Executive Summary
Overview
The Mississippi Department of Transportation must purchase property in the proposed road area (right-of-way) and then clear it of all structures in order to construct highways. Because of several complaints regarding the department’s clearance methods, PEER examined the department’s process of selling and clearing structures from the right-of-way, focusing on the issues raised by the complainants. Complainants stated that:
• in some instances the department has not allowed citizens to bid on buying and moving structures from the right-of-way because they were to be torn down due to time constraints, but later has allowed demolition contractors to move the houses intact rather than destroy them;
• department personnel changed proposed removal methods several times during the course of a project, reversing their previous decisions to allow citizens to buy structures; and,
• they suspected department personnel may have received kickbacks from contractors who moved structures from the right-of-way because contractors were allowed to remove houses intact that citizens had been told had to be destroyed.
In reviewing methods by which the department makes decisions to move structures, PEER determined that some decisions which may not appear to be fair to the public are driven by the department’s desire to remove structures quickly from the right-of-way in order to meet construction deadlines. For instance, the department states that its use of demolition companies to remove structures for a fee is more timely than selling structures and helps to ensure that the property is cleared prior to the construction contract award date. Also, Clearance Section personnel state that removal methods are affected by numerous factors such as dates when structures are vacated and changes in proposed construction award dates. PEER attempted to verify these assertions through an analysis of departmental data, but determined that the data was inaccurate and incomplete.
Despite the department’s reasons for its choice of removal methods, its lack of comprehensive, up-to-date policies and management controls for guidance of clearance agents could result in arbitrary decisions which could be perceived as unfair by those interested in purchasing properties on the right-of-way. Also, the department’s lack of sufficient oversight policies and prevention measures increases the potential for illegal acts such as kickbacks. Although a review of clearance files did not reveal situations that would suggest specific instances of kickbacks, the files do not include the type of information and proper documentation which would help lead to such conclusions or prevent improper acts.
The department has not developed policies to help agents make systematic and fair decisions and to factor costs of various removal methods into decisionmaking. For instance, the department does not have a formal policy which governs whether and under what circumstances demolition contractors or subcontractors may move structures intact and to require price competition between contractors. The department also has not developed a written policy to determine when properties should be sold and when demolition contractors may remove them. Also, some policies do not reflect current practice of the department. This has resulted in inconsistent practices in obtaining performance bonds from those who purchase structures. The official department policy also violates state law because it allows discretion to sell structures valued at more than $500 by private sale rather than advertised sale.
Recommendations
See pages 24 through 27 of the report for detailed recommendations.
Clearance Policies
1. The Department of Transportation’s Clearance Section should revise its written policies to include the full scope of its operations and necessary management controls and submit these to the Transportation Commission for approval. The department should ensure that its revised policies incorporate the policy elements required by federal regulations governing property management. The revised policies should include the following:
a. Clearance policies should outline parameters and time frames for choosing a particular removal method for clearing the right-of-way.
b. Clearance policies should outline how clearance agents can conduct private sales with potential house buyers.
c. Clearance policies should require separation of the duties of the individuals responsible for assigning salvage values to structures from the duties of those who sell the structures.
d. Clearance policies should require that agents follow ethical guidelines developed by the department and require agents to sign a statement of ethics.
e. The department should rewrite official policies to correspond with actual right-of-way procedures, especially for performance bonds and owner buyback of property.
Communication of Policies to the Public
2. The Department of Transportation should improve communications with the public or with those with whom they will be dealing in selling houses. The department should make available to the public and interested parties a guide sheet of its policies for clearing structures from the right-of-way.
Competitive Bidding Procedures
3. The Legislature should amend MISS. CODE ANN. Section 65-1-123 (1) to require documentation of private sales and sealed bids. Agents should document that they have contacted at least three house movers to bid on structures which are to be sold privately. For sealed bids, the Clearance Section should require that agents and witnesses present for the bid opening signify that the opening of sealed bids has taken place on a given date.
4. The Department of Transportation should consider establishing a qualified bidders’ list for house movers. The department should distribute copies of and communicate its policies to the qualified house movers.
5. Clearance Section personnel should follow written policies for obtaining performance bonds from individuals who win bids to move structures from the right-of-way.
6. Departmental personnel should obtain bids from at least two demolition contractors on each separate demolition job.
7. In overall bids to demolish structures on a project, the Department of Transportation should require that demolition contractors include a bid for purchasing those structures that they move intact from the right-of-way. The department should obtain assurance that contractors have informed the department when they will move rather than destroy structures.
File and Data Administration
8. Clearance Section personnel should file in a central location all information related to clearance of structures. Personnel should use a detailed checklist to ensure the presence of all items necessary to document the method of removal. Right-of-Way management should revise the project filing system to require that all clearance information be filed in one section of the folder to help ensure information is not lost.
9. The Clearance Section should revise its data system to include categories outlining the actual method by which each structure was removed from the right-of-way and the date of removal of each structure.