Right of Way Capital vs SupportAugust 19, 2016
How do we classify (capital or support) right of way costs for our project?
Right of Way (R/W) capital expenditures usually covers costs of:
- R/W acquisition
- Excess land
- Inverse condemnation
- Gains and losses from sales of excess land
- Title and escrow fees
- Condemnation expert witnesses
- Condemnation deposits
- Utility relocation
R/W support expenditures covers labor charges and all operating and equipment expenses chargeable to a project.
R/W capital essentially reflects the direct costs or products to acquire the required project right of way specified by the PS&E. R/W support are the costs to prepare or review those direct costs or products.
Here are several activities that are commonly brought up when differentiating between the R/W capital and support phases:
- Preliminary title reports – RW capital. The product is part of title fees. Any work done by the local agency (staff or consultant) to secure or review the title reports would be RW support.
- Appraisals – RW support. Unless needed to initiate condemnation, work to prepare appraisal reports is a RW support activity.
- Surveying – RW support. Within the context of preparing RW products, surveying is a RW support activity. (Survey can also be part of the PE or CON phase depending on the reason it’s being performed.)
- Project permit fees – RW capital. Although these permits (e.g. Fish and Game 1601 permits, Water Resource Control Board National Pollutant Discharge Elimination System Permits (NPDES), and Regional Water Quality Control Board 401 Water Quality Certifications, etc.) are typically acquired during the project’s project development stage, they are treated as R/W capital expenses2.