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Section 29: Administrative Settlements (for State)

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An administrative settlement is any settlement, the amount of which exceeds the approved value, made or authorized by the responsible acquiring agency, before initiating the ED process. The Administrative Settlement program was developed in order to enhance the acquisition process by adding flexibility to settle reasonable differences in opinion of value and to negotiate the acquisition of required right of way which would otherwise require judicial determinations of fair compensation. The administrative settlement program is not intended as a remedy for incomplete or poor quality valuation determination. The process is not intended to cure appraisal deficiencies or as a forum to debate appraisal methodology. It is also not intended as a mechanism to bypass the potential increased award determination of special commissioners or to meet pressing letting dates. These are issues that are appropriately addressed through quality control and quality assurance applied to approval of values by TxDOT staff or otherwise through the expeditious initiation and conduct of eminent domain proceedings.

The administrative settlement team (see second diamond, next paragraph) will recommend the approval or disapproval of all timely submitted administrative settlements.

Whether approved or disapproved, forward all documentation related to all administrative settlements to ROW Program Office.

The negotiator must make a diligent effort to reach a settlement with the property owner at the approved value. The administrative settlement is one of the tools available to the negotiator with the specific purpose to resolve reasonable differences with the opinion of value supported by the TxDOT 's appraisal. If an agreement on the approved value cannot be reached, the negotiator will explain the administrative settlement process and inform the property owner of the following:

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  • A written counteroffer is required and must include a property owner's signed proposal for full settlement setting forth a specific value with information to support the proposal, including a copy of the owner’s appraisal report on the property, if applicable. This counteroffer, or a written request from the property owner for an extension of time to submit a counteroffer, must be received by TxDOT no later than thirty days from the property owner's receipt of the initial offer letter and any counteroffers/administrative settlement requests or requests for extension of time received after the expiration of thirty days should not be considered.
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  • Only a written counteroffer will be considered, and if an additional offer letter is required due to an updated approved value (prior to a final offer letter having been sent), such additional offer letter must contain the wording that any counteroffer or request for time must be received within thirty days of the date of the property owner's receipt of the additional offer letter or it will not be considered.
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  • A timely submitted written request for an extension of time must be approved by TxDOT. The length of time, if approved, will be determined based upon the purpose of the extension, to insure that such extension of time will not jeopardize the construction letting and that the extension of time is in the best interest of TxDOT.
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  • The counteroffer will be reviewed by an administrative settlement evaluation team (as described below) that will recommend approval or disapproval unless the team determines the acquisition process should enter into enhanced negotiations as described later in this chapter.
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  • A final offer letter at the original approved value shall be sent within 5 business days if:
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    • the 30 days have passed, provided no counteroffer or written request for extension of time has been received within said time;
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    • the administrative settlement is not approved; or
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    • the property owner decides to reject an approved administrative settlement.
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  • The property owner will be notified by TxDOT, in writing, of the agency's decision.
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  • If improvements are retained, the retention values will be subtracted from the total settlement amount.

TxDOT will appoint an administrative settlement team consisting of the Right of Way Project Manager or designee and two or more members who will analyze pertinent information and reach consensus on whether an administrative settlement should or should not be recommended. The recommended team composition is three or five members of which the review appraiser may be a member, except when contract review appraisers are used. Other members might include the condemnation coordinator (if assigned), staff lawyer (if applicable), project engineer (or designated representative), or other right of way staff members. Alternate team members may be chosen and substituted based on individual availability and issues specific to the parcel. The negotiator for the parcel will provide details of the negotiations but will not participate in the decision of the team.

Team responsibilities are as follows:

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  • The team must meet and complete its evaluation within five working days after receipt of a written counteroffer. After the team approves the ROW-N-9 Administrative Settlement Evaluation and Approval form, forward the form to Right of Way management within five working days of the approval date.
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  • The team must reach a consensus to recommend approval or disapproval of an administrative settlement.
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  • Administrative settlement teams will consider any pertinent value information provided by the owner to assess whether to approve the counteroffer.

Upon approval of an administrative settlement, the negotiator will:

Upon disapproval of an administrative settlement, the negotiator will:

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Enhanced Negotiations

The enhanced negotiations process provides additional flexibility in negotiations with the property owner in conjunction with the administrative settlement process.

This enhanced negotiations process allows an additional 30 days for the negotiator to work with the owner to eliminate ineligible items from the counteroffer and to submit a revised counteroffer (if needed). An informal non-binding mediation meeting between all parties involved could occur during the additional 30 days to work toward an administrative settlement.

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Enhanced Negotiations Process

After the Administrative Settlement Team reviews the owner’s counteroffer, if some but not all issues raised relating to valuation, legal issues, cost savings and project scheduling are considered to have merit, then the counteroffer will be returned to the negotiator with ineligible items marked and/or approval of a lesser amount with ineligible items removed from the counteroffer.

If the Administrative Settlement Team marked ineligible items in the counteroffer and returned it to the negotiator, the negotiator will discuss ineligible items in the counteroffer with the owner and ask for a revised counteroffer with ineligible items deleted. If the owner submits a revised counteroffer, it will be transmitted to the Administrative Settlement Team who may either approve or disapprove the revision. (In complex and/or unusual cases, the Administrative Settlement Team may refer the revised counteroffer to the Right of Way Project Delivery Manager for review).

If the Administrative Settlement Team approved a lesser amount with the ineligible items marked out, then the negotiator will relay the approved amount and see if it is accepted by the owner.

At the conclusion of this process the negotiator will prepare the ROW-N-9 Administrative Settlement Evaluation and Approval form as well as either the ROW-N-11 Administrative Settlement Approval Letter or ROW-N-12 Administrative Settlement Disapproval Letter which must be signed by the Right of Way Project Delivery Manager or its designee. If the ROW-N-12 Administrative Settlement Disapproval Letter is prepared and signed by the Administrative Settlement Team members, then the negotiator prepares the final offer letter for signature by the Right of Way Project Delivery Manager or its designee.

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