Procedures for Computing Elective Betterment Credit

  1. Prepare a plan and estimate of cost for replacement of the existing facility in the most economical manner, as required by the transportation construction project:
    (A)
    .
  2. Prepare a second plan and estimate including the betterments that the utility elects to build:
    (B)
    .
  3. Subtract the two (above items) from one another to arrive at the difference between the two:
    (B) minus (A) = (X)
  4. Compute a betterment credit percentage based upon the ratio of the result
    (X)
     in the bullet above to the betterment estimate
    (B)
    : = Elective Betterment Credit Percentage
  5. Apply the elective betterment percentage to the final billing of actual costs incurred in building the “bettered” facility
    BEFORE
     deducting accrued depreciation, if applicable, and salvage credits.
Table 7-2: Example Computation of Elective Betterment Percentage
Estimated Total Cost of Relocation:
$1,000,000 (B)
Non-betterment Estimate
‑ 700,000 (A)
Elective Betterment Credit
$ 300,000 (difference) (X)
(X) / (B) = % (Percentage)
30% Betterment Credit
Table 7-3: Estimate Summary
Total Billing (including betterments)
$1,200,000
Less 30% Betterment Credit
$ 360,000
Less: Accrued Depreciation (if applicable)
$ -0-
Less: Salvage (if applicable)
$ 122,000
Eligibility Ratio (if applicable)
$ -0-
Estimated Reimbursement
$ 718,000
*Actual cost may differ from the estimated cost.
Care should be taken when arriving at the estimated cost of relocation to avoid having to bid.
  • Reimbursable Miscellaneous Items:
    • Storm Water Pollution Prevention Plan (SWPPP): The general requirements established by the EPA maintain that the contractor must have a National Pollution Discharge Elimination System (NPDES) permit for certain construction activities.
    • Security: The utility may contract with a security service to provide security for their on-site equipment and materials during the utility adjustment.
    • Revegetation: In accordance with the UAR, the utility is responsible for reseeding and re-sodding to reduce erosion when the utility installation is complete. It is also required to reshape, reseed, or re-sod the area when, within six months after utility installation, settlement or erosion occurs.
    • Product Loss (not to be confused with revenue loss): The following 4-step calculation will be used to estimate gas loss when relocating pipelines containing natural gas:
    • (1) FPV = 1 + P2 / 1000 * 0.847
      (2) V2 = [P1 * [D1 / 12 * D1 / 12/4] * L1 * [[P2 + 14.65] / 14.65] * FPV] / 1000
      (3) R1 = V2 * 1000 * S1
      (4) Gas Loss = R1 / 2000.
      Where:
      FPV = Super-compressibility factor
      P2 = Pressure (PSIG)
      V2 = Volume of gas in pipeline segment (in MCF)
      P1 = Original absolute pressure
      D1 = Internal diameter of pipe
      L1 = Length of pipeline
      R1 = Gas release weight in lbs/cf
      S1 = Sample of gas in lbs/cf.
    • Trench Safety Plan
    • Testing and Removal of Contaminated Soils