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Pavement Utility Cuts
3. Controlling Pavement Cuts by Implementing Policy
While policies alone may not reduce the frequency of pavement utility cuts, certain types of policies should be implemented to control such things as the quality of repairs, the timing of utility cuts, or the information concerning cuts and repairs. These and other topics have become matters of great concern for state and local agencies who wish to control the access to their ROW but receive an overwhelming amount of requests from numerous entities.
This chapter discusses the types of policies available to state and local agencies; issues at the local, state and federal level regarding their implementation; several examples of successful policies and their implementation; and a survey describing the current state of practice among state highway agency policy.
Some basic definitions with respect to right-of-way management, regulations, ordinances and policies are included in this section.
Adjacent Land Value - To establish the ROW rental value based on the market value of its adjacent property value. In this ROW compensation method, the market value of adjacent property (land only) per square foot is assigned to the related rights-of-way.
Combination Gross Revenue/Linear Foot Fee - A right-of-way compensation methodology that is adopted with certain telecommunications providers who may not generate significant revenues for a period of time. In this case, the local jurisdiction will implement the linear foot fee assessment until the company generates a mutually negotiated level of revenues. Upon achievement of the agreed upon revenue level, the percent of gross revenue methodology would then be implemented for the life of the franchise.
Degradation Fee - The estimated fee established at the time of permitting by the local government unit to recover costs associated with the decrease in the useful life of the right-of-way caused by the excavation.
Excavation - Any work in the surface or subsurface of the public ROW, including, but not limited to opening the public ROW; installing, servicing, repairing or modifying any facility(ies) in or under the surface or subsurface of the public right-of-way, and restoring the surface and subsurface of the public right-of-way.
Facility - Any tangible asset in the public right-of-way required to provide utility service. Includes any and all cables, cabinets, ducts, conduits, converters, equipment, drains, handholds, manholes, pipes, pipelines, splice boxes, surface location markers, tracks, tunnels, utilities, vaults, and other appurtenances or tangible things owned, leased, operated, or licensed by an owner or person that are located or are proposed to be located in the public right-of-way.
Fee per Access Line - The right-of-way compensation methodology that is rapidly replacing the percent of gross revenue formula historically used in franchise/rental agreements for local exchange telephone companies where a fee is assessed per access line.
Flat Annual Fee - Right-of-way compensation that many local jurisdictions are adopting to ensure receipt of a known revenue amount annually. Typically, franchise agreements that require this type of compensation will also include a provision allowing for a yearly escalator or inflation factor to adjust the annual fee for increases in service provided by the effected utility.
Franchise Agreement - An agreement executed to manage the occupant of public right-of-way. This document includes the rules, rights, and fees associated with using public property for private purpose and are applicable for those right-of-way occupants that provide services to the local, county and state jurisdictions.
In-kind Service - In-kind services received that can be negotiated in addition to or in lieu of cash to be used over a period of time, or infrastructure to be specified and installed.
License Agreements - Written for firms that are simply traveling through the area with facilities that serve other communities.
Linear Foot Fee - Rights-of-way compensation methodology that is typically utilized when the rights-of-way occupants require space along a specific route or for a limited purpose within the public rights-of-way.
Percentage of Gross Revenue - The most common method of compensation for use of the ROW when the utility requires ubiquitous access to the ROW.
Public Right-of-Way - The area across, along, beneath, in, on, over (above), under, upon, and within the dedicated public alleys, boulevards, bridges, courts, freeways, highways, lanes, parks, parkways, rivers, roads, sidewalks, spaces, streets, tunnels, viaducts, and any other place, area, or real property, other than real property owned in fee by a jurisdiction.
Restoration - The process by which an excavated public right-of-way and surrounding area, including pavement and foundation, is returned to the same or better condition that existed before excavation.
Trench - An excavation in the pavement, with the excavation having a length equal to or greater than the width of the pavement.
Utility Excavator - Any owner whose facility or facilities in the public right-of-way are used to provide electricity, gas, information services, sewer service, steam, telecommunications, traffic controls, transit service, video, water, or other services to customers.
Utility Service - Includes 1) those services provided by a public utility as defined in respective State Statutes; 2) service provided by, or the transporting of voice or data information by, a telecommunications right-of-way user as defined in respective State Statues; 3) service provided by cable communications systems as defined in respective State Statutes; 4) natural gas or electric energy or telecommunications service provided by a local government unit; 5) service provided by a cooperative electric association organized under the provisions of respective State Statutes; and 6) water, sewer, district cooling or heating systems.
3.2 Legislative Issues Regarding Policy Implementation
There are many issues regarding the ability of states and local municipalities to enact legislation and ordinances concerning utility construction and maintenance. Possibly the most important is the Telecommunications Act of 1996. This, and other aspects of the regulatory climate must be considered by agencies when developing policies, and when implementing them with regulations and ordinances. This section provides some basic information and points to consider regarding these issues.
3.2.1 Federal - 1996 Telecommunications Act
Implementation of the Act has had a major impact on jurisdictions. Some of the issues they have faced concerning telecommunications and cable television in the legislature are:(14)
In many states, the telecommunication industry has supported legislation that requires standardized franchise agreements. Such legislation has taken the form of preventing cities from requiring telecommunications providers from making limited street cuts, or providing acceptable bonds or insurance or burying their cables in certain instances.
A number of states have limited the ability of local governments to collect franchise fees and property taxes, requiring that they all be collected and imposed at the state level. Proposals in other states have limited the right of local governments to charge as a franchise fee anything more than the actual cost to the jurisdiction associated with administering the franchise and/or managing the rights-of-way.
Numerous jurisdictions have elected to provide communications services to their citizens. This is particularly true in communities that provide electric service. In some states, the telecom and cable industries have sought and won legislation that would prohibit or restrict cities from getting into the business or providing such service. For existing providers of telecommunications and cable service this ensures they will have no real competition since markets are small enough that it is unlikely that another privately owned provider would compete with the existing provider.
The Act imposed a number of conditions on jurisdictions regarding the size and location of a cellular tower in a community. First, jurisdictions cannot unreasonably discriminate among providers competing in the delivery of similar wireless services. Additionally, jurisdictions are not allowed to impose different setback, height, or safety restrictions in residential and commercial zones. Second, jurisdictions must act on all wireless tower permit requests within a reasonable time, taking into account the nature and scope of the request. Third, any decision denying a request must be in writing and substantiated by evidence contained in the written record of the decision-making body. Finally, fourth, jurisdictions can no longer be able to make zoning decisions based on the environmental effects of radio frequency emissions unless the facility is not in compliance with FCC emissions regulations.
In some states, efforts have been made to require that all disputes between cities and telecom providers be settled by an arbitrator or the Public Service Commission rather than the local circuit court that is closest to the people.
3.2.2 At the State Level - Right of Way Compensation and Regulatory Limitations
State regulations must also adhere to provisions of the Telecommunications Act of 1996. Some states are faced with the challenge of developing and implementing rights-of-way policies and appropriate compensation methodologies for submerged lands in addition to uplands. Utilization of shared resourced agreements continue to be the growing mechanism states have identified as the best approach to allow utilities and other companies access to available rights-of-way. Some examples of this include:
3.2.3 At the Local Level - Right of Way Compensation and Regulatory Ordinances
Local governments may receive reasonable rental compensation from private commercial entities for their use of local public property for private economic gain, even where federal statutory law restricts local governments from denying access to ROW for telecommunications services. Their regulatory authority over their rights-of-way emanates from state constitutional or statutory authority. In most states, the state itself initially has title and authority to regulate the public streets and ROW, as the property is dedicated for public use. A majority of states delegate the authority to municipalities by statute, while a minority of states grant franchises to the telecommunications provider directly. While the majority of states do allow cities to be compensated, several do not. The statutory law in each state should be reviewed to determine a given city's authority to grant franchises and impose any limitations on them.
Execution of a franchise agreement or ordinance is the common process used to grant utilities permission to utilize the ROW for private economic gain. Typically, the utility pays the city for the use of the public streets in the form of franchise fees. The franchise fees that are paid to a city as compensation for using the public streets are sometimes called street rentals - not taxes. A franchise fee is the consideration paid for the rights granted by the franchise, and serves as compensation for use of the public property. The payment of franchise fees is a contractual obligation of the utility or franchisee.
Some of the factors considered when negotiating the franchise fee are:
3.3 Types of Policies
This section outlines the types of polices used to minimize utility street cuts and encourage the use of other methods, such as trenchless technology. This section also discusses specific regulations designed to use fees or construction standards to discourage utility construction and encourage shared use of facilities where possible.
3.3.1 Incentive-Based Policies
Selected states and cities were surveyed to determine what policies exist to monitor utilities and other companies' use of a jurisdiction's alleys, sidewalks, streets, tunnels, poles, conduits and ducts to provide their customers service and transact business. The results of this survey have helped identify incentives utilized to encourage use of trenchless technology and other incentive-based policies that attempt to minimize the impact of street cuts on state and local roads.
Trenchless technology is becoming more commonly used to meet underground construction needs. Trenchless technology provides an alternative to open trench construction in many cases and conditions. It is being used in many communities to lessen environmental and traffic impacts of open trench work. Other benefits include lessening the loss of revenue to businesses along the utility alignment and avoidance of differential settlement in trench restorations. The types of policies discussed in this section describe ways of encouraging utility companies and others seeking access to the public right-of-way to consider methods other than trenching.
Incentives to Encourage Use of Trenchless Technology
One method of implementing this type of incentive is in the form of permit or inspection fee waivers in return for the use of trenchless technology. Since in many cases trenchless technology is still more expensive than traditional trenching, especially in urban and suburban areas, financial incentives can encourage utility contractors to try the technology. Other methods of providing incentives for utility contractors to use trenchless technology is to reduce some of the administrative and regulatory processes necessary under traditional trenching operations. Obviously, any pavement degradation fee that applies to traditional trenches will not be applicable in most trenchless applications. Where limited excavation in the pavement area is necessary to a trenchless operation, the pavement degradation fee can be waived to provide an additional incentive. This should be done while maintaining adequate control over the ROW and the construction to ensure that the pavement, existing utilities, and other ROW components are not damaged.
Incentives to Encourage Less Damaging Types of Cuts
Some jurisdictions are strengthening and monitoring the type of excavations being made, the quality of excavation repairs and the effect of excavations on pavement life. While it is true that better utility cut repairs result in less pavement damage than poor-quality repairs, there is always some damage to the pavement structure. A method of incentive for contractors to put forth more effort to making better-quality pavement cut repairs is to decrease or eliminate any fees associated with the repairs. This could be in the form of waived degradation fees, reduced inspection fees, or others.
Encourage Coordination - Shared Trenching
Whenever possible, the use or formation of a Utility Coordinating Committee (UCC) is most helpful for new major utility installations. The permitting jurisdictions should always be represented at the committee's meetings. Utility coordination requires participation of privately-owned utility companies, jurisdictions, regulating bodies, public works agencies, highway departments and other interested groups. Since it is in the public interest to share the right-of-way, government and private industry must join in some sort of mutual planning action to protect the public interest. This action should include establishment of uniform regulations and a mutual liaison effort such as the Utility Coordinating Committee that will ensure a continuous formal interchange of information covering regulations, planning, designing, and scheduling of all major construction projects within the public right-of-way including the need for utilities to participate in joint trenching efforts. Failure for jurisdictions to perform this function adequately can result in liability to the jurisdictions and additional cost to the utilities. Typical problems addressed by UCCs include utility excavations in newly paved roads, disruption of essential utility service, injuries caused by inadvertent severing of utility facilities, location of utility poles, and environmental impacts of damaged facilities.
All states that responded to the survey stated that shared trenching was not a requirement but was encouraged. These same states agreed the number of excavations definitely could be reduced. The American Public Works Association (APWA) has published the following actions to support highway/utility coordination.(16)
Coordinating Actions for Highway Agencies
Coordinating Actions for Utilities
While there are additional procedures that can be implemented, the aforementioned steps are imperative for a UCC to yield effective, positive results.
Encourage Coordination - Shared Resources
The term shared resource is used to describe a new partnership approach to obtaining a different form or compensation/value from the public ROW. These are public-private arrangements where each party taps the special resources of the other. The private partner gains access to public ROW and the public partner gains access to some form of compensation, whether in-kind telecommunications facilities or services, cash, or both. Shared resource projects have three distinct features:
Shared resource programs have been facilitated by the Federal Highway Administration's (FHWA) delegation of authority to states to determine their own utility accommodation policies and by the American Association of State Highway and Transportation Officials (AASHTO) Board of Directors' resolution that recognized fiber optics as distinct from other utilities and sanctioned their longitudinal installation in freeway rights-of-way.
Survey data revealed that six states have already begun shared resource projects with significant benefit to their state and local communities. Other states have taken slightly different approaches. For example, New York has an open request for proposals (RFP) that continuously seeks applicants to use their right of way for telecommunications. Minnesota and others have issued an RFP with a closing date and awarded the contract to a single company who in turn will install, operate and maintain a telecommunication facility for state and private use. The telecommunication provider usually is responsible for subleasing conduit space and fiber to others at fair and non-discriminatory rates. There does not appear at this time to be a single best model, but the shared resource approach appears to be a new tool that states can use to increase the valuation of the highway rights-of-way.
The following is a list of some pros and cons of the shared resource approach:
3.3.2 Fee-Based Policies
Another type of policy that can be considered is the implementation of fees and other economically-based measures to reduce and/or control the utility cuts made in the right-of-way. Generally, fees are assessed to recover administrative costs such as managing the permit process, inspecting utility cut repairs, and other activities conducted by the agency due to right-of-way access. The compensation received should generally be over and above administrative costs. Such fees that are beyond administrative costs can be in the form of pavement degradation fees, lane-rentals, and penalties for poor repairs.
Compensation can be goods and services, cash or a combination of both. The choice is determined by legal restrictions on cash revenues or the jurisdiction's need for communication infrastructure and services. If the jurisdiction receives cash, the receipts can be earmarked for identified telecommunication or transportation projects. It is important for the jurisdiction to identify how cash revenues would be used since the allocation could possibly eliminate any negative actions by utilities and/or telecommunication companies that are assessed the rental fee. In-kind services received can be negotiated in addition to cash to be used over a period of time, or infrastructure to be specified and installed. Examples of such in-kind goods and services are described in table 1. It is believed that in-kind compensation is easier to achieve with wireline versus wireless providers because wireline projects are more extensive and cover a wider geographic territory whereas wireless projects tend to be very site specific.
Assess Appropriate Rights-of-Way Fees
Assessing ROW rental or franchise fees is most common for local utilities, cable companies and competitive local exchange companies (CLEC). Local utilities include local exchange telephone companies, electric, gas, water and steam. CLECs are companies that compete with local exchange carriers in the area of providing access to long distance carriers, private line and local telephone service. A review of the types of franchises or licenses granted by the cities surveyed revealed that there are three general categories of utility users of public ROW, described in table 2. Research into local governments' ROW compensation arrangements for these categories indicates ROW fees are generally assessed in the manner described in table 3. Table 4 details the comparison of gross revenues derived from rights-of-way fees for selected cities.
Gross receipts based franchise agreements generally permit utilities to have unlimited access to public space and ROW for a specific purpose such as providing electric or gas service within the City. These franchises typically regulate pole placement, conduits, buried cable and all other aspects of the utility's activities in public ROW. In return for ROW access, the franchised utilities agree to pay the City based on a percentage of all gross receipts from operations within the City. Utilities are typically required to pay property, utility and other taxes such as sales, use, special taxes and assessments for public improvements, in addition to gross receipts franchise fees.
1 St. Louis has a gross receipts tax instead of a franchise fee.
Once implemented, it is important to monitor fee assessments to ensure companies are in compliance with negotiated terms; but most importantly to determine if the arrangement is working or if there should be contractual changes. Things to consider during this phase are:
Additional reasons for monitoring existing fiber optic fee arrangements include:
The fiber optic fee process adopted by the State is very important. Issues addressed in this section of the report highlight some of the steps that should be considered. Establishment of an overall telecommunications policy is critical as such a policy ensures consistent handling of state-owned land users and ROW access users.
Linear Foot Fee
Generally, the linear foot charge is used for limited access to public ROW as in the case of a telecommunications operator building a limited network in a downtown urban area. Many of the cities surveyed used this method for fiber optic local loop, interstate long distance carrier and interstate pipeline companies. For example, Atlanta and Chicago use the percentage of gross receipts model for utilities such as local exchange, electric and gas companies. Philadelphia, on the other hand, only charges a linear foot fee.
In addition to the cities below, the rate charged by a public transit authority to telecommunication providers for the use of their facilities is included. The Washington Metropolitan Area Transit Authority uses the public ROW to operate the public mass transit rail system within DC. ROW is leased for the installation of fiber optic cables ranging from $1.60 to $3.80 per linear foot per year.
The City of Atlanta charges certain ROW tenants a $5.00 per linear foot for the usage of the City's rights-of-ways and the City of Pittsburgh charges $1.00 per linear foot (See table 5).
Over time, the term of franchise agreements has decreased. Initially, agreements were made for extensive periods of time, such as 30, 40 or 50 years. The recent trend has been for the agreement to have a term of 10 or 15 years, with incorporation of a provision outlining the city's right to renegotiate and a clause for inflation factors. Based on the information obtained from the survey, the average agreement term is approximately 18.3 years. Franchise agreements normally specify the compensation basis and method of calculating the franchise fee. Additionally, the franchise agreements are normally initiated through an application process that includes review(s) by the city, coordination of different city departments and/or localities, and approval by the City Council (or an applicable legislative branch).
Research of State Fees and Process for Fiber Optic Facilities
The research for this section focused on the national market to evaluate what other states charge for access to ROW, excavations, proposed methodologies for valuing corridors, negotiation guidelines for easements, fiber optic use of both uplands and submerged, and how they process requests. A survey was developed that identified listed states to be contacted. The survey was designed to gather the following information. Although this survey was directed at fiber optic facilities, the results may be applicable to many other types of utilities as well. This survey is different from that discussed in section 3.4.
The following is a listing of the initial states chosen for the survey with their respective estimated populations:
The following observations were made either as a direct response from survey respondents, or as part of the analysis of survey results regarding state land and rights-of-way permits and fees:
The observations below address the states' procedures to process requests to access state land or ROW.
Finally, the following observations relate to the states' current methodologies for valuation.
This section highlights selected states as examples of state practices for lease of land and highway ROW. Short summaries of the experiences from Maryland, New York, and Oregon follow.
Maryland The State's Natural Resources department has negotiated two land licenses with two interstate gas pipeline companies who have current gas pipeline easements and are adding fiber optic facilities in same ROW corridor. The first license charge was $3.50 per linear foot of conduit and capped the installed fiber strands at 200. Adding fiber stands over 200 would require the company to request Natural Resources to approve an increase. The second land license was set at $3.50 per linear foot of conduit times the ratio of strand of fiber installed over 200. This was done to address changed technology that increased the number of fiber strands in the bundle. The license is for 10 years with two 10-year renewal options. Natural Resources has not encountered the submerged land issue but would not envision a different fee structure. Submerged lines only increase complexity of work and raise environmental restrictions that may increase company costs.
Normally, each department owning state land receives and processes land license requests related to use of their land. However, these two licenses were processed differently because they qualified as high tech projects, and the state had passed a new law to focus its efforts on high tech and established a separate review and approval process.
In both cases, companies submitted requests to Natural Resources to use fiber on state-owned lands using previously granted gas line easements. After the company's request was reviewed and processed, Natural Resources sent them to Budget and Management and a Special Legislative High-Tech Review Committee for approval. Furthermore, to fund high-tech investment, the state created a "high-tech fund" in which proceeds from all licenses of state lands from high tech ventures would be deposited (rather than to individual departments) and then made these funds available to improve the technological capabilities of state agencies.
The State Highway Administration (SHA) negotiates all fees for fiber optic use of the ROW under a new approach begun recently. The SHA has prepared an RFP for Resource Sharing of any Maryland's public ROW and state-owned land and released it this year. The RFP is good for five years and requests fiber optic companies to submit proposals on how best to utilize the state land and highway ROW. The SHA then evaluates each proposal as it is submitted and negotiates compensation based on Maryland's fiber optic needs for that specific project. The proposal follows the high-tech review process previously mentioned.
Compensation for a corridor ranges from cash to bartered fiber infrastructure or a combination of both. The SHA uses some of the following benchmarks to evaluate each proposal: past usage fees collected, what other states charge or what railroads charge, and also consider the current fiber facility needs for Maryland state government, the intelligent highway system or Network Maryland (extending fiber to all schools, libraries, etc.). Each compensation package will be different because timing and needs change.
New York No fee is charged for a permit, but an extensive permit review process is in place to protect state-owned land especially for wetlands and environmentally sensitive areas of the state. The company submits a standard application for a permit to use state-owned lands to the department that owns the land. Assistance is available to assist in developing the least disruptive corridor in a pre-application conference. All requests for use of submerged lands (wetlands, protected bodies of water and streams) must be reviewed by Environmental Conservation and General Services Departments and potentially the US Corps of Engineers. No permit fees, administrative fees or fixed fees are charged. Compensation is negotiated based on each company's proposal and use of public highway ROW for the benefit of the State. A rule of thumb is to recover approximately $1.00 per linear foot of fiber installed - assumed to be an industry standard about ten years ago. Fees and terms will vary depending on the company's proposal.
The State Department of Transportation (DOT) continuously advertises in the NY Contract Reporter and seeks Requests for Proposals from fiber optic companies to use state highway ROW based on the State's Accommodation Plan for Fiber Optic Facilities. Each quarter, the DOT Property Management Division receives and reviews proposals, negotiates terms and approves use of ROW for fiber.
Oregon The State land office charges a fee for each crossing of state land (with the least impact), the greater of: 100 percent of fair market value (FMV), $250, or the highest comparative compensatory payment. Permits for use of submerged land under State control such as "navigable rivers" are granted at no cost except in cities. In cities, the land use compensation is tied to adjoining appraisal property value of land on each side of the river at the access corridor. The company completes an application, provides local plans and zoning compliance sign off; state land office processes application and coordinates with adjoining owners and other properties of interest. Any altering of state waterway requires a special permit. The DOT does not charge a permit, administrative or application fee for use of the conventional highway ROW for fiber optic cable; however, companies must apply for and be granted a permit to install fiber optic cable in the ROW.
Companies submit a letter of request to the DOT district office in which the project is located and include plat maps detailing starting and ending points, scope of work, traffic control plans, and engineering drawings certified by an engineer. The DOT reviews, coordinates and approves plans, and issues permits. Fair market value is determined by use of real estate property tax roll (assumed to be market values) for adjoining property adjusted for placement; surface use: 100 percent of fair market value, and aerial and underground use: 1/3 of fair market value.
Assess Appropriate Pavement Degradation Fees
Jurisdictions around the US are conducting studies to determine the effects of utility cuts on the service life of pavements. Many of these jurisdictions accumulate data using pavement management systems to quantify the effects of the cuts and study current cuts practices. The results of these studies have confirmed that a city's streets are a valuable public asset, which the government agency holds in trust for its citizens. Therefore, it is reasonable and in the public interest to impose pavement degradation fees to be paid by excavators in order to recover the increased repaving and reconstruction costs caused by excavation which are currently borne by taxpayers. It is also reasonably in the public interest to structure the fee, and any exclusions, in a manner that discourages excavation in newly-paved streets and encourages excavators to minimize excavation and to coordinate necessary excavation with the city's repaving schedule. For the most part, these types of fees are higher for newer streets and lower for older streets including those scheduled for imminent repaving. It is recommended that proceeds from pavement degradation fees be allocated to a dedicated fund or account, instead of the general fund, that will be used solely for repaving and reconstruction of the city's streets. A sample calculation to determine an appropriate pavement degradation fee is given in Appendix A.
The City and County of San Francisco enacted a street damage restoration fee, ranging from $1.00 / ft2 for streets between 15-20 years old (since last reconstruction) to $3.50 / ft2 for streets less than five years old.
Assess Appropriate Permit Fees
The permit fee is intended to capture the administrative costs of approving, monitoring, tracking, and inspecting pavement utility cuts. Sometimes the inspection fee is a separate item. For example, the City and County of San Francisco charges a $25 administrative fee for each block in which excavation is proposed. Also, a fee of $8.61 / m2 ($0.80 / ft2) for inspection is assessed. The administrative fee is to compensate the "Department [of Public Works] for the cost incurred to administer provisions of the code".
Violations of the permit and/or the code can result in fines. Normally, an agency will provide for a certain amount of time, such as 24 - 72 hours to remedy the situation and become compliant once again. These penalties are often high, on the order of $1,000 per day per violation. Most codes also specify civil and/or criminal penalties for extreme cases of violation.
Some specific violations, usually enumerated in a regulation or ordinance, are:
Assess Lane-Rental Fees
A method used extensively to limit the time during which a contractor will have traffic lanes closed to traffic is to rent the lane to the contractor. This practice is most often implemented in one of two ways. The first is for the contractor requesting a cut permit to be given a certain amount of time in which to complete the work. Beyond this amount of time, each impacted lane must be rented from the agency until the repairs are complete to the satisfaction of the agency. The second method is that the contractor must rent the lane from the agency throughout the entire duration of the construction work.
Require Deposits to Protect Against Poor Repairs
In addition to permit fees and inspection costs, some jurisdictions also may require deposits and/or performance bonds to ensure the public right-of-way, where the work occurred, is restored in accordance with the jurisdiction's requirements. Pavement excavation costs taxpayers additional money annually in increased street maintenance because of damage caused to the original life of the pavement. Some of this money could be obtained through deposits and other charges to the utility contractors for future repair of the street. This type of requirement could be considered similar to the pavement degradation fee. The difference is that the degradation fee is never returned to the contractor, whereas a deposit would be returned after a specified amount of time, provided that the repair performs satisfactorily during that time. The City of San Francisco ordinance in Appendix B contains a deposit requirement.
Assess Penalties for Non-Compliance or Failed Repairs
The City and County of San Francisco has one of the most stringent trench restoration requirements in the country. Permits for street excavations are required; the permitted backfilling materials and procedures are prescribed; and there is a three-year moratorium on excavation in newly surfaced or reconstructed streets.(2) When pavement cut repairs fail, often the agency is left to cover the costs of additional repairs. By implementing a policy of penalties for failed repairs, an agency can recover some of the costs for these activities. An important consideration for this and other policies such as requiring deposits, etc., is that each repaired cut must be tracked and associated with the utility contractor that made it. In the future, if a repair fails, the appropriate contractor must be approached for payment of the penalty.
Implementation of San Francisco's excavation ordinance was intended to have the effects of improving the smoothness of city streets, preserving taxpayers' investment in the streets, and minimize the impact of failed repairs on neighborhoods and the streets they must use every day.
3.3.3 Requirement-Based Policies
Many jurisdictions have developed and implemented regulations to preserve the life of streets within their jurisdiction. Rather than attempt to provide incentives or to implement direct fees for pavement utility cuts, many state and city agencies have implemented regulations or ordinances that require certain actions or prohibit others. This type of policy sets forth actions that must or must not be done. This section describes some of the policies that can be instituted by state regulation or city ordinance to require or prohibit certain activities in the ROW.
Require Agency-Owned Utilities to Meet Repair Quality Standards
Often, agency regulations and ordinances specifically exempt from the standards those utilities that are owned by the agency. However, most agency-owned utilities are water and wastewater. Sometimes these types of utilities require more excavation and pavement cuts, and to a greater extent than other utilities. In addition, when such utilities rupture, much greater damage is done to the pavement structure than if an electrical or telephone line is severed. In addition, in environments where agency-owned utilities are exempt from such requirements, and in order to save money for the agency, the cut repairs are sometimes made to a lower quality level than those required of private contractors.
Require Justification for Not Using Trenchless Technology
Upon receiving an application to excavate, many jurisdictions are discussing the use of trenchless technology with utility applicants. Often, trenchless may not be the feasible nor practicable from an engineering or economic standpoint. However, in areas where an agency is encouraging or requiring the use of trenchless technology, a contractor can be asked to justify his reasons for not using it. The reasons can then be reviewed by the public works director or state utilities engineer, who will then either approve the request or ask for further justification. If the reasons submitted are not adequate to the agency's authorized representative, the request can be denied and the trenchless technology can be required. In situations such as this, however, the agency then takes much more responsibility for disruptions to the pavement, existing utilities, or other components of the ROW if problems arise.
Establish Moratorium Periods for New Pavement
A pavement utility cut moratorium can be implemented by an agency to protect newly-built or rehabilitated pavements for a period after construction. In establishing such a policy, the agency must provide opportunities for the utility companies to perform their necessary work in the area prior to construction. There must also be a clause that allows utility cuts in cases of emergency. This type of requirements-based policy is likely the most common among city agencies today.
Require Repaving Area Larger than Cut to Mitigate Pavement Damage
Many studies have indicated that a utility cut damages an area of pavement larger than the actual area of the excavation, and state and city agencies often require contractors to repave an area larger than the immediate area of the cut. The City of Houston, for example, requires the utility contractors reconstruct the street from curb to curb wherever a utility cut is made between them. Policies such as this must clearly describe the method of determining the area of pavement that must be reconstructed. One drawback to this approach may be that since making a utility cut damages the pavement, reconstructing the street in a larger area may not improve the situation, but may simply enlarge the affected area. Such reconstructions must be performed with an attempt to match the current elevations and conditions existing in the pavement structure. This type of reconstruction is easier to do in portland cement concrete pavements, since the new material can be tied into the existing material and can match the existing elevations more easily.
Enhance Inspection and Enforcement of Specification Requirements
Often the inspection procedures in a city or state are less effective than they could be. Additional or enhanced regulations on the repair quality and inspection standards can greatly improve the overall quality of pavement utility cut repairs. The extra cost of such improvements to the inspection work force can be offset by fees established or adjusted to recover those costs.
3.4 Survey of the State of Practice
In addition to the aforementioned survey, each state highway agency, and many cities and state leagues of cities in the United States were requested to complete a survey to determine the type of rights-of-way practices and policies that are utilized to manage access by utilities and other companies. Another objective of the survey was to determine how these agencies encourage the use of alternative methods for installing and maintaining underground facilities. Surveys were sent to 138 state agencies, selected cities, and municipal leagues. Responses were received from the following 28 state highway agencies, shown in table 7. The remainder of this section describes the responses given to the survey.
3.4.1 Franchise/Permitting Process
Approximately 93 percent of the respondents have an established formal process in place to allow utilities and other companies to utilize the rights-of-way.
3.4.2 Franchise/Model Agreements
While the majority of the respondents have a formal franchise/permitting process in place, only Louisiana, New York, Alaska, Missouri, North Carolina, Pennsylvania, South Dakota, Texas and Wisconsin actually require utilities to execute franchise, permit, encroachment, ROW access or occupancy agreements to utilize ROW. The same states have also drafted model agreements for services provided by certain utilities to ensure consistency of the application process and methods of compensation.
3.4.3 Franchise Agreement Requirements for ROW Access
Alaska, Georgia, Illinois and Indiana assess and receive franchise fees and/or utility taxes as described in table 8.
3.4.4 Permit Required Before Access
Ten of the agencies require utilities to pay permit fees for construction, maintenance, pole attachment, bridge attachment and other type of permits. The required fees vary from as little as $20 to over $5,000 per permit or project. These same agencies have inspection policies in place to ensure pavement repairs are conducted in compliance with established agency policies.
3.4.5 Underground Conduit Owned
None of the respondents own any conduit.
3.4.6 License Fee Assessments
Illinois, Iowa, Louisiana, Missouri, New York, Pennsylvania and Wisconsin have license fee assessments for bridges, tunnels or poles.
3.4.7 Jurisdiction Tax Revenues
This information was not readily available for any of the DOT's.
3.4.8 Cell Tower Construction
Only 39 percent of the agencies have experienced cell tower construction, primarily by wireless telecommunication providers. The number of sites varies from 1 to 85 as detailed in the following table.
3.4.9 Antenna Attachments
Only Georgia, New York and Virginia have agreements involving antenna attachments. The users involved primarily are Metricom and Ricochet Wireless.
3.4.10 Trenchless Technology Use
Almost all of the respondents utilize or require trenchless technology, and overall report favorable results. Details of this part of the survey are described in section 4.4.1. The major obstacles mentioned are:
The major attitudes that inhibit the use of trenchless technology focused on cost, damage to existing facilities, knowledge of contractors and effective use of equipment.
3.4.11 ROW Management Systems Used
The majority of the agencies do not claim to have effective tracking systems in place to monitor construction and other activities in the ROW. While degradation fees are not being assessed, some agencies do require construction bonds for certain projects. Moratorium policies on newly paved roads average 5 - 7 years. Most agencies enforce One Call Damage Programs and penalties for violation of excavation policies.
3.4.12 Use of Jurisdiction-Owned Land
As previously mentioned, agencies are now entering into Shared Resource Agreements for use of state-owned land by telecommunications, fiber optic and other companies. The compensation provision included in these types of agreements varies from state to state.
3.5 Additional Policies
This section summarizes new and innovative approaches for managing utility cut activities and to minimize such cuts. Inspection and enforcement activities using computer tools for tracking and monitoring street cut activities, and measuring compliance with city or state construction standards are among those included.
3.5.1 GIS Implementation
Geographic Information Systems (GIS) are being utilized by jurisdictions more every year. Currently, these systems have become more important as the General Accounting Standards Board continues to develop and implement accounting policies that require jurisdictions to record and monitor the value of rights-of-way infrastructure and other activities. Some jurisdictions are also taking advantage of these enhanced requirements to incorporate tracking systems within developed GIS programs to monitor utility construction and maintenance activities more effectively.
3.5.2 Cut Repair Warranties
Most state and local jurisdictions require utilities to guarantee, or to be responsible for, the condition of excavation permanent repairs for at least 2 years, and as many as 5 to 10 years. In case utilities fail to adhere to this obligation, construction deposits may be required until expiration of the warranty period to ensure availability of appropriate funds to repair pavement deterioration not handled by utilities in a timely manner. In order to make a system or policy such as this work for to the benefit of the agency, however, a system must be in place to track the individual utility cuts and the contractor or utility company that made the cut and repair. Without this information, it would be impossible to establish a claim against the responsible party.
The City of Modesto, CA, instituted an ordinance that gives utility contractors a choice when trenching in the city streets. Essentially, if the contractor signs a warranty requiring the cut to be maintained by the contractor for the remainder of the pavement life, the contractor would be exempt from paying a pavement degradation fee. If not, a pavement degradation fee is assessed at the time of the permit application. Certain exemptions are allowed, depending on the current condition of the street, and the time until the city plans to reconstruct the street. Horizontal Directional Drilling (discussed in section 4.1.1 of this report) is also exempt from the degradation fee.
3.5.3 Automated Permit System
In addition to enhancing existing GIS systems, jurisdictions are eliminating the manual processing of permitting and inspection activities. The automation of these tasks has allowed jurisdictions better to monitor issued permits from the beginning to the end of a given project. Additionally, automation of these tasks has:
See the discussion in section 4.4.2 for information on how this has worked for the City of Houston and the utility companies requesting permits.
This section briefly discusses the methods and models for implementing the policies described throughout chapter 1. These include procedures for developing franchise agreements and permitting processes, establishing the level of fees and penalties for various activities, and developing and passing regulations and ordinances to implement the policies.
3.6.1 Franchise and Permitting Procedures
At a minimum, an established ROW policy or franchise/permitting procedure should include:
Additional provisions that should be included are:
Several options available for permit application methods are shown in table 10.
3.6.2 Methods for Developing Level of Fees
There are at least six key ways to determine the value of land or rights-of-way to be used by utilities. However, no single approach will yield a completely accurate value. These approaches are:
The common methodologies used to establish appropriate fees are:
3.6.3 Model Ordinances (Rulemaking Documents)
Franchise and license agreements are powerful tools in managing the occupants of public ROW. These agreements outline the rules, rights, and fees associated with using public property for private purpose. By definition, franchise agreements are applicable for those ROW occupants that provide services to local, county and state jurisdictions. License agreements are written for firms that are simply traveling through the area with facilities that serve other communities. The power that jurisdictions have is regulated through state law. Federal law may dictate who may have access to ROW, but on what condition this occupancy occurs is clearly under local control. The franchise and license agreement serves as the device to set these conditions.
There are certain elements that should be included in all franchise agreements. The following is a general outline of the provisions and standards in a franchise or license type of agreement.
The policies described in this chapter - primarily to control the frequency of pavement utility cuts - can be implemented beginning with the methods of establishing appropriate fees and following model rulemaking documents such as the outline presented in section 3.6.3. In addition, several appendices to this report contain sample regulations and ordinances that have been in use by states and municipalities for several years.
The next chapter discusses the application of developments in technology to reduce the frequency of pavement utility cuts. However, conditions may often arise where policies are needed to encourage the use of this technology. Many of the types of policies described in this chapter may be of use in implementing and encouraging climate for trenchless and other technologies.
 West, The Information Highway Must Pay Its Way Through Cities: A Discussion of the Authority of State and Local Governments to be Compensated for the Use of Public Rights-of-Way, 1 Mich.Tel.Tech.L.Rev.2(1995)
 American Public Works Association, Utility and Public Right-of-Way Committee, Model Franchise and License Agreement