Budgets and Appropriations: Restoring our Infrastructure

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

Budgets and Appropriations:Restoring our Infrastructure

Budgets and Appropriations:Restoring our Infrastructure

National WaterwaysConference

National WaterwaysConference

Gary A. Loew

Headquarters, U.S. Army Corps of Engineers

March 11, 2009

Gary A. Loew

Headquarters, U.S. Army Corps of Engineers

March 11, 2009

BUILDING STRONGBUILDING STRONG

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Budgets and Appropriations( $ Millions )

* No FY09 Energy & Water Development Appropriation has been passed. We are operating at FY08 levels under a Continuing Resolution Authority until Mar 09.

FY08Execution

FY08Budget

FY08Approp

FY09Budget

FY09Conference

Investigations 156 90 167 91 168

Construction 2,221 1,523 2,294 1,402 2,140

Operation & Maintenance 1,971 2,471 2,244 2,475 2,202Mississippi River & Tributaries 385 260 387 240 384

Regulatory 158 180 180 180 183Flood & Coastal Emergencies 953 40 0 40 40

F.U.S.R.A.P. 139 130 140 130 140

Expenses 168 177 175 177 179

ASA(CW) 4 0 5 6 4.5

Sub - Total 6,155 4,871 5,592 4,741 5,401

Supplemental Approps 3,383 3,383 5,761 5,761

Stimulus Bill 4,600

Total 6,155 8,254 8,975 10,502 15,694

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Civil Works Business Programsin FY2009 Budget & Supplemental

Environmental Protection& Restoration

Flood & CoastalStorm Damage

Reduction

Hydropower Recreation

Navigation

Water SupplyRegulatory Support for Others

EmergencyManagement

Figures from FY09 Budget + Supplemental. Total = $9.475 M (includes $183 M Management & Oversight not listed in pictures)

$1,892 M

** Estimated reimbursement from supported agencies, not in budget

$7,083 M $511 M

$319 M $58 M $270 M

$2,400 M**$6 M$180 M

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Civil Works Program TrendsFY06 – 13

0

2

4

6

8

10

12

14

16

18

20

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

$ B

illi

on

s

Stimulus Package

Tot SFO

Non-Federal

FUSRAP

FC ( MR & T )

GI

RP + FCCE

GE

O&M

Construction

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FY2009-11 Budgets and Appropriations

• 1 Oct 08- 11Mar 09–FY09 Continuing Resolution Act (CRA)• 17 Feb 09 – ‘American Recovery and Reinvestment Act’

-- PL 110-5 (ARRA)• 24 Feb 09 – FY09 Omnibus Appns Conference Rpt Filed• 26 Feb 09 – President presents FY10 Budget Overview• ~11 Mar 09? – FY09 Appropriations Act• 11 Mar 09 – FY11 Budget Guidance to field offices• ~16 Mar 09 – ARRA funds issued to field offices• Mar 09 – FY09 Appns Act funds issued to field offices• ~24 Apr 09 – FY10 Budget details released to public• ~Apr 09 – House T&I ARRA Oversight Hearing• 30 Apr 09 – House FY10 Budget Hearing• Early-mid 2010 – Another Stimulus Bill?

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FY2009 Appropriations ---Some Provisions---

• CRA and FY09 Appropriations exempt inland waterway Rehabilitation (not new construction) projects from Inland Waterways Trust Fund cost sharing for FY 2009

• Executive Order (E.O.) instructs agencies to ignore Report directions.

• Current version of Bill incorporates Conference Report text and tables into law by reference to counteract E.O. except for Section 1, Reprogramming instructions.

• New Administration position on E.O. unknown

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Economic Stimulus American Recovery and Reinvestment Act

• $4.6 billion for Corp programs• ARRA funds are not to be cost shared 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.

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ARRA Appropriations

APPROPRIATIONS by ACCOUNT

($Billions)• Investigations $0.025

Construction $2.000• O&M $2.075• MR&T $0.375• Regulatory $0.025• FUSRAP $0.100• TOTAL $4.600

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Other ARRA Provisions

• Projects are eligible only if funded “heretofore

or hereafter” [i.e. no new starts]• Relief from cost sharing with IWTF• Unlimited reprogramming authority (?)• Up to 0.5% to administer the Act (Mgmt & Oversight) • 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 surveys)

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Stimulus-Project Selection Criteria

Project selection criteria in Conference Report are projects, programs or activities that will:

• be obligated/executed quickly; • result in high, immediate employment; • have little schedule risk; • be executed by contract or direct hire of temporary

labor; and • complete either a project phase, a project, an

element, or will provide a useful service that does not require additional funding.

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Stimulus-Project Selection Criteria - II

Criteria Implementation

Obligate/execute quickly;

High, immediate employment

Sort by award date.

For same date, sort by completion date

Little schedule risk Districts filter out all projects with schedule risk

Complete project phase, project, or element, or will provide a useful service that does not require additional funding

Districts prepare work packages accordingly

Execute by contract or direct hire of temporary labor

No in-house labor except for OH/E&D/S&A

No reimbursements

No land purchase

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Stimulus-Project Selection Criteria III

In addition, some CW Program Goals

• Reasonable distribution across programs, e.g. flood risk management, coastal and inland navigation,, environmental restoration, hydropower, recreation

• Reasonable geographic distribution

• These goals were applied in select cases:– IWTF project funding set at a reasonable appropriation level

• FY 2004-08/4 = $368/ IWTF Stimulus projects = $358 M)– Environmental Infrastructure = $201M, consistent with legal minimum – CAP requests totaled $60 M; all were included;– Element size was capped at $50 M to enable geographic and

business line balance

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Stimulus Projects Submitted

Civil Works Data Base of Eligible Projects that could be Executed by 30 Sep 2010

Account Number of Work Packages

Amount

(Millions)

Construction 3,600 $7,700

Opns & Maint 6,600 $7,000

MR & T 700 $ 700

Total 10,900 $15,400

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Projects Selected - PREDECISIONAL

Account Work Packages Projects

Amount

Construction - IN

($2 billion)

272 packages

250 projects

$25 K - $49 M

$25 K - $90 M

Construction – OUT 468 packages

117 projects

$2 K - $355 M

$2 K - $1.2 B

O&M - IN

($2.075 billion)

2,164 packages

516 projects

$1 K - $36 M

$23 K - $85 M*

O&M – OUT 3,418 packages

655 projects

$1 K - $43 M

$12 K - $147 M

Investigations - IN 69 projects $20 K - $2 M

Investigations – OUT 420 projects $1 K - $4 M

MR&T – IN ($375 M) 247 packages

39 projects

$25 K - $24 M

$231 K - $41 M

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Benefits-Jobs Created

• Jobs created by USACE portion of stimulus estimated at 139,000. – Direct creation of ~37,000 new

private sector jobs with average annual wages between $38,000 and $42,500

– Additional 102,000 new jobs in industries supplying construction and O&M activities and sell goods and services to new workers and their families.

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FY2010 Budget - Status

• President will delivered the FY10 Budget Overview to Congress on Feb 27th. It is a high level document (with no accompanying agency detailed project information)

• OMB has provided the Corps a FY10 Budget ceiling

• ASA/Corps staff are working with OMB on the final criteria, program amounts and project details.

• Target is to release FY10 Budget detailed information in mid-late April

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And for the Out Years …

• FY 2011 Budget Guidance to divisions and districts to be sent on Mar 11th

• 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 from

• 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

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Trends To Watch

• Continuing Pressure on Budget• Entitlement Programs ( Medicare, Medicaid, Social Security)• Interest on the National Debt• Status of US & World Economies

• Cost of Infrastructure Recapitalization• Improved Inspection Techniques• Modern Design Standards• Cost of meeting ESA and other legal requirements

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• National Economic Efficiency?National Economic Efficiency?

• Environmental Sustainability?Environmental Sustainability?

• Security?Security?

• Quality of Life?Quality of Life?

• All of the Above?All of the Above?

• None of the AboveNone of the Above

• Other????Other????

Making the Case for InfrastructureMaking the Case for Infrastructure

What is the Message?What is the Message?

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BUILDING STRONGBUILDING STRONG