Federal Aviation Administration Advisory Circular
Section 3.Acceptance of Administrative Settlement
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- 3.2.Adequate Written Documentation Required For FAA Acceptance of an Administrative Settlement.
- 4.2.Mediation and Condemnation Settlements.
- 4.4.Acquisition of Public Streets, Highways, Roads and Other Public Use Property.
Section 3.Acceptance of Administrative Settlement3.1.Administrative SettlementAdministrative settlements are simply that – agreed settlement in excess of the sponsor’s offer of just compensation made for acceptable administrative reasons to reflect the public interest. During negotiations, an administrative settlement may be proposed to preclude more costly and unfavorable litigation and/or to settle a disputed acquisition at reasonable cost. Under the Uniform Act reasonable attempts to expedite acquisitions by agreements with owners to avoid litigation and relieve congestion in the courts are encouraged. Significant cost savings may be documented in the use of administrative settlements versus condemnation or terminating stalemated negotiations. There is no need to inflate or diminish the airport’s appraisal as support for an administrative settlement. If the owner presents creditable documented appraisal information, then the just compensation offer is updated to complete negotiations (see paragraph 3-9(a)). An administrative settlement however is a judgmental matter to be carefully considered by the sponsor as an option to condemnation or termination of a proposed acquisition where negotiations have reached an impasse on the amount of just compensation. Sound project management require administrative settlements to reflect the public interest and are not merely a matter of convenience. Adequately supported settlements are an eligible property acquisition cost. 3.2.Adequate Written Documentation Required For FAA Acceptance of an Administrative Settlement.The sponsor must prepare and maintain adequate written justification that the settlement is prudent and in the public interest. At a minimum the items listed below shall be cited as applicable to support a settlement amount. The written explanation must be commensurate with the settlement amount involved. Small settlements or within 10% of the appraised value may only require brief discussion noting the amounts involved and evidencing the sponsor’s approval. Settlements that involve substantial amounts or large increases require full analysis and discussion to verify the settlement amount is clearly cost effective and reflects the public interest. Amounts attributed to noncompensable items under Federal law, should be excluded from Federal participation (see Chapter 2 Non Allowable Land Cost). a.The probable range of testimony in litigation including the airport's approved appraisals and the property owner's appraisals.b.The type of property involved and damages, if any.c.Recent court awards in the vicinity (particularly involving similar property).d.A summary of the negotiation effort and the recommendation of the negotiator to conclude the purchase with a settlement.e.The estimate of trial cost, including preparations.f.The advice and opinion of the sponsor’s legal counsel.g.The settlement shall ultimately be approved by the appropriate airport official with management responsibility for the acquisition project.3.3.ReservedSection 4.Condemnation Awards4.1.Condemnation.When negotiations conforming to this Chapter for an amicable purchase agreement are not successful, the sponsor may apply its eminent domain authority and file condemnation for possession of needed property. The sponsor’s legal counsel represents the sponsor in condemnation and is responsible for subsequent negotiations, the selection of trial witnesses, and settlement and appeal determinations. Legal counsel must consult with the sponsor and its project management prior to the settlement of the condemnation case for an amount substantially different from the established just compensation or any other legal decision that affects the cost for possession of the needed property. Prior to requiring an owner to surrender possession of he real property the Sponsor shall deposit with the court, for the benefit of the owner, an amount not less than the Sponsor’s approved appraisal of the market value of such property, or the court award of compensation in the condemnation proceeding for the property. 4.2.Mediation and Condemnation Settlements.At any time prior to court trial the Sponsor’s legal counsel may secure a settlement in lieu of trial. An administrative settlement may be made if justified as described in Section 2. Where the Sponsor’s legal counsel makes settlement, the settlement justification described in Section 2 should be supplemented by the following: a.A signed statement by the attorney who handled the case describing reasons that the settlement is in the sponsor’s interest with supporting data and analysis as appropriate.b.A signed statement by the sponsor management indicating concurrence in the proposed settlement and explanation of any reservations on the proposed settlement.c.Amounts attributed to noncompensable items under Federal law, should be excluded from Federal participation (see paragraph 2-6 Non Allowable Land Cost).4.3.Condemnation Awards.A condemnation award is eligible for reimbursement with Federal funds provided that the amount of the award is reasonable. Amounts attributed to noncompensable items under Federal law, should be excluded from Federal participation (see paragraph 2-6 Non Allowable Land Cost). The condemnation award must be supported by adequate trial report citing the range of value testimony, major issues, and any comments and recommendations on possible legal error and possible success in requesting a new trial, remittitur, and/or appeal. The sponsor should indicate their concurrence and/or acceptance in the trial report and any legal recommendations. 4.4.Acquisition of Public Streets, Highways, Roads and Other Public Use Property.a.Public streets, highways, and roads. Only nominal compensation is owed for closed or vacated streets. For example, the streets that had served an acquired neighborhood would be closed and vacated under applicable law to preclude continued public access to the acquired property. When the airport acquired the subdivision lots the property owner was already compensated for the value of the street access to their lot. If there is a necessity for the governmental unit from which the street has been acquired to replace the street, then the cost of replacing the street with a functionally equivalent is just compensation for the taking. Therefore, because streets that do not need replacement require only nominal compensation and compensation for streets that require replacement is generally measured by the cost to replace them, appraisals are seldom, if ever, needed nor should they be prepared.b.Other public use property. Condemnation of property in prior public use may not be authorized under state law. The sponsor may need to rely on other state law or procedures to secure needed property for the airport project.Directory: documentlibrary -> media -> advisory circular advisory circular -> Of Transportation Federal Aviation Administration advisory circular -> U. S. 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