Repayment Agreement - PowerPoint

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					                                The Corps of Engineers
 US Army Corps
 of Engineers®                   Water Supply Program
                                           • Authorities,
                                           Policies and
                                           Procedures
                                           • Model Agreements
                                           and Processing
                                           • Database
                                           • Business Line

Presented by:                       Planning Associates Program
Ted Hillyer                                    Kansas City, MO
Institute for Water Resources                       12 July 2006
                                                                   1
        Learning Objectives
• The Corps’ major water supply authorities
• The major components of a water supply
  agreement
• Where is the majority of the Corps’s M&I
  water supply storage space
• What is PART
                                              2
      2006 PA’s - WATER SUPPLY
              PROJECTS
Barbara Blumeris   New England    3
Randy Campbell     Huntington     7
Maria Chin         Mobile         3
Martin Gonzalez    Jacksonville   1
Clarke Hemphill    Alaska         0
Alicia Kirchner    Sacramento     1
Vechere’ Lampely   Nashville      4
Joan Lanier        New Orleans    0
Dana Needham       Little Rock    12
Jason Needham      HEC            0
Shawneen O'Neill   Tulsa          27
Jeremy Weber       Portland       1
                                       3
                    Water Supply Sources
 Surface water          Groundwater                   Reuse


                    Water Supply Facilities
       Storage        Wells           Desalinization Plants
  Intakes& Pumps      Treatment      Transmission & Distribution


                            Water Users
Municipal      Industrial     Agricultural          Recreation
                  Environmental           Hydropower
       Navigation                   Flood Control
                                                                 4
            (Areas of primary Corps involvement in water supply)
  Water Supply in a
 Multipurpose Project


                    Elev. 200
Flood Control Storage
                     Elev. 150

     Conservation        Storage

                                Elev. 80
                        Sediment
     Water
     Supply
                                           5
ELIGIBLE USERS
    Brown County Water
   District: residential water
              needs

     City of Springfield:
   watering municipal golf
           course



  BMF Power, Inc.: cooling
   new coal-burning plant
                                 6
          WATER SUPPLY
            Guidance
• ER 1105-2-100 PGN
   Paragraph 3-8
  Appendix E, Section VIII*
• EP 1165-2-1 Policy Digest
   Chapter 18
• IWR Report 96-PS-4 Water Supply
  Handbook*
  * Included in the read ahead material

                                          7
         WATER SUPPLY
        Primary Authorities
• Section 6 of the Flood Control Act of 1944
  (surplus water)
• Section 8 of the Flood Control Act of 1944
  (irrigation water)
• The Water Supply Act of 1958
  (storage space)
                                               8
          WATER SUPPLY
         Primary Authorities
      Sec. 6, 1944 FCA: (Surplus Water)
• Sec Army can enter into agreements for surplus water with
  states, municipalities, private entities and individuals.
• Surplus is defined as water not required for the original
  purpose because the need never developed or the need was
  reduced by changes in demand.
• Prices and terms are as the Secretary deems reasonable. We
  use the same pricing system that is used for reallocations.
• Amounts of water are normally small.
• Contracts for 5-years with option for renewals.
• Agreements for M&I but not for crop irrigation.

                                                                9
            WATER SUPPLY
           Primary Authorities
                  Agricultural Water
• Sec. 8, 1944 FCA for Western States
   – Include irrigation in Corps lakes in 17 contiguous
     Western States upon recommendation of Sec DOI and in
     conformity with Reclamation Law.
   – DOI constructs, operates and maintains irrigation works
     and enters into agreements for use of storage.
• Agricultural Water Outside the Western States
   – Section 103(c)(3) of WRDA ’86; Cost shared at 35% of
     costs + 100% OMRR&R

                                                               10
          WATER SUPPLY
          Primary Authorities
Title III, 1958 R&HA, “The 1958 Water Supply Act”:
                 (Water Supply Storage)
• Act states that water supply is primarily a state and local
  responsibility.

• Include M&I water supply storage in new reservoir projects.

• Reallocate storage in existing projects to M&I water supply.

• Modification of projects to add M&I that would seriously
  affect other authorized purposes require congressional
  authorization (policy: 50,000 AF or 15% of total storage)
• Repayment of Costs: (depends on when authorized)
                                                                 11
             WATER SUPPLY
        Repayment of Storage Costs
• Old Projects (pre-WRDA 86)
  -   Non-Federal sponsor pays 100% of costs
  -    30-year repayment, 1st 10-years interest free
• New Projects (post WRDA 86)
  -  Non-Federal sponsor pays 100% of costs
  -    Repaid during period of construction
• All “Plumbing” Facilities: conveyance, treatment, and
       distribution facilities are non-Federal
• No single purpose water supply reservoirs
  - at least 20 % of benefits from FDR, Nav, Env
  - Single purpose modifications to existing projects, O.K.

                                                              12
             WATER SUPPLY
            Secondary Authorities
•   PL 75-208, 1937

•   1952 Independent Offices Appropriation Act (31 U.S.C. 9701)

•   PL 88-140, 1963

•   Section 22 of WRDA 74 (PL 93-251)

•   Sec. 82 of WRDA 74 and 1974 Disaster Relief Act

•   Section 931 of WRDA 1986 (PL99-662)

•   Section 322 of WRDA 90 (PL 101-640)

•   Non-traditional Authorizations (WRDA 86 – WRDA 00)            13
           WATER SUPPLY
          Secondary Authorities
• PL 75-208, 1937: Sec Army can receive contributed funds
  for adding water supply to flood control reservoir projects.

• 1952 Independent Offices Appropriation Act: Charge for
  the things of value (cost to the Gov’t. + value to the
  recipient).

• PL 88-140, 1963: Non-Federal sponsor has right to
  permanent use of storage for the physical life of the project.

• Sec. 22 of WRDA 74: Provide planning assistance to states,
  including the preparation of comprehensive plans for water
  resources development and conservation.

                                                                 14
           WATER SUPPLY
         Secondary Authorities
• Sec. 82 of WRDA 74 and 1974 Disaster Relief Act
   – Provide emergency supply of water and construct wells
     and transport water in drought areas

• Sec. 931, WRDA of 1986
   – Sec Army can allocate for up to 5-years, M&I water not
     under repayment agreement for interim irrigation.

• Section 322 of WRDA 90
   – Provides for a reduced price of water for low income
     communities in reallocations where the updated cost of storage
     governs.
                                                                 15
        WATER SUPPLY
    Non-Traditional Authorities
• About 63 provisions in WRDA since WRDA 86.
• Studies and projects have been authorized for planning,
  design & construction assistance for water quality /
  wastewater treatment, water supply and distribution
  systems, reuse systems, streamflow enhancement, drainage
  facilities and flooding.
• 3 authorities apply nationwide: radium removal;
  environmental infrastructure (obtained some funding) and
  abandoned and inactive non-coalmine restoration.
• 60 authorities involve 44 states + DC
• About $1.7 billion authorized but little actually funded   16
             WATER SUPPLY
              Reallocation
• Considered when a permanent change is
  desired.
• Made from flood control pool - No effect on
  flood protection, downstream floodplain uses have been
  modified or excess flood control storage built into
  reservoir
• Made from Conservation pool – Authorized
  purpose no longer needed or water supply need more
  valuable
                                                           17
            WATER SUPPLY
             Reallocation
• Cost – based on the higher of
  –   Updated costs of storage (usually governs)
  –   Revenues foregone
  –   Benefits foregone
  –   Replacement Costs
• Cost Repayment
  – 30-years
  – WRDA 86 interest rate
• User gets a permanent right to storage

                                                   18
        WATER SUPPLY
Reallocation Report Requirements
1.   Purpose of report
2.   Background, project data and map
3.   Water supply needs analysis
4.   Test of financial feasibility
5.   Cost of storage analysis
6.   Analysis of alternatives to meeting water supply needs
7.   Appropriate NEPA documentation
8.   Recommendation of the district engineer
9.   Public participation and public interest review
     documentation
                                                              19
      Model Agreements &
          Processing

• Provisions of Model Agreements
     For storage agreements there is now one agreement
     with options. Being changed to three agreements:
     original, reallocated, new projects.

• Approvals
• Processing
                                                        20
                      Provisions
•   WHEREAS clauses -- describes background/authority
•   Storage Space -- assigned space and its limitations
•   Right to Use Water -- responsibility of the user
•   Measurements -- User responsible for measuring devices
•   Payments -- construction, annual O&M, repair& rehab
•    Permanent Rights -- upon completion of payment and
    continued payment of O&M
•   Transfers/Assignments -- need approval of Sec Army

                                                          21
                  Approvals
• Originally Authorized
   Delegated to HQUSACE (if following model agreement
    & policies)
   HQUSACE may further delegate to Division /
    District Commanders
• Reallocations/Modifications
   1958 WSA allows if no serious affects
   Permitted for M&I water supply only
   Policy limits to 50,000 AF or 15% of total usable
    storage, whichever is less
   Actual approval varies
                                                         22
Approval of Agreements for
   Reallocated Storage
                     Draft
      From – To              *Approval by
      (acre-feet)
        0 – 99                  District
      100 – 499                Division
       500 & up                ASA CW)

* For reallocations that do not require Congressional
approval and that follow the model format or the model
with approved changes                                 23
Approval of Agreements for
   Reallocated Storage
                    Final
     From – To              *Approval by
     (acre-feet)
       0 – 499                  District
      500 – 999              HQUSACE
     1000 & up                ASA CW)
* The ASA (CW) reserves the right to retain
approval authority of any final agreement he
                                               24
approved as a draft.
              Processing at HQ
 Send documents (10 copies in draft form to HQ-
 MSC/RIT )
  - model contract/agreement with red line changes
  - list of deviations with explanation for changes
  - clean copies revised model
 MSC-RIT will “manage” review and processing
 Team assigned from CECW-PC, CECC-G,
 CERE-A, CECW-E, CECW-O as necessary

                                                      25
         Processing of Drafts

 If significant revisions needed, documents
 returned to Div/Dist with comments and
 resubmittal
 If no or minimal changes, HQ will send to
 ASA with recommendations, or return to
 field to finalize as appropriate
 Target Time – 30 Days

                                               26
         Processing of Finals
  (4 Copies Ready for Signature/Approval)
 Most delegated to district or division
 Those that require ASA approval, will be
 sent after district/sponsor sign
 Those requiring HQ approval, will be sent
 to DCW after district/sponsor sign
 Ensure Review Record is included in
 packages

                                              27
           Post Processing


Furnish “copy” of signed/approved to HQ-
 MSC-RIT (includes those approved at
           district/division level)




                                            28
                2005 Database
•   Overview
•   Storage Space
•   Storage Not Under Contract
•   Reallocations
•   Local Sponsors
•   People Served
•   Storage Costs
•   Studies Underway (2004)
•   Revenues Received versus Costs of Collection (2004)
•   Irrigation (2004)


                                                          29
   Database Overview – 2005 Data
         Municipal and Industrial Water Supply
Storage Space:      9.76 million acre-feet
Reservoirs:         136 reservoirs
Location:           25 States and Puerto Rico
                    23 of the Corps 38 districts
Investment Cost:    $1.46 billion
No. Agreements      307 covering 9.36 million acre-feet

                 Irrigation Water Supply (2004)
56.6 million AF of storage for irrigation and other uses in 48
   reservoirs in the West (only 640,000 of which is specific irrigation)

                                                                       30
            M&I Storage Space
              by Division
    Division              Storage Space (acre-feet)
   Proj./Cont.     Present Use   Future Use       Total
NAD: 8 / 9           147,810              0   147,810
SAD: 11 / 26         208,080         12,920   221,000
LRD: 25 / 35         582,113          2,200   584,313
MVD: 8 / 12          211,314        163,817   375,131
NWD: 16 / 29         406,914        537,522   944,436
SWD: 64 / 192      5,071,838      1,858,048 6,929,886
SPD: 4 / 4           557,900              0   557,900
Total: 136 / 307   7,185,969      2,574,507 9,760,476     31
Geographic Distribution of M&I WS
       Storage Space by %

       9. 7%                       1. 5%
                 3. 8%

       5. 7%             6. 0%

               71. 0%      2. 3%




         0%
                                           32
M&I Storage Space
  by Category

               Present Use
               Storage Under
               Contract (73.6%)
               Future Use Storage
               Under Contract
               (22.2%)
               Storage Not Under
               Contact (4.2%)




                             33
Change in Storage Categories
   1996-2005 (1,000AF)
8,000
7,000
6,000                        Present Use
5,000
4,000                        Future Under
3,000                        Contract
2,000                        Not Under
                             Contract
1,000
   0
        1996   2004   2005
                                            34
   M&I Storage Space Not Under
            Contract
 Corps                Project(s)           Storage Space
 District                                    (acre-feet)
Pittsburg     Stonewall Jackson, WV                 2,200
Vicksburg     DeGray, AR                           32,557
Portland      Lost Creek, OR                        6,292
Kansas City Smithville, MO                         75,700
Little Rock   DeQueen, AR                          17,275
Tulsa         9 projects in OK                    270,813
6 Districts      14 Projects in 5 states          404,837


                                                            35
             M&I Reallocations
  Division     Number of   Number of   Storage Space
                Projects   Contracts    (acre –feet)
NAD                3           3              30,835
SAD                6          20              62,431
LRD               12          24              31,740
MVD                3           3              20,975
NWD                8           8             230,780
SWD               18          66             814,996
SPD                0           0                   0
TOTAL             50          124          1,191,757

                                                       36
History of Agreements Signed as a
     Result of Reallocations
 60
 50
 40
 30
                                          Reallocations
 20
 10
 0
      50s   60s   70s   80s   90s   00s




                                                37
% of M&I Storage Space by Type of
      Non-Federal Sponsor



                         State 50.3
                         City 33.7
                         County 12.7
                         Industry 1.8
                         Other 1.1
                         Private 0.4




                                        38
            People Served
Division   Personal Needs Met   Household needs Met
               (1,200 gpd)        (avg 50-85 gpd)
NAD                  221,664             3, 940,740
SAD                  310,500             5,520,000
LRD                  510,333             9,072,592
MVD                  115,083             2,045,926
NWD                  160,667             2,856,296
SWD                1,497,167            26,616,296
SPD                  323,316             5,749,630
TOTAL              3,138,830            55,801,480
                                                      39
                M&I Storage Cost
                  by Division
    Division                   Contract Price ($000)
Project / Contract   Present     Future     Conduit    Total
                      Use         Use
NAD: 8 / 9            138,839           0         0    138,839
SAD: 11 / 26          244,890       1,588         0    246,478
LRD: 25 / 35           74,456       4,300         0     78,756
MVD: 8 / 12            40,575       5,461         0     46,036
NWD: 16 / 29           43,720      70,645       365    114,730
SWD: 64 / 192         394,435    281,579     34,814    710,827
SPD: 4 / 4            124,158           0         0    124,158
TOTAL: 136/307       1,061,073   363,572     35,179 1,459,824
                                                                 40
  WS Studies Underway
        (2004)
   Type     Number   Cost ($)
O&M           18      1,835,000
GI            6      19,300,000
Cong. Add     4       2,750,000
Other         4        641,000
TOTAL         32     24,526,000


                                  41
                Irrigation Storage
                      (2004)
Division / Number    Non-Federal    Joint-Use       Specific Irrigation
   of Projects           Cost        Storage          Storage (AF)
                      ($millions)     (AF)
Northwestern / 30    1,1659,697 50,348,000                         NA

Southwestern / 2          42,100                0              64,000

South Pacific / 16      525,039     5,677,000                 577,000

Total 3 / 48          1,726,836 56,025,000 At least 641,000
                                                                    42
Location of M&I and Irrigation
            Projects




                     Developed by
                    Monica Franklin


       www.iwr.usace.army.mil
Click on “Specialties” then “Water Use”
                                          43
Location of M&I and Irrigation
            Projects




       www.iwr.usace.army.mil
Click on “Specialties” then “Water Use”
                                          44
                                MAP - DATA
State   Project      District    Number of       Storage Space (Acre-Feet)
                                 Contracts
                                               Under     Not Under       Total
                                              Contract   Contract
 KS     Hillsdale     NWK             1        7,500       45,500       53,000




                            WS Contract Price ($000)

Under Contract            Not Under            Conduit               Total
                          Contract
           3,314.2               20,107.5                  0           23,421.7




                                                                                  45
                 OMBIL
We have just initiated an effort to get water
 supply into the Operations and Maintenance
 Business Information Link.

This will enable us to have a water supply
 database that is updated on an annual basis.


                                            46
      Corps of Engineers Business
         Program Managers

•   Navigation: Mark Pointon & Angie Premo (acting)
•   Flood & Coastal Storm Damage Reduction: Harry Kitch
•   Environmental: Rennie Sherman
•   Regulatory: Mark Sudol
•   Hydropower: Kamau Sadiki
•   Recreation: Judith Rice
•   Emergency Response: Leonard Kotkiewicz
•   Water Supply: Ted Hillyer

                                                    47
     MSC Water Supply Business
        Program Managers
•   William Sutyak – NAD
•   Terry Stratton - SAD
•   Tab Brown – LRD
•   Kevin Curran – MVD
•   Jim Fredericks – NWD
•   Adrienne Carter – SWD
•   Ahsan Syed – SPD
•   Helen Stupplebeen - POD
                                 48
  Water Supply Business Program
       Objectives and Performance Measures


      Program Objectives                 Performance Measures
In partnership with non-Federal     Acre-feet of storage under
water management plans and          contract versus acre-feet
consistent with law and policy,     available.
manage Corps reservoirs to
provide water supply storage in a   Percent of costs covered by
cost-efficient and                  revenues returned to Treasury.
environmentally responsible
manner.

                                                                     49
Water Supply Business Program
Measurement of Performance Measures
 • Acre-feet of storage under contract versus acre-feet
   available in 2005
     9.8 million available
     9.4 million under contract present and future
     96 % success rating (vs. 92% in 1996)

 • % of costs covered by revenues returned to
   Treasury in 2005
       All costs collected are returned to Treasury
       $1.46 billion total investment cost
       $1.10 billion has been or is being repaid
       75 % success rating (vs. 53 % in 1996)
                                                       50
  Water Supply Business Program
      Objectives and Budget Ranking Criteria

         Program Objectives                 Ranking Criteria
In partnership with non-Federal       Acre-feet of storage under
water management plans and            study versus cost of study.
consistent with law and policy,
reallocate storage space from other
project purposes.
Insure the timely collection of       Revenues collected versus
payments from existing water supply   cost of reallocation.
contracts.


                                                                    51
 Water Supply Business Program
    Measurement of Ranking Criteria
                2004 Data
• Annual Collections: $26.8 million
     P&I: 16.8 million
     OMRR&R: $10.0 million
• Annual Collection Costs: $1.3 million
• B/C : 20/1


                                          52
    Water Supply Work Category
     Codes Established in FY 07
OPERATIONS FOR WATER SUPPLY FUNCTIONS
60810 Operation for water supply
60811 Operation of project gates, specific water supply
  conduits, permanent operation equipment, etc. for water
  supply
60812 Water supply agreements
60820 Studies and surveys for water supply

MAINTENANCE FOR WATER SUPPLY FUNCTIONS
61810 Maintenance of project gates, specific water supply
  conduits, permanent operation equipment, etc. for water
  supply

                                                            53
                   WS 07 Budget (000)
                                                  Recommended   P Budget
OPERATION AND MAINTENANCE
• Operations / Collections / Administration:      $2,097        $2,097
• O&M Surveys and Studies:
   – Alabama- Coosa, AL                             180            180
   – Texas Water Assessment, TX                     100            100
   – Cougar water temperature facility                0            148
   TOTAL O&M                                      $2,377        $2,525

GENERAL INVESTIGATION
• Chatfield, Cherry & Bear Creek Reservoirs, CO     $166                   0
• Middle Brazos, TX                                  550                   0
• Levisa Regional Reallocation Study, VA & KY        200                   0
                           TOTAL GI                 $916          $        0
REMAINING ITEMS
• Portfolio Assessment for Reallocations            300            300

TOTAL WATER SUPPLY                                 $3,593       $2,825
ROUNDED                                            $4M            $3M
                                                                      54
 Portfolio Assessment for Storage
           Reallocation
• 300K in FY 07 to initiate an appraisal of projects to
  identify the best candidates for opportunities for
  operational changes and/or reallocation.

• Where opportunities are identified, specific studies will
  be proposed.

• Goal – to insure existing reservoirs contribute to
  enhance economic and ecosystems values as water
  demands evolve.
                                                          55
   Distribution of 07 Water Supply
           Budget by MSC
Division   O&M ($000)         Studies ($000)       Other ($000)   Total ($000)
NAD                     45                     0              0             45
SAD                   345                   180               0            525
LRD                   257                      0              0            257
MVD                   205                      0              0            205
NWD                     78                     0            148            226
SWD                 1,092                   100               0          1,192
SPD                     75                     0              0             75
Total               2,097                   280             148          2,525

Distribution of the $300,000 Portfolio not yet determined
                                                                             56
                     PART
This year for the first time, water supply has become
  a part of OMB’s Program Assessment Rating
  System.

PART was developed to assess and improve program
  performance results. The review helps identify a
  program’s strengths and weaknesses to inform
  funding and management decisions aimed at
  making the program more effective. PART
  includes a consistent series of analytical questions
  that allows programs to show improvements over
  time, and allows comparisons between similar
  programs.
                                                    57
                        PART
               Other Corps Programs in PART
•   Coastal Storm Damage Reduction
•   Coastal Ports and Harbors
•   Emergency Management
•   Environmental Stewardship
•   Hydropower
•   Recreation Management
•   Regulatory Program
•   Flood Damage Reduction
•   Formerly Utilized Sites Remedial Action Program
•   Inland Waterways Navigation
                                                      58
                       PART
• A series of 25 questions in four sections
    Answer yes, no or not applicable
    Provide an explanation and evidence to support your
     answer
• WS had two performance measures with targets
    Increase the % of storage space under contract versus
     the acre-feet available
    Increase the % of costs covered by revenues returned to
     the Treasury
    Both of these measures were outcome measures and
     both were both long term and short term measures

                                                           59
                   PART
           Initial Assessment Rating
•   Program Purpose & Design           100%
•   Strategic Planning                  88%
•   Program Management                  84%
•   Program Results/Accountability      58%

• A work in progress with a lot of give and
  take with OMB before final in Sept. 06
                                              60
     Water Supply Assistance
• Steve Cone – CECW-PC: 202/761-5451
  Chief HQ reviewer of WS contracts and reallocation
  reports for policy implications
 John Micik – CECW-PC: 202/761-8643
 Pat Mutschler – CECW-PC: 202/761-4589

• Peter Shaw – CESWD-PDS-P: 469/487-7038
  Technical POC for the Water Management &
  Reallocation Center of Expertise

• Ted Hillyer – CEIWR-GR: 703/815-1510
  HQ WS Business Program Manager
                                                       61
   Whiskey’s
  for drinkin’:

  water’s for
   fightin’

     --Mark
      Twain


Questions ?
            62

				
DOCUMENT INFO
Description: Repayment Agreement document sample