**Work Order Number BAT 04-020**

**Costs Related to Compliance with Federal Environmental Laws: Case
Studies in the Federal-Aid Highway Program**

**FINAL REPORT**

**To**

**Office of Planning, Environment and Realty**

**Federal Highway Administration**

**Washington, D.C.**

**Office of Policy**

**Federal Highway Administration**

**Washington, D.C.**

**July 2006**

**Prepared by**

![](media/image1.png){width="2.1222222222222222in"
height="0.8770833333333333in"}

**514 10^th^ Street, NW**

**Suite 700**

**Washington, DC 20004**

**Acknowledgements**

> This report was prepared by Joe Crossett and Craig Secrest of
> TransTech Management for the Federal Highway Administration (FHWA)'s
> Office of Planning, Environment, and Realty. Oversight of the study
> was provided by Nina Kelley (Team Leader, Office of Real Estate
> Services) and Janet Myers (Program Manager, Office of Real Estate
> Services). Additional comments were provided by the following FHWA
> staff: Allen Greenberg (Office of Policy); Shari Schaftlein (Team
> Leader, Office of Project Development and Environmental Review); and
> Fred Skaer (Director, Office of Project Development and Environmental
> Review).
>
> The study team would like to thank the following individuals for their
> significant contributions throughout the project: Frannie Brindle
> (Oregon DOT), Lorraine Butler (Oregon DOT), Mike Hancock (Kentucky
> Transportation Cabinet), Carolyn Ismart (Florida DOT), Brent Jensen
> (Utah DOT), Melissa Maiefski (Arizona DOT), John Metille (Kentucky
> Transportation Cabinet), Vickie Murphy (Montana DOT), Josh Nelson
> (Maryland State Highway Administration), Dan Scudder (Wisconsin DOT),
> Robert Shreeve (Maryland SHA), Ken Smith (Washington DOT), and Nick
> Testa (Oregon DOT).

**Additional Information**

> For information concerning FHWA Planning, Environment and Realty
> activities and similar topics, please go to the internet home page for
> the FHWA Office of Environment, Planning and Realty at:
> <http://www.fhwa.dot.gov/hep/index.htm>. If you have questions
> concerning this particular study, please contact the current Team
> Leader for Program/Policy Development in the Office of Project
> Development and Environmental Review; contact details can be found at:
> http://www.fhwa.dot.gov/hep/hepoffice.htm.

**Table of Contents**

[Executive Summary ii](#executive-summary)

[1.0. Introduction 1](#introduction)

[1.1. Study Purpose, Methodology, and Structure
1](#study-purpose-methodology-and-structure)

[1.2. Literature Review 3](#literature-review)

[2.0. Definition of Environmental Costs
8](#definition-of-environmental-costs)

[2.1. Compensatory Costs 8](#compensatory-costs)

[2.2. Avoidance Costs 10](#avoidance-costs)

[2.3. Environmental Costs Excluded from the Study
12](#environmental-costs-excluded-from-the-study)

[3.0. Tracking Environmental Costs 13](#tracking-environmental-costs)

[3.1. Benefits and Barriers to Tracking Environmental Costs
13](#benefits-and-barriers-to-tracking-environmental-costs)

[3.2. When Do DOTs Incur Environmental Costs?
15](#when-do-dots-incur-environmental-costs)

[3.3. How do DOTs Track Environmental Costs?
18](#how-do-dots-track-environmental-costs)

[3.4. Project-Level Environmental Costs Tracking Method
25](#project-level-environmental-costs-tracking-method)

[3.5. Observations and Considerations
26](#observations-and-considerations)

[4.0 Case Studies of Environmental Costs
29](#case-studies-of-environmental-costs)

[4.1. Selecting Representative Case Studies
30](#selecting-representative-case-studies)

[4.2. Case Study Format 31](#case-study-format)

[4.3. Case Studies 32](#case-studies)

> [Highway US 113 Dualization, Maryland
> 33](#highway-us-113-dualization-maryland)
>
> [Montana Highway 84 (Four Corners - West) Reconstruction, Montana
> 39](#montana-highway-84-four-corners---west-reconstruction-montana)
>
> [Alexauken Creek Bridge Replacement, Rte 179, New Jersey
> 44](#alexauken-creek-bridge-replacement-rte-179-new-jersey)
>
> [Bob Creek Bridge Replacement, Pacific Coast Highway, Oregon
> 48](#bob-creek-bridge-replacement-pacific-coast-highway-oregon)
>
> [Highway 12300/12600 South Highway Widening, Utah
> 53](#highway-1230012600-south-highway-widening-utah)
>
> [I-90 Sunset Way Interchange, Washington
> 58](#i-90-sunset-way-interchange-washington)

[4.4. Case Study Observations 64](#case-study-observations)

[5.0 Conclusions and Recommendations
67](#conclusions-and-recommendations)

[Appendix A A-1](#appendix-a)

[Appendix B B-1](#appendix-b)

#  {#section .unnumbered}

# Executive Summary

**Introduction**

Projects to build or preserve transportation infrastructure sometimes
affect human and natural environmental quality. Federal environmental
laws such as the National Environmental Policy Act (NEPA) require the
Federal Highway Administration (FHWA) and state Departments of
Transportation (DOTs) to consider and address mitigation of the
environmental impacts of Federal-aid transportation projects.

This study responds to a request by the House Appropriations
Subcommittee on Transportation, Treasury, Housing, and Urban
Development, the Judiciary, District of Columbia, and Independent
Agencies that requires the FHWA "to determine the costs associated with
the environmental process on a representative sample of projects." The
purpose of the study is to establish a comprehensive definition of state
DOTs' environmental costs, including mitigation and documentation costs
as described in the Congressional request, and use it to gather best
available data on complete environmental costs for a set of case studies
that represent the kinds of projects routinely undertaken by state DOTs.

The study is based on detailed interviews and information provided by
practitioners at selected state DOTs including Arizona DOT, Florida DOT,
Kentucky Transportation Cabinet, Maryland State Highway Administration,
Montana DOT, New Jersey DOT, Oregon DOT, Utah DOT, Washington DOT, and
Wisconsin DOT.

**Definition of Environmental Costs**

According to practitioners, a comprehensive definition of environmental
costs incurred during delivery of transportation projects has two parts:

-   **Compensatory costs** associated with preparing for and undertaking
    actions to make up for unavoidable environmental impacts during
    project delivery. Primary compensatory activities for a project
    might include some or all of the following: wetland and stream
    restoration, stormwater treatment, wildlife and ecosystems
    protection, noise reduction, and documentation and other handling of
    historic and cultural resources. Compensatory mitigation is easily
    distinguishable from other project activities because it involves
    discrete environmental activities that go beyond the core scope of a
    project. Some projects require extensive compensatory activities
    while others require few or none.

-   **Avoidance costs** associated with evading environmental impacts by
    not taking an action, or parts of an action, or by minimizing its
    magnitude. Primary avoidance activities required for a project might
    include some or all of the following: preparation of environmental
    documentation, project design and alignment changes, Section 4(f)
    compliance, project construction changes, and altered project
    construction practices. Activities to avoid or minimize
    environmental impacts can be hard to distinguish from overall
    project activities because they are not discrete efforts that are
    readily separable from the core scope of the project. Some projects
    require extensive avoidance activities while others require few or
    none.

**Tracking Environmental Costs**

-   **What are the benefits of tracking environmental costs?** Most
    state DOTs do not track environmental costs, but those that do -
    including Montana, Oregon, and Washington - report that cost
    tracking efforts help them provide greater accountability to
    stakeholders, support better policy-level decision making, and
    improve project cost estimating and decision-making.

-   **When do DOTs incur environmental costs?** A DOT incurs
    environmental costs at all phases throughout the lifespan of a
    project including planning, environmental review, design, land
    acquisition, permitting, and construction. Costs should be tracked
    at each phase to ensure accurate information.

-   **What categories of costs must be measured?** Key categories of
    environmental-related costs that must be tracked in any DOT include:

```{=html}
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```
-   In-house staff time and other direct costs

-   Consultant services charges

-   Land acquisition and relocation expenditures

-   Construction contractor costs.

> Any of these cost categories may be related to compensatory
> activities, avoidance activities, or both.

-   **How can DOTs track environmental costs?** Two categories of data
    are likely to provide the primary sources of information on
    environmental costs in most DOTs:

```{=html}
<!-- -->
```
-   **Financial information management system data.** State DOTs all
    maintain agency-wide electronic systems for managing financial
    information that are a potentially valuable resource for tracking
    environmental costs. Many DOTs, however, rely on antiquated
    mainframe-based computer programs to run their financial systems
    that are poorly set up to disaggregate environmental costs.

-   **Contractor and consultant contract records.** Considerable amounts
    of information can be gathered from consultant and contractor
    contracting records, but this usually requires careful
    project-by-project scrutiny of documentation.

> As a rule of thumb, a person knowledgeable about the project must
> carefully review costs reported in both types of information to ensure
> complete and accurate data is collected.

**What are the challenges to tracking environmental costs?** Many of the
state DOTs interviewed for this project caution that environmental costs
are hard to measure in practice. Some of the difficulties that must be
overcome include financial management system limitations, apportioning
project costs that have both environmental and non-environmental
objectives, tracking in-house costs, separating costs of mandates from
good stewardship, and estimating the costs of "the path not taken."

**Case Studies of Environmental Costs**

As requested by Congress, this study focuses on a representative set of
case studies that give a flavor of typical environmental costs by
including projects in a range of geographic locations and urban and
rural settings, and by featuring common project types with varying
levels of environmental impacts and NEPA documentation. The case studies
also feature a range of environmental impacts most commonly encountered
by DOTs on projects, such as wetlands, stormwater, historic and cultural
resources, and wildlife and ecosystems. The information in the case
studies shows how environmental costs are incurred by DOTs. The six case
studies include:

-   **US Highway 113, Maryland --** Widening of a rural two-lane state
    highway in Maryland's Eastern Shore region to a four-lane divided
    facility to address safety concerns.[^1]

-   **Montana Highway 84, Montana --** Roadway modernization including
    rehabilitation of pavement and correction of horizontal and vertical
    pavement design deficiencies on a rural state highway near Bozeman,
    Montana.

-   **Alexauken Creek Bridge, New Jersey** -- Replacement of an old
    bridge on a rural two-lane minor arterial road.

-   **Bob Creek Bridge, US Highway 101, Oregon --** Replacement of an
    old bridge on a scenic rural two-lane principal arterial in an area
    of high natural value on Oregon's Pacific coast.

-   **12300/12600 South, Utah --** Widening of an urban principal
    arterial and replacement of an interchange in a rapidly growing
    suburban area on the fringe of the Salt Lake City region.

-   **I-90 Sunset Way, Washington --** Interstate interchange
    replacement in a rapidly growing suburb of Seattle, Washington.

The following table overleaf provides a summary of each project's
characteristics.

**Summary of Case Study Characteristics**

  ----------- --------------- ----------- ---------------- ------------ --------------- -------------
  **Project   **Project       **State**   **NEPA           **Project    **Project       **Setting**
  Name**      Type**                      Document**[^2]   Duration**   Cost**          

  US-113      Dualization     MD          EIS              1997 -       \$181,125,760   Rural
              (2-lane to                                                                
              4-lane)                                                                   

  MT-84       Roadway         MT          EA               1992-2005    \$10,291,345    Rural
              Modernization                                                             

  Alexauken   Bridge          NJ          CE               2005         \$1,979,792     Rural
  Bridge      Replacement                                                               

  Bob Creek   Bridge          OR          CE               2001-2005    \$1,701,222     Rural
  Bridge      Replacement                                                               

  12300/      Arterial        UT          EA               1999-2005    \$132,291,601   Urban
  12600 S     Widening                                                                  

  I-90 Sunset Interchange     WA          EIS              1996-2003    \$112,800,000   Urban
  Way         Replacement                                                               
  ----------- --------------- ----------- ---------------- ------------ --------------- -------------

**Case Study Results**

-   **Environmental costs for the case studies range from two to 12
    percent of total project costs.** The table overleaf provides a
    summary of environmental costs for each of the case study projects.
    The share of environmental costs for the case studies ranges from
    two percent up to twelve percent of total project costs. On average,
    for the projects studied, environmental costs are eight percent of
    total project costs.

-   **Environmental costs increase with project costs.** For the
    projects studied, absolute environmental costs are lower on smaller
    projects and higher on larger projects. For the smaller projects
    studied, environmental costs for preconstruction activities
    outweighed environmental costs incurred during construction; the
    reverse was true for larger projects.

-   **Expenditures on stormwater, landscaping, and wetlands during
    construction are large environmental cost drivers.** For the case
    study projects, the cost to construct stormwater management
    structures, replace wetlands, control erosion, and conduct
    landscaping have a much bigger impact on total project costs than
    staff and consultant time spent on project studies and construction
    engineering. For example, expenditures to prepare the Environmental
    Impact Statement (EIS) (\$1,103,252) and oversee environmental
    issues during construction (\$325,000) were only 6 percent of total
    environmental costs (\$21,915,152) on the Maryland US 113 case study
    and less than one percent of total project costs of \$181,125,760.
    Case study projects that did not require extensive wetlands
    mitigation and stormwater treatment, such as the Utah12300/12600 S
    case study, feature much lower environmental costs.

-   **Environmental costs are a significant proportion of total
    preconstruction (excluding land acquisition) costs.** Environmental
    costs are incurred during preconstruction for NEPA document
    preparation processes, other environmental studies and coordination
    with other resource agencies. They usually include a mix of in-house
    costs and consultant costs, which the case study state DOTs had
    little trouble identifying. Several DOTs had trouble identifying
    environmental costs attributable to non-environmental bureau staff
    or consultants but were confident these costs account for a small
    share of total environmental-related costs. Environment accounted
    for an average of 23 percent of total preconstruction costs for the
    case study projects.

-   **Environmental-related land acquisition costs vary among projects,
    but can be a significant cost driver.** Environmental costs are not
    always incurred during the land acquisition phase of a project.
    Three out of the six case study projects involved no additional land
    acquisition associated with environmental requirements. Where
    additional land was required for the project, this appeared to add
    considerable project costs. For all the case studies, however,
    methodologies for apportioning environmental-related land
    acquisition costs could be improved.

-   **Environmental costs during construction engineering are small.**
    Environmental costs associated with construction engineering during
    the construction phase of a project are usually small compared to
    environmental costs associated with the other project activities
    during construction. The case study states are able to identify
    environmental staff time charged to the project during construction.
    They are also able to provide an approximate estimate of
    non-environmental staff time spent on environmental issues, such as
    erosion control. Environmental-related construction engineering
    costs averaged about 5 percent of total construction engineering
    across the case studies.

-   **Project design and construction changes to accommodate
    environmental issues can add or decrease costs, but are hard to
    measure.** For five of the six case study projects, elements of
    project design and construction were altered in part to accommodate
    environmental issues. These changes sometimes reduce costs, but they
    can also increase costs:

    -   **Cost savings.** In the Oregon case study, a one-lane temporary
        bridge was constructed instead of a two lane bridge to avoid
        impacts to cultural resources and Federal lands, which generated
        some cost savings. Likewise in the New Jersey case study, a
        simpler bridge design that involved replacement of the
        superstructure only was selected in part to avoid a complicated
        environmental process, but also to save overall construction
        costs and time.

    -   **Cost increases.** In the Maryland, Montana, and Utah case
        studies, larger bridges or culverts were built to avoid
        sensitive wetlands, improve fish passage, and accommodate a bike
        trail respectively. In each of these cases, costs were added to
        the projects.

> In each instance, estimates of costs associated with "the path not
> taken" are heavily reliant on professional judgment.

  -------------- ----------------------- ----------- ----- ----------------------- ---------- ----- ----------------------- ------------- ----- ----------------------- -------------- ----- ----------------------- -------------- -----
  **Overview**                                             **Detailed Breakdown**                                                                                                                                                   

  **Project**    **Overall Costs**                         **Environmental Review                   **Land Acquisition**                        **Construction                               **Construction**                       
                                                           and Design**                                                                         Engineering**                                                                       

                 Environmental-Related   Total       \%    Environmental-Related   Total Env. \%    Environmental-Related   Total Land    \%    Environmental-Related   Total          \%    Environmental-Related   Total          \%
                 Costs (000s)            Project           Costs (000s)            Review/          Costs (000s)            Acquisition         Costs (000s)            Construction         Costs (000s)            Construction   
                                         Costs                                     Design                                   Phase Costs                                 Engineering                                  Phase Costs    
                                         (000s)                                    Phase                                    (000s)                                      Phase Costs                                  (000s)         
                                                                                   Costs                                                                                (000s)                                                      
                                                                                   (000s)                                                                                                                                           

  US-113 (MD)    \$21,915                \$181,126   12%   \$1,103                 \$14,455   8%    \$2,264                 \$15,680      14%   \$325                   \$6,300        5%    \$18,223                \$144,690      13%

  MT-84 (MT)     \$282                   \$10,291    3%    \$44                    \$452      10%   NA                      NA            NA    \$12                    \$903          1%    \$226                   \$7,751        3%

  Alexauken      \$240                   \$1,980     12%   \$206                   \$498      41%   NA                      NA            NA    \$8                     \$196          4%    \$26                    \$1,286        2%
  Bridge (NJ)                                                                                                                                                                                                                       

  Bob Creek      \$166                   \$1,701     10%   \$141                   \$394      36%   NA                      NA            NA    \$5                     \$139          4%    \$20                    \$1,168        2%
  Bridge (OR)                                                                                                                                                                                                                       

  12300/ 12600S  \$2,405                 \$132,292   2%    \$964                   \$3,576    27%   \$500                   \$39,918      1%    \$294                   \$2,942        10%   \$647                   \$85,855       1%
  (UT)                                                                                                                                                                                                                              

  I-90 Sunset    \$12,202                \$112,800   11%   \$2,350                 \$13,730   17%   \$6,020                 \$10,919      55%   \$380                   \$8,816        4%    \$3,452                 \$79,344       4%
  Way (WA)                                                                                                                                                                                                                          

  Average                                            8%                                       23%                                         18%                                          5%                                           4%
  -------------- ----------------------- ----------- ----- ----------------------- ---------- ----- ----------------------- ------------- ----- ----------------------- -------------- ----- ----------------------- -------------- -----

**Summary of Case Study Results**

**Findings and Recommendations**

This study is the first to give a comprehensive report on state DOTs'
complete environmental costs based on actual cost documentation. As
such, the findings and recommendations it makes should be considered a
work in progress; but one that provides considerably more detailed and
more reliable information than policy makers have received in the past.

**Research Findings.** Findings are discussed in terms of responding to
the Congressional request and observations from the study.

-   **Congressional language: Identify "costs associated with the
    environmental process."** Chapter two of the study defines costs
    associated with the "environmental process" to include compensatory
    costs associated with preparing for and undertaking actions to make
    up for unavoidable environmental impacts, and avoidance costs
    associated with evading environmental impacts by not taking an
    action, or parts of an action, or by limiting its magnitude. This
    definition is used throughout the study to estimate environmental
    costs.

-   **Congressional language: Analyze "a representative sample of
    projects."** The study features six case study, or sample, projects
    that were carefully selected to represent diverse geographic
    locations, urban and rural settings, a mix of common project types,
    a range of NEPA documentation requirements, an array of types of
    environmental impacts, and "middle-of-the-road" project costs that
    are typical of projects that DOTs must handle on a regular basis.
    See the introduction and the start of chapter four for more
    discussion of the criteria by which case study projects were
    selected.

-   **Congressional language: Examine environmental "costs associated
    with the project itself."** For each of the case studies, full
    estimates of the cost of any physical mitigation required, such as
    for wetlands and 4(f) are provided.

-   **Congressional language: Examine environmental "costs associated
    with preparing the document."** For each of the case studies,
    detailed estimates of the cost of any preconstruction activities
    associated with preparation of the NEPA document are provided.

-   **Congressional language: Examine "related costs associated with the
    time it takes to complete the environmental process."** For each of
    the case studies, detailed estimates of other related costs such as
    mobilization of construction contractors, or DOT staff construction
    engineering costs are provided. As noted in chapter two, estimates
    of costs associated with delay caused by environmental issues were
    not estimated. None of the states interviewed expressed concern
    about major delays associated with the projects profiled;
    furthermore, available methods for estimating costs associated with
    delay and apportioning all or some of those costs to environmental
    factors are understood to be weak.

Overall, the findings from the study suggest environmental costs are
measurable; for a typical DOT project they are likely to be in the range
of two to 12 percent of total project costs, which for most states is
likely to add up to millions of dollars in environmental expenditures
each year. Some of this cost is for NEPA documentation and other
"process" costs. The case studies suggest, however, that a large share
of environmental costs is likely to be for construction of stormwater
facilities, mitigation of wetland losses, erosion control, and
landscaping. Key conclusions from the study include:

-   **State DOTs are investing more in environmental stewardship and
    streamlining but its effect on project-level costs is unclear.** In
    qualitative terms, all the case study states say they continue to
    undertake efforts to improve their stewardship of the environment. A
    consensus emerged across participants in the interviews that DOTs
    now conduct many environmental responsibilities as the "right thing
    to do" and therefore at least some environmental costs would be
    incurred on projects regardless of environmental laws. All the case
    study states also indicate they are undertaking efforts to
    streamline their environmental activities and that this is helping
    expedite project schedules. The US-113 project in Maryland and the
    Alexauken Bridge project in New Jersey are both recognized
    nationally as "streamlined" projects; however, practitioners in
    these states were not willing to estimate absolute cost savings on
    these projects associated with a faster environmental review
    process.

-   **Only a handful of state DOTs currently measure environmental
    costs.** The states identified in this study, including Montana,
    Oregon, Washington, and Wisconsin, are national leaders in
    developing comprehensive estimates of their environmental costs. The
    state-of-the-practice for defining and measuring environmental costs
    has clear deficiencies that are likely to be addressed over time as
    DOTs enhance their approaches for measuring costs.

-   **Environmental costs include compensatory costs and avoidance
    costs.** According to practitioners, a comprehensive definition of
    environmental costs incurred during delivery of transportation
    projects should include "compensatory costs" associated with
    preparing for and undertaking actions to make up for unavoidable
    environmental impacts, and "avoidance costs" associated with evading
    environmental impacts by not taking an action, or parts of an
    action, or by limiting its magnitude.

-   **Comprehensive estimates of environmental costs should include all
    phases of project delivery.** A DOT incurs environmental costs
    throughout the lifespan of a project, including planning,
    environmental review, design, land acquisition, and construction.
    Cost tracking efforts should account for each phase.

-   **Not all environmental costs are easily identifiable.** Some
    environmental costs are clear cut, such as NEPA document preparation
    costs or the cost of a longer bridge to avoid a wetland. Other
    environmental costs may be harder to identify. A more costly project
    solution, for example, may yield both engineering and environmental
    benefits. The bridge constructed in the Oregon, Bob Creek Bridge
    Case Study was more costly because it avoided in-water piers but
    this solution minimized environmental impacts to salmon habitat. The
    same solution also avoided bridge scour problems that would
    otherwise shorten the bridge's lifespan and increase maintenance
    costs.

-   **Practical constraints limit many DOTs' ability to track
    environmental costs.** The process of developing the case studies
    reveals that many DOTs face significant hurdles to developing
    environmental cost tracking methods. For many states, a primary
    constraint is the lack of project-level environmental activity codes
    that support tracking of in-house and consultant costs. Other
    constraints include difficulty in collecting and analyzing land
    acquisition data related to addressing environmental impacts, and
    the increased use of design-build contracting, which often limits
    the amount of environmental cost data available to DOTs.

-   **Environmental cost tracking is labor intensive, particularly at
    the outset but has many benefits.** DOTs that are measuring
    environmental costs report that it is labor intensive, and some
    practitioners question the relative cost to benefit ratio for
    tracking environmental costs. Once methodologies are in place,
    however, DOTs that measure costs find that they are able to use the
    information to resolve policy questions, improve project
    decision-making, and increase accountability to stakeholders.

**Recommendations.** The study conclusions provide the basis for several
general recommendations on next steps that may be appropriate, these
include:

-   **More dialogue with state DOTs on the value of environmental cost
    tracking.** The study found that states that track environmental
    costs see the information as beneficial, but it also found that
    environmental cost tracking is potentially complex and time
    consuming. More discussion with state DOTs is needed to help
    determine whether additional efforts should be pursued.

-   **Develop additional case studies and refine and enhance cost
    tracking methods.** If cooperating states can be identified,
    additional case studies could be conducted with ease using the
    methods established in this study. A larger data set would provide
    stronger support for drawing conclusions that guide policymaking on
    this issue. Additional case studies could also be used to refine and
    enhance methods and approaches used in this study.

-   **Technical assistance for state DOTs on environmental cost tracking
    methods.** Based on the outcomes of dialogue with state DOTs and
    efforts to improve and enhance methods for tracking environmental
    costs, provide state DOTs with technical assistance such as training
    or guidance documents.

# 1.0. Introduction

## 1.1. Study Purpose, Methodology, and Structure

> Projects to build or preserve transportation infrastructure sometimes
> affect human and natural environmental quality. Federal environmental
> laws such as the National Environmental Policy Act (NEPA) require the
> Federal Highway Administration (FHWA) and state departments of
> transportation (DOTs) to consider and address mitigation of the
> environmental impacts of Federal-aid transportation projects.[^3]
> Projects that are 100 percent state-funded must still sometimes comply
> with NEPA because of the need for Federal permits or other approvals.
> The requirements of NEPA and other Federal environmental laws are
> independent of the state environmental laws that often apply to
> transportation projects.
>
> **Study Purpose.** This study responds to a request by the House
> Appropriations Subcommittee on Transportation, Treasury, Housing, and
> Urban Development, the Judiciary, District of Columbia, and
> Independent Agencies that directs the FHWA "*to determine the costs
> associated with the environmental process on a representative sample
> of projects. Analysis should include information on environmental
> costs associated with the project itself, such as wetlands mitigation
> and 4(f); costs associated with preparing the document; and other
> related costs associated with the time it takes to complete the
> environmental process."* [^4]
>
> The purpose of the study is to establish a comprehensive definition of
> state DOTs' environmental costs, including mitigation and
> documentation costs specifically described in the Congressional
> request, and use it to gather best available data on complete
> environmental costs for a set of case studies that represent the kinds
> of projects routinely undertaken by state DOTs. The FHWA recognizes
> that environmental expenditures by state DOTs also generate many
> benefits, but quantification of the environmental benefits associated
> with NEPA compliance is not addressed as part of this study.
>
> **Study Methodology.** As requested by Congress, the study relies on a
> representative sample of projects to provide a better understanding of
> costs associated with mitigating the environmental impacts of
> transportation project delivery. The study was conducted in two phases
> that each involved detailed interviews with selected state DOTs:

-   **Environmental costs definition phase.** In the first phase,
    knowledgeable practitioners in eight states were interviewed to
    gather input on how DOTs generally incur environmental costs.
    Interview states included Arizona, Florida, Kentucky, Maryland,
    Oregon, Utah, Washington, and Wisconsin. The resulting definition of
    environmental costs, based on information from the interview states,
    was used to shape the direction of the second phase of the study.

-   **Case study development phase.** In the second phase, case studies
    were developed for a set of six recently completed highway projects
    from Maryland, Montana, New Jersey, Oregon, Utah, and Washington via
    information collected during site visits and in multiple phone
    interviews with numerous staff in each state.

> Ensuring a representative sample of projects, as specified by
> Congress, was a major emphasis in the study. The following selection
> criteria for the case study projects featured in this report help
> ensure they represent characteristics broadly shared among highway
> projects underway across the United States, including:

-   **Diverse geographic locations.** The extent and nature of
    environmental impacts varies across geographic areas. To capture
    some of this variation, the case studies are located in the states
    of Maryland, Montana, New Jersey, Oregon, Utah, and Washington,
    which represent a wide assortment of climatic, ecological, and
    socio-economic conditions.

-   **Urban and rural settings.** Projects in urban locations often face
    different environmental challenges from those located in rural
    areas. Higher real estate prices in urban areas, for example, may
    add to mitigation costs when projects require additional land for
    features such as stormwater treatment ponds. The case studies are
    located across a mix of rural and urban locations.

-   **Mix of common project types.** The projects reflect an emphasis on
    system preservation and modernization that are common priorities
    among states as they address aging infrastructure and growing travel
    demand. The case studies include two bridge replacements, upgrade of
    a roadway to modern design standards and three projects that add
    capacity on existing facilities.

-   **Range of NEPA documentation requirements.** The level of effort
    required for NEPA documentation varies according to the extent of
    anticipated environmental impacts. The case studies include two
    processed under NEPA as Categorical Exclusions (CEs), two processed
    as Environmental Assessments (EAs), and two processed as
    Environmental Impact Statements (EISs).

-   **Moderate project costs.** The case studies were explicitly chosen
    to include a range of low to moderate cost projects that are typical
    of projects that DOTs must handle on a regular basis, rather than
    case studies of high-profile, but unique "mega" projects that are
    less representative of typical projects. The total cost of projects
    studied ranges from under \$2 million to about \$180 million.

> **Study Structure.** Using information provided by the FHWA's state
> DOT partners, this study develops a definition of environmental costs
> for transportation projects and a method for calculating their
> magnitude from initial project planning to the time the project is
> opened for travel. The study uses this definition to quantify
> environmental costs for six representative case study projects around
> the nation based on actual data from state DOTs' financial management
> information systems and other sources. Following this introduction
> chapter, the study report includes the following chapters:

-   **Chapter Two - Definition of environmental costs.** This chapter
    draws on interviews with selected DOTs to provide a definition of
    the environmental costs incurred as a project moves from planning to
    completion of construction, i.e. "open to traffic."

-   **Chapter Three - Systems for tracking environmental costs.** This
    chapter uses the definition of environmental costs to establish a
    method for extracting relevant environmental cost information from
    state DOT electronic financial management information systems and
    other sources.

-   **Chapter Four - Profiles of environmental costs for six case study
    projects.** This chapter provides a detailed assessment of
    environmental costs for six project-level case studies using the
    methods described in the previous chapter. The level of detail in
    the case studies exceeds all previous efforts to estimate the
    environmental costs of transportation project development among
    states.

-   **Chapter Five -- Conclusions and recommendations.** This chapter
    provides a brief set of conclusions based on the findings of the
    study and recommendations on next steps for policy makers.

## 1.2. Literature Review

> Review of the literature on environmental costs in transportation
> project delivery suggests that the FHWA and most state DOTs lack
> accurate and easy to use methods for successfully measuring
> environmental costs. (See sidebar.) In a literature review conducted
> for this study, three reports were identified that report on
> national-level or multi-state efforts to analyze environmental costs
> and all conclude that data on this topic is limited:

-   **United States General Accounting Office (GAO) -** A 1994 study by
    the GAO observes that the total amount of Highway Trust Fund money
    that states spent on mitigating environmental impacts could not be
    calculated because of incomplete data. (*Highway Planning: Agencies
    are Attempting to Expedite Environmental Reviews, But Barriers
    Remain*, Report to the Chairman, Subcommittee on Transportation,
    Committee on Appropriations, U.S. House of Representatives. GAO/RCED
    94 211. Washington, DC. 1994)

-   **Center for Transportation and the Environment (CTE), North
    Carolina State University --** A statistical study completed in 1997
    by CTE examines the correlation between project costs and
    application of Federal environmental laws. The study notes that all
    past economic analyses of the costs of environmental regulations
    have completely overlooked their impacts on the construction and
    repair of highways but suggests expenditures for Federal-aid
    construction are affected by environmental mandates. (*Environmental
    Compliance Costs: Where the Rubber Meets the Road.* Center for
    Transportation and the Environment, North Carolina State University.
    Raleigh, NC. 1997)

-   **National Research Council, National Cooperative Highway Research
    Program (NCHRP) -** A 2003 NCHRP-sponsored study concluded that a
    majority of states do not track environmental costs separately from
    overall project costs. None of the 32 state DOT environmental
    officials that responded to the project survey associated with this
    report indicated they have engaged in any study or compilation of
    planning, design, and environmental costs related to environment and
    planning activities. (*Improving Project Costing and Incorporation
    of New Attributes -- Highways and Transit,* NCHRP 20-24 (25)
    Washington, DC. 2003.)

> At the state level, the literature review identified reports from
> Montana, Washington, Oregon, and Wisconsin DOTs indicating that they
> are among a small set of state DOTs taking steps to quantify
> environmental costs associated with transportation project delivery.
>
> Montana and Washington have examined environmental costs as a share of
> individual project costs while Oregon and Wisconsin have examined
> environmental costs as a share of total annual transportation budgets.
> Direct comparisons among the data presented in each state's report are
> impossible since Wisconsin and Oregon attempt to calculate total
> program-wide environmental costs but use different methodologies,
> while Washington and Montana examine a sample of projects but do not
> include exactly the same costs in their estimates. Following are some
> key findings from each state's efforts.

-   **Montana DOT Project Cost Case Study -- Environmental Mitigation
    and Context Sensitive Design. (October 2004)** Like most DOTs,
    Montana Department of Transportation (MDT) does not track
    environmental costs as standard practice. A 2004 study prepared by
    the Department examined environmental costs for a set of 14 recently
    completed or almost completed projects. For the 14 projects studied,
    environmental elements such as document preparation by consultants,
    erosion control by contractors, or environmental bureau staff time
    were identified and available data was collected on associated
    in-house, contractor and consultant costs.

> The median total cost per project for the 14 projects in the MDT study
> was \$9.7 million while the median cost of environmental requirements
> per project was \$210,000. Among the 14 projects studied, the median
> for environmental costs averaged 1.7 percent of total costs per
> project. Figure 1.1 provides a project-by-project summary of the MDT
> study results. Projects with an unusually high proportion of
> environmental costs included "14 K South of Havre S" (at 17 percent of
> total costs), which was a reconstruction project mostly located in a
> county park and "Victor Crossing" (at 24 percent of total costs) which
> was a bridge replacement that required extensive stream mitigation.
>
> **Figure 1.1. Montana DOT Environmental Costs Study Results
> Summary**[^5]
>
> ![](media/image2.wmf){width="6.0in"
> height="4.048611111111111in"}Project Name

-   **Washington DOT Project Mitigation Costs Case Studies. (May 2003)**
    Washington DOT (WSDOT) has published a set of *WSDOT Project
    Mitigation Costs Case Studies* that provides a detailed review of
    mitigation costs associated with 14 completed projects around the
    state. The WSDOT report is conceived as a one-time "snapshot" of a
    few sample projects, although staff indicates a similar analysis may
    be repeated in the future. Total environmental costs captured for
    each project include actual construction costs, actual right-of-way
    costs, an allocated share of contractor mobilization costs, an
    allocated share of construction engineering, and an allocated share
    of planning and design costs. The report has helped the Department
    respond to concerns among legislators and the public, particularly
    to the public's misconceptions that excessive funds were spent by
    the DOT to meet environmental mandates.

> The median total cost per project for the 14 projects in the WSDOT
> study was \$16 million while the average cost of environmental
> requirements per project was \$2.1 million. Across the 14 projects,
> median environmental costs were 15 percent of total costs per project.
> Figure 1.2 provides a project-by-project summary of the WSDOT study
> results.
>
> **Figure 1.2. Total Costs and Environmental Costs Compared for 14
> Projects Completed by Washington DOT**[^6]
>
> ![](media/image3.wmf){width="5.990277777777778in"
> height="4.029861111111111in"}

-   **Oregon DOT Environmental Cost Study for State Fiscal Year 2004.
    (December 2004)** Oregon DOT (ODOT) may well be unique among state
    DOTs in producing a detailed annual report on its program-wide
    environmental costs. Oregon DOT's report responds to a 1999
    requirement passed by the Oregon State Legislature that the DOT must
    provide regular summaries of costs related to state and Federal
    mandates and environmental regulations. ODOT estimates that total
    environmental costs were 4.8 percent of total agency costs for
    fiscal year (FY) 2004, or \$33.0 million. These costs include all
    staff, consultant, and contractor expenditures related to compliance
    with 68 local, state, and Federal regulations and mandates
    encountered during planning, design, and construction of
    transportation projects. Major areas where ODOT tracks costs
    incurred include air quality, biology, cultural resources, hazardous
    material, land use, noise, water quality, and wetlands. Biology,
    wetlands and water quality are noted as major cost contributors.

-   **Wisconsin Legislative Audit Bureau, An Evaluation of Major Highway
    Program. (November 2003)** The Wisconsin State Legislature's
    Legislative Audit Bureau conducted a comprehensive audit of the
    state DOT's highway program, which included an examination of
    environmental costs associated with the program. The audit report
    concludes that Wisconsin DOT (WisDOT) FY2001 environmental
    expenditures totaled \$29.1 million, or about 1.4 percent of
    WisDOT's \$2.03 billion FY2001 budget.[^7]

> At each of the states profiled above, the primary motivation for
> collecting environmental cost data is to provide greater
> accountability to external stakeholders, particularly state
> legislators. The Wisconsin Legislature for example requested a study
> of WisDOT's environmental costs and ODOT's environmental costs
> initiative is mandated under state law. Washington DOT reports that
> its efforts are also in part motivated by discussion in the state news
> media about the DOT's expenditures on environmental costs. At each
> DOT, once environmental cost data is available it has also been used
> to support policy discussions on an as needed basis.

# 2.0. Definition of Environmental Costs

> This chapter draws on the observations made by expert practitioners
> during study interviews to develop a definition of environmental
> costs. According to practitioners, a comprehensive definition of
> environmental costs incurred during delivery of transportation
> projects has two parts:

1.  **Compensatory costs** associated with preparing for and undertaking
    actions to make up for unavoidable environmental impacts during
    project delivery, such as creating a new wetland to replace one
    destroyed by a new road;

2.  **Avoidance costs** associated with evading environmental impacts by
    not taking an action, or parts of an action, or by minimizing
    impacts. For a transportation project this might include special
    project location, design, and construction elements that would not
    otherwise be required to meet the project's transportation function
    such as building on a narrower road footprint to avoid a cultural
    resource site.

> The elements that make up compensatory and avoidance costs are
> discussed in sections 2.1 and 2.2 of this chapter.

## 2.1. Compensatory Costs

> Some projects require extensive compensatory activities while others
> require few or none. The primary range of compensatory activities
> required for a project might include some or all of the following:

-   **Wetland and stream restoration.** Adverse impacts to wetlands or
    streams may be unavoidable during construction of project elements
    such as roadway fills, approaches to bridges, or culvert
    installations. To preserve the valuable functions wetlands and
    streams perform in ecological systems, Section 404 of the Clean
    Water Act (CWA) may require consultation with the U.S. Army Corps of
    Engineers and the U.S. Environmental Protection Agency, study of
    affected natural resources, permits, and restoration or replacement
    of any losses. If replacement wetlands are required, additional land
    or an off-site location may be needed. Re-vegetation of riparian
    areas and repairs to streambeds may also be required.

> FHWA data published in 2001 shows a nationwide average wetland
> mitigation cost of \$16,000 per acre.[^8] Anecdotal information
> gathered by FHWA, however, indicates that states are experiencing cost
> ranges from \$4,000 per acre to \$100,000 per acre, depending on
> location and type.[^9] An April 2006 study published by the
> Environmental Law Institute, titled *2005 Status Report on
> Compensatory Mitigation in the United States*, examined wetland and
> stream mitigation across the CWA Section 404 program, which is
> administered by the U.S. Army Corps of Engineers. That report found
> that the range of wetland and stream mitigation costs varied widely,
> depending on type of mitigation, location, land acquisition, and who
> provided the mitigation. The lowest reported wetland mitigation cost
> was \$3,000-\$4,000 per acre (excluding land costs) for non-tidal
> wetland restoration. The highest reported cost was \$350,000 for an
> acre of credit from a wetland mitigation bank. The reported wetland
> mitigation costs were derived from data submitted by 15 of 38 Corps
> Districts. Fewer Corps districts offered stream mitigation costs.
> Those reported costs similarly varied by location and other factors.
> The "per linear foot" reported costs range was \$75 to \$400, while
> two districts gave costs of \$57,000 and \$68,000 based on acreage or
> combined acreage per linear foot measures.

-   **Stormwater treatment.** Depending on factors such as soil quality,
    water table levels, and proximity to bodies of water, control of
    polluted stormwater runoff during and after project construction may
    be required under the National Pollution Discharge Elimination
    System of the CWA and the Coastal Zone Management Act. Common
    controls include silt fencing during construction and creation of
    permanent stormwater detention ponds, sewers, and runoff swales.
    Ponds or other features may require acquisition of additional land.
    A WSDOT study completed in 2003 found that the average cost of
    stormwater treatment within the State was \$1.81 per square foot of
    impervious surface constructed.[^10]

-   **Wildlife and ecosystems.** Construction of highway projects can
    cause impacts to important natural upland ecosystems and landscapes.
    Under the Endangered Species Act (ESA), mitigation activities may
    include investigative studies and consultation with resource
    agencies. If necessary, land acquisition and other measures to
    establish mitigation, such as re-vegetation, site preparation,
    fencing, pest management, access control, fire control, and
    mitigation performance monitoring may be required. Special sensitive
    construction techniques -- such as avoidance of nesting seasons -
    may also be required to protect natural resources and communities.
    The FHWA asks state DOTs to report their threatened and endangered
    species mitigation-related costs annually. Cost data on Federal
    agency ESA spending is reported in the U.S. Fish and Wildlife
    Service's annual Federal and State Threatened and Endangered Species
    Report.[^11]

-   **Noise reduction.** Construction noise and on-going traffic noise
    can be a nuisance to humans and wildlife. The FHWA has in place
    noise abatement standards. If certain criteria are met, a project
    may require construction of linear concrete, block, brick, metal, or
    earth barriers to help reduce noise in adjacent areas. Noise walls
    can sometimes be accommodated within the existing right-of-way, or
    they may require additional right-of-way. Washington DOT found that
    the average cost per square foot to build a noise wall is
    \$32.31.[^12] A FHWA study, based on analysis of data from 44
    states, suggests that the average noise wall construction cost
    between 1991 and 2001 was \$20.00 per square foot when adjusted for
    inflation.[^13] Oregon DOT estimates that noise accounts for about
    19 percent of its total environmental compliance costs.[^14] Utah
    DOT (UDOT) requires that noise walls should not cost more than
    \$20,000 to \$25,000 per affected resident.

-   **Documentation and other handling of historic and cultural
    resources.** Construction of highway projects may have adverse
    impacts on historic and cultural resources. Under Section 106 of the
    National Historic Preservation Act (NHPA), activities may include
    consultation with resource agencies, identification of resources,
    assessment of impacts, and efforts to minimize or mitigate impacts,
    which most commonly includes documentation.

> Of the categories described above, the states interviewed for this
> study generally find that wetlands and stormwater requirements are the
> greatest cost drivers. In addition to the cost categories described
> above, on a less regular basis DOTs may also conduct a range of other
> mitigation activities including strategies to address secondary and
> cumulative impacts, strategies to address community impacts, hazardous
> materials clean up, land use protection, indirect and cumulative
> impact mitigation, and environmental justice mitigation.
>
> Compensatory mitigation is easily distinguishable from other project
> activities because it involves discrete environmental activities that
> go beyond the core scope of a project. Replacement of wetlands, for
> example, is not undertaken for any reason other than to address
> environmental quality. As a result, compensatory costs can generally
> be identified in an objective manner and are reasonably
> straightforward to compile.

## 2.2. Avoidance Costs

> Some projects require extensive avoidance activities while others
> require few or none. The primary range of avoidance activities
> required for a project might include some, or all of the following:

-   **Preparation of environmental documentation.** Under NEPA and other
    environmental laws, documentation requirements that are sometimes
    extensive generally place a special emphasis on consideration of
    efforts to avoid or minimize environmental impacts. Document
    preparation activities may include preliminary project design work,
    public involvement, environmental resource studies, and coordination
    with stakeholders. The cost of environmental documents, however, is
    also partially related to determining the need for and scope of
    compensatory actions.

-   **Project design and alignment changes.** Sometimes a project's
    design or alignment may be altered to avoid or minimize
    environmental impacts. A bridge design, for example, may feature
    longer spans to avoid placing piers in a water channel. Such spans
    may not be required from a hydraulic design perspective. A road
    alignment may be specially located to avoid a sensitive habitat or
    some historic resources. These project elements may require
    additional design time. Project scope or footprint may also decrease
    as a result of avoidance activities.

-   **Section 4(f).** "Section 4(f)," is a requirement first established
    under the DOT Act of 1966 that deserves special mention as a unique
    factor that often leads to design and construction-related avoidance
    costs. Section 4(f) requires that a special effort must be made to
    preserve public parks, wildlife and waterfowl refuges, and historic
    sites. Section 4(f) applies to all historic sites and publicly owned
    parks, recreational areas, and wildlife refuges. Any project that
    affects Section 4(f) land must include a Section (4(f)) assessment.
    Use of Section 4(f) lands is only granted if no prudent and feasible
    alternative can be found and all possible planning is done to
    minimize harm to the land or resources. Section 4(f) impacts may
    require purchase of additional land and design or
    construction-related costs if improvements such as grading are
    needed.

-   **Project construction changes.** The construction cost of projects
    may increase as a result of design and alignment changes to avoid or
    minimize environmental impacts. In Washington, for example, several
    projects reviewed as part of the 2003 environmental costs study were
    found to require bridge crossings in place of box culverts as part
    of the conditions for permitting, e.g. State Route 18 at an
    additional estimated project cost of \$3.33 million, and State Route
    202 at an additional cost of \$1.05 million.

-   **Altered project construction practices.** Project construction
    practices may sometimes be modified to avoid environmental impacts.
    Typical alterations include seasonal limits on construction to avoid
    impacts to wildlife, avoidance of "in-water" construction on
    bridges, noise limits, or use of "environmental monitor" staff
    on-site during construction to ensure quality assurance and quality
    control of environmental procedures.

> Activities to avoid or minimize environmental impacts can be hard to
> distinguish from overall project activities because they are not
> discrete efforts that are readily separable from the core scope of the
> project. States with experience in estimating environmental costs
> raise concerns about attempting to quantify avoidance and minimization
> costs:
>
> "*The preferred project alignment from an environmental perspective
> may also be supported by the local community so we would do it this
> way regardless of environmental laws.*" -- Maryland State Highway
> Administration (SHA)
>
> "*If a project alignment is extended to avoid a wetland, is the added
> cost of a longer route or structure an environmental cost, or would
> the additional hurdle of building on unstable wetland soils have been
> equally expensive?*" -- WisDOT
>
> "*These types of costs and savings lie in the realm of the "road not
> taken" and are extremely subjective to measure.*" -- ODOT
>
> In contrast to compensatory costs, avoidance-related costs often
> require subjective judgments and are harder to compile. Avoidance
> activities are not necessarily considered "environmental" activities,
> but might involve changes in the way non-environmental activities are
> carried out. Also, the discussions leading to such avoidance decisions
> are not always well documented.

## 2.3. Environmental Costs Excluded from the Study

> Some expenditures that may be considered environmental costs according
> to the definition above are specifically excluded from the study,
> either because measurement is hard or opinions are mixed about whether
> they should be categorized as environmental costs. Costs not included
> in the study are as follows:

-   **"Context sensitive solutions" costs.** Many DOTs now develop
    project design and construction solutions that are more sensitive to
    the specific needs of project stakeholders, such as a special
    architectural treatment in a bridge design to help it blend
    aesthetically with its surroundings. These solutions are not
    mandated and they are often characterized by practitioners as "the
    right thing to do" regardless of environmental law.

-   **Costs borne by Federal and state agencies.** Other Federal and
    state agencies, particularly resource agencies, may incur costs for
    time spent on project review and permitting. These expenditures are
    thought to be small in comparison to DOT expenditures. Review and
    permitting costs are tracked by individual agencies and resources
    for this study did not allow collection of this data.

-   **Costs of environmental-related maintenance activities.** Once a
    project is constructed, environmental costs may be incurred for
    activities such as culvert and drainage pipe repair, permit
    requirements for stormwater run off at maintenance facilities, solid
    waste disposal, hazardous materials, and control of vegetation and
    weed pests mandated by laws such as the ESA, the CWA, the Resource
    Conservation and Recovery Act or the Noxious Weed Act. Apportioning
    such costs specifically to a stretch of roadway is beyond the scope
    of the methodology proposed in this study.

-   **Costs of environmental-related project delays.** If a project is
    substantially delayed, total costs may increase or decrease as a
    result of inflation or deflation in construction materials and labor
    costs over time, changes in technology, or changes in regulatory
    requirements. Empirical evidence suggests that environmental issues
    can delay projects, however, measuring the extent and cause of
    delays is often highly subjective and calculating costs associated
    with delays is complex. The study does not consider costs incurred
    as a result of delays. None of the projects studied for this report
    experienced delays and for many projects, environmental activities
    when performed in an expected manner do not become the critical path
    and cause delay.

# 3.0. Tracking Environmental Costs

> This chapter examines the benefits and barriers of tracking
> environmental costs (section 3.1), explains when DOTs incur
> environmental costs (section 3.2), demonstrates how agencies can use a
> combination of data from their financial management information
> systems and detailed review of contracting documents to measure
> environmental costs with reasonable accuracy (section 3.3), and
> provides some general observations on tracking environmental costs
> (section 3.4).
>
> To learn more about the state-of-the-practice among state DOTs in
> tracking environmental costs, practitioners at eight DOTs were
> interviewed, including Arizona, Florida, Kentucky, Maryland, Oregon,
> Utah, Washington, and Wisconsin. The states were selected based on
> consultation by the study team with the FHWA staff and other experts.
> They are intended to provide insight on a range of experiences among
> state DOTs in tracking environmental costs. Summaries of the state
> interviews are included in Appendix A.

## 3.1. Benefits and Barriers to Tracking Environmental Costs

> The DOT interviews conducted for this study suggest that environmental
> cost tracking offers DOTs some useful benefits but is also subject to
> significant barriers. This section briefly discusses the benefits and
> barriers to tracking environmental costs.
>
> **Benefits of Tracking Environmental Costs.** Most state DOTs do not
> track environmental costs. Therefore, a discussion of the benefits of
> tracking environmental costs necessarily should be considered somewhat
> speculative. Based on discussions with 23 states, only four DOTs were
> identified for this study (Maryland, Montana, Oregon, and Washington)
> that have attempted to track environmental costs in a comprehensive
> fashion.[^15] These state DOTs suggest that environmental cost
> tracking efforts can have three primary benefits:

-   **Greater program-wide accountability.** By collecting data on
    environmental costs, a state DOT can show stakeholders how it is
    performing, for example in maintaining environmental costs within
    acceptable limits. Both WSDOT and ODOT have found that credible
    environmental cost data has helped them respond to inquiries from
    their state legislatures and other stakeholders about perceived
    excessive expenditures on environmental features or unfunded Federal
    mandates. Several other states interviewed for this project that do
    not have cost tracking systems in place report that they have
    struggled to respond effectively to such inquiries from their state
    legislatures.

-   **Better policy-level decision support.** The fiscal impacts of new
    or enhanced environmental mandates for issues such as stormwater or
    wetlands are often widely debated at a policy level by state DOTs
    and their resource agency counterparts. While the benefits of such
    actions are usually understood at least in qualitative terms, the
    costs are rarely quantified. Several of the DOTs that participated
    in this study describe instances where environmental costs
    information has been used to support policy-making. For example,
    WSDOT has revised its policy governing when noise walls are
    constructed after finding that the actual cost per square foot of
    building a noise wall was higher than previously assumed.

-   **Improved project cost estimating and decision-making.** State DOTs
    often employ sophisticated project cost estimating tools, such as
    the American Association of State Highway and Transportation
    Officials (AASHTO) "TRNS\*PORT" software, to help improve project
    cost estimating, but the cost estimating procedures for
    environmental elements of projects are often weak. Data on actual
    project-level environmental costs provides a robust basis for
    helping project engineers and managers to better predict future
    project costs and may help reduce or avoid cost overruns that would
    otherwise result from unanticipated environmental expenditures. For
    example, WSDOT has used environmental cost information to
    demonstrate the relative cost effectiveness of different "best
    management approaches," and has found that this has changed resource
    agency attitudes considerably during project negotiations once
    resource agencies understand the cost implications of different
    choices.

> **Barriers to Tracking Environmental Costs.** Many of the state DOTs
> interviewed for this project cautioned that environmental costs are
> often hard to measure in practice. Difficulties that must be overcome
> include:

-   **Apportioning costs for activities that have environmental and
    non-environmental objectives.** For example, a more costly bridge
    design that avoids "in water" pier footings may have lower
    environmental impacts, but also has reduced scour damage which
    prolongs bridge life. Alternatively, a contractor's bid item for
    excavation may include excavation of stormwater ponds and roadway
    structures.

-   **Tracking in-house costs.** DOT staff spends considerable time
    overseeing contractor and consultant-led environmental activities
    and may also conduct some of these activities themselves. Systems
    for tracking staff time by activity are not always capable of
    providing the level of detail needed to apportion staff costs
    accurately. A primary problem with systems in place at many DOTs is
    that they lack adequate environmental activity codes that can be
    used to quickly track staff and consultant environmental costs.

-   **Separating costs of mandates from stewardship.** As DOTs grow more
    sensitive to the needs of project stakeholders, projects often
    incorporate features such as special architectural treatments or
    landscaping that are not mandated by environmental laws, but which
    help ensure support for implementation of the project and create a
    better project for the community, socially and economically in the
    long-term.

-   **Estimating the cost of "the path not taken.**" Changes in project
    design and construction to accommodate environmental needs, such as
    building a longer bridge to avoid a wetland, are a large part of
    environmental costs on some projects. Estimating the change in cost
    associated with these choices is not easy.

-   **Monitoring environmental costs across a project's lifespan.**
    Environmental costs may be incurred throughout a project's lifespan,
    which is often measured in years and sometimes decades. Keeping
    accurate track of all costs on a per project basis over a multi-year
    period can be challenging and some question the worth of the
    investment required to do so.

-   **Staff time requirements at outset are large.** The experiences of
    MDT, ODOT, WSDOT, and WisDOT in measuring environmental costs
    suggest that collecting data is labor intensive. WSDOT, for example,
    reports that its efforts to collect data took the equivalent of one
    full time employee working full time on the project for a year and
    WisDOT reports a yearlong process to gather data on one fiscal
    year's costs.

> Several states interviewed as part of this study suggested that the
> current complexity of retrieving environmental cost information
> outweighs the benefits of having better environmental costs
> information. Most states agree, however, that improved cost estimation
> methodologies, more robust accounting systems, and greater pressure
> for accountability are likely to make this a topic of increasing
> interest in the future.

## 3.2. When Do DOTs Incur Environmental Costs?

> A DOT incurs environmental costs throughout the lifespan of a project.
> Following is an overview of how environmental costs are incurred in
> the pre-construction and construction phases of project delivery.
>
> **Planning.** Project delivery begins with planning, which takes place
> before NEPA documents are prepared and which varies among projects and
> among DOTs. In general, planning efforts are most extensive for major
> projects with potential for significant environmental impacts. Minor
> projects, such as guard rail replacement or roadway resurfacing may
> involve little or no planning activity. The planning phase helps a DOT
> identify project needs, community concerns, and potential solutions.
> In many states, early consideration of environmental issues before a
> NEPA document is prepared is an increasingly common part of project
> planning. Maryland SHA, for example conducts all planning activities
> with an eye towards subsequent NEPA requirements.
>
> A fraction of total project-related planning activity may be
> attributable to environmental mitigation, such as early identification
> of environmental resources during corridor studies, or public
> involvement. Environmental costs at this phase are incurred for a
> blend of compensatory and avoidance-related activities but they are
> hard to separate from overall planning activity, which is likely to
> include public involvement and consideration of issues such as
> possible project alignments.

-   **Compensatory costs.** Compensatory costs for mitigation of impacts
    may be incurred during planning if early identification of impacts
    takes place, such as site searches for mitigation. Traditionally,
    such efforts were not common for projects at the planning phase.
    More and more states are conducting compensatory activities early in
    the planning phase as part of their stewardship and streamlining
    activities.

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-   **Avoidance costs.** Avoidance costs may include state DOT staff
    time and other direct costs to conduct studies and work with
    stakeholders and the cost of hiring consultants to prepare studies
    or conduct public involvement.

> Staff at DOTs have mixed opinions about ascribing any costs during
> planning specifically to environmental mitigation. Some view almost
> all planning costs as part of a general "good government" ethic that
> is required to win support for projects regardless of environmental
> compliance requirements.
>
> **Environmental Review.** Preparation of a NEPA document can include
> activities such as coordination with natural resource agencies,
> detailed review of project alternatives, public outreach, and studies
> of environmental resources. Other Federal environmental laws, such as
> the CWA or the NHPA may also require consultations, outreach, or
> mitigation studies during preliminary engineering. For complex or high
> profile projects, environmental review can be time-consuming efforts
> that may take several years to complete. Wisconsin DOT estimates that
> the average cost of preparing an EIS is \$2 million.[^16] For the two
> case studies in this study that required an EIS, the costs were \$1.1
> million and \$2.3 million respectively. For small projects, compliance
> with environmental requirements is less complex and less costly.
>
> The FHWA's most recent environmental streamlining progress report
> indicates that in 2003, 36 projects, or three percent of all projects
> and nine percent of \$30 billion in Federal-aid funds were advanced as
> EIS documents. [^17] The same report indicates that 230 projects, or
> about six percent of all projects and fifteen percent of all
> Federal-aid funding in 2003, were advanced as EA-FONSI documents. By
> contrast, 91 percent of projects and 76 percent of all Federal-aid
> funds in 2003 required only a CE document.

-   **Compensatory costs.** Compensatory costs incurred during
    environmental review may include staff or consultant time to
    coordinate with resource agencies and work during preparation of a
    NEPA document to plan mitigation strategies. In addition, other
    studies such as Section 106 (archeological and historic resources),
    Section 404 (wetlands) or Section 7 (endangered species) reports
    may include work to identify appropriate compensatory actions.

-   **Avoidance costs.** Avoidance costs may include state DOT staff
    time and other direct costs incurred during management of
    environmental review activities. External consultant costs
    associated with preparation of studies, NEPA documents, or public
    involvement are common. During environmental review, many
    alternative alignments and design options may be scrutinized and
    discussed with a broad range of stakeholders.

> **Design, Land Acquisition, and Permitting.** Once the NEPA process is
> complete and a basic horizontal and vertical alignment for the project
> is agreed upon, detailed engineering plans can be prepared. Most
> design work is unrelated to environmental mitigation. Design of
> environmental compensation or enhancement features, such as stormwater
> control facilities, wetland mitigation, or noise walls, may add to
> overall final design costs. Utah DOT estimates that for a typical
> project less than 10 percent of its final design costs are related to
> environmental mitigation.
>
> If avoidance or minimization of environmental impacts requires a more
> complex design, additional costs may also be incurred because plans
> may take more time in design. DOTs often observe, however, that
> distinguishing between the most practicable design solution from an
> engineering perspective and the environmentally preferred solution is
> difficult.
>
> Where needed, land is acquired once design plans provide sufficient
> detail to identify specific parcels. The process of land acquisition
> includes the payment of market value for land or easements, as well as
> staff and consultant costs for handling all real estate processes
> including mapping, appraisals, acquisitions, and relocations. If a
> relocation is required, costs are incurred for actual moving of
> residents and, or businesses. Environmental costs are incurred if land
> is required for environmental purposes, for example to accommodate
> wetland restoration or a stormwater control facility. Washington DOT
> reports that stormwater facilities and wetlands mitigation,
> particularly, can require additional land acquisition. Maryland SHA
> reports that additional land required for these facilities is usually
> a small proportion of total land needs on a large project but may be
> significant as a proportion of the project costs on small stormwater
> retrofit projects.
>
> Permits from natural resources agencies, such as the U.S. Army Corps
> of Engineers, may also be required at this phase during project
> delivery and require time to prepare and approve. Permits may be
> required for wetland restoration, stormwater runoff control,
> conservation of historic resources, or special construction management
> techniques.

-   **Compensatory costs.** Compensatory costs during design may include
    DOT staff time, consultant time for design of mitigation features,
    and costs associated with any additional land. These costs include
    staff or consultant time needed to follow the land acquisition
    process, actual land costs, relocation of owners and tenants if any,
    and any costs associated with investigation and clean up of
    hazardous materials found on properties acquired for the project.

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-   **Avoidance costs.** Avoidance costs may include additional state
    DOT staff or consultant time and other direct costs associated with
    development of a different project design.

> **Construction.** During construction, DOTs use contractors to build
> projects and DOTs typically retain an overall project management and
> oversight role. Many projects require erosion control practices that
> can reasonably be described as environmental costs. Environmental
> mitigation costs are also incurred at this phase if the design
> requires construction of environmental compensatory or
> enhancement-related elements. Furthermore, if the project design is
> more complex as a result of efforts to avoid or minimize environmental
> impacts, overall construction costs may increase.

-   **Compensatory costs.** Compensatory costs during construction may
    include DOT staff time to manage contractors, and contractor costs
    for construction of mitigation features, or adherence to special
    construction methods and procedures. If this is the case, a share of
    contractor mobilization costs proportional to the extent of
    mitigation activities may also be attributable to environmental
    mitigation.

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-   **Avoidance costs.** Avoidance costs may include additional state
    DOT staff or contractor costs associated with construction of a
    different project design, such as a longer bridge span.

## 3.3. How do DOTs Track Environmental Costs?

> State DOTs all maintain agency-wide electronic systems for managing
> financial information. Many DOTs still rely on antiquated
> mainframe-based computer programs to run their financial systems, but
> several of the states interviewed for this study are switching to more
> versatile local area network-based software systems such as those
> produced by Oracle and PeopleSoft.
>
> State DOTs' financial management information systems track and report
> employee hours and contractor and consultant payments by project and
> activity type and are a potentially valuable resource for tracking
> environmental costs.[^18] Every DOT's financial management information
> system is unique and therefore the level of detail about environmental
> costs that can be gleaned varies greatly from one system to another.
>
> The value of a state DOT's financial management information system for
> tracking environmental costs depends in part on the number of
> environmental activity codes it is set up to handle. Appendix B
> includes listings of environmental codes used by Arizona, Kentucky,
> and Oregon DOTs. Utah DOT is in the middle of developing a brand-new
> Oracle-based electronic project management system that doubles as a
> financial management system and will include more than 25
> environmental activity codes. Figure 3.1 provides a sample of the
> results of a basic data query using MDT's financial management
> information system. This example shows total in-house environmental
> bureau staff costs recorded in the system for each phase of the
> recently completed MT-84 project near Bozeman, Montana. This data
> appears in the "In-house environmental staff cost" components of the
> Montana case study in chapter 4.
>
> Financial management information systems are usually run by a DOT's
> office that has responsibility for finance, fiscal services, or
> business systems. At Maryland SHA for example, the financial
> management information system is run by the Office of Finance and
> Information Technology, and in Florida DOT the financial management
> information system is run by the Business Systems Support Office.
> Frequently, a DOT's project staff must make data requests that are
> then handled by financial management information system staff.
>
> While data from financial management information systems are a useful
> starting point for gathering information about environmental
> expenditures, even the most detailed breakdown of environmental costs
> usually requires additional scrutiny of contracting documents to get a
> complete picture of environmental costs. This section describes how
> financial management information can be used in coordination with
> detailed review of contract documents to estimate environmental costs.
>
> **Figure 3.1. Montana FMIS Printout For Environmental Bureau Staff
> Time Costs by Project Phase (MT-84 Project)**
>
> ![](media/image4.wmf){width="5.497222222222222in"
> height="3.7423611111111112in"}
>
> Source: MDT internal document provided by Ms. V. Murphy
>
> **In-House Staff Time and Other Direct Costs (ODCs)**
>
> During project delivery, most DOTs conduct a proportion of
> environmental mitigation-related activities in-house using their own
> staff, and staff also oversees the work of consultants and
> contractors. Many DOTs are increasing outsourcing of environmental
> mitigation activities, which suggests the amount of DOT staff costs
> may be decreasing as a proportion of overall costs.
>
> Costs are incurred whenever DOT staff spends time or incurs other
> direct costs, such as for travel or supplies, while working on
> project-related environmental mitigation activities. The extent of
> in-house staff involvement in environmental-related activities varies
> from project to project and is not always significant. Some projects
> may require little or no environmental component. While on other
> projects, consultants may handle all or some environmental issues.
>
> **Tracking Staff Time and Other Direct Costs.** Actual in-house staff
> costs are a simple function of time spent on environmental activities
> multiplied by a combined hourly labor and overhead rate. DOTs track
> this information across projects in their financial management
> information system. Staff is typically required to report time in
> hourly increments according to projects worked on and types of
> activities undertaken. These systems use unique alpha-numeric
> identifiers, often called "object codes" or "activity codes," to
> distinguish costs associated with different categories of activities,
> such as traffic, project management, pavement, or bridge design.
> Information from any financial management information system must be
> obtained about two types of staff activity to ensure a reasonably
> complete assessment of in-house DOT staff time costs:

-   **Stand-alone environmental activities.** Some DOTs' systems have
    specific object codes for monitoring stand-alone environmental
    mitigation activities. For example, Arizona DOT's financial
    accounting system has 40 environmental activity codes used by its
    staff, which are reproduced in Table 3.1. Oregon DOT's "TEAMS"
    system includes 11 specific environmental object codes that are used
    by environmental staff to report time (See Appendix B). Montana
    DOT's "CARES" system, by contrast, has one environmental activity
    code.

> Some DOTs are adding to the number of environmental activity codes
> they use so that they can better track environmental costs. In April
> 2005, for example, Kentucky Transportation Cabinet introduced a set of
> 22 environmental activity codes for use in time reporting by its
> Division of Environmental Analysis staff (See Appendix B). Utah DOT is
> developing a set of about 25 environmental codes for inclusion in its
> brand new electronic Project Management (ePM) system, which will
> enhance project cost tracking.
>
> **Table 3.1. Arizona DOT Environmental Activity Categories**

  ------------------------ ----------------------- -----------------------
  General environmental    Preparation of noise    Cultural resource
  activity                 reports                 surveys

  Prepare categorical      Review consultant noise Cultural resource
  exclusion                reports                 testing

  Preparation of draft     Preparation of air      Cultural resource data
  environmental document   quality reports         recovery

  Preparation of final     Rev of consultant air   Cultural resource
  environmental document   quality reports         agency coordination

  Review of                National Pollution      Section 106
  consultant-prepared      Discharge Elimination   consultation
  documents                System-related activity 

  Environmental project    Process 404 permits     Cultural resource
  scoping activities                               permit/maintain

  Environmental agency     Process 401 permits     Environmental
  coordination                                     mitigation
                                                   post-construction
                                                   review

  Environmental field      Hazardous materials     Public noise
  review                   preliminary assessments involvement

  Environmental project    Hazardous materials     Environmental
  travel                   initial site            committees
                           assessments             

  Preparation of public    Hazardous materials     Partnering
  involvement              site investigation      

  Conduct public           Hazardous materials     Training
  involvement              remediation             

  Preparation of material  Section 7 consultation  Project admin
  sources for                                      
  environmental documents                          

  Review of consultant/    Gen cultural resource   Monitoring on-call
  contractor material      activities              consultants
  sources documents                                
  ------------------------ ----------------------- -----------------------

> Source: AZDOT internal document provided by Melissa Maiefski

-   **Activities that include environmental elements.** Not all
    environmental activities can be tracked using stand-alone
    environmental object codes. For some activities, only a fraction of
    staff time may be directed to environmental issues, such as project
    management, roadway or bridge design, right-of-way acquisition, or
    construction engineering activities. In these instances, the DOT
    must manually estimate the fraction of activity that is associated
    with environmental compliance.

> At ODOT, for example, methodologies have been developed for ascribing
> the fraction of selected non-environmental object codes, such as
> geo-technical work, hydraulics, roadway design, or bridge design, that
> are attributable to environmental activities. Different fractions are
> applied for different project types, such as bridge replacements,
> modernization projects, or repaving projects. In most instances,
> however, combined activities are likely to be easily missed unless a
> manual review of data for individual projects is conducted.
>
> A simpler approach for estimating in-house costs may be to assume a
> percentage of overall project costs that is attributable to in-house
> costs. This number could be based on a combination of professional
> judgment and review of sample case studies. It could vary by type of
> project and amount of outsourcing performed.
>
> **Consultant Services Costs**
>
> State DOTs may rely on support from consultants to conduct some
> environmental mitigation activities during the pre-construction phases
> of project delivery. Consultants supplement in-house staff time or
> expertise and enable DOTs to implement a larger program of projects
> and tackle projects where specialist expertise is required. Arizona
> DOT, for example, estimates that about eighty percent of all
> environmental work is completed by its consultants rather than
> in-house. Wisconsin DOT estimates that they outsource about 60 percent
> of their pre-construction project work. WisDOT paid consultants \$6.2
> million in FY2001 for environmental services or 21 percent of its
> total expenditures on environmental mitigation.
>
> Costs for consultant services are incurred whenever a consultant works
> on environmental mitigation-related activities. Consultants are
> frequently used by DOTs during the environmental review and design and
> land acquisition phases of project delivery. Common environmental
> mitigation-related activities performed by consultants include: NEPA
> document preparation services, mitigation study preparation (e.g. for
> air quality, biology, historic resources, noise, water quality, and
> wetlands), preliminary design to support NEPA analysis, parts of
> project design related to environmental mitigation features (e.g.
> noise walls or stormwater ponds), and parts of land acquisition
> related to environmental features (e.g. land for wetlands).
>
> Consultant costs in each of these areas include staff time, overhead,
> and other direct costs for items such as equipment, travel, and
> supplies.
>
> Practices for using consultants vary from agency to agency and project
> to project. At Arizona DOT, for example, the agency relies on an
> on-call roster of five environmental consultants for most
> environmental mitigation activities, particularly during NEPA and
> preliminary engineering. On midsize or large projects, however, many
> DOTs rely on consultant teams that include sub-consultants with
> environmental expertise. In these instances costs attributable to
> sub-contractors may be hard to identify. At Maryland SHA, for example,
> environmental work incurred during design is sometimes part of an
> overall design consultant contract. In such instances, SHA's
> consultant design team includes specialist sub-contractors and their
> costs can only be identified via review of original contract
> documents.
>
> **Tracking Consultant Costs.** In some instances, individual DOT staff
> specialists keep their own cost records for consultants used for their
> area of expertise. Such records can be useful, but obviously provide
> only a partial record of overall consultant costs.
>
> Sometimes a DOT's financial management system tracks consultant costs
> by project and object codes that allow environmental consultant costs
> to be broken out. More commonly, a manual review of individual
> consultant contracts and invoices is needed. As with in-house staff
> time costs, consultant costs fall into two categories:

-   **Stand-alone environmental activities.** Some consultant contract
    costs are for stand-alone environmental mitigation activities where
    all consultant costs are environmental-related. On-call consultant
    costs are often entirely in this category. Arizona DOT indicates
    that its on-call environmental consultant costs are easily tracked
    and reported within the DOT's financial management system. Likewise,
    UDOT reports that most of its Section 106-related work is conducted
    using stand-alone contracts that can easily be tracked.

-   **Activities that include environmental elements.** Some consultant
    contract costs are for other activities (e.g. design), which include
    an environmental component. Oregon DOT, for example, applies
    standard percentages by project type to estimate the share of
    overall consultant costs associated with environmental activities.

> As with in-house costs, some DOTs may prefer to use professional
> judgment based on prior experience to apply a percentage share of
> pre-construction or overall project costs to consultant costs. WSDOT
> used this approach in its 2003 study.
>
> **Land Acquisition and Relocation Costs**
>
> In some instances, projects require more land as part of compensatory
> mitigation or avoidance mitigation. For example, a roadway widening
> may require more land for stormwater detention ponds. Land costs
> include acquisition costs, costs to relocate any affected businesses
> or residents, and in-house staff costs or consultant services costs
> associated with these activities.
>
> Ideally, total land acquisition costs should be estimated based on
> information about specific land parcels acquired for mitigation sites.
> States interviewed for this study, however, generally indicated that
> the effort required to match and retrieve site-specific information
> about individual parcel costs is impractical because it is too time
> consuming. Several states suggested that, as a simpler approach, a
> percentage of total land costs may be attributed to environmental
> mitigation based on the ratio between total land required and
> additional land needed for mitigation purposes. Caution should be used
> in adopting this approach, because land costs for environmental
> mitigation may not always be similar to total land costs. For example,
> offsite wetland mitigation-related land costs may be lower than those
> for land acquired for right-of-way because the offsite mitigation site
> is located in a more rural area with lower land costs and fewer
> relocations.
>
> **Construction Contractor Costs**
>
> DOTs rely on private contractors to build projects designed in-house
> or by consultants. Major elements of contractors' costs include
> earthwork, drainage, base courses, pavements, structures, and traffic
> control. Common environmental features that may be constructed by
> contractors include wetland restoration, stormwater control facilities
> to control runoff from new impervious surface, conservation of
> historic properties, and noise walls. In addition, permitting
> requirements may stipulate the use of special construction techniques
> and erosion control best practices.
>
> Environmental mitigation costs vary from project to project, and the
> magnitude of environmental mitigation-related costs incurred by
> contractors depends on specifications that are agreed to during a
> project's pre-construction phase. Some projects may require little or
> no environmental mitigation-related construction. If a project
> involves moderate or extensive environmental mitigation work, a share
> of contractor mobilization costs should be apportioned to
> environmental costs.
>
> **Tracking Contractor Costs.** Project related mitigation costs during
> construction must be disaggregated from the project's total
> construction cost. Review of contract documents is the most accurate
> way to identify environmental costs, since contract documents provide
> a detailed breakdown of construction costs by "bid items." Bid items
> are used by project engineers to ensure comparable offers of work and
> supplies from competing contractors.
>
> Each project is described in terms of bid items for measurable
> quantities of materials and labor required. Some contract bid items
> are almost never environmental-related, such as asphalt, concrete, or
> striping, while other bid items are exclusively environmental, such as
> erosion control. Other bid items reflect a mix of environmental and
> non-environmental functions, such as facilities to remove stormwater
> from roadways (required for any project to protect the roadway) and
> treat it (required for environmental purposes) and care should be
> taken to apportion these costs appropriately. An engineer familiar
> with the project should review the contracting documents to determine
> which bid items are fully or partially related to environmental costs.
> Several data sources may be used to verify contractors' environmental
> mitigation-related costs:

-   **The winning contractor's bid document.** In response to a bid
    advertisement issued by the DOT, contractors will submit a bid
    document that lists their price for all bid items specified by the
    DOT. It provides a detailed breakdown of fair and reasonable project
    costs using unit prices for provision of specific bid items such as
    Portland cement concrete pavement, structural concrete, structural
    steel, asphalt concrete pavement, or embankments. The successful
    bidder's price establishes the overall cost of the project and the
    cost of individual units. Change orders during construction may
    result in actual project costs that vary from the bid document
    price.

-   **The record of invoices paid.** This document shows what the DOT
    ultimately paid for actual units of bid items used. Discrepancies
    between the engineer's estimate or contractor's bid document may
    occur; for example a contractor may find that more or less materials
    are required to complete the job than specified in their original
    bid. Change orders are used to make the design a better fit for the
    actual field conditions. Sometimes a change order may result in an
    increase in project cost. The invoices paid provide the greatest
    degree of accuracy in determining and categorizing actual costs.
    Tracking change orders can be complex.

> The engineer's project estimate is an alternative source of cost
> information. This document is used by the DOT for soliciting and
> awarding construction contracts. The engineer's unit prices are based
> on his or her knowledge about labor and materials costs, industry
> overhead costs, and profit margins. The integrity of state contracting
> processes depends on preparation of accurate engineers' estimates;
> therefore, this information is likely to be acceptable for use in
> estimating environmental mitigation costs. Washington, for example,
> has used engineers' estimates for estimating construction-related
> environmental costs.

## 3.4. Project-Level Environmental Costs Tracking Method

> This section describes the major cost elements and primary sources of
> data that should be part of any reasonable estimate of environmental
> costs incurred over the life of a project from planning to completion
> of construction. Even if followed carefully, this method may not
> capture all environmental costs, however, it is likely to generate a
> close approximation of the ratio between environmental costs and total
> project costs that is adequate for policy making purposes. This method
> is used in chapter four to examine environmental costs for six case
> study projects.
>
> **Part 1. Planning, Environmental Review, and Design Costs**

-   **In-house staff costs.** Collect data from DOT's financial
    information system for all DOT staff costs attributed to stand-alone
    environmental activities that take place during planning,
    environmental review and design (identified by unique activity
    codes) for the project (identified by a unique project code).

> If possible, estimate the fraction of other DOT staff costs attributed
> to the project that is for activities that are only partially
> environmental-related. To avoid time consuming review of individual
> project data, consider development of state-specific assumptions about
> the range of such costs that are typical for categories of project
> types. A Delphi approach (in which a group of knowledgeable experts
> reach agreement on appropriate cost ranges) could be used to provide
> appropriate ratios.

-   **Consultant services costs.** Review consultant contract records to
    determine proportion of consultant costs spent on environmental
    activities and if possible collect data from DOT's financial
    information system on consultant costs recorded for stand-alone
    environmental activities (identified by unique activity codes) as
    back-up validation to information from contract records. According
    to the states participating in the case studies, consultant costs
    are almost always clearly environmental or non-environmental and can
    be easily separated.

> **Part 2. Land Acquisition and Relocation Costs (If Applicable)**
>
> In theory, land acquisition and relocation costs may be estimated
> based on review of detailed parcel-by-parcel records maintained by the
> DOT for each project. Departments of transportation that participated
> in this study indicated, however, that such a review is too time
> consuming to be practicable. In its place, they recommend that project
> managers should estimate the share of total land acquisition and
> relocation costs required for environmental purposes (e.g. stormwater
> or wetlands) and use this ratio to apportion costs, including:

-   **In-house staff costs.** If project includes a land acquisition
    element, collect data from the DOT's financial information system on
    all DOT staff costs recorded for right-of-way activities (identified
    by unique activity codes) attributed to the project.

-   **Consultant services costs.** If project includes a right-of-way
    element and consultant support was used, review consultant contract
    records to determine proportion of consultant costs spent on these
    activities and if possible collect data from financial information
    system on consultant costs (identified by unique activity codes) as
    back-up validation to information from contract records.

-   **Land acquisition and relocation costs.** If project includes a
    right-of-way element, collect data from financial information system
    on all non-staff time land acquisition and relocation payments to
    owners and tenants.

> If costs are apportioned based on the percent of land required for
> environmental purposes, the project manager should be consulted to
> ensure that the project does not feature any wide variances in land
> acquisition and relocation costs that might generate an over- or
> under-estimate of environmental costs.
>
> **Part 3. Construction Engineering Costs**

-   **In-house staff costs.** Collect data from DOT's financial
    information system on all DOT staff costs recorded for construction
    engineering activities (identified by unique activity codes)
    attributed to the project. The project manager should estimate share
    of total construction engineering required for environmental
    purposes and use this ratio to apportion staff costs.

> **Part 4. Construction Contractor Costs**

-   **Environmental-related contractor payments.** Collect data from
    engineer's estimate, bid award, or invoice documentation on the cost
    of stand-alone environmental construction items and the fractional
    cost of partially environmental construction items, particularly
    mobilization costs which should be appropriately apportioned to
    environmental costs if significant mitigation work is required as
    part of construction. This will often require individualized review
    of construction contract documentation.

> If a project includes significant design alterations to accommodate
> environmental issues, an estimate of the total additional construction
> cost should be made. An estimate should be based on the professional
> judgment of a project engineer familiar with the overall project.

## 3.5. Observations and Considerations

> **Observations**

-   **Most state DOTs are poorly equipped to track environmental
    costs.** The interviews with selected state DOTs, and more tellingly
    the comments from practitioners in state DOTs that turned down the
    opportunity to participate in the study, suggest that many state
    DOTs have a long way to go before they are capable of tracking
    environmental costs efficiently and accurately. A primary constraint
    for many states is the lack of project-level environmental activity
    codes and accounting systems that support tracking of in-house and
    consultant costs.

-   **States that track environmental costs find the information
    useful.** States that do track all or some environmental costs find
    the information serves several valuable functions including greater
    fiscal accountability to external stakeholders, better management of
    project costs, and useful input on environmental policy decisions.

-   **Interest in measuring environmental costs varies considerably
    among DOTs but appears to be growing.** Interest in measuring
    environmental costs is, at present, limited to a small group of
    state DOTs, many of whom are featured prominently in this report.
    Practitioners at several DOTs approached for this study make clear
    that, in their opinion, the benefit to cost ratio associated with
    tracking environmental costs does not justify investment of
    resources. Practitioners at some DOTs indicate, however, that their
    agencies are beginning to invest in systems that will enable better
    tracking of environmental costs in the future.

-   **Tracking environmental costs involves a learning curve for DOT
    staff.** States that have experience in measuring environmental
    costs, such as WSDOT and ODOT, report that their initial efforts
    involved a steep learning curve and significant staff resources, but
    that over time they have become increasingly proficient at tracking
    costs efficiently and accurately.

> **Considerations**

-   **Further work is needed to refine environmental cost definitions
    and data collection methods.** The study presents a credible and
    comprehensive definition of environmental costs that is compatible
    with the types of data collected in the states featured in the case
    studies. It is a work in progress; further research would be
    beneficial, particularly in the following areas:

    -   Reaching agreement on the share of project planning activities
        that can reasonably be attributed to environmental requirements

    -   Determining the extent to which non-environmental staff at the
        DOT also perform some environmental activities and methodologies
        for estimating the cost of these activities

    -   Methods for handling costs on projects where preconstruction
        elements are conducted as a single project, such as study of an
        entire corridor in a single EIS, but construction is conducted
        as multiple project;

    -   Methods for estimating changes in design and construction costs
        of project elements that exceed design standards for
        transportation purposes as a result of environmental
        requirements

    -   Comprehensive review of methods for tracking land
        acquisition-related environmental costs need improvement

    -   Methods for reviewing bid item lists or other contract documents
        to extract environmental costs to ensure consistency in
        extracting appropriate costs among projects reviewed

    -   Methods for allocating costs on contract items that serve
        environmental and non-environmental functions (e.g. excavation),
        which require a subjective judgment by the project engineer

    -   Methods for allocating stormwater and erosion control costs that
        would be required for the project regardless of environmental
        laws

    -   Determining whether landscaping costs should be counted as a
        complete or partial environmental expenditure

    -   Methods for allocating shares of contractor mobilization costs
        and construction engineering which require a subjective judgment
        by the project engineer

    -   Development of thorough quality assurance and quality control
        approaches on data collection.

-   **Tracking via case studies and samples is probably more practical
    for most states than a comprehensive assessment approach.** The
    complexity and staff time needed to track environmental costs on a
    statewide level suggest that a case study-based approach is likely
    to yield useful information while being more timely and
    cost-efficient to implement.

-   **Protocols for environmental cost data collection during project
    delivery are needed to ensure good information.** After the fact
    analysis of costs is inherently difficult unless comprehensive data
    is collected in the right formats during project delivery. Data
    collection protocols should be developed in tandem with selection of
    methodologies for analyzing cost data. They should be designed to
    minimize additional reporting burdens on staff.

-   **States should consider upgrading their financial systems to
    include more environmental activity codes.** Lack of reporting for
    staff time and consultant costs by environmental activity is often a
    roadblock to more accurate tracking of environmental costs.

-   **Design-build project approaches reduce availability of
    environmental cost information.** Two of the case studies featured
    in the study were "design-build" jobs where the same engineering
    team designed and built the project. State DOTs are increasingly
    choosing design-build project management structures to administer
    some of their projects in place of traditional design-bid-build
    approaches. Environmental cost information is much more difficult to
    track for design-build projects since the DOT is less directly
    involved in the project.

#  4.0 Case Studies of Environmental Costs

> As requested by Congress, this study focuses on a representative set
> of case studies that are intended to provide a sense of typical
> environmental costs by including projects in a range of geographic
> locations and urban and rural settings, and featuring common project
> types with varying levels of environmental impacts and NEPA
> documentation. The information provided in the case studies gives a
> detailed contextual analysis of how environmental costs are incurred
> by DOTs. The six case studies include:

-   **US Highway 113, Maryland --** Widening of a rural two-lane highway
    on Maryland's eastern shore to a four-lane divided facility to
    address safety concerns.[^19]

-   **Montana Highway 84, Montana --** Roadway reconstruction and
    correction of horizontal and vertical pavement design deficiencies
    on a rural highway near Bozeman, Montana.

-   **Alexauken Creek Bridge, New Jersey** -- Replacement of an old
    bridge on a rural two-lane minor arterial road.

-   **Bob Creek Bridge, US Highway 101, Oregon --** Replacement of an
    old bridge on a scenic rural two-lane principal arterial in an area
    of high natural value on Oregon's Pacific coast.

-   **12300/12600 South, Utah --** Widening of an urban principal
    arterial and replacement of an interchange in a rapidly growing
    suburban area on the fringe of the Salt Lake City region.

-   **I-90 Sunset Way, Washington --** Interstate interchange
    replacement in a rapidly growing suburb of Seattle, Washington.

> Table 4.1 provides a summary of each project's characteristics. The
> six case studies should not be considered a statistically valid
> representation of state DOTs' environmental costs in general since the
> sample size of data collected is too small.
>
> For the projects studied, environmental costs range from two to 12
> percent of an individual project's total costs with an average of
> eight percent. Table 4.2 summarizes the results of the case studies in
> more detail. The case study descriptions are based on extensive
> discussions with numerous DOT staff and review of data taken from
> multiple sources provided by the DOTs involved in the case studies.
>
> **Table 4.1. Summary of Case Study Characteristics**

  ----------- --------------- ----------- ------------ ----------------- --------------- -------------
  **Project   **Project       **State**   **NEPA       **Project         **Project       **Setting**
  Name**      Type**                      Document**   Duration**[^20]   Cost**[^21]     

  US-113      Dualization     MD          EIS          1997 -- not       \$181,125,760   Rural
              (2-lane to                               finished                          
              4-lane)                                                                    

  MT-84       Roadway         MT          EA           1992-2005         \$10,291,345    Rural
              Modernization                                                              

  Alexauken   Bridge          NJ          CE           2005              \$1,979,792     Rural
  Bridge      Replacement                                                                

  Bob Creek   Bridge          OR          CE           2001-2005         \$1,701,222     Rural
  Bridge      Replacement                                                                

  12300/      Arterial        UT          EA           1999-2005         \$132,291,601   Urban
  12600 S     Widening                                                                   

  I-90 Sunset Interchange     WA          EIS          1996-2003         \$112,800,000   Urban
  Way         Replacement                                                                
  ----------- --------------- ----------- ------------ ----------------- --------------- -------------

## 4.1. Selecting Representative Case Studies

> To ensure consistency with the request from Congress to study a
> "representative sample" of projects, all the case studies were
> selected to meet the following criteria:

-   **Open to traffic.** Case studies should be open to traffic and all
    work contracts closed out to allow full identification of costs.

-   **Typical for DOT.** Case studies should avoid projects that are
    unusually large in cost and scope, or that were subject to
    non-typical delays due to environmental issues.

-   **Recently completed.** Case study projects should be constructed
    within ten years of starting the NEPA process, so they are assumed
    to reflect the current state-of-the-practice.

-   **Reflective of a mix of geographic settings.** Case studies should
    include a mix of geographic settings including a variety of
    climatic, socio-economic, land use, and ecological conditions.

-   **Representative of a range of NEPA documentation requirements.**
    Case studies should reflect a range of NEPA documentation
    requirements, including projects that require CEs, EAs, and EISs.

-   **Reflective of common project types.** The project types featured
    in the case studies include bridge replacements, roadway
    replacement, roadway dualization, and interchange improvement.

> The case studies also feature a range of environmental impacts most
> commonly encountered by DOTs, such as wetlands, stormwater, historic
> and cultural resources, and wildlife and ecosystems. (Table 4.3
> summarizes environmental impacts by project.)
>
> **Table 4.1. Summary of Case Study Environmental Impacts**

  --------------------- -------- --------- -------------- -------- ---------- --------
                        **US 113 **MT-84   **Alex-auken   **Bob    **12300/   **I-90
                        (MD)**   (MT)**    Bridge (NJ)**  Creek    12600 S    Sunset
                                                          Bridge   (UT)**     Way
                                                          (OR)**              (WA)**

  **Wetlands & Stream   ▓        ▓         ▓                       ▓          ▓
  Restoration**                                                               

  **Stormwater          ▓                                                     ▓
  Treatment**                                                                 

  **Erosion Control**   ▓        ▓         ▓              ▓        ▓          ▓

  **Wildlife &                   ▓                        ▓                   ▓
  Ecosystems**                                                                

  **Noise**                                                        ▓          

  **Historic & Cultural ▓                  ▓                       ▓          
  Resources**                                                                 

  **NEPA                ▓        ▓         ▓              ▓        ▓          ▓
  Documentation**                                                             

  **Project Design &    ▓        ▓                                 ▓          ▓
  Alignment Changes**                                                         

  **Section 4(f)**               ▓                                            

  **Project             ▓        ▓                                 ▓          ▓
  Construction                                                                
  Changes**                                                                   
  --------------------- -------- --------- -------------- -------- ---------- --------

## 4.2. Case Study Format

> Each of the case studies is presented in a format that includes a
> brief introduction describing the context for the project; a text box
> that summarizes key project information; a description of the purpose
> and need for the project; an overview of the actual project;
> significant environmental issues affecting the project; a qualitative
> analysis of environmental cost issues; and a detailed table that lists
> the project's environmental and total costs. The table for each case
> study follows the format identified in Section 3.3 of the study report
> for breaking environmental costs into:

-   **Planning, environmental review, and design-related costs.** This
    includes all DOT staff time and other direct costs, consultant
    services costs associated with portion of planning, environmental
    review, and design-related costs that are attributable to NEPA
    document processes, such as document preparation, impact studies,
    and coordination with other agencies. This section of each table
    provides the total costs, expressed in dollars and percentages, for
    the entire environmental review/design phase of the project, as well
    as the subtotals that represent the environmental costs incurred as
    a portion of the project's environmental review/design phase costs.

-   **Land acquisition costs (if any).** This includes all DOT staff
    time and other direct costs, consultant services costs associated
    with land acquisition, such as appraisals, acquisitions, and
    relocations that may be attributed to environmental requirements as
    well as land acquisition and easement purchase costs. This section
    of each table provides the total costs, expressed in dollars and
    percentages, for land acquisition for the project, and the subtotals
    that represent the environmental costs incurred as a portion of the
    project's land acquisition costs.

-   **Construction engineering costs.** This includes all DOT staff time
    and other direct costs incurred to support construction engineering
    that may be attributed to environmental requirements. This may
    include environmental monitoring, permit acquisition, and oversight
    of erosion control. This section of each table provides the total
    costs, expressed in dollars and percentages, for construction
    engineering activities for the project, as well as the subtotals
    that represent the environmental costs incurred as portion of the
    project's construction engineering costs.

-   **Construction contract costs.** This includes costs for all bid
    items that are completely or partially related to environmental
    requirements as well as a portion of construction mobilization if
    appropriate. Costs include both labor and materials. This section of
    each table provides the total costs, expressed in dollars and
    percentages, for the construction phase of the project, and the
    subtotals that represent the environmental costs incurred as a
    portion of the project's construction phase costs.

> For each cost item, environmental costs are compared to total costs
> including the environmental cost element.

## 4.3. Case Studies

> Following are the Maryland, Montana, New Jersey, Oregon, Utah, and
> Washington case studies.

#  Highway US 113 Dualization, Maryland

Highway US 113 is one of three major highways that form the backbone of
the transportation system for Maryland's lower Eastern Shore. Land uses
adjacent to the roadway are predominantly rural including farmland,
forested areas, and wetlands. The Eastern Shore is a major regional
tourist destination during summer months and has a significant amount of
year-round agricultural activity. Highway US 113 provides a critical
high-speed travel connection on the Delmarva Peninsula for through and
local traffic, including recreational trips.

> Highway US 113 is classified as a rural principal arterial by the
> FHWA. It departs from Highway US 13 near Pocomoke City, Maryland and
> extends north for 40 miles in Maryland and 60 miles in Delaware before
> rejoining Highway US 13 in Dover. The route dates from the late 1600s,
> and it was paved in the early 1900s, generally along its present
> alignment. The 60 mile portion of Highway US 113 in Delaware is a four
> lane facility in its entirety, but when this project began in 1996
> about half of the 40 mile stretch of US 113 in Maryland had only two
> undivided lanes. The EIS for the Highway US 113 project has been
> nationally highlighted as an example of good environmental
> streamlining.

### Project Purpose and Need

> The purpose and need identified by Maryland State Highway
> Administration (SHA) for the Highway US 113 project was to improve
> vehicular safety conditions and traffic operations. A local citizens
> group called County Residents Action for Safer Highways (CRASH) was
> vocal in its support for a transportation solution that reduced
> crashes.
>
> Maryland SHA's 1995 traffic counts for this stretch of highway
> indicated that summer average daily traffic (ADT) ranged from 4,900 to
> 18,500 vehicles per day along portions of the corridor. Stretches of
> the highway were rated level of service "D" in engineering terms.
> Forecasts prepared for the EIS suggest that summer ADT will grow to
> between 7,000 and 30,400 vehicles per day in 2020. Prior to completion
> of this project, the fatal accident rate along the most hazardous
> two-lane stretches of US 113 was significantly higher than the
> statewide average at 6.3 fatalities per year compared to a statewide
> average of 2.5 fatalities per year. The EIS ascribed this poor safety
> record to a combination of substandard highway geometry and traffic
> volume that exceeded the capacity of the highway as built.

### Project Description

> The project solution selected by Maryland SHA through the NEPA process
> consisted of improving a 24 mile stretch of two lane US 113 by
> "dualizing" the roadway along a combination of new and existing
> alignments, i.e. upgrading the two-lane highway to a four-lane,
> divided highway. This solution improves several locations with
> substandard horizontal geometrics, adds an additional travel lane in
> each direction, creates a 34 foot median with crash barriers except at
> two sensitive wetland crossings where the median is about 10 feet,
> adds two new bridges, and some interchange improvements.
>
> While pre-construction, right-of-way activities, and wetland
> mitigation for US 113 dualization were treated as a single project,
> construction is being completed as two separate projects. Construction
> of the northern element of the project was completed in three phases
> and is now open to traffic. The southern element of the project is
> being built in five phases, of which only one is complete. Cost
> information about the remaining phases is available from SHA and was
> used to predict total environmental costs for the project. Further
> information about the project is available online at a FHWA webpage
> featuring successful cases of environmental streamlining.[^22]

### Environmental Issues of Concern

> The Highway US 113 project was processed under NEPA as an EIS because
> of the clear potential for significant environmental impacts
> associated with the project. The EIS process for the project was
> completed in 15 months (February 1997 to May 1998). The final EIS for
> Highway US 113 describes two categories of adverse environmental
> impacts, regulated under Federal laws, that were considered most
> significant.

-   **Cultural Resources (National Historic Preservation Act, Section
    106).** The new US 113 roadway passes adjacent to a historic church
    and project alternatives would have resulted in physical destruction
    and visual impacts to several other historic structures including a
    farm, a house, and two stores. Under Section 106 of the NHPA, the
    selected alternative was found to have only an adverse visual effect
    on St. Martins Church, which is listed on the National Register. The
    church's historic setting in an agricultural and forested location
    was changed visually by the increased roadway width. SHA developed a
    memorandum of agreement with the Maryland Historic Trust and
    Advisory Council on Historic Preservation to ensure appropriate
    mitigation takes place. No historic property was acquired as part of
    the project; therefore, a Section 4(f) analysis was not required.

-   **Wetlands (Clean Water Act, Section 404).** The distribution and
    extent of the wetlands and linear nature of this project prevented
    complete avoidance of construction in wetlands while still meeting
    project purpose and need and avoiding other substantial adverse
    environmental impacts. The preferred project alignment was selected
    to minimize impacts to wetlands, but according to the EIS, the
    entire northern and southern elements of the US 113 project have an
    impact on about 12 acres of wetlands. The project's wetland
    mitigation plan calls for creation offsite of 25 compensatory acres
    of wetlands. In addition, the project includes two bridge structures
    that would otherwise have been built as smaller box culverts.

### Overview of Environmental Costs

> A majority of the design and all construction work for the Highway US
> 113 project is being completed by consultants and contractors with
> oversight from Maryland SHA staff. More than 80 percent of Maryland
> SHA's environmental costs associated with the Highway US 113 project
> will be incurred during construction, primarily for construction of
> offsite wetlands mitigation, stormwater treatment, erosion control,
> landscaping, and for construction of two bridge structures of
> sufficient length to span environmentally sensitive wetlands. A
> qualitative discussion of environmental costs by project phase,
> starting with planning and ending with construction, follows.

**Planning, Environmental Review and Final Design**

> During planning, environmental review and final design, a combination
> of in-house and consultant costs were incurred for investigating
> environmental issues associated with the Highway US 113 project. Some
> elements of the project were changed during preliminary engineering to
> reduce environmental impacts. For example, to avoid wetland impacts,
> the selected alignment for the project is narrower at some locations.
> The project footprint was shifted in other locations. Additionally,
> two longer bridges were built. According to SHA engineers, however, no
> measurable amount of additional costs at this phase could reasonably
> be attributed to these changes.
>
> Key components of preliminary engineering costs include:

-   **In-House Staff Costs -** Maryland SHA's staff time was the main
    in-house cost at this phase and costs were principally incurred for
    oversight of: 1) EIS preparation by a consultant, 2) Section 106
    (cultural and archeology resources) analysis by a consultant, 3)
    permit acquisition by a consultant, 4) development of wetland
    delineation and mitigation plans by a consultant, and 5) other
    miscellaneous activities. This oversight role included considerable
    interaction with other state and Federal resource agencies on an
    expedited schedule to reach agreement over how to handle sensitive
    environmental issues (particularly wetlands) while maintaining
    progress on a project of great concern to the local community.

> The aggregate cost of these activities is readily available because
> staff at Maryland SHA records their hourly time to project charge
> numbers using detailed activity codes. As a result, environmental
> staff costs by project can be broken out via analysis of data stored
> in Maryland SHA's custom-built electronic financial accounting system,
> which is called the Financial Management Information System (FMIS).
> Non-environmental in-house staff costs are accounted for in FMIS,
> which assigns an hourly staff cost rate that includes average fringe
> benefits and other indirect costs as well as direct labor costs. The
> activity codes used within FMIS do not support accurate disaggregated
> analysis of environmental costs by task, e.g. for oversight of EIS
> preparation or wetland delineation.

-   **Consultant Costs -** The other principal environmental cost
    incurred during preliminary engineering for the US 113 project was
    for consultant support. Major environmental-related consultant
    activities in this phase included 1) EIS preparation, 2) Section 106
    (cultural and archeology resources) analysis, 3) permit acquisition,
    and 4) development of wetland delineation and mitigation plans. At
    Maryland SHA, consultants bill costs using the same activity codes
    as used by SHA staff and therefore aggregate costs can be easily be
    pulled from FMIS.

> **Special Considerations --** In contrast to some of the other case
> study states, Maryland SHA was unable to identify the amount of
> non-environmental staff time spent on environmental issues and
> subsequent costs; however, agency staff is confident that the detailed
> environmental activity codes used at SHA capture most of the staff
> time spent on environmental issues.
>
> **Land Acquisition**
>
> Some of the US 113 project was built within existing SHA-owned
> right-of-way; however, some land was acquired to accommodate the wider
> cross section of the project and a portion of new alignment. Maryland
> SHA completed all land acquisition using in-house staff. A total of
> 511 additional acres of right-of-way was required to accommodate the
> new four lane divided highway. An estimated seven percent, or 36 acres
> out of this additional amount was required for stormwater facilities.
> An additional 142 acres of land was acquired offsite to mitigate for
> wetland impacts. Overall, about 27 percent of all land acquired for
> the project was related to environmental needs, primarily offsite
> wetland impact mitigation. This proportion was used to allocate costs
> stored in FMIS that were attributable to project land acquisition.
>
> **Construction Engineering**
>
> Since most of the US 113 project was structured in part as a "detailed
> build" job over which the contractor has greater autonomy, SHA's
> construction engineering costs are smaller than normal. As with other
> phases, Maryland SHA is able to identify all Highway US 113
> project-related construction engineering costs in FMIS. These costs
> were incurred for SHA staff time spent to oversee contractors' work
> and manage the project. The environmental component of construction
> engineering costs is attributable to the presence of a SHA
> environmental manager whose time was dedicated to the Highway US 113
> project and who fulfilled all environmental responsibilities. The
> environmental manager uses a separate activity code in FMIS to report
> hours spent on the project.
>
> **Construction**
>
> Maryland SHA was able to identify environmental costs incurred during
> construction of the Highway US 113 project either from the project
> engineer's estimate (used for costs associated with Northern
> Alignment, Phases One and Three, and Southern Alignment Phases One to
> Five) or the contractor's bid documents (used for costs associated
> with Northern Alignment Phase Two and offsite wetlands mitigation).
> Maryland SHA staff was able to identify both unit costs that are
> exclusively environmental-related and those that had to be apportioned
> to environmental/non-environmental categories based on best
> professional judgment. Major categories of environmental costs
> incurred during the construction phase of the Highway US 113 project
> included:[^23]

-   Share of overall contractor mobilization

-   Offsite wetlands mitigation

-   Storm drainage

-   Erosion and sediment control

-   Seed and mulch

-   Landscaping

-   Offsite wetland mitigation.

> Costs provided for these actions include both materials and labor.
>
> In addition, Maryland SHA constructed two bridges as part of the
> project that spanned environmentally sensitive wetlands left in place.
> For hydraulic purposes, a short 18-foot box culvert structure was
> sufficient in both instances; however, the bridge structures were 450
> feet and 222 feet respectively. According to Maryland SHA, the bridges
> added \$4.2 million in additional costs to total costs for the
> project.

**US Highway 113, Maryland -- Detailed Environmental Costs**

![](media/image5.wmf){width="6.003472222222222in"
height="6.733333333333333in"}

# Montana Highway 84 (Four Corners - West) Reconstruction, Montana

> Montana State Highway 84 (MT-84) is part of an extensive system of
> two-lane rural arterial routes in Montana that are important to
> interstate, statewide, and regional travel. The Four Corners -- West
> project is located on MT-84 about 10 miles west of Bozeman, Montana.
> It is classified as a rural minor arterial and connects Bozeman to the
> east and Norris to the west, both of which are connecting points for
> interstate and intrastate highways. Use of MT-84 is heavily oriented
> to agricultural farm-to-market traffic and recreational/tourism
> traffic accessing the nearby Madison River basin. A portion of the
> corridor also serves increasing amounts of residential traffic as
> Bozeman grows westward. Projected traffic volumes on the corridor for
> 2015 range from 2,450 to 5,640 annual average daily traffic, with four
> to seven percent truck traffic.
>
> The eastern portion of the Four Corners -- West project corridor
> crosses the Gallatin River floodplain, which is characterized by flat
> alluvial deposits. The western portion of the project corridor passes
> through rolling terrain created where runoff from the mountains has
> eroded deep ravines in the wind-deposited silt material prevalent in
> the area, necessitating vertical curvature and horizontal alignment
> changes in many locations.
>
> Land use along the western portion of the Four Corners West project
> corridor includes dry farm or pasture areas dotted with rural
> farmsteads. At the eastern end of the corridor, low density
> residential and light industrial land uses that make up part of
> Bozeman's suburban fringe are prevalent.
>
> Montana State Highway 84 was paved in the mid-1950s. At the time, the
> highway was designed as a best fit to existing terrain. Prior to this
> project, no major improvements or modifications of the highway had
> been undertaken since the time of its initial construction. As a
> result, pavement was in poor condition with a narrow width, surface
> break up, and rutting that required extensive annual maintenance. The
> vertical and horizontal alignment of the highway was also substandard
> in several places.

### Project Purpose and Need

> The purpose and need identified by MDT for the Four Corners -- West
> project was to improve safety and traffic flow and correct pavement
> deficiencies. Before the project was completed, several horizontal
> curves along the corridor were sharper than current design standards
> recommend; several vertical grades were steeper than current
> recommended design standards; and lane widths were below design
> standards. The accident rate along the corridor was slightly higher
> than the statewide average.

### Project Description

> The Four Corners -- West stretch of MT-84 was fully reconstructed in
> accordance with MDT standards to meet a 62 mph design speed consistent
> with the surrounding terrain. Driving lanes and shoulders were
> widened. The new horizontal alignment predominantly follows the
> existing highway corridor with the exception of flattening some
> substandard curves and eliminating some horizontal curves by
> straightening the roadway. The new vertical alignment also follows the
> existing highway corridor with the exception of flattening substandard
> vertical curves and reducing steep vertical grades where possible. The
> project used existing right-of-way where possible; however, some new
> land was required on one or both sides of the highway for most of the
> project. The project was completed as a design-bid-build contract and
> was overseen by MDT staff.

### Environmental Issues of Concern

> The Four Corners -- West reconstruction project was processed under
> NEPA as an EA because of the potential for significant environmental
> impacts associated with the project. At the conclusion of the EA, the
> FHWA made a Finding of No Significant Impacts (FONSI) determination.
> By definition, the EA-FONSI for the project describes no major
> categories of adverse environmental impacts, regulated under Federal
> laws. Minor issues highlighted in the EA that did contribute to
> environmental costs included:

-   **Cultural Resources (National Historic Preservation Act, Section
    106).** A cultural resources inventory report was completed in 1992.
    This study found no historic sites eligible for listing in the
    National Register of Historic Places.

-   **Parklands (Section 4(f)).** The project has minor impacts (a
    taking of 0.6 acres of public land) at the Shedd's Bridge Fishing
    Access point, which is owned by Montana Department of Fish,
    Wildlife, and Parks (MDFWP). The MDFWP agreed that no mitigation was
    required for this impact.

-   **Wetlands (Clean Water Act, Section 404).** A wetlands assessment
    report was prepared for the project. Construction of the preferred
    alternative resulted in disturbance of 3 acres of wetlands.
    Mitigation was provided at an existing offsite mitigation bank owned
    by MDT on the east edge of Bozeman. MDT has in place no methodology
    for estimating the cost associated with use of the wetlands bank to
    mitigate for the small amount of wetlands affected by this project;
    therefore, an estimate of the cost of mitigation was assumed based
    on FHWA data for average wetland costs per acre.

-   **Erosion Control.** Routine erosion control procedures were
    followed during construction of the Four Corners -- West project.
    This included development of an Erosion Control Plan that
    incorporates Best Management Practices. The objective of the Plan
    was to minimize erosion of disturbed areas during and following
    construction of the project.

-   **Fish Passage.** For one culvert required on the project, a wider
    2400 mm pipe was used, instead of a 1500 mm pipe, to allow for fish
    passage.

### Overview of Environmental Costs

> About 80 percent of MDT's environmental costs associated with the Four
> Corners -- West project were incurred during construction, primarily
> for wetlands mitigation, construction of a wider culvert suitable for
> fish passage; erosion control; and removal of the old roadway. A
> qualitative discussion of environmental costs by project phase,
> starting with planning and ending with construction, follows.

**Planning, Environmental Review and Final Design**

> During planning, environmental review and final design, a combination
> of in-house and consultant costs were incurred for investigating
> environmental issues associated with the Four Corners - West project.
> These costs included preparation of an EA, a biology report, a
> wetlands delineation study, and a cultural resources report. During
> completion of these studies, MDT staff provided an oversight role and
> consultants completed the reports. According to MDT's project
> engineers, no elements of the project were changed significantly
> during preliminary engineering to reduce environmental impacts, and no
> measurable amount of additional costs at this phase could reasonably
> be attributed to these changes.
>
> MDT tracks environmental bureau staff time costs in its financial
> accounting system but was not able to report costs by individual
> environmental activity (e.g. EA preparation or wetland study
> preparation) since this level of detail is not recorded by MDT staff.
> MDT was able to provide data from its financial accounting system on
> consultant charges for each report, as well as overall consultant
> costs incurred during preliminary engineering.
>
> **Special Considerations --** In contrast to some of the other case
> study states, MDT was unable to identify the amount of
> non-environmental staff time spent on environmental issues (and
> subsequent costs). They estimated that this amount of time, however,
> is unlikely to exceed more than 100 to 200 hours. In the detailed cost
> estimate, a placeholder value of 150 hours was used.
>
> **Land Acquisition**
>
> Some of the Four Corners -- West project was built within existing MDT
> right-of-way; however, a considerable amount of new land was acquired
> by MDT to accommodate the wider cross section of the project. MDT
> completed land acquisition using in-house staff and consultants. A
> total of 123.73 additional acres of land was required to accommodate
> the project's needs. MDT indicates, however, that none of the land
> acquired for the project was related to environmental needs.
>
> **Construction Engineering**
>
> MDT is able to identify all Four Corners -- West project-related
> construction engineering costs from its financial management
> information system. These costs were incurred for MDT staff time spent
> to oversee contractors' work and manage the project.
>
> **Construction**
>
> MDT was able to identify environmental costs incurred during
> construction of the Four Corners -- West project based on the
> Department's record of actual payments to the contractor. MDT staff
> was able to identify both unit costs that are exclusively
> environmental-related and those that had to be apportioned to
> environmental and non-environmental categories based on best
> professional judgment. Major categories of environmental costs
> incurred during the construction phase of the Four Corners - West
> project included:

-   Temporary erosion control

-   Construction of a culvert suitable for fish passage

-   Roadway removal and reclamation.

> Costs provided for these actions include both materials and labor.
>
> **Special Considerations --** In contrast to some of the other case
> study states, MDT did not consider inclusion of a share of contractor
> mobilization in the environmental costs to be appropriate since total
> environmental costs of \$225,667 incurred in construction represents a
> small fraction total construction costs which were \$7.7 million.

**Montana Highway 84 -- Detailed Environmental Costs**

![](media/image6.wmf){width="5.993055555555555in"
height="6.154166666666667in"}

# Alexauken Creek Bridge Replacement, Rte 179, New Jersey

> Route 179 is a minor rural two-lane road located near West Amwell in
> New Jersey's Hunterdon County. The area in the vicinity of the
> Alexauken Bridge on Route 179 is listed as a part of the Mount Airy
> Historic District on the National Register of Historic Places,
> although the bridge itself does not contribute to the historic
> qualities of the District.
>
> The Alexauken Creek bridge on Route 179 is a two lane facility that
> serves primarily local traffic. ADT on the bridge, according to New
> Jersey DOT (NJDOT) is about 5,000 vehicles per day. Route 179 is
> classified as a rural minor arterial by the FHWA.
>
> Prior to the bridge replacement, Route 179 used a three span bridge to
> cross Alexauken Creek. New Jersey DOT initially planned this project
> as a total bridge reconstruction including replacement of the three
> span structure with a single span, which would have created
> substantial water quality permitting and Section 106 compliance
> issues. In particular, a Section 106 study revealed the presence of an
> early nineteenth century blacksmith shop adjacent to the bridge
> footprint. As part of its "Hyperbuild" initiative, NJDOT opted to
> streamline the project design and construction timeline and reduce
> costs by replacing only the bridge's superstructure and remaining
> within the original bridge "footprint."

### Project Purpose and Need

> The purpose and need identified by NJDOT for the Alexauken Creek
> bridge project was to address structural problems in the 76 year old
> Route 179 bridge including wide cracks in its underside, flaking on
> its concrete railings, and deterioration of its reinforcing steel
> beams.

### Project Description

> The project solution for the Route 179 bridge selected by NJDOT
> consisted of 1) replacing the superstructure of the Alexauken Creek
> bridge while reusing the existing abutments and piers on the same
> alignment and 2) rehabilitating about 25 feet of roadway on either
> side of the bridge. The project was completed as one of the initial 14
> projects statewide that are part of NJDOT's Hyperbuild initiative to
> improve project delivery. NJDOT expedited construction by employing a
> detour on adjacent Route 202 and allowing only one lane of traffic to
> travel in a single direction through the construction area, which
> eliminated the need for a temporary bridge outside the current
> footprint.

### Environmental Issues of Concern

> The Alexauken Creek bridge replacement project was processed under
> NEPA as a categorical exclusion (CE), which required minimal
> NEPA-related processing. In addition, Section 106 (historic resources)
> phase I and II surveys, a Stream Encroachment permit, and a Freshwater
> Wetlands permit were completed during project planning to rule out any
> impacts to historic resources or streams. The environmental
> documentation for the Alexauken Creek bridge replacement project
> describes two major categories of environmental impacts, regulated
> under Federal laws and that were considered a potential concern:

-   **Archaeological Resources (NHPA, Section 106).** Since the project
    is located in a National Register-listed Historic District, detailed
    historic investigations were required. Field investigations during a
    Phase I archaeological survey of the project site revealed the
    remains of an early nineteenth century blacksmith shop. Phase II
    archaeological testing of the historic site was conducted as were
    photographic documentation, informant interviews, and the location
    of surveyed resources with global positioning system (GPS)
    technology. By keeping the new bridge on the old footprint, the
    archeological site was avoided.

-   **Wetlands/Stream Resources.** The project temporarily affected
    0.066 acres of wetlands/streams, which required issuance of
    environmental permits from the New Jersey Department of
    Environmental Protection (NJDEP). NJDEP has been delegated authority
    for the CWA, Section 404 program in New Jersey. Since construction
    involved in-stream work, a Stream Encroachment permit was also
    required. The permits required erosion control and temporary
    shielding measures during construction.

### Overview of Environmental Costs

> The Alexauken Bridge project was designed in-house by NJDOT without
> consultant assistance. Almost all environmental costs for the project
> were incurred during preliminary engineering for investigation of
> potential environmental issues. A qualitative discussion of
> environmental costs for the Alexauken Creek bridge project by project
> phase, starting with planning and ending with construction, follows.

**Planning, Environmental Review and Final Design**

> During planning, environmental review, and final design, a combination
> of in-house and consultant costs were incurred for investigating
> environmental issues associated with the Alexauken Creek bridge
> replacement project. Key components of preliminary engineering costs
> include:

-   **In-House Staff Costs --** NJDOT's staff time was the main in-house
    cost at this phase and costs were principally incurred for oversight
    of Section 106 Phase I and II studies, a wetlands report, NEPA
    document preparation, and overall design of the new bridge. Staff
    recorded 558.5 hours worked on environmental activities during
    preconstruction. Discrete estimates of the cost of each activity are
    readily available because staff at NJDOT has developed methodologies
    for extracting such costs from their financial management
    information system. The NJDOT's financial management information
    system assigns an hourly staff cost rate that includes average
    fringe benefits and other indirect costs as well as direct labor
    costs.

-   **Consultant Costs -** The other principal environmental cost
    incurred during this phase for the Alexauken Creek bridge
    replacement project was for consultant support. Major
    environmental-related consultant activities in this phase included
    Section 106 Phase I and II studies, NEPA Categorical Exclusion
    document preparation, and acquisition of wetlands permits.

> **Land Acquisition**
>
> No additional land was required for the Alexauken Creek bridge
> replacement project since the replacement bridge was completely within
> the footprint of the old bridge.
>
> **Construction Engineering**
>
> In-house NJDOT environmental staff performed only a small construction
> engineering role on the Alexauken Creek bridge replacement project.
> All staff time is tracked by project charge number and activity code,
> therefore detailed information about environmental staff time and
> other costs is readily available in NJDOT's financial management
> information system.
>
> **Construction**
>
> NJDOT staff was able to identify all environmental costs incurred
> during construction of the Alexauken Creek bridge replacement project
> from the final project ledger, which codes unit costs by type. Major
> categories of environmental costs incurred during the construction
> phase of the Alexauken Creek bridge replacement project included:

-   Erosion control

-   Temporary shielding.

> Costs provided for these actions include both materials and labor.

**Alexauken Creek Bridge, New Jersey -- Detailed Environmental Costs**

![](media/image7.wmf){width="5.996527777777778in"
height="5.860416666666667in"}

# 

#  

# Bob Creek Bridge Replacement, Pacific Coast Highway, Oregon

Oregon's two-lane Pacific Coast Highway (US 101) runs the length of the
state's Pacific coast. Within Oregon, it is one of two principal
north/south intercity routes west of the Cascade Mountains. The entire
route gives access to an area of great natural beauty and environmental
sensitivity that generates many recreational trips and links several
small communities along Oregon's ocean coast. Highway US 101 is
designated as a National Scenic Byway. The rugged topography of Oregon's
coastline, across which are scattered many stream valleys that run
perpendicular to Highway US 101, necessitates frequent bridging of
streams. The ocean coast and accessible streams provide habitat for
naturally spawning populations of coho salmon, which has been proposed
for listing as a threatened species under the ESA.

> The Bob Creek bridge on Highway US 101 is a two lane facility that
> serves a mix of local and through traffic, including frequent logging
> trucks. An adjacent stretch of Highway US 101 had an annual daily
> traffic of 19,925 vehicles in 2004. Prior to completion of the
> project, a three span bridge structure built in 1931 and supported by
> two columns crossed Bob Creek about 200 meters upstream from its
> confluence with the Pacific Ocean. The structure included one
> in-channel column that constrained Bob Creek. Land adjacent to the Bob
> Creek bridge replacement project is characterized by steep ocean-side
> bluffs within the Siuslaw National Forest and some private land
> parcels. Highway US 101 is classified as a rural principal arterial by
> the FHWA.

### Project Purpose and Need

> The purpose and need identified by ODOT for the Highway US 101 project
> was to address several structural problems in the 70 year old Bob
> Creek bridge including: 1) damage from ocean salt spray, 2)
> substandard bridge rail and approach guard rail, 3) a badly cracked
> approach pavement, and 4) scour damage to the bridge's in-stream
> column footing.

### Project Description

> The project solution selected by ODOT through the NEPA process
> consisted of replacing the Bob Creek bridge with a new two-lane
> structure that is on the same alignment and meets current bridge
> standards. Rehabilitation of the bridge was rejected as a practical
> option because of its advanced state of deterioration. The new Bob
> Creek bridge structure is a single span bridge supported by two
> abutments and without any in-channel features. As part of the project,
> a temporary single-lane detour bridge was constructed and subsequently
> removed, without in-water work, immediately upstream of the existing
> bridge.

### Environmental Issues of Concern

> The Bob Creek bridge replacement project was processed under NEPA as a
> CE, which required only limited processing. A Section 106 (historic
> resources) phase 1 survey and a Section 7 (endangered species)
> Biological Assessment were completed during project planning to rule
> out any impacts to historic resources or threatened and endangered
> species. The environmental documentation for the Bob Creek bridge
> replacement project describes two major categories of environmental
> impacts that are regulated under Federal laws and that were considered
> a potential concern:

-   **Threatened and Endangered Species (Endangered Species Act (ESA),
    Section 7).** Bob Creek supports an anadromous run of coho salmon,
    which are a proposed threatened species with proposed critical
    habitat. Critical habitat within Oregon is designated to include all
    river reaches and estuarine areas accessible to listed coho salmon
    and Federally funded actions must not destroy critical habitat.

> The greatest impact from the project is associated with removal of
> in-channel portions of the old bridge, such as a column footing and
> protective riprap. This activity had a higher than negligible
> probability of affecting coho salmon and their habitat either through
> direct harm to fish or from an increase in stream turbidity. As a
> result, the contractor had to follow a special work plan that included
> use of sandbags to divert flow and other containment measures to
> minimize sediment contributions to Bob Creek. In addition, all
> in-water work was required to be completed between July 1 and
> September 15.
>
> The new bridge enhances habitat for coho salmon because it has no
> in-channel features. The new single span structure was built using
> modern engineering techniques that were not feasible when the old
> bridge was constructed. This approach was more costly in terms of
> initial construction costs, but the total life cycle costs of the
> single span approach are less expensive since scour problems are
> eliminated and the life of the bridge is extended. Due to this overall
> structural benefit, no environmental costs are recorded. The approach
> would have been chosen without consideration of environmental issues.

-   **Archaeological Resources (NHPA, Section 106).** Phase 1
    archaeological investigations for the Bob Creek Bridge project
    revealed evidence of Native American artifacts in an area close to
    the project site. To avoid the potential archaeological site,
    construction of a two-lane temporary detour bridge that maintained
    traffic flow was ruled out. ODOT instead opted to construct a
    single-lane detour bridge immediately adjacent to the new bridge. A
    traffic control program allowed the bridge to be stage-constructed
    with 24 hour electronic signals to keep one traffic lane open at all
    times. This approach actually lowered overall project costs because
    only a single-lane detour bridge was required.

### Overview of Environmental Costs

> Design work for the Bob Creek bridge replacement project was completed
> in-house by ODOT staff, with consultant support for environmental
> investigations. A majority, 80 percent, of total environmental costs
> for the project were incurred during preliminary engineering, where
> about half of all environmental costs incurred were for studies of
> impacts to cultural resources and to threatened and endangered
> species. A small amount of costs were also incurred during
> construction primarily to protect habitat for coho salmon during
> removal of the old bridge. A qualitative discussion of environmental
> costs for the Bob Creek bridge project by project phase, starting with
> planning and ending with construction, follows:
>
> **Planning, Environmental Review and Final Design**
>
> During planning, environmental review, and final design, a combination
> of in-house and consultant costs were incurred for investigating
> environmental issues associated with the Bob Creek bridge replacement
> project. Key components of environmental-related preliminary
> engineering costs include:

-   **In-House Staff Costs --** ODOT's staff time was the main in-house
    cost at this phase and costs were principally incurred for oversight
    of: 1) a Section 106 Phase 1 study, and 2) a Section 7 Biological
    Assessment. Discrete estimates of the cost of each activity are
    readily available because staff at ODOT has developed methodologies
    for extracting such costs from their financial reporting system.
    Note that average fringe benefits and other indirect costs as well
    as direct labor costs system are all accounted for in the financial
    management system.

-   **Consultant Costs -** The other principal environmental cost
    incurred during preliminary engineering for the Bob Creek bridge
    replacement project was for consultant support. Major
    environmental-related consultant activities in this phase
    included 1) a Section 106 Phase 1 study and 2) a Section 7
    Biological Assessment.

> **Special Considerations --** In contrast to some of the other case
> study states, ODOT was able to make an estimate of the amount of
> non-environmental staff time spent on environmental issues (and
> subsequent costs). This estimate, however, is based on a general
> formula for typical costs borne by non-environmental staff on similar
> projects and, therefore, it may not be completely accurate.
>
> **Land Acquisition**
>
> No additional land was required for the Bob Creek bridge replacement
> project because the project remained within the footprint of the old
> bridge.
>
> **Construction Engineering**
>
> In-house ODOT staff performed a construction engineering role on the
> Bob Creek bridge replacement project. All staff time is tracked by
> project charge number and activity code, therefore detailed
> information about environmental staff time and costs is readily
> available in ODOT's financial management information system. As noted
> in the planning and environmental review section, ODOT was also able
> to make an estimate of the amount of non-environmental staff time
> spent on environmental issues during construction engineering. This
> estimate, however, is based on a general formula for typical costs
> borne by non-environmental staff on similar projects, and, therefore,
> it may not be completely accurate.
>
> **Construction**
>
> ODOT staff was able to identify all environmental costs incurred
> during construction of the Bob Creek bridge replacement project from
> the final project ledger, which codes unit costs by type. For this
> project, ODOT staff did not identify any unit costs that were only
> partly environmental-related. Major categories of environmental costs
> incurred during the construction phase of the Bob Creek bridge
> replacement project included:

-   Erosion control

-   Temporary scour holes

-   Silt fence

-   Permanent seed and mulch

-   Temporary slope drains

-   Temporary mulch

-   Straw wattle sediment barrier

-   Jute matting.

> Costs provided for these actions include both materials and labor.
>
> **Special Considerations --** In contrast to some of the other case
> study states, ODOT did not include a share of contractor mobilization
> in the environmental costs since total environmental costs in
> construction were so small.

**Bob Creek Bridge, Oregon -- Detailed Environmental Costs**

# ![](media/image8.wmf){width="5.722222222222222in" height="8.792361111111111in"}  {#section-3 .unnumbered}

# Highway 12300/12600 South Highway Widening, Utah

> Riverton and Draper are two rapidly growing suburbs situated at the
> southern edge of the Salt Lake City metropolitan area on either side
> of I-15. The 12300/12600S highway connects Riverton and Draper and it
> is one of the primary east to west travel routes in the southern Salt
> Lake Valley. The corridor serves regional demand for access to I-15
> and the Bangerter Expressway, which are the two major north/south
> corridors that connect Salt Lake City with fast growing suburbs to the
> south. The corridor also serves growing suburb-to-suburb travel.
>
> 12300/12600S is classified as an urban principal arterial by the FHWA.
> Land use along the corridor includes a mix of agricultural,
> commercial, rural residential, and low density urban residential
> development that is characteristic of a fast growing suburban area.
> The corridor includes a crossing of the Jordan River, which is an
> important natural resource within the region, and several historic
> properties. Before the widening project, most of the corridor
> consisted of one travel lane in either direction with no shoulders,
> curb lane, gutter, or sidewalks; traffic flow in the corridor was
> impeded by inadequate intersection design; a heavily used at-grade
> rail crossing; and a substandard interchange with I-15. The corridor
> also formed a barrier to the Jordan River Parkway Trail, which must
> cross the roadway.

### Project Purpose and Need

> The purpose and need identified by UDOT for the 12300/12600S project
> was to "*increase the multi-modal capacity of the 12300/12600S
> corridor to alleviate existing congestion and to accommodate projected
> future travel demand along the corridor*" (from final Environmental
> Assessment, prepared by UDOT/FHWA) via better accommodation of travel
> demand, improved corridor functionality, improved safety at signalized
> intersections, improved operations at the I-15 interchange, and
> enhanced opportunities for multi-modal transportation.

### Project Description

> The 12300/12600S project included the following roadway related
> improvements:

-   Widen the corridor to a consistent cross section of two travel lanes
    in each direction with a center median and shoulders, curb and
    gutter, park strips, and sidewalks along a project length of 6.2
    miles.

-   Add bicycle lanes to the corridor, which entails a striped and
    signed lane on each side of a roadway for one-way bicycle travel.

-   Replace the existing bridge across the Jordan River with a new,
    wider, and longer structure to accommodate the proposed roadway
    improvements and the Jordan River Parkway Trail.

-   Upgrade the at-grade railroad crossing at the Union Pacific Railroad
    (UPRR) tracks to provide a new grade-separated crossing of the
    tracks over the roadway, which accommodates both freight and future
    commuter rail usage.

-   Widen and improve many of the intersections along the corridor with
    dedicated right and left-turn lanes and upgraded traffic signals.

-   Implement mountable raised center island medians at several
    locations along the corridor for access control and to improve
    safety and operations.

-   Reconstruct the existing diamond interchange on I-15 at 12300 South
    to provide a more efficient interchange with increased capacity
    similar to the interchange at 9000 South.

-   Accommodate bus service along the corridor by providing 3.0 meter
    (10 foot) shoulders for bus loading and unloading.

> Since the project was completed as a design-build contract and many
> traditional cost categories established under a typical
> design-bid-build contract were not identified separately, some
> individual environmental cost items were estimated.

### Environmental Issues of Concern

> The 12300/12600S project was processed under NEPA as an EA because of
> the potential for significant environmental impacts associated with
> the project. At the conclusion of the EA, the FHWA made a Finding of
> No Significant Impacts (FONSI) determination. The EA for the project
> was completed in about two years (1999 to 2001). By definition, the
> EA-FONSI for the project describes no major categories of adverse
> environmental impacts, regulated under Federal laws. Minor issues
> highlighted in the EA that did contribute to environmental costs
> included:

-   **Cultural Resources (National Historic Preservation Act, Section
    106).** The 12300/12600S project had an impact on six historic
    properties, including a historic church and several historic houses.
    Most of the impacts involved minor land takings without harm to the
    structures; however, one structure was completely demolished to
    allow the project to proceed. A Memorandum of Agreement between
    UDOT, the FHWA, and state and local historic resources agencies laid
    out mitigation requirements for the impacts.

-   **Parklands (Section 4(f)).** The project had minor impacts on
    parkland associated with the Jordan River Parkway. The widened river
    crossing required taking of 1.4 acres of parkland to construct a new
    bridge, but the project was also used as an opportunity to enhance
    the environmental quality of the Jordan River banks and to provide a
    grade separated connection for the Parkway trail.

-   **Noise Barriers.** Noise walls were found to be a reasonable and
    feasible mitigation solution along two short stretches of the
    corridor where they were both practicable and a sufficient number of
    dwellings benefited to make them worth the expense.

-   **Wetlands (Clean Water Act, Section 404).** The 12300/12600S
    project resulted in the loss of 2.27 acres of wetlands throughout
    the corridor. In coordination with U.S. Army Corps of Engineers,
    UDOT purchased a 15-acre mitigation site alongside the Jordan River,
    which serves as a combined mitigation site for several
    transportation projects underway in the region with 5 acres
    attributable to the 12300/12600S project.

-   **Hazardous Materials.** One leaking underground storage tank
    located on property acquired for the project required clean up of
    petroleum contamination in accordance to UDOT standard
    specifications.

### Overview of Environmental Costs

> The design and construction work for the 12300/12600S project was
> completed by a single design/build team with oversight from UDOT
> staff. Environmental costs for the project totaled about \$2.6 million
> or two percent of total project costs. About 65 percent of UDOT's
> environmental costs associated with the 12300/12600S project were
> incurred during construction. A qualitative discussion of
> environmental costs by project phase, starting with planning and
> ending with construction, follows.
>
> **Planning, Environmental Review and Final Design**
>
> During planning, environmental review, and final design for the
> 12300/12600S project, a consultant was responsible for completing an
> Environmental Assessment, as well as several other environmental
> reports. Historic issues were a particular concern on this project,
> but according to UDOT engineers, no major elements of the project
> required changes to reduce environmental impacts. In-house staff costs
> were tracked in UDOT's FINET system; however, unlike the financial
> management systems involved in the other case studies, UDOT's system
> does not separate its environmental-related in-house staff costs,
> although such a system is now in development. By working directly with
> the project manager, UDOT was able to provide a reasonable estimate of
> in-house staff time required to oversee preparation of the EA and
> other tasks. Consultant cost records, which accounted for a majority
> of the costs during preliminary design on this design/build job, were
> readily available from contract records.
>
> **Land Acquisition**
>
> Some of the 12300/12600S project was built within UDOT's existing
> right-of-way, however, new land was required to accommodate the wider
> cross section of the project. A small amount (5 acres) of total
> additional land acquired was used for environmental mitigation
> purposes. This fraction was used to allocate total right-of-way costs
> for staff and land acquisition that were reported for the project in
> UDOT's FINET system. In addition, as part of a Section 106 memorandum
> of agreement, this project involved a \$445,000 payment by UDOT to
> affected local governments and the State Historic Preservation Officer
> to address Section 106 impacts identified during the planning and
> environmental review phase. The funds were used to conduct
> compensatory activities.
>
> **Construction Engineering**
>
> Since the 12300/12600S project was structured as a design-build job,
> the contractor had additional responsibilities in the design process
> and accepted more of the risk for decisions. As with other phases,
> UDOT was able to identify all 12300/12600S project-related
> construction engineering costs in FINET. These costs were incurred for
> UDOT staff time spent to oversee contractors' work and manage the
> project. The environmental component of construction engineering costs
> was estimated by UDOT staff to be about 10 percent of total
> construction engineering costs.
>
> **Construction**
>
> UDOT was able to identify environmental costs incurred during
> construction of the 12300/12600S project based on a combination of
> reviewing the project engineer's estimate and discussing environmental
> costs with the project's manager. Major categories of environmental
> costs incurred during the construction phase of the 12300/12600S
> project included:

-   A small amount (about five acres) of offsite wetlands mitigation

-   Dust control

-   Noise walls

-   Erosion and sediment control best management practices

-   Hazardous materials clean-up.

> Costs provided for these actions include both materials and labor.
>
> In addition, UDOT constructed a longer bridge span as part of the
> project that spanned environmentally sensitive wetlands along the
> Jordan River. According to UDOT, the extra length of the bridge added
> 10 percent, or \$130,000 to the total cost of the bridge.

**12300/12600 South, Utah -- Detailed Environmental Costs**

![](media/image9.wmf){width="5.995138888888889in" height="6.15625in"}

# I-90 Sunset Way Interchange, Washington

> The I-90 Sunset Way Interchange is located in the City of Issaquah and
> is part of the Mountains to Sound Greenway National Scenic Byway. The
> Sunset Way interchange serves Issaquah Highlands, a 2,200-acre
> development with homes, shops and offices. The City of Issaquah has a
> population of 17,000 and is a gateway to both Washington's Cascade
> Mountains and the Seattle area's I-90 business and transportation
> corridor. It is experiencing rapid growth with respect to both
> residents and jobs.

### Project Purpose and Need

> The purpose and need identified by the participating agencies for the
> I-90 Sunset Way Interchange was to replace an antiquated Interstate
> interchange, reduce congestion on nearby city and county streets,
> improve safety, and enhance access to the Sammamish Plateau. Prior to
> completion of the project, the existing I-90 Sunset Way Interchange
> consisted of only an eastbound on-ramp and a westbound off-ramp; the
> need for improvements to the interchange had been discussed since the
> early 1980s. At the time the project was approved, the interchange was
> operating over-capacity and growth in future travel demand was
> expected to be significant, particularly in light of new development
> that already had been approved by the City of Issaquah. In addition,
> the two nearest interchanges (Front Street and SR 900) were
> experiencing significant congestion levels which could be relieved by
> expansion and modernization of the Sunset Way interchange.

### Project Description

> The I-90 Sunset Way Interchange project entailed replacing the
> existing eastbound and westbound ramps by constructing four new
> bridges (one post-tensioned cast-in-place bridge, two structural steel
> tub bridges, and one precast post-tensioned concrete tub bridge), new
> on-ramps and off-ramps, and a bicycle and pedestrian trail. The
> project also required construction of mechanically stabilized earth
> retaining walls and soldier pile walls, installation of stormwater
> treatment facilities, implementation of wetland mitigation strategies
> and stream restoration activities. Due to I-90's designation as a
> National Scenic Byway and the strong advocacy of the Mountains to
> Sounds Greenway Trust, significant efforts were made to develop and
> implement context sensitive design solutions to maintain the natural
> aesthetics of the area.
>
> The project was funded, designed and constructed through a partnership
> that included WSDOT, the FHWA, the City of Issaquah, King County,
> Sound Transit, the Transportation Improvement Board, Port Blakely
> Communities, and other state and Federal agencies. The design
> contract, which included development of the EIS, was overseen by the
> City of Issaquah, while WSDOT awarded and managed project
> construction. The Notice of Intent for the project was filed in March
> 1996 and construction began in summer 2001. Project construction was
> completed in two years, and the new facility was opened to traffic on
> August 29, 2003.

### Environmental Issues of Concern

> The I-90 Sunset Way Interchange project was processed under NEPA as an
> EIS because of the significant environmental impacts associated with
> the project. The Final EIS describes several categories of significant
> adverse environmental impacts, regulated under Federal laws,
> including:

-   **Stormwater Runoff** -- The Sunset Way interchange project created
    12.84 acres of new impervious highway surfaces located both in hilly
    terrain and within the Puget Sound drainage basin. In addition, the
    project site included a portion of the East Fork Issaquah Creek, and
    the new facility is adjacent to Lake Sammamish. To address runoff
    concerns, two sets of stormwater ponds were constructed -- the Front
    Street Ponds with a capacity of 201,590 cubic feet and the Sunset
    Way Ponds with a capacity of 21,070 cubic feet. Due to a city
    ordinance requiring new projects to return stormwater runoff to the
    aquifer, the pond facilities included significant investment in
    design and equipment to facilitate greater infiltration.

-   **Stream Restoration --** The East Fork Issaquah Creek runs though
    the project area and its riparian areas were disturbed by
    construction activities. The creek also is a spawning ground for
    endangered chinook salmon and a habitat for sockeye salmon. To
    restore the creek to a natural environment, the project sponsors
    established in-stream fish habitat structures, built a series of
    weirs to modify the slope of the channel bottom, and constructed 500
    feet of bio-stabilized creek bank. This work could only be completed
    in a dry creek bed, so creek water was temporarily rerouted by pipe
    until the construction could be completed.

-   **Sediment Control** -- Soil in the I-90 Sunset Way Interchange area
    is fine and silty, making it difficult to clean construction-related
    runoff from soil boring activities. To protect the East Fork
    Issaquah Creek from potential sediment impacts, WSDOT installed a
    sand filtration system, stormwater ponds, a continuous pumping
    system, and a series of check dams.

-   **Wetlands** -- The I-90 Sunset Way Interchange project affected
    0.15 acres of wetland areas and 1.40 acres of wetland buffer area.
    To mitigate these impacts, the project sponsors created 0.3 acres of
    replacement wetland areas, made wetland enhancements to another 0.17
    acres, and implemented 1.4 acres of buffer enhancement.

### Overview of Environmental Costs

> WSDOT is one of the few state DOTs that has tried to estimate the full
> costs of environmental compliance for selected projects through an
> initiative entitled Project Mitigation Cost Case Studies. While the
> department does not actively track environmental-related staff costs
> for non-environmental personnel, the costs developed for the case
> studies reflect a significant level of effort by the WSDOT Project
> Manager and a special project team to go back and allocate project
> costs for environmental and non-environmental purposes based on actual
> project costs, as opposed to bid items or engineer's estimates. The
> I-90 Sunset Way Interchange project was one of 14 projects selected by
> WSDOT as environmental mitigation cost case studies.
>
> A majority of the design and all construction work for the I-90 Sunset
> Way Interchange was completed by consultants and contractors. The
> design contract, including EIS development was managed by the City of
> Issaquah, while WSDOT awarded and managed the construction contract. A
> large percentage of the project's environmental costs were associated
> with design and right-of-way acquisition activities, primarily related
> to the stormwater treatment facilities and offsite wetlands
> mitigation. Costs for temporary erosion and sediment control during
> construction also were significant. A qualitative discussion of
> environmental costs by project phase, starting with planning and
> ending with construction, follows.
>
> **Planning, Environmental Review and Final Design**
>
> The I-90 Sunset Way Interchange project included significant in-house
> and consultant costs associated with planning, environmental review
> and final design costs. The total costs for environmental-related
> activities and the specific costs for individual environmental
> activities are difficult to gauge because 1) the contract with the
> pre-construction consultant did not break out specific costs for
> addressing discreet environmental activities, and 2) WSDOT's
> mechanisms for reporting preliminary engineering-related staff time on
> projects do not separate "environmental" preliminary engineering costs
> for non-environmental staff from the cost of their other preliminary
> engineering activities. As such, the costs for consultant and in-house
> environmental-related preliminary engineering activities are estimates
> based on the professional judgment and experience of the WSDOT project
> manager. Key components of costs included:

-   **In-House Staff Costs --** WSDOT's staff time was the main in-house
    cost at this phase and costs were principally incurred for oversight
    of: 1) EIS preparation by a consultant, 2) permit acquisition by a
    consultant, 3) design of stormwater treatment strategies and
    facilities by a consultant, 4) development of wetland delineation
    and mitigation plans by a consultant, and 5) development of stream
    restoration plans and; 6) creation of erosion and sediment control
    strategies. This oversight role included considerable interaction
    with other local governments, state and Federal resource agencies,
    and stakeholder groups to reach agreement over how to handle
    sensitive environmental issues.

-   **Consultant Costs -** The other principal environmental cost
    incurred during preliminary engineering for the I-90 Sunset Way
    Interchange project was for consultant support. Major
    environmental-related consultant activities in this phase
    included 1) EIS preparation by a consultant, 2) permit acquisition
    by a consultant, 3) design of stormwater treatment strategies and
    facilities by a consultant, 4) development of wetland delineation
    and mitigation plans by a consultant, and 5) development stream
    restoration plans; and 6) creation of erosion and sediment control
    strategies.

> **Land Acquisition**
>
> A portion of the I-90 Sunset Way Interchange was built within existing
> WSDOT right-of-way, but new land was required to accommodate
> additional ramps and roadway, and to address environmental mitigation
> requirements. WSDOT completed all land acquisition using in-house
> staff. An estimated 1.5 acres of additional land was required for
> stormwater facilities. An additional 1.87 acres of land was acquired
> offsite to mitigate for wetland impacts.
>
> **Construction Engineering**
>
> In-house WSDOT staff performed the construction engineering role on
> the I-90 Sunset Way Interchange project. All staff time is tracked by
> project charge number and activity code, but specific codes do not
> exist for environmental work; therefore, construction engineering
> costs related to environmental activities are based on the
> professional judgment and expertise of the WSDOT project manager. For
> this project, 4 percent of total construction engineering costs were
> allocated to environmental activities.
>
> **Construction**
>
> As part of the research and analysis of the I-90 Sunset Way
> Interchange completed for the Project Mitigation Cost Case Studies,
> WSDOT was able to identify environmental-related costs incurred during
> construction based on expenditures (i.e., actual cash outlays to
> contractors) for the project. These costs include both unit costs that
> are exclusively environmental-related and those that had to be
> apportioned to environmental and non-environmental categories based on
> best professional judgment. Major categories of environmental costs
> incurred during the construction phase of the I-90 Sunset Way
> Interchange project included:

-   Stormwater treatment

-   Offsite wetlands mitigation

-   Stream restoration

-   Erosion and sediment control

-   Share of overall mobilization (incorporated into each environmental
    activity cost estimate).

> Costs provided for these actions include both materials and labor.
>
> In some cases, state and local requirements in Washington go beyond
> Federal requirements. In particular, Washington requires that projects
> address stormwater runoff needs for both new and existing facilities
> associated with a project, and a City of Issaquah ordinance requires
> that runoff be reintroduced to the aquifer. While these added
> requirements may have added environmental mitigation costs to the
> project, it is not possible to allocate costs between Federal and
> non-Federal environmental requirements.

**I-90 Sunset Way Interchange, Washington -- Detailed Environmental
Costs**

> ![](media/image10.wmf){width="5.993055555555555in"
> height="5.5368055555555555in"}

## 4.4. Case Study Observations

-   **Preconstruction costs -- where most environmental "process" costs
    are incurred - are a small percent of total project costs.** For the
    projects studied, preconstruction costs (design, right of way, and
    environmental) ranged from 16 percent of total project costs
    (Montana Highway 84) to 33 percent of total project costs
    (12300/12600 S, Utah). Construction accounts for a great majority of
    total costs on any project.

-   **Construction mitigation costs are a small percent of total
    construction costs.** For the projects studied, construction
    mitigation costs ranged from 1 percent of total construction costs
    (12300/12600S, Utah) to 13 percent of total construction costs (US
    Highway 113, Maryland).

-   **Environmental costs for the case studies range from two to 12
    percent of total project costs.** Table 4.2 provides a summary of
    environmental costs for each of the case study projects. The share
    of environmental costs ranges from two percent up to 12 percent. On
    average, environmental costs are eight percent of total project
    costs for the projects studied.

-   **Environmental costs increase with project costs.** For the
    projects studied, absolute environmental costs are lower on smaller
    projects and higher on larger projects. For the small projects
    studied, environmental costs for preconstruction activities
    outweighed environmental costs incurred during construction; the
    reverse was true for larger projects.

-   **Expenditures on stormwater, landscaping, and wetlands during
    construction are large environmental cost drivers.** For the case
    study projects, the cost to construct stormwater management
    structures, replace wetlands, control erosion, and conduct
    landscaping have a much bigger impact on total project costs than
    staff and consultant time spent on project studies and construction
    engineering. For example, on Maryland's US Highway 113, expenditures
    to prepare the EIS (\$1,103,252) and oversee environmental issues
    during construction (\$325,000) were only 6 percent of total
    environmental costs (\$21,915,152) for the project and less than one
    percent of the total project costs of \$181,125,760. Projects that
    do not require extensive wetlands mitigation and stormwater
    treatment, such as the Utah 12300/12600 S case study, feature much
    lower environmental costs.

-   **Environmental costs are a significant proportion of total
    preconstruction (excluding land acquisition) costs.** Environmental
    costs are incurred during preconstruction for NEPA document
    preparation processes, other environmental studies and coordination
    with other resource agencies. They usually include a mix of in-house
    costs and consultant costs, which the case study state DOTs had
    little trouble identifying. Several DOTs had trouble identifying
    environmental costs attributable to non-environmental bureau staff
    or consultants but were confident these costs account for a small
    share of total environmental-related costs. Environment accounted
    for an average of 23 percent of total preconstruction costs for the
    case study projects.

-   **Environmental-related land acquisition costs vary among projects,
    but can be a significant cost driver.** Environmental costs are not
    always incurred during the land acquisition phase of a project.
    Three out of the six case study projects involved no additional land
    acquisition associated with environmental requirements. Where
    additional land was required for the project, this appeared to add
    considerable costs that ranged from nine percent (US Highway 113,
    Maryland) to thirty percent of total project costs (12300/126000 S,
    Utah). The environmental components of those total project land
    acquisition costs in the Maryland and Utah case study projects were
    14 percent and one percent, respectively, and were approximately one
    percent or less of total project costs. For all the case studies,
    however, methodologies for apportioning environmental-related land
    acquisition costs could be improved.

-   **Environmental costs during construction engineering are small.**
    Environmental costs associated with construction engineering during
    the construction phase of a project are usually small compared to
    environmental costs associated with the other project activities
    during construction. The case study states are able to identify
    environmental staff time charged to the project during construction.
    They are also able to provide an approximate estimate of
    non-environmental staff time spent on environmental issues, such as
    erosion control. Environmental-related construction engineering
    costs averaged about 5 percent of total construction engineering
    across the case studies.

-   **Project design and construction changes can add costs, but are
    hard to measure.** For five of the six case study projects, elements
    of project design and construction were altered in part to
    accommodate environmental issues. These changes sometimes reduce
    costs, but they can also increase costs:

    -   **Cost savings.** In the Oregon case study, a one-lane temporary
        bridge was constructed instead of a two lane bridge to avoid
        impacts to cultural resources and Federal lands, which generated
        some cost savings. Likewise in the New Jersey case study, a
        simpler bridge design that involved replacement of the
        superstructure only was selected in part to avoid a complicated
        environmental process, but also to save overall construction
        costs and time.

    -   **Cost increases.** In the Maryland, Montana, and Utah case
        studies, larger bridges or culverts were built to avoid
        sensitive wetlands, improve fish passage, and accommodate a bike
        trail respectively. In each of these cases, costs were added to
        the projects.

In each instance, estimates of costs associated with "the path not
taken" are heavily reliant on professional judgment.

**Table 4.2. Summary of Case Study Results**

  -------------- ----------------------- ----------- ----- ----------------------- ---------- ----- ----------------------- ------------- ----- ----------------------- -------------- ----- ----------------------- -------------- -----
  **Overview**                                             **Detailed Breakdown**                                                                                                                                                   

  **Project**    **Overall Costs**                         **Environmental Review                   **Land Acquisition**                        **Construction                               **Construction**                       
                                                           and Design**                                                                         Engineering**                                                                       

                 Environmental-Related   Total       \%    Environmental-Related   Total Env. \%    Environmental-Related   Total Land    \%    Environmental-Related   Total          \%    Environmental-Related   Total          \%
                 Costs (000s)            Project           Costs (000s)            Review/          Costs (000s)            Acquisition         Costs (000s)            Construction         Costs (000s)            Construction   
                                         Costs                                     Design                                   Phase Costs                                 Engineering                                  Phase Costs    
                                         (000s)                                    Phase                                    (000s)                                      Phase Costs                                  (000s)         
                                                                                   Costs                                                                                (000s)                                                      
                                                                                   (000s)                                                                                                                                           

  US-113 (MD)    \$21,915                \$181,126   12%   \$1,103                 \$14,455   8%    \$2,264                 \$15,680      14%   \$325                   \$6,300        5%    \$18,223                \$144,690      13%

  MT-84 (MT)     \$282                   \$10,291    3%    \$44                    \$452      10%   NA                      NA            NA    \$12                    \$903          1%    \$226                   \$7,751        3%

  Alexauken      \$240                   \$1,980     12%   \$206                   \$498      41%   NA                      NA            NA    \$8                     \$196          4%    \$26                    \$1,286        2%
  Bridge (NJ)                                                                                                                                                                                                                       

  Bob Creek      \$166                   \$1,701     10%   \$141                   \$394      36%   NA                      NA            NA    \$5                     \$139          4%    \$20                    \$1,168        2%
  Bridge (OR)                                                                                                                                                                                                                       

  12300/ 12600S  \$2,405                 \$132,292   2%    \$964                   \$3,576    27%   \$500                   \$39,918      1%    \$294                   \$2,942        10%   \$647                   \$85,855       1%
  (UT)                                                                                                                                                                                                                              

  I-90 Sunset    \$12,202                \$112,800   11%   \$2,350                 \$13,730   17%   \$6,020                 \$10,919      55%   \$380                   \$8,816        4%    \$3,452                 \$79,344       4%
  Way (WA)                                                                                                                                                                                                                          

  Average                                            8%                                       23%                                         18%                                          5%                                           4%
  -------------- ----------------------- ----------- ----- ----------------------- ---------- ----- ----------------------- ------------- ----- ----------------------- -------------- ----- ----------------------- -------------- -----

# 5.0 Conclusions and Recommendations

> **Conclusions**
>
> This study is the first attempt to report on state DOTs' environmental
> costs at a national level. As such, the conclusions it makes should be
> considered a "work in progress;" but one that provides considerably
> more detailed and more reliable information than policy makers have
> received in the past. Conclusions are discussed in terms of responding
> to the Congressional request and observed findings from the study.
>
> **Responding to the Congressional Request.** The study results provide
> information on environmental costs that is consistent with the request
> from Congress. The original request from the House Appropriations
> Subcommittee on Transportation, Treasury, Housing, and Urban
> Development, the Judiciary, District of Columbia, and Independent
> Agencies requested the FHWA:
>
> *"to determine the costs associated with the environmental process on
> a representative sample of projects. Analysis should include
> information on environmental costs associated with the project itself,
> such as wetlands mitigation and 4(f); costs associated with preparing
> the document; and other related costs associated with the time it
> takes to complete the environmental process."*

-   **"Costs associated with the environmental process."** Chapter two
    of the study defines costs associated with the "environmental
    process" to include "compensatory costs" associated with preparing
    for and undertaking actions to make up for unavoidable environmental
    impacts, and "avoidance costs" associated with evading environmental
    impacts by not taking an action, or parts of an action, or by
    limiting its magnitude. This definition is used throughout the study
    to estimate environmental costs. See chapter two for a detailed
    discussion on the types of costs associated with the environmental
    process.

-   **"A representative sample of projects."** The study features six
    case study, or sample, projects that were carefully selected to
    represent diverse geographic locations, urban and rural settings, a
    mix of common project types, a range of NEPA documentation
    requirements, an array of types of environmental impacts, and
    "middle-of-the-road" project costs that are typical of projects that
    DOTs must handle on a regular basis. See the introduction and the
    start of chapter four for more discussion of the criteria by which
    case study projects were selected.

-   **Environmental "costs associated with the project itself."** For
    each of the case studies, full estimates of the cost of any physical
    mitigation required, such as for wetlands and 4(f) are provided. See
    the case study results in chapter four for more detail.

-   **Environmental "costs associated with preparing the document."**
    For each of the case studies, detailed estimates of the cost of any
    preconstruction activities associated with preparation of the NEPA
    document are provided. See the case study results in chapter four
    for more detail.

-   **"Related costs associated with the time it takes to complete the
    environmental process."** For each of the case studies, detailed
    estimates of other related costs such as mobilization of
    construction contractors, or DOT staff construction engineering
    costs are provided. As noted in chapter two, estimates of costs
    associated with delay caused by environmental issues were not
    estimated. None of the states interviewed expressed concern about
    major delays associated with the projects profiled; furthermore,
    available methods for estimating costs associated with delay and
    apportioning all or some of those costs to environmental factors are
    understood to be weak.

> **Findings from the Study.** Environmental costs are measurable; for a
> typical DOT project they are likely to be in the range of two to 12
> percent of total project costs, which for most states is likely to add
> up to millions of dollars in environmental expenditures each year.
> Some of this cost is for NEPA documentation and other "process" costs.
> The case studies suggest, however, that a large share of environmental
> costs is likely to be for construction of stormwater facilities,
> mitigation of wetland losses, erosion control, and landscaping. Key
> conclusions from the study include:

-   **State DOTs are investing more in environmental stewardship and
    streamlining but its effect on project-level costs is unclear.** In
    qualitative terms, all the case study states say they continue to
    undertake efforts to improve their stewardship of the environment. A
    consensus emerged across participants in the interviews that DOTs
    now conduct many environmental responsibilities as the "right thing
    to do" and therefore at least some environmental costs would be
    incurred on projects regardless of environmental laws. All the case
    study states also indicate they are undertaking efforts to
    streamline their environmental activities and that this is helping
    expedite project schedules. The US-113 project in Maryland and the
    Alexauken Bridge project in New Jersey are both recognized
    nationally as "streamlined" projects; however, practitioners in
    these states were not willing to estimate absolute cost savings on
    these projects.

-   **Only a handful of state DOTs currently measure environmental
    costs.** The states identified in this study, including Montana,
    Oregon, Washington, and Wisconsin, are among a small handful that
    have attempted to develop comprehensive estimates of their
    environmental costs. The state-of-the-practice for defining and
    measuring environmental costs has clear deficiencies that are likely
    to be addressed over time as DOTs enhance their approaches for
    measuring costs.

-   **Environmental costs include compensatory costs and avoidance
    costs.** According to practitioners, a comprehensive definition of
    environmental costs incurred during delivery of transportation
    projects should include "compensatory costs" associated with
    preparing for and undertaking actions to make up for unavoidable
    environmental impacts, and "avoidance costs" associated with evading
    environmental impacts by not taking an action, or parts of an
    action, or by limiting its magnitude.

-   **Comprehensive estimates of environmental costs should include all
    phases of project delivery.** A DOT incurs environmental costs
    throughout the lifespan of a project, including planning,
    environmental review, design, land acquisition, and construction.
    Cost tracking efforts should account for each phase.

-   **Not all environmental costs are easily identifiable.** Some
    environmental costs are clear cut, such as NEPA document preparation
    costs or the cost of a longer bridge to avoid a wetland. Other
    environmental costs may be harder to identify. A more costly project
    solution, for example, may yield both engineering and environmental
    benefits. The bridge constructed in the Oregon, Bob Creek Bridge
    Case Study was more costly because it avoided in-water piers but
    this solution minimized environmental impacts to salmon habitat. The
    same solution also avoided bridge scour problems that would
    otherwise shorten the bridge's lifespan and increase maintenance
    costs.

-   **Practical constraints limit many DOTs' ability to track
    environmental costs.** The process of developing the case studies
    reveals that many DOTs face significant hurdles to developing
    environmental cost tracking methods. A primary constraint for many
    states is the lack of project-level environmental activity codes
    that support tracking of in-house and consultant costs. Other
    constraints include difficulty in collecting and analyzing land
    acquisition data, and the increased use of design-build contracting,
    which often limits the amount of environmental cost data available
    to DOTs.

-   **Environmental cost tracking is labor intensive, particularly at
    the outset but has many benefits.** DOTs that are measuring
    environmental costs report that it is labor intensive, and some
    practitioners question the relative cost to benefit ratio for
    tracking environmental costs. Once methodologies are in place,
    however, DOTs that measure costs find that they are able to use the
    information to resolve policy questions, improve project
    decision-making, and increase accountability to stakeholders.

> **Recommendations**
>
> The study conclusions provide the basis for several general
> recommendations on next steps that may be appropriate, these include:

-   **More dialogue with state DOTs on the value of environmental cost
    tracking.** The study found that states that track environmental
    costs see the information as beneficial, but it also found that
    environmental cost tracking is potentially complex and time
    consuming. More discussion with state DOTs is needed to help
    determine whether additional efforts should be pursued.

-   **Develop additional case studies and refine and enhance cost
    tracking methods.** If cooperating states can be identified,
    additional case studies could be conducted with ease using the
    methods established in this study. A larger data set would provide
    stronger support for drawing conclusions that guide policymaking on
    this issue. Additional case studies could also be used to refine and
    enhance methods and approaches used in this study.

-   **Technical assistance for state DOTs on environmental cost tracking
    methods.** Based on the outcomes of dialogue with state DOTs and
    efforts to improve and enhance methods for tracking environmental
    costs, provide state DOTs with technical assistance such as training
    or guidance documents.

# Appendix A

### State-by-State Interview Reports

**Interview Contacts**

**Arizona DOT**

Melissa Maiefski

**Florida DOT**

Larry Barfield

Josh Boan

Buddy Cunill

Carolyn Ismart

Carl McMurray

**Kentucky Transportation Cabinet**

Mike Hancock

John Metille

**Maryland SHA**

Susan Ridenour

Rob Shreeve

Josh Nelson

**Montana DOT**

Zia Kazimi

Vicki Murphy

Mark Wissinger

**Oregon DOT**

Lorraine Butler

Frannie Brindle

Donna Kilber

Kate Poole

**Utah DOT**

Brent Jensen

Reed Soper

**Washington DOT**

Ken Smith

**Wisconsin DOT**

Dan Scudder

Shar TeBeest

### Arizona DOT

> **Background.** Arizona DOT's Environmental and Enhancement Group
> (EEG) has a limited but expanding capacity to track some environmental
> mitigation costs incurred by the agency during project delivery. The
> focus of ADOT's efforts at present is on collection of cost data for
> biological resource documentation and mitigation as part of a broader
> environmental project management tool. Cost tracking in other
> environmental areas is sporadic. The general approach ADOT uses to
> track biology-related costs, however, appears applicable to other
> environmental resources for which ADOT has responsibility. ADOT's new
> environmental cost tracking system has great potential as a project
> management and cost measurement tool. When fully implemented, ADOT
> staff will have the ability to examine actual environmental mitigation
> costs by resource type (e.g. endangered species, wetlands) for
> individual projects as they are incurred and they will have a detailed
> database of historic environmental mitigation costs. The system also
> will have broader project management benefits, such as improved
> project-by-project tracking of consultant activities.
>
> **Motivation for Cost Measurement.** Impacts to biological resources
> are often a concern for transportation projects in Arizona, where a
> rapidly growing population and an expanding transportation program
> necessitate considerable efforts to preserve the State's unique
> ecosystems. ADOT staff explains the primary motivation for developing
> its cost tracking capabilities has been to enable accurate responses
> to regular questions from sources outside the agency, including
> legislators and Federal agencies, about expenditures for mitigation of
> impacts to threatened and endangered species. ADOT does not publish
> costs data, but it is available on request.
>
> **Tracking Systems.** ADOT's biological costs tracking effort is part
> of a broader electronic environmental information management system
> that is maintained by EEG staff and was developed by in-house ADOT
> information technology support staff. Running on a Microsoft Standard
> Query Language (SQL) platform, the database enables staff to
> efficiently track every element of the NEPA process on a
> project-by-project basis from their PCs. Information in the system is
> easily navigable and is updated on a regular basis. ADOT environmental
> staff uses the database for a range of functions such as tracking
> project staffing and workloads, monitoring important environmental
> study milestones, analyzing key concerns, and reporting the current
> status of individual projects for each specialty (e.g. air, water, and
> hazardous materials).
>
> ADOT began its efforts to track biological costs on a comprehensive
> basis in 2003. Almost all ADOT's biological mitigation costs are
> linked to use of consultants and contractors whose work includes
> biology documentation and any specific actions required as a result of
> studies. Almost all (about 90 percent) biology-related work is
> conducted by one of ADOT's pre-approved, on call consultants.
> Biological costs are broken into the following fields, based on
> information collected from these consultants on a project-by-project
> basis:

-   **Biological Documentation Cost:** This includes pre-construction
    activities such as coordination with agencies, review of relevant
    literature, field studies, and preparation of reports. Cost
    information is collected from consultant task order documentation,
    which includes detailed standards for reporting hours and costs by
    activity type that enable costs to be broken out. (See a sample in
    Table A-1.)

-   **Bio-Mitigation Cost, Pre-Construction:** This includes mitigation
    efforts required before construction begins, such as species
    surveys, or exclusionary netting on bridges. Cost information is
    collected from consultant task order documentation.

-   **Bio-Mitigation Cost, Construction:** This includes mitigation
    conducted during construction. Cost information is collected from
    ADOT project managers who generally provide numbers based on bid
    item documentation.

Table A-1. Arizona DOT: Sample Consultant Task Order Hours and Cost
Report

  ------------------ -------------------- --------------------- ----------------- -------------------- ---------------------
  Breakdown of cost                                                                                    
  items for:                                                                                           
  Coronado Trail                                                                                       
  Switchbacks Rubble                                                                                   
  Retaining Walls                                                                                      

  (TRACS Number: 191                                                                                   
  GE 175 H6744 01E)                                                                                    

                     [Cost]{.underline}   [Hours]{.underline}                     [Cost]{.underline}   [Hours]{.underline}

  Task Management    \$6,295              89                    Section 404       \$122                2

  Cultural Resources \$25,796             438                   Land Use          \$61                 1

  Biology Resources  \$2,741              44                    Air Quality       \$61                 1

  Biology Mitigation \$0                  0                     Noise             \$61                 1

  Floodplains        \$61                 1                     Hazmat            \$467                7

  Public Involvement \$0                  0                     Socioeconomic     \$183                3

  Visual Impacts     \$61                 1                     Farmlands         \$0                  0

  Scenic Rivers      \$0                  0                     Aquifer           \$0                  0

  Construction       \$422                6                     Utility Impacts   \$61                 1
  Impacts                                                                                              

  AZPDES             \$61                 1                     Data Recovery     \$0                  0

  Public/Agency      \$2,206              35                    General Action    \$5,718              82
  ------------------ -------------------- --------------------- ----------------- -------------------- ---------------------

> Using the database, ADOT staff can report biology-related mitigation
> costs program-wide, project-by-project, or even species by species.
> Not included in EEG's database is in-house staff time, however, this
> information is tracked via bi-weekly employee timesheets that use 40
> environmental codes. EEG has not made an attempt to integrate staff
> time costs with the consultant and contractor cost tracking
> capabilities of the database. Staff perceives that staff costs are a
> small share of total biological costs borne by ADOT and that the
> effort required to track this information would exceed the value of
> having it.
>
> **State Funded Projects and Mitigation Requirements.** Arizona's state
> environmental laws are not as broad ranging as Federal environmental
> laws. ADOT does conduct some projects with state funds only, but it
> uses the same environmental procedures regardless of funding sources.
> (An exception is the Section 4(f) process, which is by-passed if state
> funding is used.) Staff cite several reasons for following
> Federal-style procedures including the presence of Federal lands
> throughout Arizona, which necessitates Federal participation in
> decision-making, and the clarity that Federal regulations assure for
> working with affected stakeholders and resource agencies.
>
> **Environmental Requirements and Project Scope.** ADOT staff provided
> two examples of projects where scopes were scaled back to accommodate
> environmental concerns:

-   **Organ Pipe National Monument --** The project footprint of a
    scenic road improvement was reduced by reducing the number of rest
    areas from three to two, which reduced project costs.

-   **Highway 82 (Bridge Replacement), Santa Cruz, Arizona --** The
    original detour during bridge construction ran through a dry river
    bed, however, environmental concerns led to a solution that
    maintained traffic on the bridge during construction. This solution
    was also cheaper than building the detour would have been.

### Florida DOT

> **Background.** Environmental cost measurement is a lower priority at
> Florida DOT than it is at any of the other DOTs that participated in
> this study. Staff at FDOT describes a decentralized organization where
> practices for collecting information such as environmental costs vary
> from district to district. FDOT staff provided helpful perspectives on
> the challenges and value of measuring environmental costs.
>
> **Motivation for Cost Measurement.** Florida DOT reports limited
> internal or external motivation for greater measurement of
> environmental costs.
>
> **Tracking Systems.** Florida DOT has no comprehensive environmental
> cost measurement system. The Department tracks selected environmental
> costs on a regular basis:

-   **Biology.** Since 2001, consultant costs associated with
    determination of endangered species impacts and any required
    mitigation have been reported annually to the FHWA. Data is broken
    out by species using a format requested by the FHWA. In-house staff
    costs are not tracked. Data for this report is collected from
    District staff by an e-mail survey

-   **Wetlands --** Since 1997, the Department has tracked annual
    in-lieu fee costs paid to the State's wetlands agency for wetlands
    mitigation. For 85 to 90 percent of wetlands affected by
    transportation projects, FDOT pays a flat in-lieu fee of \$90,000
    per acre to the appropriate Water Management District in Florida.
    Districts coordinate closely with Water Management Districts that
    are responsible for conducting wetland restoration either on-site or
    at a bank and maintaining wetlands. FDOT views this approach
    favorably because it enables a holistic wetland mitigation efforts
    that ensure best value is achieved for funds spent by considering
    long-term, watershed implications. Cost data is easily collected for
    these payments. Remaining wetland impacts (primarily for saltwater
    wetlands) are mitigated by FDOT and its contractors, but no
    comprehensive cost tracking exists for these efforts.

> Florida DOT has not considered a broader effort to identify in-house
> staff costs, consultant costs, or construction contractor costs
> associated with environmental mitigation. Environmental and permitting
> staff use unique time codes, so their time could easily be identified,
> but tracking environmental-related time for design engineers or
> construction engineers would be difficult. Consultant costs are
> tracked, but environmental costs are not broken out. Florida DOT
> expressed great concern about the amount of time required to extract
> environmental cost data from contractor costs. They indicated it would
> probably be possible on a project-by-project basis using bid item
> lists or pay item data.
>
> Florida DOT was skeptical about the ability to accurately compare the
> cost of avoided alternatives to the selected alternative. Staff also
> questioned whether additional costs could be fairly attributed to
> environmental requirements, since many factors often influence the
> selection of a preferred alternative.

### Kentucky Transportation Cabinet

> **Background.** In the last several years, Kentucky Transportation
> Cabinet (KTC) has undergone a significant transformation in its
> commitment to environmental stewardship. Efforts such as the agency's
> innovative "Communicate All Promises" program to ensure all
> environmental commitments are kept, and its nationally recognized
> Context Sensitive Solutions initiative are making the agency much more
> sensitive to environmental considerations. As part of this philosophy,
> KTC acknowledges it also must practice responsible management of
> environmental costs. The agency emphasizes strongly that while work is
> underway in this area, staff understanding of environmental costs has
> yet to reach maturity. Given the infancy of KTC's efforts, this
> interview was most valuable in providing the perspectives of a
> practitioner at the outset of measuring environmental costs.
>
> **Motivation for Cost Measurement.** KTC would like to be able to
> improve its project cost estimates, understand how costs are changing
> over time, and demonstrate responsible cost management practices. One
> use for cost information cited by KTC is "benchmark" costs for typical
> environmental activities that can be used in project development.
>
> **Cost Tracking Systems.** KTC does not have a comprehensive tracking
> system in place, but the agency recently undertook an internal review
> of all 2000 to 2005 environmental costs. The study focused on basic
> compensatory costs and did not include consideration of many avoidance
> costs. The agency has chosen not to make the results of its study
> public, however staff indicated that although costs appear to be
> steady over time, archaeology costs in particular are a major issue.
> In Spring 2005, KTC introduced 22 new activity codes for use by
> environmental staff and a comparable set of 22 codes for tracking
> consultant activity (See Table A-2) that are expected to improve the
> Agency's cost tracking capabilities. Specific comments from KTC about
> environmental costs incurred during project development include:

-   **Planning.** Some environmental costs are incurred during planning,
    but these numbers were not included in KTC's study. A limited
    Environmental Overview may be prepared for some projects. It usually
    includes brief field reviews to "raise a flag over showstopper
    issues."

-   **Preliminary Engineering.** This includes NEPA document
    preparation, which may be done in-house, but is often done by
    consultants. In-house staff time spent on NEPA documents or review
    of consultants' work is not tracked, but consultant costs could be
    tracked. Sub-contractors on a design team often conduct
    environmental work, but work scopes include costs for environmental
    components.

-   **Final Design.** A few environmental costs may be incurred at this
    phase, but not many according to KTC staff.

-   **Right-of-Way Acquisition.** Additional right of way may be
    required for wetlands and stormwater treatment facilities. Costs
    include staff time for negotiations as well as land costs.

-   **In-Lieu Fees.** KTC pays an in-lieu fee to the Kentucky Department
    of Natural Resources for wetland and stream mitigation.

-   **Construction.** Some bid items are unique and clearly
    environmental such as noise walls, but others such as earth moving
    may include an environmental component. KTC has no methodology for
    determining environmental costs in this instance.

> KTC believes that avoidance costs are not easily estimated.
>
> Table A-2. KTC Staff and Consultant Activity Codes

  ------------------------ ---------------------- -----------------------
  Adv. stream mitigation   Env. project manager   Permitting
  dev.                                            

  Adv. wetland mitigation  Facilities             Permitting in-lieu fees
  dev.                                            

  Air quality              General geological     Permitting mitigation

  Aquatic ecology          Historic               Socioeconomic

  Aquatic mitigation       Historic mitigation    Socioeconomic
                                                  mitigation

  Archaeology              Noise                  Terrestrial ecology

  Archaeology mitigation   Noise mitigation       Terrestrial mitigation

                                                  UST/HZM
  ------------------------ ---------------------- -----------------------

### Maryland SHA

> **Background.** Maryland State Highway Administration (SHA) has a
> decade long track record of collecting selected environmental cost
> information for internal use to strengthen project cost estimating
> procedures. Typically, this information is used on an ad-hoc basis by
> individual project engineers during the design phase. The agency has
> not, however, routinely used this information to prepare comprehensive
> estimates of environmental costs.
>
> Maryland SHA estimates that most of its environmental costs are
> incurred for mitigation related to reforestation (a state-level
> requirement), stormwater, wetlands, stream restoration, noise walls,
> and historic and cultural resources. Staff indicates that
> comprehensive project-level measurement of environmental
>
> costs could be achieved via careful review of existing systems, but
> would be extremely labor intensive without a major overhaul of the way
> cost information is collected.
>
> **Motivation for Cost Measurement.** SHA's primary motivation for
> environmental cost measurement is internally driven. SHA uses
> environmental cost data from old projects to help develop estimates of
> environmental costs for new projects. Project managers, however, use
> past data only as a guide to projecting new project costs, since every
> project is different. This use of cost data occurs on an informal
> basis, with project managers self-selecting comparative projects and
> reviewing any data independently. Unlike WSDOT and ODOT, Maryland SHA
> has not received strong external pressure to provide accounting for
> its environmental costs.
>
> **Cost Tracking Systems.** All SHA staff time and pre-construction
> consultant activities are tracked using SHA's Financial Management
> Information System (FMIS). This system assigns a specific alphanumeric
> code to each project and consultants and in-house staff use
> project-specific charge codes for different activities. A single EIS
> document, however, may subsequently be designed and constructed in
> several phases each with an independent project code. As a result,
> FMIS data may not provide a straightforward way to track total
> environmental costs for a project. SHA does not use FMIS data for
> review of environmental costs.
>
> At SHA, most mitigation activities such as wetland restoration, noise
> walls, and stream restoration almost always are designed and
> constructed out under separate contracts from overall design and
> construction, which ensures data is easily available. By contrast,
> stormwater and erosion control features are usually conducted as part
> of overall project design and construction and are therefore harder to
> track separately.
>
> During construction, Maryland SHA employs environmental inspectors to
> monitor environmental components of construction.
>
> **State Funded Projects and Mitigation Requirements.** In Maryland,
> few if any environmental costs can be avoided by using only state
> funds on projects. Maryland's state environmental regulations closely
> mirror Federal regulations. For example, the Maryland Environmental
> Protection Act is the same as NEPA. Maryland's water quality,
> reforestation, and endangered species requirements are more stringent
> than Federal regulations.
>
> **Environmental Requirements and Project Scope.** Maryland SHA staff
> is skeptical that project costs are ever reduced as a result of
> environmental regulations, except in instances where a project is not
> pursued. SHA staff interviewed could identify no examples of scope
> reductions with cost savings. As an example, staff described a project
> where the footprint was narrower, but since the median was eliminated
> crash barriers and other safety devices added to the project costs.

### Oregon DOT

> **Background.** Oregon DOT is the only state DOT interviewed that
> prepares a comprehensive annual estimate of its environmental costs.
> Since 1999, Oregon DOT has been required by state statute (Oregon
> Revised Statutes 184.666) to estimate the cost incurred in response to
> new mandates and legislation relating to environmental concerns:
>
> "*The Department shall develop a summary that shows, to the extent it
> can be determined, how the department's costs for maintenance,
> preservation, and modernization are affected by state and Federal
> mandates, environmental regulations, or other factors that have a
> significant impact on cost.*"
>
> ODOT estimates that 70 mandates, laws, regulations, and ordinances
> affect its environmental compliance costs. (47 Federal, 22 state, 1
> local) For fiscal year 2004, the Department spent \$33.0 million on
> environmental compliance activities, or 4.8 percent of ODOT's budget
> for its Transportation Operations Division and Transportation
> Development Division combined. Biology, wetlands and water quality
> account for more than half ODOT's environmental costs.
>
> **Motivation for Cost Measurement.** ODOT has responded to legislative
> pressure as an opportunity to account for the costs of all
> environmental regulations.
>
> **Cost Tracking Systems.** Oregon DOT has developed detailed
> methodologies for measuring costs on a program level. Some costs are
> derived from actual costs as reported in ODOT's financial accounting
> systems, such as costs of personnel engaged wholly in environmental
> compliance. Other costs are estimated based on past experience, such
> as environmental costs for personnel engaged in a primary activity
> such as design, where the response to environmental mandates is
> diffused within the overall work effort. Specific elements of ODOT's
> cost tracking methodology include:

-   **Planning Costs.** Budget allocations for activities that address
    environmental mandates are identified, then a level of effort
    applicable to the mandate is estimated and finally calculated
    against the budget for the appropriate activity.

-   **Preliminary Engineering/Environmental Costs.** This is largely a
    summary of actual costs because all environmental personnel are
    engaged full time in applying environmental mandates. Since
    environmental staff is also specialized, there is a very good match
    between costs and each category, such as wetlands.

-   **Right-of-Way Costs.** The largest cost factor in right of way is
    the purchase of property for mitigation sites, usually for wetlands
    and noise walls. These are actual costs. In addition there are some
    estimated costs that relate to personnel costs.

-   **Design Costs.** Differentiating design work between normal design
    and design for environmental mandates is very difficult. Managers
    were asked to estimate the percentage of time spent by their crews
    on environmental design issues. This percentage was then applied
    against the aggregate personnel costs expended by each design unit.
    For some design functions, namely those dealing with water quality,
    erosion control, and hydraulic design, the costs were more directly
    discernable.

-   **Construction.** Environmental cost items are most readily
    discernable in the bid items rather than the progress payments. The
    item is accounted for in the year that it is bid. This cost grouping
    experiences significant variability year to year.

-   **Maintenance.** There are some maintenance personnel assigned to
    environmental issues where true costs could be captured. There are
    also some activities that are tracked on a true cost basis. However,
    some costs are estimates and include labor, equipment, supplies and
    services as well as contract work. Maintenance activities are not
    performed at the same level, consistently, year after year. This is
    primarily due to weather influences such as flooding, severe snow,
    etc. The applicability of environmental requirements varies
    throughout the state resulting in environmental costs varying from
    maintenance district to maintenance district.

> ODOT does not report what it calls "indirect costs," such as the cost
> of providing a small bridge rather than a culvert to enable fish
> passage, that vary with each individual situation. Nor does the
> Department calculate costs or savings due to avoidance of impacts to
> resources calculated. These types of costs and savings, according to
> ODOT staff, lie in the realm of the "road not taken" and are extremely
> subjective to measure and arguable as to outcome.
>
> **State Funded Projects and Mitigation Requirements.** In Oregon, as
> with several other states interviewed, few if any environmental costs
> can be avoided by using only state funds on projects. Oregon's state
> environmental regulations closely mirror or even exceed Federal
> regulations.
>
> **Environmental Requirements and Project Scope.** ODOT staff were
> unwilling to speculate about whether environmental requirements might
> reduce a project's scope without a detailed review of projects. They
> noted that in general, "the path not taken" is highly subjective and
> almost impossible to quantify in terms of either added costs or
> savings.

### Utah DOT

> **Background.** Utah DOT tracks some components of overall
> environmental costs, but the Department anticipates that it may be
> able to provide a more comprehensive estimate of environmental costs
> in the future as part of a broader effort to improve efficiency and
> accountability at UDOT via creation of an electronic project
> management system called "ePM."
>
> **Motivation for Cost Measurement.** Utah DOT's primary motivations
> for measuring environmental costs are to provide information to the
> FHWA and to use for internal project cost estimating processes,
> particularly for wetlands and noise walls. The Department also seeks
> to ensure that its environmental practices are fiscally responsible.
> The State Legislature is likely to start requiring UDOT to report its
> archaeology costs.
>
> **Cost Tracking Systems.** At present, UDOT does not have a
> comprehensive environmental cost tracking system in place. The
> Department is developing an electronic project management (ePM) system
> using an Oracle database platform. The system is almost complete and
> it will enable much better tracking of environmental costs. The ePM
> will include about 25 environmental-related activity codes that will
> allow better tracking of staff time and consultant costs. The ePM will
> also allow project managers to predict environmental costs based on
> standard defaults for different types of activities. The system will
> be improved as more information is gathered over time.
>
> At present, UDOT tracks several elements of overall environmental
> costs on a fairly informal basis, including:

-   Noise abatement construction costs per linear foot by height, based
    on past year's projects and reported to FHWA

-   Threatened and endangered species -- reported to the FHWA

-   Wetlands monitoring costs -- based on Statewide Transportation
    Improvement plan (STIP) data, typically about \$100,000 per year
    statewide

-   Wetlands mitigation costs - \$50,000 to \$75,000 per acre usually

-   In-lieu fees for wetlands mitigation - \$100,000 per acre.

> Specific comments from UDOT about environmental costs incurred during
> project development include:

-   **Planning.** Staff time will be tracked by the new ePM system. Most
    costs incurred during planning are not environmentally related.
    Activities may include a general scan of sensitive resources in the
    proposed corridor and some public involvement.

-   **Preliminary engineering and NEPA.** UDOT staff is always involved
    at this phase, but consultants may be used to prepare an
    environmental document, particularly if an Environmental Assessment
    or EIS is required.

-   **Final design.** At this stage, a final project alignment is known
    and UDOT estimates that less than 10 percent of final design costs
    are related to environmental mitigation.

-   **Right of way.** According to UDOT, costs may include additional
    land for stormwater retention ponds or wetlands, and clean up of
    contamination. UDOT has no simple way to identify these costs other
    than to pull up each parcel and examine its use in the project. UDOT
    staff thinks that environmental mitigation-related right of way
    costs are a small proportion of total project costs.

-   **Construction.** Large UDOT projects include an Environmental
    Control Supervisor for the contractor and a UDOT environmental
    monitor. UDOT has not tracked its construction-related environmental
    costs, but staff thinks that bid item lists could be used to collect
    this information. Some bid items are exclusively environmentally
    related, but others would have to be sub-divided, such as erosion
    control and earthwork. Likewise construction engineers' time would
    have to be subdivided.

> **State Funded Projects and Mitigation Requirements.** In Utah, as
> with several other states interviewed, few if any environmental costs
> can be avoided by using only state funds on projects. Utah's state
> environmental regulations are similar to Federal regulations and a lot
> of land in Utah is Federally controlled. One exception is use of state
> funds would avoid Section 4(f) requirements, which UDOT staff estimate
> could save about \$10,000 to \$30,000 in staff and capital costs on a
> typical project where 4(f) issues occur.
>
> **Environmental Requirements and Project Scope.** UDOT staff
> acknowledges that environmental requirements might reduce a project's
> scope. They cited an instance during Purpose and Need development
> where a smaller interchange was chosen with consequent money savings.

### Washington DOT

> **Background.** Washington is one of only two states interviewed in
> this study that has examined the environmental cost of its projects in
> detail. In May 2003, Washington DOT (WSDOT) investigated the
> environmental mitigation costs associated with 14 projects that have
> recently been constructed or are planned for construction in the near
> future. The projects included five interchanges, seven widenings or
> lane additions, and two preservation projects. Based on the findings
> reported by Washington, environmental mitigation costs for WSDOT
> projects are most commonly attributable to stormwater,
> wetlands/streams, or noise-related requirements.
>
> For the projects studied, the percent of project costs spent on
> environmental mitigation ranged from 4 percent to 34 percent and the
> absolute value of mitigation costs ranged from \$55,000 to \$27.93
> million. The median share of costs attributable to environmental
> mitigation was 12 percent. According to WSDOT, there is no clear
> pattern for the scale of mitigation costs in relation to project size.
> The setting of projects in relation to neighborhoods, streams, and
> wetlands were more critical factors.
>
> **Motivation for Cost Measurement.** WSDOT's 2003 report was intended
> to provide information to the State Legislature about WSDOT's
> environmental costs. According to WSDOT staff, a considerable amount
> of "misinformation" was circulating about how much WSDOT spends on
> environmental mitigation. The study helped alleviate these concerns.
> WSDOT has since incorporated the results of the study into its cost
> estimating procedures. WSDOT may periodically update the study with a
> fresh sample set of projects, but because this requires considerable
> effort, no comprehensive cost measurement effort is planned.
>
> **Cost Tracking Systems.** For each project, the cost components
> included in the WSDOT estimates include:

-   Environmental component of construction cost (taken either from
    contractor's bid document or engineer's estimate)

-   Share of total right of way acquisition cost (based on discussion
    with project team)

-   Allocated share of contractor's mobilization (based on discussion
    with project team, usually assumed to be 10 percent of overall
    construction amount)

-   Allocated share of WSDOT's cost for construction engineering and
    administration (based on discussion with project team)

-   Allocated share of WSDOT cost for planning, NEPA, and design (based
    on discussion with project team, usually assumed to be 5 to 15
    percent of overall project costs.

> Data for each of these elements is tracked in WSDOT's electronic
> Program Delivery System, which provides a comprehensive accounting
> system for the Department.
>
> WSDOT estimates that the project required approximately 150 person
> hours per project for compilation of information. For each project,
> the contractors bid item list had to be reviewed item by item by the
> project team since WSDOT's bid item categories often blend
> environmental and non-environmental activities that must be correctly
> apportioned. As an example, 15 bid items address stormwater that must
> be removed from the road regardless of environmental concerns and
> costs to do this should not be counted as environmental costs. Once
> removed from the road, however, stormwater becomes primarily an
> environmental concern. Contractor's bid item estimates were generally
> found to be within 1 or 2 percent of actual costs, so bid estimates
> were used.

### Wisconsin DOT

> **Background.** The Wisconsin State Legislature has asked WisDOT to
> provide a complete accounting for its environmental costs. In 2002,
> WisDOT prepared a highly labor-intensive estimate of its complete FY01
> environmental costs. The State's Legislative Audit Bureau subsequently
> conducted its own investigation of environmental costs as part of a
> broader highway program audit. The LAB study reported that WisDOT's
> FY01 environmental costs were \$29.1 million for construction bid
> items, consultant contracts, and staffing related to safeguarding the
> environment. Stormwater and erosion control are WisDOT's largest
> environmental cost categories.
>
> **Motivation for Cost Measurement.** WisDOT's primary motivation for
> attempting to measure environmental costs is direct requests from its
> State Legislature, however, the Department also sees value in using
> the data internally to improve project management cost estimating
> processes.
>
> **Cost Tracking Systems.** WisDOT's ability to modify its Financial
> Management System (FMS) has been a big hurdle to better environmental
> cost tracking. The FMS was originally developed in the 1950s,
> according to WisDOT staff, and it includes only a handful of
> environmental-related activity codes. WisDOT has had difficulty
> extracting reliable cost information about staff time and consultants'
> activities from the FMS. WisDOT's initial FY01 estimate of its
> environmental costs was based on review of thousands of printed pages
> of data from FMS and consultant contracts and is not reproducible on
> an annual basis. Likewise, Wisconsin has also had difficulty in
> breaking out bid items that include environmental and
> non-environmental components. A task force that involves contractors
> is now attempting to reach general rules of thumb for attempting this
> activity.
>
> WisDOT is developing a new project management system that is capable
> of tracking environmental costs project-by-project. WisDOT is now in
> the process of developing such a system and it is about to be started
> on a pilot basis.
>
> **State Funded Projects and Mitigation Requirements.** WisDOT does not
> use state funds to avoid Federal environmental regulations because,
> according to WisDOT staff, Wisconsin's state environmental regulations
> are similar to Federal regulations.
>
> **Environmental Requirements and Project Scope.** WisDOT staff doubts
> that project costs are reduced on a regular basis because of the fact
> that environmental requirements might reduce a project's scope. They
> cited an instance on a highway geometrics project (eliminating bumps,
> curves, widening shoulders, etc.) where issues related to Native
> American cultural artifacts led to a reduced footprint with narrow
> shoulders. While the costs of this alternative were probably lower,
> the time taken to arrive at this solution was considerable and the
> solution reflected balancing cultural impacts and safety design
> options.

# Appendix B

**Financial Management Information Systems**

**Environmental Activity Codes**

**Arizona DOT**

  ------------------------ ----------------------- -----------------------
  General environmental    Preparation of noise    Cultural resource
  activity                 reports                 surveys

  Prepare categorical      Review consultant noise Cultural resource
  exclusion                reports                 testing

  Preparation of draft     Preparation of air      Cultural resource data
  environmental document   quality reports         recovery

  Preparation of final     Rev of consultant air   Cultural resource
  environmental document   quality reports         agency coordination

  Review of                National Pollution      Section 106
  consultant-prepared      Discharge Elimination   consultation
  documents                System-related activity 

  Environmental project    Process 404 permits     Cultural resource
  scoping activities                               permit/maintain

  Environmental agency     Process 401 permits     Environmental
  coordination                                     mitigation
                                                   post-construction
                                                   review

  Environmental field      Hazardous materials     Public noise
  review                   preliminary assessments involvement

  Environmental project    Hazardous materials     Environmental
  travel                   initial site            committees
                           assessments             

  Preparation of public    Hazardous materials     Partnering
  involvement              site investigation      

  Conduct public           Hazardous materials     Training
  involvement              remediation             

  Preparation of material  Section 7 consultation  Project admin
  sources for                                      
  environmental documents                          

  Review of consultant/    Gen cultural resource   Monitoring on-call
  contractor material      activities              consultants
  sources documents                                
  ------------------------ ----------------------- -----------------------

**Kentucky DOT**

  ------------------------ ----------------------- -----------------------
  Adv. stream mitigation   Env. project manager    Permitting
  dev.                                             

  Adv. wetland mitigation  Facilities              Permitting in-lieu fees
  dev.                                             

  Air quality              General geological      Permitting mitigation

  Aquatic ecology          Historic                Socioeconomic

  Aquatic mitigation       Historic mitigation     Socioeconomic
                                                   mitigation

  Archaeology              Noise                   Terrestrial ecology

  Archaeology mitigation   Noise mitigation        Terrestrial mitigation

                                                   UST/HZM
  ------------------------ ----------------------- -----------------------

**Oregon DOT**

  -----------------------------------------------------------------------
  Cultural/air quality unit

  Project coordination (environmental) unit

  Biology unit

  Permits, water quality, and wetlands

  Project management - environmental

  Environmental section manager
  -----------------------------------------------------------------------

# 

[^1]: Of the six case studies, only the Maryland project was still under
    construction at the time of report publication.

[^2]: NEPA documentation range in complexity from a Categorical
    Exclusion (CEs) to an Environmental Assessment -- Finding of No
    Significant Impact (EA-FONSI) and an Environmental Impact Statement
    (EIS)

[^3]: The Council on Environmental Quality (CEQ), which oversees NEPA
    implementation, considers mitigation to include: (a) avoiding
    impacts altogether by not taking a certain action or parts of an
    action; (b) minimizing impacts by limiting the degree or magnitude
    of the action and its implementation; (c) rectifying the impact by
    repairing, rehabilitating, or restoring the affected environment;
    (d) reducing or eliminating the impact over time by preservation and
    maintenance operations during the life of the action; and (e)
    compensating for the impact by replacing or providing substitute
    resources. (40 CFR Part 1508.20)

[^4]: Language directing FHWA to undertake this study is included in HR
    108-671, which accompanied appropriations bill number HR 5025. The
    specific language is as follows: "The Committee directs FHWA to
    determine the costs associated with the environmental process on a
    representative sample of projects. Analysis should include
    information on environmental costs associated with the project
    itself, such as wetlands mitigation and 4(f); costs associated with
    preparing the document; and other related costs associated with the
    time it takes to complete the environmental process."

[^5]: Source: Montana DOT Project Cost Case Study -- Environmental
    Mitigation and Context Sensitive Design. (October 2004) Four Corners
    W. project is featured as a case study in the report. Environmental
    costs reported in the Montana study are slightly different from
    those reported in the case study because MTD staff reported during
    study interviews some additional costs for environmental activities:
    as part of construction engineering, wetlands mitigation, and
    roadway obliteration. These costs were not included in MTD's
    internal study.

[^6]: Source: WSDOT Project Mitigation Costs Case Studies. (May 2003)

[^7]: Information on WisDOT FY2001 budget from "*Summary & Analysis.
    1999-2001 Transportation Budget*" report prepared by Transportation
    Development Association of Wisconsin, 1999.

[^8]: Information on wetland mitigation costs was obtained from FHWA's
    *Greener Roadsides* newsletter, Summer 2001 issue. Data is for a
    nationwide average and is based on available data obtained from
    1992-1994.

[^9]: Communication from Carol Adkins, FHWA Office of Natural and Human
    Environment, June 29, 2006

[^10]: Information reported in *WSDOT Project Mitigation Costs Case
    Studies*, WSDOT (2003)

[^11]: www.http://www.fws.gov/endangered/pubs/

[^12]: Information reported in *WSDOT Project Mitigation Costs Case
    Studies*, WSDOT (2003)

[^13]: Information reported in *Highway Traffic Noise Barrier
    Construction Trends*, FHWA (2003)

[^14]: Information reported in *Oregon DOT Environmental Cost Study for
    State Fiscal Year 2004*, Oregon DOT (Dec, 2004)

[^15]: States contacted as part of this study included: Arizona,
    California, Florida, Illinois, Kansas, Kentucky, North Carolina,
    Maryland, Maine, Minnesota, Mississippi, Missouri, Montana, New
    Hampshire, New York, Ohio, Oregon, Pennsylvania, Texas, Utah,
    Washington, West Virginia, and Wisconsin.

[^16]: Information taken from *An Evaluation of Major Highway Program*,
    Wisconsin Legislative Audit Bureau (Nov 2003)

[^17]: *Report to Congress on FHWA Environmental Streamlining Activities
    During 2003* (FHWA, 2004)

[^18]: The term "financial management information system" is used in a
    generic fashion throughout the study and should not be confused with
    the FHWA's own Financial Management Information System.

[^19]: Of the six case studies developed, only the Maryland project is
    still under construction.

[^20]: From starting NEPA document to opening road to traffic

[^21]: Includes staff costs, c

[^22]: See
    <http://www.environment.fhwa.dot.gov/strmlng/casestudies/md.asp>,
    checked on March 15, 2006.

[^23]: A detailed breakdown of construction costs is included in an
    Appendix to this report.