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Agreements & Cost Estimates
Matthew L. HardingDistrict Utility Engineer, INDOT
April 18, 2023
Objectives Reimbursement
Grounds for Reimbursement & the Appropriate Agreements Partial Reimbursement
Agreements Filling out an Agreement Reviewing an Agreement Extraordinary Cost Agreement
Cost Estimates Parametric Estimates Developing Estimates Detailed Estimates
Invoices & Invoicing Reviewing an Invoice Itemized Cumulative Invoice Sample Invoice
References Examples
Reimbursement&
Agreements
Reimbursable Positions Reimbursable Positions should be determined by
Stage 1 A summary page should be drafted
Include all utilities seeking reimbursement Grounds for Reimbursement Further Explanation of their Situation
Submitted to Project Manager & State Director of Utilities at Stage 1
Clarifies who has a qualified interest early in the project
Any disputes can be cleared in well in advance of letting
Partial Reimbursement A utility may be partially reimbursable for a project Different options to split the cost
Percentage of Overall Cost Precise Breakdown
Should be noted in the agreement Percentage is most appropriate for relatively uniform
facilities Example: 700 LF of a 1000 LF line is in a private easement
70% Reimbursable from the total cost of the relocation Includes Overhead, Equipment, etc.
Precise Method works best for non-uniform facilities Example: Same as above except the last 500 LF is a larger pipe
The first 700 LF are 100% Reimbursable The last 300 LF are excluded The Overhead, Equipment, etc. can be split 70% - 30%
Types of Agreements
General Agreements Preliminary Engineering Standard Extraordinary Cost Unnecessary Cost Addenda to Agreements LPA Utility Agreements Utility-Specific Agreements
INDOT employees can access all current agreementsY:/Div.design/Utilities & Railroads/Utility Coordination/Standard Agreements
Consultants may request a copy of the correct agreement from their Oversight Agent
Work may be by Utility or by INDOT
Example Agreement - Prep
Example Agreement - Prep
Example Agreement - Prep
Agreements – Exhibits Agreements generally have two exhibits
Exhibit A – Signed & Approved Workplan Prioritize reimbursable utilities when planning coordination
Exhibit B – Itemized Cost Estimate All pages should be numbered, i.e. Exhibit A – 1 of 4
Example Agreement - Review
Example Agreement - Review
Example Agreement - Review
Extraordinary Cost Agreements EC Agreements require additional approval before
proceeding with development Extraordinary Cost Request Internal Memo prepared by Oversight Agent Exhibit A – Copy of the SPMS Schedule Exhibit B – Letter from utility requesting hardship Exhibit C – Revenues from the previous calendar year Exhibit D – Itemized Cost Estimate Exhibit E – Workplan
Generally, include the work in the contract
Extraordinary Cost Agreements Cost Split
Utility is responsible for at least 10% of their gross annual revenue
PE & CE costs may be deducted from their share INDOT is responsible for the remainder of the estimated
cost
Example Agreement – Ex. Cost
Reimbursement & Agreements There must be a clear conflict between the INDOT
Project and the utility’s facilities Betterment of utility facilities is not reimbursable Original signed hardcopy must be sent to CO
for approval & execution Ensure the Address on the front page is the Utility's
remit to address Ensure all exhibits are correctly labeled and
numbered Flag the signature pages before sending to CO Affix a Memo & Routing Slip to the front of the packet LPA stands in for the State Transportation
Department (STD) in regards to all FHWA Requirements
Cost Estimates
Cost EstimatesParametric Estimate
Used to populate a basic amount of money when a project is initially developed Does not take any site/utility conditions into consideration The project manager can decline these recommendations
Example: SR 256 in Austin Estimated Project Cost: $315,000 Utility Estimate: $31,500
Non-Interstate
Interstate
Rural 5% 10%
Urban
10% 15%
Cost EstimatesBallpark Estimate
Submitted by the utility with their initial notice response Educated Guess Specific to the project Based on initial anticipated accommodation Can be as simple as a cost per foot x length
Refined as the project develops As more is known about the relocations Develops towards a detailed estimate
Cost EstimatesDetailed Estimate Submitted Reimbursable Utilities May be refined multiple times Preferably formatted similarly to an invoice Contingencies are not accepted by FHWA
Labor Surcharge
Materials Salvage
Transportation Equipment Overhead
Preliminary Engineering Construction Engineering Inspections Legal Fees
Betterment
Cost Estimates Credits
Salvage Materials that can be returned to stock at current market value Proceeds from sale of materials can be credited to the project
Betterment Definition: Wholly at the election and for the benefit of the utility Methods of Calculation
Determined to be a percentage of the total cost Precise Itemization
Exceptions: Required by the Project Equivalent Standards Next highest grade/size for obsolete materials Required by government law or regulatory commission code Current utility design practices & there is a direct benefit to the
highway project
Cost Estimates Non-Participating Items
The following items are not reimbursable with federal money External Relations Marketing
Lobbying Research Programs Returns on Investments
AFUDC (Allowance for Funds Used During Construction) Interest Financing Costs Float (Considered to be interest)
Capital Stock Tax Contingencies In the event of conflicting policies we follow FHWA guidelines
Cost Estimates – Sample
Invoices & Invoicing
Reviewing an Invoice A good invoice should include three components
The Bill Single Page Letter Utility Name Remit to Address Invoice Number Date of Invoice Start & End Dates Project & Permit Information Purchase Order Number Utility Representative Contact
Information Summary of Charges
The Ledger Cost Item ID Cost Item Category Date cost was incurred Name of Contractor Type of goods or services Rate for each unit of goods or
services Number of units of the goods or
services Total Cost of the goods or services
The Supporting Documentation Work Logs Contractor Invoices Receipts
Itemized Cumulative Invoice The Final Bill Summary listing of the charges for the entire
project Should use the same categories as the ledgers Include a total amount due
Can be compared directly to estimate Facilitate an explanation of Cost Overruns
Must be submitted within 90 days of utility work complete per the agreement
Example Invoice
Example LedgerUtility Name Indianapolis Communications DirectorateINDOT Des. No. 0201297Description SR 751 road reconstruction from west intersection with SR 826 to Franklin Parkway
Identification Number
Cost Item Category
Date Cost Incurred
Name of Contractor or Employee Types of Good or Services
Unit of Puchase Rate per Unit
Quantity of Units
Total Cost of Goods or Services
2013020100001 Contractor 02/01/2013 Gestalt Engineering Preliminary Engineering LS $14,567.00 1 $14,567.002013020200001 Contractor 02/02/2013 Picadilly Surveying Site Survey LS $7,987.00 1 $7,987.002013020300001 Contractor 02/03/2013 Dig It Baby Dig It Subsurface Utility Engineering LS $4,246.00 1 $4,246.002013020700001 Labor 02/07/2013 Robert C. Peterson CAD plan preparation Hour $40.00 8 $320.002013020700002 Labor Surcharge 02/07/2013 Robert C. Peterson CAD plan preparation Hour $60.00 8 $480.002013020700003 Labor 02/07/2013 William T. Pantangle Water system design Hour $60.00 4 $240.002013020700004 Labor Surcharge 02/07/2013 William T. Pantangle Water system design Hour $90.00 4 $360.002013020800001 Labor 02/08/2013 Jeff J. Jefferson Meeting w/ clients Hour $80.00 2 $160.002013020800002 Labor Surcharge 02/08/2013 Jeff J. Jefferson Meeting w/ clients Hour $120.00 2 $240.002013021200001 Materials 02/12/2013 General Supply Co. Wire, guy steel 1.0 inch Foot $2.50 100 $250.002013021200002 Materials 02/12/2013 General Supply Co. Pole, power, wood 40 ft Each $2,345.67 4 $9,382.682013021200003 Materials 02/12/2013 General Supply Co. Rod, ground 5/8 inch copper Each $142.35 4 $569.402013021200004 Materials 02/12/2013 General Supply Co. Pole, power, wood 50 ft Each $3,456.78 6 $20,740.682013021400001 Materials 02/14/2013 Fiber Optic B-Us Fiber, armored Foot $3.25 720 $2,340.002013021400002 Materials 02/14/2013 Fiber Optic B-Us Fiber optic cable Foot $1.85 5280 $9,768.002013021600001 Materials 02/16/2013 Make It Snappy Quick connect type 1 steel Each $42.60 18 $766.802013021600002 Equipment 02/16/2013 Rent It Now High Lift, 40 foot Day $240.00 5 $1,200.002013021600003 Equipment 02/16/2013 Rent It Now Truck, pick up, extended cab Day $75.00 5 $375.002013021600004 Transportation 02/16/2013 Fancy Car Rentals Rental Car Day $39.50 5 $197.502013022100001 Transportation 02/21/2013 Polka Dot Cab Company Taxi Cab Fare LS $21.50 1 $21.50
Total $73,992.56
Contractor $26,800.00Labor $720.00Labor Surcharge $1,080.00Materials $43,817.56Equipment $1,575.00Transportation $219.00Sub-total $73,992.56Overhead 15% $11,098.88Total $85,091.44
References
References For More Information
IC 8-23-2-6 http://www.fhwa.dot.gov/reports/utilguid/
FHWA 23 CFR 645, Subpart A http://www.fhwa.dot.gov/reports/utilguid/ Commentary Appendix A – Legal Code
INDOT Utility Coordination Website http://www.in.gov/indot/2389.htm
Indiana Design Manual: Chapter 104 http://www.in.gov/indot/design_manual/files/Ch104_2013.pdf
Examples
Example 1
Franklin Petroleum has asked for reimbursement Remove their casing and replace the pipeline under the road Current industry practice is to install pipes without casings
There are no grounds for reimbursing the removal of the casing
The pipe is not in conflict with the project It is the current standard but not in the best interest of the project Extending the casing to the new edge of the road could qualify
Example 2
Boilertown Electric Company has claimed a Second Time Move
They must relocate their facilities out of the way of construction They must move to temporary and return to permanent Right of
Way There are no grounds for reimbursement of the second
time move Two moves is part of their workplan They should understand that this is an intermediary step A single move to final placement is not always possible The same holds true for all attached utilities
Example 3
Boilertown Electric has asked for reimbursement Municipal Utility on municipal RoW
There are grounds for partial reimbursement They are crossing municipal RoW several times Percentage of poles if they are similar Itemized if the poles vary considerably Only if the attached utility was municipally owned
Example 4
Boilertown Electric has asked for reimbursement Municipal Utility on another municipality’s RoW
There are no grounds for reimbursement They have no property interest in Hoosiertown Municipal utility only has rights within its municipality unless
property rights were secured in another municipality
Example 5
All three have asked for reimbursement Boilertown Electric pole line is on a private easement Cardinal Communications has a private easement Bulldog Bandwidth is attached to a pole with a property interest
There are grounds for reimbursement BEC is reimbursable in full Cardinal Communications is reimbursable in full The CC Easement overlaps with their current
There are no grounds for reimbursement Bulldog Bandwidth has no property interest BEC is the holder of the property interest as owner of the poles
Example 6 Extraordinary Cost Agreement
The upgrade to 4” PVC does not qualify as betterment Replacing the AC with equivalent PVC does not qualify
as betterment Changing from 6” to 8” is betterment
The estimated cost of relocation is $__________ (See Exhibit “B” for itemization). The utility represents that the total operating revenue received by the Utility during the utility’s most recent fiscal year was $_________. The estimated cost of betterment to the utility’s facilities is $_________. The total cost of INDOT’s construction project is $_________. Therefore the estimated cost of the Utility’s relocation to be reimbursed by INDOT is $________. The utility understands that INDOT will not reimburse the Utility for the cost of betterment.
90,000
500,0008,000
450,00032,000
Example 7 Cost Estimates
A) would make a satisfactory ballpark estimate Not enough detail regarding construction No labor, material, equipment, transportation breakdowns
B) would make a satisfactory detailed estimate Has enough detail for materials, labor etc. Is very clear on what all associated costs are expected
C) would be a sufficient ballpark estimate Shows the expected material credit
D) would be a good detailed estimate Breaks down the overhead Breaks down construction costs, disposal costs, restoration costs
Questions