Many communities in the rural American West rely on Bureau of Reclamation (Reclamation) facilities for their very existence. Western water users also are the ones who pay most of the costs of maintaining and modernizing Reclamation projects.  In general, irrigators are obligated to pay 100 percent of the costs of project operations and maintenance, which covers everything from repainting guard shacks to replacing multi-million-dollar flood gates.  The costs of some “maintenance” projects exceed the original price of building the dam, and irrigators must pay those costs immediately, not over time.  That is why family farmers, ranchers and irrigation districts want to see Reclamation operate in the most cost-effective way possible.

Earlier this week, I attended the “Managing for Excellence” public workshop hosted by Reclamation in Sacramento . This two-day event provided an excellent opportunity for Reclamation officials to hear directly from Western water and power customers as Reclamation prepares its organizational action plan for the 21^st century. At the Family Farm Alliance, we believe this process provides an important opportunity for western water users to find further ways to improve transparency in Reclamation decision-making and make the organization as efficient as possible.

The following provides a summary of that meeting.

Overview of “Managing for Excellence” Process

As many of you know, “Managing for Excellence” is Reclamation’s response to Managing Construction and Infrastructure in the 21^st Century Bureau of Reclamation, a comprehensive report completed earlier this year by the National Research Council (NRC) of the National Academy of Sciences. Executing the action plan is a primary initiative for Reclamation this year.

The “Managing for Excellence” Action Plan lays out 41 specific action items. These action items are organized under the functional areas they support:

·        Relationships with Customers and Other Stakeholders;

·        Policies and Organization;

·        Engineering and Design Services;

·        Major Repair Challenges;

·        Project Management;

·        Asset Sustainment;

·        Research and Laboratory Services; and

·        Human Resources / Workforce.

The quickest way to learn more about each of these functional areas and the individual action items is to go to Reclamation’s website: http://www.usbr.gov/excellence/.

Family Farm Alliance Involvement in this Process

We have spent considerable time and resources in the past year working with the NRC Committee and Reclamation as the Committee developed Managing Construction and Infrastructure in the 21^st Century – Bureau of Reclamation, which was finalized earlier this year. In June of 2005, the Alliance completed our own collection of case studies, titled: The Bureau of Reclamation’s Capability to Fulfill Its Core Mission: The Customer’s Perspective (“Alliance Report”). On June 23, 2005 in Washington , D.C. , the Alliance presented its final case study report to the Committee. In May and June of 2005, the NRC Committee also sent out teams of three to tour “case study” sites throughout the West, and committee members met with Alliance representatives in Boise , Denver and Sacramento . I also testified twice this year on behalf of the Alliance at oversight hearings conducted by the U.S. House Water and Power Subcommittee and the U.S. Senate Energy and Natural Resources Committee.

The Alliance has been well represented at the two earlier public workshops hosted by Reclamation in Las Vegas and Salt Lake City , and also worked with the National Water Resources Association (NWRA) and power customer organizations to set up an initial meeting on this process in Denver last spring. At the meeting in Sacramento , Alliance representatives from Arizona , New Mexico , Oregon , San Joaquin Valley and Sacramento Valley were present. Several of us also had a chance to have breakfast with the Commissioner and Deputy Commissioner Brenda Burman on Tuesday morning.

Key Issues for Western Irrigators

In an effort to clearly articulate expectations to Reclamation regarding the development of a 21^st century action plan, the Alliance joined the American Council of Engineering Companies (ACEC) and the Colorado River Energy Distributors Association (CREDA) and formally transmitted a letter in September outlining key concerns. The American Public Power Association (APPA) is also supportive of the majority of this coalition letter, and addressed additional issues that they addressed in a separate letter to Reclamation. 

The letter identified specific expectations that we can gauge as we move through this process, and was intended to state our views on improving customer standing in Reclamation financial decision-making, providing more opportunities for local water users to outsource design work, facilitating title transfers, and emphasizing the use of performance-based standards over design-based standards.

Overview of Sacramento Meeting

Reclamation and the Department of the Interior are clearly serious about this process. Recently confirmed Reclamation Commissioner Bob Johnson kicked off the festivities by telling the fifty or so participants that this process is his “top priority”, and that he would not sacrifice a quality final product for timeliness. Like many Reclamation customers, Commissioner Johnson sees two key primary objectives for this process: 1) Improved transparency of Reclamation decision-making; and 2) Enhanced efficiency of operations. Assistant Secretary of the Interior for Water and Science Mark Limbaugh had similar comments. All five Reclamation regional directors and other policy directors from Denver and Washington , D.C. were in attendance and directly participated in presentations in Sacramento .

Reclamation officials in Sacramento presented updates on work completed for several of the action items, which are further outlined below. Based on conversations I had with irrigation and power customers in attendance, folks were impressed with the amount of material presented and the progress made to date by Reclamation. A one-inch thick packet of materials was handed out to attendees, which duplicated the power point presentations made at the meeting. Several of us

also noted Reclamation’s willingness to acknowledge the need for improvement in some areas, and were appreciative of the high level of productive discourse that occurred in the workshops between customers and presenters.

Action Item Update

Reclamation has made a lot of progress in recent months towards completing action items. So far, nine action items have already been completed:

·        Make available the Reclamation Manual;

·        Revise policy development to consider transparency and value;

·        Revise delegations of authority;

·        Workload evaluation;

·        Pilot reviews for engineering estimate oversight;

·        Policy & Procedures for design and construction estimate oversight;

·        Loan guarantees; and

·        Identify staff positions that require collaboration skills.

Several other action items will be completed by year’s end:

·        Identify decision-making process gaps;

·        Alternative scenarios;

·        Evaluate Reclamation’s workload to determine what is commercial or inherently governmental;

·        Engineering standards;

·        Develop process to determine need for major repairs;

·        Add value to major repairs;

·        Project management;

·        Establish and maintain contracting repository;

·        Financial status reporting for all infrastructure;

·        O&M: analyze and integrate into budget;

·        Lab services: using, retaining, consolidating or eliminating;

·        Increase core mission research & development; and

·        Collaborative competency curriculum.

Many reports and products will be generated during the “Managing for Excellence” project, and Reclamation is soliciting comments on these documents. When these products are ready for your review and comment, they will be placed on Reclamation’s website (http://www.usbr.gov/excellence) under their respective Functional Area, where they will be listed as a Draft Product. Once products have been updated and approved by Reclamation management for implementation, they will be listed as a Final Product.

You may want to check the website regularly, as new products can be posted at any time. Comments should be submitted electronically to Excellence@do.usbr.gov. The website also includes (or will include) all the documents distributed in Las Vegas, Salt Lake City and Sacramento, draft and final documents, and latest news. 

According to Deputy Commissioner Larry Todd, about 90 percent of the comments provided via Reclamation’s website have come from within the agency. It appears that water and power customers have primarily used the “Managing for Excellence” public workshops as the forum to express their concerns, and in my judgment, it looks like Reclamation is seriously trying to address those concerns.

Key Developments

Obviously, I cannot get go into detail on every Reclamation presentation, and will try here instead to focus on those issues of special interest to Western water users. Again, if you want more information on this expanding process, please go to the website noted above. To see the presentations made in Sacramento , go to www.usbr.gov/excellence/events/sacpm.html. The following captures what I think were the notable developments that were discussed in Sacramento .

Reimbursable Costs – At the Salt Lake meeting, Reclamation was requested to provide a breakdown of reimbursable costs (those paid for by customers) vs. non-reimbursable costs (those borne by Reclamation). This is proving to be a challenging task, but it appears that a presentation will be made at the next public meeting on this topic.

Right-Sizing the Bureau – perhaps one of the most important processes underway in “Managing for Excellence” relates to an effort to ensure that Reclamation has appropriate core capability, is “right sized”, and efficient when it comes to providing engineering and technical services, some of which are ultimately paid for by water users. This is not a simple task, and involves determining what services are “inherently governmental”, assessing historical workload, organizational scenarios, costs, alternative funding, technical processes, standards and other considerations to propose a future organization fit for the 21^st Century. Some of the customer representatives in Sacramento expressed concerns that the complexity of this task may make it possible for customers to understand. Reclamation was firm in saying they want to provide a very transparent process in this regard.

The Family Farm Alliance believes that Reclamation’s workforce should be sized to maintain the critical core competencies and technical leadership but to increase outsourcing of much of the engineering and laboratory testing work. Interestingly, Commissioner Johnson noted that Reclamation has contracted out 40% of its work over the last three fiscal years.

Title and O&M Transfers – Reclamation has done some incredible work in this area, especially relative to transfers of title to Reclamation constructed facilities to local entities. In Sacramento , we were provided with draft copies of a Reclamation report that provides an evaluation and “lessons learned” discussion of recent title transfers, as well as recommendations for improvements. Based on that study and feedback received from the July Las Vegas public meeting, Reclamation has proposed a legislative concept that would provide a 3-track programmatic approach intended to simplify transfer of “non-complicated” facilities. This proposal would develop programmatic criteria to identify which projects qualify as “non-complicated”. Reclamation and the non-federal entity would develop a “transfer agreement”, and Reclamation would prepare and submit a report to Congress. Reclamation would then have the authority to convey facilities pursuant to the transfer agreement. In essence, this would allow single purpose, non-complicated projects to transfer title without having to navigate complicated NEPA regulations.

When multi-purpose projects are proposed for transfer, things start to get more complicated, as evidenced by comments made in Sacramento . Some of the power customers present at the meeting reiterated cost allocation concerns they have with facilities being transferred to irrigation and water districts.

Reclamation Fund – Bob Wolf, Reclamation Director of Program and Budget, provided an excellent primer on the much-discussed Reclamation Fund. At the Salt Lake meeting, there was considerable interest expressed in the possibility / legality of using this fund for infrastructure repairs. Bob Wolf provided a sobering and informative reality check that suggests, outside of specific congressional legislation, the encouraging balances in the Reclamation Fund cannot be looked to as a source of funding. Bob’s presentation can be viewed on the Reclamation website.  

Project Management – Alliance members have been complimentary and critical of Reclamation project managers (“project” meaning a fish screen project, or pumping plant project, and not Klamath Project or Central Valley Project). Regional Director Rick Gold and his team noted a few key concerns: 1) Lack of a consistent project development process; 2) Insufficient policy, standards and oversight; and 3) The need to recognize project management as a discipline. More specifically, the team found there is significant room for improvement in the initiating, integration and closing processes of a project. Among other things, it was found that project management is cont a consistently well understood or well executed process across Reclamation and has not been seen as a priority by management, except when projects are high profile.

In the end, the team found that there would be significant increased benefit to Reclamation by implementing a more formal practice of project management. The team recommended that Reclamation “diligently implement the practice of sound project management for all work that meets the definition of a project”, accompanied by a clear mandate from Reclamation leadership to ensure successful implementation.

Family Farm Alliance members have expressed concern about the perceived diminished role of engineers in Reclamation project management. In Sacramento , we reiterated this concern, and also encouraged Reclamation to employ those nearing retirement in mentoring roles to pass on institutional knowledge to younger hires.

Next Steps

Reclamation intends to conduct three more public workshops in 2007. The next one will likely be scheduled for February. I talked to the Commissioner about trying to schedule a workshop in conjunction with the Family Farm Alliance annual meeting, scheduled for February 21-23 in Las Vegas . We are still working out the details. At a minimum, we will have a panel discussion featuring Action Team leaders that can update the conference on new developments. Reclamation will is working with NWRA and the Mid-Pacific Water Conference planners on similar arrangements for their annual meetings.

I encourage you to surf the Reclamation website and take a look at what is coming together. If you have specific concerns or issues that you want raised by the Alliance in this process, please do not hesitate to contact me at (541)-850-9007 or dankeppen@clearwire.net.

Thank you for your consideration of this matter.