International Dredging Review

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In March, the U.S. Army Corps of Engineers released its 2018 Annual Report to Congress. This is the third annual report that the Corps has completed, as instructed by the Water Resources Reform and Development Act (WRRDA) of 2014, Section 7001. It’s part of a process to make the authorization and appropriation process more transparent. Details on how the Corps assembles the annual report, project criteria and list of newly authorized dredging studies and projects can be found in the story on page 28.

Along with the publication of the annual report, the House Transportation & Infrastructure (T&I) Subcommittee on Water Resources and Environment held a hearing with the Assistant Secretary of the Army for Civil Works and Lieutenant General Todd Semonite, Corps commanding general and chief of engineers, to not only review the authorized project, but also the authorization and appropriation process.
In his opening statement, the Subcommittee Chairman Garrett Graves (R – LA) said, “Right now, there is a backlog of 1,000 projects totaling approximately $96 billion in need. With an annual Corps construction budget of less than $2 billion, the simple reality is that we will likely never catch up. Therefore, it is absolutely vital that the Corps is working as efficiently as possible.”

The hearing explored solutions to infrastructure problems and ways to make funding work more efficiently and stretch farther. We’ll never meet the backlog without significant changes to either the process, the levels of funding or probably both.
“This hearing is a critical step in the process to develop and move a water resources bill,” said T&I Committee Chairman Bill Schuster (R – PA). “Today is part of our transparent process that we established in 2014. Again, to make sure projects and policies are in place. We need to have a more efficient project delivery system.”

Ranking member Grace Napolitano (D – CA) used her opening remarks to criticize the administration’s infrastructure plan, which she says puts too much emphasis on local money, and unduly relieves the federal government of its job in developing this country’s infrastructure.
Following up on Napolitano’s comments regarding Civil Works funding, Peter DeFazio (D – OR) called for full use of the Harbor Maintenance Trust Fund (HMTF), in order to meet Civil Works project backlogs and continue to maintain the country’s waterways infrastructure.
“We are assessing a tax on the American people. Every time you buy an imported good, every single thing you buy, there is a tiny ad valorem tax added to it,” DeFazio said, noting that this was a creation of Ronald Reagan in the 1980s, as stable funding source to deal with port issues. Neither of the last two administrations have used the full tax for its intended purpose.

“We collect the tax and part of the money gets diverted into some theoretical trust fund over there somewhere at the Treasury that we never spend. It will be about $10 billion in taxes, if this president’s budget [for 2019] is adopted,” DeFazio said.
He said that reinstituting WRDA bills every two years has been effective for authorizing projects, but it has only added $40 billion to the unmet, authorized Corps backlog of projects. Congress still does not have the funds for appropriate construction on many of these projects.
“We need some advocacy. We need to fight for this money,” DeFazio said. “And hopefully, this committee will join in that.”

Chairman Graves characterized the situation with HMTF more bluntly: “If we were to charge fees under the auspices of using it for a particular purpose and then spend it somewhere else in the private sector, that’s called embezzling. In the federal government, that’s called budgeting. And it’s ridiculous.”

Secretary James assured the committee that the Corps would work with Congress on funding challenges and process efficiencies. Even before Secretary James took his post, four weeks prior to the hearing, the Corps had already begun an analysis of its own progress and procedures. James said he has also assembled a task force of Corps members and other federal agencies to look at where the process can be improved.
“The Corps credibility is measured on our ability to deliver results that are on time, on budget and of exceptional quality,” said Gen. Semonite. In terms of funding, he noted that more and more of the Corps Civil Works budget goes to operations and maintenance activities at both the expense of new investigations and new construction investments.

Additionally, he said, “Our feasibility studies are formulated with the assumption of efficient funding, and most of our multi-year projects we budget on an annual basis with no assurances that funding will be available year to year.”
Without proper long-term funding, the results of feasibility studies (and the economic impact of projects) can’t be measured correctly. And if projects do begin, they are often stalled waiting on additional funding year after year.

Bob Gibbs (R – OH) pointed to the Section 404 permitting process, as one area that needed more guidance, efficiency and consistency. These permits are often not done in a timely manner and often not consistently from district to district. In response, Gen. Semonite said that over the years at the Corps, big project decisions have more and more been made by headquarters and Corps leadership. Instead, the Corps needs to delegate down more, Gen. Semonite said. “What we don’t want to do is overly centralize the process,” he added.

The next Water Resources Development Act, on schedule for passage this year, on course with the two-year schedule, provides Congress with another attempt to help legislate more efficiency and productivity. However, at the hearing Semonite said that most of the changes needed, from the Corps’ perspective, are policy that can be changed by rules and regulations and don’t need changes in the law.

One Federal Decision
There has been much criticism of the permitting process, from all parties involved – the contractors, local partners, the Corps and other federal agencies. On April 9, the Trump Administration released Executive Order 13807, a Memorandum of Understanding (MOU) between many federal agencies, including the U.S. Army Corps of Engineers, the Department of Interior, the Environmental Protection Agency, to establish more timely environmental reviews and authorization decisions for major infrastructure projects.

“E.O. 13807 requires the Office of Management and Budget (OMB) and the Council on Environmental Quality (CEQ), in consultation with the Federal Permitting Improvement Steering Council (Permitting Council), to develop a framework for implementation of the Executive Order,” the document stated.

Under the One Federal Decision (OFD) approach, federal agencies must develop a single permitting timetable, a single environmental impact statement, sign a single record of decision (ROD), and issue all necessary authorization decisions within 90 days of the issuance of the ROD.
The overlying purpose of the OFD approach is praiseworthy: make the review process more predictable and timely; establish standard federal operating procedures for making concurrent reviews for major infrastructure projects; and eliminate duplication efforts among different agencies.
The authorization process is also complicated. See the chart on this page. Some of the OFD initiatives could help simplify a convoluted process.
At the March hearing, Congressman De-Fazio noted that the Civil Works need for funding over the next decade is $20.3 billion. However, the proposed budget is $10 billion. He wanted to know how the Corps of Engineers will produce a 50 percent increase in efficiency? Will the OFD approach close that gap? I think it could make great strides to do so, but it must also be matched with more adequate funding and increased appropriations from HMTF for use as its intended purpose.