A Follow-up Review of the Mississippi Department of Transportation’s Methods for Acquiring Right-of-Way Properties
Executive Summary
During its 1994 review of the Department of Transportation’s right-of-way acquisition process, PEER identified several inconsistencies in the acquisition function. These inconsistencies promoted citizens’ perceptions of unfair treatment to property owners. To address the weaknesses, PEER recommended that the department improve operating procedures to ensure consistent and uniform property appraisals and administrative settlements, improve oversight of property acquisitions, provide clear and complete information to property owners, and ensure that it acquires all property within a project prior to letting the construction contract.
Since PEER’s 1994 report, the Department of Transportation has taken little action to address citizens’ concerns that acquisition of right-of-way be fair to all parties.
The Department of Transportation has been largely unresponsive to PEER’s 1994 concerns, taking little action to address identified weaknesses. As a result, the Right-of-Way Division’s acquisition process continues to allow inconsistency and unfairness to property owners. Although the department has improved the clarity and content of information distributed to property owners, it has not heeded recommendations to improve consistency of appraisals, administrative settlements, or damage awards to property owners.
The department’s decision to hire private acquisition agents increased its oversight responsibility. The Department of Transportation chose to supplement in-house right-of-way acquisition efforts by contracting with private firms to procure property. This gives private firms the responsibility of interacting with property owners and places additional burden on the Right-of-Way Division to monitor those firms and ensure that they administer the process consistently and fairly.
The department’s oversight responsibility has increased due to contracts with private acquisition agents and reduced federal oversight, yet the department has not acted to improve oversight of acquisition operations.
Reduction in oversight of Right-of-Way acquisitions decreases assurance that the division performs this function consistently. Since 1994, the Department of Transportation has not acted to improve internal oversight of its acquisition operations. In addition, federal authorities reduced their oversight efforts in 1998, exempting projects that cost less than five million dollars and routes that are not part of the national highway system. The lack of sufficient internal oversight will also affect acquisitions by private contractors, particularly for projects now exempt from federal oversight and subject only to the department’s review.
Because the department has taken little action to control for inconsistencies in the acquisition process and assure fairness, its administration of the process continues to cause concern regarding impact on property owners. This follow-up review assesses department actions to address weaknesses PEER identified in 1994.
Recommendations for Departmental Action
Before December 31, 1999, the department should adopt measures to improve operating procedures for consistent and uniform property appraisals and administrative settlements, improve oversight of property acquisitions, provide clear and complete information to property owners, and ensure that it promotes timeliness in bringing closure to eminent domain cases and obtaining titles.
1. The department should address weaknesses that contribute to inconsistent property appraisals by:
•requiring review appraisers to use a checklist of appraisal components when conducting appraisal reviews.
•developing a standard checklist of compensable items.
•requiring reviewers to log characteristics and compensation for parcels on a project basis to ensure internal consistency. In order to establish consistency, particularly for damages and compensations, the department should develop standard operating procedures for the Appraisal Review Section to follow in logging information on a project. This project log should enable a reviewer to check consistency across all parcels throughout the acquisition process.
2. The department should take action to improve consistency of its administrative settlements by developing criteria that the Acquisition Section will use as the basis for settlements. The department should adopt standard operating procedures requiring formal documentation and justification for awarding administrative settlements.
3. The department and the Office of the Attorney General should develop procedures for more effectively monitoring fee attorneys’ progress on eminent domain cases. These procedures should promote timeliness in obtaining titles and bringing closure to eminent domain cases. Although the department has modified its parcel tracking system to record filing information on eminent domain cases, the department has not transmitted this information to the Attorney General’s Office.
In the event that the Attorney General’s Office increases its reliance on fee attorneys, it should establish standard procedures that formally outline criteria for their selection.
4. The department should develop guidelines and specify conditions for awarding damages to property owners. The adoption of such guidelines would help to ensure consistency in project acquisitions. To ensure that it awards damages uniformly, the department should adopt policies to ensure that review appraisers give field appraisers guidelines before the appraisal process begins.
5. Although the department has taken some action to improve the clarity and content of information distributed in its "Citizen’s Right-of-Way Acquisition Guide," it should take additional measures to inform property owners of their rights in the acquisition process. The department should:
• insert a statement in its Guide that the department will accept and consider a private appraisal and determination of just compensation that the property owner obtains; and,
• establish a toll-free number for property owners to contact with questions concerning right-of-way procedures and/or their parcel.
6. In light of the reduction in external oversight by federal authorities, the department should require that its Internal Audit Division annually sample parcel files to verify that the Right-of-Way Division follow department procedures to ensure consistency and fairness.
By December 31, 1999, the department should respond to PEER concerning its actions taken to address weaknesses identified in this report. If PEER finds that the department has not addressed weaknesses, the Legislature should adopt legislation requiring the department to improve administration of the acquisition process in the areas recommended above.
Options for Legislative Action
Landowners in Mississippi who incur unforeseeable damages after condemnation suffer an uncompensable burden in that they have no remedy against the state for these damages. To address this problem, the Legislature has at least three options:
•create a statutory cause of action for unforeseeable damages;
•amend the Mississippi Tort Claims Act to allow remedies for unforeseeable damages; or,
•create an administrative claims settlement procedure within the Department of Transportation by amending M
ISS. CODE ANN. Section 65-1-8.