Arkansas Administrative Code
Agency 001 - ARKANSAS DEPARTMENT OF TRANSPORTATION
Rule 001.01.89-001 - Arkansas State Highway Commission Utility Accommodation Policy
Current through Register Vol. 49, No. 2, February 2024
DEFINITIONS
AHTD/Department - Shall mean the Arkansas State Highway and Transportation Department.
ADT - Average Daily Traffic - The average 24-hour volume, being the total volume during a stated period divided by the number of days in that period. Unless otherwise stated, the period is a year. The term is commonly abbreviated as ADT.
1. Low Volume Roadway - Under 2,000 ADT
2. High Volume Roadway - Over 2,000 ADT
Backfill - Replacement of suitable Material compacted as specified around and over a pipe, conduit, casing or gallery.
Backslope - The slope leading away from flowline of ditch.
Bedding - Organization of soil or other suitable material to support a pipe, conduit, casing or gallery.
Bury - Depth of top of pipe or facility below grade of roadway or ditch,
Cap - Rigid structural element surmounting a pipe, conduit, casing or gallery.
Carrier - Pipe directly enclosing a transmitted fluid (liquid or gas) .
Casing - A larger pipe enclosing a carrier.
Clear Roadside Policy - The policy employed by a highway authority to increase safety, improve traffic operation and enhance the appearance of highways by designing, constructing, and maintaining highway roadsides as wide, flat, and rounded as practical and as free as practical from physical obstructions above the ground such as trees, drainage structures, massive sign supports, utility poles, and other ground-mounted obstructions. (also referred to as: clear recovery area and clear zone).
Coating - Material applied to or wrapped around a pipe.
Conduit or Duct - An enclosed tubular runway for protecting wires or cables.
Control of Access - The condition where the right of owners or occupants of abutting land or other persons to access, light, air, or view in connection with a highway is fully or partially controlled by public authority.
Full Control of Access - The authority to control access is exercised to give preference to through traffic by providing access connections with selected public roads only by prohibiting crossings at grade or direct private driveway connections.
Partial Control of Access - The authority to control access is exercised to give preference to through traffic to a degree that, in addition to access connections with selected public roads, there may be some crossings at grade and some private driveway connections.
Cover - Depth of top of pipe, conduit, casing or gallery below grade of roadway or ditch.
Cradle - Rigid structural element below and supporting a pipe.
Direct Burial - Installing a utility underground without encasement, by plowing.
Drain - Appurtenance to discharge liquid contaminants from casings.
Drainage Structure - Any structure providing drainage for the highway other than a bridge.
Dry Bore - Augered or drilled, the use of water may be used as a lubricant providing water pressure does not exceed 10 PSIG.
Emergency - An unforeseen occurrence or condition, that may cause harm to persons or property, calling for immediate action.
Encasement - Structural element surrounding a pipe.
Encroachment - Unauthorized use of highway right-of-way or easements as for signs, fences, buildings, utilities, parking, storage, etc.
Expressway - A divided arterial highway for through traffic with full or partial control of access and generally with grade separations at major intersections.
FHWA - Shall mean the Federal Highway Administration.
Flexible Pipe - A plastic, fiberglass, or metallic pipe having large ratio of diameter to wall thickness which can be deformed without undue stress.
Flowline of Ditch - The low point of a ditch that runoff water will follow.
Foreslope - The slope leading away from the pavement or shoulder of a highway.
Freeway - An expressway with full control of access.
Frontage Road - A local street or road auxiliary to and located on the side of an arterial highway for service to abutting property and adjacent areas and for control of access.
Gallery - An underpass for two or more utility lines.
Grade Separation - A crossing of two highways, or a highway and a railroad, at different levels.
Grounded - Connected to earth or to some extended conducting body which serves instead of the earth whether the connection is intentional or accidental.
Grout - A cement mortar or a slurry of fine sand or clay.
High Volume Roadway - Over 2,000 ADT
Highway, Street or Road - A general term denoting a public way for purposes of vehicular travel, including the entire area within the right of way.
Jacket - Encasement by concrete poured around a pipe.
Low Volume Roadway - Under 2,000 ADT
Manhole - An opening in an underground system which workmen or others may enter for the purpose of making installations, inspections, repairs, connections, and tests.
Median - The portion of a divided highway separating the traveled ways for traffic in opposite directions.
Normal - Crossing at a right angle.
Oblique - Crossing at an acute angle.
OSHA - Occupational Safety & Health Administration
Overfill - Backfill above a pipe.
Pavement Structure -The combination of subbase, base course, and surface course placed on a subgrade to support the traffic load and distribute it to the roadbed.
Pipe - A tubular product made as a production item for sale as such. Cylinders formed from plate in the course of the fabrication of auxiliary equipment are not pipe as defined here.
Plowing - Direct burial of utility lines by means of a "plow" type mechanism which breaks the ground, places the utility line and closes the break in the ground in a single operation,
Pressure - Relative internal pressure in psig (pounds per square inch gauge).
Right-of-Way - A general term denoting land, property, or interest therein, usually in a strip, acquired for or devoted to transportation purposes.
Rigid Pipe - Pipe designed for diametric deflection of less than 1%.
Roadside - A general term denoting the area adjoining the outer edge of the roadway. Extensive areas between the roadways of a divided highway may also be considered roadside.
Roadway - The portion of a highway, including shoulders, for vehicular use. A divided highway has two or more roadways.
Roadway Cross Section - That area of a highway facility contained between the outside edges of backslopes/foreslopes (Divided facilities, the term applies to each set of roadways).
Safety Rest Area - A roadside area with parking facilities separated from the roadway provided for motorists to stop and rest for short periods. It may include drinking water, toilets, tables and benches, telephones, information, and other facilities for travelers.
Scenic Overlook - A roadside area provided for motorists to stop their vehicles beyond the shoulder, primarily for viewing the scenery in safety.
Semi-Rigid Pipe - Pipe designed to tolerate from 1% to 3% diametric deflection,
Shoulder - The portion of the roadway contiguous with the traveled way for accommodation of stopped vehicles, for emergency use, and for lateral support of base and surface courses.
Sidefill - Backfill alongside a pipe.
Slab, Floating - Slab between but not contacting pipe or pavement.
Sleeve - Short casing through pier or abutment of highway structure.
SubBase - The layer or layers of specified or selected material of designated thickness placed on a subgrade to support a base course.
Subgrade - The top surface of a roadbed upon which the pavement structure and shoulders are constructed.
Toe-of-Slope - The bottom of a slope of a fill or cut area usually the lowest point of the slope.
Traffic Control Device - Any sign, signal, marking, or installation placed or erected under public authority for the purpose of regulating, warning, or guiding traffic.
Traveled Way - The portion of the roadway for the movement of vehicles, exclusive of shoulders and auxiliary lanes.
Trenched - Installed in a narrow open excavation.
Untrenched - Installed without breaking ground or pavement surface, such as by jacking or boring.
Use and Occupancy agreement or Utility Permit - The document by which the highway authority regulates and/or gives approval of the use and occupancy of highway right-of-way by utility facilities or private lines.
Vent - Appurtenance to discharge gaseous contaminants from casing.
Walled - Partially encased by concrete poured alongside the pipe.
Wet Bore - A hole is sluiced through the roadway subgrade by jetting with water under high pressure.
PART I ACCOMMODATION OF UTILITIES ON HIGHWAY RIGHT OF WAY
INTRODOCTION
To prescribe the policies and procedures for the accommodation of utility facilities, both public and private on the rights-of-way of all roadways and property within the Arkansas State Highway and Transportation Department System.
Under Arkansas Statutes, 27-67-218 and 27-67-304 public utilities may use highway right-of-way for the purpose of installing utility facilities, provided such use will not interfere with the use of the right-of-way for highway purposes. Utility owners must secure a permit and post a bond prior to performing any work. I nstallation of utility facilities on highway right-of-way must be done in accordance with the rules and regulations prescribed by the Arkansas State Highway Commission.
To authorize the Utilities Section, Right of Way Division, Arkansas State Highway and Transportation Department to, issue permits and enter into agreements to provide for the installation, adjustments, relocation, maintenance, or removal of utilities on highway right-of-way and property. Issue permits for mechanical trimming and for use of chemicals for vegetation control on highway rights-of-way and property. Cover existing and provide for future joint use and occupancy of highway and utility rights-of-way and/or properties by highway and utility facilities on, over, under or across the same lands and under coincidental property rights or interests in accordance with State Law and Federal rules and regulations.
This policy shall apply to the owners and operators of utility facilities including but not limited to electric power, water, sewer, gas, communications (telephone, telegraph, cable TV, and fiber optic or light guide cables), chemical, oil, petroleum products, steam, storm water not connected with highway drainage, irrigation and similar facilities.
This policy shall apply to all new installations, and to the servicing, repair, restoration, relocation, rehabilitation, or removal of any existing utility facilities where the roadway, roadside, right-of-way, or traffic will be affected by the work operations or by the new facilities occupancy.
The provisions of this Statement of Policy shall supersede and void all prior Commission or Administrative Orders and/or Statements of Highway Department Policy relating to the accommodation and/or adjustment of utilities on highway rights-of-way, included in Commission Minute Order No. 70-300 dated August 26, 1970 and Commission Order No, 77-80 dated February 23, 1977.
Exceptions to any provisions of this policy may be authorized under certain situations where it is shown that extreme hardship and/or unusual conditions provide justification, and where alternate measures can be prescribed in keeping with the intent of this policy.
Consideration of requests for exceptions on controlled access highways will be in accordance with American Association of State Highway and Transportation Official's (AASHTO) "A Policy On The Accommodation of Utilities Within Freeway Right-of-Way" (current issue),
Any request for exceptions to this policy shall be submitted to the Utilities Section for Departmental review and.approval.
GENERAL CONSIDERATIONS
The location and design of all utility installations within the highway rights-of-way shall conform as a minimum to the following:
(Fully and Partially Controlled)
UNDERGROUND UTILITY INSTALLATIONS
Crossings may be ENCASED or UNCASED as determined by specific conditions of the Utility, the Department, or type of highway facility.
When existing underground utility facilities are permitted to remain in place, suitable bridging, concrete slabs, or other appropriate measures may be used for protection, when by reason of shallow bury the facility may be vulnerable to damage from highway construction or maintenance operations. (See Figures 12 & 13)
Only distribution lines providing natural gas service will be permitted longitudinally within the highway right-of-way and shall have a minimum depth of cover of 30 inches. Longitudinal installations of transmission type facilities will not be permitted.
One or more vents shall be provided for each casing or series of casings. For casings longer than 150 feet vents should be provided at both ends. On shorter casings a vent should be located at the higher end with a marker placed at the lower end. Vents shall be placed at the right-of-way line immediately above the pipeline, situated to not interfere with highway maintenance or be concealed by vegetation. Ownership of the lines shall be clearly shown on a sign attached to the vent pipe,
The utility company shall place a readily identifiable and suitable marker at each right-of-way line where it is crossed by any gas or liquid petroleum line except where marked by a vent. Ownership of lines shall be clearly shown on a sign attached to the marker. Markers are not required for service line crossings.
Above ground appurtenances such as meters, regulators, etc. should be located outside the highway right-of-way .
Valve box covers must be flush with the ground and/or pavement surface as applicable.
Longitudinal water line installations on highway right-of-way shall have a minimum depth of cover of 3 0 inches.
Encasement is required on all water lines crossing the highway and shall have a minimum depth of cover of 3 6 inches below the ditches or 42 inches below the top of highway subgrade, whichever gives the greater cover. (See Figure 9)
A marker bearing the name of the utility owner shall be placed at each right-of-way line where it is crossed by a water line two inches or larger in diameter. Markers are not required for searvice line crossings. Markers for longitudinal lines must be located at the right-of-way line,
Customer meter settings should be located outside the highway right-of-way.
It is preferable that any appurtenances requiring a vault such as master meters, pressure reducers, etc. be located outside the highway right-of-way.
In rural areas fire hydrants and/or blow-off valves shall be placed at the right-of-way line, but in no case shall be placed in the Roadway Cross Section (See Figure 1) . In urban areas fire hydrants should be placed at the right-of-way line but shall not be placed closer than five (5) feet to the curb. (See Figure 7)
Valve box covers must be flush with the ground and/or pavement surface as applicable.
Distance from the right-of-way line shall be no more than five (5) feet unless otherwise approved by the Utilities Section, On highways with frontage roads, such installation will be located between the frontage roads and the right-of-way line.
Above ground pedestals or other appurtenances installed as part of an underground communication line shall be located at or near the right-of-way line.
OVERHEAD UTILITY INSTALLATIONS
The minimum vertical clearance for overhead communication and power line's above the highway shall not be less than 18 feet. Greater height may be required by the National Electric Safety Code or any other regulatory agencies having jurisdiction.
INSTALLATIONS ON HIGHWAY STRUCTURES
IRRIGATION AND DRAINAGE FACILITIES
PERMIT PROCEDURES
A deposit or bond to guarantee restoration of highway rights-of-way or property is required prior to the issuance of a permit.
Work performed under a permit shall constitute full acceptance of all applicable requirements, laws, rules, regulations and the specific terms and provisions as set forth in or attached to the permit.
If a change in ownership takes place, the new owners shall give written notice of such change to the Utilities Section as soon as possible.
The Director of Highways is hereby authorized to revoke or annul a permit or agreement, subject to giving the utility owner reasonable notice, for the following:
In the event of conditions where immediate action by the utility owner is necessary for the protection of persons or property, or to minimize damage to or loss of utility or highway property, the utility, at its own responsibility and risk, may make necessary repairs and shall notify the Highway District Engineer or Utilities Section of such work as soon as practicable.
Permits will be issued to private owners for highway crossings only. Longitudinal installations within the highway right-of-way are not permitted. Any such request will be referred to the Department's Chief Counsel for a legal opinion as to whether the proposed private use of highway right-of-way is in violation of State Law. Any approved use of highway right-of-way by private owners must meet all applicable provisions of this policy.
Requests for permits to install or renovate highway lighting systems by electric utilities or municipalities shall be treated as special cases. Each request shall be referred to the Department's Traffic Services Division for review and recommendations as to acceptability of the design, adequacy of lighting, and safety factors. In addition the permit must meet the other applicable provisions of this policy.
When it becomes evident that an existing utility facility has become a hazard to the safe operation of a highway facility, the Department shall require the utility owner to correct the condition.
Various types of utilities not specifically covered herein shall be considered within the provisions of this policy in accordance with the nature of the utility. It shall be a general practice to consider all lines carrying caustic, flammable, or explosive materials under the provisions for high pressure gas and liquid fuel lines.
ROADWAY CROSS SECTION
TYPICAL SECTION
TYPICAL RURAL SECTION
TYPICAL URBAN SECTION
TYPICAL SECTION OF REPAIR FOR UTILITY CUT ON PAVED HIGHWAYS
NOTE:
TYPICAL CROSSING (ENCASED)
NOTE:
TYPICAL SECTION OF LONGITUDINAL TRENCH
EXAMPLES OF PROTECTION OF EXISTING PIPELINES
EXAMPLES OF ENCASEMENT AND ALLIED MECHANICAL PROTECTION
STANDARD RIGHT-OF-WAY MARKER
PRUNING SUGGESTIONS
PART II REIMBURSEMENTS FOR UTILITY RELOCATIONS AND ADJUSTMENTS
To prescribe the policies and procedures for reimbursement of eligible utility costs associated with the relocation and adjustment of utility facilities on state highway construction projects. To authorize the Utilities Section of the Right of Way Division of Arkansas State Highway and Transportation Department to make all contractual arrangements with Utility Owners.
Federal Highway Program Manual Vol. 6, Chapter 6, Section 3, Sub-Section 1 (FHPM 6-6-3 -1), as amended and supplemented, adopted by reference herein with the same force and affect as if recited at length. Determination of reimbursement eligibility pursuant to applicable State Law, Statutory, and Case is generally interpreted by the Highway Department's Legal Counsel.
This applies to all utility owners with facilities affected by a highway construction project.
A privately, publicly, or cooperatively owned facility which directly or indirectly serves the general public. The term utility shall also mean the utility company inclusive of any wholly owned or controlled subsidiary.
A privately owned facility devoted solely to private use and not directly or indirectly serving the general public.
The adjustment of utility facilities required by a highway project. It shall also mean the construction of a functionally equivalent replacement facility necessary for continuing operation of the utility service, the project economy, or sequence of highway construction.
A utility owner having the right of occupancy in the existing location because of holding the fee, an easement, or other real property interest the damaging or taking of which is compensable in eminent domain, is considered eligible for reimbursement. The general criteria for determining eligibility for reimbursement for relocation costs shall be applied on the basis of the factual location of the existing utility facility in relation to existing highway right-of-way.
Existing utility facilities located on private property, street right-of-way of any incorporated Town or City, or County Road, dedicated urban development road, and/or private road rights-of-way which were not a part of or on the State Highway System at the time the facilities were installed, shall be considered eligible for reimbursement.
Utility facilities presently located on existing state highway right-of-way by permit or unwritten consent of the Highway Department shall be considered as not eligible for reimbursement.
Initial authorization on highway projects is for preliminary engineering by the utility owner's personnel (force account), the cost of which will be included in the subsequent relocation agreement.
When the utility is not adequately staffed with technical personnel or the present work load would be prohibitive to perform the necessary preliminary engineering, a consulting engineer may be employed by the utility owner. If any part or all of the consultant's fee is eligible for reimbursement, the Utility Owner must submit a written request to the Utilities Section requesting approval for the use of a Consultant.
Preliminary engineering costs are reimbursable to the utility owner only to the extent that the existing utility facilities required to be adjusted are eligible for reimbursement.
See Appendix I - "UTILITY ENGINEERING BY CONSULTANT".
A utility facility located on private right-of-way or easement (outside the existing highway right-of-way) is considered to be eligible for reimbursement of the cost of replacement right-of-way. Copies of an. easement or affidavit verifying the utility owner's right of occupancy must be submitted with the request for reimbursement. There will be no charge to the Highway Department for that portion of the utility owner's existing right-of-way being transferred to the Department for highway purposes.
After notification by the Utilities Section of an impending highway project, the Utility Owner is obligated to make the necessary arrangements for planning and accomplishing the relocation work required by the highway construction. The Utility Owner is responsible for the design and integrity of the utility facilities to be installed within highway right-of-way, in accordance with PART 1 "Utility Accommodation Policy".
The Utility Owner's responsibilities include but are not limited to the following functions:
All work would be done by the Utility's own personnel.
A contract would be awarded to the lowest qualified bidder based on an appropriate solicitation.
In some instances a combination of force account and contract labor may be required. Work normally done for a Utility Owner by a contractor under an existing continuing contract may be acceptable, provided the established rates are reasonable.
See Appendix II - "PREPARATION OF COST ESTIMATES AND ADJUSTMENT PLANS".
After the Utilities Section has reviewed and approved the cost and plan information, work authorization will be given either by Permit or Relocation Agreement.
Issued for nonreimbursable adjustments.
May be used when the estimated reimbursable cost is $25,000.00 or less and is mutually acceptable to the Utility and the Department, except that utility work let to contract cannot be a lump sum agreement. Confirmation by audit of actual costs is not required on Lump Sum Agreements.
Estimated reimbursable costs exceeding $25,000.00 must be done on an actual cost basis, except that Lump Sum Agreements in excess of $25,000,00 may be approved when it is determined that this method of developing costs would be in the best interest of the public. Actual Cost Agreements are subject to audit by the Department and the Federal Highway Administration.
After issuance of work authorization by the Utilities Section, the utility owner is expected to begin the adjustment work within a reasonable time and to exercise due diligence to complete the work without delay or interference to the highway contractor's operation.
All utility work shall be done in accordance with the approved agreement, plans and specifications. Any deviation in the scope of the work must have written authorization from the Utilities Section prior to the implementation of the change in order for the cost to be eligible for reimbursement.
In cases where undue delays to the highway project might be caused, verbal authorization for such changes may be given by the Utilities Section subject to submission and approval of revised plans and estimate as needed to prepare a written authorization.
Utility Owners shall notify the designated District Engineer in writing not less than three (3) days prior to starting work in order that observation and inspection of the work may be provided and shall periodically inform him of the progress of the work. The Utility Owner shall notify the Department's Engineer on the date the work is completed so that a final inspection may be scheduled.
The inspection process is the responsibility of the Resident Engineer assigned to a project under the jurisdiction of the District Engineer.
It is essential that there be field verification of the reimbursable utility work done in order to certify the utility billing for payment.
In order to substantiate the final actual cost of the work performed, the Engineer is required to keep daily inspection records verifying materials, labor and major items of equipment used. The Engineer must also certify that the work is complete, acceptable and in accordance with the agreement.
Daily inspection records are not required to verify the final actual cost on lump sum agreements; however, it is necessary that the Engineer certify the work is complete, acceptable and in accordance with the approved agreement.
It is necessary that the Engineer inspect any utility work being performed to verify its compliance with the approved permit.
Upon completion of the adjustments the Utility Owner shall provide, in accordance with the terms of the agreement, one final and complete billing of the actual costs incurred, or the agreed-to lump sum amount, at the earliest practicable date, but not later than six (6) months after the work is completed.
If requested by the Utility Owner, intermediate progress payments of 90% of eligible billed costs may be made, provided the billed amount is $5,000.00 or more. Such payments shall be made at no more than monthly intervals and shall cover only work completed to date, but may include payments for materials on hand.
See Appendix III - "ACCOUNTING INSTRUCTIONS AND RECORD REQUIREMENTS."
UTILITY ENGINEERING BY CONSULTANT
Under certain circumstances when a utility is unable to perform the Engineering work because it is not adequately staffed with technical personnel or the present work load would be prohibitive to perform the Engineering services with its own forces, a Consulting Engineer may be employed by the utility.
If any part or all of the consultant's fee is eligible for reimbursement, the Utility Owner must submit a written request to the Utilities Section requesting approval for the use of a Consultant.
Consultant Engineering costs are reimbursable only to the extent that the existing facilities are determined to be eligible.
Consultant Engineering fees must be based on actual cost, with a fixed amount for profit, and having a fixed upper limit for the total fee.
Preliminary Phase Engineering fees may be handled by lump sum reimbursement when the work is clearly defined and the fee relatively small. However, a breakdown of the fee is required.
Construction Phase Engineering fees must be handled on the actual cost basis.
It is recommended that consultant fees for reimbursement be based on the hourly base rate for each job classification with current percentages for payroll expense and general overhead expense being applied to the total direct labor cost.
PRELIMINARY ENGINEERING PHASE PROCEDURES
After approval of the cost estimate and plans, a Highway/Utility Relocation Agreement will be prepared and submitted to the Utility Owner for execution.
After receiving the fully executed agreement, the Utilities Section will authorize the Utility Owner to proceed with advertising for bids and acquisition of necessary right-of-way.
After the bids have been opened, the Utility Owner will submit one copy of each bid received and the bid tabulation sheet to the Utilities Section with a request for the Department's concurrence in award of the contract to the lowest qualified bidder.
After concurrence, the Utility Owner shall submit five (5) copies of the executed contract and five (5) sets of the completed specifications to the Utilities Section.
After these documents have been received, the Utilities Section will issue a Contract Work Order to the Utility Owner.
This completes the Preliminary Engineering Phase.
NOTE: If the utility construction work is to be performed by the Utility Owner's personnel, the construction work order will be issued to the Utility Owner following execution of the Highway/Utility Relocation Agreement and the contract letting process dispensed with.
CONSTRUCTION ENGINEERING PHASE PROCEDURES
Supervision and inspection by the Consultant during the construction work will be considered as a part of the Highway/Utility Relocation Agreement and reimbursed separately from the Preliminary Engineering Agreement; and will consist of but not be limited to the following:
PREPARATION OF COST ESTIMATES AND ADJUSTMENT PLANS TO SUPPORT HIGHWAY/UTILITY AGREEMENTS
When all or part of the cost of required adjustments of a Utility Owner's facilities is determined to be reimbursable, the Utilities Section shall be furnished the following:
MINIMUM REQUIREMENTS FOR A COST ESTIMATE
The estimate of cost should be detailed in accordance with Utility Work Order Procedures and Policies of the applicable Federal, State, or Local regulatory body setting up the accounting system or the utility's own accounting procedure approved in advance by the Highway Department.
The elements or components of a cost estimate should comprise:
In the respective components, all items of labor, material, and equipment should be itemized to show quantity, type, unit cost, and extended cost, and be summarized by the various categories and recapitulated to produce the net estimated cost of the adjustment.
Preliminary Engineering costs, utility right-of-way costs (including clearing), and construction supervision and inspection costs are to be shown as separate items.
If overhead cost amounts are determined by using percentage factors, labor loadings, or some other similar method, an analysis of the basis for overhead cost computations setting forth the elements of overhead costs accumulated in the computations must be furnished.
Generally, the adjustment in the facilities of a utility will be accomplished by company forces (force account). When certain items of the adjustment are to be performed by contract forces, costs covering these items shall be shown separately in their respective categories.
The reimbursement eligibility ratio, if adjustment costs are less than 100% eligible for reimbursement, should be developed, explained, and then applied in the estimate to show the proportionate costs of the adjustment to be borne by the utility and the Highway Department.
MINIMUM INFORMATION NEEDED ON ADJUSTMENT PLANS
When the cost of a required adjustment is to be solely at the Utility Owner's expense (non-reimbursable), the Utility Owner shall submit five (5) sets of the detailed adjustment plans. Also advise the time required to begin and complete the adjustment work.
BILLING PROCEDURES ACCOUNTING INSTRUCTIONS AND RECORD REQUIREMENTS FOR UTILITY ADJUSTMENT REIMBURSEMENT
A Utility must use an accounting system prescribed by the Federal or State Regulatory Body under which it operates, or in cases where a Utility does not use a prescribed accounting system, it must use its established system of accumulating specific work order costs or establish a system of accounts which will provide for accumulating direct and related costs of the utility adjustment. In any case, the system of accounts used must be in form and detail that will identify each claimed item of cost with the particular project. Any request for full or partial reimbursement of costs must be completely documented and clearly identified with the specific highway project.
To facilitate the formulation of rules and regulations for agreement and payment of the costs incurred for adjusting the facilities of all privately, publicly, or co-operatively owned utilities, the provisions of the Federal Agency directives must be observed. These directives require that the preliminary estimate of cost and the actual final bill be prepared in conformity with the same accounting procedure and in each instance use comparable unit quantities and prices by cost categories such as labor, equipment, overheads, materials used and recovered, etc.
The following is a substantial but not all inclusive outline of the basic bookkeeping and related records required for utility relocations cost accounting.
The primary purpose of the records will be to support and document the Utility's Invoice and to assure that it is in accord with the executed and approved Highway - Utility Agreement between the State and the Utility; and that the bill includes only those costs actually incurred as direct or related costs in the relocation and/or removal of the Utility's facilities because of a specific highway construction project.
It will be necessary for the Utility and the Highway Department's auditor to be completely familiar with the terms, conditions, and limitations contained herein and with the contents of the specific agreement. This is necessary in order for the auditor to properly verify that all charges or reimbursement claimed are eligible for State and/or Federal reimbursement; and in order that the Utility be properly informed of State and Federal requirements.
CONTROLLING-DATES (of Authorization to Incur Reimbursable Costs)
Preliminary engineering costs incurred prior to the date established by Step 1 above will not be reimbursed. Construction costs incurred prior to the date established in Step 2 above will not be reimbursed.
All cost records of the Utility (such as those listed below) must be identified in the Utility's records with the specific utility relocation job.
Vendor's Invoices
Material Issue Tickets
Material Returned to Stores Tickets
Mileage Reports
Equipment Usage Records
Expense Accounts, signed by employee and approving superior
Payroll Records, including time books, rate cards, etc.
Any other written records of the Utility which identify the
costs incurred with the specific Highway construction project
e.g.; Freight tickets, rental equipment invoices, etc.
Utilities shall maintain all books, documents, papers, accounting records and other evidence pertaining to costs incurred and make such materials available at their respective offices at all reasonable times during the contract period and for three (3) years from the date of final payment under the contract for inspection by the State, Federal Agency or any authorized representatives of the Federal Government and copies thereof shall be furnished if requested.
SALARIES AND WAGES
Direct Labor Charges
When supported by adequate records. salaries and wages billed at actual rates or at average rates for productive labor hours; . retroactive pay adjustments; and expenses paid by a Utility to individuals during the period of time they are directly or incidentally engaged in the utility relocations are reimbursable. Rates charged must be those paid employees at the Utility in its normal operations.
Indirect Labor Charges
Costs to the Utility for vacation holidays, sick leave, company-sponsored benefits and similar costs incident to labor employment will be reimbursed when supported by adequate records.
Such indirect labor costs should be distributed as a percentage of the direct labor charged to the project. The proper percentage to be applied to direct labor charges for indirect labor costs can be established by dividing the actual expense to the Utility for ordinary labor fringe benefits during the twelve (12) month period in which the relocation work is performed by the total productive payroll expense of the utility during the period.
Indirect labor charges normally include items of expense or costs which vary in direct ratio to the amount of the labor charges, Based on experience of the Utility Company, the following items are usually included in the calculation of a variable percentage figure which is applied to the total labor cost of the project in order to arrive at a cost item to be charged to capitalized or reimbursable projects, or as an expense item currently charged to operations.
Payroll Taxes
Vacation Pay
Retirement Reserve
Sick Leave Reserve
Hospitalization Insurance
Workmen's compensation Insurance
Other expense normally attributable to payrolls
Direct charges to the job for non-productive time such as vacation, sick leave, etc., will not be reimbursed. Example: A utility charges vacation time to the highway project on the basis that the employee would have engaged in this work had he been on the job. Although this may be the regular policy of the Utility, this method is not acceptable and such charges will not be reimbursed.
Consultant and Contract Technical or Professional Services
Where a Utility is not adequately staffed to perform the relocation, the amounts paid to engineers, architects, and others for required technical services by the Utilities Section will be reimbursed. Approval will not be given to fees for such technical services which are determined on the basis of a percentage of the total actual or estimated cost of the relocation.
Equipment
Where a Utility does not have the necessary equipment available to perform the required work, reimbursement will be limited to the amount of rental paid to the lowest bidder following appropriate solicitations for quotations. In the event of an emergency, such as breakdown of Utility's own equipment, reimbursement will be allowed for rental of equipment at the lowest rates available. Existing continuing contracts for rental of transportation and heavy equipment, which the Utility determines to be the most advantageous in its normal operations, shall be considered to comply with these requirements. Arbitrary or otherwise unsupported use charges, whether or not the equipment is owned by the Utility, will not be reimbursed.
Where a utility uses its own equipment on a reimbursable relocations project a rental rate must be developed for each specific class of equipment (auto, pickup, trucks, backhoes, dozers, etc.) Costs used in developing the rental rate may be depreciation, fuel, oil, repairs and tires, insurance, licenses and taxes. The rental rate for each class of equipment can be established by dividing the total operating costs for each class of equipment during the twelve (12) month period in which the relocation work was performed by the actual miles or hours used during the same twelve (12) month period. The utility may also develop the rate on a semi-annual, quarterly or monthly basis,
When the Utility does not have adequate records to support the cost distribution rates charged for its equipment, a rate must be negotiated for each type of equipment used for which payment will be requested.. Such rates must be negotiated and approved by the Highway Department prior to the work being done in order to be reimbursable.
In lieu of a negotiated rate for its equipment (when the Utility does not have adequate records to support a cost distribution rate), the fuel, lubricants, minor repairs, and other direct costs of operation incurred while the equipment is used on the job may be reimbursed; however, the Utility must maintain a record of the expenditures identifying them with the piece of equipment and identifying its use with the highway project. An acceptable basis for distribution of any operating expenses that are allocatable to the cost of the relocation must be determined and approved by the Department prior to using the item of equipment. Thus, an approved basis would be required to claim reimbursement for depreciation, tires, batteries, license, insurance, painting, and like expenses that are applicable to more than one job or operating function, or to a period of use longer than the duration of the highway utility relocation project.
Materials Installed
Materials installed and supplies used shall be billed at inventory prices when furnished from the Utility's stocks, and at actual cost to the Utility when the materials and supplies are not available from the Utility stocks and must be purchased for the relocation. Major material used in construction but not shown in the initial estimate, or supplemental change authorization, or by letter approval of the Utilities Section will not be reimbursed.
Materials Removed
Materials recovered from temporary use in connection with a highway project, and which are in suitable condition for reuse by the Utility, shall be credited to the cost of the project at stock-prices charged to the job, less ten per cent (10%) for loss in service life, if claimed by the Utility. The State shall have the right to inspect all recovered materials not classified reusable by the Utility. (See last paragraph in this section)
Materials recovered in suitable condition for reuse by the Utility in connection with construction or retirement of existing facilities shall be credited to the cost of the project at current stock prices. When the Utility returns recovered material to its Materials and Supply Account at original cost, or at a percentage of current price new, as a consistent practice in its normal operations, the work order shall receive credit accordingly. The foregoing shall not preclude any additional credits when such credits are required by law or regulations.
Items of materials recovered, both from the existing facility and from temporary use, in condition or lengths unsuited for acceptance for reuse by the Utility, and which are determined to have a sale value, shall be disposed of as follows:
The State's pre-designated engineer on the project, or other authorized State Highway employee, shall have the right to inspect recovered materials classified non-reusable prior to disposal by sale or junked as scrap without sale or use value. This requirements will be satisfied by the Utility giving written notice to the State of the time and place the materials will be available for inspection. This notice is the responsibility of the Utility, and it will be held accountable for the full value of materials disposed of without such notice.
Stores Handling
The costs of supervision, labor and expenses incurred in the operation and maintenance of storerooms and material yards, including storage, handling and distribution of materials and supplies are reimbursable. A rate or other equitable method of distribution of these costs is acceptable as long as it is representative of actual cost to the utility. In no event will a combination of a billing of actual and direct costs and a rate representative of actual and direct costs on a highway project be reimbursed. Expenses which may be used in developing a rate for stores expense are storeroom labor, freight and express, storeroom office expense, salaries of storeroom office and stock clerks, purchasing department salaries and expenses, storeroom maintenance expense, storeroom material handling equipment expense and other expenses connected with material handling. The rate can be established by dividing the total stores expense for a twelve (12) month period in which the relocation work was performed by the total amount of stores issued in the same twelve (12) month period.
Construction Overhead
Construction overhead costs are those overhead costs which would not have been incurred if construction had not been undertaken.
In order that each job or unit shall bear its equitable proportion of Overhead Construction costs, all such costs not chargeable directly to construction accounts, (such as general engineering and supervision, general office salaries and expenses, construction engineering and supervision by others than the accounting Utility, legal expenses, insurance, pensions, taxes, and the like) shall be allocated on the basis of the amount of such overheads reasonably applicable thereto. These instructions shall not be interpreted as permitting the addition to Utility accounts of arbitrary percentages or amounts to cover assumed overhead costs. but require the assignment to particular jobs of actual and reasonable overhead costs.
The following is an example of some of the overhead expenses which would have occurred whether or not the relocation work was accomplished and will not be allowed as expenses for relocation cost reimbursement.
Advertising
Bad Debts
Contingency Reserves
Contributions
Salaries and Fees of Board of Directors
Entertainment .
Federal and State Income Taxes
Fines and Penalties
Home Office Operations (except direct relationship to relocation costs)
Interest during Construction
Insurance not related Directly to Project
Life Insurance Premiums with Company as Beneficiary
(NOT employee fringe benefit)
Specific Legal and Accounting unless it is for the Project
Losses on Sale of Capital Assets
Losses from Other Projects
Resource Planning
Research Programs
Sales Promotion
Special Bonuses not Part of General Conditions of Employment
Stock and Stockholders Expense
Special Management Studies
Taxes and Expenses in Connection with Financing
Records kept supporting the entries for overhead costs shall show the total amount, rate, allocations basis of each additive, and shall be subject to audit by representatives of the State or the Federal Agency.
Insurance
Premiums paid to an insurance company for Workmen's Compensation, Public Liability and Property Damage Insurance will be reimbursed where, and to the extent it is determined that the amounts of the premiums are the products of the proper rates applied to the amounts of paid salaries and wages, exclusive of vacation pay or allowances, and are acceptable to the State and Federal Agency.
Contract
Contracts may be entered into by the Utility for facility relocation when a clear showing is made that it is to the best interest of the State, or that the Utility is not adequately staffed or equipped to perform the work with its own forces. Such contracts must have the prior approval of the Utilities Section of the Highway Department before they are executed.
If reimbursement is to be requested, any contract to perform- work in connection with the Utility relocation should be awarded to the lowest qualified bidder who submitted a proposal in conformity with the requirements and specifications as set forth in an appropriate solicitation for bids. (For the permissible exception, see, last paragraph under Contracts).
Subject to prior approval by the State Highway Department, existing written continuing contracts may be used for relocation work where it is demonstrated that such work is regularly performed for the Utility under such contracts at reasonable costs. This may include existing continuing contracts with another Utility. Where such other Utility has an ownership interest in the facility to be relocated, the inter company profit will not be reimbursed.
When work is to be done by both company forces 'and by contract, the attachments to the Utility Agreement should specifically describe the portion of the work to be done by each. For example: Where right of way clearing is to be performed by contract forces, the name of the contractor and the items of work covered by the contract should be clearly set forth in the Utility Agreement or attachments thereto.
Where the Utility proposes to contract outside the foregoing requirements for work of relatively minor cost or nature, the Utility will be reimbursed provided it is demonstrated that such requirements are impractical and the Utility's action did not result in an expenditure in excess of that justified by the prevailing conditions.
Rights of Way (Replacement)
When existing utility facilities are located outside existing publicly owned lands or highway right-of-way the Utility Owner may be reimbursed the cost of acquistion of replacement right-of-way subsequent to authorization by the Highway Department.
To properly document its records as to justification for the amounts paid for rights-of-way, the Utility shall determine and record its valuations of the rights-of-way to be acquired prior to negotiations therefor. The valuation may consist of appraisals made by utility personnel or by independent appraisers.
Except when the cost of right-of-way is $500.00 or less, adequate and formal appraisals should be made and records kept as justification for rights-of-way payment. The format for such appraisal reports is not prescribed, but should include:
IMPROVEMENTS
Plant Betterments (Specific Items)
Any increase in the functional capacity of, or service improvements in, the replacement facility over the existing facility, either through the use of materials, techniques, or methods, will require a betterment credit, except that no betterment credit is required for additions or improvements which are:
utility Change Order (Agreement Modification)
When a 'substantial" change from the work authorized in the approved Agreement is required, reimbursement shall be limited to the costs incurred for work described in a Utility Change Order that has written authorization from the Utilities Section. When there is any doubt as to the necessity for obtaining formal and prior approval of the proposed change, the Utilities Section of the Department should be contacted for clarification before such work is performed.
NOTE:
TYPICAL CROSSING (UNCASED)
