DEPARTMENT OF THE ARMY
OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY (CIVIL WORKS)
DR. JOSEPH W. WESTPHAL
ASSISTANT SECRETARY OF THE ARMY (CIVIL WORKS)

INTRODUCTION

Mr. Chairman and Members of the Subcommittee, I am Joseph Westphal, Assistant Secretary of the Army for Civil Works. Accompanying me are Major General Russell L. Fuhrman, Director of Civil Works for the Army Corps of Engineers and Michael Davis, Deputy Assistant Secretary of the Army for Civil Works. We are here today to present the Department of the Army proposals for a Water Resources Development Act of 1998 and to respond to your questions. We appreciate the opportunity to work with the Congress on this important legislative initiative. Further, it is an honor that my first testimony as Assistant Secretary is before this distinguished Subcommittee on such an important piece of legislation.

HISTORY AND MISSIONS OF THE CORPS OF ENGINEERS

We in the Department of the Army are proud of the long and distinguished history of the Army Corps of Engineers and its service to the country. Since its founding in 1775, the Corps of Engineers has contributed to this nation, through its engineering support to the military, as the lead agency for the development of the nation's water resources, and through programs that restore and protect our environment. Early on, our missions included such activities as construction of coastal fortifications and lighthouses, surveying and pathfinding on the frontier, construction of public buildings, snagging and clearing of river channels, and construction and operation of early national parks such as Yellowstone.

To enhance National defense and promote economic development, our first general Civil Works mission was to help develop this country's ports and harbors and an extensive inland navigation system. As areas along our rivers and deltas were developed for agriculture and commerce, flooding and associated flood damages also became a major concern. The Mississippi River Commission was formed in 1879 in acknowledgment of the need for comprehensive water resources development. Major floods in the Mississippi River basin in the early 1900's resulted in a new role for the Corps of Engineers -- flood control. The Flood Control Act of 1936 recognized flood control as a proper activity of the Federal Government and gave responsibility for most projects to the Corps of Engineers. This led to numerous flood control projects (dams, levees and channels) in the decades of the forties, fifties, and the sixties. Many of these projects, particularly the dams and their reservoirs, were multipurpose, providing flood control, hydropower, water supply, navigation, recreation and fish and wildlife enhancement. Although these projects served critical purposes, the lack of good floodplain management in many instances resulted in extensive development in the floodplains, often placing more people and development at risk. In the decades of the seventies, eighties and the nineties, as numerous floods exceeded the capacity of some flood control projects and caused extensive damage, it became apparent that better management of the floodplains and a comprehensive strategy for flood damage reduction or mitigation was necessary. Today, we've learned not to use the term "flood control" as it creates a false sense of security that may be not only unrealistic, but also dangerous. In the past decade, we've gained a more realistic sense of Mother Nature's propensity to demonstrate that floodplains were designed to receive flood waters. Instead we now focus our efforts on reducing flood damages and, where appropriate, moving people out of harms way.

Army Corps of Engineers Main Mission Areas

Our third major mission; environmental protection and restoration is not a completely new mission area for the Corps. In fact, this mission had its origin in the Refuse Act of March 3, 1899, which granted the Secretary of the Army authority to control certain discharges into and along the navigable waters of the Untied States. An excerpt is quoted below:

"It shall not be lawful to throw, discharge, or deposit, or cause, suffer, or procure to be thrown, discharged, or deposited either from or out of any ship, barge, or other floating craft of any kind, or from the shore, wharf, manufacturing establishment, or mill of any kind, any refuse matter of any kind or description whatever other than that flowing from streets and sewers and passing therefrom in a liquid state, into any navigable water of the United States, or into any tributary of any navigable water from which the same shall float or be washed into such navigable water; and it shall not be lawful to deposit, or cause, suffer, or procure to be deposited material of any kind in any place on the bank of any navigable water, or on the bank of any tributary of any navigable water, where the same shall be liable to be washed in such navigable water, either by ordinary or high tides, or by storms or floods, or otherwise, whereby navigation shall or may be impeded or obstructed: ..."

The Corps environmental mission has been expanding over time with major changes in environmental law and policy, such as the National Environmental Policy Act of 1969, which requires each Federal agency to assess fully its actions affecting the environment, and the Federal Water Pollution Control Act of 1972 (commonly called the Clean Water Act) in which the Corps was given a major responsibility for regulating the discharge of dredged or fill material into all of our Nation's waters, including wetlands. Subsequent Water Resources Development Acts have expanded further the environmental protection and restoration mission of the Corps of Engineers.

While the Corps has undertaken and continues to execute many Civil Works missions, to include disaster response, hydropower production, recreation, water supply, coastal shore protection, natural resources management and development of environmental infrastructure, the three primary missions of navigation, flood damage reduction, and environmental protection and restoration are the priority outputs of today's Civil Works program.

IMPORTANCE OF A WATER RESOURCES DEVELOPMENT ACT

We share with the Congress a firm commitment to water resources development and the biennial authorization cycle with the following goals:

As you are well aware, there are many pressing needs for water resources development in this country. We must work together to address these problems in the full light of our fiscal capabilities and constraints. To help us meet our mutual objectives, we suggest the following principles be utilized as we formulate a final Water Resources Development Act for 1998:

Preservation of the Concept of Cost Sharing. At the heart of the Water Resources Development Act of 1986

THE ARMY CIVIL WORKS LEGISLATIVE PROGRAM FOR 1998

The Army Civil Works legislative program was forwarded to the Congress on April 22, 1998. This program consists of important legislative proposals for the administration of the Civil Works program and authorizations for projects recommended by the Administration. I would like to emphasize some of the more important provisions below:

Challenge 21- Flood Hazard Mitigation and Riverine Ecosystem Restoration

Challenge 21, the centerpiece of the Army Civil Works Legislative Program for 1998, will provide the nation with a comprehensive tool for reducing flood damages. Part of a $25 million Fiscal Year 1999 budget request, this initiative expands the use of non-structural options to achieve the dual purposes of flood damage reduction and the restoration of riverine ecosystems. Challenge 21 responds to those communities who have expressed a strong desire to aggressively reduce or even eliminate repeated losses and improve the quality of their environment by creating partnerships with these state, tribal and local entities, allowing their priorities to be realized.

The Mississippi River floods of 1993 and the floods of 1997 revealed both strengths and weaknesses in the way we manage floods and have taught us important lessons about Federal floodplain management. These record floods have submerged entire towns; destroying homes, businesses, farms, wildlife and, in some cases, taking human lives. In response we, as a nation, are now spending over $4 billion a year for disaster recovery due to floods. And while the dams and levees we've built continue to prevent billions of dollars in flood damages, many communities are still flooded --- often on a frequent basis. We have learned several lessons from these tragic events.

Challenge 21 will:

One very important lesson we've learned is that structural flood control measures are not always successful in preventing the flooding of our communities. In some cases, no matter what we do and no matter how much money we spend, the waters still come. In those cases, we should focus less on trying to control flood waters and more on reducing the negative impacts of flood damages. This leads us to another important point - paying billions of dollars annually for repeated damages is not a fiscally sustainable course. We must break this cycle and aggressively look to other solutions. Since flooding cannot always be prevented, we can reduce our national disaster relief bill by shifting our focus to include a greater use of non-structural flood damage reduction measures.

In some cases, structural solutions have lulled us into a false sense of security as we build closer and closer to the river. In fact, in many cases, development and the resulting increase in stormwater run-off have dramatically changed the hydrology of our floodplains by significantly reducing their ability to store water. In addition, development in the floodplain has often had devastating effects on the natural ecosystems and habitat along our rivers. Thus, another lesson we've learned is that over-development of our floodplains has, in some cases, actually increased the risk of flooding. This committee has been helpful in this area by passing a WRDA in 1996 that requires that communities prepare floodplain management plans as a condition for Federal flood projects. However, we need to do more.

Examples of Non-structural Approaches:

Challenge 21 responds, through its focus on nonstructural alternatives to flood protection, to the first lesson, that structural flood control measures are not a panacea. Challenge 21 will work with other Federal agencies to move families and businesses out of harm's way, where appropriate, thereby returning the floodplains of rivers and creeks to a condition where they can naturally moderate floods, while maintaining the flexibility to use more traditional structures and ultimately reducing our national natural disaster relief bill. Potential solutions will include an array of cost-effective non-structural and structural measures. Through these measures, Challenge 21 will also provide benefits to our environment. For example, a project might include the relocation of threatened homes and businesses and the restoration of wetlands and other natural floodwater storage areas within the floodplain.

Quick Facts on Challenge 21:

Structural approaches to flood protection will continue to play an important role in our efforts to reduce flood damages when such solutions are economically and environmentally justified. Challenge 21 projects may, in fact, include structural components as part of an overall flood damage reduction strategy. In short, with Challenge 21, the Corps is expanding its flood damage reduction mission portfolio to more effectively meet community needs.


Western Governors' Association
In their December 1997 Report, WGA recommended that "Federal and State priorities should encourge relocation and restoration of the natural beneficial functions of flood plain areas." Subsequently in a June 9, 1998 letter to Congressional Committees, WGA wrote, "The Western Governors find that the concepts behind Challenge 21 to be consistent with many of the priorities we identified. . . . in our December 1997 report. We commend the Corps for putting forward this proposal.

Challenge 21 will also improve inter-agency and inter-governmental coordination. The Western Governor's Association's January 1997 report, "An Action Plan for Reducing Flood Risk in the West", not only recommended nonstructural floodplain management tools, but also outlined state and Federal roles and responsibilities. These governors recognized that no one level of government will solve this problem. It will take the combined, coordinated effort of Federal, state, tribal, and local government, working in cooperation with communities, to be successful. The Corps, along with Federal Emergency Management Agency (FEMA), the Department of the Interior and the Environmental Protection Agency (EPA), have signed a memorandum of agreement with the Western Governor's Association (WGA) to implement specific actions of coordination. Thus, another lesson we've learned is that Federal floodplain management policy needs to be better coordinated and the work needs to be shared not only throughout the Federal government, but also by creating partnerships with state, tribal, and local entities.

Challenge 21 projects will also be coordinated fully with Federal, state, tribal and local communities. Because the cost of projects will be shared, no project will be implemented unless state, tribal and local sponsors support it. Thus, through coordination with other Federal agencies and state and local communities, Challenge 21 addresses another lesson we've learned from the past decade of floods - - flood damage reduction efforts must include partnering between Federal agencies and state, tribal and local communities.

Watershed by watershed, Challenge 21 builds on existing programs and initiates and expands partnerships with other Federal and non-Federal national and local entities. Key Federal partners include FEMA and the Department of Agriculture. Through Federal partnering, a Challenge 21 project could include an urban structure relocation piece led by FEMA and a rural wetland restoration piece led by the Department of Agriculture's Natural Resources Conservation Service. Thus, Challenge 21 relies on the collective knowledge, expertise and authorities of many Federal water resource agencies.

The Willamette River in Oregon is a good example of a potential Challenge 21 project. The existing system of Corps projects in the Willamette controls only about 27 percent of the basin runoff and is capable of controlling up to a 2 to 5 year event. After a thirty year absence, major flooding became a real and powerful presence in February 1996 for the Willamette River Basin. Flood frequencies ranged from a 2 to 200 year event, 23 counties were declared disaster areas, numerous cities and communities suffered major damages and agricultural losses were widespread. Due to continued population growth and corresponding development in the Willamette floodplain, the Willamette River Basin has lost much of its natural flood storage capacity and a significant flood risk remains.

In 1996, the conservation group River Network completed a study of the hydrologic feasibility and benefits of restoring floodplains for natural flood management in the Willamette Valley. They concluded that floodplain restoration opportunities exist to reduce flood hazards to homes, public structures and farms while allowing for fish and wildlife habitat restoration. In addition, the Willamette Basin Floodplain Restoration Study is a new start General Investigation study for FY 98. The proposed study and project focus on benefits of flood damage reduction and ecosystem restoration. This provides an excellent opportunity to provide additional flood protection for the Willamette Basin through nonstructural floodplain restoration measures.

Non-structural flood damage reduction measures are gaining momentum across the country. We are very interested in pursuing such approaches as we work with communities to reduce flood damages. It is important to note that this is not just an Army initiative - - many communities and floodplain interest groups support Challenge 21 nonstructural approaches. In a March 31 hearing before the House Transportation and Infrastructure Committee, the National Association of Flood and Stormwater Management Agencies, the National Wildlife Federation, American Rivers and the Association of State Floodplain Managers all expressed support for nonstructural solutions. And the National Association of Flood and Stormwater Management Agencies and the National Association of Counties, recently joined the other groups in endorsing Challenge 21.

We have learned a great deal from the floods of the past and these important lessons have prompted the Administration to find a more sustainable approach to reducing flood damages and restoring our riverine ecosystems now... an approach that plans for the future before the flood occurs. We believe that Challenge 21 is that approach. Challenge 21 will attempt to find permanent nonstructural solutions to reduce flood damages that, in the long run, will reduce the natural disaster bill to the American taxpayer.

The recent floods associated with El Nio have reinforced the key lessons we've learned from the Mississippi River floods of 1993. Despite our continued reliance on structural flood control measures, the overall cost of flooding disasters has only increased. Challenge 21 attempts to break the cycle of repeated flooding by addressing the weak links in our national floodplain management policy with a new initiative that not only reduces the devastating effects of flooding but also restores our riparian environment. Working together to enact Challenge 21, the Congress and the Administration can exercise the leadership that is needed to provide communities with an important new tool in our flood damage reduction tool box.

Shore Protection Policy

The Administration is proposing a new approach to shore protection that would allow a renewed commitment to shore protection in the Army Corps of Engineers. With the adoption of this approach, the Administration will consider, consistent with overall funding constraints, shore protection projects on an equal basis with other water resources development projects.

As you know the Administration and the Congress have not had a common vision of the Nation's shore protection policy. The Administration has had two concerns. First, commitments on existing shore protection projects that involve periodic nourishment require a significant amount of future Federal funds. We have found it difficult to initiate new projects in the face of the cost of these commitments. Figure 1 below shows the number of shore protection projects where initial construction was completed by the Corps over the last 50 years. Of these projects, the Corps has a responsibility to participate in the periodic nourishment of about 46 projects. In addition, there are 11 authorized projects under construction, 14 authorized projects awaiting construction, with another 17 in the design phase. In addition to these, the Corps has almost 30 potential projects being evaluated in feasibility studies. These all show an even greater demand for future Federal funding of hurricane and storm damage reduction projects.

The second Administration concern is that while these shore protection projects produce storm damage prevention benefits, they also provide local recreation benefits, and that some of the revenue created in the areas that these projects protect should be dedicated to shore protection projects that provide such recreational opportunities. To resolve both these concerns, we have included in the Army Civil Works legislative program a proposal to advance the dialogue on how to reconcile this important issue.

Under our proposal, the cost sharing for the initial construction of shore protection projects will remain the same (generally a 65 percent Federal share). However, the cost sharing for periodic nourishment of shore protection projects would change. Our recommendation is that when the project protects a developed area with shores under public control, the cost sharing of periodic nourishment would generally be 35 percent Federal and 65 percent non-Federal. When the project protects undeveloped private property, the cost sharing of periodic renourishment would remain at 100 percent non-Federal; and when the project protects Federal property, the cost sharing of periodic renourishment would remain at 100 percent Federal. We believe this is a fair solution to the difficult problem and that it will free up Federal funds and allow new shore protection projects to be constructed.

OTHER WRDA 1998 INITIATIVES

Everglades and South Florida Ecosystem Restoration

This provision extends the authorization of appropriations for critical ecosystem restoration projects in South Florida through FY 2000 to take advantage of the synergy and collaborative approaches that have evolved to implement a shared vision for ecosystem restoration. Funds were not available to begin work on this important project in FY97, as anticipated. Despite the lack of funding, the Corps, in partnership with the Department of Interior, the State, and many interested parties, compiled and prioritized a list of 38 Critical Projects, whose implementation will provide immediate, substantial and independent ecosystem restoration benefits. The Critical Projects address a suite of environmental restoration and protection needs, involving endangered species, water supply and quality, enhanced water control, nuisance exotic species control, habitat protection and restoration and non-point source pollution reduction. These projects have been nominated and formulated by all levels of government, interested parties, and Indian Tribes. Fourteen Letter Reports have been received for Critical Projects, with ten approved for implementation and the remaining four are under consideration for approval.

While not part of this legislative proposal, I am pleased to report that work on the Comprehensive Plan required by Section 528 of WRDA 1996 is on schedule, and work on six alternatives will be finished in time for an initial draft alternative to be identified by July. A draft Comprehensive Plan will be ready for public review in October 1998. The results are encouraging in terms of achieving and balancing restoration and water supply needs. Extending the authorization of appropriations will enable the partners to achieve fully the environmental restoration objectives set forth in Section 528 of WRDA 1996.

Lower Missouri River Aquatic Restoration Projects

The purpose of this provision is to recognize and build on the existing efforts to restore and protect the Missouri River ecosystem between Gavins Point Dam and the Missouri River's confluence with the Mississippi River. This proposal recognizes the efforts of navigation, agriculture, and environmental communities in developing a consensus and balanced approach to ecosystem restoration in this reach of the Missouri River. Specifically this proposal will authorize a comprehensive report to be completed at full Federal expense within one year after funds are made available. The report will identify a general implementation strategy and overall plan for environmental restoration and protection along the Lower Missouri River between Gavins Point Dam and the confluence of the Missouri and Mississippi Rivers and recommend individual environmental restoration projects that can be considered by the Secretary for implementation under section 206 of the Water Resources Development Act of 1996.

Management of Natural Resources

There are several measures that will help us to better manage our important natural resources, primarily at our numerous lakes and reservoirs. One of our more important measures will allow our resource managers to retain funds resulting from increased collections of recreation user fees above the baseline collections. Eighty percent of the increased collections would go to the site from which the fees were collected and twenty percent would be used agency wide. This will serve as an incentive to improve collection of recreation user fees. Another important provision will allow the Department of the Army to enter into cooperative agreements with such organizations as the Student Conservation Service to allow students and faculty to participate in recreation and natural resource management to enable us to better utilize limited operations and maintenance funds.

Measures for Efficient Program Management

There are several measures that will allow us to improve our program management. For example, we have included proposals to allow us to use public or non-profit organizations as project sponsors on aquatic ecosystem restoration and beneficial uses of dredged material projects. Another example is a provision that would allow the Secretary of the Army to accept non-Federal funds from state and local governments to expand our services in compiling and transmitting information on floods and flood damages.

PROJECT AUTHORIZATIONS

Included in the Army Civil Works legislative program are projects recommended for authorization that have been reviewed and approved by the Administration and a conditional authorization for Grand Forks, North Dakota and East Grand Forks, Minnesota. Additional projects are under review at the current time, and these will be furnished to you as soon as Administration review is complete. The projects included are listed below:

American River, Sacramento, California. The flood damage reduction project described as the Folsom Stepped Release Plan in the U. S. Army Corps of Engineers Supplemental Information Report for the American River Watershed Project, California, dated March 1996, at a total cost of $464,600,000, with an estimated Federal cost of $302,000,000 and an estimated non-Federal cost of $162,600,000. This project would both supplement the levee stabilization and strengthening "common elements" that were authorized in the Water Resources Development Act of 1996 and provide a much needed higher level of flood protection to Sacramento, California. We envision that the "common elements" would be completed first, and after a reevaluation to account for changes that have taken place since the Corps study was competed, the Corps would implement modifications to the Folsom Dam and Reservoir. As the third phase of the plan, the Corps would, after additional studies and a report back to Congress, implement the downstream levee and associated works called for in the Stepped Release Plan.

Amite River and Tributaries, Louisiana, East Baton Rouge Parish Watershed. The project for flood damage reduction and recreation, Amite River and Tributaries, Louisiana, East Baton Rouge Parish Watershed: Report of the Chief of Engineers, dated December 23, 1996, at a total cost of $110,045,000, with an estimated Federal cost of $71,343,000 and an estimated non- Federal cost of $38,702,000.

Guanajibo River, Puerto Rico. The project for flood damage reduction, Guanajibo River, Puerto Rico: Report of the Chief of Engineers, dated February 27, 1996, at a total cost of $27,441,000, with an estimated Federal cost of $17,837,000 and an estimated non-Federal cost of $9,604,000.

Rio Nigua at Salinas, Puerto Rico. The project for flood damage reduction, Rio Nigua at Salinas, Puerto Rico: Report of the Chief of Engineers, dated April 15, 1997, at a total cost $13,565,000, with an estimated Federal cost of $7,079,000 and an estimated non-Federal cost of $6,486,000.

Grand Forks, North Dakota, and East Grand Forks, Minnesota. The project for flood damage reduction and recreation, Grand Forks, North Dakota and East Grand Forks, Minnesota consisting of setback levees and floodwalls, subject to the issuance of a report by the Chief of Engineers and approval of that report by the Secretary of the Army at a total cost of $281,754,000, with an estimated Federal cost of $140,877,000 and an estimated non-Federal cost of $140,877,000.

The inclusion of the Grand Forks, North Dakota, and East Grand Forks, Minnesota project in the Army Civil Works Legislative Program for 1998 as a contingent authorization is an unusual step for the Administration. However, it is one that is justified as an essential step to help those communities rebuild after the devastating floods of May 1997.

HARBOR MAINTENANCE TRUST FUND

As you are well aware, the Supreme Court issued its decision in the case United States, Petitioner, versus United States Shoe Corporation on March 31, 1998. The Court determined that the harbor maintenance tax is unconstitutional because it violates the Export Clause of the Constitution. According to the Court, a user fee that is a "...charge designed as compensation for government-supplied services, facilities, or benefits...." would be acceptable in lieu of the harbor maintenance tax. On May 20, 1998, Franklin D. Raines, Director, Office of Management and Budget forwarded the Administration's proposal to establish a Harbor Services Fund (HSF) to the Committee on Environment and Public Works of the Senate, the Committee on Transportation and Infrastructure of the House, and to the Subcommittees on Energy and Water Development, Committee on Appropriations of both the Senate and the House. Director Raines stated the Administration's view that the users of the Nation's ports should be responsible for the costs of ensuring a safe and competitive port system. The HSF would be used to finance both operation and maintenance and the new construction required to maintain a competitive port system.

Following up on the May 20 letter, the Administration expects to transmit, for Congress' consideration, a legislative proposal that would impose a user fee on commercial vessels. The fees would be based on benefits commercial vessels receive from Government harbor development, operation, and maintenance services at ports. The intent would be to recover fees, in the aggregate, that annually would generate funds sufficient to pay the Army's harbor development, operation and maintenance expenses.

CIVIL WORKS STRATEGIC PLAN

The Administration's Water Resources Development Act proposal builds upon the goals set out in the Strategic Plan for the Civil Works Program. In August 1997, a draft of the Strategic Plan for the Civil Works Program of the Army Corps of Engineers was distributed for review. After receiving numerous, extensive comments from Congress, other Federal agencies, and stake-holders, the Strategic Plan was completely rewritten. We worked hard to address the comments provided by all of the groups and believe that our final submission addressed all of the concerns and that there were no contrary views. The strategic plan identifies six goals, as follows:

1. Provide the water resources infrastructure to enhance the Nation's economic well- being, 2. Lead in the management, protection, and restoration of the Nation's land and water resources, 3. Provide timely, effective, and efficient disaster preparedness, response, recovery, and mitigation, 4. Improve the delivery of program results for our current customers, and maintain these capabilities in order to respond to the engineering and technical challenges of the future, 5. Develop, motivate, and retain an empowered, world-class workforce, and 6. Be a leading Army program in effectively and efficiently applying its resources to achieve its mission.

The Government Performance and Results Act (GPRA) strategic plan outlines performance measures for each of these goals. For example, we have set our goal to reduce the time form the beginning of the reconnaissance study to being eligible for construction funding (project development time) from the current baseline of an average of 12 years. Our short-term performance goal is to reduce project development time by 10 percent (to 10.8 years), and by 33 percent (to 8 years) in the long-term. To assure that new investments achieve intended program results, we have set construction performance goals to monitor and maintain the economic justification for project (benefit-cost ratio) from beginning of construction through to completion. Our plan also sets operational goals for completed projects, such as maintaining existing commercial navigation and flood damage reduction facilities so they will be fully operational at least 95 percent of the time.

We believe these are important steps to help ensure better performance and improved customer satisfaction for the Civil Works program. We look forward to working with this Subcommittee as we implement this plan and continue to improve our performance.

CONCLUSION

Mr. Chairman, this concludes my testimony. I can assure you that our top priority at Department of Army and the Corps of Engineers is to work with your committee to ensure passage of a Water Resources Development Act this year. We are working closely with your staff to provide information and answer questions. We will continue to work and cooperate with you to the fullest extent to complete work on this important legislation.