4
The Corps Planning Process: A New Opportunity

INTRODUCTION

The Corps of Engineers has traditionally had access to the planning, expertise, and resources necessary to construct projects for controlling the vagaries of the hydrologic regime. Although state and local governments participated in federal water project planning and decision making, their participation was limited. Over the second half of the twentieth century, federal budget support for Corps-built projects declined steadily. At the same time, significant responsibilities for water allocation decisions remain organized around water laws and administrative rules of individual states. In many states, these legal and administrative responsibilities are now focused on balancing demands for instream flow with municipal, industrial, and agricultural demands. For example, the National Research Council has recently had study committees conducting two state-sponsored studies on these topics (one for the State of Texas on instream flow standards, the other for the State of Washington on water withdrawal permitting decisions, the latter of which has been published; see NRC, 2004). In this current setting, what roles are appropriate for the Corps, and what planning approaches best support those roles? The Corps can continue to make important water resources management contributions, but this will entail a general planning reorientation and a complementary strengthening of the agency’s planning capabilities. This chapter explains that role–captured in the “portfolio planning” metaphor—and provides the conceptual foundation for a complementary planning program. Following this chapter, Chapter 5 identifies specific actions required for implementing the decision-making processes in support of this water resources planning reorientation.



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service 4 The Corps Planning Process: A New Opportunity INTRODUCTION The Corps of Engineers has traditionally had access to the planning, expertise, and resources necessary to construct projects for controlling the vagaries of the hydrologic regime. Although state and local governments participated in federal water project planning and decision making, their participation was limited. Over the second half of the twentieth century, federal budget support for Corps-built projects declined steadily. At the same time, significant responsibilities for water allocation decisions remain organized around water laws and administrative rules of individual states. In many states, these legal and administrative responsibilities are now focused on balancing demands for instream flow with municipal, industrial, and agricultural demands. For example, the National Research Council has recently had study committees conducting two state-sponsored studies on these topics (one for the State of Texas on instream flow standards, the other for the State of Washington on water withdrawal permitting decisions, the latter of which has been published; see NRC, 2004). In this current setting, what roles are appropriate for the Corps, and what planning approaches best support those roles? The Corps can continue to make important water resources management contributions, but this will entail a general planning reorientation and a complementary strengthening of the agency’s planning capabilities. This chapter explains that role–captured in the “portfolio planning” metaphor—and provides the conceptual foundation for a complementary planning program. Following this chapter, Chapter 5 identifies specific actions required for implementing the decision-making processes in support of this water resources planning reorientation.

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service CONCEPTUAL BASES OF PORTFOLIO PLANNING Promoting efficient transport of interstate and foreign commerce, and providing protection from flood and storm hazards, continue to define federal interests in water resources management and key missions for the Corps. The Corps water resources program is, however, experiencing budgetary decline. For many years in the early twentieth century, Corps water programs represented approximately 3 percent of total annual federal spending (Figure 4-1). Today, however, these programs represent less than two-tenths of 1 percent of the budget—a roughly twenty-fivefold decrease. Within that budget, the Corps spends less than 20 percent for new construction, and there is a “backlog” of authorized, but unfunded, project spending of around $50 billion. Equally important is that a significant share of construction dollars is allocated to structural rehabilitation of older projects, while another share is devoted to a relatively new and broadly defined ecological restoration mission. One explanation for the current situation is that the original mission of harnessing the flows of major interstate rivers has been mainly accomplished. Indeed, the nation’s physical landscape has been forever altered by thousands of projects, constructed by the Corps (and several FIGURE 4-1 Corps civil appropriations as percentages of federal budget and of U.S. gross domestic product. SOURCE: USACE (2001).

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service other agencies and private investors). For example, the Corps itself has built about 1,000 harbor projects, of which 929 are still being maintained. In addition, there are about 12,000 miles of channels that support navigation, 230 lock and dam projects for navigation and related purposes, 377 dam and reservoir projects, and hundreds (if not thousands; there is no inventory) of channel modifications, small levees, coastal and riverine floodwalls, diversion channels, and ice control structures. The Corps (and others) has thus constructed a vast physical infrastructure. Although these assets (part of the Corps “portfolio”) will be added to in the future, the large amount of past construction means that future construction prospects are limited. The possibilities of serving a different mix of purposes with this massive investment, in light of changing national needs, are today being considered (Holliday, 2002). Meanwhile, the relaxation of hydrologic and geomorphic controls (under the rubric of “ecological restoration”) is being promoted by some as a new focus for the Corps’ water management program. Aquatic ecosystem research conducted during the 1980s and 1990s supports theories demonstrating the importance of natural hydrologic and geomorphic variability in maintaining river system biodiversity and productivity (Koel and Sparks, 2002). Restoration of some degree of hydrologic variability and natural geomorphic processes to the nations’ rivers and coastal areas is thus viewed by many as central to achieving a variety of environmental objectives. In places such as Florida’s Kissimmee River, for example, the Corps has removed a multipurpose water control project in order to restore some degree of the pre-settlement hydrologic regime. In other places the Corps is pursuing new opportunities for such restoration with the promise of benefiting most or all stakeholders (see Box 4-1). At other times, hydrologic and geomorphic restoration may entail difficult choices and trade-offs of national-level importance that will have to be addressed by the president and Congress if they are to be resolved (see Box 4-2). As another example, the Corps has had to address different perspectives regarding the viability of the navigation system of the Appalachacola River (Holliday, 2003). Finally, in instances such as with the Comprehensive Everglades Restoration Plan, significant new investments are expected both to meet restoration goals and to serve more traditional purposes such as municipal and industrial water supplies. These two factors—a mature physical infrastructure that controls vast amounts of water and related resources, and an emerging interest in relaxing controls on hydrologic and geomorphic processes across large watersheds—suggest the need for an authority that will enable the Corps

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service BOX 4-1 New Operational Regimes The Corps is involved in various efforts across the nation to implement some changes to dam and reservoir system operations schedules. For example, in the Sustainable Rivers Project, the Corps and the Nature Conservancy signed an agreement in 2002 to help restore some natural flows and processes on several rivers across the nation, while also providing services such as flood management and hydropower generation. Within this program there are currently fourteen candidate sites on ten rivers in eleven states (see:http://nature.org/success/dams.html; accessed July 12, 2004). In the Upper Mississippi River basin, the Corps St. Paul District and the Chippewa National Forest Service signed an agreement in early 2003 to cooperate on the Mississippi River Headwater’s Reservoir Operations Plan Evaluation, or ROPE, study. The program aims to develop a new operating plan for the region’s reservoir system. The program is to include dialogue among federal and non-federal dam operators and stakeholders representing interests in flood control, environment, tribal interests, recreation, and hydropower generation. The study, which is to be cost-shared by the Corps and the U.S. Forest Service, represents the first time since the 1950s that the region’s reservoir operating plan has been updated (see http://www.mvp.usace.army.mil/print/default.asp?pageid=676&subpageid=0; accessed July 12, 2004). The Sustainable Rivers Project and the ROPE study are examples of the Corps’ recognition of the importance of ecological conditions in the nation’s watersheds, comprehensive water management at the watershed river basin scale, and cooperation and dialogue with fellow agencies and stakeholders. to focus its planning functions and capabilities on these new realities. The Corps currently has planning authorities that provide some latitude to review project operations and make appropriate adjustments. Perhaps the two most frequently invoked authorities for this purpose are an authority from Section 216 of the 1970 Flood Control Act and another from Section 1135 from the 1986 Water Resources Development Act (WRDA, 1986; see Box 4-3; also see the 216 study panel on river basins and coastal systems). As illustrated in Box 4-3, these existing authorities provide little detail on how the Corps might evaluate and implement a program for ad-

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service BOX 4-2 Operating the Missouri River Dam and Reservoir System The Corps of Engineers sets the operations schedule for the Missouri River mainstem dams and reservoirs that the agency constructed during the middle of the twentieth century. The system consists of six dams and reservoirs extending from Fort Peck Dam in Montana downstream to Gavins Point Dam on the Nebraska-South Dakota border. The system is important for many reasons: the storage capacity in the Missouri River basin is the largest of any river system in North America; it is the site of protracted upstream-downstream, interstate conflict regarding proper operations of a multiple-reservoir system; and it is a prime example of how the Corps can be caught between conflicting obligations and legislation. Two pieces of federal legislation are at the heart of the system’s construction and operations. The 1944 Flood Control Act contained the Pick-Sloan Plan, which divided construction and operations responsibilities for the tributaries and mainstem between the Bureau of Reclamation and the Corps. The 1945 Rivers and Harbors Act contained the Missouri River Bank Stabilization and Navigation Project, which authorized the Corps to construct a navigation channel 9 feet deep and not less than 300 feet wide. Post-1945 environmental legislation—namely the Endangered Species Act (ESA) of 1973—has created new management obligations and have complicated system operations. Pursuant to the ESA, once a species is “listed” as endangered or threatened by the Department of the Interior, no federal agency may take actions jeopardizing its continued existence. On the Missouri River, two listed bird species—the least tern and the piping plover—and one listed fish—the pallid sturgeon—have been the source of controversies and conflicts involving the navigation industry, environmental groups, basin states, the U.S. Fish and Wildlife Service, and the Corps. justing post-construction project operations. Most importantly, these authorities were not created to fundamentally reorient Corps planning, beginning with consideration of the condition and purposes being served by existing Corps-built infrastructure at a regional scale (i.e., “portfolio planning”). As noted in Chapter 1, “portfolio” includes the water and related land resources of rivers and coastal areas, as well as Corps-built projects in these rivers and coastal areas. “Planning” includes both the analysis and the decision-making processes that govern investment and management strategies within the portfolio. Traditional Corps missions,

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service In the 1945 legislation, Congress instructed the Corps to maintain a 9-foot navigation channel. In the 1973 Endangered Species Act, Congress instructed the Corps not to jeopardize the existence of endangered species. Consistent with scientific knowledge, the Fish and Wildlife Service (which consults with the Corps on operating plans) maintains that these endangered bird and fish species require some degree of pre-settlement hydrologic and geomorphic conditions and processes (e.g., shallow-water habitat; sandbars and islands for nesting) in order to survive. These two acts are not fully consistent: one authorizes the Corps to maintain a stable channel; the other suggests that more variable flow and depth regimes are needed to protect federally-endangered species. One manifestation of the ensuing confusion and criticisms is that the Corps has been attempting—unsuccessfully—to revise its Master Manual for mainstem system operations since 1989. Some have blamed the Corps for failing to come up with a revised Master Manual that satisfies the demands of ecology and commerce after 15 years of effort. An example of the fundamental ambiguities that can attend contemporary river flow management is the following sequence of events. Within a four-week period in July 2003, a federal court in Washington, D.C., ordered the Corps to lower summer releases in order to protect endangered species, while a federal court in the Midwest ordered the Corps to release flows to support Missouri River commerce. Responsibility for sorting out these conflicting directives was subsequently assigned to a federal district court in the State of Minnesota, which ordered the Corps to reduce Missouri River flows in accord with the injunction from the Washington, D.C., federal court (http://www.newsday.com/news/nationworld/wire/snsap-river-fight,0,5514673.story?coll=sns-ap-nationworld-headlines; ac-cessed August 7, 2003). As this report was going to press, the Corps released its final Master Manual environmental impact statement (USACE, 2004b). opportunities for meeting emerging water demands, and new interests in hydrologic restoration can all be well served by the portfolio planning concept. Indeed, as Boxes 4-1 and 4-2 illustrate, the Corps appears already to be engaged in portfolio planning in many places, but on an ad hoc basis. The portfolio concept has also been offered to help the Corps place a greater emphasis on better management of the agency’s existing infrastructure and related natural assets. Like many economic and social

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service BOX 4-3 Key Corps of Engineers “Continuing Authorities” 1970 Flood Control Act, Section 216 The Secretary of the Army, acting through the Chief of Engineers, is authorized to review the operation of projects, the construction of which has been completed and which were constructed by the Corps of Engineers in the interest of navigation, flood control, water supply, and related purposes, when found advisable due to the significantly changed physical or economic conditions, and to report thereon to Congress with recommendations on the advisability of modifying structures or their operation, and for improving the quality of the environment in the overall public interest. 1986 Water Resources Development Act, Section 1135 Subsection 1135(a) authorizes the review of existing water resources projects to determine the need for modifications in the structures and operations of projects constructed prior to the authorization of this Act for the purpose of improving the quality of the environment in the public interest. Subsection 1135(e) authorized maximum annual appropriations of $25 million for this section. Corps guidance on implementing this section is provided in EC 1105-2-206 and ER 1105-2-100 (subsection 1135(b) initially authorized a two year demonstration program, and Section 304 of the Water Resources Development Act of 1990 (33 U.S.C. 2309a) amended this section to make it a continuing program. sectors across the nation, the Corps is being asked to make better use of their current assets. This reflects larger debates regarding other elements of public and civil works infrastructure across the nation. For example, the transportation sector, universities and public school systems, and military installations are all being asked to increase efficiencies, properly maintain past investments, and minimize resource consumption and environmental impacts. The Corps is not alone in finding itself in a setting of limited and declining resources, competing goals, broadening mandates, and important environmental priorities. Given these circumstances, the nation should seek unrealized efficiencies from its existing water infrastructure portfolio. In some instances, this will require difficult decisions regarding priorities. Decision making agencies like the Corps must have the direction, analytical means, organization, and resources to provide credible analytical support to elected leaders and others. Portfolio plan-

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service ning does not mean there is no longer a need for new investments, but rather that new investments should be evaluated in the context of the state of existing infrastructure and operational priorities. Technical analysis is an important part of this concept, but it alone cannot be looked to resolve fundamentally different priorities for often competing uses of the portfolio’s infrastructure. Current Corps planning guidance consists of many documents, some of which apply to all federal agencies, and some of which are authored by the Corps itself. A detailed review of this voluminous body of material was beyond the scope of this study. All the 216 study panels noted, however, that some components of this planning guidance have not been updated for many years. The Corps has taken a strong lead in advancing “public involvement processes,” and including stakeholders and other agencies in some of its planning processes (see, for example, comments on stakeholder collaboration from the 216 study panel on Project Planning and from the 216 study panel on Adaptive Management). In the end, however, the Corps has generally adhered to its own internal practices, and its own internal policies were used to define priorities that best serve the national interest. A future planning challenge for the Corps will be to adapt its planning processes to ensure that its planning activities and reports help clarify and resolve, rather than exacerbate, conflicts over national priorities. Another planning challenge is at the technical level. Professionals in multiple disciplines have pressed the Corps to plan and make decisions at larger spatial scales in order better recognize economic and environmental interdependencies among past and proposed future activities (see the report from the 216 study panel on River Basins and Coastal Systems). The agency has also been encouraged to more explicitly incorporate scientific and forecasting uncertainties into planning and management (e.g., adopting “adaptive management” practices). The larger spatial and temporal scales that the Corps is being urged to consider in its planning can be addressed within the portfolio planning rubric (also see the report from the River Basins and Coastal systems panel). Are the Corps and its water resources planning processes up to these challenges? As a result of budgetary declines, the Corps is experiencing a shrinking professional staff, along with an imperative to execute its military mission in connection with homeland security responsibilities. Yet, competent management of the federal water infrastructure demands that the nation retain technical competence within water resources planning within the Corps. If the Corps cannot provide this service, the nation must find another way to secure these capabilities. The Corps (or

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service any agency) cannot, however, act alone on this front; executive and congressional actions are needed to develop new study authorities, to clarify the focus and the limits of the Corps’ responsibilities and priorities, and to the shift the locus of decision making on fundamental federal policy matters from Corps staff and leadership to the Administration and the Congress. The portfolio planning metaphor is not offered in order to fully replace the Corps' many water resources planning obligations. The Corps will continue to be expected to address new problems and opportunities that emerge beyond the operation of its existing investment infrastructure. Traditional flood risk management planning studies will continue to be requested. In some instances the Corps may be asked to participate in revisiting the operations of projects that have been constructed by others. In some urban areas, the Corps, in partnership with the EPA, is developing urban river programs that seek to address water and related environmental issues to complement to other urban revitalization efforts. However, even as these and other planning activities are being pursued, the budget for new investments will be limited. A portfolio planning program that increases operational efficiency of existing infrastructure, and that continually adjusts these operations to meet emerging demands, will help ensure that new projects will fit smoothly into current systems of infrastructure and their operations. EXECUTING PORTFOLIO PLANNING Economic and Environmental Analysis Clarifying the Restoration Mission One conceptual adjustment entailed by a portfolio planning approach is a need to clarify the Corps’ roles in ecosystem restoration. In the Water Resources Development Act of 1990, Sections 306 and 307 authorized the Secretary of the Army to include environmental protection as a primary mission of the Corps. To reflect this change, the Corps has sought a new approach to planning that would integrate the multiple objectives of environmental and economic enhancement. An initial step in this realm was the issuance of Ecosystem Restoration in the Civil Works Program (EC 1105-2-210) in June 1995 (USACE, 1995). Under these guidelines, it was determined that Corps planning should explicitly rec-

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service ognize opportunities for environmental restoration. In the agency’s Planning Guidance Notebook (USACE, 2000), the Corps issued planning guidance in which it formally adopted national ecosystem restoration (NER) as a planning and evaluation objective of parallel and equal importance to national economic development. Then in May 2003, the Corps issued field guidance titled Planning Civil Works Projects Under the Environmental Operating Principles (USACE, 2003a) for use in formulating and evaluating measures to serve NED and NER. These have been positive steps, but Corps activities within the broad and multidisciplinary realm of ecosystem restoration remain somewhat unfocused. Efforts to add ecosystem restoration as a primary water resources planning account (the NER account) to its traditional NED planning and evaluation process demonstrate the Corps’ appreciation of a new context for water planning. However, in efforts to develop a framework for evaluating these benefits, the Corps has relied strongly on difficult-to-define conceptual terms such as “sustainability” and “ecosystem health” (Lackey, 2001). Although such terms signal a new emphasis, they must be made operational in order to be meaningful and to provide specificity to planners, decision makers, and other stakeholders. A lack of clarity regarding the Corps’ ecosystem restoration mission may be resulting in the agency’s limited budget being devoted to non-traditional (for the Corps) projects, which are typically the province of other bodies (e.g., local and state governments). The possible value of these types of non-traditional investments is not at issue. The use of limited planning capacity and budget to fund such projects, however, diverts the Corps from pursuing its restoration (and other) goals. A clear definition of the Corps’ restoration mission is consistent with the portfolio planning approach, and is necessary to focus the Corps resources on traditional mission areas and its professional competencies and strengths. Increasing scientific and public interest in hydrologic and geomorphic restoration offers an opportunity to enhance the clarity of the Corps’ environmental mission. As explained in Chapter 3, the Corps’ long history of controlling hydrologic and geomorphic process in rivers and coastal areas has served as the traditional engineering principle governing its approach to water management. It follows that the Corps’ restoration mission should focus on these types of traditional emphases. The Corps’ restoration mission within the portfolio planning concept should focus on hydrologic and geomorphic processes in places and over areas or regions where Corps projects have significantly altered those processes. Adjusting hydrologic and geomorphic processes can be as simple

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service as re-operating reservoirs as a system at little opportunity cost (see Box 4-1), or it could entail significant changes and controversies regarding the operations of systems of projects (see Box 4-2). Examples of restoration measures that affect hydrologic and geomorphic processes include removing artificial obstructions to river flows, reestablishing wetlands that had been drained, inserting crevasses in levees to reconnect rivers and their floodplains, and allowing for the silting of river channels. Such measures would allow the Corps to focus on its traditional hydrologic and geomorphic concerns, which are often the key processes in ecosystem restoration. For example, a 2002 report from a National Research Council committee that reviewed ecosystem science and conditions in the Missouri River and floodplain ecosystem concluded the following: “Degradation of the Missouri River ecosystem will continue unless some portion of the hydrologic and geomorphic processes that sustained the pre-regulation Missouri River and floodplain ecosystem are restored” (NRC, 2002a, emphasis added). An emphasis on restoring hydrologic and geomorphic processes will not exhaust the scope of the Corps’ environmental program. The agency is obliged to mitigate adverse environmental effects of its new projects. Beneficial uses of dredged material may mean the creation of wetlands in confined disposal areas that can become wildlife habitat. Programs in urban settings, in partnership with other agencies, will also constitute part of the agency’s environmental activities. Portfolio planning to serve large-scale restoration creates a unique and important environmental opportunity for the Corps because it combines the Corps’ historical program with extensive and continuing responsibilities for water projects operations and new investments. The Corps could help operationalize its national ecosystem restoration evaluation account by developing hydrologic and geomorphic out-come measures. Appropriate measures will be site specific and a function of project goals. For example, in some cases, acres of wetlands reconnected to the floodplain may be the measure of NER output. Other measures could be imagined for other study locations, suggesting that measures may well be site specific and driven in part by the central problems of concern. For example, given concerns over the infilling of backwater areas along the Upper Mississippi River, a key measure there could be reconnecting acres of backwater with the main channel (Koel and Sparks, 2002). Given concerns over dwindling salmon populations on the Columbia River, a key measure could be the degree to which a more natural flow regime is restored and contributes to healthy salmon populations; and given concerns regarding the alteration of flows through

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service Florida’s Everglades National Park, a key measure could be a metric that represents patterns and timing of flows that are expected to meet biological goals. This emphasis on hydrologic metrics is increasingly being adopted as a guide to formulating and evaluating river system scale restoration projects (Richter et al., 2003). Defining the restoration mission and restoration measures in ecologically meaningful hydrologic terms can link the Corps’ efforts in this new realm to its traditional areas of expertise in hydrology and engineering. It also directs attention to the management and operation of existing projects. Further, the concept of restoration mission and restoration measures requires that the Corps place its restoration program in the broader context of federal, state, and local programs. For example, hydrologic restoration may promote biodiversity. The Corps’ restoration responsibilities, however, would not be directed toward ensuring biodiversity or other biological goals. Other programs and agencies (e.g., the U.S. Fish and Wildlife Service, U.S. Geological Survey, U.S. National Park Service), working in cooperation with the Corps, can address other important issues such as habitat preservation and pollutant runoff controls that, together with hydrologic restoration, can promote a greater degree of biodiversity. For this reason, portfolio planning places a premium on meaningful interagency program collaboration. The Corps’ primary environmental mission should be to restore hydrologic and geomorphic processes in large river and coastal systems (Recommendation 1). Expanding Economic Analysis In addition to ambiguity regarding the Corps’ ecosystem restoration mission, there are also differences of understanding regarding economic criteria for evaluating Corps activities. The term “national economic development” (NED) is used to describe the economic consequences of water investments. There is, however, some disagreement among those who use the “NED” concept regarding its meaning. These differences of perspective may confuse public debate over Corps planning reports and their analytic content (the 216 study panel report on methods of analysis for project planning offers advice regarding revisions to economic analyses conducting according to the Principles and Guidelines (P&G) framework). The P&G analytical framework promotes conventional benefit-cost analysis of water resources investments. This analysis must demonstrate

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service how a water resources infrastructure investment represents a justified response to economic changes sparked by market forces. For example, in planning navigation capacity for bulk commodity movements, the P&G requires an analysis documenting an increased demand for bulk commodity transportation without the project in place, to show that additional navigation capacity is justified. In fact, the Office of Management and Budget requires (and some professional economic reviewers of Corps planning studies advocate) such an analysis for calculating benefits and costs. In contrast, many supporters of the Corps’ water resources investment program have a different understanding of the role of economic analysis. These supporters hypothesize a link between water infrastructure investment and the economic prosperity of the nation and its various regions. They often expect that economic analysis will determine whether and by how much a particular investment in water infrastructure will stimulate economic change, thereby advancing economic prosperity. For them, when evaluating increases in water transportation, they are interested in an analysis that determines whether an investment will, for example, increase the international competitiveness of producers of bulk commodities, thus stimulating demand for waterborne transportation. Other economic information is also critical to portfolio planning. If new storage allocations are made or if operations are changed, an estimate of the costs of any change will be required. Costs are of two types. First, new federal expenditures will have to be allocated for project purposes, with appropriate cost-sharing arrangements. Second, costs may be in the form of benefits forgone to existing project users. In this case there may be a need to accurately estimate the value of the forgone benefits so that appropriate levels of compensation, if warranted, might be made. In any event, there are many economic implications of Corps projects that are important to citizens and to elected officials that are not consistently presented in the National Economic Development account. Corps economics analyses for portfolio planning should thus: a) explicitly evaluate and report on how a new project, or changes in operations, may affect national and regional economies and its implications for national and international economic competitiveness; b) explicitly evaluate and report on the magnitude and incidence of forgone benefits associated with any modifications to the current system of projects or their operations; and c) explicitly evaluate and report on traditional categories of NED benefits that accrue from restoration measures (Recommendation 2).

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service Evaluation for Restoration Although restoration measures generally seek to relax hydrologic controls, it is also true that restoration as a planning objective for the NER account defines a direction of change, not a desired end state. Only careful analysis of the NER and NED consequences of alternatives can inform decisions on whether any restoration measures are justified. More generally, both the formulation and the evaluation of alternatives will be influenced by the presence of these twin objectives. Through adoption of the NER account, the Corps has decided to not attempt to quantify all ecosystem outcomes using NED metrics. The Corps has adopted a two-criterion evaluation approach and plans to apply an “incremental analysis” approach to decision making. In principle, incremental analysis evaluates how costs (both financial outlays and NED benefits forgone) increase with increasing levels of restoration outcomes (e.g., additional acres of floodplain hydrologically reconnected to a river’s main channel). Incremental analysis does not provide a justification for selecting any specific restoration level. Rather, justification rests on demonstrating the “significance to the nation” of the level of restoration recommended (USACE, 2003). As applications of these measures are extended, there will be an increase in both the costs (net of calculated NED benefits) of the measures and the measured level of hydrologic restoration. The question is: How much restoration is enough? Put another way: When is spending another dollar on restoration no longer justified? The Corps does not propose to answer such questions with a single benefit-cost calculation—but such questions must nonetheless be addressed. In portfolio planning, this question will be answered by negotiations among local sponsors, other stakeholders, and federal budget decision makers (see Chapter 5 for more discussion) in recognition of the significance of the resources being restored. In that analysis, ecological models might be relied on to forecast (acknowledging the existence of some degree of uncertainty) the effects of hydrologic change on certain biologic metrics. Monetary measures of people’s values for the predicted habitat or other environmental services forecast to result from hydrologic restoration may be reported to document significance, as may physical habitat quality or legal and policy recognition of significance of the waters or areas where restoration is realized (for example, the area may be critical habitat according to the Endangered Species Act). The Corps has chosen to not rely solely on benefit-cost analysis for making the final selection of an ecosystem restoration alternative, opting

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service to also employ nonmonetary measures. In a desire to ensure that restoration is not framed solely in economic terms, however, the agency has not adequately emphasized the fact that restoration measures can also yield traditional NED benefits (USACE, 2003). For example, restoration measures such as wetland rehabilitation or removing obstacles from a stream can reduce flood peaks and thus yield NED flood damage reduction benefits. Such benefits, however, are not reported or considered in justifying restoration measures. Planning guidelines should recognize that restoration and nonstructural measures often yield benefits traditionally understood as NED benefits, and these should be calculated and employed in project planning computations. For portfolio planning and for individual project operations and investment analysis, the Chief of Engineers should issue guidelines clarifying that traditional categories of NED benefits that accrue from restoration measures should be calculated and used in plan evaluation. A NEW PLANNING APPROACH AND AUTHORITY Portfolio planning would ideally support a structured and ongoing process for making decisions that over time ensures the greatest benefit from the national assets of water control infrastructure and natural capital (water and related land resources). Portfolio planning addresses questions such as: When does investment in a new project increase the value of the existing national water infrastructure portfolio? When are operational changes justified? What types of gains and losses might be realized? The purpose of beginning planning with an explicit and open review of existing projects is not to critique past decisions, nor is it to suggest that there are no prospects for new investment. Instead, this approach seeks to enhance operational efficiency so that the benefits of flood management, navigation, water supply, hydropower, and other purposes of the existing physical infrastructure are maximized. It also seeks to ensure that new projects are constructed and then operated to be compatible with existing projects. This will enable some clarification of the Corps’ roles in aquatic ecosystem restoration. Portfolio planning offers the opportunity to better anticipate operational changes of existing projects to meet legal obligations (e.g.., Endangered Species Act, Clean Water Act) and to adjust to changing economic realities and social preferences for river restoration. As an example, a portfolio planning process would create an opportunity for states, the Environmental Protection Agency,

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service and the Corps to integrate reservoir operations with the development of Total Maximum Daily Load (TMDL) plans. Portfolio planning entails a continual, iterative process that will benefit from adaptive management principles (see the report from the 216 study panel on adaptive management). Of equal importance is that the spatial extent for portfolio planning will often extend beyond the immediate area affected by a project. That is, areas of study would be defined in relation to the problem or planning issue at hand, and would not be bound by conformance to fixed hydrologic or other boundaries (see Box 4-4). Portfolio planning starts by identifying and defining problems and then defining appropriate study regions. It does not assume that study boundaries are necessarily organized around watersheds, although watershed boundaries may ultimately prove to appropriately define the study area (see the 216 study panel on river basins and coastal systems planning for more details on planning across spatial scales). Finally, portfolio planning not only includes technical analysis, but also requires decision making by local, state, and federal agencies, as well as by the administration and Congress. For example, the Corps has built numerous reservoirs across the nation. Today, in the face of increased demands for municipal and industrial water supply, these reservoir projects may be considered possible water supply sources. However, many of the projects have limited storage allocated to water supply. Therefore, meeting water demands from existing reservoirs may require storage reallocation and changes in project operations. As such changes are considered, existing project purposes may be affected. Also, in considering reoperations and storage reallocation, water supply, flood control, such project purposes may have to be balanced with instream flow considerations. Given the limitations of the Corps’ existing continuing authorities for conducting evaluations of post-construction project outcomes and adjusting project and system operations, along with the new realities of today’s water resources planning context, the Corps should have a new authority with a stronger emphasis on promoting portfolio planning. A new study authority should be enacted and structured according to the following principles, which will help effect portfolio planning within the Corps (Recommendation 3): It should focus on existing Corps-built infrastructure (both single projects and systems) and related water and land resources in determining when operational changes, project decommissioning, or new project investments would yield economic or environmental improvements of national significance.

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service BOX 4-4 Portfolio Planning for Coastal Ports The Corps’ economic analyses for individual port project expansions have often been the focus of criticisms. At the same time, funds available for port projects have been limited and priorities must be set. Portfolio planning can provide a sound analytical foundation for such priority setting. For example, consider the contribution of portfolio planning in a region where one or more existing ports are being considered for deepening. Analytically, the evaluation would begin by reviewing all existing channels and their cargo flows in relation to projected future cargo flows to the region. Next, plan formulation would evaluate multiple scenarios in which different ports were considered for deepening to different depths. The analysis would report estimated NED benefits and how a plan might redistribute existing landings among ports. A risk assessment could be employed to consider the value of redundancy in capacity so that unanticipated shifts in cargo destinations or temporary loss of capacity at one port could be accommodated at other ports. Both dredge material handling problems and beneficial use opportunities for different alternatives would be reported and might usefully be considered in the context of a regional sediment management strategy (Martin, 2002). These analyses are computationally feasible with existing data bases, modeling tools, and computing power. However, the results will be sensitive to assumptions regarding national trade patterns, future locations of regional transfer facilities, and other such matters. Analysts may differ in the assumptions they make, so the sensitivity of the port development strategy analysis to such assumptions would have to be examined. This kind of port planning will be complex and subject to dispute among experts. Portfolio planning for ports will highlight—and also inform—difficult choices that must be made when setting port spending priorities. Portfolio planning therefore does not lead to the Corps recommending a regional port development strategy. In the event of complex planning efforts, such as this example, the Chief of Engineers may choose not to make a recommendation. The Corps should aim to provide sound planning and technical assistance to the study sponsor (a port or group of ports) and to interested federal agencies. In the end, funding priorities and the federal interest are represented by the president’s recommendations to the U.S. Congress.

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service Study cost-sharing would be with federal agencies and affected states, which would cooperate with the Corps in executing management and operational changes. Planning studies under this authority should reconsider the original project authorization of existing Corps water control projects and their operations. Planning studies under this authority should identify at least one nonstructural alternative to current project operations that seeks more efficient use of existing investments, or that may help achieve a goal without altering the hydrologic regime (e.g., purchase of flood flowage easements to reduce flood damages). Planning studies should report not only traditional national economic development (NED) analysis, but also the extent to which water project investment and operations may affect jobs, income, competitiveness of industries among regional economies, and international trade. Recommendations that would entail modest expenditures for changes of physical infrastructure or project operations could be authorized under this study authority. Recommendations that would entail significant expenditures for changes of physical infrastructure, or that would entail additional study time and resources regarding potential shifts in project purposes, should require further congressional authorization. In addition, all authorization requests for new project investments having significant budgetary requirements or the potential for significant controversy should be evaluated under this authority’s planning procedures and methods. Along with environmental mitigation, alternatives should consider economic mitigation in the form of cash payments or in-kind replacement for economic services lost from significant physical or operational changes. A unit at Corps Headquarters should be responsible for selecting portfolio planning studies and for assigning priorities and responsibilities for their execution, such as a study’s analytical and regulatory dimensions. SUMMARY Federal budget support for water project investments has declined sharply. There are important national water resources planning services,

OCR for page 48
U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service however, that can be met by the Corps. These needs authorize an ongoing planning process that evaluates current project operations and prospective new water project investments. This analysis would be conducted at large spatial scales, with explicit attention to maximizing the values derived from the existing built infrastructure, as well as related water and land resources. This chapter has defined a new planning authority and a conceptual approach to planning under that authority. Chapter 5 examines and presents the requirements for executing the portfolio planning authority.