1. Serving the Nation And Its Defense Presentation to California Marine Affairs & Navigation Conference Mr. Steven L. Stockton, Deputy Director of Civil Works HQ U.S. Army Corps of Engineers 9 February 2006

2. One Corps Serving the Army and the Nation Water Resources – the Situation Nation faces large and growing water resources challenges.Nation faces large and growing water resources challenges. Population pressures, changes in national priorities and values will fundamentally change how we approach water resources problems.Population pressures, changes in national priorities and values will fundamentally change how we approach water resources problems. Availability of water will likely be single most significant factor in our economic prosperity and quality of life in this century.Availability of water will likely be single most significant factor in our economic prosperity and quality of life in this century.

3. One Corps Serving the Army and the Nation Corps Role in Water Resources Ensuring the Nation’s ability to –deliver economic goods and services, while –protecting and sustaining our environment/ecosystems. Addressing water resource issues in a rational, systematic and disciplined way Tailoring projects to specific physical, economic, and environmental context Offering hands-on experience –Scientific: engineering/economic/ ecological –Governmental: political/public policy

4. One Corps Serving the Army and the Nation Our Navigation Mission: Vital to Trade and to Our Economy Million Tons Over 100 50 - 100 25 - 50 10 - 25 Houston Corpus Christi S. Louisiana New Orleans Baton Rouge Texas City Lake Charles Plaquemines Tampa New York/NJ Valdez Long Beach Beaumont Norfolk Lower Delaware River (9 harbors) Duluth/Superior Los Angeles Port Arthur St. Louis Portland Seattle Freeport Huntington Richmond Oakland Tacoma Boston Newport News Port Everglades Jacksonville Memphis Detroit Cleveland Savannah Charleston Indiana Hbr Cincinnati Portland Two Harbors Anacortes Honolulu Chicago Pittsburgh Baltimore Pascagoula 52 harbors – coastal, inland, Great Lakes - handled over 10 million tons each in 2005… While 196 inland waterway locks and dams support over 600 million tons of commerce annually Ashtabula Mobile New Haven Matagorda

5. One Corps Serving the Army and the Nation Key Harbor Improvement Projects Funded in 06 Houston/ Mobile New York/NJ Lwr Delaware R Los Angeles Main Channel Oakland 50-ft Boston Port Everglades Jacksonville Brunswick Indiana Hbr Canaveral Sault Ste Marie (Soo Locks) Pascagoula Wilmington DeLong Mtn Hbr Savannah Great Lakes System Study Corpus Christi Sabine- James R Ventura Construction / Design Funds Feasibility Funds Under Construction/ Study for Additional Improvements Texas City SF Bay to Stockton Columbia R Norfolk St. Paul Hbr Kikiaola Lake Washington St Petersburg Nome Freeport Brazos Island Hbr Anchorage Haines Searsport Tampa Gulfport   27 key deep draft harbor improvements in ’06 appropriation   About $306 million   Long-term investment of over $4 billion Chignik Sand Pt Unalaska Akutan Yakutat Kaumalapau Barbers Pt Iberia Neches WW Galveston Calcasieu R

6. One Corps Serving the Army and the Nation Why It’s Critical: They’re Steaming to Our Shores to Stock Our Stores 0 40 80 120 160 year 2000year 2010year 2020 calls (thousands) Tankers Dry Bulk Containership General Cargo Other Projected Number of Annual Calls to and from U.S. Ports by Ship Type: Year 2000-2020 Source: National Dredging Needs Study, USACE

7. One Corps Serving the Army and the Nation Pacific Coast 4.5 3.8 14.0 Atlantic Coast 7.4 5.1 17.7 Depth-Constrained Containership Calls in 2020, with and without Planned Harbor Projects (in thousands of ship calls) Under Construction Under Study Under Construction/ Study for Additional Improvements Harbor Projects in 2006: Gulf Coast 1.11.6 2.5

8. One Corps Serving the Army and the Nation FY 2007 Budget Emphasizes 3 critical Corps activities. 1. Construction and completion of projects that will provide high return on the nation’s investment in commercial navigation, flood and storm damage reduction, and aquatic ecosystem restoration. 2. Increased funding for regulatory program to help protect and preserve Nation’s waters and wetlands. 3. Funds for Corps’ critical emergency preparedness and response mission in regular budget process. Corps’ focus is on assuring maintenance of critical infrastructure, funding high return studies and construction projects, and continuing best of other ongoing planning and construction efforts within available funds

9. One Corps Serving the Army and the Nation Civil Works Budget & Appropriations FY05FY05FY05FY06FY06FY07 ConferenceSuppls.Total Approp.BudgetConferenceBudget Construction, Gen. 1,782631,8451,6372,3721,555 Oper. & Maint., Gen.1,9433552,0981,9791,9892,258 Gen. Investigations1431439516494 Mississippi R. & Tribs. 3226328270400278 Regulatory144144160160173 Flood & Coast Emerg.034834870081 FUSRAP164164140140130 Gen. Expenses166166162154164 OASA(CW)4__4040 Total4,6687725,4404,5135,3834,733

10. One Corps Serving the Army and the Nation FY 07 Budget Priority Projects Comprehensive Everglades Restoration New York- New Jersey Harbor Olmsted Lock & Dam Upper Miss.R. Side Channel Restoration Missouri River Fish & Wildlife Mitigation Sims Bayou Columbia River Fish Mitigation Environmental Oakland Harbor Flood Damage Reduction Navigation

11. One Corps Serving the Army and the Nation Performance Based Budgeting – Which Projects Make the Cut? Performance Measures & Ranking Criteria Dam Safety All—Benefit/Cost Ratio, Remaining Benefit/Remaining Cost Ratio, Time to Complete Flood Damage Reduction – –People in 100-year flood plain – –Average annual damages prevented – –Property at risk in 100-year floodplain Navigation – –Tonnage – –Average Annual Benefits Environmental Restoration – –Loss prevention for significant natural resources – –Endangered Species Act & other environmental compliance needs

12. One Corps Serving the Army and the Nation Performance Based Budgeting – Modifications for FY07 We are NOT departing from Performance Based Budgeting. BUT We have enhanced it by adding additional key metrics to decision making efforts. –People in 100-Year Floodplain –Average Annual Damages –Tonnage –$ Cost/Ton –Average Annual Benefits These have been added to overall Remaining Benefit to Remaining Cost Ratio metric in decision making for Flood Control and Navigation business lines

13. One Corps Serving the Army and the Nation Five-Year Development Plan Based on President’s budget and guidance for Civil Works program. Presents 5-year plan for FY 2006-10. Purpose is to present informed discussion and decision making on program funding. Presents how watershed-integrated water resources management will be pursued. Performance based - discusses how funding over 5-year period will achieve goals in Civil Works Strategic Plan.

14. One Corps Serving the Army and the Nation Lean Six Sigma Corpswide business transformation initiative Tool to pursue expertise and organizational structure required to succeed Enhanced work environment, job satisfaction, productivity, efficiency and streamlined processes Identification of processes and implementation starts in FY06 L6  training begins Nov 05 (leadership), continues with facilitators’ training Only 4-6 processes a year (due to funding constraints)

15. One Corps Serving the Army and the Nation Asset (Infrastructure) Management Presidential Executive Order #13327 All Federal infrastructure Major focus area is identification of “low use” Federal facilities that may be subject to removal from inventory as savings objective; Federal agencies must manage their assets in a sustainable manner. Now a major focus area of OMB oversight for all Federal agencies. –OMB now grades each agency quarterly on two areas (progress and performance) in PMI (Presidential Management Initiatives).

16. One Corps Serving the Army and the Nation WRDA ’02 ’03 ’04 ’05 ‘06  Civil Works projects usually authorized in Water Resources Development Acts (WRDAs)  No WRDA has passed Congress since 2000  House passed its version of WRDA 2005 Jul 14 (vote of 406-14)  Senate version passed Energy and Public Works Committee  Hopeful for floor action, conference this year  WRDA provisions that support improvements to processes:  Peer review  Planning improvements  Mitigation  Technical assistance to States  Upper Mississippi River-Illinois Waterway  Louisiana Coastal Area Ecosystem Restoration  Working with Congress as they move towards WRDA enactment

17. One Corps Serving the Army and the Nation Challenges - Current & Future RELATIONSHIPS –Nation –Congress –Stakeholders & Partners MANAGEMENT –Extracting Maximum Benefit from Available $’s Changing Directions –Budget Development & Defense –Reprogramming –Continuing Contracts FUNDING –Reserve Used Up –$4.5B to Manage a $6B Program –Demand for Projects & Services Exceeds Available Funding

18. One Corps Serving the Army and the Nation Where We’re Going Watershed-based approach Multi-party collaborations among all partners Emphasis on watershed objectives with budget priority for comprehensive planning Sustainable integration of constructed and natural systems Coordinated & standardized data collection and archiving Optimized learning/information sharing Effective leveraging of partners’ resources

19. One Corps Serving the Army and the Nation Corps Campaign Plan Revising policies, practices and processes to provide a more holistic approach to analyzing water resources challenges Developing collaborative, effective and efficient approaches that integrate sponsors, stakeholders, Federal and State agency efforts Improving our regulatory processes to better balance the demands of sustainable development with environmental protection Developing individual and organizational capabilities to produce technically sound solutions to complex water resources challenges

20. One Corps Serving the Army and the Nation Collaborative Planning EC 1105-2-409, 31 May 05 Planning studies (recon through feasibility) will be completed in three years. –Collaborative, watershed studies may be granted an exception to this requirement. Collaborative planning may recommend a watershed plan with Corps’ components as well as components to be implemented by other Federal agencies Plan Selection: All planning studies will evaluate, display and compare the full range of alternative plans’ effects across all four Principles and Guidelines’ accounts. Plan may be candidate for selection if it has, on balance, net beneficial effects. May select and recommend any one of the candidate plans – (ASA(CW) exception needed if not NED or NER plan) Selection will consider the beneficial and adverse effects in all four accounts Must identify an NED plan (for comparison)

21. One Corps Serving the Army and the Nation Initiatives Initiatives HQ streamlining and use of Vertical Teams Delegated post-authorization and reconnaissance report approval Planning model improvements and R&D Environmental Advisory Board and Operating Principles Office of Water Project Review Planning Centers of Expertise Streamlining Processes Alliances with State Water Managers Collaboration with Stakeholders

22. One Corps Serving the Army and the Nation Alliances with State Water Managers Recognize state primacy for water rights Become the states’ primary Federal support for state-wide water planning Provide technical assistance, data and watershed analysis Bring planning and analysis to bear in developing cooperative solutions to water conflicts that avoid litigation and heavy handed regulation

23. One Corps Serving the Army and the Nation Environmental Operating Principles 1. 1.Strive to achieve Environmental Sustainability. 2. 2.Recognize the interdependence of life and the physical environment. 3. 3.Seek balance and synergy among human development activities and natural systems 4. 4.Continue to accept corporate responsibility and accountability 5. 5.Seek ways and means to assess and mitigate cumulative impacts 6. 6.Build and share an integrated scientific, economic & social knowledge base 7. 7.Respect the views of interested individuals & groups

24. One Corps Serving the Army and the Nation Role of Sponsors & Stakeholders In planning In policy development On project delivery team As part of ongoing relationships

25. One Corps Serving the Army and the Nation Other Issues Overdepth Dredging Guidance Issued Impact of Single Overhead Rate on Regulatory Impacts of Hurricane Recovery on $’s and Personnel

26. One Corps Serving the Army and the Nation Guiding Principles: State & local governments have primary jurisdiction over water resources. Our goal is to support State & local leaders in meeting their challenges. We want to develop partnerships in planning, managing and integrating We can offer expertise with balancing conflicting requirements. What Can We Offer Our Partners? Engineering, scientific and environmental expertise & data to assist with local projects.Engineering, scientific and environmental expertise & data to assist with local projects. Watershed or systems planningWatershed or systems planning Coordination of sustainable development on regional scaleCoordination of sustainable development on regional scale Avoid wasteful duplication and conflicting projectsAvoid wasteful duplication and conflicting projects

27. One Corps Serving the Army and the Nation Navigation Partner Considerations True partnership Regional economic development Intermodal linkages Cost-effective alternatives to rail and highway transportation Meeting customer needs and schedules Increased international competitiveness Recreation opportunities Environmental considerations

28. One Corps Serving the Army and the Nation Our Future: Desired End State Water resources are collaboratively managed, developed and protected using systems principles to balance contemporary economic and environmental objectives for the welfare of current and future generations. Federal purposes are met: World's best, fully modern navigation system empowers transportation and world trade Economic losses and human suffering from flooding are substantially reduced Nation's environment is protected and restored State and local governments manage resources for the quality of life of their people in harmony with and appropriately supported by the Federal government

29. Serving the Nation And Its Defense Presentation to California Marine Affairs & Navigation Council Mr. Steven Stockton, Deputy Director of Civil Works U.S. Army Corps of Engineers 9 February 2006