U.S. Army Corps of Engineers Water Resources Planning: A New Opportunity for Service (2004)

For nearly 200 years the U.S. Army Corps of Engineers has constructed, operated, and maintained many of the nation’s dams, levees, and navigation channels. The Corps has a long history and many accomplishments in its traditional programs that have provided benefits in the form of flood control, coastal protection, supporting inland and port navigation, water supply, hydroelectric power, and recreation. In the past three decades, the Corps has sought to broaden its water program in response to environmental concerns and legislation, and today the agency lists environmental protection and aquatic ecosystem restoration as among its principal missions. The most publicized of its restoration efforts has been in the Florida Everglades; however, many other smaller and less publicized efforts are currently under way. There are some concerns that the current Corps planning and construction budget has not kept pace with expanding national water management needs for flood risk management, water transportation, and other purposes. At the same time, others question the wisdom of and budgetary prospects for the continuation of a traditional water project construction program. Debates about water use and funding priorities now include intense scrutiny of Corps of Engineers planning, investment, and project operations programs.

One result of this high level of scrutiny was passage of Section 216 of the Water Resources Development Act of 2000 (WRDA 2000; Section 216 is listed in Appendix A),which requested that the National Academies review Corps peer review procedures and methods of analysis. In response to this request, the National Research Council convened five study committees. Four of these panels considered different dimensions of Corps planning (Peer Review; Adaptive Management; Analytical and Planning Methods; River Basins and Coastal Systems; This report’s Foreword explains the study panels in greater detail, and Chapter 1 summarizes those panel reports. The panels were collectively referred to

as the “216” study panels), and one served as an overarching “coordinating committee.” Chairmen of the four study panels were all members of the coordinating committee, which facilitated discussions within and among the study panels. Each panel operated independently and in accord with National Research Council guidelines. The coordinating committee also issued its own report, which was subjected to standard National Research Council procedures. In doing so, it considered the draft reports from the panels (in the case of the Panel on Peer Review Procedures, its final report was used; see NRC, 2002b), as well as discussions among panels, panel chairs, and other coordinating committee members. This report from the coordinating committee is in accord with its statement of task, which requested that the committee “produce a synthesis document that includes the panel’s findings and recommendations and provides advice on implementation of the panels’ recommendations” as well as “identify overarching themes, issues, or recommendations that emerge from the panels’ studies, including possible future roles for the Corps in sustainable management of coastal and inland waters in the United States” (the coordinating committee’s full statement of task is listed in Chapter 1). The Corps of Engineers water resources infrastructure is extensive (it is located in all 50 U.S. states), the agency’s water projects impound some of the nation’s largest reservoirs, and its operations and maintenance activities support some of the nation’s great harbors and inland waterway systems. Corps infrastructure and operations, however, represent only a subset of a much larger national water resources infrastructure that includes projects from other federal agencies (e.g., the Bureau of Reclamation), state and local governments, and the private sector. This larger national water infrastructure includes dams, reservoirs, and water treatment and distribution systems. This report does not apply to all national water infrastructure, but rather focuses on the portion that is owned, operated, and maintained by the Corps of Engineers.

Following this Executive Summary, Chapter 1 summarizes and synthesizes the findings and recommendations of the other four study panels. The coordinating committee’s own study is then presented in Chapters 2-6.

A key theme that emerged from the 216 study panels was the need for authorities, planning approaches, and guidelines that better match the

contemporary management challenges facing the Corps. In particular, many of the authorities and much of the planning guidance were enacted when federal water infrastructure investment was a higher priority and when there were significant opportunities for constructing civil works projects on large interstate rivers. These conditions have changed, however, and today the Corps is in a situation in which it must maintain and operate an extensive water resources infrastructure to serve both traditional purposes and a new restoration mission, while the prospects for constructing new civil works structures have diminished. This contemporary setting, recognized in the reports from the 216 study panels, suggests a need for some reorientation of emphasis within the Corps of Engineers civil works program for water resources planning.

The Corps has constructed, and in some cases operates and maintains, a large share of the nation’s physical water management infrastructure of dams, reservoirs, locks, levees, and port and inland navigation channels. Construction spending, however, has declined over the past three decades, while the backlog of authorized (but unfunded) projects has grown. The near-term future thus appears to be one of increasing importance of and emphasis on maintaining, rehabilitating, and better operating existing infrastructure, with a reduced emphasis on and limited prospects for constructing new projects for flood control and navigation purposes. A stronger emphasis on more efficient operations of existing infrastructure will entail significant demands on the federal budget, given the importance of ensuring the continued utility and viability of these substantial past investments. These investments will require careful attention for another reason: Corps projects control the hydrologic and geomorphic processes in most of the nation’s large rivers and along vast stretches of coastline.

Public support for individual projects to serve traditional mission areas remains, but today there are also calls to reallocate storage and flows in order to better serve a broader set of users and sectors (including recreation and environmental considerations). One example of this reallocation would be releasing water in order to restore some degree of pre-regulation flows and processes that were purposely disrupted by the original projects. Another example may be increasing the use of existing storage for municipal and industrial water supply, especially in watersheds where Corps projects occupy potential storage locations. Limited budgets and shifting views and knowledge of water management needs have spawned long-standing debates about future roles and responsibilities of the Corps. Over the past few decades, federal legislation, executive orders, and other directives that guide and constrain Corps decision

making have been enacted. Most parties agree with the need for continued management of flood and storm risks, and for the need to maintain some inland navigation and port systems. However, as Congress’ request for this set of studies from The National Academies demonstrates, the justification for new water projects is questioned by many. Furthermore, the means by which the Corps justifies its maintenance, operation, and structural modifications of existing projects continue to be carefully scrutinized.

In recognition of these trends, this report focuses on a central organizing principle: in the near term, the Corps should center its planning activities on “portfolio planning.” The term “portfolio” is used in the Corps’ own planning documents, and its meaning is extended herein to consider both the water and the related land resources of the nation’s rivers and coastal areas (natural capital), as well as the physical water management infrastructure in these river and coastal systems. The term “planning” includes analytical approaches and decision-making processes that govern investment and management strategies. Portfolio planning does not mean that there is no longer a need for new investment, but it does mean evaluating new investments in the context of the condition and operations of existing physical infrastructure. Portfolio planning does not mean that the Corps program will no longer serve traditional navigation and flood risk management needs, but it does mean that these needs can no longer primarily determine how past project investments are operated and new project investments evaluated.

The Corps has been experiencing reductions in professional staff and budget, along with an imperative to emphasize its military mission and its homeland security responsibilities. Yet competent management of the federal water infrastructure demands technical competence. If the Corps cannot provide its traditional technical services to the nation, another way to secure these capabilities will have to be found. The Corps (or any agency) cannot unilaterally ensure this capability. Executive and congressional actions are necessary, as well. So that it can fulfill its portfolio planning responsibilities, this report offers recommendations to provide the Corps authority to do so and to clarify the analytical concepts that will promote portfolio planning.

Recommendations 1-3 (as listed below) are presented and further discussed in Chapter 4, while recommendations 4-11 (also listed below) are presented and discussed in Chapter 5.

The Corps’ traditional program areas of flood control and navigation were broadened in the 1990s when Congress requested the Corps to also pursue ecological restoration as a mission area. Details regarding the scope and purposes of the Corps’ roles within ecosystem restoration, however, are not clearly defined. For example, it is not clear whether the Corps’ mission in ecosystem restoration projects should be to focus solely on hydrology and water system operations, or if the Corps should also be involved in duties such as reintroducing species. Increasing scientific and public interest in the restoration of aquatic ecosystems offers an opportunity to clarify the Corps’ restoration mission. The Corps is currently involved in a variety of activities focused on restoring some degree of pre-settlement hydrologic and geomorphic processes. It follows that formulating and evaluating alternatives focused on hydrologic and geomorphic components within aquatic ecosystem restoration efforts are appropriate roles for the Corps. This should, in turn, help other federal agencies, with whom the Corps cooperates in restoration projects and programs, focus on other important restoration program elements such as habitat preservation, reintroduction of species, and pollution control. A focus on restoring hydrologic and geomorphic processes will not exhaust the scope of the Corps’ environmental program because the agency is also obliged to mitigate project environmental impacts. A beneficial use of dredged material, for example, may be used to create wetlands that can become wildlife habitat. In any case, clarification of the Corps’ roles within ecosystem restoration will enhance its efforts and expenditures in executing a portfolio planning mission.

1. The Corps’ primary environmental mission should be to restore hydrologic and geomorphic processes in large river and coastal systems.

The benefit-cost (national economic development, or NED) analysis that underpins Corps of Engineers planning studies rests on principles documented in the “Principles” section of the federal Principles and Guidelines (P&G). The economic analysis principles included in current guidance should continue to be the foundation of NED analysis. With regard to the Corps’ ecosystem restoration projects, and in contrast to its traditional civil works program, the Corps does not rely solely on NED

analysis for making a final recommendation of an ecosystem restoration plan, relying instead primarily on nonmonetary measures. This approach has its merits, but there are important economic issues that often are not part of current evaluation procedures.

For example, economic issues of primary importance to elected officials and citizens, such as employment, regional economies, and international commercial competitiveness, are not reflected in a NED analysis. The absence of such information, however, can cloud debates regarding the merits of and methods in Corps planning studies. In addition, although restoration studies are usually viewed in environmental terms by most interested parties, the Corps has not adequately emphasized the fact that restoration measures often yield traditional NED benefits (e.g., when wetland rehabilitation reduces flood peaks and thus provides NED flood damage reduction benefits).

2. Corps economics analyses for portfolio planning should (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 foregone 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.

The Corps currently has “continuing authorities” that allow operations of existing infrastructure to be reviewed and revised. Two commonly invoked Corps continuing authorities, for example, are from the 1970 Flood Control Act and the 1986 Water Resources Development Act. Current Corps continuing authorities, however, were not enacted in order to help reorient the agency’s planning processes and priorities toward an emphasis on managing a huge existing physical infrastructure. These existing authorities are therefore insufficient for helping the Corps reorient the agency’s mission to encompass portfolio planning.

3. A new study authority should be enacted and structured according to the following principles, which will help effect portfolio planning within the Corps:

1. 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.

2. Study cost-sharing would be with federal agencies and affected states, which would cooperate with the Corps in executing management and operational changes.

3. Planning studies under this authority should reconsider the original project authorization of existing Corps water control projects and their operations.

4. 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).

5. Planning studies should report not only traditional 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.

6. Recommendations that would entail modest expenditures for changes of physical infrastructure or project operations could be authorized under this study authority.

7. Recommendations that would entail significant expenditures for changes of physical infrastructure, or that would entail further study time and resources regarding potential shifts in project purposes, should require additional congressional authorization. In addition, all authorization requests for new project investments having significant budgetary requirements or having the potential for significant controversy should be evaluated under this authority’s planning procedures and methods.

8. 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.

9. 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 aspects.

The move toward a portfolio planning paradigm represents a challenge to the Corps’ planning capabilities because there will be a need to plan over large areas, to accommodate differing values, and to explicitly incorporate the complexities and uncertainties of the interactions of hydrologic processes and human activities. These factors will need to be considered while recognizing the water management responsibilities of state and local governments and other federal agencies. The agency will have to keep abreast of conceptual and analytical developments. Several changes are necessary to facilitate successful portfolio planning. Among the most significant are the importance of focusing planning expertise and the need to expeditiously resolve federal interagency conflicts. Brief discussions of these two topics are presented below, followed by a summary of other recommendations to help effect successful portfolio planning.

Although the Corps clearly faces personnel and staffing pressures, the agency can make better use of available staff (especially in regard to executing a new portfolio planning authority) by ensuring that its most knowledgeable staff are given leadership responsibilities for complex and controversial portfolio planning studies. In accord with agency tradition, Corps of Engineers planning studies are conducted by agency staff from a given district office. Increasing complexities and the interdisciplinary breadth of Corps planning studies, however, combined with limits in the agency’s budget, make it impractical for the Corps to employ a full suite of analysts at every district office. Moreover, personnel needs vary across studies, and planning for smaller, less expensive projects will likely require less analytical sophistication than will portfolio planning studies.

4. The Chief of Engineers should assign responsibility for conducting the agency’s more complex and controversial studies to specially-chartered teams that draw upon the best expertise available within the entire agency, as well as other federal and state agencies, rather than relying solely on staff from a given district or division office.

Many of the current water project and planning controversies in which the Corps is involved stem from laws and agency authorities that are often difficult to reconcile, and the absence of a process for formally elevating conflicts among federal agencies and stakeholders to a higher authority. Many of these conflicts cannot be resolved by technical means alone.

5. A process for reviewing and resolving conflicts that cannot be resolved through planning methods or federal interagency agreements, and that elevates conflicts over applications of economic and environmental evaluation procedures and other water management activities, should be created within an existing governmental body.

Several other actions will promote the effective and efficient execution of the portfolio planning authority, and will enhance planning and decision making in support of all Corps programs. These actions and recommendations include the following:

6. A program of continuing regional assessments can serve as the basis for setting portfolio planning program priorities. These regional assessments, which could include comparisons of water issues between regions and longitudinal studies in select regions, should be periodically conducted in order to help identify key water resources issues of federal-level importance.

7. The Secretary of the Army should report within one year to the Congress on projected professional staffing, skill, and related budgetary needs for implementing portfolio planning.

8. Computer-aided decision making is a promising approach to helping clarify and resolve conflicts over water management priorities. A “community of practice” in computer-aided decision making that facilitates discussions between Corps staff and outside experts should be established.

9. Portfolio planning may result in disagreements among agencies, levels of government, and stakeholders, which are most appropriately resolved by the president and Congress. In such cases, a Chief’s Report should include a full reporting of alternatives that

were not recommended, relevant supporting analyses, and a clear explanation of the recommendation made for the most controversial decisions. In addition, recommendation of a preferred plan by the Chief of Engineers should not be compulsory.

10. Portfolio planning will be most effectively and appropriately conducted over large spatial scales and extended periods of time. Current reconnaissance study and study cost share guidelines, however, may inhibit studies that will entail these more comprehensive perspectives. A review of the applicability of reconnaissance study cost limitations, of the importance of distinguishing between the reconnaissance and feasibility study stages, and possible modifications of study cost-sharing requirements, should thus be undertaken, with subsequent adjustments made to advance portfolio planning.

11. The presence of “backlogged” Corps projects—those that have received congressional authorization but have not yet received financial appropriations—could limit the utility of portfolio planning. When assessing potential new projects and alternative operations of existing projects, this backlog can confuse the setting of priorities that will derive from execution of the new study authority. Congress should develop a process for inventorying and ranking the funding priority of authorized, but unfunded, Corps projects that constitute the current project backlog. This process of prioritization can both inform and benefit from portfolio planning.