in place and comparing data on them against appropriate measures. Output from performance indicators should go to establishing strategic goals. Again, performance indicators are not simply counting the number of phone calls, memorandums, or letters that each employee generates daily. Performance measures evaluate the results of phone calls, memos, or letters and lead to possible process improvement.

Performance Indicators- a Typical ROW Example

The Federal Highway Administration (FHWA) has delegated certain decisions to the State highway departments. As a result, States were given the option to implement a minimum value that a property must have to qualify for an appraisal. This process, called a waiver or nominal process, or administrative determination of value, allows the States to use abbreviated procedures where the estimated cost of a parcel is less than a specific monetary amount and does not present complex valuation issues. This amount is $10,000 for 4 of the States, and $2,500 for Wisconsin. States have used the waiver process to varying degrees, though it does seem to significantly reduce the time and expense needed to complete an appraisal. The appraisal is an integral step in the ROW division's task of determining the price that a State will offer citizens for parcels the DOT needs to acquire.

This example illustrates the correlation between the use of the appraisal waiver process and expense attached to the appraisal of parcels. This correlation will vary due to the different requirements, laws, and policies under which each State operates.

State Performance Evaluations

Each state appraises a certain number of parcels each year. Each state provided a breakdown of costs per task, or man hours per task, for both normal appraisals and appraisal waivers. Comparison is made between the total expenditures for the normal appraisal process and for the appraisal waiver. The findings demonstrate the huge impact made by the appraisal waiver process on the time and expense needed to complete the appraisal task.

The following charts, called histograms, show the cost of completing both processes--normal appraisals and appraisal waivers.

Chart 1: Costs Per Appraisal Florida

Florida Evaluation

Chart 1 illustrates that by implementing the appraisal waiver procedure, costs are dramatically decreased. Florida handles approximately 3,000 parcels each year. Normal appraisals cost about $6,000 per appraisal. If all 3,000 transactions were handled through the normal process, transaction costs would be approximately $18 million per year. Approximately three percent of all Florida ROW transactions are handled using the waiver process. The use of the waiver process decreases costs by $5,000 per parcel valuation. If three percent (90 parcels) handled using the waiver process and the remaining 97 percent (2,910 parcels) are handled using the normal process, total expenditures will approach $17.5 million per year--a difference of $0.5 million per year in expenditures alone.

Louisiana Evaluation

Chart 2: Cost Per Appraisal Louisiana

Chart 2, illustrates that costs are dramatically decreased by implementing the appraisal waiver procedure. Louisiana handles approximately 2,000 parcels each year. Normal appraisals cost about $1,885 each. If all 2,000 transactions were handled through the normal process, transaction costs would approach $3.8 million per year. Approximately 33 percent of all Louisiana ROW transactions are handled using the appraisal waiver process. Chart 2 shows that use of the appraisal waiver process decreases expenditures to about $355 per parcel, a cost savings of $1,530 per parcel valuation. If 33 percent (666 parcels) are handled using the waiver process and the remaining 67 percent (1,334 parcels) are handled using the normal process, then total expenditures will approach $2.75 million per year--a difference of $1.02 million a year in expenditures alone. The implementation and use of the waiver appraisal process has saved the Louisiana DOT significant expense and manhours per project.

Oregon Evaluation

Chart 3: Costs per Appraisal Oregon

Chart 3, illustrates that by implementing the appraisal waiver procedure, costs are dramatically decreased. Oregon completes about 900 parcel valuations in a given year. Normal appraisals cost about $4,500 each. Handling all 900 transactions through the normal process would put transaction costs at approximately $4.1 million a year. Approximately 50 percent (450 parcels) of all Oregon ROW transactions are handled using the waiver process. As Chart 3 shows, use of the appraisal waiver process decreases expenditures to about $900 per parcel and decreases costs by $3,600 per parcel valuation. If 50 percent (450 parcels) were handled using the waiver process, then total appraisal expenditures would approach $2.4 million per year--a difference of $1.7 million a year in expenditures alone. The implementation and use of the waiver process has saved the Oregon DOT significant expense and manhours per project.

Pennsylvania Evaluation

Chart 4: Costs per Appraisal Pennsylvania

Chart 4, illustrates that implementing the appraisal waiver dramatically decreases procedure costs and time. Pennsylvania handles about 3,000 parcel valuations in a given year. As seen in Chart 4, normal appraisals cost about $3,125 each. If all 3,000 transactions were handled through the normal process transaction costs would approach $9.4 million per year. Approximately 74 percent (2,220 parcels) of all Pennsylvania ROW transactions are handled using the waiver process. As Chart 4 illustrates, use of the appraisal waiver process decreases expenditures to about $100 per parcel and decreases costs by $3,025 per parcel valuation. If 74 percent (2,220 parcels) were handled using the waiver process, then total appraisal expenditures would approach $2.7 million per year a difference of $6.7 million per year in expenditures alone. The implementation and use of the waiver process has saved the Pennsylvania DOT significant expense and manhours per project.

Wisconsin Evaluation

Chart 5: Costs per Appraisal Wisconsin

Chart 5, illustrates that implementing the appraisal waiver procedure dramatically decreases costs and time. Wisconsin handles about 2,000 parcel valuations in a given year. Chart 5 shows normal appraisals cost about $4,708 each. If all 2,000 transactions were handled through the normal process, transaction costs would approach $9.5 million a year. Approximately 60 percent (1,200 parcels) of all Wisconsin ROW transactions are handled using the waiver process. As Chart 5 illustrates, using the appraisal waiver process decreases expenditures to about $723 per parcel and decreases costs by $3,985 per parcel valuation. If 60 percent (1,200 parcels) were handled using the waiver process, then total appraisal expenditures would approach $4.3 million per year--a difference of $5.2 million a year in expenditures alone. The implementation and use of the waiver process has saved the Wisconsin DOT significant expense and manhours per project.

Updated: 09/05/2014
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