1) Allow credit for ecosystem restoration work that is related to a flood control project and is locally implemented prior to project authorization,

2) Permit pre-Project Cooperation Agreement (PCA) credit in the Section 206 and 1135 programs for necessary project elements performed by the non-federal sponsor,

3) Raise the programmatic ceilings for Corps’ Sections 1135 and 206 Continuing Authority Programs (CAP) from $25 million to $100 million, and raise individual project ceilings under these authorities from $5 million to $10 million, and

4) Correct the problem of unlimited liability responsibility all accruing to the non-federal sponsor for Continuing Authority Projects (CAP).

Most importantly, I would like to offer The Nature Conservancy’s support for passage of WRDA this year.

The Nature Conservancy is dedicated to preserving the plants, animals, and natural communities that represent the diversity of life on Earth by protecting the lands and waters they need to survive. The Conservancy has more than one million individual members and over 1900 corporate sponsors world-wide, and currently has programs in all 50 states and in 27 other nations. To date, our organization has protected more than 15 million acres in the United States, and has helped local partners protect approximately 102 million acres around the globe. Our conservation work is grounded in strong science, strong partnerships with other landowners, and tangible results at local places.

The Conservancy has been active in Nevada for twenty years, helping to protect treasures such as Ash Meadows, Red Rock Canyon, Stillwater Marsh, and Pyramid Lake. Nevada's arid Great Basin and Mojave Desert ecoregions rank fourth in the nation for biodiversity, with hundreds of endemic species found nowhere else on the planet. Regarding rivers, Nevada is an arid state that has lost an estimated two-thirds of its floodplains and wetlands, even while 75% of plants and animals rely on these rivers at some point of the year or their life cycle. The Conservancy has worked for more than a decade to protect the Truckee River, which is Nevada's largest. Flowing 110 miles from its source at Lake Tahoe to its terminus at Pyramid Lake, the Truckee River is home to critical species such as the Lahontan cutthroat trout, cui ui fish, hundreds of nesting and migrating birds, and amphibians such as the northern leopard frog.

Over the last few years, the Conservancy has embraced the Corps as an important conservation partner. Our expanding partnership is reflected in our Sustainable Rivers Project, a joint effort focusing on dam reoperations on 10 ecologically significant river systems across the country. At another 19 sites we are collaborating with the Corps under CAP Sections 1135 and 206, and other Corps authorities, to protect and restore areas of critical ecological concern. While the Corps is an excellent and willing partner, policy and legislative constraints have often limited or prevented them from working successfully with local communities to achieve mutually agreed upon flood control and ecosystem restoration goals.

It is important to note that the federal government plays a critical role in flood control and ecosystem restoration. The past century has witnessed a serious decline in the ecological health of many of our nation’s rivers. Much of this decline is the unintended consequence of federal water development projects designed to provide public benefits such as flood control, electricity and irrigation. As communities recognize the importance of healthy rivers to their economic and social viability, and their needs and uses of their rivers evolve, it is important for the federal government to recognize and mitigate its mistakes while responding to, and helping to provide for, these changing needs. The Truckee River in Nevada is one such place, and serves as an excellent example of the willingness of the Corps to implement a local community’s flood control and ecosystem restoration vision, while demonstrating the problems that limit the Corps’ ability to achieve that vision.

The McCarran Ranch 1135 Project, for which the Conservancy is the non-federal sponsor, will restore a 5 mile reach of the lower Truckee River, downstream of the Truckee Meadows Flood Control Project. In addition to receiving flood waters, the project will dramatically improve riparian and wetland habitats and water quality, and is serving as the model for the floodplain restoration strategies proposed in the Truckee Meadows Flood Control Project. The Conservancy, in expectation of the initiation of the 1135 project in late summer, has already restored one mile of the Truckee River on its own at a cost of over $1 million, using funds from a variety of private and public sources.

From the community’s perspective, these two projects are strongly interdependent, and the community is eager to see the McCarran Ranch 1135 project and complementary floodplain restoration work proposed upstream under the community preferred alternative for the Truckee Meadows Flood Control Project initiated and completed.

But, as of today, neither project is moving forward as intended, which brings me to the Conservancy’s specific recommendations and the reasons we believe WRDA needs to be passed this year.

1. Permit credit for ecosystem restoration work that is related to a flood control project and is locally implemented prior to project authorization.

Presently, the Corps may credit non-federal sponsors for early implementation of flood walls, levees or other features that reduce flood damages if built to Corps standards and ultimately included in the authorized project. However, no similar authority exists for early implementation of floodplain or ecosystem restoration. For example, restoration of 60 miles of river downstream from Reno will likely be an integral part of the forthcoming Truckee Meadows Flood Project. Because downstream restoration will effectively mitigate the higher flows from upstream, the Corps and non-federal sponsors agree in principle that floodplain restoration elements need to be among the first implemented. Most of the flood protection benefits for Reno and Sparks will not be initiated until after implementation of the restoration elements.

The local sponsors of the Truckee Meadows Flood Control Project have both the land and the local funds needed to start ecosystem restoration now. However, they are inhibited because there is no mechanism for the Corps to credit the work. Allowing early restoration means implementation can proceed more quickly, perhaps accelerating the schedule by years. From the Conservancy’s standpoint, this means that the ecological degradation of the Truckee can be halted sooner rather than later, firmly establishing the floodplain and riparian areas long before they receive significant flood waters.

2. Permit pre-Project Cooperation Agreement (PCA) credit in the Section 206 and 1135 programs for necessary project elements performed by the non-federal sponsor.

The PCA occurs after all of the Corps studies, planning, and designs are completed and the non-federal project sponsor commits to the non-federal share of the project. All of the Corps costs prior to signing the PCA are included in the cost of the project, while any work the non-federal sponsor does prior to the PCA is not included or credited. The Conservancy proposes the local Corps District be permitted to give cost-share credit for work undertaken by the non-federal partner within 5 years prior to signing the PCA and after the initial letter of intent. This credit could include such activities as pre-project monitoring and restoration activities. Credit will not be recognized beyond the non-federal sponsor’s cost share requirement and the Corps will not be liable for funds if the PCA is not ultimately signed.

3. Raise the programmatic funding ceilings for Continuing Authority Programs (CAP) Sections 206 and 1135 from $25 million to $100 million per year nationally, and the per project ceilings from $5 million to $10 million.

The CAP 1135 and 206 projects are producing success stories, and demand nationally far exceeds available resources. There are distinct advantages – both for the Corps and project sponsors – to the relatively small CAP projects. Principally, the scope and cost of the work is more manageable, which expedites on-the-ground progress and participation of the local sponsor. Yet, the typical costs associated with ecosystem restoration such as re-vegetation or channel reconstruction can easily eclipse the federal limit of $5 million per project. The Conservancy is presently the non-federal sponsor for 12 CAP projects around the country.

The McCarran Ranch 1135 Project, with an earmark from Congress in FY04, was on pace to meet its scheduled construction start this fiscal year; however, work has stopped due to the Corps’ discovery that they have more projects than funding. Demand that now exceeds even the annual autorized limits for these programs. The Corps’ decision-making and project management for the McCarran Ranch project has been exemplary, but those efficiencies are rendered meaningless when work stops due to lack of funds. Because the McCarran Ranch1135 project is seen as a precursor to the much larger Truckee Meadows Flood Control Project, missing the implementation schedule will be an ominous sign to the community, and will have a corrosive effect on the remarkable local consensus that exists today.

4. Correct unlimited liability for non-federal sponsor in Project Cooperation Agreements (PCA). Presently, PCAs permit either party to stop a project if it exceeds agreed project costs. The unlimited liability problem is a clause in the PCA that permits the District Engineer to require a project to be completed at statutorily required cost share for the purposes of public health and safety and if the project exceeds the statutorily determined cap for federal share then all additional costs become the responsibility of the non-federal partner. The Conservancy proposes that in the event that the District Engineer determines a project needs to be continued for the purpose of public health and safety, the non-federal sponsor will be responsible for increased project costs up to 20 percent over the original estimated project cost at the statutorily determined cost share. The Corps will assume all costs exceeding the 20 percent of the original estimated project cost, notwithstanding the statutorily determined federal share cap.

In conclusion, the Truckee River experience suggests that the Corps is developing remarkable projects that achieve significant economic and environmental gains, and are highly responsive to local interests. Passage of WRDA this year will allow these successes to continue and increase, and we strongly urge the Subommittee to take action and pass WRDA during this congressional session. I would like to thank the Chairman, Senator Reid, and the entire Subcommittee for the opportunity to share this testimony with you today.