Natomas Levee Improvement Program Crediting Issues Before the Central Valley Flood Protection Board

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Natomas Levee Improvement ProgramCrediting
Issues Before the Central Valley Flood
Protection BoardFebruary, 2009 Sacramento Area
Flood Control Agency
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What is Credit?

• Traditionally, the Corps constructs projects, and
  requires payment of a local share by the
  non-federal sponsor.
• In California, that local share is split
  between the State and the local sponsor.
• Where projects are not yet Congressionally
  authorized, or where the Corps does not have
  funds to construct, local agencies may seek to
  construct projects in advance of the Corps. In
  these circumstances, the local agency requests
  that the funds it expends act as a credit
  toward the local share for future work to be
  performed by the Corps.

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Credit Mechanisms

• The credit mechanism most familiar to the Board
  is know as Section 104 credit
• This mechanism comes from Section 104 of WRDA
  1986.
• It provides that for projects not yet authorized,
  where the local agency seeks credit, the local
  agency shall request a credit pre-approval prior
  to start of work (this has since be interpreted
  as prior to contract award).
• The actual credit is then determined after
  construction and after authorization of the
  project.

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Credit Mechanisms

• Some other credit mechanisms are specific to
  individual projects, such as Section 130 of the
  Omnibus Appropriations Act of 2008
• Section 130 is specific to work previously
  authorized in Natomas.
• It provides the non-Federal interest shall
  receive credit toward the non-Federal share of
  project costs for expenses that the non-Federal
  interest incurs for design or construction of any
  authorized project feature, including credit for
  work commenced before the date of execution of a
  cooperation agreement for the affected feature.
  The amount of the credit shall be determined by
  the Secretary.

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Belt and Suspenders

• Section 130 of the Omnibus Appropriations Act of
  2008 covers authorized work. SAFCA believes that
  most if not all of the work for Application Nos.
  18159-2 18159-3 is authorized.
• However, to the extent that any of it is not
  authorized, SAFCA seeks to rely on Section 104.
  (This Board requested Section 104 credit on
  January 25, 2008).
• The Corps has agreed to process Section 130 and
  Section 104 together.

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Obtaining Credit Under Section 130

• The Corps has not issued guidance for
  implementation of Section 130.
• The Corps recently stated that in requesting
  credit under Section 130, the Board should use
  the guidance adopted by the Corps for Section
  2003 of WRDA 2007.

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Section 2003 of WRDA 2007

• Provides that in any case in which the
  non-Federal interest is to receive credit . . .,
  the Secretary and the non-Federal interest shall
  enter into an agreement under which the
  non-Federal interest shall carry out such work,
  and only work carried out following the execution
  of the agreement shall be eligible for credit.
• Corps guidance (EC 1165-2-208) provides that the
  form MOU provided by the Corps satisfies the
  requirement of an agreement.
• This is like the Section 104 process, except that
  the actual MOU must be executed prior to
  construction, instead of merely receiving an
  approval letter from the Secretary.

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The MOU

• In order to get the credits, the MOU must be
  executed before SAFCA awards a construction
  contract on April 1.
• The MOU requires commitments of the signer, such
  as actually building the project. These are
  commitments that the Board cannot make.
• Because SAFCA is the proper entity to make the
  commitments, SAFCA has signed the MOU and the
  Corps is beginning to process.
• SAFCA will cooperation with DWR to ensure that
  State funds provided toward the project obtain
  credit through provisions of the funding
  agreement for the NLIP.

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Conclusion

• SAFCA is working with DWR and your staff to make
  sure that all funds provided by SAFCA and the
  State are available for maximum credit.