The U.S. Army Corps of Engineers Authorizations

Introduction

The Association of State Floodplain Managers, Inc. (ASFPM) is pleased to share comments on issues related to Authorization programs of the Corps of Engineers. These include the 2002 Water Resources Development Act (WRDA), and proposed bills S 1987 and S 646.

The Association of State Floodplain Managers, Inc. and its state chapters represent over 4,500 state, local and private sector officials as well as other professionals who are engaged in all aspects of floodplain management and hazard mitigation. All are concerned with reducing our Nation’s flood-related losses and many have worked with Corps Staff on the implementation of flood control and restoration projects in their community or state.

The ASFPM chooses not to comment on specific water resource projects, rather we choose to focus on policies that drive project formulation and implementation.

The Problem

In general the ASFPM believes that the US Army Corps of Engineers has a long proud tradition of providing water resource projects to the nation. However, we also believe that the model being used today best served the nation in a past era, and that it is time reshape the Corps based on modern domestic policies.

Current policy and process have resulted in disagreement over the economic and environmental viability of many projects; a huge backlog of controversial projects; division among the nation’s policy makers on how to invest in projects; and a situation where the cost of operating and maintaining existing projects is becoming excessive.

The policy and process model that we are currently working under:

1. Assumes that national return on investment (NED) is our focus for water resources, yet we never consider the opportunity cost of this investment.

2. Assumes that environmental or social benefits are of a lesser value than economic benefits, in spite of congressional actions to the contrary.

3. Has led to many non-federal sponsors wasting time and money on projects that are not justified, or will not be funded.

4. Has attempted to meet national objectives through an altruistic planning process that is prone to manipulation to meet pre-conceived project outcomes.

5. Has failed to expand from a federal investment mentality to one that embraces and supports a broader array of domestic policies, most notably the lack of focus on actions that reduce future disaster expenditures.

In order to address these issues and others, we will focus our testimony on the following areas:

Trends in Flood damages—Growing disaster expenditures

Despite the expenditure of over 100 billion dollars and years of efforts in federal programs to reduce flood damages and encourage sound floodplain management flooding costs are now approaching $5-$8 billion per year. On one hand this may be surprising, but on the other hand it was predictable. Our policies and practices have tended to encourage people to occupy areas that are marginally protected from flooding, or to take actions in the floodplain that have transferred their problem onto others. The economist would suggest that these occasional damages are reflected in the economic models, and as long as benefits exceed cost, that escalating flood damages is a rational outcome. For this model to work however, based on current policies, it would needs to assume that there is virtually an unlimited supply of money to pay for the disaster costs, and that other programs of domestic policy would not suffer because of the transfer of dollars to pay for disasters.

The fact is that there is not an unlimited supply of cash, and that other domestic programs do suffer from escalating disaster costs. To break this cycle the Corps must begin to modify its model such that it leads to solutions that provide permanent flood protection with an eye towards reducing disaster costs. Many times these solutions may be the least cost solution, but may not satisfy the NED criteria. Recognizing the regional economic development goals of many local sponsors, we would suggest that Congress encourage the ability to link Corps projects with other programs of economic development outside of flood hazard areas.

Principles and Guidelines (P&G)

The P&G have been used since 1983, when they replaced the Principles and Standards. In spite of their shortcomings, in theory they provide a reasonable approach to justify an investment mentality for project alternatives. In reality, they are a maze which both federal and non-federal sponsors navigate to justify a pre-conceived outcome. The P&G alone fall short of supporting the domestic policies of the nation. At a minimum the P&G need to be reissued with the environmental quality account being a required input to the process.

For P&G to be effective, the Congress must mandate the Corps to develop and adopt methods for quantifying the economic value of environmental, cultural, and social inputs. For the expenditures of the Corps to be effective, the P&G must be augmented with decision-making criteria that reflect current domestic policies and programs. In essence they need more than tweaking. The P&G do not reflect the way planning is done today, by any level of government, let alone the Corps. Forcing Corps staff to use these guidelines sets up an instant conflict in the project alternatives. The Principles and Guidelines need to reflect a collaborative, multi-objective approach in the beginning, rather than attempting that collaboration at the end of the process. The list of Environmental operating principles put forth by General Flowers provides some excellent ideas for incorporation.

We would urge that the Principles and Guidelines be revised in collaboration with a group of Corps “partners”, who work with the Corps and other programs in developing projects for flood loss reduction and environmental restoration. Incorporating the ability to coordinate project implementation with other programs will provide an opportunity to leverage dollars.

Benefit/Cost analysis--There is broad support of the need for modifications in the approach for determining the cost effectiveness of projects. Much of this focus is misplaced due to the emphasis in the process that results in selection of the NED plan. Better to spend our efforts re-thinking the process to select the alternative, so we end up with a project appropriate to the multiple needs of the local partner.

Incentives in cost sharing

There has been considerable discussion about the federal/non-federal cost share formula. We offer no preference on a specific cost share, and suggest that formula is a policy decision of Congress. We urge Congress to base their decisions on independent studies, which carefully assess where the true interests of the nation’s taxpayers lies.

What we do urge is a sliding cost share for non-federal partners, which would provide incentives for those partners to take responsibility for reducing flood risk in their community.

There are communities in the nation that are aggressively implementing programs that reduce the need for federal project expenditures or for disaster relief. Yet, we have likewise heard concerns from our members as to why should they continue to proactively fight future flood damages, when they can take the easy political route, do nothing and simply wait for federal projects and disaster relief. The current system makes no sense, and does nothing to encourage local accountability and responsibility for combating disaster expenditures

It is time to Congress to communicate to those States and Communities that are taking proactive steps to combat future flood losses, that they are doing the right thing for their community and for the nation. We would argue that by providing a more favorable cost share to those communities that are proactively dealing with future losses, that in the long run federal expenditures for projects and disasters will decrease.

Some might argue that this may be quite complex, but we would like to remind these individuals that in the mid-90’s Corps Staff had developed the details for implementing a similar plan, and that FEMA has over a decade of experience in a similar program called the Community Rating System. These positive actions would demonstrate a commitment that will save the federal taxpayers money on disaster relief, thus justifying the investment in the sliding cost share. A list of low cost incentives is attached.

The federal role

The federal government has a key role to play in helping to reduce flood damage, but that role has changed and evolved from what it was 30 to 60 years ago. It has become apparent that federally developed solutions often yield single purpose projects which tend to address specific flooding problems, but may pay insufficient attention to other critical local considerations such as economic development, housing, water quality, watershed planning, natural resources, recreation and quality of life. Without those considerations, local buy-in is often razor thin.

We have learned that some structural solutions to specific flooding problems can inadvertently create new flooding problems downstream. Some generate higher operation and maintenance costs than can realistically be supported by the local sponsor. Current programs tend to promote that flooding and flood protection is a federal and not a local issue. Local governments and citizens grow to believe the federal government will bail them out if flooded or if the problem gets worse.

Structural flood control projects are necessary in many instances and are often advocated by our members. Unfortunately, without the ability to offer various solutions or a mix of approaches, structural policies and programs can provide incentives to pursue solutions, which may not be the best choice for building hazard resistance in some communities. It is important to recognize that current federal flood policy rewards those communities and states, which do the least to prevent and solve their flooding problems. Those rewards come in the form of federal disaster assistance, federal flood control projects and cost sharing for these actions. The Corps cost-sharing formula needs to evolve in order to be consistent with the evolution to new approaches in flood loss reduction in the nation.

Independent Peer Review

The ASFPM understands the cry for independent review, in light of the revelations during recent years. The problem with the independent peer review proposal is that peer review is necessary for two reasons. The first is to introduce a level of quality control, the second is to safeguard against what some might see as abuses to the process. If the peer review is meant to implement a level of quality control, than one needs to question why this is not already being accounted for within the planning and design process. If it is to safeguard against abuses, than one needs to question whether the problem is so severe within the Corps that the entire program needs to be reorganized with new management. While clearly there is always room for improved quality, the evidence would suggest that “cleaning house” is NOT necessary.

What we do believe is necessary however is the following:

1. A renewed commitment by the Corps to quality Control measures and plans.

2. Occasional GAO audits of projects.

3. A zero tolerance policy for those found to be directing the manipulation of project results.

4. Independent peer groups that are formed to evaluate the assumptions used in the planning guidance.

While some direct abuses have been alleged, for the most part what we have heard about tends to indicate planning guidance that is out of touch with real world situations and current domestic policy. If independent project review comes about, we suggest a streamlined process and a logical funding threshold is considered. Surely a $25 million project is not reasonable. We see some individual homes being built in the nation with costs approaching that. Perhaps something 8 to 10 times that amount might make more sense.

Backlog and de-authorization

There is a need to address review of the huge backlog of projects, with an eye toward either re-authorizing or de-authorizing the projects. The experience of our members suggests this backlog creates many problems. A common example occurs immediately after a flood disaster. The community wants to do something because of the damages it received, and the first thing they think of is some Corps project that was looked at in the past, which sits on the shelf now, in an inactive state. It may be there for a number of reasons, including being not cost effective, major environmental harm, controversy, etc. In most instances, the project would probably not be viable under today’s circumstances, if it ever was. But the community sees it as a quick solution and spends lots of effort and time trying to make the project work, rather than looking at their problems and needs today, and working with all the interests in community to identify viable and implementable solutions.

***************************************************

Questions about this testimony may be directed to Lisa Holland at (803) 734-9120, or ASFPM Executive Director Larry Larson at (608) 274-0123 or email larry@floods.org.