406 Dirksen EPW Hearing Room

Mr. Gregory A. Zlotnick

Director, Santa Clara Valley Water District, San Jose, CA

Good afternoon, Mr. Chairman, members of the Subcommittee and staff. My name is Greg Zlotnick and I am a member of the Board of Directors of the Santa Clara Valley Water District. I want to thank you for holding this hearing on the role for the U.S. Army Corps of Engineers in meeting the nation’s water resources needs.

Mr. Chairman, the agency that would become the Santa Clara Valley Water District was formed in 1929. At that time, the population of Santa Clara County was 145,000 and agriculture was the leading industry in what was known as “the valley of hearts delight.” The area suffered from repeated flooding of the Guadalupe and other rivers and streams in the region. Today, the population of the county is 1.7 million and the District manages flood protection and water supply resources for the entire County, including the center of high technology innovation – the fabled Silicon Valley. And although many people are now protected from flooding, the Guadalupe and other rivers and streams still have the potential to cause millions of dollars in flood related damages.

Over the past seven years, the District has gone through an evolution from a dual purpose flood protection and water supply agency to a progressive, proactive, multi-purpose focused organization. This change has come about by policy changes by the District Board of Directors, enabling legislation at the state level, passage of a tax measure by voters that promised Clean, Safe Creeks and Natural Flood Protection, International Standards Organization certification for Capital, Watershed, and Environmental Management Programs, and pursuit of “Green Business” certification. We see the need for change and evolution of the Corps as similar to the District’s; we have made a lot of progress but still have a long way to go.

We have a long history working with the Corps of Engineers and the Bureau of Reclamation to find solutions to our water resources problems. Even though our agency has significant capabilities in water resources development, our varied needs and the costs of projects, mitigation, and appropriate public processes far outstrip our ability to pay for them on our own. Therefore, on those projects critical to maintaining the economic vitality of our region, an engine of the national economy, we turn to the Corps as a partner. We have been pleased in our working relationship, providing multi-purpose projects that my constituents demand, and which reflect the leading edge of a national trend. The District was local sponsor to a $62 million Corps flood protection on Coyote Creek that now prevents an estimated $250 million in flood damages during a 100-year event. Currently, we are the local sponsor or a participant in ten active and on-going Corps of Engineers projects in every stage of the development process, including the completion of the flood protection elements of our ground-breaking $250 million Guadalupe River Project. We believe that we now have an extremely productive relationship with the Corps, and that we and the Corps are partners in the truest sense of the word.

However, getting to this point in our relationship with the Corps has not been easy, and we have to work hard to maintain the partnership, even if that means that we sometimes have to tell the Corps “no” when they make a proposal that we don’t think is in the best interests of our citizens. Our area around the San Francisco Bay is certainly one of the most environmentally conscious regions of the country, and the old style Corps of Engineers flood control consisting of concrete flood walls through the middle of town, although originally offered, just won’t work in our area. To its credit, the Corps has shown responsiveness and creativity in working with us to develop alternatives more consistent with community expectations.

As I indicated earlier, a primary source of flooding in our area has been the Guadalupe River, which runs through downtown San Jose and the heart of the Silicon Valley. Protecting our citizens and businesses from that flooding has been a focus of our agency, and I’m happy to report that the flood protection features of the portion of the project that runs through downtown San Jose will be completed later this year. And while flood protection has been a key focus, what we are most proud of is that, working with the Corps, we have developed a number of projects which adopt a watershed approach that balances flood protection needs with water quality, habitat enhancement and restoration, and recreational opportunities. In fact, the District feels so strongly about environmental restoration, that in 2001 the Water District sought and sponsored state legislation that added environmental stewardship as an explicit third chartered mission, along with water supply and flood protection to its authorities.

This multi-purpose project, known as the Guadalupe River Project, is a great example of what can happen when the Corps of Engineers and local interests work together as true partners, and this project has become a model for what the Corps hopes to be able to achieve throughout the country. The best example of this partnership occurred in 1996, when the project had already been under construction for four years. At that point, construction was stopped due to concerns regarding the adequacy of mitigation, new listing of endangered species, and the receipt of a notice of intent to sue from four environmental organizations. In the past, I believe that these circumstances could have resulted in the termination of the project. Instead, our District initiated a collaborative process with the Corps, the City, Federal and state resource agencies, and the environmental community to resolve the mitigation disputes. The result was a modified project allowing for a bypass channel and the inclusion of shaded riverine habitat to cool the river for the listed species and to preserve a significant riverine corridor. The modified project was approved in November of 2001. In a June 24, 2002, editorial the San Jose Mercury News said, “At a time when government-bashing is an overplayed sport, the Guadalupe flood-control, river-restoration project is a great example of how government can get it right.”

The not so good news is that it has taken a very long time for us to get to this point. The reconnaissance report for this project was initiated in 1975, almost 30 years ago. It took ten years for just the feasibility study to be completed. In the meantime, our citizens continued to be subject to the devastating effects of flooding, and costs for us and the Federal taxpayers have increased significantly. It is also true, however, that because of the time it takes for a project to move through the Corps process, and in this case, the change in conditions which forced a redesign of the project, we have a much better project than we would otherwise have had. So, I believe that the key issue that the Corps, and we, as local sponsors, must address is how can we move projects through the process faster, but still get them “right” the first time.

Another more recent example of how we as partners can overcome historic differences to bring forward innovative, environmentally-sensitive projects through positive experience and developing flexible, new arrangements is occurring now in our area around the San Francisco Bay. In the 1980s, the Corps conducted a study of the need for flood protection in the low-lying areas around the southern end of San Francisco Bay. At that time, the Corps concluded that the potential for flooding damages was low and, therefore, the study was suspended. Since the completion of that study, the area, particularly Silicon Valley, has undergone significant development and in July of 2002, the Corps was authorized to review the previous study to determine the Federal interest in tidal and fluvial flooding flood damage reduction and environmental restoration in Santa Clara, San Mateo and Alameda Counties. The fiscal year 2004 Energy and Water Development Appropriations Act included $100,000 for the Corps to initiate the reconnaissance phase of that study, the South San Francisco Bay Shoreline Study.

One of the reasons why the earlier Corps study ended with a “no action” recommendation was that the existing levees associated with maintenance of the active salt ponds owned by the Cargill Company, while not designed for flood protection, did provide a measure of flood protection. In March of 2003, however, the salt ponds were acquired by the State of California, Federal government, and private foundations with the goal of restoring them to wetlands. This restoration effort, if flood protection activities are not incorporated simultaneously, would have a significant impact on the threat of tidal flooding problems faced by residents of the counties surrounding the bay. Also at risk is the golden triangle of Silicon Valley in north San Jose, an area that lies below sea level.

Based on our positive experiences working with the Corps of Engineers to develop flood protection measures that also included significant environmental restoration components, we saw this situation as an opportunity to develop an integrated, multi-objective watershed project, using the authority of the South San Francisco Bay Shoreline Study, that would address both tidal flood protection, which was our primary interest, and restoration of the salt ponds, as well as public access, and recreation opportunities for the broader interests in the state and which are consistent with our watershed management approach. The challenge was how to get the Federal and state agencies involved in the flood protection and wetlands restoration projects working together. This challenge was all the more difficult because, quite frankly, the agency the state placed in charge of the salt ponds restoration effort, initially wanted nothing to do with the Corps of Engineers. Their view of the Corps was of the “old” Corps – an agency that did what it wanted, not what the community wanted – to the detriment of the environment. We knew, however, that through our positive experience that the Corps did not have to operate that way and we worked closely with the state agency over a number of years in collaboration to educate, advise and show the agency our Corps-partnered initiatives.

Recently, we helped arrange a meeting between officials of the agency and the Corps here in Washington. At the meeting, the agency explained its vision of how the project should proceed, which was that it, my agency, and other local interests would lead the study effort, with technical input from the Corps, rather than the traditional model of the Corps conducting the study with input from the community. Perhaps to the state agency’s surprise, the Corps embraced this concept, and we are now working with the agency and this Committee to develop the necessary legislation to make this concept work. I believe that this is a good example of how adding flexibility to the Corps study process can prove beneficial to all parties. Perhaps if we make the necessary improvements to the Corps system as we outline here and below, these type of flexible and expertise-based arrangements can be handled seamlessly through more tailored feasibility study agreements.

Some recent developments have helped us move in the direction of timely progress and getting it “right” the first time. The change to a streamlined reconnaissance study process a few years ago to quickly determine if there is a Federal interest in solving a problem has been a big help. Another more significant development has been the gradual but accelerating cultural change that the Corps is undergoing where local sponsors are now partners, deserving of service and collaboration, rather than merely the local receptacle of Corps “wisdom” along the lines of “we’re from the government and we’re here to help.” This culture change is still evolving and the message doesn’t always get down to the District level, but it is critical, in our view, to a successful and revitalized civil works program as the nation struggles to maintain aging water resource infrastructure while meeting water supply, water quality, and flood management challenges of the future. While you can’t legislate a change in attitude, there are things you can do to encourage it. The partnering provisions contained in H.R. 2557, the House-passed Water Resources Development Act of 2003, are a step in the right direction.

From the perspective of a local sponsor, what can be extremely time-consuming and frustrating is having to deal with a take it or leave it contract for construction, that is the project cooperation agreement, which dictates the partners’ roles. Typically, it must then be moved up the Corps’ chain of command only to be reviewed yet again at the Assistant Secretary of the Army’s office, where the lawyers review what has already been reviewed many times below them producing delay and inefficiencies. In our view, the partnership must start at the field level and the Corps’ district commanders must be empowered to honor and use the abilities of its local partners. In fact, this true partnering effort should start at the feasibility cost sharing agreement stage and flow through design and the project cooperation agreement level. A Corps district commander should, under general principles from Headquarters, be able to tailor each agreement, be that feasibility study or partnering agreement, to the capabilities and needs of the sponsor. If, for example, the sponsor has the capability and experience to lead the feasibility study and this provides efficiencies to the system, both partners, and for the project, then they should be allowed to proceed without the need for special legislation or additional agreements. Further, if, for example, due to local conditions, perhaps a significant flood or environmental threat, the experienced and motivated local sponsor must proceed with advance construction work to provide early benefits and this is in the federal interest to reduce the threat and reduce damages and total project costs, then the sponsor should be able to proceed without developing additional agreements which can drag on for months and sometimes years.

The partnering principle could also be expanded to include the process for selecting a recommended project. Currently, the Corps recommends the NED plan. If the community prefers a different plan, it must pay any cost differential between the NED plan and that plan, even if the community’s plan is also economically justified. Because the taxpayer’s money is involved, it is important that the Corps continue to examine the benefits and costs of each plan being considered. However, the Corps should be given the flexibility to deviate from the NED plan in order to meet the real needs of the community as long the solution preferred by the community is also economically justified.

Another possibility along these lines is to allow a local sponsor to carry out the necessary work of a reconnaissance level investigation, with the Corps monitoring rather than doing the work, that would then put the Corps in a position to make a determination of whether there’s a federal interest in moving forward with a project or not, but not having to hold up that preliminary determination to the Congress authorizing a potential new start. Congress would still have to authorize the new start, but it would do so knowing whether a federal interest had been determined or not. The traditional route of having the federal government pay for the reconnaissance investigation after getting a new start authorization for it would still be an option, but for agencies with the wherewithal and a local sense of urgency, this would allow the process to start in the Congress one step further down the path to a project.

It must be noted that communities, ours included, are taking the initiative in difficult budget times to raise revenue dedicated to water resources infrastructure as well as environmental restoration and recreation. In our case, our community strongly signaled their trust in the Water District as its watershed steward and flood manager in November 2000, when more than two-thirds of the county’s voters agreed to tax themselves to the tune of $25 million a year to provide funding to the Water District for a 15-year effort to reduce flood hazards, as well as protect and restore hundreds of miles of waterways in Santa Clara County. Over the course of the Clean, Safe Creeks and Natural Flood Protection Program, the District will construct nine new flood protection projects to safeguard 13,600 homes, 1,040 businesses and 43 schools and public facilities in the county from flooding. Over half of the flood protection projects funded by the Program are Corps partnered projects.

In addition to flood protection, the Clean, Safe Creeks program is also protecting, enhancing and restoring creek ecosystems, improving water quality, helping keep neighborhood creeks free from trash and developing 70 miles of trails, parks and open space along the creeks in the county. The second annual report by an external and independent monitoring committee has, as in its first year, verified progress to date and provides assurance to the community the District is fulfilling its promises.

Another recommendation for efficiency in the Corps system flows from the idea of building accountability into the feasibility and design stages. From a local sponsor’s perspective, it is not acceptable to watch years go by on a study with no discernable progress towards solving the problem already identified as in the federal interest to resolve, and no accountability. Feasibility studies, as well as detailed design and preconstruction activities should be completed on a date certain basis, with past due efforts and all costs associated with and attributable to federal delay shifting to 100% federal responsibility.

Mr. Chairman, the Santa Clara Valley Water District has a long and storied history with the Corps, not always smooth, but now very positive, progressive and always improving to meet the needs of the community. As the Committee considers how to improve the Corps’ process and reaffirm Congress’ commitment to a stronger and more efficient program, we hope you will consider the recommendations identified here for true partnering, empowering the field officers and local governments to build flexibility and innovation into the system, as well as allowing for local dollars to flow early to save lives, economically develop our communities and allow sponsors and the Corps to meet the challenge most efficiently.

Thank you, Mr. Chairman, for your time and consideration and I stand ready to answer any questions you may have.