[Senate Hearing 109-]
[From the U.S. Government Publishing Office]
ENERGY AND WATER, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR
2007
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WEDNESDAY, APRIL 5, 2006
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2:40 p.m., in room SD-124, Dirksen
Senate Office Building, Hon. Pete V. Domenici (chairman)
presiding.
Present: Senators Domenici, Craig, Bond, Allard, Murray,
Dorgan, and Landrieu.
DEPARTMENT OF DEFENSE--CIVIL
DEPARTMENT OF THE ARMY
Corps of Engineers--Civil
STATEMENT OF JOHN PAUL WOODLEY, JR., ASSISTANT
SECRETARY OF THE ARMY (CIVIL WORKS)
OPENING STATEMENT OF SENATOR PETE V. DOMENICI
Senator Domenici. The hearing will please come to order.
Because of schedule problems, we are going to let some Senators
speak out of order. Senator Bond would like to make an opening
statement at this point. I yield to you, Senator.
STATEMENT OF SENATOR CHRISTOPHER S. BOND
Senator Bond. Mr. Chairman, I thank you very much for your
kind courtesies.
Mr. Woodley, we have had long discussions about the need
for locks on the Mississippi and Illinois Rivers, and one of
these days I hope we will have an authorization coming out of
our Environment and Public Works Committee which will allow
this committee to do the vitally important work it should do in
funding our vitally needed Nation's infrastructure.
I have here in my hand an article from the Wall Street
Journal which I would share with you and those with whom you
discuss. It's called ``As Utilities Seek More Coal, Railroads
Struggle to Deliver.'' It reports that their shipping fees are
going up a reported 20 to 50 percent. The Department of
Transportation predicts that commercial shipping volume over
the next 20 years will increase by 70 percent. Most people, at
least outside Washington, recognize the bulk commercial freight
cannot be emailed, so transportation capacity is an issue that
will demand leadership, and the sooner the better.
Last month Secretary Johans of the Department of
Agriculture, Deputy Connor, and Chief Economist Dr. Keith
Collins testified before the Appropriations Committee. Mr.
Woodley, if you and your team are not routinely in touch with
Collins I would be very disappointed. Dr. Collins has been
Chief Economist or in that office serving at least four or five
presidents.
He testified again that any 50-year study is highly
speculative, noting that even the 10-year forecasts USDA does
are speculative and that 10 years is heroic enough. However, he
is clear that they do not see stalled or dwindling or flat
export activity through the gulf. In fact, he said they see a
substantial increase, in testimony previously he said 40 to 45
percent in corn alone, and he sees a good long-term market for
grains and oilseeds in the world and he noted that having
efficient infrastructure will help make that possible.
As we all know, the demand for goods, agricultural goods,
one item transported on the rivers, depends upon
transportation. In good years ag exports exceed imports by $30
billion, bringing great economic boost to the breadbasket of
America as well as helping our balance of payments.
Secretary Johans agreed firmly that the existing lock
system, built 70 years ago, has proved an important and wise
investment and that should be obvious even to the fiercest
opponents of commercial shipping.
Mr. Woodley, with help of able staff I want to introduce
you to Major Charles L. Hall, Rock Island Engineer from 1927 to
1930. He advised President Hoover and Congress in 1929 that the
proposed system, the one which currently exists on the
Mississippi River, was not economically feasible and argued
that ``limited barge traffic did not indicate that a viable
barge industry would develop.'' Fortunately, President Hoover
and the Congress ignored the advice and President Hoover said
modernization would ``put the rivers back as great arteries as
commerce after a half century of paralysis.''
Now, with 80 million tons moved annually and two-thirds of
our exported grain moving through that system, it is clear that
the Congress and President Hoover were wise to ignore the
expert advice of Major Hall. I suspect and fear that the Major
may have a grandchild working dutifully somewhere, maybe at the
Office of Management and Budget.
So I ask that you let history help inform your future
decisions and that you consider that we must not only try to
predict the future, but shape the future. In some cases,
opinions of experts deserve to be very strongly considered just
before they are very thoroughly rejected. I believe that some
80 members of the Senate believe that we should pass a Water
Resources Development Act which will enable my good friend the
outstanding chairman to act appropriately in this subcommittee.
I thank you, Mr. Chairman, for your comments.
Senator Domenici. Well, I thank you for your comments, and
I just want to ask you, since you are one of the proponents,
and quite properly and appropriately, of the WRDA bill, what is
your--in 2 minutes, what is holding it up?
Senator Bond. Initially there were objections from the
Office of Management and Budget. We had an opportunity to go
above their heads to policymakers who have a broader
perspective and they agreed that the Office of Management and
Budget would not threaten a veto. Currently there are, as I
said, 80 signatures on a letter to the Republican and
Democratic leaders saying that we need to move the bill. There
are still holds in the Senate from people who want us to go
back to the horse and buggy days and rely on overcrowded
railroads and tremendously crowded highways to ship not only
grain for the export market, but the tremendous amount of
commercial commodities.
Senator Domenici. Those are Senators?
Senator Bond. Those are Senators.
Senator Domenici. We do not know who they are at this point
and you cannot get them released. We are stuck.
Senator Bond. We intend to do everything we can and ask the
leaders to call for a vote if the holds are not relieved and
not pay attention to the holds, and we hope that the Office of
Management and Budget will not follow Major Hall and have a
last minute reconversion to their opposition.
Senator Domenici. All right.
Senator Bond. Thank you, sir.
Senator Domenici. Having said that, the Democrats are
present. When I opened they were not. I apologize for that. It
was only 3 minutes, Senator, and then you came.
I am not going to have any opening statements. I think we
are going to run out of time. Any opening statements desired on
your side? I knew Senator Bond had to say something or else we
would have a----
Senator Dorgan. Did he talk about the Missouri River
management? If so, I will have an opening statement.
Senator Domenici. No.
Senator Dorgan. If not, I will not.
Senator Domenici. No. But I knew if I did not----
Senator Bond. I will be sure and cc you.
Senator Domenici. I knew if I did not let him speak the way
he wanted to we would have problems.
How about over here?
STATEMENT OF SENATOR WAYNE ALLARD
Senator Allard. Mr. Chairman, I have a very brief
statement.
Senator Domenici. Let us do it.
Senator Allard. Mr. Chairman, first of all I want to thank
you for holding the hearing. The Corps of Engineers does a
great deal for the country, as well as for Colorado, but I must
express my disappointment with the fact that funding to
complete the Fountain Creek watershed study was not included in
the President's proposed budget again this year. The study was
originally contracted at $2.9 million with a 50 percent
Federal, 50 percent local funding split. The locals have long
ago put in over $1.4 million, but the Federal Government has
not lived up to its side of the bargain.
In what should be the final year of the study, it mystifies
me why the Corps did not place enough value on the study to
include it in the budget request. But I will have questions on
that later on, Mr. Chairman. Thank you for your tolerance.
Senator Domenici. Thank you very much.
On the Democrats' side, Senator Mary Landrieu.
PREPARED STATEMENT OF SENATOR MARY L. LANDRIEU
Senator Landrieu. Mr. Chairman, I have a statement for the
record, but I do want to say that I will come back after the
vote. I have a series of questions that really do need answers
today based on the situation that we are facing in the gulf
coast and some charts I want to share with you, Mr. Chairman,
and the committee about the backlog of current projects.
[The statement follows:]
Prepared Statement of Senator Mary L. Landrieu
Mr. Chairman, thank you for calling this hearing to review the
President's budget for the Army Corps of Engineers.
Before I comment on any specific budget matters, I wish to express
my appreciation for being a member of this subcommittee. Its
jurisdiction over both energy and water are matters of monumental
concern to my State of Louisiana, the Gulf Coast, and our Nation. Now
is a critical time for action on these issues.
Because of these monumental issues and because of the relationships
with you and Senator Reid that we have built, I sincerely look forward
to working with both of you. I appreciate the time that each of you
have taken over the years to join me in Louisiana to see the Nation's
worst coastal erosion as well as successful projects such as the SELA
flood control project.
For many years, Congress has received the administration's request
for funding for the Civil Works program of the Army Corps of Engineers
and has increased this request. In recent years, Congress has
appropriated approximately 10 percent to 15 percent more funding. Once
again, the administration has requested less funding for fiscal year
2007 for the Corps than was provided by Congress for the current fiscal
year.
Simply stated, the administration's fiscal year 2007 budget request
for the Corps puts the Nation at risk, and we cannot be complacent.
Hurricanes Katrina and Rita shred that curtain of complacency and gave
the Nation a look at the inadequate infrastructure as it relates to
water management and flood protection. We must act.
Underfunding infrastructure puts our Nation at risk. Hurricanes
Katrina and Rita exposed this risk. These storms were not the real
culprits. Instead, the real culprit was the failure to fund a levee
system that would have protected us against hurricanes such as these.
This failure caused the deaths of more than 1,000 people in
Louisiana alone. More than 215,000 homes were destroyed with thousands
more damaged. Countless businesses, churches, and schools were wiped
out. The cost of recovering from this levee failure will be hundreds of
billions of dollars. The cost will be far more than it would have cost
to build the infrastructure that would have prevented this catastrophic
loss.
The impact of the administration's inadequate Corps funding
requests are also felt throughout the Nation on vital projects causing
a delay in their completion and resulting benefits. Many of these
projects are physically located in Louisiana but greatly impact the
entire Nation.
For example, numerous hurricane protection and flood control
projects in Louisiana are intended to protect millions of Americans
living in coastal Louisiana. These projects are also intended to
protect energy infrastructure that supplies oil and gas throughout the
Nation.
The existing backlog of authorized projects combined with the WRDA
authorizations currently under consideration amount to more than $50
billion. Yet, the administration asks for only $1.5 billion for
construction in fiscal year 2007. At this pace, it will take at least
35 years to construct the backlog of projects assuming no inflation and
no new projects are added during that time.
Hurricanes Katrina and Rita showed that we have not provided enough
funding for levees and pumps. The current cost of recovering from the
destruction caused by these storms shows that it is more expensive to
pay for re-building than for prevention.
Another component of protecting Louisiana and the Nation is the
coastal restoration effort to save America's Wetland.
The Louisiana Coastal Area comprises one of the Nation's largest
expanses of coastal wetlands. As an environmental treasure, it supports
a diverse collection of migratory birds, fish, and other species. As a
productive natural asset, the Louisiana Coastal Area supports an
extensive energy infrastructure network responsible for an estimated 20
percent of our Nation's energy and provides over 20 percent of the
seafood consumed in the United States. Additionally, offshore oil and
gas production off of Louisiana's coast is one of the U.S. Treasury's
largest revenue sources. This production contributes approximately $6
billion a year to the Federal Government, and this amount is rising.
Despite these significant national contributions made by the
Louisiana Coastal Area and its resulting standing as America's Wetland,
it accounts for 90 percent of the Nation's total coastal marsh loss.
This destruction puts all of its national benefits at risks.
Accordingly, the Corps along with the State of Louisiana has been
engaged in the development of a comprehensive coastal restoration plan.
Hopefully, implementation of this plan will begin soon, and this
Congress will provide the Corps with the funding necessary to do the
job. I will continue to work with all of you toward achieving this
vital goal.
Another example of a project physically located in Louisiana having
national implications is the Inner Harbor Navigation Canal (IHNC) lock
project. This project at the Port of New Orleans was wrongly zeroed out
in the President's budget. Congress first authorized the replacement of
this lock in 1956! It is a project of national significance that
impacts trade in over 25 States on a daily basis. In fact, over 16
million tons of cargo move through this lock each year. Additionally,
its completion directly relates to closing the Mississippi River Gulf
Outlet which has destroyed more than 27,000 acres of wetland and
thereby eliminated a hurricane buffer to metro New Orleans.
In closing, Hurricanes Katrina and Rita show us that we must invest
more in our infrastructure. We either heed their warning or peril.
Finally, Mr. Chairman, I thank you for your continued leadership on
the Nation's water issues. I look forward to the testimony of our
witnesses and the opportunity to question them when appropriate.
Senator Domenici. Senator Craig.
PREPARED STATEMENT OF SENATOR LARRY CRAIG
Senator Craig. Mr. Chairman, I will ask unanimous consent
that my full statement be a part of the record, but I want to
recognize when a job well done is well done and completed, and
I want to thank the Corps for their completing of the channel
improvement project on the Snake River between Idaho and
Washington. Critical importance to the aid of transportation in
that region. I want to thank you for the work done.
Thank you, Mr. Chairman.
Senator Domenici. Your statement is made a part of the
record.
[The statement follows:]
Prepared Statement by Senator Larry Craig
First, I want to take a moment and thank all of those in the U.S.
Army Corps of Engineers who have served their country in Iraq. I also
want to commend those who served their fellow Americans in the wake of
devastating hurricanes. It has been a trying year for many, and I
appreciate the support you have provided those in need.
I also want to thank the Army Corps of Engineers for all the work
they have done in many of our rural communities to get drinking and
wastewater infrastructure updated. In my State, rural water
infrastructure is an increasing need, with many rural communities
struggling with funding and expertise to fulfill their responsibility
of providing safe and reliable drinking water. As infrastructure
continues to age and water quality standards rise, an agency like the
Corps becomes more and more vital, and I hope to continue working with
the Corps to see our water infrastructure meets the appropriate
standards.
Additionally, I want to thank the Corps for completing the channel
improvement project on the Snake River between Idaho and Washington.
This project has aided farmers by providing a safe, efficient means of
shipping to meet demands, not only for our country, but also other
countries as well. As gas prices continue to rise and roads become
increasingly crowded, barges will serve as a critical and efficient
means of transporting commodities, and I will continue working with the
Corps on similar projects.
I have a couple of concerns, one of which is the change in the
Corps' budgeting practices. In the past, the Corps enjoyed considerable
flexibility and were able to reprogram funds fairly easily, but with
the changes, that will no longer be the case. At the appropriate time,
I'll have a question about that issue.
I look forward to hearing your testimony.
Senator Domenici. Senator.
STATEMENT OF SENATOR PATTY MURRAY
Senator Murray. Yes, Mr. Chairman. I just wanted to welcome
Secretary Woodley and General Strock. Thank you for your
testifying today. I think what happened in the last few months
in Senator Landrieu's State and elsewhere really showed all of
us how important the work is you do and how important it is
that we maintain that.
I want to compliment you for the three district offices
that operate in my State. We have a really varied landscape
when it comes to Corps projects. We have got hydroelectric,
flood control, navigation, irrigation, and the Army Corps work
is really essential to our economy and to our ability to
maintain the critical infrastructure in our community. We have
the Portland District that is maintaining the Columbia River
dredging and the jetties, repairs to the jetties, critical for
safety. The Seattle District is working on some really complex
flooding issues and the Walla-Walla District is providing some
really important engineering expertise for us for the waste
treatment plant out of Hanford.
So I want to compliment you on that work, but I just want
to say I have another hearing, but I want to say publicly I am
deeply concerned about the investment to our infrastructure, to
the Corps. We have got to do better than what we have been
presented, because we have to continue, as I think the Senator
from Louisiana well knows, to maintain the critical
infrastructure we have and to make the important investments in
our Nation's future. So I will join with all of you in working
towards that direction.
Thank you, Mr. Chairman.
Senator Domenici. Very well. Thank you.
Well, I have a long analytical statement that, it would not
help here. The atmosphere has been so nice that it would make
things look very, very bad. Just suffice it to say that I think
the way you handled the budgeting is a mess, and I do not think
that you can expect us to do it the way you recommended.
You are short of money and we know that. The President did
not fund--did not put in as much as we need. But the way you
went around, went about trying to make the money work in my
opinion has made matters worse. So do not look for us, for it
coming out the way you recommended. It is going to come out,
but with no damage, we hope.
My statement and Senator Cochran's statement will be made
part of the record.
[The statements follow:]
Prepared Statement of Senator Pete V. Domenici
Good afternoon--the hearing will come to order.
Today, the subcommittee will take testimony on the fiscal year 2007
budget request for the U.S. Army Corps of Engineers.
Our panel will consist of witnesses from the U.S. Army Corps of
Engineers.
Testifying for them will be: John Paul Woodley, Principle Deputy,
Assistant Secretary of the Army for Civil Works, and Lieutenant General
Carl A. Strock, Chief of Engineers for the U.S. Army Corps of
Engineers.
Mr. Woodley, General Strock, thank you for appearing before us
today.
The President's budget for the Corps of Engineers proposes $4.73
billion, which is $596 million below the fiscal year 2006 enacted of
$5.33 billion after rescission.
PERFORMANCE-BASED BUDGETING
The Corps' budget was again prepared using performance-based
budgeting. I have several concerns with developing the budget in this
manner. This method seems to concentrate budget development at OMB
rather than at the District level where it belongs.
Again for fiscal year 2007, the Remaining Benefits to Remaining
Costs Ratio is the primary criteria for prioritizing funding decisions.
There does seem to be more of an effort to ensure obvious national
priorities were not overlooked, but no attempt to capture traditional
items of importance to Congress.
For example, no attention has been given to workforce distribution
in project selection. Congress has repeatedly demonstrated a desire for
a geographically diverse Corps of Engineers organization. In order to
maintain that distribution, a suite of projects needs to be selected to
maintain the workforce at a stable level. The budget request does not
consider this factor.
PROJECT SUSPENSIONS
The administration has budgeted $41.4 million to suspend/terminate
10 construction projects that have been budgeted in the past in order
to redirect resources to complete high-priority projects. However the
532 projects and studies that were included in the fiscal year 2006
Energy and Water Act are not addressed by the fiscal year 2007 Budget
Request. It is as if termination of these items are either free or
Congress's problem. I believe when the President signs an appropriation
bill, all of those studies and projects become the joint property of
the administration and Congress. Treating Congressional priorities
differently will lead to consequences.
MAJOR ISSUES BY APPROPRIATION ACCOUNT
The General Investigations account is a disaster. Of the $94
million requested, only $16.7 million is provided for ongoing study
efforts nationwide. This compares to $102 million in the current fiscal
year.
The budget request shifts projects totaling $342 million from the
Construction, General account to the Operations and Maintenance,
General account. Beach renourishment due to navigation impacts,
Endangered Species Act (ESA) compliance, beneficial use of dredged
material and major rehabilitations are the categories of the items
shifted.
A large portion of the shifted funds is Endangered Species Act
compliance items. An example is Columbia River Fish Mitigation. In
fiscal year 2006 this was an $85 million CG line item. In fiscal year
2007, it is distributed across eight O&M projects for the Columbia
River. There is no easy way to determine how much funding is for these
mitigation activities and how much is for O&M. It is all considered
O&M.
The other category of funding shifted to O&M is for major
rehabilitations of locks and dams. Gentlemen, I have been around long
enough to remember when these projects were funded in the O&M account.
We moved them to the Construction, General Account and allowed half the
costs to come from the Inland Waterway Trust Fund because they were not
being sufficiently budgeted in O&M. Now, because of the backlog in the
CG account, you are proposing to move them back to O&M. Why not try
budgeting sufficient funding for them rather than playing three-card
monte?
There were a couple of increases proposed in your budget for fiscal
year 2007.
The budget proposes $173 million for the Regulatory Program versus
$158 million enacted after rescission, a 9.5 percent increase. This
account has increased from $117 million since fiscal year 2000, by far
the largest percentage growth in any Corps account over the same
period, yet complaints about permits seem to be on the rise. I have
been made aware several issues in New Mexico over the last 3 months.
General Strock, you and I will need to have further discussions about
this at another time.
The General Expenses account traditionally funds the Corps
Headquarters and Division offices is proposed at $164 million, a 7.9
percent increase. However, this includes $6 million for the Office of
the Assistant Secretary of the Army. When you compare the fiscal year
2006 enacted General Expenses of $152 million to the fiscal year 2007
proposal of $158 million, it is only a 3.9 percent increase.
Secretary Woodley, I understand that this $2 million increase in
your budget over the fiscal year 2006 enacted of $4 million is to cover
joint costs previously covered by the Department of the Army.
As you are aware, this office was funded in a separate account in
the fiscal year 2005 and 2006 Energy and Water Acts. Prior to fiscal
year 2005, your office was funded in the Defense Army OMA account. I
think we should look at moving funding for your office back to the
Defense Army OMA account due to your other duties as Assistant
Secretary in addition to the Corps Civil Works Program.
You should know that I will oppose the regionalization of the O&M
budget for fiscal year 2007. This method of displaying O&M effectively
disguises the underfunding of O&M projects and allows the Corps the
ability to freely move funds around. It appears that you invented a
whole new way to aggregate and appropriate O&M just so you could get
around the Congress's fiscal year 2006 reprogramming guidance.
The fact that you went to this much trouble in this budget proposal
demonstrates our need to seriously reexamine reprogramming guidance as
we prepare the fiscal year 2007 bill.
Finally, we will need to revisit contracting and reprogramming
issues for fiscal year 2007. It is clear to me, that the language
agreed to in fiscal year 2006 is not improving the management of the
Civil Works program. If anything, it appears to be hindering getting
work accomplished.
Secretary Woodley, General Strock, your full statements will be
made a part of the record. I would ask that you summarize your
statements.
______
Prepared Statement of Senator Thad Cochran
Mr. Chairman, I thank you for holding this hearing and thank the
witnesses for their willingness to appear today before the Energy and
Water Subcommittee.
While I understand that this hearing is being held to consider the
President's budget request for fiscal year 2007, I must mention at the
outset the good work of the Corps of Engineers in my home State of
Mississippi in the wake of Hurricane Katrina. I know there have been
some concerns over the speed with which the Corps has had debris
removed and the number of out-of-State companies that are leading the
debris removal effort.
The Vicksburg District has been thoughtful in their proposal to use
Mississippi contractors for smaller, more manageable contracts. The
Government Accountability Office recently agreed that set-aside
contracts are allowed in Mississippi, and this action will result in
local people leading local debris removal contracts. I think this is
good for recovery and good for Mississippi victims as well as
businesses in our State. Thank you for this assistance.
I understand that the Corps of Engineers continues to use a
performance based budgeting formula, which has led to the proposal to
terminate 10 projects this year. Last year you proposed to terminate 35
projects. This means that important projects that were previously
budgeted for by the Corps are, under this budget submission, not going
to move forward.
Another area of concern is the language that was included in the
fiscal year 2006 Energy and Water Appropriations bill regarding the
Corps of Engineers' use of the continuing contract clause and their
reprogramming guidelines. My constituents in Mississippi are already
feeling the negative impacts of this language, and it is my
understanding that the Corps will likely carry over large amounts of
the historic funding levels provided in the current year's
appropriations bill.
I appreciate the efforts of the Corps of Engineers but worry about
inadequate funding of important missions under your jurisdiction. The
Corps is charged with improving safety and security for our Nation's
citizens, and I hope that this committee will provide the resources
necessary complete these missions.
STATEMENT OF JOHN PAUL WOODLEY, JR.
Senator Domenici. Having said that, we are ready for you to
speak. I gather that you want to do it in the normal order; is
that correct, where you want the Honorable Paul Woodley to
speak first and then the General? Is that what we want to do?
General Strock. Yes.
Senator Domenici. All right. Mr. Secretary, make your
statement brief. It will be made part of the record.
General, we look forward to hearing from you next. Make
your statement long. It will be made a part of the record also.
Mr. Woodley, please proceed.
Mr. Woodley. Thank you, Mr. Chairman. I appreciate the
opportunity to testify today and ask that the full statement be
put in the record.
Our 2007 budget includes about $4.7 billion----
Senator Domenici. Pull the mike up a little. Thank you very
much.
Mr. Woodley [continuing]. A 5 percent increase from last
year. We provided a 5-year budget plan along with the other
budget justification materials, including three potential 5-
year funding scenarios for planning purposes and analytical
purposes.
The budget includes an increase of about $280 million for
construction projects compared to the fiscal year 2006 budget.
The funding is allocated according to guidelines that emphasize
economic returns, reduction of risk to human life, and
ecosystem restoration benefits.
Mr. Chairman, the budget provides $173 million to the
Corps' regulatory program to protect wetlands and other waters
of the United States. This represents a $15 million increase
compared to fiscal year 2006 appropriations and a 20 percent
increase in budgeted funding for the regulatory program over
the last 3 years. The funding will be used to reduce permit
processing times, improve aquatic resource protection through
monitoring and compliance activities, and advance watershed
approaches to permitting.
The budget also reassigns about $340 million of work at
existing projects from the construction account to the
operation and maintenance account. This reassignment improves
accountability and oversight, reflects the full cost of
operation and maintenance, and supports an integrated funding
strategy for existing projects.
The operation and maintenance budget has been revamped and
is presented by major river basin and mission areas. This lays
the groundwork for improved management of appropriated funds
and more strategic formulation of future budgets.
The budget includes increased funding for preparedness,
response and recovery activities related to flood and coastal
storm emergencies. The budget does not include funding for
recovery from last year's hurricanes since supplemental
appropriations are being sought to provide that funding.
PREPARED STATEMENT
In summary, Mr. Chairman, the budget and the 5-year plan
incorporate performance budgeting principles, allocate funding
to activities with the highest returns, and advance important
national objectives.
Thank you very much.
[The statement follows:]
Prepared Statement of John Paul Woodley, Jr.
Mr. Chairman and distinguished members of the subcommittee, thank
you for the opportunity to testify before the subcommittee, and to
present the President's budget for the Civil Works program of the Army
Corps of Engineers for fiscal year 2007.
OVERVIEW OF FISCAL YEAR 2007 ARMY CIVIL WORKS BUDGET
The fiscal year 2007 budget for Army Civil Works provides funding
for development and restoration of the Nation's water and related
resources within the three main Civil Works program areas, namely,
commercial navigation, flood and coastal storm damage reduction, and
aquatic ecosystem restoration. The budget also supports hydropower,
recreation, environmental stewardship, and water supply services at
existing water resources projects owned or operated by the Corps of
Engineers. Finally, the budget provides for protection of the Nation's
regulated waters and wetlands; cleanup of sites contaminated as a
result of the Nation's early efforts to develop atomic weapons; and
preparedness, response, and recovery activities related to flood and
coastal storm emergencies.
The budget does not fund work that should be the responsibility of
non-Federal interests or other Federal agencies, such as wastewater
treatment, irrigation water supply, and municipal and industrial water
supply treatment and distribution.
The fiscal year 2007 budget includes new discretionary funding of
$4.733 billion, the highest civil works budget transmitted to Congress
by any President. The estimate for fiscal year 2007 outlays is $5.846
billion. Enclosure 1 displays the current estimate for the distribution
of new discretionary funding among eight appropriation accounts, eight
program areas, plus executive direction and management, and five
sources including the general fund of the Treasury and trust funds.
Enclosure 2 is a crosscut between appropriation accounts and program
areas.
A 5-year budget development plan (FYDP) is being provided, as
called for in the fiscal year 2006 Energy and Water Development
Appropriations Act Conference Report. The FYDP includes three scenarios
or projections--one based on the President's proposed fiscal year 2007
budget, one above that level, and one below that level. The projections
are formula driven. They do not represent budget decisions or budget
policy beyond fiscal year 2007 but they can provide perspective on the
Army Civil Works program and budget.
EMERGENCY SUPPLEMENTAL APPROPRIATIONS
To date, the Corps has received $3.3 billion in emergency
supplemental appropriations to address the impacts of the 2005
hurricane season. In addition, on February 16 of this year the
President transmitted to Congress his request for $1.46 billion in
additional emergency supplemental appropriations to strengthen and
improve hurricane and storm protection in the greater New Orleans
metropolitan area.
PERFORMANCE-BASED BUDGETING
The fiscal year 2007 budget builds upon lessons learned from the
2005 hurricane season, one of which is the importance of setting
spending priorities to meet water resources needs that are the most
compelling from a national perspective.
One of my priorities for the Army Civil Works program is to develop
the Civil Works budget and manage the program based on objective
performance measures. The fiscal year 2007 budget reflects significant
progress toward this goal, by focusing funding those activities that
are expected to provide the highest net returns to the Nation.
The fiscal year 2007 budget also supports performance-based
budgeting by funding ongoing efforts to develop better risk-based
facility condition indices and asset management systems. These
analytical tools will improve our ability in the future to develop
long-term asset management strategies and establish priorities for the
operation, maintenance and management of Civil Works assets. Our goal
is to begin using these improved analytical tools within 2 years.
The focus on Civil Works program performance has a number of
foundations. First, the Civil Works Strategic Plan, which was updated
in 2004, provides goals, objectives, and performance measures that are
specific to program areas as well as some that are crosscutting.
Second, each program area is assessed using the Program Assessment
Rating Tool (PART). Both the Civil Works Strategic Plan and the PART-
based program evaluations are works in progress and will continue to be
updated.
The Environmental Stewardship sub-program and the Formerly Utilized
Sites Remedial Action Program were assessed in the most recent
assessment period (2005). Based upon the findings of these program
assessments, the Corps is taking follow-up actions to address
identified problems. Summaries of all completed civil works program
assessments can be found on the administration's new website,
www.ExpectMore.gov.
Budget decisions link to performance in a number of ways. First,
alternative funding levels relate to alternative performance targets,
or levels of outputs and outcomes, as measured by the program area
metrics. Second, related metrics and decision guidelines (see
``Construction,'' below) are used to rank work within each account or
within each program area.
CIVIL WORKS PROGRAM IMPROVEMENTS
The fiscal year 2007 Civil Works budget proposes five program
improvements, as discussed below.
Funding Activities in the Operation and Maintenance Account
In addition to introducing the concept of watershed and system
budgeting for operation and maintenance, described in detail below, the
budget proposes to fund four types of operation and maintenance-related
activities in the Operation and Maintenance account, rather than in the
Construction account as has been the case in the recent past. It is
appropriate to assign responsibility for these activities to the
Operation and Maintenance program, both because of the nature of the
work and because of its integral connection to operation and
maintenance. This reassignment improves accountability and oversight,
reflects the full cost of operation and maintenance, and supports an
integrated funding strategy for existing projects. Total fiscal year
2007 funding for the activities being reassigned to the Operation and
Maintenance program is about $340 million. The four types of activities
are described in greater detail below.
First, the Operation and Maintenance account would fund activities
to comply with Biological Opinions at existing projects pursuant to the
Endangered Species Act. These activities facilitate the Corps
continuing to operate its existing multi-purpose projects, principally
in the Columbia and Missouri River Basins. The compliance costs would
be allocated among the project purposes of the operating projects.
Second, the account would fund rehabilitation of existing projects.
Rehabilitation work would compete for funding on a level playing field
with other operation and maintenance activities. The O&M program would
consider each potential investment and develop recommendations based on
a long-term strategy for maintaining the existing infrastructure. Fifty
percent of the costs of rehabilitations for inland waterway projects
would be derived from the Inland Waterways Trust Fund, just as was the
case when they were funded in the Construction account.
Third, the account would fund the construction of facilities,
projects or features that use maintenance dredging material. These
include beneficial uses of dredged material for island and marsh
creation, shore protection, and other environmental purposes pursuant
to the Section 204/207/933 Continuing Authority Program and specific
authorizations (such as for the Poplar Island, Maryland, project).
These also include dredged material disposal facilities for material
from maintenance dredging (including Indiana Harbor, Indiana, which had
been line-item budgeted in the Construction account). Funding for the
dredged material disposal facilities would be derived from the Harbor
Maintenance Trust Fund, just as was the case when they were funded in
the Construction account.
Fourth and finally, funding in the account would be used to replace
sand lost from shores due to the operation of Federal navigation
projects (navigation mitigation). This activity would be carried out
pursuant to specific authorizations for shore protection projects that
involve navigation mitigation, and pursuant to the Section 111
Continuing Authority Program. The budget proposes that funding for
navigation mitigation be derived from the Harbor Maintenance Trust
Fund. The estimated amount for fiscal year 2007 that would be derived
from the trust fund for this purpose is $27 million.
Accompanying the budget is proposed appropriations language that
would clarify that these activities are to be funded in the Operation
and Maintenance account. For example, the budget proposal includes a
provision, which the Congress adopted in the fiscal year 2005 Energy
and Water Development Appropriations Act, indicating that among the
purposes for which funding is provided is ``for the benefit of
federally listed species to address the effects of civil works projects
owned or operated by the Corps''. The budget language also provides
that funding for ``eligible operations and maintenance'' is to be
derived from the Harbor Maintenance Trust Fund. Consistent with section
201 of the Water Resources Development Act of 1996, eligible operations
and maintenance activities include not only harbor dredging but also
the dredged material disposal facilities and navigation mitigation
discussed above.
Watershed and System Budgeting for Operation and Maintenance
Although the concept of watershed and system budgeting and program
execution for operation and maintenance (O&M) was adopted too late in
the budget cycle to be fully implemented in formulating the fiscal year
2007 budget, the O&M budget is presented on a watershed/system basis
and, if Congress concurs on the benefit of planning and carrying out
the O&M program in accordance with system-wide priorities, then during
fiscal year 2007 the O&M program would be managed by watershed and
business program, rather than primarily project-by-project.
Proposed fiscal year 2007 funding is consolidated according to
Civil Works program areas, such as commercial navigation and flood and
storm damage reduction, for each of the 21 major river basins in the
United States, as established by the U.S. Geological Survey. The
specific projects that would receive funding in each basin also are
identified by name. For future fiscal years, the budget not only will
be presented by basin or system, but also will be developed in the
first place based on basins and systems. Should operation and
maintenance work be funded in the manner presented, managers in the
field would be better able to adapt to uncertainties and changed
conditions throughout the fiscal year, consistent with budget and
appropriations decisions.
Repayment of the Judgment Fund
We are proposing that funds that (1) were appropriated in fiscal
year 2006 or a prior year, (2) are not needed for the purpose for which
they were appropriated, and (3) are carried over unobligated to fiscal
year 2007 be reprogrammed to begin to repay the Department of the
Treasury's Judgment Fund. The repayments would be for judgments against
the United States that were paid by the Fund on Civil Works projects.
Currently over $150 million is owed to the Judgment Fund for Civil
Works projects.
Expenses Account
The Expenses account funds the management and executive direction
expenses of the Army Corps of Engineers, both at its Headquarters and
Major Subordinate Divisions, as well as support organizations such as
the Humphreys Engineer Center Support Activity, the Institute for Water
Resources, and the Finance Center. In addition, the fiscal year 2007
budget proposes that, beginning in fiscal year 2007, the Office of the
Assistant Secretary of the Army for Civil Works--including some
indirect and overhead costs not previously allocated to this office--be
funded in an expanded Expenses account, rather than in its own separate
account or as part of the account funding the other Army Secretariat
offices.
Reprogramming and Contracting
The budget proposes reauthorization of sections 101, 106, and 108
of the Energy and Water Development Appropriations Act, 2006, with
certain changes. These sections established rules in law for fiscal
year 2006 on reprogramming and continuing contracts. I would like to
emphasize the programmatic need for one of these changes, namely, that
we would no longer require each partially funded contract for operation
and maintenance to be a continuing contract, so that the Corps would
have the flexibility to use other contracting tools in the O&M program,
such as base-plus-options contracts.
STUDIES AND DESIGN
The fiscal year 2007 budget concentrates funding on the 55 most
promising studies and preconstruction engineering and design (PED)
activities. For the navigation and flood and storm damage reduction
studies, performance was assessed based primarily on likely economic
benefits and costs. For PED activities for such projects, the estimated
ratio of remaining benefits to remaining costs is known, and PED
activities were funded for projects with ratios of 4.0 to 1 or greater
at a 7 percent discount rate. For aquatic ecosystem restoration studies
and PED activities, performance was assessed based on the likelihood of
projects that would meet the criteria in the construction guidelines.
The budget provides $94 million for the Investigations account and
$1 million for investigations within the Mississippi River and
Tributaries account. Among the $95 million total, $25 million is for
the Louisiana Coastal Area study of coastal wetlands restoration; $20
million is for a national inventory of flood and storm damage reduction
projects; $13 million is for other project-specific studies including a
new study needed to support continued land acquisition to further
reduce the risk of flood damage in the Atchafalaya Basin; $4 million is
for project-specific PED; $15 million is for research and development;
and $18 million is for other coordination, data collection, and study
activities.
One of my priorities is to improve analytical tools to support
water resource planning and decision-making. The budget supports this
with robust funding for the Navigation Economic Technologies research
program and for the development of benefit evaluation methods for
aquatic ecosystem restoration.
CONSTRUCTION
In recent years, many more construction projects have been
authorized, initiated, and continued than can be constructed
efficiently at any one time. This has led to the postponement of
benefits from the most worthy projects, which has significantly reduced
overall program performance. To remedy this situation and to achieve
greater value to the Nation from the Civil Works construction program,
the budget focuses significant funding on the projects that yield the
greatest return to the Nation, based upon objective performance
criteria.
The budget again proposes performance guidelines to allocate funds
among construction projects, including significant refinements to the
performance guidelines proposed in 2006. The most significant of these
changes is the addition of a non-economic performance criterion
covering flood and storm damage reduction projects that address a
significant risk to human safety.
Under the guidelines, the budget allocates funds among construction
projects based primarily on the remaining economic benefits of projects
relative to their remaining costs, their contributions to reducing
life-threatening inundation hazards, and the extent to which they cost-
effectively contribute to the restoration of nationally or regionally
significant aquatic ecosystems where the ecosystems have become
degraded as a result of Civil Works projects or to a restoration effort
for which the Corps is otherwise uniquely well suited. The 2007
performance guidelines are at Enclosure 3.
The funded construction projects include 6 considered to be
national priorities; 14 projects in their final year of construction
(including 1 dam safety project); 10 other dam safety, seepage, and
static instability correction projects; 1 high priority newly funded
project (Washington, DC and vicinity, which will reduce the risk of
flood damage to the museums on the National Mall, the Franklin Delano
Roosevelt Memorial, and the World War II Memorial and eliminate the
temporary closures at 23rd Street and Constitution Avenue, NW, and 2nd
and P Streets, SW in downtown Washington, DC); and 60 other ongoing
projects. Ninety-one projects are funded altogether.
After adjusting for the work reassigned to the Operation and
Maintenance account, the budget provides an increase in construction
funding of about $280 million compared to the fiscal year 2006 budget.
This robust funding level enables work on most of the 91 projects, as
well as on the ongoing projects reassigned from the construction
program to the operation and maintenance program, to proceed at between
80 percent and 100 percent of the maximum rate that the Corps can
efficiently spend funds in fiscal year 2007.
For low priority projects that are scheduled to have a construction
contract underway at the beginning of fiscal year 2007, the budget
provides funding either to complete each ongoing contract, or to
terminate it and pay the Federal share of settled claims, whichever is
estimated to be less costly. The budget includes $50 million for this
purpose, $42 million in the Construction account and $8 million in the
Mississippi River and Tributaries account.
CIVIL WORKS PROGRAM AREAS
The Army Civil Works program includes eight program areas, plus
oversight/executive direction and management. The eight program areas
are commercial navigation, flood and coastal storm damage reduction,
aquatic ecosystem restoration, recreation, hydropower, water supply,
emergency management, and the regulatory program. Budget proposals for
the eight program areas are discussed below.
Emergency Management and Flood and Coastal Storm Damage Reduction
The budget for Emergency Management and Flood and Coastal Storm
Damage Reduction reflects a sharpened focus on flood and hurricane
preparedness and damage reduction.
The budget provides $20 million in the Investigations account for a
national inventory and database of flood and storm damage reduction
projects, and for developing and testing methods to assess the
structural and operational integrity and the associated risks of such
projects. This effort will dovetail with the Corps' ongoing risk
assessment for its portfolio of dams.
The budget provides $81 million in the Flood Control and Coastal
Emergencies account for planning, preparedness, and response to flood
and storm emergencies, and for rehabilitation of damaged flood and
storm damage reduction projects. This is an increase of $11 million
over the fiscal year 2006 budget. Our experience during the 2005
hurricane season underscores the need for securing funds in advance for
such purposes, and we urge the Congress to include this funding in the
annual Energy and Water Development Appropriations Act.
The budget continues to support Federal participation in the
initial phase of authorized beach nourishment projects for storm damage
reduction and ecosystem restoration purposes. The budget continues the
policy of funding Federal involvement in long-term, follow-on periodic
renourishment only to the extent that the operation and maintenance of
Federal navigation projects is the reason for the sand loss on
shorelines.
Commercial Navigation
The amount budgeted for the construction and rehabilitation of
inland waterway projects, $394 million, is the highest amount ever
included in a Civil Works budget. This funding will help ensure the
continued efficiency and reliability of our principal inland waterways.
Work will begin on rehabilitation of Lock and Dam 27, Illinois and
Missouri, and Markland Lock and Dam, Indiana and Kentucky. The budget
focuses operation and maintenance funding for the inland waterways on
those segments that support high volumes of commercial traffic,
including the Mississippi, Ohio, and Illinois waterways.
The budget gives priority to the operation and maintenance of
harbors with high volumes of commercial traffic. The budget also funds
harbors that support significant commercial fishing, subsistence,
public transportation, harbor of refuge, national security, or safety
benefits.
As discussed earlier, the budget provides funding under the
operation and maintenance program for authorized beach renourishment
work to the extent needed to replace sand lost due to Federal
navigation operation and maintenance. This work is now part of the
commercial navigation program area.
Aquatic Ecosystem Restoration
The budget includes $164 million for the Corps contribution to the
Everglades restoration effort. Of this amount, $35 million is for the
Corps to continue to participate financially in the Modified Water
Deliveries project, along with the National Park Service. Within this
amount, the budget also includes funds to initiate additional work on
the Kissimmee River, continue the pilot aquifer storage and recovery
projects program, continue other planning and design work on the
Comprehensive Everglades Restoration Plan, and examine flows in the
vicinity of Lake Okeechobee.
The budget provides $27 million for the Upper Mississippi
Restoration Program, including $3 million for a study needed to
establish priorities for the next 10 years for this nationally
significant effort. To address the continuing loss of wetlands along
the Louisiana coast, the budget provides $20 million to continue
planning and design for the Louisiana Coastal Area aquatic ecosystem
restoration program and $5 million for the science program supporting
this effort.
As discussed above, the budget proposes that measures at operating
projects to comply with Biological Opinions pursuant to the Endangered
Species Act be funded from the Operation and Maintenance account and
allocated among project purposes.
Regulatory Program
The President's budget provides $173 million to the Corps
Regulatory Program to protect wetlands and other waters of the United
States. This represents a $15 million increase compared to fiscal year
2006 appropriations, which would result in a total increase of 20
percent in funding over the last 3 years. One of my priorities for the
Civil Works program is to improve the effectiveness of aquatic resource
protection and the efficiency of permit reviews and decision-making.
The added funds will be used to improve permit processing times,
increase aquatic resource protection, and advance watershed-based
approaches.
Investing in the Regulatory Program is a win-win proposition. The
added funds will enable most public and private development to proceed
with minimal delays, while ensuring that the environment is protected
consistent with the Nation's water quality laws.
Recreation
The fiscal year 2007 budget proposes a recreation modernization
initiative for Civil Works recreation facilities, based on a promising
model now used by other major Federal recreation providers such as the
National Park Service and the Forest Service. The administration has
proposed legislation for the Corps to use additional fees and other
revenues to upgrade and modernize recreation facilities at the sites
where this money is collected.
Specifically, the legislation includes authority for the Corps to
charge entrance fees and other types of user fees where appropriate,
and to cooperate with non-Federal park authorities and districts. The
Corps would use collections above a $37 million per year baseline to
provide facility modernizations and upgrades.
Hydropower
The budget provides funding for hydropower operation and
maintenance costs, as well as funding for ongoing replacements at three
hydropower projects. Unlike the budgets of recent years, the budget
does not propose that Federal power marketing administrations directly
fund the costs of hydropower operation and maintenance.
Environmental Stewardship
Corps of Engineers-administered lands and waters cover 11 million
acres. That is equal in size to the area of the States of Vermont and
New Hampshire. The budget proposes a total of $89 million for
environmental stewardship for these resources. Funded activities
include shoreline management, protection of natural resources,
continuation of mitigation activities, and protection of cultural and
historic resources.
Oversight and Executive Direction and Management
The fiscal year 2007 budget provides $164 million for the Expenses
account. This account funds executive direction and management
activities of the Corps headquarters, the Corps division offices, and
related support organizations that pertain to Civil Works.
In addition, $6 million of the funding for the Expenses account is
for the Office of the Assistant Secretary of the Army (Civil Works).
This amount is needed to cover not only the Assistant Secretariat share
of costs that are usually allocated among offices in the Headquarters,
Department of Army, but also the appropriate share of centrally managed
and ordinarily non-allocated costs. The inclusion of funding for these
purposes is in accordance with the direction in the fiscal year 2006
Conference Report.
The Budget proposes to finance audits through the Revolving Fund.
The costs would be allocated among and then charged back to the
benefiting accounts as a normal cost of doing business.
PRESIDENT'S MANAGEMENT AGENDA
The Army Civil Works program is pursuing five government-wide
management initiatives, as are other Federal agencies. These are
competitive sourcing, strategic management of human capital, financial
management, e-government, and budget-performance integration. The Army
Civil Works program also is participating in the initiative for real
property asset management.
The Office of Management and Budget scores the status of each
agency in implementing each initiative. Like most agencies, the Army
Civil Works program started out with ``red'' stoplight scores across
the board. On four initiatives--all but competitive sourcing and human
capital--Civil Works status is still red. We are working to improve our
progress and status and welcome your support of our efforts.
CONCLUSION
At $4.733 billion, the fiscal year 2007 Army Civil Works budget is
the highest Civil Works budget in history.
The budget reflects progress in performance-based budgeting, as
called for in the President's management agenda. In developing this
budget, we made explicit choices based on performance. The emphasis on
the completion of high-performing construction projects, preparedness
for and mitigation of flood and hurricane hazards, and improved
execution of the Regulatory Program, for example, reflect a
performance-based approach.
The Army Civil Works budget for fiscal year 2007 will enable the
Civil Works program to move ahead with more resources to pursue
investments that will yield good returns for the Nation in the future.
The budget represents the wise use of funding to advance worthy,
mission-based objectives. I am proud to present it.
Thank you, Mr. Chairman and members of the subcommittee, for this
opportunity to testify on the President's fiscal year 2007 budget for
the Civil Works program of the Army Corps of Engineers.
ENCLOSURE 1.--DEPARTMENT OF THE ARMY CORPS OF ENGINEERS--CIVIL WORKS
BUDGET SUMMARY, FISCAL YEAR 2007
------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
Requested New Appropriations by Account:
Investigations..................................... $94,000,000
Construction....................................... 1,555,000,000
Operation and Maintenance.......................... 2,258,000,000
Regulatory Program................................. 173,000,000
Flood Control, Mississippi River and Tributaries... 278,000,000
Expenses........................................... 164,000,000
Flood Control and Coastal Emergencies.............. 81,000,000
Formerly Utilized Sites Remedial Action Program.... 130,000,000
----------------
TOTAL............................................ 4,733,000,000
================
Requested New Appropriations by Program Area:
Commercial Navigation.............................. 1,926,000,000
Flood and Coastal Storm Damage Reduction........... 1,291,000,000
Environment........................................ 539,000,000
(Aquatic Ecosystem Restoration)................ (320,000,000)
(FUSRAP)....................................... (130,000,000)
(Natural Resources)............................ (89,000,000)
Hydropower......................................... 285,000,000
Recreation......................................... 267,000,000
Water Supply....................................... 2,000,000
Emergency Management............................... 86,000,000
(Flood Control and Coastal Emergencies)........ (81,000,000)
(National Emergency Preparedness).............. (5,000,000)
Regulatory Program................................. 173,000,000
Executive Direction and Management................. 164,000,000
----------------
TOTAL............................................ 4,733,000,000
================
Sources of New Appropriations:
General Fund....................................... 3,791,000,000
Harbor Maintenance Trust Fund...................... 707,000,000
Inland Waterways Trust Fund........................ 197,000,000
Special Recreation User Fees....................... 37,000,000
Disposal Facilities User Fees...................... 1,000,000
----------------
TOTAL............................................ 4,733,000,000
================
Additional New Resources:
Rivers and Harbors Contributed Funds............... 445,000,000
Coastal Wetlands Restoration Trust Fund............ 75,000,000
Permanent Appropriations........................... 18,000,000
----------------
TOTAL............................................ 538,000,000
================
Total New Program Funding........................ 5,271,000,000
------------------------------------------------------------------------
ENCLOSURE 2.--DEPARTMENT OF THE ARMY--CORPS OF ENGINEERS--CIVIL WORKS BUDGET, FISCAL YEAR 2007--CROSSCUT BETWEEN APPROPRIATION ACCOUNTS AND PROGRAM
AREAS
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aq.
Navigation Flood/ Recreation Eco. Env. FUS-RAP Hydro- Water Emerg. Reg. ED&M TOT
Storm Rest Stewrd. Power Supply Mgmt. Prog.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Investigations........................ 23 34 .......... 37 ....... ....... ....... ....... ....... ....... ....... 94
Construction.......................... 596 653 .......... 278 ....... ....... 28 ....... ....... ....... ....... 1,555
Operation/Maint....................... 1,270 387 253 ....... 84 ....... 257 2 5 ....... ....... 2,258
MR&T--I............................... .......... 1 .......... ....... ....... ....... ....... ....... ....... ....... ....... 1
MR&T--C............................... 14 111 .......... 5 ....... ....... ....... ....... ....... ....... ....... 130
MR&T--M............................... 23 105 14 ....... 5 ....... ....... ....... ....... ....... ....... 147
FUSRAP................................ .......... ....... .......... ....... ....... 130 ....... ....... ....... ....... ....... 130
FC&CE................................. .......... ....... .......... ....... ....... ....... ....... ....... 81 ....... ....... 81
Regulatory............................ .......... ....... .......... ....... ....... ....... ....... ....... ....... 173 ....... 173
Expenses.............................. .......... ....... .......... ....... ....... ....... ....... ....... ....... ....... 164 164
-----------------------------------------------------------------------------------------------------------------
TOTAL........................... 1,926 1,291 267 320 89 130 285 2 86 173 164 4,733
--------------------------------------------------------------------------------------------------------------------------------------------------------
ENCLOSURE 3.--DEPARTMENT OF THE ARMY--CORPS OF ENGINEERS--CIVIL WORKS
BUDGET, FISCAL YEAR 2007--PERFORMANCE BUDGETING GUIDELINES FOR CIVIL
WORKS CONSTRUCTION
The budget for the construction account allocates funds based on
the following seven performance-based guidelines, which improve the
overall performance of the construction program by redirecting funds to
high-performing projects and limiting new construction starts.
1. Project rankings within mission areas.--All ongoing,
specifically authorized construction projects, including projects
funded in the Mississippi River and Tributaries account, will be
assigned based upon their primary purpose to one of the main mission
areas of the Corps (flood and storm damage reduction; commercial
navigation; aquatic ecosystem restorations) or to hydropower. Projects,
except for aquatic ecosystem restoration projects, will be ranked by
their remaining benefits divided by their remaining costs (RBRC),
calculated at a 7 percent real discount rate. Aquatic ecosystem
restoration projects will be ranked by the extent to which they cost
effectively contribute to the restoration of a nationally or regionally
significant aquatic ecosystem that has become degraded as a result of a
Civil Works project, or to a restoration effort for which the Corps is
otherwise uniquely well-suited (e.g., because the solution requires
complex alternations to the hydrology and hydraulics of a river
system).
2. Project completions.--Each project with an RBRC of 3.0 or
greater that can be completed in the budget year with a final increment
of funding will receive the balance of funding needed to complete
construction and related administrative activities. Likewise, each
aquatic ecosystem restoration project that cost-effectively contributes
to the restoration of a nationally or regionally significant aquatic
ecosystem that has become degraded as a result of a civil works
project, or to a restoration effort for which the Corps is otherwise
uniquely well-suited, and that can be completed in the budget year with
a final increment of funding will receive the balance of funding needed
to complete construction and related administrative activities.
3. Projects with very high economic and environmental returns.--The
projects with the highest RBRCs (or that are the most cost-effective in
contributing to the restoration of a nationally or regionally
significant aquatic ecosystem that has become degraded as a result of a
Corps project, for aquatic ecosystem restoration) will receive not less
than 80 percent of the maximum level of funding that the Corps can
spend efficiently in each fiscal year.
4. Projects with a low priority.--All ongoing flood and storm
damage reduction, commercial navigation, and hydropower constructions
projects that have RBRCs below 3.0, except for flood and storm damage
reduction projects that are funded in the budget to address significant
risk to human safety, will be considered for deferral. All ongoing
aquatic ecosystem restoration projects that do not cost-effectively
contribute to the restoration of a nationally or regionally significant
aquatic ecosystem restoration that has become degraded as a result of a
Civil Works project, and do not cost-effectively address a problem for
which the Corps is otherwise uniquely well-suited, and are less than 50
percent complete will be considered for deferral. Where a project
considered for deferral was previously budgeted, the budget will
include funding to cover the cost of terminating or completing each
ongoing contract, whichever is less. Budget year and future year
savings from project suspensions (after covering the cost of
terminating or completing ongoing contracts) will be used to accelerate
the projects with the highest net economic and environmental returns.
5. New starts and resumptions.--The budget will provide funds to
start up new construction projects, and to resume work on ongoing
construction projects on which the Corps has not performed any physical
work under a construction contract during the past 3 consecutive fiscal
years, only if the project would be ranked in the top 20 percent of the
ongoing construction projects in its mission area that year.
The term ``physical work under a construction contract'' does not
include activities related to project planning, engineering and design,
relocation, or the acquisition of lands, easements, or rights-of-way.
For non-structural flood damage reduction projects, construction begins
in the first fiscal year in which the Corps acquires lands, easements,
or rights-of-way primarily to relocate structures, or performs physical
work under a construction contract for non-structural project-related
measures. For aquatic ecosystem restoration projects, construction
begins in the first fiscal year in which the Corps acquires lands,
easements, or rights-of-way primarily to facilitate the restoration of
degraded aquatic ecosystems including wetlands, riparian areas, and
adjacent floodplains, or performs physical work under a constructions
contract to modify existing project facilities primarily to restore the
aquatic ecosystem. For all other water resources projects, construction
begins in the first fiscal year in which the Corps performs physical
work under a construction contract.
6. Other cases.--All other ongoing construction projects will
receive not more than the amount needed to meet earnings permitted
under ongoing multi-year contracts and related costs, except for flood
and storm damage reduction projects that are funded in the budget to
address significant risk to human safety, which will receive at least
the funding needed to pay contractor earnings and related costs.
Dam safety assurance, seepage control, and static instability
correction projects that are funded in the budget for construction will
receive the maximum level of funding that the Corps can spend
efficiently in each fiscal year.
Projects that are funded in the budget for construction will
receive the amount needed to ensure that they comply with treaties and
with biological opinions pursuant to the Endangered Species Act, and
meet authorized mitigation requirements.
7. Ten percent rule.--Up to a total of 10 percent of the funding
available for construction may be allocated to ongoing construction
projects regardless of the guidelines above. However, this may not be
used to start up or resume any project.
The budget proposes that the administration and the Congress apply
these guidelines to the Corps construction account and to the
construction activities in the Mississippi River and Tributaries
account.
Senator Domenici. Thank you very much.
General.
STATEMENT OF LIEUTENANT GENERAL CARL A. STROCK, CHIEF
OF ENGINEERS
General Strock. Mr. Chairman and members of the committee:
I am honored to be testifying before you today with the
Honorable John Paul Woodley on the President's fiscal year 2007
budget for the Army civil works program. If I may, I would like
to briefly summarize the key points of my testimony and include
my complete statement for the record.
Senator Domenici. Please do and that will be done.
General Strock. Good, sir.
This budget is a performance-based budget that reflects the
realities of the national budget, supporting the Nation's
recent natural disasters and the global war on terror. This
budget focuses construction on funding of 63 projects that will
provide the highest returns on the Nation's investment,
including 11 dam safety projects. Funds will be used for
critical water resources infrastructure that improves the
quality of our citizens' lives and provides a foundation for
national economic growth and development.
The budget incorporates performance-based metrics for
continued efficient operation of the Nation's waterborne
navigation, flood control, and other water resource management
infrastructure, fair regulation of wetlands, and restoration of
important environmental resources.
There are six national priority construction projects
funded in the construction program. They are: the New York-New
Jersey Harbor Deepening Project; the Oakland River--the Oakland
Harbor Deepening Project; construction of Olmstead Locks and
Dam in Illinois and Kentucky; the Florida Everglades and South
Florida Ecosystem; the Side Channels of the Upper Mississippi
River System; and Sims Bayou in Houston, Texas; and two others,
the Missouri River Restoration and the Columbia River
Restoration, both funded in the operations and maintenance
account.
This budget also provides the quality of recreation
services through stronger partnerships and modernization. The
budget provides approximately $65.3 million to complete 14
projects, including one dam safety project, in 2007. As part of
a comprehensive strategy to reduce the construction backlog,
the fiscal year 2007 budget funds projects that provide the
highest returns and are consistent with current policies. In
all, 91 projects are funded so that we can provide benefits to
the Nation sooner.
The fiscal year 2007 budget includes $2.258 billion for the
operations and maintenance program and I can assure you that I
will continue to do all that I can to make these programs as
cost effective and efficient as possible.
Domestically, more than 8,000 volunteers from around the
Nation have deployed to help citizens and communities on the
gulf coast in the aftermath of Hurricanes Katrina, Rita, and
Wilma. Even now, more than 6 months after Hurricane Katrina,
2,000 USACE volunteers continue to execute our FEMA-assigned
disaster recovery missions along the gulf coast and to
accomplish the critical restoration work of the New Orleans
Area Levee System.
Internationally, the U.S. Army Corps of Engineers remains
committed to the monumental task of helping to rebuild the
infrastructure and economies of Iraq and Afghanistan, and more
than 1,700 USACE volunteers have deployed to Iraq since 2003.
They continue to make progress toward this Nation's goals of
restoring the security and quality of life for all Iraqis and
Afghans as they pursue democracy and freedom.
The Corps' Gulf Regional Division has overseen the
initiation of 3,000 reconstruction projects and the completion
of more than 2,100. These projects make a difference in the
everyday lives of the Iraqi people and are visible signs of
progress.
The water resources management infrastructure has improved
the quality of our citizens' lives in support of the economic
growth and development of this country. Our systems of
navigation, flood, and storm damage reduction projects and
efforts to restore aquatic ecosystems contribute to our
national welfare.
PREPARED STATEMENT
In closing, the Corps is committed to selflessly serving
the Nation and I truly appreciate your continued support in
this end. Thank you, Mr. Chairman and members of the committee.
This concludes my statement.
[The statement follows:]
Prepared Statement of Lieutenant General Carl A. Strock
Mr. Chairman and distinguished members of the subcommittee, I am
honored to be testifying before your subcommittee today, along with the
Assistant Secretary of the Army (Civil Works), the Honorable John Paul
Woodley, Jr., on the President's fiscal year 2007 budget for the United
States Army Corps of Engineers' Civil Works Program.
My statement covers the following 3 topics:
--Summary of fiscal year 2007 Program Budget,
--Civil Works Backlog,
--Value of the Civil Works Program to the Nation's Economy, and to
the Nation's Defense.
SUMMARY OF FISCAL YEAR 2007 PROGRAM BUDGET
Introduction
The fiscal year 2007 Civil Works Budget is a performance-based
budget, which reflects a focus on the projects and activities that
provide the highest net economic and environmental returns on the
Nation's investment or address significant risk to human safety. The
Civil Works Program, including the Direct and Reimbursed programs, is
expected to involve total spending (Federal plus non-Federal) of $7.3
billion to $8.3 billion. The exact amount will depend on assignments
received from the Federal Emergency Management Agency (FEMA) for
hurricane disaster relief and from the Department of Homeland Security
for border protection facilities.
Direct Program funding totals $5.271 billion, consisting of
discretionary funding of $4.733 billion and mandatory funding of $538
million. The Reimbursed Program funding is projected to involve an
additional $2 billion to $3 billion.
Direct Program
The budget reflects the administration's commitment to continued
sound development and management of the Nation's water and related land
resources. It incorporates performance-based metrics for the
construction program, funds the continued operation of commercial
navigation and other water resource infrastructure, provides a needed
increase in funding for the regulation of the impacts of development on
the Nation's wetlands, and supports restoration of nationally and
regionally significant aquatic ecosystems, with emphasis on the Florida
Everglades, the Upper Mississippi River, and the coastal wetlands of
Louisiana. It also improves the quality of recreation services through
stronger partnerships and modernization.
The budget emphasizes the construction and completion of water
resources projects that will provide a high return on the Nation's
investment in the Corps' primary mission areas. There are 91 projects,
including 6 national priority projects; 14 projects in their final year
of completion (including 1 dam safety project); 10 other dam safety
assurance, seepage control, and static instability correction projects;
1 high priority newly funded project (Washington, DC and vicinity,
which will reduce the risk of flood damage to the museums on the
National Mall, the Franklin Delano Roosevelt Memorial, and the World
War II Memorial and eliminate the temporary closures at 23rd Street and
Constitution Avenue, NW, and 2nd and P Streets, SW in downtown
Washington, DC); and 60 other ongoing projects. The focus of this
budget is on providing the highest net economic and environmental
returns on the Nation's investment and addressing significant risk to
human safety.
Reimbursed Program
Through the Interagency and Intergovernmental Services Program we
help non-DOD Federal agencies, State, local, and tribal governments,
and other countries with timely, cost-effective implementation of their
programs, while maintaining and enhancing capabilities for execution of
our Civil and Military Program missions. These customers rely on our
extensive capabilities, experience, and successful track record. The
work is principally technical oversight and management of engineering,
environmental, and construction contracts performed by private sector
firms, and is fully funded by the customers.
Currently, we provide reimbursable support for about 60 other
Federal agencies and several State and local governments. Total
reimbursement for such work in fiscal year 2007 is projected to be $2.0
billion to $3.0 billion. The exact amount will depend on assignments
received from the Federal Emergency Management Agency (FEMA) for
hurricane disaster relief and from the Department of Homeland Security
for border protection facilities.
CIVIL WORKS BACKLOG
The budget addresses the construction backlog primarily by
proposing that the administration and the Congress use objective
performance measures to establish priorities among projects including
potential new starts, and through a change in Corps contracting
practices to increase control over future costs. The measures proposed
include the ratio of remaining benefits to remaining costs for projects
with economic outputs; the extent to which the project cost-effectively
contributes to the restoration of a nationally or regionally
significant aquatic ecosystem that has become degraded as a result of a
Civil Works project or to an aquatic ecosystem restoration effort for
which the Corps is otherwise uniquely well-suited; and giving priority
to dam safety assurance, seepage control, static instability
correction, and projects that address significant risk to human safety.
With the exception of up to 10 percent of the available funds that
could be allocated to any project under construction regardless of
performance, resources are allocated based on Corps estimates to
achieve the highest net economic and environmental returns and to
address significant risk to human safety. Over time, this approach
would significantly improve the benefits to the Nation from the Civil
Works construction program.
We believe that narrowing the focus of our effort to fund and
complete a smaller, more beneficial set of projects will improve
overall program performance and bring higher net benefits per dollar to
the Nation sooner. That is why the budget proposes only one new, high
priority construction start and accelerates completion of the highest-
return projects.
Maintenance Program
The facilities owned and operated by, or on behalf of, the Civil
Works Program are aging. As stewards of this infrastructure, we are
working to ensure that it continues to provide an appropriate level of
service to the Nation. Sustaining such service poses a technical
challenge in some cases, and proper operation and maintenance also is
becoming more expensive as this infrastructure ages.
The operation and maintenance program supports the operation,
maintenance and security of existing commercial navigation, flood and
storm damage reduction, and aquatic ecosystem restoration works owned
and operated by, or on behalf of, the Corps of Engineers, including
administrative buildings and laboratories. Funds are also included for
national priority efforts in the Columbia River Basin and Missouri
River Basin to support the continued operation of Corps of Engineers
multi-purpose projects by meeting the requirements of the Endangered
Species Act. Other work to be accomplished includes dredging, repair,
and operation of structures and other facilities, as authorized in the
various River and Harbor, Flood Control, and Water Resources
Development Acts. Related activities include aquatic plant control,
monitoring of completed coastal projects, and removal of sunken
vessels.
The Operation and Maintenance program for the fiscal year 2007
budget consists of $2.258 billion in the operation and maintenance
account and $147 million under the Mississippi River and Tributaries
program. To improve accountability and oversight, reflect the full cost
of operating and maintaining existing projects, and support an
integrated investment strategy, the fiscal year 2007 Civil Works budget
transfers several activities to the O&M program from the construction
program. This budget also organized operation and maintenance
activities by river basin and by mission area to set the stage for
improved management of Civil Works assets and more systematic budget
development in future years. Furthermore, we are searching for ways to
reduce costs and thereby accomplish more with available resources.
The fiscal year 2007 budget also supports performance-based
budgeting for the operation and maintenance program by funding ongoing
efforts to develop better risk-based facility condition indices and
asset management systems. These analytical tools will improve our
ability in the future to develop long-term asset management strategies
and establish priorities for the operation, maintenance and management
of Civil Works assets. Our goal is to begin using these improved
analytical tools within 2 years.
value of the civil works program to the nation's economy and defense
We are privileged to be part of an organization that directly
supports the President's priorities of winning the global war on
terror, securing the homeland and contributing to the economy.
The National Welfare
The way in which we manage our water resources can improve the
quality of our citizens' lives. It has affected where and how people
live and influenced the development of this country. The country today
seeks economic development as well as the protection of environmental
values.
Domestically, more than 8,000 USACE volunteers from around the
Nation have deployed to help citizens and communities along the Gulf
Coast in the aftermath of Hurricanes Katrina, Rita, and Wilma. Even
now, more than 6 months after Hurricane Katrina, 2,000 USACE volunteers
continue to execute our FEMA-assigned disaster recovery missions along
the Gulf Coast, and to work on rebuilding the New Orleans-area levee
system.
As to Hurricane recovery--the Corps of Engineers is repairing
significant damages to reaches of federally constructed levees,
floodwalls and other features, repairing damaged pumping stations that
were constructed or modified as a part of the Southeast Louisiana Urban
Flood Control project, and repairing non-Federal levees and pump
stations. Along the three outfall canals, we are installing interim
closure structures and temporary pumps until a more permanent solution
can be implemented. We have also initiated analyses that will explore
options to improve protection along the Louisiana and Mississippi
Coasts.
Mr. Chairman, we continue to work with you, this subcommittee, and
other members of Congress on the authorization and funding proposed by
the administration for modifications that will strengthen the existing
hurricane protection system for New Orleans.
Research and Development
Civil Works Program research and development provides the Nation
with innovative engineering products, some of which can have
applications in both civil and military infrastructure spheres. By
creating products that improve the efficiency and competitiveness of
the Nation's engineering and construction industry and providing more
cost-effective ways to operate and maintain infrastructure, Civil Works
Program research and development contributes to the national economy.
The National Defense
Internationally, the U.S. Army Corps of Engineers remains committed
to the monumental task of helping to rebuild the infrastructures and
economies of Iraq and Afghanistan. Corps' Civilians and Soldiers
continue to make progress toward this Nation's goals of restoring the
security and quality of life for all Iraqis and Afghanis as they pursue
democracy and freedom.
More than 1,700 USACE volunteers have deployed to Iraq since 2003.
The Corps' Gulf Region Division has overseen the initiation of nearly
3,000 reconstruction projects and the completion of more than 2,100.
These projects make a difference in the every day lives of the Iraqi
people, and are visible signs of progress.
In Afghanistan, the Corps is spearheading construction projects for
the Afghan national army and national police, supporting USAID, and
executing important public infrastructure and humanitarian projects.
CONCLUSION
The Corps of Engineers is committed to staying at the leading edge
in service to the Nation. In support of that, we are working with
others to transform our Civil Works Program. We're committed to change
that leads to open, transparent modernization, and a performance-based
Civil Works Program.
Thank you, Mr. Chairman and members of the committee. This
concludes my statement.
Senator Domenici. Thank you very much.
Now, I want to make a little announcement which I think we
all know up here, but let us make sure you know out there. The
Majority Leader has indicated to us Republicans that at 3:15 he
would like all Republicans present on the floor of the Senate.
He is going to address the issue that is before the Senate. And
we will try to be there. That is not mandatory for you all.
Senator Dorgan. Is it advisable?
Senator Domenici. It is whatever you will do.
What I would suggest, if you have no desire to go down and
be part of that, I am willing to say you proceed if you be
careful and do things right, and I am sure you will.
Now, we are going to--with your permission, I think we are
going to use the time between now and 3:15 without yielding to
you all and then give it to you. Everything will turn off. When
we give it over to you, it will turn off 15 minutes after you
take over. It will turn off, everything. So you will have 15
minutes also. I am kidding you.
The two Senators on this side, you want to split a little
time and leave me a little at the end?
Senator Allard. I do not think I will take too long. I just
have two or three important questions.
Senator Domenici. Proceed, Senator.
Senator Allard. I want to get back to this Fountain Creek
Watershed Study in Colorado. How much has been expended by the
Federal Government to conduct that study to date?
General Strock. Sir, we have spent $65,000 through fiscal
year 2003.
Senator Allard. Not anywhere near a match of 50 percent of
what local governments have spent, is that correct?
General Strock. Yes, sir.
Senator Allard. Please share with me how you set priorities
for the budget and why the funding for the Fountain Creek Study
wasn't included this time around?
Mr. Woodley. Senator, in general the priorities within the
general investigations account were set in accordance with the
same priorities that are used with respect to the construction
account, on the concept that the one would lead into the other.
But this year our general investigations allocation was very
severely constrained because it was largely devoted to two very
large efforts that we are undertaking, one with respect to the
Louisiana Coastal Area Restoration Study and the other is in a
$20 million request for a nationwide study and inventory of
flood control structures, and in particular levees. So that put
enormous constraints and very, very many very worthy studies
were not able to be included in this year's budget request.
Senator Allard. Is that the same problem we are running
into with the tamarisk removals? There are tamarisk removal
projects I think all over the West. It is a water-drinking
tree.
Mr. Woodley. Yes, sir, I am very familiar with salt cedar.
Senator Allard. And you do not have any plans to conduct
any more of those removal projects in the West?
Mr. Woodley. I would have to get back to you on that. I
will tell you that I would advocate for that. That is a very
important--and indeed, the chairman and I have visited the
Bosque in his home State, in which a great part of our effort
that is ongoing along that watershed at Albuquerque is to
remove the tamarisk salt cedar. It is something we are finding
all over our properties and I think I would advocate for a
concerted national effort to rid our areas of that.
Senator Allard. I think that is going along the Rio Grande
in New Mexico. We have got the Rio Grande in Colorado and we
also have the Arkansas and Colorado Rivers. So I am
particularly interested in your responding as far as the
Colorado projects in the West. I would like to get that
information when you get a chance.
Mr. Woodley. Absolutely, yes, sir. I will get back to you
on that.
Senator Allard. Very good.
Then I will stop right there, Mr. Chairman, so you and the
other members can----
General Strock. Senator, if I could quickly amend my answer
to you. The $65,000 I cited was through 2003, but since that
time, in 2004 and 2005, we have had a total of $937,000 against
the project.
Senator Allard. Nine hundred thirty-seven thousand dollars?
General Strock. And in 2006 $125,000, for a total of
$1,032,000, which is matched by the State, and that is where we
are now.
Senator Allard. Yes, okay. I appreciate that. Thank you.
Senator Domenici. General, I am going to talk about Katrina
a little bit. I am sure that the distinguished Senator from
Louisiana is going to follow up on a lot of this, but I want to
go through as much as I can, and what I do not get through I am
going to submit to you to answer.
First of all, General, can you give us a quick status
update on the current rebuilding efforts?
General Strock. Yes, sir. Currently our main target is by
June 1 of this year to have the entire system restored and
repaired to where it was when Katrina hit, and we are on target
to do that, sir.
Senator Domenici. I have been told that the United States
Geological Survey says that the storm surge from Hurricane
Katrina is the greatest recorded storm surge to ever hit the
United States. Can you confirm this was in fact a large
hurricane that struck, contrary to what may have been said? And
is that, is what I have just said, true?
General Strock. Sir, I cannot personally confirm that. I
have heard that cited, but I have not heard that directly from
the USGS. But I do understand that is the case. I know that it
was such a large system and storm surge, that it destroyed most
of the gauges that would tell us what actually occurred.
Senator Domenici. So do you think the USGS can confirm this
or do you think they cannot, what I have just said?
General Strock. I am sure they can, yes, sir. I have
absolute confidence in the USGS, yes, sir.
Senator Domenici. If we want that we should get it from
them?
General Strock. Yes, sir.
Senator Domenici. Along with everyone else, I have read
articles from various experts about the levee failures in New
Orleans. Most of those experts have indicated that the Corps
was aware of potential problems with the levees as designed and
constructed. Further, there has been considerable comment that
the levees should have withstood the effects of Katrina.
General, I need to know from you, what is the Corps'
response? Is there any fire to go with all this smoke or is
this speculation from self-described experts without access to
real concrete data?
General Strock. Sir, that is a tough one to answer. I think
that if you look at the history of these projects, the Lake
Pontchartrain study, which is the one, the project which
actually failed during the event, was authorized in 1965, so
there have been literally generations of people involved in
this. To say that at some point in this there may have been
some concerns expressed about adequacy of designs and so forth,
I really do not know.
I can tell you that as an institution we were not aware of
any particularly hazardous situations. Each time we are
confronted with that, we do look into that and ensure that we
did not have previous knowledge of any potential
vulnerabilities in the system.
Senator Domenici. Can you give us for the record a brief
overview of the findings from the inter-agency performance
evaluation team to date?
General Strock. Yes, sir. For the record or here, sir?
Here. Sir, I would be happy to expand in the record, but I can
tell you that we have gotten to the point now where the IPET
has reached some conclusions about the performance of the
system. Specifically, in the 17th Street Canal area we have now
concluded that we did have a problem with the design of the
structures there, something we had hoped would not be the case,
but now must confront that as a reality.
That finding is being reviewed by the American Society of
Civil Engineers and we expect their response to that soon. So
that is one of the most significant findings to date.
Other findings that the IPET has arrived at have to do with
the storm surge in the Mississippi River gulf outlet, ``MRGO,''
and the conclusion on that is that it does contribute to some
degree in storm surge on the inner harbor, but to a very small
degree. Point-two of a foot is being attributed to MRGO and I
think that is an important aspect to consider in the future.
But sir, the most dramatic conclusion is that, yes, we had
a design problem and that there may be other elements in the
system designed along that way that need to be addressed.
Senator Domenici. As I understand the current situation
concerning the levee rebuilding, funding provided through
enacted supplemental appropriations will complete the levee
system as currently authorized. This includes rebuilding levees
to the authorized levels, that is to the authorized level of
protection, I should say, as well as repairing non-Federal
levees and pump stations. This system was not completed before
Katrina; is that correct?
General Strock. Sir, the system was not completed before
Katrina. There are several projects involved in this, about six
in all. Our estimate is that we have sufficient funding to
complete those systems by September 1, 2007, and with the third
supplemental to provide some enhancements like those you
discussed.
I must caveat somewhat, though, sir, because the IPET
results call into question the flood walls that we are using,
we may have to replace some of the flood wall sections.
Replacement of flood walls is not currently in our current
estimates, with some small exceptions in the inner harbor area.
So there may be an additional requirement to rebuild flood
walls as we get into this. But generally speaking, we feel like
we have sufficient funding.
Senator Domenici. I am not going to have time to go through
this very difficult and bothersome issue of the $6 billion
authorization that has been alluded to by Director Powell and
what should be done with it. Suffice it to say that I will
submit to you three, four questions regarding that whole
situation. Would you answer them as soon as you can?
General Strock. Yes, sir.
Senator Domenici. Then I have a number of questions on
continuing contracts and reprogramming, which were very
difficult for us to handle in this budget. We had a very hard
time as we tried to put it together. I will submit those to you
and you can answer them as soon as possible.
General Strock. Yes, sir.
Senator Domenici. Now, having done that, I am going to
yield the gavel to you, Senator, and you do it as you see fit
between the two of you, and we may return and we may not. But
would you close it if we do not?
Senator Dorgan. Senator Landrieu, what did you want to say?
Senator Landrieu. Before Senator Domenici leaves, I just
wanted to thank him for his focus on this Katrina-gulf coast
issue. He has really been focused, as has his staff, with
trying to come up with solutions as well as suggestions. So
thank you, Senator, and I will have some others to follow up.
Senator Domenici. I did not mean to be critical. The
General understands. These questions I am asking have to come
out and we have to decide how to fix this, and it is very
difficult to explain to the public and we need your help in
explaining it. The authorized level and all this business, it
does not mean much to people, but it is very, very much the
order of the day for us on where we spend, why we spend, what
we did not spend. So we need to work together on it.
General and Mr. Secretary, thank you. Thanks for your help
in New Mexico, too. I skipped over that. Particularly, I thank
you for the Acequias funding. Since you funded it, I am not
going to ask you whether you can say it or not. Normally I try
to find out if you can pronounce it, but if you can put the
money in I do not care whether you can pronounce it or not.
Thank you very much.
General Strock. Thank you, sir.
Senator Dorgan. Senator Domenici, thank you very much, and
we will ask our questions and then adjourn the hearing, after
we have done some legislative business.
Senator Landrieu. You do it, we will fix it.
Senator Dorgan [presiding]. At any rate, we appreciate the
courtesy of Senator Domenici.
Let me ask a couple of questions, and state first that at
the moment the Red River is running north. It is flooding, well
above flood stage at Wapaton, crested now, we believe,
yesterday in Fargo. It is now being steered through the city of
Grand Forks.
This budget requests the final $12 million for the flood
control project in Grand Forks. We appreciate that. We have
spent a lot of money on flood control projects up and down the
Red River. That is I think a success story for the Corps of
Engineers and we appreciate very much the work the Corps has
done and believe that this is the last contingent of money that
is required to complete the Grand Forks flood control project.
So I want to say, especially in areas where we have seen really
excellent work by the Corps, that we appreciate that, because
we are experiencing this flood. I think it is the third highest
in history, these crests, not so far from the 1997 crest in
which the entire city of Grand Forks was evacuated. It is a
pretty aggressive flooding.
Let me ask General Strock and Secretary Woodley about a
parochial issue, but nonetheless an important one, the Fort
Stevenson Marina Project at Fort Stevenson in North Dakota. The
Corps of Engineers built a marina at Fort Stevenson and in half
of the years you have not been able to see the water from the
marina, so it has been unusable. I have been up there many
times.
We finally created a circumstance where the Corps said they
will move over--it is about 1 mile--and do a deeper water
marina. It is not something that would break the bank, but the
Corps made a commitment to do that. They were going to
reprogram funds to do it. Now I think there is a question of
whether the Corps is prepared and willing to proceed.
Can you tell me what the current thinking of the Corps is
and what your commitment is?
General Strock. Sir, what I do have on that is that we
estimate that it is about an $11 million requirement to
accomplish the movement of the marina. And yes, water is down,
as it is throughout the northern reservoirs. And I would
assume, since we have identified the cost associated, we feel
like we can do it. But we simply do not have the money to do
that now.
Senator Dorgan. When Mr. Rob Vining was making the
commitment on behalf of Corps, he talked about using
reprogrammed funds.
General Strock. Yes, sir.
Senator Dorgan. It actually was $5 million. Back then the
cost was around $5 million or $6 million to do this. I do not
know how the Corps has gotten this to an $11 million project.
But the problem is these folks have a marina that's unusable.
It is the Corps' marina. The regulation of the water--instead
of retaining water in the upper reservoirs, we have been
flushing it out so that my friend from Missouri can run his
barges down south. So folks who want to use a marina at Fort
Stevenson do not have a marina to use, and moving a very short
distance would give them a deep water marina and it would not
cost a great deal. The Corps of Engineers actually built the
first one. We have not been able to use it every other year.
So it seems to me the Corps has a responsibility to provide
the money to move this.
General Strock. Sir, I can certainly provide you a better
informed answer for the record on why the cost has shifted. If
we are relying on reprogramming, I think you understand the
limits on reprogramming right now that have been placed on the
Corps, and it is very difficult to find both sources and then
get approval of moving money. That may be a factor in not being
able to move ahead on this.
Sir, we certainly recognize the challenges of the drought.
It has been going on for many, many years and we are trying to
operate the system in accordance with the master manual, which
has been recently revised and approved. And we do know that it
does cause problems for everyone in the system, not just the
upriver States but the downriver as well.
Senator Dorgan. Well, General, I am going to submit a list
of questions about this. But I do think the Corps has a
responsibility at Fort Stevenson and I do not know how you meet
it. We have a presidential budget now that cuts $0.5 billion. I
know you are getting some emergency funding, but in terms of
regular funding a cut of $0.5 billion when you have unmet
needs, you have commitments that have been made that are not
now apparently going to be kept, that is a pretty
unsatisfactory response to tell to the folks up in the northern
part of the reservoir.
The upstream benefits of tourism, recreation, fishing are
ten times the size of the downstream benefits of barging, and
yet we continue to see that water rush out of those gates
headed downstream.
You and I have more to talk about, I think, as well as the
Secretary, about how we meet the responsibility to the people
who have been told by the Corps that the Corps would move that
Fort Stevens marina.
General, let me talk about a subject that you are not going
to want to talk about at all. But I have tried to do this by
submitting questions last year. I have tried to do this by
letter to you, and I have never gotten a satisfactory answer.
That is the Bunnatine Greenhouse issue and the Rio contracts.
I have as a result of magazine reports of what has happened
at the Corps of Engineers, I have held policy committee
hearings. Ms. Greenhouse has testified. She has been demoted,
perhaps for that testimony or perhaps for other reasons, but
she has been demoted. And she has said that--let me read her
quote--``I can unequivocally state that the abuse related to
the contracts awarded to KBR, a subsidiary of Halliburton,
represents the most blatant, improper contract abuse I have
witnessed during the course of my professional career.''
It takes a lot of guts for somebody to say that. She was
given excellent recommendations all along the way during her
career, a remarkable public servant. People outside of your
agency who know about contractors tell me that she is a first-
rate contract official in the Corps of Engineers. And for this
candor she has lost her job, been demoted.
I know there are legal issues in the Pentagon. You probably
cannot respond to the legal issues, but you could respond at
least by letter to me, and you could respond to the questions
that I propounded last year during the hearing about what is
going on here.
I assume that you will probably want to say that she is
wrong, there are no contracting abuses. I assume also that the
inspector general is looking into all of this. What has been
appearing in the popular literature, magazines and others,
about this situation is deeply troubling to me--the RIO
contract, the LOGCAP contracting, substantial evidence of
abuse, waste, and even fraud in sole source no-bid contracts in
Iraq.
I have tried, both in letters and in submitted questions,
to get candid responses from you and have been unsuccessful.
Can you tell me why?
General Strock. Sir, first of all I need to make sure that
we have responded in a timely way to your questions, and I will
have to go back and look at those responses. There are limits
to what we can talk about in this and one of the most important
aspects of this entire thing--and this may sound somewhat
contradictory to the situation you just laid out--is that we
have an obligation to respect the rights of the individuals and
privacy of the individuals here. So my ability to talk about
specific reasons for actions we took is very, very limited.
Therefore I must simply say that we have a process that is
very important to us. We followed the appropriate process in
disposition of Ms. Greenhouse's case. And I think that has been
reviewed on multiple times. She has been----
Senator Dorgan. If Ms. Greenhouse would waive those
provisions, if she would waive that and allow you to say
whatever you wish, would you be willing to do that?
General Strock. If that is possible, sir, and it was done
in the right kind of way and I was cleared to do that, yes,
sir, absolutely. I would be happy to do that. But it is all
about protecting her privacy.
Sir, in terms of the allegations, I can talk about those a
bit. I was personally involved in many of those decisions and
can look you right in the eye and say that we followed the
rules that were in existence at the time to make all those
calls. The Government Accountability Office has reviewed the
award of those contracts and has found that they were done in a
proper fashion. The Army Inspector General has also conducted
an investigation. The DOD Inspector General has also conducted
investigations. And to date we have not had any indication that
things were not done properly in the award of those contracts.
There have been many questions about the actual delivery of
products and services under those contracts and in most cases I
think the Government has shown to have acted in a reasonable
and appropriate manner in adjudicating claims paid and all that
sort of thing.
So this entire thing has been looked at in many, many ways
and many times and so far the results are that we did things in
the proper way.
Senator Dorgan. Well, General, I also have looked at some
of them and had whistleblowers come and testify and it
contradicts that answer. Food service, water quality. I will
give you an example. I do not know whether you had these, the
water quality contracts, on the bases. Was that yours?
General Strock. Sir, I did not. This particular contractor
has a number of contracts. One of them is the LOGCAP contract,
which is managed by the Army Materiel Command, which provides
for sustainment on military bases. Our contracts had to do with
the reconstruction of the oil industry, so the food and water
issues that you cite were not part of our contracts.
Senator Dorgan. Yours were the RIO contracts?
General Strock. Yes, sir, ours was RIO.
Senator Dorgan. I just observe on the LOGCAP contracts that
both the Department of Defense and Halliburton have been
dishonest publicly about that. We now have internal documents
from Halliburton that show that the responses by DOD and
Halliburton were not honest.
General Strock. And I cannot speak to that, sir.
Senator Dorgan. My understanding from the inspector general
on the issues surrounding the allegations Ms. Greenhouse made
is that there has been a referral to the Department of Justice
for a criminal investigation. Is that not accurate?
General Strock. Sir, I do not know that. I know that there
are a number of proceedings related to her case that are going
on right now and I am involved in some of those. But I do not
know if they have risen to the level of the Department of
Justice.
Senator Dorgan. I believe the inspector general has told us
that in a letter.
My point is not to badger you about this, except that there
are questions that demand answers. The American people demand
answers.
General Strock. Yes, sir.
Senator Dorgan. We are spending an enormous amount of money
on these projects, contracts, the RIO contracts, LOGCAP
projects, feeding troops, providing water to troops, equipment
to troops, oil. The fact is there is a substantial amount of
evidence there has been dramatic waste and abuse and in my
judgment fraud. The Custer Battles issue comes to mind. I am
not going to lay all this on your shoulders, but I am telling
you it makes me sick when you take a look at what is going on
and the waste of money, and nobody seems to care very much.
All I am asking is that, with respect to those issues under
your jurisdiction, that you respond fully to the questions we
are asking. And if you cannot answer, I will ask Ms. Greenhouse
if she will provide a waiver so that you can give us all the
information.
I know that you are going to leave this room and mutter
things that I probably should not say out loud under your
breath, because this is not what you want to hear at this
hearing.
General Strock. Sir, not at all. If I might, not at all. I
share the same concerns you do. We have to treat people in the
right ways, and I think we have done that. So no, sir, I am not
going to mutter anything on the way out of the room.
Senator Dorgan. One other question. The person that has
been noticed in at least one publication to replace Ms.
Greenhouse it appears to me has no contracting experience.
General Strock. Sir, her replacement is Ms. Sandra Riley,
who has come to us after about 40 years of Government
experience. She did serve as a head of contracting agency,
which is the same level of responsibility that I have within
the Corps of Engineers, and she managed all the affairs for the
Department of the Army and the Pentagon related to that.
It is true that she is not an acquisition certified
professional under the Defense Acquisition Improvement Work
Force Act. But she has been given a waiver for some of the
criteria and she has gone to school and is currently being
brought up to speed on what it is she needs to know as a
contracting official.
She is really coming to us as a change agent, sir, which
she has a reputation for in the Army, and she brings us
leadership. It is part of the Army's intent that, like our
general officers that can serve in many capacities, our senior
civilians are expected to be true corporate leaders as well and
do not necessarily need the specific experience and credentials
of the particular area of the government that they are working,
that they have oversight for.
Senator Dorgan. General, with due respect, that seems
illogical to me, to have to bring her up to speed with respect
to knowledge. My colleague here from Louisiana has just
experienced FEMA's failures. Seven of the top eleven positions
in FEMA were staffed by cronies, I am sure who had good
management experience, but did not know a thing about emergency
response. So you put cronies in positions for emergency
response, they did not know how to respond to an emergency.
I am just making a point that Ms. Greenhouse, fairly or
unfairly--I guess ultimately the facts will judge this--lost
her job, was demoted, for speaking out about what she perceived
to be abuses. She regularly had excellent recommendations,
excellent performance evaluations, year after year, but has now
been demoted and replaced by someone who has no experience or
no substantial knowledge in contracting. That just seems
unbelievable to me.
General Strock. Yes, sir, I would not characterize her as
having no experience, no substantial knowledge, but she is not
certified as an acquisition professional at this point, that is
true.
Senator Dorgan. Well, we have more to exchange on that and
I will do that by letter, General Strock. I hope and expect we
want the same thing, that we want accountability and we want
facts to speak for themselves.
Let me close then on a positive note so that I can tell you
again, we have--we are a semi-arid State. North Dakota would
hold ten Massachusetts in land mass. We are a big, big State,
and 642,000 people spread out. We have got a big Missouri River
running in one part of it and we have got a Red River running
north.
We have a lot of water issues. We have got a flood in
Devil's Lake that came and stayed, and it is a huge problem. We
have got the need to move water from western North Dakota to
replenish the Red River in times when it does not have enough
water. At the moment it is busting out of its banks and
flooding in three large communities.
So having watched the Corps of Engineers in 1997 in action,
I can tell you that the performance of the Corps to do well is
critical to our surviving during floods and surviving during
droughts. I have not talked at great length about the
management of the Missouri River today, but that also is a
significant part of our angst.
But you have men and women working for the Corps of
Engineers that work day and night at times when we are in
crisis, and I hope you and the Secretary will communicate to
them our appreciation for that. I know they are doing that now
up and down the entire Red River valley and we want you to tell
them thank you on behalf of a grateful citizenry.
General Strock. Sir, thank you very much.
Senator Dorgan. Senator Landrieu.
Senator Landrieu [presiding]. Thank you, Senator Dorgan.
Mr. Secretary and General Strock and others, I want to
begin by acknowledging that you have been down to Louisiana,
Mississippi, and the gulf coast many times since Katrina and
Rita and the multiple levee breaks that ensued, and you have
sent extra support and been attentive to our requests. So I say
that just to acknowledge that in my view you personally have
done what you can.
But my questions will be about the constraints that you are
operating under, which I think are very serious and actually in
fact put the Nation at risk. I want to start with you,
Secretary Woodley, if I could. Could you just for the record
before this Appropriations Committee that has the task of
funding critical civil works projects for energy and water for
the country say again clearly for the record what we are going
to be able to fund this year and what we are not, based on what
is the backlog of authorizations? And if you do not have that,
I think General Strock or others might.
What is our current backlog of authorized critical projects
that is not going to get funded based on the budget that you
have submitted?
Mr. Woodley. Senator, I want to preface what I say, I think
I understand what you mean by the backlog. It is a term, it is
a sort of a pejorative term for these, that I try to avoid
because I regard those projects not as being projects in some
kind of backlog, but rather it being opportunities that exist
for investment on the part of the Nation in water resource
development.
Senator Landrieu. That is fine. Then what are the
opportunities that we are not funding?
Mr. Woodley. I believe that we have something in excess of
400 different projects across the country that are eligible for
Corps funding, and of those I believe that about 90 to 100 are
actually receiving funding in the President's request.
Senator Landrieu. With the number about $44 billion be
about accurate, $44 billion, opportunities that are not funded?
Mr. Woodley. That might--well, of course that would not be
in any given year. That would be the total build-out for the
entire amount.
Senator Landrieu. That is correct.
Mr. Woodley. But I cannot confirm the number, but it would
not surprise me.
Senator Landrieu. Well, let me then try. I am going to say
a number and if you disagree with me for the record then you
can get back in writing. But basically our records reflect, my
records reflect, that we have about $44 billion in--let us use
your word--opportunity to protect Americans from flooding, to
promote navigation and economic development, and to protect
wetlands, coastal restoration, et al., as described in the
charge.
And the way that I look at it and many Members of Congress
is we are about $42 billion short, because in this budget we
have approximately $1.5 billion for new construction, then x
few billion for operations and maintenance.
But I want to focus on, because all the hearings are, as
you testified, we have 5 percent more money than last year.
Since the last year number is irrelevant to the people that I
represent, 1,200 of whom who have lost their lives because it
was too low, 5 percent more does not have any relevance to me
or to the people I represent or to the gulf coast. So I am
going to try to focus us on what the real pending crisis is.
That is that this budget is so far short of where this Nation
needs to be in investments in civil works it is almost in my
view not worth discussing.
For the record, I want to be clear that there is 44--before
we pass the next WRDA bill, which 88 of us have signed on to
get passed, which will add how much, $10 billion to $13 billion
in new authorized projects which everyone is clamoring for, we
have $44 billion worth of projects that do not have a penny
allocated to them in this budget.
Now, that is the first point. The second point I want to
make is I want to show you a little chart of why this is of
significance for the country. I am going to provide this to the
members. This is a chart that I got from the National Civil
Works--American Civil Works Society. You can see it goes back
to 1929. This is 2004, I guess. This is where the levees broke
in New Orleans, the bottom of this long, dangerous,
nonsensical, irrational, irresponsible, funding level. This is
where they broke.
You can see what happened in the early part of the century,
and even just going back as recently as--this is a percentage
of GDP. This is the investment gap in America today just on
civil works. But it is not just civil works; it is all water
projects, all flood control projects in the country. And this
is a disgrace. This budget is a disgrace because of that.
The paragraph that introduces this budget I would like to
read, is an insult to me and the people that I represent: ``The
fiscal year 2007 civil works budget is a performance-based
budget which reflects a focus on the projects and activities
that provide the highest net economic and environmental returns
on the Nation's investment or address significant risk to human
safety.'' That is an insult to the people I represent because
it is a lie, because it does not.
Now let me ask you this question. When the Corps conducts a
feasibility study on hurricane protection projects, does the
current law direct you or indicate to you that you have to
conduct that feasibility study for life and property, or is it
just for property? Do you take human life into your
calculations, technically? Do you do, General Strock? To
General Strock or really to the engineers. Go ahead.
General Strock. Not per se, ma'am. We do not take that in
as a factor. We use sort of a surrogate for that, which is we
do consider economic development, and typically where there is
economic development there are people. So the main driver is
economics and tradeoffs there.
Senator Landrieu. I just want to call to the attention of
this committee that that is something that we are going to have
to take a look at, because this comment about human life, human
safety, is a stretch based on the fact that it is just
extrapolated from economic data. So some of us are looking very
closely at asking for human life to be a calculation in these
studies because it may have a direct impact then on whether
some of this gets built or not.
But that is why I take issue with this, because it is not
included right now--I know that for a fact--in your
assumptions.
General Strock. Ma'am, if I could just modify a bit. That
is not our traditional method of valuing human life and human
lives exposed, but this year we do have a criteria in the
budget that for a given likelihood of an occurrence for a
certain amount of flows, for the density of populations, we do
consider projects as high-risk projects. It has to do with
warning time, people in the flood plain, potential depth of
flooding and velocities.
So this year in looking at high risk projects that should
be supported, we have taken that into account.
Senator Landrieu. Well, I appreciate you taking that, that
extra step, because in the current laws, which we are going to
recommend be changed, that has not been in the past
calculations. And besides these numbers being low, that is also
a critical component, with populations moving closer and closer
to water, whether they be coasts or along great rivers or
lakes, et cetera. It becomes a real serious issue that makes
these numbers that are pretty devastating even worse.
Let me ask for some clarification on the $6 billion, and
whoever can answer this the best. Last week our administration
received what I consider a bombshell of an additional $6
billion that is needed to meet the current authorization levels
or the current safety levels or the certification, if you could
explain which of those it is. How did you arrive at that figure
and do you think it is accurate for southeast Louisiana? And I
do not know who wants to take that. Maybe General Strock. You
conducted the--
Mr. Woodley. Actually, Senator, that figure had to do with
the question that was raised to the Corps at the local level,
at the district, on making assumptions with respect to the base
flood elevation that may eventually be determined by the FEMA
for the new flood maps. The question there was, can you give us
a rough order of magnitude, a very-swiftly-arrived-at estimate
of what the outside cost to raise those levees by a certain
amount might be.
We have--the only thing I can tell you is that we answered
that question. Those figures have been--are being refined even
now, so I would not----
Senator Landrieu. So you are saying, you are saying that
FEMA requested that information of you?
Mr. Woodley. Yes, ma'am.
Senator Landrieu. FEMA requested that information. How long
did they give you to--when did they request it? And when you
said you hurriedly put it together, did you put it together,
General, in 2 weeks or 3 weeks or 5 weeks?
Mr. Woodley. I would say perhaps even less than that. I am
not exactly sure of the precise chronology, but it was a very
swift question. It was based on, as far as I understand the
estimate----
Senator Landrieu. Did you take more than 48 hours to put it
together? General, try to testify. How long did it take you to
put that together----
General Strock. Yes, ma'am. If I could just back up a bit
and talk----
Senator Landrieu [continuing]. And is it accurate?
General Strock [continuing]. About the process here. Mr.
Woodley cited the base flood elevations, which determine the
100-year flood plain that is identified by FEMA. We participate
and support FEMA with hydrologic studies to determine just what
that flood plain should look like. So we are a supporting
agency to FEMA in making that determination.
We all recognize that after a storm of the magnitude of
Katrina that it would impact the base flood elevations that
would be applied post-Katrina, because Katrina is such a
massive storm that it really influenced the record which is
used to determine that.
It was about the November time frame, I think, when we
concluded what those base flood elevations should be, and in
fact we have issued those advisory notices in all the counties
and parishes along the coasts that were impacted except for the
four in the New Orleans area. We did not at that time go
forward because the initial feeling was that it was such a high
elevation that it would make a dramatic impact. So what we
asked is that we should delay the issue of those base flood
elevations until we had time to really do some more refined
analysis, and then also to consider the impacts.
In the process, we determined that, given the base flood
elevations that we arrived at, we could not certify most of the
levee system around New Orleans to a 100-year level. It was not
an important question on the gulf coast in Mississippi because
there are no levees to certify. It is what it is. But when you
are behind a levee, if you can certify the levee to a 100-year
it essentially takes out the people and infrastructure behind
that levee, it takes them out of the flood plain.
So our ability to certify levees was then an important
question. As we did that analysis, we determined that in most
cases we could not certify the levees to 100-year protection
levels, which essentially puts everybody in the flood plain and
they act like the levee is not even there. So it has tremendous
implications.
As a result of that, we were asked what it would cost to
raise the existing projects to 100-year level, and the number
that Chairman Powell put out last week was a preliminary
estimate which we are continuing to refine. I think that you
will see at such point as a decision has been made on this that
you will see that estimate should come down somewhat.
Senator Landrieu. Okay, I accept that and I know that this
number can be refined. We are actually hoping that it is
refined. It is hard to get any money around here, let alone $6
billion, so we are hoping it can be refined.
But I just want to press this for just a minute. You said
1-in-a-100-year flood. Would that roughly equate to category 2,
3, 4, or 5 roughly? I know they do not match up, but if you had
to chart it what would it be?
General Strock. I cannot answer that. I am not sure there
is a direct correlation between the flood plain and the
categorization of storms. What that tells you is that in that
area that there is a 1 percent chance in a given year that you
will see a storm of that magnitude.
Senator Landrieu. What do we have now in the other parts of
the city? Is that the same 1 percent in 100 years?
General Strock. Ma'am, about--well, first of all, I think
70 or 80 percent of the city is already in the flood plain.
This just adds more to that.
Senator Landrieu. That is not what I am asking, what is in
the flood plain. I am trying to ask--I am trying to establish,
so I can compare apples to apples--the $6 billion which you
have recommended, which will be refined, let us just say it is
refined to $4.5 billion. That number, whatever it ends up
being, is going to build category 2, 3, 4, or 5 levees around
the areas that you have proposed, just roughly? There is no way
for you to say whether they are 2's, 3's, 4's, or 5's?
General Strock. I truly cannot answer that. I think that we
are wrong in trying to describe these systems in terms of the
category of storms they can protect against. That has been one
of the challenges throughout, that we simply do not build the
category system for hurricanes----
Senator Landrieu. It may not be the accurate way, but I can
tell you one of the things that I am going to press very hard
as a Senator is to have some way. It does not have to be a
category 1 through 5. It does not have to be 100 to 10,000. But
I have to have some way to explain to people that the levees
are going to be either 1 foot, 4 feet, 5 feet, or protect them
from x.
So I suggest if you do not like the way we are doing it,
General, we have to come up with a way that is clear to people,
that is transparent, that everybody understands, like this is a
$1 bill, you know what a $1 bill is; this is a $10 bill, this
is a $100 bill. We cannot give you a $100 bill; we are giving
you a $1 bill. People are clear.
We need that, so it does not matter to me. So I am going to
leave that there, but I have to come back to this question. But
let me try, without having the benefit of any levels or any
storms, just say, ask you this way. Whenever we get this dollar
amount, if we do not get this dollar--let me just put it this
way. If we do not get this dollar amount that will be refined,
what happens to those areas in four parishes? They either have
to build up to about what height or what? You said--you did not
release the heights. I am not asking you to. But the general
height, is it 13 feet or 20 feet or 25 feet?
General Strock. I would have to get back with you, ma'am.
It varies by where you are in the city.
Senator Landrieu. Could you give just a range of those four
parishes that you looked at? I know you have it in your data.
You had to have it.
General Strock. Early on, I think in the November time
frame, it was about 17 feet, something like that. The challenge
here, ma'am, is that if the levees are not certified to a 100-
year level then FEMA acts as if they are not there at all. The
fact is there are levees providing protection and you are not
going to be fully inundated because there are levees there.
What we are trying to do to articulate the level of risk is
to show levels of inundation in a Katrina-like event that would
occur on June 1, 2006 when we complete our current work, what
we would see on September 1, 2007, and then, if we certify it
at 100-year and we build the levees to that, what people could
expect in different parts of the area in terms of depth of the
water.
That is how I think is the best way to articulate the risk
associated with this.
Senator Landrieu. Well, that may make sense to you,
General, but we are struggling with trying to make that sense
to 3 million people that live in south Louisiana and just need
to know whether the hurricane levees are going to be at a
category 3, 4, or 5 or some equivalent of that and whether it
will work or not.
But I am going to leave the testimony at: you are refining
the number, it is a real need for these four parishes, and you
have not requested it in the budget.
General Strock. That is correct.
Senator Landrieu. Secretary, can I ask you, does the
President have any intention of requesting this or what do you
think the status of that is?
Mr. Woodley. I believe that that is a decision that has not
yet been made by the President.
Senator Landrieu. So we still can remain hopeful that
perhaps it might be forthcoming. I will just remain hopeful
today.
Mr. Woodley. Yes, ma'am.
Senator Landrieu. Is there anything that you--I just wanted
to--I have 100 questions I could ask, but I wanted to try to
hone in on the $6 billion, on the study, and on the general
lack of funding, which I will conclude by saying that because
of that chart I would suggest that Katrina and Rita have, I
hope, ripped away the curtain of complacency, that we have had
a false sense of security in this country about the investments
that we are making. They are not adequate, and if we do not
find a whole other paradigm we just cannot not only protect the
people along the gulf coast, but we are investing so little of
our gross national product in what I would think are essential,
essential civil works projects, for not just trade and commerce
but for humans, safety of human life. And the safety and
protection of billions of dollars of investments that we have
made all along the coast and all along the great river systems
and all along the great lakes systems of America are at great
risk, because this line is about off the chart. You cannot get
much lower than where it is. You literally cannot go any lower
on the chart. You would be off the page, down to zero. Would
you hold it up again?
There is nowhere down to go. And it represents less than, I
think, one-tenth of what we spent in 1929 or 1930 and one-sixth
of what we spent in the 1970's.
This is what our delegation, just in conclusion, has been
looking at, this precipitous falloff, and thinking we have a
coast that has to be saved, wetlands that are washing away at
an alarming rate, levee systems that are underfunded and
underdesigned, and systems that have to give added money.
So we have got to change this, and we have recommended for
us a solution is getting revenue, offshore oil and gas revenue,
to start investing in the gulf. We have even recommended
sharing that with the other States to help them. Of course we
have been rebuked. We cannot do that. So now we are down to
just trying to find for Louisiana, Mississippi, Alabama, and
Texas a new source of funding to help get these civil works,
essential civil works projects, up.
Because I said, this is where the levees broke. It is just
a matter of time until they break again some other place
because we are not investing nearly the money that we need to.
In all fairness to this administration that I have been very
critical of, this did not start with the current
administration. It has been going on quite a long time.
But I would say one final thing. The reason I am remaining
somewhat critical is in these years we did not always have
surpluses, but when we had surpluses we chose to do something
else with them, and funding of civil works was not one of them.
So we have a lot of work to do on this budget. Senator
Domenici has been very, very kind to let us go on. But the $6
billion issue has to get resolved. The way we define levee
protection, you pick a way, tell us what to do so people
understand it. Then the overall budget number for this budget
is something we are going to have to work on.
Do you want to add anything before we conclude?
General Strock. Ma'am, the only thing I would add is, one
of the ways that we can get at the business of articulating
risk is using the money that you gave us in the third
supplemental to create a national levee inventory and database,
and this budget also requests additional funds for that. That
would allow us to capture all the levees in this country from
private through Federal and then to build a model that would
allow us to articulate risk and reliability associated with
those, and that will really frame the problem and the potential
for investment and help us set priorities. So I think that is a
wonderful step that needs to be done.
Senator Landrieu. I thank you, General, for raising that. I
wanted to get a status report. I would just ask you to submit
it in writing, not to take any more time. But I am glad we were
able to get that study in for the Nation, because then you are
given an opportunity to present to the Congress the real needs,
and then it is up to Congress to decide and this
administration, are we just going to not fulfill our
responsibilities, pretend like it is not a real risk, hope we
do not get any more hurricanes, pray no river goes over its
boundaries?
I mean, this truly is a Nation at risk right here at home.
And I know we have risk around the world and I am cognizant of
what we are doing in Iraq, but I hope that the study--and you
should be finished with that when? I think it was June?
General Strock. There is a preliminary----
Senator Landrieu. A preliminary in June.
General Strock. August.
Senator Landrieu. In August. Preliminary in June and then a
final in August. That will help us. That will be very helpful
to the country.
Our situation is more urgent, as you know, because
hurricane season starts in 2 months. But we will continue to
work on it.
General Strock. Where the New Orleans levees are concerned,
we are doing a study now for those areas that were not
obviously impacted to make sure that they are still
structurally intact, and that will be done certainly in June.
The preliminary report on the levee inventory will be in
August, not the final report.
Senator Landrieu. Anything else, Mr. Secretary?
Mr. Woodley. Thank you, Senator. It has been a real
privilege to work with you and the rest of the Louisiana
delegation on these important response issues and we appreciate
your continued support for the agency and assure you that we
take your views very, very seriously.
ADDITIONAL COMMITTEE QUESTIONS
Senator Landrieu. Well, I appreciate that. You have worked
very closely with our delegation. But this is just not--this
current system does not work. It does not work, did not work
for us, does not work for anyone. We have got to have some
serious change.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Pete V. Domenici
REGULATORY ISSUES IN NEW MEXICO
Question. General Strock, I have had Colonel Wang in my office a
couple of times this year concerning a couple of permitting issues with
the city of Albuquerque. One of these concerned the Montano Bridge,
which has since been resolved, the other was the Paseo Del Norte road
extension.
The Paseo project involves crossing an arroyo and the issue had to
do with the permitting required. I am simplifying the chain of events
here for brevity. The city originally planned to cross the arroyo with
a culvert. The permitting requirements became so onerous for the
culvert, particularly with Corps' discretionary decisions concerning
historic preservation consultation, that the city has committed to me
that they will build a bridge instead. A bridge will be considerably
more expensive. I have not heard any status on this project lately.
General Strock, do you know the current status of this project?
General Strock. The Albuquerque district is processing the Paseo
Del Norte as a Nationwide Permit 14 and 43 for a culvert crossing of
Piedras Marcadas arroyo. The district made a finding of no adverse
effect to historic properties. The Advisory Council on Historic
Preservation (ACHP) objected to the district's determination. As
required by the National Historic Preservation Act, the district is
reevaluation their initial finding of no adverse effect and will
provide their decision to the Advisory Council on Historic Preservation
in accordance with the requirements of regulations 800.5(c)(3)(ii) and
800.5(c)(3)(B) in the Code of Federal Regulations, Title 33, Appendix
C. This completes the Corps responsibilities under section 106 of the
Historic Preservation Act.
Question. Can you comment on the Corps discretionary roles in the
permitting process, particularly in the area of historic preservation?
General Strock. Compliance with Section 106 is required for all
Federal undertakings which include issuance of Federal Permits in
jurisdictional waters of the United States. The Corps of Engineers uses
nationwide general permits and individual permits to authorize
activities in compliance with the applicable laws and regulations. The
Corps of Engineers must ensure activities comply with the National
Historic Preservation Act regardless of the type of undertaking. The
Corps has responsibility for determining the appropriate scope of
analysis and the effect of the undertaking, in this case the activity
in waters of the United States, on historic properties, including the
direct and indirect effects of these activities. The Corps must also
afford the State Historic Preservation Office (SHPO) and the ACHP an
opportunity to comment on its determination of effect. The Corps must
document how it considered the opinion of the ACHP and SHPO in its
administrative record for the permit decision. Once this is
accomplished the Section 106 process is complete.
Question. Also in New Mexico, there is a railroad project called
Abo Canyon. This canyon, which is about 4.5 miles long, has only a
single track through it and, as a result, is a major railway
constriction from the west coast to the Midwest and beyond.
To maintain efficient transit of goods, it's essential that a
second track be constructed through the canyon. I'm told that, before
the railroad can construct a second track parallel to the existing one,
they have to have a permit from the Corps because a grand total of 0.1
acre of wetlands might be impacted.
Now, General, these so-called wetlands are normally very dry--this
being New Mexico--but I do understand why the Corps would have to be
involved, given its Clean Water Act responsibilities. However, I don't
understand why the Corps is requiring an archaeological investigation
of the entire canyon, rim-to-rim, just because of this one-tenth of an
acre of dry wetlands.
Can you explain why the Corps has required this, and why it isn't
over-reaching on the part of the Corps in defining its jurisdiction?
General Strock. The Corps of Engineers is evaluating the second
rail track for the Burlington Northern Santa Fe (BNSF) Railroad project
in accordance with its regulations under the individual permit
procedures because the project will impact a total of more than 0.5
acre of waters of the United States at 24 separate locations along the
proposed 4.5 mile alignment. The permit process has been delayed by
historic property issues.
Most of the landowners affected by the proposed track have
cooperated with and sold their land to BNSF. The property owners of
Dripping Springs Ranch have not sold their land and oppose the project.
BNSF initiated the condemnation process for this parcel; however, the
process is currently in abeyance pending a final decision on the 404
permit. Thus far, Dripping Springs Ranch has not allowed BNSF to
complete a required survey for cultural properties on their property.
This is not an insignificant survey as BNSF has already identified over
100 historic sites along the proposed alignment. The Corps and BNSF are
meeting with the property owners to resolve this issue.
Due to potential impacts to at least 17 of the 125 sites already
identified, the Corps has determined that the proposed activity will
have an adverse effect on historic properties and has sent a letter to
the New Mexico State Historic Preservation Officer (NM SHPO) in
accordance with the National Historic Preservation Act. The Corps will
work with the consulting parties (BNSF, NM SHPO, Bureau of Land
Management (BLM), the owners of Dripping Springs Ranch) to develop an
MOA to mitigate for the adverse effects to historic properties in
accordance with the regulations and law. BLM is involved in this
process as BNSF must acquire a small piece of land from BLM to complete
the project.
The district expects to conclude permit evaluation, including the
MOA to address adverse effects on historic properties, in August 2006.
DROUGHT
Question. As you may be aware, we are facing significant drought
issues in the Southwest and particularly New Mexico this year. I wanted
to let you know that I am seeking $5 million in the current
Supplemental for the Corps to provide drought assistance.
Obviously this still has to be conferenced with the House before it
becomes law, but can you describe some of the drought assistance
measures that the Corps can provide under the Stafford Act?
General Strock. The Corps is the Department of Defense Agent for
Emergency Function 3 (public works and engineering) under the National
Response Plan which is implemented pursuant to the Stafford Act. During
a disaster, the Corps will do what is asked by Federal Emergency
Management Agency under the Stafford Act pursuant to the National
Response Plan.
Question. Are there any other programs within the Corps that would
allow you to respond to drought?
General Strock. There are several ways the Corps can help during
droughts independent of the Stafford Act. These authorities are
summarized below.
--Emergency Provisions of Clean Water.--Public Law 84-99, as amended.
Water can be provided to a community that is confronted with a
source of contaminated water.
--Emergency Well Construction.--Public Law 84-99, as amended.
Authorizes the construction of wells or the transport of water.
--Planning Assistance to States.--Public Law 93-251, as amended.
States may obtain Corps water resources planning expertise on
50/50 cost shared studies to develop plans related to the
overall State water plan. This plan must be developed prior to
any water shortage in order to be effective.
--Drought Contingency Plans for Corps Reservoirs.--Provides for
release of water from Corps reservoirs during drought. Not in
law, but is part of the operation of Corps reservoirs.
--Drought Contingency Water.--Section 6 of the 1944 FCA. When
available, the Corps can sell surplus water to a State or
political subdivision, which agrees to act as a wholesaler.
--Reallocation of Storage.--Public Law 85-500. This permits the
reallocation of storage from an existing purpose to M&I water
supply. This plan must also be developed prior to any water
shortage in order to be effective.
--Interim Use of M&I for Irrigation.--Section 931, Public Law 99-662.
This program is limited in that it is only applicable to
certain projects.
KATRINA
Question. Hurricane Katrina was a terrible blow to this Nation. The
costs in terms of human suffering are incalculable, and the costs of
response and recovery have been staggering to the Nation's treasury.
General Strock, can you give us a quick status update of the
current rebuilding efforts?
General Strock. Task Force Guardian has awarded all of the 59
separate construction contracts identified as being needed to restore
hurricane protection to southeast Louisiana. As of April 5, 2006, a
total of 20 of the 59 construction contracts have been completed.
Repairs to the Mississippi River levees (105 miles) have been completed
and all vessels (155) have been removed from the levees and floodwalls.
Of the 59 contracts, 54 (91 percent) were awarded to local businesses,
36 were awarded to small businesses, 15 were awarded to 8(a) firms, and
7 were awarded to HubZone firms. The total estimated cost of the
repairs is $800 million.
Question. General Strock, I have been told that the United States
Geological Survey says that the storm surge from Hurricane Katrina, is
the greatest recorded storm surge to ever hit the United States. Can
you confirm this? This was, in fact a large hurricane that struck,
contrary to what may have been said. Is that true?
General Strock. To our knowledge, the statement made by the USGS is
correct. The highest ``storm-tide'' (surge plus astronomical tide
component) other than Katrina of which we are aware of was generated by
Hurricane Camille, 1969. Camille's ``storm-tide'' is given by the
National Oceanic and Atmospheric Administration's National Hurricane
Center as 24.6 feet at Pass Christian, Mississippi. Dr. Andrew Garcia,
of the Corps' Coastal and Hydraulics Laboratory, recalls others reports
of around 27 to 28 feet attributed to Camille, but Katrina's ``storm-
tide'' at Waveland, Mississippi was right at or exceeded even these
undocumented Camille values.
Question. Along with everyone else, I have read numerous articles,
from various ``experts'' about the levee failures in New Orleans. Most
of these ``experts'' have indicated that the Corps was aware of
potential problems with the levees as designed and constructed. Further
there has been considerable comment that these levees should have
withstood the effects of Katrina. General Strock, I need to know from
you what is the Corps' response? Is there any fire to go with all of
this smoke? Or is this speculation from self-described experts without
access to all relevant data?
General Strock. The Federal storm damage reduction system is
composed of multiple Federal projects, authorized and constructed over
many years. Some features had not yet been completed at the time of the
storm. Others were built by the local sponsors and incorporated into
the system under specific authorization language enacted by the
Congress for this purpose. The Corps was aware that some areas of the
levees were no longer at design grade due to subsidence or settling. We
now suspect that design deficiencies may also have played a role in the
failure of some I-walls. On a larger scale, the design of the built
system was significantly different from the design that the Corps
initially identified for the Lake Pontchartrain waterfront. To what
degree the Corps was aware of these or other problems, or of the
potential for such problems, prior to Katrina is a matter currently
being assessed. I can assure you, however, that the way in which the
Corps recommends projects and deals with any known, suspected, or
anticipated problems is a matter that I consider critical to our
future.
Question. General Strock, can you give us a brief overview of the
findings from the Interagency Performance Evaluation Team to date?
General Strock. The Interagency Performance Evaluation Team, or
IPET, is an outstanding group of experts from government, industry, and
academia that are literally working around the clock to complete an in-
depth analysis of the performance of the Hurricane Protection System.
IPET is looking at how the system was designed and constructed, the
forces it experienced during Katrina, how the system performed, and
what mechanisms caused the catastrophic breaching. IPET has done
everything from putting boots on the ground to collect data and
eyewitness accounts to pushing the modeling envelope with supercomputer
model runs of Katrina's storm surge.
The IPET draft final report is scheduled for release on June 1. I
expect both the consequence and risk analyses in that report will be
invaluable tools to evaluate additional hurricane protection measures
in the near term and for future higher levels of protection.
But IPET has already made great contributions from its findings to
date.
IPET determined the failure mechanisms for structures that breached
prior to reaching their design levels, such as the 17th Street and
London Avenue Canals. This knowledge of ``how and why'' is being used
to assess the integrity of all other similar sections of floodwalls in
the system. These results also helped in the development of specific
strategies to strengthen I-wall sections that are outside the outfall
canals, including stability berms, relief wells, deeper sheet piles and
limiting wall cutoff heights to significantly increase the stability of
these structures.
IPET determined why levee sections failed because of overtopping
and scour, such as those along the Inner Harbor Navigation Canal. This
information has fueled repairs that include substituting T-walls for I-
walls to increase resistance to scour from overtopping and resistance
to failure from lateral forces, such as surge and waves.
IPET found levee sections that were overwhelmed by surge and waves
with damages that related to the levee elevations and the strength of
the levee materials. IPET lessons learned are being used to select the
types of materials used in the levee reconstruction and the height of
their construction in areas such as St. Bernard Parish.
IPET also found sections of floodwalls and levees that performed
very well during Katrina, such as the Orleans Outfall Canal. IPET is
providing these equally important lessons learned to the repair and
reconstruction efforts.
Every lesson learned that IPET has provided has received immediate
attention in the repair efforts. In some cases, repair design
activities were halted and changed to take advantage of IPET knowledge.
IPET work also helped validate significant temporary measures, such as
the temporary gates and pumping capabilities at the Lake Pontchartrain
end of the outfall canals.
IPET input is also being used in design guidance for enhanced
protection projects to ensure the New Orleans area protection system is
better and stronger than before. We feel strongly that the IPET
contributions will help us achieve this goal.
Question. As I understand the current situation concerning levee
rebuilding situation, funding provided through enacted supplemental
appropriations will complete the levee system as currently authorized.
This includes rebuilding levees to the authorized levels of protection
as well as repairing non-Federal levees and pump stations. This system
was not completed before Katrina. Is that correct?
General Strock. That is correct, although cost increases are
possible. Funding was provided in the enacted supplemental
appropriations to repair the system to pre-Katrina conditions, to
accelerate completion of the system and to rebuild those parts of the
system that were below design height due to subsidence. Funding was
also provided to repair non-Federal levees and pump stations. The money
provided was based on the best information available at the time and it
is possible that the cost for some of this work may increase. For
example, at the time of the third supplemental, the IPET findings
concerning floodwall stability were not known. Further, long-term
subsidence will require that additional levee lifts be constructed for
some of the levees in the protection system. These lifts must be
constructed on average every 4-5 years until the subsurface soils
stabilize. Funds provided through the supplemental appropriations do
not cover these costs.
The system was not completed before Hurricane Katrina.
Question. Further, the President's latest supplemental takes the
first steps to improve this system beyond the project originally
authorized by authorizing and appropriating funding to remove many of
the now obvious weaknesses in the system. This includes closing off the
interior drainage canals and providing navigable closures on the
Industrial Canal and the Gulf Intracoastal Waterway, raising and
hardening interior pumping stations and armoring levees where
appropriate. These seem to be a reasonably measured approach to
improving the system, based on current information. Are you aware of
additional work that we should be considering as a part of this
supplemental?
General Strock. The President's supplemental provided appropriate
funding for these measures to improve the New Orleans hurricane
systems. Additional work has been considered but we are not prepared to
recommend these projects for funding at this time. Three of these
include a more costly plan ($190 million) to deal with the interior
canals that, if proven to be technically feasible, may be a more
reliable method of providing interior drainage; a plan to incorporate
into the system non-Federal levees on the East Bank in Plaquemines
Parish ($94 million); and a plan to repair some non-Federal levees in
western areas.
Question. Director Powell has recently indicated to the Congress
that it could cost as much as $6 billion just to restore the levees in
the New Orleans metro area to provide 100-year level of protection. Why
has the 100-year level of protection changed so drastically? What is
your confidence level in the cost estimates that compose this $6
billion figure?
General Strock. Restoring 100-year certification is now a much
different task than simply restoring the current levees, primarily
because of the new storm data and new abilities to better predict storm
impacts. Quite simply, the 100-year storm is now calculated to be a
much larger storm than envisioned in the past. Also, we now realize
that in some areas the generated storm surge, even from a smaller
storm, can be significantly larger than was indicated by models in the
past. Because of this new data, our task is not a matter of simply
restoring or rebuilding the current levees. Based on analysis of an
extended historical period of storm data including the Katrina and Rita
events and utilization of more refined modeling technology now
available, which considers such factors as losses in wetlands and
natural lines of defense that may limit attack during major storms,
land subsidence and other coastal area changes, the currently
authorized grade of levees would not be high enough to prevent
overtopping during occurrence of the revised 100-year frequency storm
surge. In many places the levees will have to be significantly higher
and stronger than they were before Katrina in order to provide
protection from the newly calculated 100-year hurricane.
The $6 billion figure for the cost to complete the system to
provide 100-year level of protection was a preliminary rough order of
magnitude estimate at a point of time, and further analysis is needed.
Question. We have requested the Corps to undertake studies for
improving protection to the New Orleans area to ``Category 5''. The
interim report for this study is due in June 2006. Where would 100-year
level of protection fall in improving levees to this new ``Category 5''
level? Is it possible that work undertaken to get to this 100-year
standard would be incompatible with the ``Category 5'' level?
General Strock. The revised 100-year level of levee protection for
the New Orleans area would be at a lower grade than the grade required
to protect the area from a major Category 5 storm using a single line
of levee protection along the existing alignment. However, the 100-year
levees along the basic ``footprint'' of the existing levee system
currently being repaired would function as a ``useable increment'' in a
system of hurricane protection that utilizes multiple or redundant
lines of protection.
Question. How does coastal restoration rank as a means of providing
immediate hurricane protection? Long range hurricane protection?
General Strock. The lessons of Hurricane Katrina show the dangers
of depending upon a single line of levee defenses. The presence of
coastal features, such as wetlands, cheniers, swamp forests, and
barrier islands, prevent inland hurricane protection structures from
being directly exposed to open gulf conditions during storms. Hurricane
protection systems having direct exposure to the Gulf have greater
potential for performance problems during storms, and will also likely
have higher construction, operations, and maintenance life cycle costs.
Protecting existing coastal features that provide this buffering
function to current hurricane protection systems has short-term
benefit, insuring against decreased system performance reliability and
increased systems operations and maintenance costs over the project
life cycle. Restoring coastal features is a long-term measure that
should increase reliability of the existing and future hurricane
protection systems that may be installed, as well as likely minimize
their construction, operations, and maintenance costs over a life
cycle.
Question. What do you see as the next steps in rebuilding the New
Orleans levees?
Mr. Woodley. By June 1, we will be restoring the level of
protection to pre-Katrina conditions. We have already begun the work to
accelerate construction on some of the uncompleted features of the
system and to rebuild subsided levees to design height and repair non-
Federal levees and pump stations. The next steps are providing a better
and stronger system, ensuring that floodwalls are reliable, building
the system high enough to provide 100-year protection, and evaluating
even higher levels of protection.
Question. As a result of Katrina, what have you learned about how
flood control and hurricane protection projects should be evaluated?
That is, how should we go about considering the possibility of serious
risks to human life as opposed to evaluating projects strictly on the
basis of economic losses prevented?
Mr. Woodley. Based on the lessons learned from Katrina, we need to
take a hard look at our policies for establishing levels of protection.
When risk to life is possible during events exceeding given levels of
protection, this loss of life risk must be addressed as a part of the
decision process on level of protection, along with the economics, that
is, net benefits of each level of protection. Formulation
considerations include minimizing catastrophic potential in areas where
large populations are at risk or evacuations are not easily
accomplished when emergencies occur. These technical considerations are
currently imposed only for design of high hazard dams, and similar
considerations need to be evaluated for high hazard levee and flood
protection systems. For instance, we are using risk and reliability
analysis concepts in the evaluation of alternatives for the South
Louisiana Hurricane Protection report. It should be noted that
selection of a plan that includes life safety considerations is
permitted under the Principles and Guidelines for water resources
planning, in that the agency head may recommend a plan that does not
maximize net national economic development benefits.
As an interim measure, the fiscal year 2007 budget proposes funding
for already authorized projects that provide significant reductions in
life risks. I expect that future budgets also will address life risk
considerations.
CONTINUING CONTRACTS AND REPROGRAMMING
Question. In the fiscal year 2006 E&WD appropriations act, the
Congress made significant changes in how funds are to be spent, which
will result in similarly significant changes in how the Corps manages
its program.
General Strock, has the Corps assessed the impact of these changes
on program execution and, if so, what are they?
General Strock. The guidelines for reprogramming and the use of
continuing contracts as set forth in the fiscal year 2006 E&WD
appropriations act and accompanying conference report have brought
about many significant changes in how we manage our Civil Works
Program. We no longer emphasize expenditures as a measure of success.
The volume of reprogrammings is significantly reduced. Reprogrammings
that exceed the dollar and percentage thresholds established in the
fiscal year 2006 act now require more coordination. We anticipate an
increase of carry-over funds in the short-term as we realign our
budgeting, planning, and execution practices.
Question. For many years, the Corps carried a fairly significant
amount of its available construction funds unobligated from one year
into the next. This unobligated carryover afforded the Corps
flexibility in meeting unforecasted needs and was a practice generally
supported by this committee.
Several years ago however, it became apparent to us that this
practice must be changed and, at the urging of this committee, the
Corps increased its execution performance and eliminated the carryover.
With the new program management practices required by the fiscal
year 2006 E&WD act, will this carryover reappear? If so, how much will
it be, approximately, by the end of the year? After next year, assuming
a constant appropriation level?
General Strock. As stated earlier, execution performance will no
longer be measured simply by the percentage of funds obligated or
expended and an increase in carried-over funds is expected. Our
estimate of unobligated funds to be carried over at the end of fiscal
year 2006, according to the execution schedules developed after the
appropriation of fiscal year 2006 Energy and Water funds, is as
follows. Dollars in are in thousands. Funds provided in supplemental
appropriations as of April 5, 2006 are included and account for the
majority of the total unobligated carryover.
------------------------------------------------------------------------
Unobligated Carryover $1,000
Appropriation -------------------------------
E&W Supplemental
------------------------------------------------------------------------
Investigations.......................... $49,495 $2,311
Construction............................ 345,702 7,406
O&M..................................... 164,345 10,384
MR&T.................................... 92,618 46,889
FCCE.................................... .............. 800,000
Expenses................................ .............. ..............
Regulatory.............................. 16 ..............
FUSRAP.................................. 974 ..............
------------------------------------------------------------------------
Since the fiscal year 2006 appropriations were not enacted until
last November, adjustments had to be made in the scheduling of funds
during the Continuing Resolution. In addition, in fiscal year 2006 we
received substantial hurricane-related supplemental appropriations.
Therefore, the amount carried over from fiscal year 2006 may not be a
good indicator of what to expect at the end of the following year.
Question. What changes to the requirements contained in the fiscal
year 2006 act would you recommend to assist you in better use of the
funds appropriated to the program?
Mr. Woodley. The fiscal year 2006 Energy and Water Appropriations
Act includes language that has enabled the Corps to limit the use of
continuing contracts and thereby increase the use of other kinds of
contracts (such as fully-funded contracts and base bid-plus-options
contracts) for projects authorized for construction. The fiscal year
2007 budget proposed to amend this language for fiscal year 2007 to
enable the Corps to limit the use of continuing contracts and thereby
expand the use of other kinds of contracting instruments for operation
and maintenance activities as well.
Question. If these changes remain unchanged for several years, will
you be able to award and carry out as many construction contracts as
you have under the previous rules? Can you estimate or characterize the
differences for us?
General Strock. The fiscal year 2006 Energy and Water
Appropriations Act has enabled the Corps to expand the use of
contracting instruments other than continuing contracts in its
construction program. The Corps recently issued guidance to ensure that
the construction program is using continuing contracts only where they
are the most appropriate contracting instrument. The fiscal year 2006
act did not, however, include a further reform proposed in the fiscal
year 2006 budget, which would have provided the Corps with the kind of
multi-year contracting authority used by other Federal agencies. In the
absence of such authority, efforts to reduce reliance on continuing
contracts could affect the number of awarded contracts during a
transition period of up to a few years.
Question. The Corps has been awarding so-called continuing
contracts for many years . . . since 1922, I'm told. This is where you
award a contract that will take more than a year to execute and where
you depend on appropriations in future years to fund the contract
earnings expected in those future years.
General Strock, what is the Corps' experience with that type of
contract? That is, have they presented great challenges or otherwise
not served the Nation well in the years you've been using them?
General Strock. Continuing contracts, like the multi-year contracts
used by other Federal agencies, enable the Corps to incrementally fund
work on any water resources project (studies, design, construction, or
operation and maintenance) that the Congress has not fully funded up
front. However, unlike the multi-year contracting authority of other
Federal agencies, the continuing contract authority of the Corps has
few constraints and allows the Corps to legally bind the Federal
Government to pay future costs in advance of appropriations. The use of
our continuing contract authority has resulted over the years in a
large number of long-term contracts with high out-year funding
commitments to one provider, and limited the ability of the Executive
Branch and the Congress to set priorities in the civil works program.
Obviously, there are other challenges as well, particularly when the
contractor's earning rate is greater than anticipated and significant
reprogramming from other projects is required.
Question. How do you plan to manage your contracting in light of
the guidance on continuing contracts contained in the fiscal year 2006
act? That is, will you award fewer contracts? If so, how many fewer
contracts in the current fiscal year would you expect to award than if
you didn't have this guidance?
General Strock. Generally, the Corps is issuing a continuing
contract in the construction program only when other contracting
options such as fully-funded contracts, incremental contracts, or other
contracts are not appropriate, and only with reasonable assurance that
the continuing contract will be funded in the out years. In the short-
term, fewer contracts are being awarded. However, I cannot make a
numerical projection of the difference. In the long-term, we would
expect the number of contracts to be as much or more than in previous
years, assuming the same overall funding level.
Question. What is the long-term impact on the number of projects
you will have underway at any given point in time? That is, will you
then be able to have fewer projects underway at any given time?
General Strock. Because we are waiting for sufficient funds to
fully fund some contracts, there will be a deferral of these contracts
in the short-term. In the long-term, at any given out-year funding
level, the number of projects underway at a given time would be the
same.
CONTINUING CONTRACTS
Question. How many continuing contracts has the Corps awarded in
fiscal year 2006 since fiscal year 2006 Energy and Water Development
Appropriations Act was passed?
General Strock. There have been a total of 12 continuing contracts
awarded as of the end of the second quarter of fiscal year 2006.
Question. How many continuing contracts have you disapproved and
why?
Mr. Woodley. There are three continuing contracts that have been
disapproved and/or sent back for reevaluation, because either the
proposal did not satisfy the criteria laid out in the Corps fiscal year
2006 program execution guidance, or the analysis of whether another
contracting mechanism would be efficient and effective in the
circumstances was inconclusive.
Question. What are your criteria for determining to award a
continuing contract?
Mr. Woodley. The Corps uses several criteria. In accordance with
the fiscal year 2006 Program Management EC, several questions must be
answered during evaluation. These questions include whether the amounts
available and that have been identified for reprogramming in fiscal
year 2006 are sufficient to fully fund the contract, and, if the amount
available in fiscal year 2006 is not sufficient to fully fund the
contract, whether the scope and schedule of the contract are
appropriate for the features of the project to be constructed. If the
amount available is insufficient and the scope and schedule are
appropriate, then different contracting vehicles are explored and
analyzed. If other relevant contracting options are not appropriate,
and delay of the contract to fiscal year 2007 or later would result in
significant consequences, a continuing contract may be recommended. My
office also assesses whether future appropriations to support the
contract are likely, based on recent funding history, the fiscal year
2007 President's budget, and the House, Senate, and Conference Reports
when available.
Question. Have the directions in the fiscal year 2006 Energy and
Water Development Appropriations Act caused any difficulties for the
Corps?
General Strock. The new guidelines have encouraged improved
discipline in the system, but they also have introduced some delays in
part by requiring elevation to the Washington level of day-to-day
operational decisions that previously were made in the district
offices.
With respect to reprogramming, we face the challenge of
transitioning our budgeting and execution practices to an environment
with limited reprogramming, including the challenge of funding
previously incurred payback commitments and the challenge of addressing
pressing or emergency situations and situations with strong business
cases.
With respect to contracting, the limited use of continuing
contracts will result in the delay of some contracts during a
transition period until funding and contracting decisions are aligned.
All told, these changes have not caused significant difficulties.
Carryover will increase in the short-term. These changes have also
provided an opportunity to look for ways to improve the overall
performance of the civil works program.
REPROGRAMMING
Question. How many reprogrammings have been approved within the
Corps authority?
General Strock. Such reprogrammings are an ongoing process
throughout the fiscal year and tend to become more frequent as the year
goes on. However, the following snapshot at the end of the second
quarter should give a reasonable estimate as to the rate of
reprogrammings within the appropriation accounts:
--Investigations--6 gainers, 2 sources;
--Construction--13 gainers, 14 sources;
--O&M--7 gainers, 5 sources;
--MR&T--7 gainers, 5 sources.
Question. How many reprogrammings that require prior notification
to Congress have been proposed and how many have been approved?
General Strock. As of the date of the hearing, the Army recently
has submitted ten requests for reprogramming to OMB. OMB has cleared
two of them already and is reviewing the others.
Question. To what do you attribute the failure to approve proposed
reprogrammings in a timely manner?
General Strock. Few reprogrammings are proposed due to the
difficulty in finding suitable sources. One type of suitable source
would be one for which the funds are excess to the total needs of the
source project due to savings, such as from a low bid or changed site
conditions; however, such situations are relatively rare. In the past,
another fairly reliable source was slipped earnings due to delayed
awards; but the expectation was that the revoked funds would be
restored when needed. The guidance in the fiscal year 2006 conference
report that there be no expectation of such payback commitments has
nearly eliminated sources with slippages.
Question. Have the directions regarding reprogramming in the fiscal
year 2006 Energy and Water Development Appropriations Act caused any
difficulties for the Corps and do you have any recommendations as to
how the directions in the fiscal year 2006 Appropriations bill might be
improved?
General Strock. The new guidelines have encouraged improved
discipline in the program. We face the challenge of transitioning our
budgeting and execution practices to an environment with limited
reprogramming, including the challenge of funding previously incurred
payback commitments and the challenge of addressing pressing or
emergency situations and situations with strong business cases.
The administration's proposals for fiscal year 2007 are reflected
in proposed bill language in the Budget Appendix. We would like to move
toward a system that retains the benefits of this discipline, but that
returns day-to-day operational decisions to the district level, perhaps
in combination with periodic reporting to the Appropriations Committees
on actions taken the prior quarter, to give them the opportunity to
assess whether the committee's guidance and the Corps' own policies
have been followed.
______
Questions Submitted by Senator Arlen Specter
HOPPER DREDGE MCFARLAND
Question. Significant and timely maintenance, repair and
replacement of systems and equipment in the amount of $25 million have
been accomplished onboard the McFarland in the past 10 years. These
include:
--Complete replacement of riveted seams (both port and starboard
sides) resulting in all welded steel hull with estimated hull
life extension of an additional 25 years;
--Phased renewal of all 12 hopper door frames;
--Phased overhaul of all 12 hopper door operating gear;
--Replacement of Steering Gear Control System;
--New propeller shafts;
--Complete replacement of propulsion control system from pneumatic
system control to electronic controls; and
--Phased overhaul of all engines and generator.
In its November 2005 report to Congress regarding the future
operation and configuration of the Federal hopper dredge fleet, the
Corps states that an additional $20 million in major overhaul and
repair activities must be expended to keep the Hopper Dredge McFarland
operational.
It is my understanding that a one-time expenditure of this
magnitude would be required only if the decision were made to
transition the McFarland to ready reserve status, and that the
McFarland can continue to work without this $20 million overhaul.
On what grounds was the assertion made that the McFarland requires
$20 million in overhaul and repair work?
General Strock. The $20 million overhaul and repair would be needed
in either case, whether the McFarland were to be placed in ready
reserve or if it were to work a full schedule.
Question. What specific repairs in the amount of $20 million are
needed to keep the McFarland operational?
General Strock. The current engine room, with 11 engines, is not
the optimal configuration, nor the safest means of powering the
McFarland. The majority of the repair costs would be used to repower
the dredge with modern low emission engines, reduce the number of
engines, and substantially improve the efficiency of operating the
McFarland. The current manner of controlling the drag arms on the
dredge is also not the optimal manner in which to perform this
operational activity on the McFarland. Costs were included in the
estimate to reconfigure the dual drag tender stations into a modern
central drag tender station, thus reducing the crew requirements and
improving the operational efficiency of the dredge. Additional items
include removal of all asbestos on the dredge for the safety of the
crew and other improvements.
Question. Port stakeholders were not invited to be members of the
Industry/Corps Hopper Dredge Management Group (ICHDMG), formed by the
Corps and Dredging Contractors of America. The port and waterway
stakeholders, and the customers they serve, are the ultimate end users
of the any federally contracted dredging contracts.
Failure to adequately respond to emergency dredging requirements,
and the increasing cost of dredging, ultimately affects the
competitiveness of the Nation's ports and waterways transportation
system.
General Strock. The ICHDMG was formed in response to Section 237 of
WRDA 96. The purpose of the ICHDMG is to maximize the effectiveness and
efficiency of our Nation's hopper dredging resources, to enhance the
viability and competitiveness of our ports and waterways by maintaining
communication between the Corps and the hopper dredging industry and to
ensure procedures are in place and sufficient hopper dredges are
available to respond to urgent and emergency dredging while meeting
needed routine dredging requirements. The ICHDMG is a working group
that is focused on identifying hopper dredging problems and crafting
solutions, sharing information, diffusing potential problems, and
coordinating schedules on a national basis. In the past some of the
shipping stakeholders and ports have participated in ICHDMG meetings.
In addition, the Corps district offices work directly with the many
ports throughout the Nation to ensure that these important stakeholders
are fully engaged in all aspects of the Corps dredging program that
affects their interests.
Question. Should port stakeholders be included in the ICHDMG to
ensure their participation in the decision-making process regarding
Federal hopper dredging?
General Strock. Any interested port stakeholders would be most
welcome to participate in ICHDMG.
______
Question Submitted by Senator Mark Dayton
POWDER RIVER BASIN EXPANSION PROJECT
Question. What steps is the Army Corps of Engineers taking to
ensure that a complete and thorough review is conducted prior to
issuing permits under Sec. 404 of the Clean Water Act and Sec. 10 of
the Rivers and Harbors Act for the proposed construction of the Powder
River Basin Expansion Project, also known as the Dakota, Minnesota &
Eastern (DM&E) Railroad project?
General Strock. The Omaha District began coordination (pre-
application meeting) with the Dakota, Minnesota and Eastern (DM&E)
Railroad relative to the Powder River Basin Expansion Project in
November 6, 1997. The Omaha District participated as a cooperating
agency under the National Environmental Policy Act (NEPA) with the
Surface Transportation Board (STB) in the formulation of an
Environmental Impact Statement to ensure that requirements of Section
404 of the Clean Water Act were addressed concurrently with the STB's
review process.
The Omaha District received two Section 404 permit applications for
the Wyoming and South Dakota portions September 15, 2000. A Section 10
permit application was submitted to the U.S. Coast Guard for a bridge
replacement on the Missouri River at approximately the same time since
that agency is responsible for that action.
The STB rendered a decision to authorize the project under its
program responsibilities January 28, 2002 which was the subject of
litigation (Mid States Coalition for Progress v. STB). The 8th Circuit
Court of Appeals remanded the decision and required that additional
study and analysis be completed in four specific areas of the EIS. A
supplemental EIS was formulated, which the Omaha District participated
in as a cooperating agency. The supplemental EIS was released January
6, 2006. The STB issued a new decision authorizing the project and is
the subject of current litigation (Mayo Foundation v. United States of
America and STB) in the 8th Circuit Court of Appeals.
The Omaha District has ensured that the information formulated in
the EIS addresses our information and data needs. Omaha has also
continued coordination with DM&E on the permit applications in an
attempt to address outstanding information needs that were identified
since December 4, 2001. Action on these applications since 2002 was
minimal due to DM&E's focus on litigation and addressing direction from
the court. A meeting with Omaha District staff in Cheyenne, Wyoming, is
scheduled to address outstanding information needs and administrative
processes to allow final permit decisions to be rendered.
SUBCOMMITTEE RECESS
Senator Landrieu. Thank you so much and the hearing is
recessed.
[Whereupon, at 3:53 p.m., Wednesday, April 5, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]