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Creating the CW Budget

Mr. Pete Luisa 2 March 2009 PNWA. Creating the CW Budget. Civil Works Value to the Nation. 299 Deep Draft Harbors. 627 Shallow Draft Harbors. Recreation areas 376 M Visitors/yr Generate $15 B in economic activity, 500,000 jobs. Emergency Operations. 8500 Miles of Levees.

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Creating the CW Budget

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  1. Mr. Pete Luisa 2 March 2009 PNWA Creating the CW Budget

  2. Civil Works Value to the Nation 299 Deep Draft Harbors 627 Shallow Draft Harbors Recreation areas 376 M Visitors/yr Generate $15 B in economic activity, 500,000 jobs Emergency Operations 8500 Miles of Levees Stewardship of 11.7 Million Acres Public Lands Environmental Restoration 11,000 miles of Commercial Inland Waterways: ½ the cost of rail 1/10 the cost of trucks ¼ of Nation’s Hydropower: $500 M + in power sales 400 miles of Shore protection Regulatory • US Ports & Waterways convey > 2B Tons Commerce • Foreign Trade alone creates > $160 B Tax Revenues

  3. CIVIL WORKS BUDGET FORMULATION TRADITIONAL APPROACH:        By account (Surveys and Design/Construction/O&M, etc.)        Geographic balance considered        Funding shortages spread across nearly all activities BUDGETING BY PERFORMANCE:        By business program (navigation, flood, etc.)        Funding distributed based on outcomes        Highest priority work funded at an efficient rate        Lower priority work may be deferred, even if already started

  4. PROGRAM STRUCTURE Account Investigations Construction Operations & Maintenance Mississippi River & Tribs Regulatory Program Formerly Utilized Sites Remedial Action Program Expenses Flood Control & Coastal Emerg Business Line Navigation Coastal harbors; Inland Waterways Flood Damage Reduction Riverine Floods; Coastal Storms Environment Aquatic Ecosystem Restoration Stewardship Formerly Utilized Site Remedial Action Hydropower Recreation Water Supply Emergency Regulatory

  5. OMB-ASA GUIDANCE ( FEB-MAR ) All Offices Develop Program Requirements ( Feb - May ) Budget Reviewed & Presented to SecArmy (Jun - Aug ) Funding Alloc. To Field Offices ( Oct - Dec ) Budget Cycle Budget Submitted to OMB ( Sep ) Cong. Hearings ( Mar - Apr ) OMB Passback ( Nov ) President Signs Approp. Bill ( Sep - Oct ) President’s Budget to Congress ( Feb ) Appropriations Bills ( Jul - Sep )

  6. FY 09 PROGRAM PROCESS Use Performance Measures and Policy Direction Guidance memo to: ·  Rank competing investments in each business program ·  Demonstrate improved outcomes from added increments Develop amounts based on their own internal performance metrics for: ·  GE; REG; FCCE; REC; ENV Stewardship; FUSRAP Develop Performance Based program for project competing business lines: ·  Initial level (No new work, phases or contracts, previously budgeted projects only) ·  O&M at 75% of last 5 years budget; Investigations same as PY-1. ·  Categorize and Prioritize CG projects into Priority levels ·  Add Performance Base High Return items and increments for GI and O&M items Add to the Highest Priority, ongoing projects & contracts to “Final Budget”

  7. Budgeting Measures Construction FRM & NAV & HYDRO - Benefit to Cost Ratio FRM & NAV - Dam Safety & Seepage Stability FRM – Construction Flood “Risk” Index ENR - Loss prevention for significant natural resources O&M NAV – Tonnage movements FRM & NAV & HYDRO – “Risk” Assessments ALL New/Continuing/Completing/Years to Complete Watershed Elements ESA & compliance needs Safety, Caretaker, Compliance, Subsistence

  8. PROGRAM COMPARISON($ millions) FY08 BudFY08 ApprFY09 Bud FY09 Appr Investigations 90 167 91 168 Operation & Maintenance 2471 (2185) 2244 2475 2202 Construction 1523 (1809) 2294 1402 2142 Miss. River & Tribs. 260 387 240 384 Regulatory Program 180 180 180 183 Flood Control & Coastal Em. 40 0 40 0 F.U.S.R.A.P. 130 140 130 140 Expenses 177 175 177 179 OASA(CW) (6) 5 6 4.5 Total 4871 5592 4741 5403 FY 2010 BUDGET DELIVERED TO CONGRESS AT $5.1 BILLION

  9. FY09 Civil Works Budget Math$4,800 mil Allocate GE, REG, FCCE, REC, FUSRAP… - 900 Allocate Base O&M (~75% of required) - 1,800 Essential Dam Safety - 500 High Performing Construction - 400 Continuing Construction Contracts - 700 Planning Studies- 100 Minimum Essential Allocation = - $4,400 Left for all other CW Projects & Programs ~ $ 400 mil* Use the $400 mil to restore project O&M to prior year levels Budget Arithmetic

  10. CW Funding Through 09 Budget

  11. Oct 08 – FY09 Continuing Resolution (CRA) to 6 Mar 09 Feb 09 – ‘American Recovery and Reinvestment Act’ Feb 09 – FY09 Appropriations Act Mar 09 – ARRA & Appns Act funds issued to field offices 26 Feb 09 – President presents FY10 Budget Overview Mar 09 – HQUSACE releases FY11 Budget Guidance to field offices Spring 09 – FY10 Budget details released to public Apr 09 – House/Senate FY10 Budget hearings May/Jun – Defense Supplemental ? Early-mid 2010 – Another possible Stimulus Bill? FY2009-11 Budgets and Appropriations

  12. ARRA Breakdown by Account SUMMARY OF APPROPRIATIONS ($Billions) • Investigations $0.025 Construction $2.000 • O&M $2.075 • MR&T $0.375 • Regulatory $0.025 • FUSRAP $0.100 • TOTAL $4.600

  13. Stimulus Funding Information CW Eligible Projects

  14. $4.6 billion for Corp programs No cost sharing with Inland Waterways Trust Fund No cost-share exemption from the HMTF or cost-shared projects Significant “transparency” requirements for tracking, monitoring and reporting of specific metrics Final selection of projects scheduled for approval in mid Mar 09 with work allowances to Districts immediately following selection. All unobligated funds (except for E&D, S&A and claims) expire 30 Sep 2010. Economic Stimulus American Recovery and Reinvestment Act

  15. Stimulus-Project Selection Criteria Project selection criteria from Conference Report: (1) Obligated/executed quickly; (2) Results in high, immediate employment; (3) Will have little schedule risk; (4) Will be executed by contract or direct hire of temporary labor; and (5) Will complete either a project phase, a project, or will provide a useful service that does not require additional funding.

  16. Other ARRA Provisions • Projects are eligible only if funded “heretofore or hereafter” • Unlimited reprogramming authority • Up to 0.5% to administer the bill • NLT $200M for environmental infrastructure • Section 902 relief • Ceiling relief for Section 14, 205, 206 and 1135 Programs • Funds may be retained after 30 Sep 2010 expiration for E&D, S&A, Claims • WRDA Sec 9006 relief (levee survey limit)

  17. And for the Out Years … • Expect a major debate on Federal funding priorities to commence with the FY 11 budget • We will continue to place a high priority on accurate ‘capability’ estimates • We will continue to place a high priority on execution of all that is appropriated • We will seek to improve our budget ‘defense’ of the value to the nation of the water resources infrastructure for which we are responsible

  18. How We All Contribute • USACE: • Develop the vision, goals, objectives in an open, collaborative way • Implement the Strategic Plan • Administration: • “Walk the performance-based budget talk.” • Stakeholders: • Contribute to vision, Goals, Objectives, Metrics • ALL: Keep Communicating! - A Vision to be the desired future state of water resources and the desire to have a water resources infrastructure that will serve this Nation’s economic, quality of life needs, today and into the future.

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