The Army Civil Works Program

1. The Army Civil Works Program Serving the Nation And Its Defense Presentation to California Marine Affairs & Navigation Conference Mr. Steven L. Stockton, Deputy Director of Civil Works HQ U.S. Army Corps of Engineers 9 February 2006

2. Water Resources –the Situation • Nation faces large and growing water resources challenges. • Population pressures, changes in national priorities and values will fundamentally change how we approach water resources problems. • Availability of water will likely be single most significant factor in our economic prosperity and quality of life in this century.

3. Corps Role inWater Resources • Ensuring the Nation’s ability to • deliver economic goods and services, while • protecting and sustaining our environment/ecosystems. • Addressing water resource issues in a rational, systematic and disciplined way • Tailoring projects to specific physical, economic, and environmental context • Offering hands-on experience • Scientific: engineering/economic/ ecological • Governmental: political/public policy

4. Our Navigation Mission: Vital to Trade and to Our Economy Anacortes 52 harbors – coastal, inland, Great Lakes - handled over 10 million tons each in 2005… While 196 inland waterway locks and dams support over 600 million tons of commerce annually Seattle Tacoma Two Harbors Portland Portland Duluth/Superior Boston Detroit New Haven Pittsburgh Chicago New York/NJ Ashtabula Lower Delaware River (9 harbors) Indiana Hbr Richmond Cleveland Baltimore Cincinnati Oakland Newport News Huntington Norfolk St. Louis Los Angeles Long Beach Memphis Million Tons Charleston Over 100 Baton Rouge Savannah Pascagoula Lake Charles Jacksonville 50 - 100 Houston Mobile Texas City Honolulu Tampa 25 - 50 Plaquemines Freeport Port Arthur 10 - 25 Matagorda New Orleans Beaumont Valdez S. Louisiana Corpus Christi Port Everglades

5. Construction / Design Funds Feasibility Funds Under Construction/ Study for Additional Improvements Key Harbor Improvement Projects Funded in 06 Great Lakes System Study Lake Washington • 27 key deep draft harbor improvements in ’06 appropriation • About $306 million • Long-term investment of over $4 billion Columbia R Sault Ste Marie (Soo Locks) Searsport Boston New York/NJ SF Bay to Stockton Indiana Hbr Lwr Delaware R Oakland 50-ft James R Norfolk Ventura Los Angeles Main Channel Wilmington Pascagoula Savannah Brunswick Calcasieu R DeLong Mtn Hbr Gulfport Houston/ Jacksonville Nome Kikiaola Galveston Iberia Mobile Canaveral Texas City Tampa Barbers Pt Anchorage Sabine- Freeport Neches WW St. Paul Hbr Yakutat St Petersburg Kaumalapau Port Everglades Chignik Akutan Corpus Christi Haines Sand Pt Brazos Island Hbr Unalaska

6. Why It’s Critical: They’re Steaming to Our Shores to Stock Our Stores Projected Number of Annual Calls to and from U.S. Ports by Ship Type:Year 2000-2020 160 120 Tankers Dry Bulk calls (thousands) 80 Containership General Cargo Other 40 0 year 2000 year 2010 year 2020 Source: National Dredging Needs Study, USACE

7. 17.7 7.4 5.1 Depth-Constrained Containership Calls in 2020, with and without Planned Harbor Projects(in thousands of ship calls) 14.0 4.5 3.8 Pacific Coast Harbor Projects in 2006: Under Construction Under Study 2.5 Atlantic Coast 1.1 1.6 Under Construction/ Study for Additional Improvements Gulf Coast

8. FY 2007 Budget Emphasizes 3 critical Corps activities. 1. Construction and completion of projects that will provide high return on the nation’s investment in commercial navigation, flood and storm damage reduction, and aquatic ecosystem restoration. 2. Increased funding for regulatory program to help protect and preserve Nation’s waters and wetlands. 3. Funds for Corps’ critical emergency preparedness and response mission in regular budget process. Corps’ focus is on assuring maintenance of critical infrastructure, funding high return studies and construction projects, and continuing best of other ongoing planning and construction efforts within available funds

9. Civil Works Budget &Appropriations FY05 FY05 FY05 FY06 FY06FY07 Conference Suppls. Total Approp. Budget ConferenceBudget Construction, Gen. 1,782 63 1,8451,637 2,3721,555 Oper. & Maint., Gen. 1,943 355 2,098 1,979 1,9892,258 Gen. Investigations 143 143 95 16494 Mississippi R. & Tribs. 322 6 328 270 400278 Regulatory 144 144 160 160173 Flood & Coast Emerg. 0 348 348 70 081 FUSRAP 164 164 140 140 130 Gen. Expenses 166 166 162 154 164 OASA(CW) 4 __ 4040 Total 4,668 772 5,4404,513 5,3834,733

10. FY 07 BudgetPriority Projects Columbia River Fish Mitigation Missouri River Fish & Wildlife Mitigation New York-New Jersey Harbor Upper Miss.R. Side Channel Restoration Oakland Harbor Olmsted Lock & Dam Sims Bayou Navigation Flood Damage Reduction Comprehensive Everglades Restoration Environmental

11. Performance Based Budgeting – Which Projects Make the Cut? Performance Measures & Ranking Criteria • Dam Safety • All—Benefit/Cost Ratio, Remaining Benefit/Remaining Cost Ratio, Time to Complete • Flood Damage Reduction • People in 100-year flood plain • Average annual damages prevented • Property at risk in 100-year floodplain • Navigation • Tonnage • Average Annual Benefits • Environmental Restoration • Loss prevention for significant natural resources • Endangered Species Act & other environmental compliance needs

12. Performance Based Budgeting – Modifications for FY07 • We are NOT departing from Performance Based Budgeting. BUT • We have enhanced it by adding additional key metrics to decision making efforts. • People in 100-Year Floodplain • Average Annual Damages • Tonnage • $ Cost/Ton • Average Annual Benefits • These have been added to overall Remaining Benefit to Remaining Cost Ratio metric in decision making for Flood Control and Navigation business lines

13. Five-Year Development Plan • Based on President’s budget and guidance for Civil Works program. • Presents 5-year plan for FY 2006-10. • Purpose is to present informed discussion and decision making on program funding. • Presents how watershed-integrated water resources management will be pursued. • Performance based - discusses how funding over 5-year period will achieve goals in Civil Works Strategic Plan.

14. Lean Six Sigma 6S • Corpswide business transformation initiative • Tool to pursue expertise and organizational structure required to succeed • Enhanced work environment, job satisfaction, productivity, efficiency and streamlined processes • Identification of processes and implementation starts in FY06 • L6S training begins Nov 05 (leadership), continues with facilitators’ training • Only 4-6 processes a year (due to funding constraints)

15. Asset (Infrastructure) Management • Presidential Executive Order #13327 • All Federal infrastructure • Major focus area is identification of “low use” Federal facilities that may be subject to removal from inventory as savings objective; • Federal agencies must manage their assets in a sustainable manner. • Now a major focus area of OMB oversight for all Federal agencies. • OMB now grades each agency quarterly on two areas (progress and performance) in PMI (Presidential Management Initiatives).

16. WRDA ’02 ’03 ’04 ’05 ‘06 • Civil Works projects usually authorized in Water Resources Development Acts (WRDAs) • No WRDA has passed Congress since 2000 • House passed its version of WRDA 2005 Jul 14 (vote of 406-14) • Senate version passed Energy and Public Works Committee • Hopeful for floor action, conference this year • WRDA provisions that support improvements to processes: • Peer review • Planning improvements • Mitigation • Technical assistance to States • Upper Mississippi River-Illinois Waterway • Louisiana Coastal Area Ecosystem Restoration • Working with Congress as they move towards WRDA enactment

17. Challenges - Current & Future • RELATIONSHIPS • Nation • Congress • Stakeholders & Partners • MANAGEMENT • Extracting Maximum Benefit from Available $’s • Changing Directions • Budget Development & Defense • Reprogramming • Continuing Contracts • FUNDING • Reserve Used Up • $4.5B to Manage a $6B Program • Demand for Projects & Services Exceeds Available Funding

18. Where We’re Going • Watershed-based approach • Multi-party collaborations among all partners • Emphasis on watershed objectives with budget priority for comprehensive planning • Sustainable integration of constructed and natural systems • Coordinated & standardized data collection and archiving • Optimized learning/information sharing • Effective leveraging of partners’ resources

19. Corps Campaign Plan • Revising policies, practices and processes to provide a more holistic approach to analyzing water resources challenges • Developing collaborative, effective and efficient approaches that integrate sponsors, stakeholders, Federal and State agency efforts • Improving our regulatory processes to better balance the demands of sustainable development with environmental protection • Developing individual and organizational capabilities to produce technically sound solutions to complex water resources challenges

20. Collaborative PlanningEC 1105-2-409, 31 May 05 • Planning studies (recon through feasibility) will be completed in three years. • Collaborative, watershed studies may be granted an exception to this requirement. • Collaborative planning may recommend a watershed plan with Corps’ components as well as components to be implemented by other Federal agencies Plan Selection: • All planning studies will evaluate, display and compare the full range of alternative plans’ effects across all four Principles and Guidelines’ accounts. • Plan may be candidate for selection if it has, on balance, net beneficial effects. • May select and recommend any one of the candidate plans – (ASA(CW) exception needed if not NED or NER plan) • Selection will consider the beneficial and adverse effects in all four accounts • Must identify an NED plan (for comparison)

21. Initiatives • HQ streamlining and use of Vertical Teams • Delegated post-authorization and reconnaissance report approval • Planning model improvements and R&D • Environmental Advisory Board and Operating Principles • Office of Water Project Review • Planning Centers of Expertise • Streamlining Processes • Alliances with State Water Managers • Collaboration with Stakeholders

22. Alliances with State Water Managers • Recognize state primacy for water rights • Become the states’ primary Federal support for state-wide water planning • Provide technical assistance, data and watershed analysis • Bring planning and analysis to bear in developing cooperative solutions to water conflicts that avoid litigation and heavy handed regulation

23. Environmental Operating Principles • Strive to achieve Environmental Sustainability. • Recognize the interdependence of life and the physical environment. • Seek balance and synergy among human development activities and natural systems • Continue to accept corporate responsibility and accountability • Seek ways and means to assess and mitigate cumulative impacts • Build and share an integrated scientific, economic & social knowledge base • Respect the views of interested individuals & groups

24. Role of Sponsors & Stakeholders • In planning • In policy development • On project delivery team • As part of ongoing relationships

25. Other Issues • Overdepth Dredging Guidance Issued • Impact of Single Overhead Rate on Regulatory • Impacts of Hurricane Recovery on $’s and Personnel

26. Navigation Partner Considerations • True partnership • Regional economic development • Intermodal linkages • Cost-effective alternatives to rail and highway transportation • Meeting customer needs and schedules • Increased international competitiveness • Recreation opportunities • Environmental considerations

27. The Army Civil Works Program Serving the Nation And Its Defense Presentation to California Marine Affairs & Navigation Council Mr. Steven Stockton, Deputy Director of Civil Works U.S. Army Corps of Engineers 9 February 2006