USACE GEEZER BRIEF 2001

1
What's Up in Washington?
FY06 Execution FY07 Budget Future Changes
Presentation to PPM Community of Practice
Conference 9-12 May 2006
2
Outline

• FY 2006 Execution Issues
• FY 2007 Budget
• Possible Future Changes

3
FY06 Appropriations Execution

• FY 06 E WD Act (PL 109-103) Directions
• Execute the appropriated program
• Retain funds on projects appropriated
• Continuing Contracts
• Reprogramming
• Funds Use Trends

4
FY06Continuing Contracts

• Issue Obligating Congress to future year
  appropriations.
• Currently 266 continuing contracts with a total
  contract amount of 2 bil
• FY 0607 amount is 1.5 bil therefore most
  contract obligations occur in first 2 FYs
• FY 07-11 total future year obligation
  commitment is 1.1 bil
• Only 26 contracts gt 20 mil account for 92 of
  all future year obligations
• Futuremaybe fully fund contracts lt10/20 mil?
• FY06 to date 37 approved 3 disapproved

5
FY 06 Reprogramming

• Issue Too much reprogramming funding projects
  through reprogramming contrary to Congressional
  intent in the Act/Conference Report
• Act Language Limits
• Sections 101(a)(1)-(a)(4) (cannot create,
  eliminate, increase, or change the purpose of a
  project, program or activity)
• Approval Limits-50 of project base amount or 2
  mil.
• ProcessDistrict/DivHQs/ASA/OMB/Congress
• Emerging Rules
• Approval process is problematical at this point

6
FY 06 Reprogramming Trends

• Substantial Reductions Achieved
• Issue Too much reprogramming funding projects
  contrary to Congressional Intent
• FY03-04 GAO Report. 7,000 reprogrammings valued
  at 2.1 bil on 60 of CW projects
• FY05 1,476 projects impacted by reprogrammings
• FY06 to date 54 reprogrammings valued at
  37.8 mil on 122 projects

7
FY 06 Reprogramming Trends

• The FY06 Issue Sources
• FY06 projected reprogramming gt2 mil/50 85
  projects need 178 mil
• 62 of 85 projects for 135 mil are restoration
  commitments
• We are making one last attempt to improve FY06
  reprogramming process
• The problem is approval of sources
• Will seek a process change
• There are indications of flexibility during
  this transition period

8
One Outcome of FY06 DirectionFunds Utilization
Trends FY06 -FY 06 Scheduled Carryover ( 000)

• GI CG OM Total
• Total Available 208,082 3,025,810 2,628,384 5,862
  ,276
• Total Obligated 12,195 387,241 78,210 477,646
• Act Language 3,232 94,434 8,562 106,228
• Congressional Adds 9,806 165,170 9,869 184,844
• To Fully Fund Contracts 209 16,894 1,256 18,359
• To Complete Projects 1,328 21,854 551 23,733
• Insufficient Cost-Shared Funds 785 19,899 13,366 3
  4,050
• Other 2,853 27,392 22,297 52,542
• Total Unobligated 18,212 345,643 55,902 419,757
• Total Carryover 30,407 732,884 134,112 897,402

9
FY 06 Execution

• Clear Issue of Executing What We Schedule
• --At end of May 2006--
• GI917 projects, 50 with no obligations, 486
  underobligated, 80 off schedule
• CG1286 projects, 88 no obligations, 726
  underobligated, 81 off schedule
• OM1052 projects, 85 no obligations, 608
  underobligated, 80 off schedule
• Contract Awards63 or 84 scheduled awarded 240
  remain to award May-Sep
• Military Projects also behind schedule
• Many PMs individually planning to recover
  schedule many wont

10
FY07 Civil Works Budget
11
FY07 Civil Works Budget

• Supports the Presidents overall budget
  priorities to
• Continue long-term economic growth
• Rebuild and recover the Gulf Coast
• Win the Global War on Terrorism
• Secure the Homeland

12
FY 2007 Budget

• Emphasizes 3 activities
• Construction/completion of projects in commercial
  navigation, flood/storm damage reduction, and
  aquatic ecosystem restoration
• Regulatory program
• Emergency preparedness and response mission
• Corps focus
• Maintenance of critical infrastructure
• Funding high return studies and construction
  projects
• Continuing best ongoing planning and construction
  within available funds

13
Civil Works Budget Appropriations History (
Millions)

• FY05 FY05 Total FY06 FY06 Total FY07
• Budget Approp. Budget Approp. Budget
• Construction, Gen. 1,437 1,796 1,637 2,348 1,555
• Oper. Maint., Gen. 1,934 1,959 1,979 1,969 2,258
  
• Gen. Investigations 90 145 95 162 94
• Mississippi R. Tribs. 270 325 270 396 278
• Regulatory 150 145 160 158 173
• Flood Coast Emerg. 50 0 70 0 81
• FUSRAP 140 165 140 139 130
• Gen. Expenses 167 167 162 152 164
• OASA(CW) 0 4 0 4 0
• Total 4,238 4,705 4,513 5,329 4,733
• Does not include 4.3 billion in two
  Emergency Supplementals for 4 storms
• Administration has requested additional 1.5
  billion in Emergency Supplemental to strengthen
  New Orleans Levees
• Does not include 4.4 billion (FY0506) FEMA
  reimbursable hurricane recovery work.

14
Performance Based Budgeting Which Projects Make
the Cut?

• Priorities
• High Risk Dam Safety
• High Performing, Completing
• Very High Performing
• RBRCRgt4
• National Priorities
• High Performing
• RBRCR 3-4
• Cost Effective Restoration of National or
  Regional Significant Species

15
FY 07 Budget National Priority 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
16
Performance Based Budgeting Modifications for
FY07Other Metrics and Considerations

• Construction
• 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
• Remedy impacts from existing Civil Works projects
  
• Environmental Restoration
• Loss prevention for significant natural resources
• Endangered Species Act other environmental
  compliance needs
• Unique Expertise in modifying Aquatic Regimes
• Planning/Design
• High Likelihood of Sponsor Support
• RBRCRs gt4

17
What is not in the FY07 Budget?

• 532 Studies and Projects funded in the FY06
  Appropriation

18
Questions?
19
FY07 and BeyondChanges Made and to Come

• Washington Focus
• DEVELOP THE BUDGET
• DEFEND THE BUDGET
• Execute the Appropriation
• Delegate more authorities to field
• Contracting authorities
• Reprogramming
• Stabilize Funds
• Fully fund more contracts
• Budget contracts to completion
• Reprogram only as appropriate

20
FY07 and BeyondMore Changes

• Understand consequences of Performance Based
  Budgeting
• Seek a better balance between budgeting by
  business line and budgeting by project
• Reassess Commanders role in establishing
  watershed and project priorities
• Pilot budget presentation by system/watershed
• Ohio River System?
• Execution handoff to field with more delegation
  and flexibility
• Seek to reduce gap between Administration Budget
  and Congressional Appropriation

21
FY07 and BeyondChange Overview

• LINK AND DECONFLICT
• Presidents Management Agenda
• PMA Initiatives
• PARTs
• USACE Campaign Plan
• Civil Works Strategic Plan
• Performance Standards
• Civil Works Budget
• Program/project budget
• Performance-based budget
• Systems (watershed) budget
• Five Year Development Plan (FYDP)
• Appropriation
• Metrics
• Performance Standards
• Execution
• Performance Review

22
Five-Year Development Plan

• Provides an overview of the Civil Works program
  and budget for FY 2007-2011
• A collaborative effort between the Corps, OMB and
  the Committees.
• Presents projections of discretionary funding for
  the Civil Works program
• Focus on projects and activities that provide the
  highest net economic/environmental returns on the
  Nations investment
• Approved and submitted to the Congress on 1 Mar 06

23
Five-Year Development Plan

• The funding is distributed among eight accounts
  over the five-years Investigations,
  Construction, Operations and Maintenance, MRT,
  the Regulatory Program, FUSRAP, Flood Control and
  Coastal Emergencies (FCCE) and Expenses
• The plan includes three scenarios
• High scenario Based on the total FY 2006
  enacted funding level (5.446 billion) as the
  base and adjusted over time for GDP price index
• Middle scenario Based on the Presidents budget
  (4.733 billion) and are formula driven funding
  levels through the out-years
• Low scenario Based on funding levels below
  those in the Middle scenario
• The budget projections are formula-driven/policy
  neutral and do not represent budget
  decisions/policy beyond FY 2007

24
Five-Year Development Plan

• Each scenario presents out-year budget
  allocations based on FY07 Administration
  assumptions and construction guidelines
• A funding wedge is accounted on each scenario to
  fund those studies, PEDs and construction
  projects not listed
• Under the High scenario
• The performs substantially more critical
  maintenance, repair and rehabilitation (445
  million increase in OM and 13 million for MRT)
• More studies, PEDs and projects are completed
  faster than the other two scenarios
• The Corps executes more critical and high
  priority items

25
Five-Year Development Plan
26
What Else Should Change?

• This nation must reassess the budget priority it
  gives to infrastructure investments

27
Communication

• Communicate that funding infrastructure is an
  investmentreturns exceed costs
• Communicate that infrastructure is important
• To the National Defense
• To the Economy
• To the Quality of All Life
• Communicate that infrastructure is integrated

28
Questions?