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