Acquisitions of Real Property and/or EasementsTHE CITY OF DUBUQUE
Masterpiece on the Mississippi
Dubuque
All-American City
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Acquisitions of Real Property and/or Easements
DATE: April 28, 2009
City Engineer Gus Psihoyos is recommending adoption of a resolution authorizing
appropriate City personnel designated by the City Manager to negotiate the purchase of
"uncomplicated" properties and easements that have an estimated fair market value of
less than $10,000.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mich el C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Gus Psihoyos, City Engineer
THE CITY OF DUBUQUE
Masterpiece on the Mississippi
Dubuque
All-American City
2007
TO: Michael C. Van Milligen, City Manager
FROM: Gus Psihoyos, City Engineer
DATE: April 27, 2009
SUBJECT: Acquisitions of Real Property and/or Easements
INTRODUCTION
This is a request from the Engineering Department for authorization to negotiate the
purchase of "uncomplicated" properties and easements which have an estimated fair
market value of less than $10,000.
BACKGROUND
In general the City of Dubuque follows the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 (Uniform Act) when purchasing real estate for
public improvements. This procedure includes: the preparation of an appraisal to
determine the fair market value; giving notice; observing a 10- or 30-day waiting period;
and then beginning negotiations.
There is a provision in Iowa Code that allows for a waiver of the appraisal provision
[I.C.6B.54(2)] for non-complex, minor acquisitions with relatively low values. In lieu of a
formal appraisal, a compensation estimate containing just compensation may be
prepared in the presence of the property owner. The property owner may waive their
right to a formal appraisal and notice as otherwise required. Guidelines for the
procedure have been established by the Iowa Department of Transportation (Iowa DOT)
and have been approved by the Federal Highway Administration for use when federal
funds are anticipated. These guidelines would be followed by City personnel.
DISCUSSION
The use of the Appraisal Waiver Provision for acquiring non-complicated properties and
easements will help reduce the cost and expedite the completion of acquisitions for
public improvements. This allows one person to meet with the property owner and
present all the necessary information for them to make an informed decision about the
purchase. The property owner participates in the calculation of how the value was
established, receives an offer, and signs the documents at the time of the initial visit, if
they choose.
Land values would be estimated from the assessed valuation of the property and two
recent sales of similar property. Temporary and permanent easements would be valued
proportionately to the land value based on the proposed use and location on the parcel.
Any acquisition deemed "complicated" per the Iowa DOT guidelines would require a
formal appraisal.
CONCLUSION
The use of Compensation Estimates as provided by the Appraisal Waiver Provision of
the Iowa Code will expedite simple property and easement acquisitions for public works
projects. The Engineering Department, with access to county records, recent
appraisals, and sales information, feel confident that for the majority of simple
acquisitions, just compensation can be arrived at with the property owner, and
therefore, requests authorization to proceed with said procedure as outlined in the Iowa
DOT document, "Using Compensation Estimates in Your Public Improvement Projects".
RECOMMENDATION
The City Council is requested to approve a resolution authorizing a designee from the
Engineering Department to prepare compensation estimates for non-complicated
acquisitions in accordance with guidelines established by the Iowa Department of
Transportation and Iowa Code Section 6B.54(2).
cc: Ron Turner, PLS
RESOLUTION NO. 139-09
A RESOLUTION TO ALLOW THE USE OF THE "APPRAISAL WAIVER PROVISION"
FOR PURCHASE OF UNCOMPLICATED ACQUISITIONS FOR PUBLIC
IMPROVEMENT PROJECTS
Whereas, during the course of design of public improvement projects, it may be
necessary for the City of Dubuque to acquire small tracts of land and/or easements with
relatively low values; and
Whereas, Iowa Code Section 68.54(2) under certain conditions provides for the
use of an Appraisal Waiver Provision; and
Whereas, the Iowa Department of Transportation has established guidelines for
non-complex, minor acquisition of relatively low value which has been approved by the
Federal Highway Administration; and
Whereas, utilization of the Appraisal Waiver Provision will expedite the
construction of public improvements.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. The City Council of the City of Dubuque, Iowa, hereby approves of
the Appraisal Waiver Provision for non-complex, minor acquisitions of low value in
accordance with established Iowa Department of Transportation guidelines with latest
revisions, attached hereto, and as provided by Iowa Code Section 66.54(2).
Section 2. The City Manager may designate appropriate City personnel to
negotiate and prepare a Compensation Estimate or other documents for minor
acquisitions and/or easements under the Appraisal Waiver Provision.
Passed, adopted and approved this 4th day of May
Roy D. Buol, Mayor
Attest: Jeanne F. Schneider, CMC, City Clerk
USING
COMPENSATION
ESTIMATES
ON YOUR PUBLIC
IMPROVEMENT PROJECT
Iowa Department
of Trans
INTRODUCTION
The Appraisal Waiver Provision may save acquiring agencies and property
owner's time, effort and expense. However, used improperly and in conflict
with state and federal laws and regulations, the process may jeopardize state
and federal financial participation in the project.
This brochure was designed to assist agencies in the appropriate use of the
Appraisal Waiver Provision. For additional information or assistance,
contact the Iowa DOT's Property Management section by calling
515-239-1300, or by mail at:
Property Management
Office of Right-of-Way
Iowa Department of Transportation
800 Lincoln Way
Ames, IA 50010
Or visit us at our Web site at:
www.dot.state.ia.us/rightofway/propertymanage/lpacs.html
UNDERSTANDING THE APPRAISAL WAIVER PROVISION
The Appraisal Waiver Provision is the legal, authorized process that
provides acquiring agencies an alternative to obtaining appraisals in
determining fair and just compensation. This process may only be used in
very limited and specific situations. A compensation estimate is simply the
form used to estimate fair and just compensation as part of the Appraisal
Waiver Provision.
The Appraisal Waiver Provision may be used as a part of a simplified
acquisition process for non-complex, minor acquisitions with relatively low
values. For this type of acquisition, the acquiring agency may determine
that obtaining an appraisal is unnecessary. Developing a compensation
estimate as part of the Appraisal Waiver Provision is an alternative method
for estimating the amount to be offered to the property owners as
just compensation. A compensation estimate is not an appraisal. It's a
compensation estimate and is used in lieu of an appraisal; hence the phrase
"Appraisal Waiver Provision: '
State and federal laws and regulations allow for the use of an Appraisal
Waiver Provision. Iowa Code Section 6B.54 (2) provides for an Appraisal
Waiver Provision. These laws specify that procedures may be developed for
waiving an appraisal requirement in specific cases. The Iowa Department
of Transportation's procedure has been approved by the Federal Highway
Administration for use when there is federal participation in a project.
PURPOSE OF THE APPRAISAL WAIVER PROVISION
The basic premise of the Appraisal Waiver Provision is to provide an
opportunity for the acquiring agency and property owner(s) to save time
and resources when very small and uncomplicated acquisitions are required
for public improvement projects. The property owner should be able to
meet with one person and receive all the information necessary for the
owner to make an informed decision. The property owner should see how
the value was established, receive an offer of just compensation, and have
an opportunity to sign all the necessary documents, if they choose.
Providing all information during one visit allows the property owner and
acquiring agency to reduce the time, effort and inconvenience of multiple
representatives and calls.
3
STEP-BY-STEP GUIDE FOR UTILIZATION
OF THE APPRAISAL WAIVER PROVISION
The Appraisal Waiver Provision is most effective when the property owner
understands how and why the process is being used. One person should
prepare and present the compensation estimate. A suggested step-by-step
guide has been provided.
• Step 1: Review the project to determine which parcels will require an
appraisal and which parcels, due to their uncomplicated nature, may be
eligible for a waiver of the appraisal process.
• Step 2: For parcels eligible for an appraisal waiver, start by gathering
market information pertaining to values of similar properties.
• Step 3: Establish apre-approved range of land values to be considered.
Step 4: Develop the compensation estimate with the property owner's
involvement.
• Step 5: Give the owner the compensation estimate and offer to purchase
at the same time. Contracts, deeds and other items should be prepared in
advance so that they are readily available, if the owner agrees to
complete the transaction.
• Step 6: Provide any and all other information necessary for the owner to
make an informed decision.
• Step 7: Provide the owner reasonable time to think about the proposal.
• Step 8: Negotiate in good faith.
• Step 9: Document the file with an appropriate administrative approval of
the compensation estimate.
ACTIONS TO AVOID
• Do not prepare the compensation estimate before meeting with the
owner.
• Do not mail the compensation estimate before meeting with the owner.
• Do not have one person write the compensation estimate and another
acquire the property.
Do not use the Appraisal Waiver Provision if any complexity in
determining value exists.
4
WHEN THE APPRAISAL WAIVER PROVISION MAY BE USED
The Appraisal Waiver Provision may be used when:
• a simple, uncomplicated, minor acquisition is involved;
• total compensation (excluding cost of tillage, fertilizer, growing crops,
agricultural right-of-way fence, and scheduled additional length of
drive) is less than $10,000; and
• one person is qualified to value and acquire the property.
WHEN IS AN APPRAISAL REQUIRED?
If the answer to any of these questions is yes (or even maybe) the parcel
most likely requires an appraisal. Any "yes" responses should be reason to
question the use of the Appraisal Waiver Provision.
• Is estimating the property's value difficult due to a lack of sufficient
market data (comparable sales)?
• Is the anticipated value of the proposed acquisition over $10,000?
• Is the anticipated value of the proposed acquisition anything more than
a strip acquisition?
• Are buildings, wells, signs, etc. affected?
• Is the anticipated value of the proposed acquisition severing any
buildings from the remainder?
• Are trees, shrubs or any other landscaping involved?
• Does moving the proposed right-of-way line require analysis of possible
proximity damages?
• Is access to the property changed or limited?
• Is the current highest and best use of the property going to be changed
as a result of the proposed acquisition?
• Does a significant amount of the total compensation involve items other
than land value?
• Are there any borrow areas?
• Is there reason to believe this parcel will proceed to condemnation?
• Is more land than actually needed being acquired?
• Does the proposed acquisition impact the sewage disposal system or
property drainage?
• Are there any other considerations that complicate the valuing of this
parcel?
MINIMUM QUALIFICATIONS TO PREPARE COMPENSATION ESTIMATES
Anyone with a basic understanding of real estate and knowledge of land
values in the local area can implement the Appraisal Waiver
Provision, prepare a compensation estimate and acquire property. The
necessary administrative approval may be performed by any agency official
with the qualifications to prepare a compensation estimate.
Preparation of compensation estimates does not require an appraiser. An
appraiser should not prepare the compensation estimate unless he/she is also
going to acquire the property.
HOW SHOULD VALUES BE EXPLAINED
Values used for the Appraisal Waiver Provision should require little
explanation. Land values are estimated through the use of two or
three recent sales in the same market area. Any reduction in value of the
remaining property should simply reflect token or minimal payments. If
schedules are used to pay for these items, apply the schedule consistently
throughout the project.
If an explanation of how the reductions in value were arrived at is
necessary, an appraisal is probably required. The Appraisal Waiver
Provision is only authorized for uncomplicated acquisitions. It is incorrect
to assume that a compensation estimate is acceptable to use simply because
the compensation is under $10,000 and significant severance damages do
not exist. If market research and analysis are needed to determine there are
limited or no severance damages, an appraisal is required.
WHAT SHOULD THE COMPENSATION ESTIMATE CONTAIN
A sample form has been provided on the back of this brochure.
6
ENSURING COMPLIANCE AND ELIGIBILITY
Contact your local public agency coordinator if:
• there are questions about which parcels on a project require an
appraisal;
• there are questions about how to implement the Appraisal Waiver
Process;
• there are concerns about whether the process conforms with regulatory
requirements; or
• more information is needed regarding specific state and federal laws and
regulations.
WHO TO CONTACT FOR MORE INFORMATION OR ASSISTANCE
Your Local Public Agency Coordinator/Property Manager
Property Management
Office of Right-of-Way
Iowa Department of Transportation
800 Lincoln Way
Ames, IA 50010
Phone 515-239-1300
Fax 515-233-7859
Or visit us at our Web site at:
www.dot.state.ia.us/ri htofway/property eg_1lpacs.html
Compensation Estimate
Parcel No. Project No.
Record Owner(s):
Owner(s) mailing address:
Tenant(s):
Tenant(s) mailing address:
Subject property address:
This property is described as:
Basis for land value estimate:
Land to be acquired: Fee title
Permanent easement
acres e S = f
acres @ S = f
Other considerations:
= f
Total Estimate = $
Certification:
I hereby certify that I am familiar with the property which is the subject of this estimate, that the estimate is
based upon data contained in the tiles of the Agency, that I have no direct or indirect present or contemplated
future personal interest in this property or in any benefit from the acquisition of this property.
'Compensation for R/W fence to be by fixed schedule or in accord with Section 68.44 Code of Iowa
Approved by: DATE OF ESTIMATE
DATE
Signed
Estimating Agent
:*
County
PM 823 5-26-06