1. Program Development & Management: U.S. Army Civil Works Program Gary Loew, Chief, Programs Integration Division Directorate of Civil Works U.S. Army Corps of Engineers National Waterways Conference Annual Meeting November 7-9, 2007

2. One Corps, Serving the Army and the Nation Outline FY07 Accomplishments FY08 Appropriations FY09 Budget Future Budget Trends

3. One Corps, Serving the Army and the Nation FY 07 ACCOMPLISMENTS  Executed about $6.8 billion in FY07  $1.6 bil obligated for NOLA System Repair & Strengthening  5 Planning and 15 Construction project completions scheduled  Reprogrammings: * Investigations = $3.5 mil * Construction = $36.9 mil * O&M = $48.2 mil * MR&T = $9.9 mil  Non-emergency Funding Carryover reduced to ~ $1 bil  “Payback” requirement reduced to 75 projects for $147 mil  Almost all new contracts fully funded * 135 continuing contracts today (as of 30 Jun) * 18 awarded in FY06 * 1 awarded in FY07

4. One Corps, Serving the Army and the Nation FY 07 ACCOMPLISMENTS (cont)  Timely guidance and funding to Field  Timely budget submissions to Administration  Timely information and response to Congress  Progress on 5 Demonstration Watershed Studies  Risk Calculation, Risk Management, Risk Communication  Prioritization, Planning and Construction of Portfolio of Dams with Dam Safety issues; applied also to leves  Levee Certification Policy and Federal Levee data base  Continued rehab on major projects; more efficient funding  Strategic Planning & Plan implementation  WRDA

5. One Corps, Serving the Army and the Nation FY 07 ACCOMPLISMENTS (cont) CIVIL WORKS CUSTOMER SURVEY ScaleMean Attitude4.33 Services4.27 Staff4.41 Timeliness3.90 Cost3.91 Communication4.29 Overall4.20

6. One Corps, Serving the Army and the Nation TRENDS TO WATCH  Cost of Infrastructure Recapitalization Improved Inspection Techniques Modern Design Standards Cost of meeting ESA and other legal requirements  Cost of Construction Fuel, Steel, Concrete Expanding worldwide demand  Continuing Pressure on Budget Entitlement Programs Medicare, Medicaid, Social Security

7. One Corps, Serving the Army and the Nation FY08 Appropriations

8. One Corps, Serving the Army and the Nation Budget & Appns Comparison FY06 FY07 FY08 FY09 $ Millions Investigations95 94 90 Operation & Maint.1,979 2,258 2471 Construction 1,637 1,5551523??? Miss. River & Tribs. 270278260 Regulatory Program 160 173 180 F.C. & Coastal Emer.70 81 40 F.U.S.R.A.P. 140 130 130 Expenses 162 164 177 ASA(CW)- (6) (6) Total 4,513 4,733 4,871 Appn5,3295,3345,448Senate 5,584House Appn>Budget+216+401~+700

9. One Corps, Serving the Army and the Nation FY08 Appropriation Legislation Status  House Bill – HR 2641, 17 Jul 07 --Report 110-185 Parts I&II  Senate Bill – S 1751, 9 Jul 07 (Cmte passed) --Report 110-127  Continuing Resolutions --CRA #1 (HJR #52) 1 Oct – 16 Nov --CRA #2 -- 17 Nov - ~14 Dec --CRA #3 -- ?  Final Resolution Possibilities -- Conference – Conference House Bill and Senate Cmte Bill (~Nov-Mar?) or -- Omnibus Bill or Joint Continuing Res. (Jan-Mar?) --Final Bill about 85% “fat free”

10. One Corps, Serving the Army and the Nation FY05 E&WD ACT CW EARMARKS As a % of the FY05 Appropriation

11. One Corps, Serving the Army and the Nation WRDA Status  23 Oct -- Sent to President  2 Nov – President Vetoed  6 Nov -- House Overode Veto 361-54  7 Nov – Senate??

12. One Corps, Serving the Army and the Nation SUPPLEMENTAL APPRORIATIONS ARE IMPORTANT TO PROJECT PERFORMANCE

13. One Corps, Serving the Army and the Nation Four FY05-7 Emergency Supplementals Approp $ Millions Four Bills FCCE $7,169.0P.L. 109-62 (FY 05) GI48.8 P.L. 109-148 (FY 06) CG687.3 P.L. 109-234 (FY 06) O&M533.7 P.L. 110-228 (FY 07) MR&T153.7 GE1.6 TOTAL$8,594.1

14. One Corps, Serving the Army and the Nation FY07 Emergency Supplemental PL 110-28 Approp $ Millions Comments FCCE $1,300.0 LPV & WBV-to auth level 107.7Mississippi 128.4Various damaged projects 11.7Missouri R. Flood 3.7Nor’easter Flood 2.6Texas 7.0Drought Assistance GI8.0 CG36.5SELA & Nor’easter Flood O&M3.0Katrina-dredging, Alabama-Coosa R. TOTAL$1,608.7

15. One Corps, Serving the Army and the Nation FY09 Budget

16. One Corps, Serving the Army and the Nation FY09 Civil Works Budget Supports the President’s Overall Budget Priorities: – Continue Long Term Economic Growth – Win the Global War on Terrorism – Secure the Homeland Supports Mission Priorities –Commercial Navigation –Flood & Coastal Storm Damage Reduction –Aquatic Ecosystem Restoration

17. One Corps, Serving the Army and the Nation FY 09 Program Process Apply Policy Direction and Guidance Rank competing investments in each business program Demonstrate improved outcomes from added increments Establish Amounts for Programs with Internal Performance Metrics General Expenses; Regulatory; Flood Control & Coastal Emergencies; Recreation; Environmental Stewardship; FUSRAP Develop Performance Based Metrics for projects in competing business lines: Initial level (No new work, phases or contracts, previously budgeted projects only) Categorize and Prioritize CG projects into Priority levels Add Performance Base High Return items and increments for GI and O&M items Add to Highest Priority, ongoing projects & contracts

18. One Corps, Serving the Army and the Nation Budgeting Metrics Main Ranking Criteria for Business Lines Flood Risk Mgmt. (FRM) - People in 100-year floodplain FRM- Flood “Risk” Index FRM, Navigation - Dam safety & seepage stability FRM, Navigation, Hydropower – Benefit/Cost Ratio Navigation - Tonnage movements Navigation, Hydropower - “Risk” Assessments Environmental - Loss prevention for significant natural resources All Business Lines – New or Continuing; Years to Complete All Investigations (Studies) - Watershed Elements All Construction – Endangered Species Act & compliance needs ALL O&M - Safety, Caretaker, Compliance, Subsistence

19. One Corps, Serving the Army and the Nation FY 08 Construction Budget – National Priority Projects Sims Bayou Oakland Harbor Olmsted Lock & Dam New York- New Jersey Harbor Navigtion Flood Damage Reduction Aquatic Ecosystem Restoration S. Fla. Everglades Upper Miss.R. Restoration

20. One Corps, Serving the Army and the Nation Budget Arithmetic – FY08 FY08 Civil Works Budget Ceiling$4,800million Allocate GE, REG, FCCE, REC, FUSRAP…- 900 Allocate Base O&M (~75% of required)- 1,800 Essential Dam Safety- 500 Assign National Priorities- 400 Continuing Construction at Base Level- 700 Planning Studies- 100 Minimum Essential Allocation =- $4,400 Left for all other CW Projects & Programs~$ 400million THAT’S IT!

21. One Corps, Serving the Army and the Nation Future Budget Trends

22. One Corps, Serving the Army and the Nation Budgeting from the Top Goal and Performance-Based Budgets –Define strategy, objectives and performance metrics –Budget to achieve those objectives –Systems budgeting—national, regional, local –More emphasis on program, system and regional benefits; –Less emphasis on individual project benefits More emphasis on multi-dimensional benefits Changing focus –HQs focus on capital decisions, future revenue, funding strategy –Field will have more influence over funding for execution

23. One Corps, Serving the Army and the Nation Five Year Planning Example FY08-12 Five Year Plan Construction Wedge, Enhanced Plan, FY08-12 $2.2 bil available for new starts in next 5 years 79 eligible projects @ $9.5 bil 131 other projects @ $6 bil If past funding trends continue we have ~15%- 23% of funds needed for approved projects

24. One Corps, Serving the Army and the Nation Example Goal-Based Budgeting for Navigation Goal: Maintain projects to meet present and future needs –Objective: Maintain Ports PM 1 – Percent time navigation channels are available to commercial users –high-commercial traffic (>10 mil tons @~95%?) –medium traffic (1-10 mil tons @~85%?) PM 2 – Percent project features that exceed Facilities Condition Index (FCI) PM 3 – O&M cost per ton cargo shipped *PM = Performance Measure

25. One Corps, Serving the Army and the Nation Example (cont) Goal-Based Budgeting for Navigation Goal: Maintain projects to meet present and future needs –Objective: Maintain Inland Navigation Channels PM 1 – Segment Availability; no instances where mechanical failure results in lock closure >24 hours PM 2 – Percent high commercial use segments with sufficient preventive maintenance to achieve good service level PM 3 – Total O&M funds/segment ton-mile (5-yr avg) PM 4 – Percent of funding to construct and expand projects allocated to high return investments PM 5 – Percent of navigation asset inventory with recent structural or operational risk assessments *PM = Performance Measure

26. One Corps, Serving the Army and the Nation Communicating Outcomes Budget is developed to achieve program objectives USACE will be able to display and communicate on a segment, system and national basis if funds budgeted and appropriated will achieve objectives Thru the 5-yr Plan, USACE will be able to forecast improving or worsening conditions –By system, region and nation –We will be able to forecast progress (or not) towards national goals

27. One Corps, Serving the Army and the Nation Risks and Challenges System Objectives Systems Analysis “High Commercial Traffic” navigation channels and segments Segment focus vs Systems focus

28. One Corps, Serving the Army and the Nation Industry Role Grow with us as we learn to better communicate importance of infrastructure to the nation’s economic well being, national defense and quality of life. Stay engaged as we examine funding sources and improve our decision processes –Systems objectives and benefits –Future planning for riverine and coastal systems –Measurement Support system, regional and national needs

29. One Corps, Serving the Army and the Nation

30. EARMARKS Definition Reference: January 25, 2007 OMB Memo M-07-09 It is an Earmark IF: –A) Add-ons. The Administration asks for $100 million … and Congress provides $110 million and places restrictions (such as site-specific locations) on the additional $10 million, the additional $10 million is … an earmark. –B) Add-ons. The President budgeted $0 for a project and Congress added funds, even if there were no written directions within the Act language, Conference report, House report, or Senate report, the added amount IS an earmark. –C) Carve-outs. The Administration asks for $100 million and Congress provides $100 million but places restrictions on some portion of the funding, the restricted portion is counted as an earmark. [Of the $1.5 bil appropriated, $30 mil is for Project XXX…]

31. One Corps, Serving the Army and the Nation FY05 E&WD ACT CW EARMARKS % Earmarked $$ by Account

32. One Corps, Serving the Army and the Nation Program Comparison FY07 BudFY07 WPFY08 Bud FY08 HouseFY08 Sen $ Millions Investigations 9416390120172 Operation & Maint. 2,2581,9752,4712,6552,292 Construction1,5552,3361,523 2,0092,059 Miss. River & Tribs. 278397260278375 Regulatory Program 173159 180180180 F.C. & Coastal Emerg. 810404050 F.U.S.R.A.P.130139 130130140 Expenses 164167177171175 ASA(CW) 54 065 Total 4,7385,340 4,8715,5895,448