1. DRAFT CORPS OF ENGINEERS CONTRACTS: Louisiana Coastal Area, Mississippi River Gulf Outlet, and Lake Pontchartrain & Vicinity Presented to the Coastal Protection and Restoration Authority July 11, 2008

2. Louisiana Coastal Area Feasibility study on 6 ecosystem restoration projects Multipurpose operation of Houma navigation lock Terrebonne basin barrier shoreline restoration Small diversion at Convent/Blind River Amite River diversion canal modification Medium diversion at White’s Ditch Convey Atchafalaya river water to northern Terrebonne marshes

3. Louisiana Coastal Area (continued) Cost Share Agreement CPRA to be Non-Federal Sponsor NFS & Corps each lead on 3 projects 50% NFS cost share NFS work-in-kind projected to be 50%, so no payment anticipated by NFS Purpose is to determine feasibility of the projects

4. Mississippi River Gulf Outlet Construction MRGO closure structure Ecosystem restoration measures Memorandum of Agreement Full federal cost Corps to construct CPRA to be Non-Federal Sponsor NFS to operate and maintain, and acquire necessary property rights

5. Lake Pontchartrain & Vicinity Construction Accelerate completion of unconstructed portions of original project Modify original project to improve performance and armor critical portions Raise levee heights and enhance original project to provide level of protection to achieve NFIP certification

6. Lake Pontchartrain & Vicinity (continued) CPRA to be Non-Federal Sponsor Partnering and Cost Share Agreement Full federal expense for completion of original project Full federal expense for improvement of original project 35% NFS cost share for raising levee heights and enhancing original project NFS to perform WIK, O&M, property acquisition

7. Common issues Corps has complete control For full federal and cost-shared work, Corps determines completion and turnover Protection and/or performance O&M cost For cost-shared work, Corps determines Corps costs and NFS credit Amount of NFS payment for Corps work Amount of credit for NFS work Corps determines expenditure of State funds

8. Common issues (continued) Hazardous substance remediation CERCLA liability can be huge and unknown Corps position is that this is 100% NFS cost Property owner liable under CERCLA Use of federal program funds Corps requires express authorization Has been a problem in the past Standard should be absence of prohibition

9. LCA-specific issues Total costs capped, but Corps could “crowd out” NFS costs Corps can incur more than 50% share Corps can “allocate” NFS costs to excess category As a practical matter, NFS may have to agree to increase total costs Availability of credits for pre- Agreement work NFS ability to audit Corps expenditures

10. MRGO-specific issues Construction at full federal expense, but: NFS to acquire necessary property rights (agreed; credit if possible) NFS to perform environmental investigation and remediation Clarification of “completion” versus “maintenance” No dispute resolution mechanism

11. LPV-specific issues NFS cannot agree or disagree to include or incur costs NFS cannot cost-share all of the same types of costs as Corps Credit limitations May be impermissible No reimbursement for WIK above NFS cost share

12. LPV-specific issues (continued) No NFS or third-party review of disagreement NFS comments during construction NFS comments on completion NFS request for warranty work Credit for property, relocations, and improvements Corps determination of funds due

13. LPV-specific issues (continued) NFS responsible for: Acquisition of necessary property rights Relocations - Roads, railroads, pipelines Building improvements for disposal of dredged material from construction Interior drainage & pumping plants – No credit Commandeering – No credit for defense CERCLA remediation – No credit

14. LPV-specific issues (continued) Confusing cost-share payment scheme Appears to require up-front payment despite credit for WIK, etc., with reimbursement later Problematic property rights process Preference for commandeering Provision of other gov’t agency property Unrealistic time frames for acquisition

15. Conclusion All three Agreements are more favorable to NFS than past PCAs Corps has agreed to some improvements Some additional improvements are still necessary Negotiations are ongoing