South Florida Ecosystem: Some Restoration Progress Has Been Made,
but the Effort Faces Significant Delays, Implementation 	 
Challenges, and Rising Costs (19-SEP-07, GAO-07-1250T). 	 
                                                                 
The South Florida ecosystem covers about 18,000 square miles, and
is home to the Everglades, one of the world's unique		 
environmental resources. Historic efforts to redirect the flow of
water through the ecosystem have jeopardized its health and	 
reduced the Everglades to about half of its original size. In	 
1993, the United Nations Educational, Scientific, and Cultural	 
Organization's World Heritage Committee (WHC) added Everglades	 
National Park (Park) to its List of World Heritage in Danger	 
sites. In 2000, a strategy to restore the ecosystem was set; the 
effort was expected to take at least 40 years and cost $15.4	 
billion. It comprises 222 projects, including 60 key projects	 
known as the Comprehensive Everglades Restoration Plan (CERP), to
be undertaken by a multiagency partnership. This testimony is	 
based on GAO's May 2007 report, South Florida Ecosystem:	 
Restoration Is Moving Forward, but Is Facing Significant Delays, 
Implementation Challenges, and Rising Costs, and a review of WHC 
decision documents relating to the Park's listing. This statement
addresses the (1) status of projects implemented (2) status of	 
projects key to improving the health of the Park, (3) project	 
sequencing factors, and (4) funding provided for the effort and  
extent to which costs have increased.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-1250T					        
    ACCNO:   A76547						        
  TITLE:     South Florida Ecosystem: Some Restoration Progress Has   
Been Made, but the Effort Faces Significant Delays,		 
Implementation Challenges, and Rising Costs			 
     DATE:   09/19/2007 
  SUBJECT:   Cost analysis					 
	     Cost overruns					 
	     Ecosystem management				 
	     Ecosystems 					 
	     Federal legislation				 
	     Program evaluation 				 
	     Schedule slippages 				 
	     Wildlife						 
	     Wildlife conservation				 
	     Cost estimates					 
	     Program implementation				 
	     Army Corps of Engineers Comprehensive		 
	     Everglades Restoration Plan			 
                                                                 
	     Everglades (FL)					 

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GAO-07-1250T

   

     * [1]Background
     * [2]Although Many Restoration Projects Have Been Completed or Ar
     * [3]Restoration Projects That Would Help Achieve the World Herit
     * [4]The Overall Restoration Effort Has No Sequencing Criteria an
     * [5]Federal Agencies and Florida Have Provided More Than $7 Bill
     * [6]GAO Contacts
     * [7]GAO's Mission
     * [8]Obtaining Copies of GAO Reports and Testimony

          * [9]Order by Mail or Phone

     * [10]To Report Fraud, Waste, and Abuse in Federal Programs
     * [11]Congressional Relations
     * [12]Public Affairs

Testimony

Before the Subcommittee on International Operations and Organizations,
Democracy and Human Rights, Committee on Foreign Relations, U.S. Senate

United States Government Accountability Office

GAO

For Release on Delivery
Expected at 3:00 p.m. EDT
Wednesday, September 19, 2007

SOUTH FLORIDA ECOSYSTEM

Some Restoration Progress Has Been Made, but the Effort Faces Significant
Delays, Implementation Challenges, and Rising Costs

Statement of Anu K. Mittal, Director
Natural Resources and Environment

GAO-07-1250T

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to participate in your hearing on
protecting the Everglades. As you know, restoring the South Florida
ecosystem is a complex, long-term effort. This vast region, which is home
to a rapidly growing population of more than 6 million people and supports
a large agriculture-, tourism-, and recreation-based economy, also
encompasses one of the world's unique environmental resources--the
Everglades. Recognizing the importance of the Everglades, in 1979, the
World Heritage Committee (WHC) of the United Nations Educational,
Scientific, and Cultural Organization (UNESCO) included Everglades
National Park (Park) on its list of world cultural and natural heritage
sites of importance. However, over the past 100 years, engineering
projects designed to control floods and supply water to the residents of
South Florida have diverted water from the Everglades. This alteration of
water flow, coupled with agricultural and industrial activities and
urbanization, has jeopardized the ecosystem's health and reduced the
Everglades to about half of its original size. In light of the Everglades
deteriorating condition, in 1993 the WHC added the Park to its List of
World Heritage in Danger sites. These sites are determined to be facing
serious and specific threats and require major conservation efforts.

In 1996, through the Water Resources Development Act of 1996, the Congress
formalized the South Florida Ecosystem Restoration Task Force, an effort
established by federal agencies in 1993 to stem the deterioration of the
ecosystem and restore the Everglades to a more natural state. The Task
Force was expanded to include state, local, and tribal representatives and
was charged with coordinating and facilitating efforts to restore the
ecosystem. The restoration effort currently consists of 222 projects,
which include 60 key projects that comprise the Comprehensive Everglades
Restoration Plan (CERP), 28 projects that lay the foundation for the CERP
projects (that we refer to as CERP-related projects); and 134 projects
that are not directly related to CERP (that we refer to as non-CERP
projects). According to WHC and Park documents, nine of the 222 projects
are key to achieving a set of benchmarks adopted by the WHC in 2006 that,
when met, would lead to the removal of the Park from its list of sites in
danger.

Our testimony today focuses on the (1) status of restoration projects and
their expected benefits, (2) status of projects that are key to restoring
the health of Everglades National Park, (3) factors that influence the
sequencing of project implementation, and (4) amount of funding provided
to the restoration effort since 1999 and the extent to which costs have
increased. Our testimony is based primarily on our May 2007 report ^1on
the status of the South Florida Ecosystem Restoration Initiative. In
addition, at the request of the subcommittee, we reviewed publicly
available WHC decision documents regarding Everglades National Park's
inclusion on the List of World Heritage in Danger. We conducted our work
in accordance with generally accepted government auditing standards.

In summary, we found the following:

           o Forty-three of the 222 projects that constitute the South
           Florida ecosystem restoration effort have been completed, while
           the remaining projects are currently being implemented or are in
           design, being planned, or have not yet started. Many of the
           completed projects are intended primarily to improve water quality
           in natural areas or to acquire or improve tracts of land in order
           to preserve wildlife habitat. The projects now being implemented
           also emphasize the restoration of wildlife habitat by acquiring or
           improving land, as well as the construction of key CERP-related
           projects that will improve water flow to natural areas. The
           projects not yet implemented are largely CERP projects that are
           crucial to realizing the restoration's overall goals, but these
           projects are progressing slowly. Despite the slow progress, agency
           officials report a number of achievements, such as finalizing key
           CERP agreements and restoring a more natural water flow to the
           Kissimmee River which is the headwater of the ecosystem. In
           addition, because of the continuing delays in implementing
           critical CERP projects, the state has begun expediting the design
           and construction of some of these projects with its own resources.
           The state hopes that its efforts will provide some immediate
           environmental, flood control and water supply benefits and will
           help provide some impetus to the larger CERP effort.

           o Most of the nine projects that were identified by the WHC as
           being critical to removing Everglades National Park from the list
           of world heritage sites in danger have not yet been completed.
           Specifically, only one project has been completed, four are
           currently being implemented, and four are currently in the
           planning and design phase. Moreover, the benefits from these
           projects may not be apparent for many more years. For example,
           five of the projects have scheduled completion dates from 2012 to
           2035.
			  
^1South Florida Ecosystem Restoration: Restoration is Moving Forward, but
Is Facing Significant Delays, Implementation Challenges, and Rising Costs,
GAO-07-520 (Washington, D.C.: May 31, 2007

           o There are no overarching criteria to ensure that the 222
           projects that make up the restoration effort are implemented in a
           sequence that would ensure the achievement of environmental
           benefits as early as possible and in the most cost effective
           manner. Instead, implementation decisions for the 162 CERP-related
           and non-CERP projects are largely driven by available funding. The
           60 CERP projects--which are critical to successfully achieving the
           restoration--have sequencing criteria; however, when the agencies
           developed their sequencing plan for CERP projects in 2005, they
           did not have key data and other information to fully apply these
           criteria. Recently, the agencies began revising the CERP project
           schedules and sequencing plan, but they still do not have the key
           information needed to fully apply the established criteria. As a
           result, there is little assurance that the revised sequencing
           plan, when it is final, will lead to a CERP project implementation
           plan that will provide restoration benefits as early as possible
           and in the most cost-effective manner. We recommended that the
           agencies obtain the information needed to fully apply the required
           criteria and then comprehensively reassess its sequencing
           decisions to ensure that the CERP projects have been appropriately
           sequenced.

           o Participating federal and state agencies provided a total of
           $7.1 billion for the restoration effort from fiscal years 1999
           through 2006. During this period, the federal government
           contributed about $2.3 billion to the restoration effort and
           Florida contributed about $4.8 billion. However, the federal
           contribution to the effort has been about $1.4 billion less than
           agencies expected during this period. Because the state has
           contributed more than its share the overall shortfall for the
           restoration effort has been about $1.2 billion. At the same time,
           the total projected cost of the restoration effort has increased
           by 28 percent--from $15.4 billion in 2000 to $19.7 billion in
           2006. According to agency officials, the overall cost increases
           are due to project scope changes, increased construction costs,
           and higher land costs. Moreover, these cost estimates do not
           reflect the true cost of the restoration effort, which could be
           significantly higher because most CERP projects are still in the
           conceptual phase and their full cost is not yet known.

Background

The South Florida ecosystem covers about 18,000 square miles in 16
counties. It extends from the Kissimmee Chain of Lakes south of Orlando to
Lake Okeechobee, and continues south past the Florida Bay to the reefs
southwest of the Florida Keys. The ecosystem is in jeopardy today because
of past efforts that diverted water from the Everglades to control
flooding and to supply water for urban and agricultural development. The
Central and Southern Florida project, a large-scale water control project
begun in the late 1940s, constructed more than 1,700 miles of canals and
levees and over 200 water control structures that drain an average of 1.7
billion gallons of water per day into the Atlantic Ocean and the Gulf of
Mexico. This construction resulted in insufficient water for the natural
system and for the growing population, along with degraded water quality.
Today, the Everglades has been reduced to half its original size and the
ecosystem continues to deteriorate because of the alteration of the water
flow, impacts of agricultural and industrial activities, and increasing
urbanization.

In response to growing signs of ecosystem deterioration, federal agencies
established the South Florida Ecosystem Restoration Task Force in 1993 to
coordinate ongoing federal restoration activities. The Water Resources
Development Act of 1996 formalized the Task Force and expanded its
membership to include state, local, and tribal representatives, and
charged it with coordinating and facilitating efforts to restore the
ecosystem. The Task Force, which is chaired by the Secretary of the
Department of the Interior, consists of 14 members representing 7 federal
agencies, 2 American Indian tribes, and 5 state or local governments.^2

To accomplish the restoration, the Task Force established the following
three goals:

           o Get the water right. The purpose of this goal is to deliver the
           right amount of water, of the right quality, to the right places,
           at the right times. However, restoring a more natural water flow
           to the ecosystem while providing adequate water supplies and
           controlling floods will require efforts to expand the ecosystem's
           freshwater supply and improve the delivery of water to natural
           areas. Natural areas of the ecosystem are made up of federal and
           state lands, and coastal waters, estuaries, bays, and islands.

           o Restore, preserve, and protect natural habitats and species. To
           restore lost and altered habitats and recover the endangered or
           threatened species native to these habitats, the federal and state
           governments will have to acquire lands and reconnect natural
           habitats that have become disconnected through growth and
           development, and halt the spread of invasive species.

           o Foster compatibility of the built and natural systems. To
           achieve the long-term sustainability of the ecosystem, the
           restoration effort has the goal of maintaining the quality of life
           in urban areas while ensuring that (1) development practices limit
           habitat fragmentation and support conservation and (2) traditional
           industries, such as agriculture, fishing, and manufacturing,
           continue to be supported and do not damage the ecosystem.

^2Representatives from the state's major industries, environmental groups,
and other stakeholders provide comments to the Task Force through public
meetings and forums.

The centerpiece for achieving the goal to get the water right is the
Comprehensive Everglades Restoration Plan (CERP), approved by the Congress
in the Water Resources Development Act of 2000 (WRDA 2000). CERP is one of
the most ambitious restoration efforts the federal government has ever
undertaken. It currently encompasses 60 individual projects that will be
designed and implemented over approximately 40 years.^3 These projects are
intended to increase the water available for the natural areas by
capturing much of the water that is currently being diverted, storing the
water in many different reservoirs and storage wells, and releasing it
when it is needed. The cost of implementing CERP will be shared equally
between the federal government and the state of Florida and will be
carried out primarily by the U.S. Army Corps of Engineers (the Corps) and
the South Florida Water Management District (SFWMD), which is the state
authority that manages water resources for South Florida.^4 After the
Corps and SFWMD complete the initial planning and design for individual
CERP projects, they must submit the proposed projects to the Congress to
obtain authorization and funding for construction.

^3The original number of individual projects in CERP was 68. In addition
to these 68, CERP included 6 pilot projects and 3 proposed feasibility
studies. Since CERP's approval in 2000, the Corps and the South Florida
Water Management District have reorganized the projects to group those
that are logically connected into broader projects. For example, several
projects around Lake Okeechobee have been combined into one project. At
the time of our report, CERP consisted of 60 projects, but the total
number of projects that make up CERP may continue to change as
implementation progresses and projects are added, combined, divided into
multiple parts or phases, or deleted.

^4Although SFWMD is CERP's primary nonfederal sponsor, the Florida
Department of Environmental Protection as well as three county governments
and two American Indian tribes also serve as nonfederal sponsors for
portions of the plan.

In addition to the CERP projects, another 162 projects are also part of
the overall restoration effort. Twenty-eight of these projects, when
completed, will serve as the foundation for many of the CERP projects and
are intended to restore a more natural water flow to Everglades National
Park and improve water quality in the ecosystem. Nearly all of these
"CERP-related" projects were already being designed or implemented by
federal and state agencies, such as the Department of the Interior and
SFWMD, in 2000 when the Congress approved CERP. The remaining 134 projects
include a variety of efforts that will, among other things, expand
wildlife refuges, eradicate invasive species, and restore wildlife
habitat, and are being implemented by a number of federal, state, and
tribal agencies, such as the U.S. Fish and Wildlife Service, the Florida
Department of Environmental Protection (FDEP), and the Seminole Tribe of
Florida. Because these projects were not authorized as part of CERP and do
not serve as CERP's foundation, we refer to them as "non-CERP" projects.

Success in completing the restoration effort and achieving the expected
benefits for the ecosystem as quickly as possible and in the most
cost-effective manner depends on the order, or sequencing, in which many
of the 222 projects will be designed and completed. Appropriate sequencing
is also important to ensure that interdependencies among restoration
projects are not ignored. For example, projects that will construct water
storage facilities and stormwater treatment areas need to be completed
before undertaking projects that remove levees and restore a more natural
water flow to the ecosystem.

Recognizing the threats that Everglades National Park was facing, in 1993,
UNESCO's World Heritage Committee (WHC) included the Park on its List of
World Heritage in Danger. This list includes cultural or natural
properties that are facing serious and specific threats such as those
caused by large-scale public or private projects or rapid urbanization;
the outbreak or the threat of an armed conflict; calamities and
cataclysms; and changes in water levels, floods, and tidal waves. The
Park's inclusion on the list resulted from five specific threats: (1)
urban encroachment; (2) agricultural fertilizer pollution; (3) mercury
contamination of fish and wildlife; (4) lowered water levels due to flood
control measures; and (5) damage from Hurricane Andrew, which struck the
south Florida peninsula in 1992 with winds exceeding 164 miles per hour.
In 2006, WHC adopted a set of benchmarks that, when met, would lead to the
Park's removal from the list. According to Park and WHC documents, nine
projects that are part of the overall restoration effort will contribute
to the achievement of these benchmarks.

Although Many Restoration Projects Have Been Completed or Are Ongoing, Key
Restoration Benefits Are Expected to Come From Projects Not Yet Implemented

Forty-three of the 222 projects that constitute the South Florida
ecosystem restoration effort have been completed, while the remaining
projects are currently being implemented or are either in design, being
planned, or have not yet started. Table 1 shows the status of the 222
restoration projects.

Table 1: Status of the 222 Restoration Projects by Project Group

                    Not yet implemented                                       
                                                                Not yet       
                Completed In implementation Planning/design     started Total 
CERP                 0                 7              21          32    60 
CERP-related        15                10               3           0    28 
Non-CERP            28                90               2          14   134 
Total               43               107              26          46   222 

Source: GAO analysis of documents provided by Task Force and participating
agencies.

Completed Restoration Projects -- Although 43 of the 222 projects have
been completed since the beginning of the restoration effort, this total
is far short of the 91 projects that the agencies reported would be
completed by 2006.^5 Nine projects were completed before 2000 when the
strategy to restore the ecosystem was set. These projects are expected to
provide benefits primarily in the area of habitat acquisition and
improvement. Thirty-four projects were completed between 2000 and 2006.
The primary purposes of these projects range from the construction of
stormwater treatment areas, to the acquisition or improvement of land for
habitat, to the drafting of water supply plans.

Ongoing Restoration Projects -- Of the 107 projects currently being
implemented,^6 7 are CERP projects, 10 are CERP-related projects, and 90
are non-CERP projects. Five of the seven CERP projects are being built by
the state in advance of the Corps' completion of the necessary project
implementation reports and submission of them to the Congress for
authorization and appropriations. Nonetheless, some of the CERP projects
currently in implementation are significantly behind schedule. For
example, four of the seven CERP projects in implementation were originally
scheduled for completion between November 2002 and September 2006, but
instead will be completed up to 6 years behind their original schedule
because it has taken the Corps longer than originally anticipated to
design and obtain approval for these projects. Overall, 19 of the 107
projects currently being implemented have expected completion dates by
2010. Most of the remaining 88 projects are non-CERP habitat acquisition
and improvement projects that have no firm end date because the land will
be acquired from willing sellers as it becomes available.

^5South Florida Ecosystem Restoration Task Force, Coordinating Success:
Strategy for Restoration of the South Florida Ecosystem, Volume 2 (Miami,
Fla.: July 31, 2000).

^6Some projects have multiple components, and while the entire project
cannot be counted as completed, important components of it may be
finished. Unless all components of the project were complete, we counted
these projects as being implemented.

Projects Not Yet Implemented -- Of the 72 restoration projects not yet
implemented--in design, in planning, or not yet started--53 are CERP
projects that are expected to be completed over the next 30 years and will
provide important benefits such as improved water flow, additional water
for restoration as well as other water-related needs. In contrast, the
other 19 projects include 3 CERP-related and 16 non-CERP projects, which
are expected to be completed by or before 2013. Consequently, the full
environmental benefits for the South Florida ecosystem restoration that
the CERP projects were intended to provide will not be realized for
several decades. Several of the CERP projects in design, in planning, or
not yet begun, were originally planned for completion between December
2001 and December 2005, but instead will be completed from 2 to 6 years
behind their original schedule. According to agency officials CERP project
delays have occurred for the following reasons:

           o It took longer than expected to develop the appropriate policy,
           guidance, and regulations that WRDA 2000 requires for the CERP
           effort.

           o Some delays were caused by the need to modify the conceptual
           design of some projects to comply with the requirements of WRDA
           2000's savings clause. According to this clause, CERP projects
           cannot transfer or eliminate existing sources of water unless an
           alternate source of comparable quantity and quality is provided,
           and they cannot reduce existing levels of flood protection.^7

^7The sources of water and levels of flood protection that must be
protected are those that were in existence on the date of WRDA 2000's
enactment--December 11, 2000.

           o Progress was limited by the availability of less federal funding
           than expected and a lack of congressional authorization for some
           of the projects.

           o The extensive modeling that accompanies the design and
           implementation of each project in addition to the "cumbersome"
           project review process may have also contributed to delays, as
           well as stakeholder comment, dispute resolution, and
           consensus-building that occurs at each stage of a project.

           o Delays have occurred in completing the CERP-related Modified
           Water Deliveries to Everglades National Park (Mod Waters) project,
           which is a major building block for CERP. These delays, in turn,
           have delayed CERP implementation.

Given the continuing delays in implementing critical CERP projects, the
state has begun expediting the design and construction of some of these
projects with its own resources. The state's effort, known as Acceler8,
includes most of the CERP projects that were among WRDA 2000's 10
initially authorized projects, whose costs were to be shared by the
federal government and the state. According to Florida officials, by
advancing the design and construction of these projects with its own
funds, the state hopes to more quickly realize restoration benefits for
both the natural and human environments and to jump-start the overall CERP
effort once the Congress begins to authorize individual projects. The
Acceler8 projects include seven that are affiliated with CERP and an
eighth that expands existing stormwater treatment areas. The state expects
to spend more than $1.5 billion to design and construct these projects by
2011.

Restoration Projects That Would Help Achieve the World Heritage Committee's
Benchmarks Will Not Be Completed for Many Years

Most of the restoration projects that would help Everglades National Park
achieve the WHC's benchmarks for removing the Park from its list of world
heritage sites in danger have not been completed. According to Park and
WHC documents, nine restoration projects were key to meeting these
benchmarks. Table 2 lists the nine projects, the type of project,
implementation status, and expected completion date.

Table 2: Status of Nine Restoration Projects Key to Achieving the World
Heritage Committee's Benchmarks

                                                                   Completion 
Project                Type         Purpose         Stage       Date       
Storm Water Treatment  CERP-related Water Quality   Completed         2005 
Areas 3/4                                                                  
East Everglades        Non-CERP     Habitat         Ongoing            TBD 
Addition to Everglades              Acquisition and                        
National Park                       Improvement                            
Everglades Agriculture CERP-related Water Quality   Ongoing           2010 
Area Storm Water                                                           
Treatment Areas                                                            
Expansion                                                                  
Modified Water         CERP-related Water Storage   Ongoing           2011 
Deliveries                          and Flow                               
C-111 (South Dade)     CERP-related Water Storage   Ongoing           2012 
                                       and Flow                               
C-111 Spreader Canal   CERP         Water Quality   Not Yet         2015^a 
                                                       Implemented            
Everglades National    CERP         Water Storage   Not Yet           2015 
Park Seepage                        and Flow        Implemented            
Management                                                                 
Water Conservation     CERP         Water Storage   Not Yet           2020 
Area 3 --DECOMP                     and Flow        Implemented            
Central Lake Belt      CERP         Water Storage   Not Yet           2035 
Storage                             and Flow        Implemented            

Source: GAO analysis of agency provided data.

^a SFWMD is expediting the design and construction of this project with
its own funds in advance of congressional authorization, which may result
in earlier completion.

As table 2 shows, only one of the nine projects has been completed; four
projects are ongoing and will not be completed until at least 2012; and
four projects are still in planning and design and are not expected to be
completed until some time between 2015 and 2035.

In February 2007, the United States prepared a status report for the WHC
on the progress made in achieving the benchmarks that the committee had
established for the Park in 2006. Based on its review of this progress
report, at a benchmarks meeting on April 2-3, 2007, the WHC's draft
decision was to retain Everglades National Park on the list of world
heritage sites in danger; to recommend that the United States continue its
commitment to the restoration and conservation of the Park and provide the
required financial resources for the full implementation of the activities
associated with CERP. WHC's draft decision also requested that the United
States provide an updated report by February 1, 2008 on the progress made
towards implementation of the corrective measures. However, at the WHC
session held between June 23 and July 2, 2007, the WHC decided to remove
the Park from the list of world heritage sites in danger and commended the
United States for the progress made in implementing corrective measures.
In its final decision, the WHC encouraged the United States to continue
its commitment to the restoration and provide the required financial
resources for the full implementation of the activities associated with
CERP. It is unclear from the WHC final decision document whether any
additional or new information was provided to the committee that led to
its final decision.

The Overall Restoration Effort Has No Sequencing Criteria and Criteria
Established For CERP Projects Have Not Been Fully Applied

No overall sequencing criteria guide the implementation of the 222
projects that comprise the South Florida ecosystem restoration effort. For
the 60 CERP projects there are clearly defined criteria to be considered
in determining the scheduling and sequencing of projects. However, the
Corps has not fully applied these criteria when making CERP project
sequencing decisions, because it lacked key data such as updated
environmental benefits data and interim goals. As a result the Corps
primarily relied on technical interdependencies and availability of
funding as the criteria for making sequencing decisions.^8 The Corps has
recently started to revisit priorities for CERP projects' and alter
project schedules that were established in 2005 (this process is referred
to as CERP-reset). However, because the Corps continues to lack certain
key data for making sequencing decisions, the revised plan, when
completed, will also not fully adhere to the criteria.

Although CERP-related projects provide the foundation for many CERP
projects, there are no established criteria for determining their
implementation schedule and their estimated start and completion dates
largely depend upon when and if the implementing agency will have
sufficient funding to implement the project. For example, the construction
of the Mod Waters project has been delayed several times since 1997
because, among other things, Interior did not receive enough funding to
complete the construction of this project. This project is expected to
restore natural hydrologic conditions across 190,000 acres of habitat in
Everglades National Park and assist in the recovery of threatened and
endangered plants and wildlife. The completion date for the Mod Waters
Project has slipped again and it is now not expected to be completed until
2011. Because completion of this project is critical to the implementation
of other CERP projects such as the Water Conservation Area 3
Decompartmentalization and Sheetflow Enhancement (Decomp) project--a
project that many agency officials consider key to restoring the natural
system--these delays will have a ripple effect on the completion date of
this project as well.

^8An agreement establishing interim goals was signed by the Departments of
the Army and the Interior and the state of Florida in late April/early May
2007.

Similarly, for non-CERP projects, agencies reported that they do not have
any sequencing criteria; instead, they decide on the scheduling and timing
of these projects primarily if and when funding becomes available. For
example, Florida has a land acquisition program to acquire lands for
conservation and habitat preservation throughout the state, including for
some non-CERP projects that are part of the South Florida ecosystem
restoration effort. State officials have identified lands and added them
to a list of priority projects proposed for acquisition throughout the
state. However, whether or not these lands will be acquired for non-CERP
projects depends on whether there is available funding in the annual
budget, there are willing sellers, and the land is affordable based on the
available funding.

Because of the correct sequencing of CERP projects is essential to the
overall success of the restoration effort, we recommended that the Corps
obtain the data that it needs to ensure that all required sequencing
criteria are considered and then comprehensively reassess its sequencing
decisions to ensure that CERP projects have been appropriately sequenced
to maximize the achievement of restoration goals. The agency agreed with
our recommendation.

Federal Agencies and Florida Have Provided More Than $7 Billion for Restoration
Activities Since 1999, But Estimated Costs Have Increased and Are Likely to Rise

From fiscal year 1999 through fiscal year 2006, federal and state agencies
participating in the restoration of the South Florida ecosystem provided
$7.1 billion for the effort. Of this total, federal agencies provided $2.3
billion and Florida provided $4.8 billion. Two agencies--the Corps and
Interior--provided over 80 percent of the federal contribution. As figure
1 shows, federal and state agencies allocated the largest portion of the
$7.1 billion to non-CERP projects for fiscal years 1999 through 2006.

Figure 1: Federal and State Funding Provided for CERP, CERP-Related, and
Non-CERP Projects and Activities, Fiscal Years 1999-2006

Note: Amounts do not total to $7.1 billion due to rounding. The amounts
are $1.93 billion for CERP-related, $2.35 billion for CERP, and $2.80
billion for non-CERP.

While federal agencies and Florida provided about $2.3 billion during
fiscal years 1999 through 2006 for CERP projects, this amount was about
$1.2 billion less than they had estimated needing for these projects over
this period. This was because the federal contribution was $1.4 billion
less than expected. This shortfall occurred primarily because CERP
projects did not receive the congressional authorization and
appropriations that the agencies had expected. In contrast, Florida
provided a total of $2 billion over the period, exceeding its expected
contribution to CERP by $250 million, and therefore making up some of the
federal funding shortfall.

Additionally, between July 31, 2000, and June 30, 2006, the total
estimated cost for the South Florida ecosystem restoration grew from $15.4
billion to $19.7 billion, or by 28 percent. A significant part of this
increase can be attributed to CERP projects; for these projects costs
increased from $8.8 billion to $10.1 billion. This increase represents
nearly 31 percent of the increase in the total estimated cost for the
restoration. Agency officials reported that costs have increased for the
restoration effort primarily because of inflation, increased land and
construction costs, and changes in the scope of work. Furthermore, the
costs of restoring the South Florida ecosystem are likely to continue to
increase for the following reasons:

           o Estimated costs for some of the projects are not known or fully
           known because they are still in the design and planning stage. For
           example, the total costs for one project that we examined--the
           Site 1 Impoundment project--grew by almost $36 million; from about
           $46 million to about $81 million after the design phase was
           completed. If other CERP projects, for which initial planning and
           design have not yet been completed, also experience similar
           increases in project costs, then the estimated total costs of not
           only CERP but the overall restoration effort will grow
           significantly.

           o The full cost of acquiring land for the restoration effort is
           not known. Land costs for 56 non-CERP land projects, expected to
           total 862,796 acres, have not yet been reported. According to
           state officials, Florida land prices are escalating rapidly, owing
           primarily to development pressures. Consequently, future project
           costs are likely to rise with higher land costs. Similarly, while
           land acquisition costs for CERP projects are included as part of
           the total estimated project costs, thus far, the state has
           acquired only 54 percent of the land needed for CERP projects, at
           a cost of $1.4 billion. An additional 178,000 acres have yet to be
           acquired; the cost of these purchases is not yet known and is
           therefore not fully reflected in the cost of CERP and overall
           restoration costs.

           o The cost of using new technologies for the restoration effort is
           unknown. The Congress authorized pilot projects in 1999 and 2000
           to determine the feasibility of applying certain new technologies
           for storing water, managing seepage, and reusing treated
           wastewater. While the pilot projects have been authorized, the
           cost to construct or implement projects based on the results of
           the pilot projects is not yet known.

In conclusion, Mr. Chairman, our review of the South Florida Ecosystem
restoration effort shows that the some progress has been made in moving
the restoration forward. However, the achievement of the overall goals of
the restoration and ultimately improvements in the ecological condition of
Everglades National Park depends on the effective implementation of key
projects that have not progressed as quickly as was expected. Moreover,
the shortfall in federal funding has contributed to some of these delays
and at the same time the costs of the restoration continues to increase
and we believe could rise significantly higher than the current estimate
of almost $20 billion. In light of these concerns, we believe that
restoring the South Florida Ecosystem and Everglades National Park, will
continue to be a significant challenge for the foreseeable future. This
concludes our prepared statement. We would be happy to respond to any
questions you may have.

GAO Contacts

If you have any questions about this statement, please contact Anu K.
Mittal @ 202-512-3841 or [13][email protected] . Other contributors to this
statement include Sherry McDonald (Assistant Director) and Kevin Bray.

(360892)

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www.gao.gov/cgi-bin/getrpt?GAO-07-1250T.

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Highlights of GAO-07-1250T, a testimony before the Subcommittee on
International Operations and Organizations, Democracy and Human Rights,
Committee on Foreign Relations, U.S. Senate

September 19, 2007

SOUTH FLORIDA ECOSYSTEM

Some Restoration Progress Has Been Made, but the Effort Faces Significant
Delays, Implementation Challenges, and Rising Costs

The South Florida ecosystem covers about 18,000 square miles, and is home
to the Everglades, one of the world's unique environmental resources.
Historic efforts to redirect the flow of water through the ecosystem have
jeopardized its health and reduced the Everglades to about half of its
original size. In 1993, the United Nations Educational, Scientific, and
Cultural Organization's World Heritage Committee (WHC) added Everglades
National Park (Park) to its List of World Heritage in Danger sites. In
2000, a strategy to restore the ecosystem was set; the effort was expected
to take at least 40 years and cost $15.4 billion. It comprises 222
projects, including 60 key projects known as the Comprehensive Everglades
Restoration Plan (CERP), to be undertaken by a multiagency partnership.

This testimony is based on GAO's May 2007 report, South Florida Ecosystem:
Restoration Is Moving Forward, but Is Facing Significant Delays,
Implementation Challenges, and Rising Costs, and a review of WHC decision
documents relating to the Park's listing. This statement addresses the (1)
status of projects implemented (2) status of projects key to improving the
health of the Park, (3) project sequencing factors, and (4) funding
provided for the effort and extent to which costs have increased.

[20]What GAO Recommends

GAO is not making any new recommendations.

Of the restoration effort's 222 projects, 43 have been completed, 107 are
being implemented, and 72 are in design, in planning, or are not yet
started. The completed and ongoing projects will provide improved water
quality and water flow within the ecosystem and additional habitat for
wildlife. According to restoration officials, significant progress has
been made in acquiring land, constructing water quality projects, and
restoring a natural water flow to the Kissimmee River--the headwater of
the ecosystem. Many of the policies, strategies, and agreements required
to guide the restoration in the future are also now in place. However, the
60 CERP projects, which are the most critical to the restoration's overall
success, are among those that are currently being designed, planned, or
have not yet started. Some of these projects are behind schedule by up to
6 years. Florida recently began expediting the design and construction of
eight key projects, with the hope that they would immediately benefit the
environment, enhance flood control, and increase water supply, thus
providing further momentum to the restoration.

In 2006, the WHC adopted several key benchmarks that if met would
facilitate removal of the Everglades National Park from its List of World
Heritage in Danger sites. As noted by WHC, achievement of these benchmarks
was linked to the implementation of nine key restoration projects.
However, only one of these projects has been completed, four are currently
being implemented and four are currently being designed. Moreover, the
benefits of these projects will not be available for many years because
most of the projects are scheduled for completion between 2011 and 2035.

There are no overarching sequencing criteria that restoration officials
use when making implementation decisions for all 222 projects that make up
the restoration effort. Instead, decisions for 162 projects are driven
largely by the availability of funds. There are regulatory criteria to
ensure that the goals and purposes of the 60 CERP projects are achieved in
a cost effective manner. However, the 2005 sequencing plan developed for
these projects is not consistent with the criteria because some of the
data needed to fully apply these criteria were not available. Therefore,
there is little assurance that the plan will be effective. GAO recommended
that the agencies obtain the needed data and then comprehensively reassess
the sequencing ofthe CERP projects.

From fiscal years 1999 through 2006, the federal government contributed
$2.3 billion and Florida contributed $4.8 billion, for a total of about
$7.1 billion for the restoration. However, federal funding was about $1.4
billion short of the funds originally projected for this period. In
addition, the total estimated costs for the restoration have increased by
28 percent--from $15.4 billion in 2000 to $19.7 billion in 2006 because of
project scope changes, increased construction costs, and higher land
costs. More importantly, these cost estimates do not represent the true
costs for the overall restoration effort because they do not include all
cost components for a number of projects.

References

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