Winter Leader Conference February 4, 2009 “ Building Strong “ 1

Creating the CW Budget

Mr. Pete LuisaMr. Pete Luisa2 March 2009 2 March 2009 PNWAPNWA

Winter Leader Conference February 4, 2009 “ Building Strong “ 2

• US Ports & Waterways convey > 2B Tons Commerce • Foreign Trade alone creates > $160 B Tax Revenues

Recreation areas 376 M Visitors/yrGenerate $15 B in economic activity,

500,000 jobs

11,000 miles of Commercial Inland

Waterways:½ the cost of rail1/10 the cost of

trucks

400 miles ofShore protection

8500 Miles of Levees

299 Deep Draft Harbors

EmergencyOperations

Stewardship of11.7 Million Acres

Public LandsEnvironmental

Restoration

627 Shallow Draft Harbors

Regulatory

¼ of Nation’s Hydropower: $500 M + in power sales

Civil Works Value to the NationCivil Works Value to the Nation

Winter Leader Conference February 4, 2009 “ Building Strong “ 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

Winter Leader Conference February 4, 2009 “ Building Strong “ 4

PROGRAM STRUCTURE

Business LineNavigation Coastal harbors; Inland WaterwaysFlood Damage Reduction Riverine Floods; Coastal StormsEnvironment Aquatic Ecosystem Restoration Stewardship Formerly Utilized Site Remedial Action HydropowerRecreationWater SupplyEmergency Regulatory

AccountInvestigations Construction Operations & Maintenance Mississippi River & Tribs Regulatory Program Formerly Utilized Sites Remedial Action Program Expenses Flood Control & Coastal Emerg

Winter Leader Conference February 4, 2009 “ Building Strong “ 5

Budget Reviewed & Presented to SecArmy

(Jun - Aug )

OMB Passback( Nov )

Budget Submitted to OMB ( Sep )

President’s Budgetto Congress ( Feb )

All Offices DevelopProgram Requirements

( Feb - May )

Appropriations Bills( Jul - Sep )

Cong. Hearings ( Mar - Apr )

President Signs Approp. Bill ( Sep - Oct )

OMB-ASA GUIDANCE ( FEB-MAR )

Funding Alloc. To Field Offices

( Oct - Dec )

Winter Leader Conference February 4, 2009 “ Building Strong “ 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”

Winter Leader Conference February 4, 2009 “ Building Strong “ 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&MNAV – Tonnage movements

FRM & NAV & HYDRO – “Risk” Assessments

ALLNew/Continuing/Completing/Years to Complete

Watershed Elements

ESA & compliance needs

Safety, Caretaker, Compliance, Subsistence

Winter Leader Conference February 4, 2009 “ Building Strong “ 8

PROGRAM COMPARISON($ millions)

FY08 Bud FY08 Appr FY09 Bud FY09 Appr Investigations 90 167 91 168Operation & Maintenance 2471 (2185) 2244 2475 2202Construction 1523 (1809) 2294 1402 2142Miss. River & Tribs. 260 387 240 384Regulatory Program 180 180 180 183Flood Control & Coastal Em. 40 0 40 0F.U.S.R.A.P. 130 140 130 140Expenses 177 175 177 179OASA(CW) (6) 5 6 4.5

Total 4871 5592 4741 5403

FY 2010 BUDGET DELIVERED TO CONGRESS AT $5.1 BILLION

Winter Leader Conference February 4, 2009 “ Building Strong “ 9

Budget Arithmetic

• 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

Winter Leader Conference February 4, 2009 “ Building Strong “ 10

CW Funding Through 09 Budget

$3,000

$3,500

$4,000

$4,500

$5,000

$5,500

$6,000

97 98 99 00 01 02 03 04 05 06 07 08 09 10

Thousands

Budget Request Final Approp.

Winter Leader Conference February 4, 2009 “ Building Strong “ 11

FY2009-11 Budgets and Appropriations

• 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?

Winter Leader Conference February 4, 2009 “ Building Strong “ 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

Winter Leader Conference February 4, 2009 “ Building Strong “ 13

Stimulus Funding Information CW Eligible Projects

Account Number of Work Packages

Amount

(Millions)

Construction 3,600 $ 7,700

Ops & Maint 6,600 $ 7,000

MR&T 700 $ 700

Total 10,900 $15,400

Winter Leader Conference February 4, 2009 “ Building Strong “ 14

Economic Stimulus American Recovery and Reinvestment Act

• $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.

Winter Leader Conference February 4, 2009 “ Building Strong “ 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.

Winter Leader Conference February 4, 2009 “ Building Strong “ 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)

Winter Leader Conference February 4, 2009 “ Building Strong “ 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

Winter Leader Conference February 4, 2009 “ Building Strong “ 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.