Download version 0.1 of ER 1105-2-100 Planning Guidance Notebook.pdf

Download version 0.1 of ER 1105-2-100 Planning Guidance Notebook.pdf
CECW-P
Department of the Army
ER 1105-2-100
U.S. Army Corps of Engineers
Engineer Regulation
1105-2-100
Washington, DC 20314-1000
Planning
PLANNING GUIDANCE NOTEBOOK
Distribution Restriction Statement
Approved for public release;
distribution is unlimited.
22 April 2000
DEPARTMENT OF THE ARMY
U. S. Army Corps of Engineers
Washington, D.C. 20314-1000
CECW-P
ER 1105-2-100
Regulation
No. 1105-2-100
22 April 2000
Planning
PLANNING GUIDANCE NOTEBOOK
TABLE OF CONTENTS
Paragraph
Page
Chapter 1
..............................................................................................................................1-1
1-1.
1-2.
1-3.
1-4.
1-5.
1-6.
1-7.
1-8.
Chapter 2
2-1.
2-2.
2-3.
2-4.
2-5.
2-6.
2-7.
2-8.
Chapter 3
3-1.
3-2.
3-3.
3-4.
3-5.
3-6.
3-7.
3-8.
3-9.
3-10.
Background. ................................................................................................................1-1
Purpose........................................................................................................................1-1
Applicability. ..............................................................................................................1-1
Distribution Statement. ...............................................................................................1-1
References...................................................................................................................1-4
Use of this Engineer Regulation. ................................................................................1-4
Availability. ................................................................................................................1-4
Organization. ...............................................................................................................1-4
..............................................................................................................................2-1
Introduction.................................................................................................................2-1
The Federal Objective.................................................................................................2-1
The Planning Process..................................................................................................2-2
Principles of Analysis. ................................................................................................2-8
Partnerships and Teamwork......................................................................................2-14
A Watershed Perspective. .........................................................................................2-16
Environmental Compliance. .....................................................................................2-16
Cost Sharing..............................................................................................................2-16
..............................................................................................................................3-1
Purpose and Authorities..............................................................................................3-1
Navigation...................................................................................................................3-1
Flood Damage Reduction. ........................................................................................3-10
Hurricane and Storm Damage Reduction. ................................................................3-18
Ecosystem Restoration..............................................................................................3-23
Hydroelectric Power Generation...............................................................................3-26
Recreation. ................................................................................................................3-28
Water Supply. ...........................................................................................................3-31
Multiple Purpose Studies. .........................................................................................3-36
Other Authorities. ......................................................................................................3-38
______________________________________________________________
This engineer regulation supersedes ER 1105-2-100 dated 28 December 1990
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Paragraph
Chapter 4
Page
..............................................................................................................................4-1
4-1. Types of Studies and Reports. ........................................................................................4-1
4-2. Corps of Engineers Final Approval Authorities.. ...........................................................4-4
4-3. Procedures for Studies and Reports. ...............................................................................4-5
4-4. Quality Control/Quality Assurance and Policy Review of Feasibility Reports..............4-9
4-5. Post-authorization Changes. .........................................................................................4-10
4-6. Planning Assistance to States (PAS).............................................................................4-10
4-7. Study and Project Deauthorization. ..............................................................................4-11
LIST OF APPENDICES
Appendix A-References .............................................................................................................. A-1
Appendix B-Public Involvement and Coordination.................................................................... B-1
Appendix C-Environmental Compliance .................................................................................... C-1
Appendix D-Economic and Social Considerations..................................................................... D-1
Appendix E-Civil Works Programs ............................................................................................ E-1
Appendix F-Continuing Authorities Program..............................................................................F-1
Appendix G-Planning Reports and Programs ............................................................................. G-1
Appendix H-Review and Approval of Decision Documents ...................................................... H-1
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CHAPTER 1
Introduction
1-1. Background. The U.S. Army Corps of Engineers is authorized to carry out Civil Works
water resources projects for navigation, flood damage reduction and ecosystem restoration, as
well as for storm damage prevention, hydroelectric power, recreation, and water supply.
Planning for Federal water resources projects constructed by the Corps of Engineers, along with
those of the Bureau of Reclamation, Natural Resource Conservation Service, and the Tennessee
Valley Authority, is based on the Principles and Guidelines (P&G) adopted by the Water
Resources Council. The P&G are comprised of two parts: The Economic and Environmental
Principles for Water and Related Land Resources Implementation Studies and The Economic
and Environmental Guidelines for Water and Related Land Resources Implementation Studies.
The first part, commonly referred to as the principles, is reproduced in Figure 1-1. The second
part, commonly referred to as the guidelines, expands on the concepts introduced in the
principles and provides additional information and requirements to conduct water resources
planning studies. Together both parts provide the framework for Corps of Engineers water
resources planning studies. Within this framework, the Corps seeks to balance economic
development and environmental needs as it addresses water resources problems. The planning
process shall address the Nation’s water resources needs in a systems context and explore a full
range of alternatives in developing solutions. Innovative solutions and the application of the full
range of the Corps programs and authorities are integral to the planning process.
1-2. Purpose. This regulation provides the overall direction by which Corps of Engineers
Civil Works projects are formulated, evaluated and selected for implementation. It contains a
description of the Corps of Engineers planning process, Corps of Engineers missions and
programs, specific policies applicable to each mission and program, and analytical requirements.
Its fundamental purpose is to describe the planning process in a straightforward, plain-language
manner. While that is not always possible in a technical policy document, every effort will be
made to make this process understandable not only to planners but to the entire project delivery
team, project partners, and the general public. Just as the planning process must reflect reason
and common sense; this regulation also shall reflect that same approach.
1-3. Applicability. This engineer regulation applies to all HQUSACE elements, and all
USACE commands having Civil Works responsibilities.
1-4.
Distribution Statement. Approved for public release, distribution is unlimited.
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Economic and Environmental Principles for
Water and Related Land Resources Implementation Studies
These Principles are established pursuant to the
Water Resources Planning Act of 1965 (Pub. L. 8980), as amended (42 U.S.C. 1962a-2 and d-1).
These Principles supersede the Principles established
in connection with promulgation of principles,
standards, and procedures at 18 CFR, Parts 711,
713, 714, and 716.
1. Purpose and Scope
These principles are intended to ensure proper and
consistent planning by Federal agencies in the
formulation and evaluation of water and related land
resources implementation studies.
Implementation studies of the following agency
activities are covered by these principles:
(a) Corps of Engineers (Civil Works) water resources
project plans;
(b) Bureau of Reclamation water resources project
plans;
(c) Tennessee Valley Authority water resources
project plans;
(d) Soil Conservation Service water resources project
plans.
marketed.
3. State and Local Concerns
Federal water resources planning is to be reponsive to State and local concerns. Accordingly,
State and local participation is to be encouraged in all
aspects of water resources planning.
Federal
agencies are to contact Governors or designated
State agencies for each affected State before
initiating Studies, and to provide appropriate
opportunities for State participation. It is recognized,
however, that water projects which are local, regional,
statewide, or even interstate in scope do not
necessarily require a major role for the Federal
Government; non-Federal, voluntary arrangements
between affected jurisdictions may often be adequate.
States and localities are free to initiate planning and
implementation of water projects.
4. International Concerns
Federal water resources planning is to take into
account international implications, including treaty
obligations. Timely consultations with the relevant
foreign government should be undertaken when a
Federal water project is likely to have a significant
impact on any land or water resources within its
territorial boundaries.
5. Alternative Plans
Implementation studies are pre- or postauthorization project formulation or evaluation studies under
taken by Federal agencies.
Various alternative plans are to be formulated in a
systematic manner to ensure that all reasonable
alternatives are evaluated.
2. Federal Objective
The Federal objective of water and related land
resources project planning is to contribute to national
economic development consistent with protecting the
Nation’s
environment,
pursuant
to
national
environmental statutes, applicable executive orders,
and other Federal planning requirements.
(a) Water and related land resources project plans
shall be formulated to alleviate problems and take
advantage of opportunities in ways that contribute to
this objective.
(b) Contributions to national economic development
(NED) are increases in the net value of the national
output of goods and services, expressed in monetary
units. Contributions to NED are the direct net benefits
that accrue in the planning area and the rest of the
Nation. Contributions to NED include increases in the
net value of those goods and services that are
marketed, and also of those that may not be
(a) A plan that reasonably maximizes net national
economic development benefits, consistent with the
Federal objective, is to be formulated. This plan is to
be identified as the NED plan.
(b) Other plans which reduce net NED benefits in
order to further address other Federal, State, local,
and international concerns not fully addressed by the
NED plan should also be formulated.
(c) Plans may be formulated which require changes in
existing statutes, administrative regulations, and
established common law; such required changes are
to be identified.
(d) Each alternative plan is to be formulated in
consideration of four criteria: completeness,
effectiveness,
efficiency,
and
acceptability.
Appropriate mitigation of adverse effects is to be an
integral part of each alternative plan.
Figure 1-1
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10. Risk and Uncertainty
(e) Existing water and related land resources plans,
such as State water resources plans, are to be
considered as alternative plans if within the scope of
the planning effort.
Planners shall identify areas of risk and uncertainty
in their analysis and describe them clearly, so that
decisions can be made with knowledge of the degree
of reliability of the estimated benefits and costs and of
the effectiveness of alternative plans.
6. Plan Selection
A plan recommending Federal action is to be the
alternative plan with the greatest net economic benefit
consistent with protecting the Nation’s environment
(the NED plan), unless the Secretary of the
department or head of an independent agency grants
an exception to this rule. Exceptions may be made
when there are overriding reasons for recommending
another plan, based on other Federal, State, local and
international concerns.
11. Cost Allocation
For allocating total project financial costs among the
purposes served by a plan, separable costs will be
assigned to their respective purposes, and all joint
costs will be allocated to purposes for which the plan
was formulated. (Cost sharing policies for water
projects will be addressed separately.)
7. Accounts
12. Planning Guidance
Four accounts are established to facilitate
evaluation and display of effects of alternative plans.
The national economic development account is
required. Other information that is required by law or
that will have a material bearing on the decisionmaking process should be included in the other
accounts, or in some other appropriate format used to
organize information on effects.
In order to ensure consistency of Federal agency
planning necessary for purposes of budget and policy
decisions and to aid States and the public in
evaluation of project alternatives, the Water
Resources Council (WRC), in cooperation with the
Cabinet Council on Natural Resources and
Environment, shall issue standards and procedures,
in the form of guidelines, implementing these
Principles. The head of each Federal agency subject
to this order will be responsible for consistent
application of the guidelines. An agency may propose
agency guidelines which differ from the guidelines
issued by WRC.
Such agency guidelines and
suggestions for improvements in the WRC guidelines
are to be submitted to WRC for review and approval.
The WRC will forward all agency proposed guidelines
which represent changes in established policy in the
Cabinet Council on Natural Resources and
Environment for its consideration.
(a) The national economic development (NED)
account displays changes in the economic value of
the national output of goods and services.
(b) The environmental quality (EQ) account displays
non-monetary effects on significant natural and
cultural resources.
(c) The regional economic development (RED)
account registers changes in the distribution of
regional economic activity that result from each
alternative plan. Evaluations of regional effects are to
be carried out using nationally consistent projections
of income, employment, output and population.
13. Effective Date
These Principles shall apply to implementation
studies completed more than 120 days after issuance
of the standards and procedures referenced in
Section 12, and concomitant repeal of 18 CFR, Parts
711, 713, 714, and 716.
(d) The other social effects (OSE) account registers
plan effects from perspectives that are relevant to the
planning process, but are not reflected in the other
three accounts.
These economic and environmental Principles are
hereby approved.
8. Discount Rate
Discounting is to be used to convert future
monetary values to present values.
9. Period of Analysis
The period of analysis to be the same for each
alternative plan.
(Note: Text retyped for clarity. Signature
scanned from original document.)
Figure 1-1 (continued)
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1-5. References. Relevant published references indicated in the text of each chapter of this
engineer regulation are listed in Appendix A.
1-6. Use of this Engineer Regulation. This engineer regulation provides the requirements for
conducting planning studies within the U. S. Army Corps of Engineers Civil Works program.
This engineer regulation will also be useful in orienting and familiarizing newly assigned
personnel, military and civilian, study /project cost-sharing partners and other interested publics
with essential requirements regarding the conduct of Corps of Engineers Civil Works activities.
1-7. Availability. This regulation is available at the following web site:
http://www.usace.army.mil/inet/usace-docs/er/er1105-2-100/toc.htm. When this regulation is
viewed on this site, active hyperlinks are provided to other sections and appendices within this
document and to other related regulations and documents. If this document is printed, the
hyperlinked references will have to be printed separately. The version of this regulation on the
web site is the official and current version. Every effort will be made to notify users when this
regulation is updated.
1-8. Organization. This regulation consists of a main regulation and eight appendices.
Appendix B provides the requirements for public involvement, collaboration and coordination in
Civil Works planning studies. Appendix C addresses the integration of environmental evaluation
and compliance requirements into the planning of Civil Works projects. Appendix D covers
economic and social considerations, other than procedures for estimating NED benefits, in water
resources planning studies. Appendix E provides policy and planning guidance for each Civil
Works mission of the Corps of Engineers. Appendix F provides general program principles,
policies and planning guidance for the nine legislative authorities under the Continuing
Authorities Program (CAP). Appendix G provides guidance and procedures for the management
and conduct of planning studies, activities and programs. Appendix H provides review and
approval procedures for decision documents.
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CHAPTER 2
Planning Principles
2-1. Introduction. The Corps of Engineers planning process is grounded in the economic and
environmental Principles and Guidelines (P&G) promulgated in 1983 and set forth in different
parts of this document. It is also grounded in the laws which apply to the Civil Works Program
and to the Corps of Engineers missions. The P&G were set forth to provide for the formulation
of reasonable plans responsive to National, State and local concerns. Likewise, the plans
recommended for implementation, in general, are to reasonably maximize net national benefits.
The Corps of Engineers planning process shall place specific emphasis on sound judgment;
planners and other team members shall be guided by common sense in applying the policies and
procedures contained herein. It also shall reflect a systematic and comprehensive treatment of
watershed resources, including urban watershed resources. With regard to site-specific project
studies, every effort should be made to assure that both economic and environmental value is
added to watershed resources.
2-2.
The Federal Objective
a. The Federal Objective. Principles and Guidelines state that the Federal objective of
water and related land resources planning is to contribute to national economic development
(NED) consistent with protecting the Nation's environment, in accordance with national
environmental statutes, applicable executive orders, and other Federal planning requirements.
The P&G use of the term objective should be distinguished from study planning objectives,
which are more specific in terms of expected or desired outputs. The P&G’s objective (Federal
objective) may be considered more of a National goal. Water and related land resources project
plans shall be formulated to alleviate problems and take advantage of opportunities in ways that
contribute to study planning objectives and, consequently, to the Federal objective. Contributions
to national economic development (NED outputs) are increases in the net value of the national
output of goods and services, expressed in monetary units, and are the direct net benefits that
accrue in the planning area and the rest of the Nation. Contributions to NED include increases in
the net value of those goods and services that are marketed and also of those that may not be
marketed. Protection of the Nation’s environment is achieved when damage to the environment
is eliminated or avoided and important cultural and natural aspects of our nation’s heritage are
preserved. Various environmental statutes and executive orders assist in ensuring that water
resources planning is consistent with protection. The objectives and requirements of applicable
laws and executive orders are considered throughout the planning process in order to meet the
Federal objective.
b. Ecosystem Restoration. Ecosystem restoration is one of the primary missions of the
Corps of Engineers Civil Works program. The Corps objective in ecosystem restoration
planning is to contribute to national ecosystem restoration (NER). Contributions to national
ecosystem restoration (NER outputs) are increases in the net quantity and/or quality of desired
ecosystem resources. Measurement of NER is based on changes in ecological resource quality
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as a function of improvement in habitat quality and/or quantity and expressed quantitatively in
physical units or indexes (but not monetary units). These net changes are measured in the
planning area and in the rest of the Nation. Single purpose ecosystem restoration plans shall be
formulated and evaluated in terms of their net contributions to increases in ecosystem value
(NER outputs), expressed in non-monetary units. Multipurpose plans that include ecosystem
restoration shall contribute to both NED outputs and NER outputs. In this latter case, a plan that
trades off NED and NER benefits to maximize the sum of net contributions to NED and NER is
usually recommended.
2-3. The Planning Process. The Corps planning process follows the six-step process defined
in the P&G. This process is a structured approach to problem solving which provides a rational
framework for sound decision making. The six-step process shall be used for all planning
studies conducted by the Corps of Engineers. The process is also applicable for many other
types of studies and its wide use is encouraged. The six steps are:
Step 1 - Identifying problems and opportunities
Step 2 - Inventorying and forecasting conditions
Step 3 - Formulating alternative plans
Step 4 - Evaluating alternative plans
Step 5 - Comparing alternative plans
Step 6 - Selecting a plan
A detailed description of each step is presented in subsequent paragraphs. Corps
decision making is generally based on the accomplishment and documentation of all of these
steps. It is important to stress the iterative nature of this process. As more information is
acquired and developed, it may be necessary to reiterate some of the previous steps. The six
steps, though presented and discussed in a sequential manner for ease of understanding, usually
occur iteratively and sometimes concurrently. Iterations of steps are conducted as necessary to
formulate efficient, effective, complete and acceptable plans.
a. Step 1 - Identifying Problems and Opportunities.
(1) Problems and opportunities statements will be framed in terms of the Federal
objective and the specific study planning objectives. Problems and opportunities should be
defined in a manner that does not preclude the consideration of all potential alternatives to solve
the problems and achieve the opportunities. Problems and opportunities statements will
encompass current as well as future conditions and are dynamic in nature. Thus, they can be,
and usually are, re-evaluated and modified in subsequent steps and iterations of the planning
process.
(2) Properly defined, statements of problems and opportunities will reflect the priorities
and preferences of the Federal Government, the non-Federal sponsors and other groups
participating in the study process; thus active participation of all stakeholders in this process is
strongly recommended. Proper identification of problems and opportunities is the foundation for
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scoping the planning process. This problem identification step, and/or “scoping”, should begin as
soon as practicable after the decision to initiate a planning study.
(3) The National Environmental Policy Act regulations (40 CFR Parts 1500-1508)
require all Federal agencies involved in water resources planning to conduct a process termed
"scoping". (See ER 200-2-2 for implementation guidance.) The NEPA scoping process
determines the scope of issues to be addressed and identifies the significant issues related to a
proposed action. Although NEPA scoping has traditionally been associated solely with
identifying the concerns associated with proposed actions, it is possible to combine the NEPA
scoping process with step 1 of the planning process. The information on problems and
opportunities gathered in step 1 will help to identify primary issues that need to be addressed in
subsequent steps of the planning process. Opportunities for combining step 1 of the planning
process and the scoping process will vary from study to study, but the opportunity should be
explored to minimize duplication of efforts at various stages of the planning process.
(4) Once the problems and opportunities are properly defined, the next task is to define
the study planning objectives and the constraints that will guide efforts to solve these problems
and achieve these opportunities. Planning objectives are statements that describe the desired
results of the planning process by solving the problems and taking advantage of the opportunities
identified. The planning objectives must be directly related to the problems and opportunities
identified for the study and will be used for the formulation and evaluation of plans. Objectives
must be clearly defined and provide information on the effect desired (quantified, if possible),
the subject of the objective (what will be changed by accomplishing the objective), the location
where the expected result will occur, the timing of the effect (when would the effect occur) and
the duration of the effect.
(5) Constraints are restrictions that limit the planning process. Constraints, like
objectives, are unique to each planning study. Some general types of constraints that need to be
considered are resource constraints and legal and policy constraints. Resource constraints are
those associated with limits on knowledge, expertise, experience, ability, data, information,
money and time. Legal and policy constraints are those defined by law, Corps policy and
guidance. These constraints are discussed in subsequent chapters of this regulation and its
appendices. Plans should be formulated to meet the study objectives and to avoid violating the
constraints. Thus, a clear definition of objectives and constraints is essential to the success of the
planning process.
b. Step 2 – Inventory and Forecast. The second step of the planning process is to
develop an inventory and forecast of critical resources (physical, demographic, economic, social,
etc.) relevant to the problems and opportunities under consideration in the planning area. This
information is used to further define and characterize the problems and opportunities. A
quantitative and qualitative description of these resources is made, for both current and future
conditions, and is used to define existing and future without-project conditions. Existing
conditions are those at the time the study is conducted. The forecast of the future without-project
condition reflects the conditions expected during the period of analysis (See paragraph 2-4j for
definition of period of analysis). The future without-project condition provides the basis from
which alternative plans are formulated and impacts are assessed. Since impact assessment is the
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basis for plan evaluation, comparison and selection, clear definition and full documentation of
the without-project condition are essential. Gathering information about historic and existing
conditions requires an inventory. Gathering information about potential future conditions
requires forecasts, which should be made for selected years over the period of analysis to
indicate how changes in economic and other conditions are likely to have an impact on problems
and opportunities. Information gathering and forecasts will most likely continue throughout the
planning process.
c. Step 3 - Formulation of Alternative Plans.
(1) Alternative plans shall be formulated to identify specific ways to achieve planning
objectives within constraints, so as to solve the problems and realize the opportunities that were
identified in step 1. An alternative plan consists of a system of structural and/or nonstructural
measures, strategies, or programs formulated to meet, fully or partially, the identified study
planning objectives subject to the planning constraints. A management measure is a feature or
an activity that can be implemented at a specific geographic site to address one or more planning
objectives. Management measures are the building blocks of alternative plans and are
categorized as structural and nonstructural. Equal consideration must be given to these two
categories of measures during the planning process. An alternative plan is a set of one or more
management measures functioning together to address one or more objectives. A range of
alternative plans shall be identified at the beginning of the planning process and screened and
refined in subsequent iterations throughout the planning process. However, additional alternative
plans may be identified at any time during the process. Plans should be in compliance with
existing statutes, administrative regulations, and common law or include proposals for changes
as appropriate. Alternative plans shall not be limited to those the Corps of Engineers could
implement directly under current authorities. Plans that could be implemented under the
authorities of other Federal agencies, State and local entities and non-government interest should
also be considered.
(2) The first phase in the plan formulation process is the identification of management
measures that could be implemented, giving equal consideration to structural and non-structural
measures. The second phase is the formulation of alternative plans by combining the
management measures as appropriate. Alternative plans should be significantly differentiated
from each other. As a general rule projects must be formulated to reasonably maximize benefits
to the national economy, to the environment or to the sum of both. Each alternative plan shall be
formulated in consideration of four criteria described in the P&G: completeness, efficiency,
effectiveness, and acceptability. Completeness is the extent to which the alternative plans
provide and account for all necessary investments or other actions to ensure the realization of the
planning objectives, including actions by other Federal and non-Federal entities. Effectiveness is
the extent to which the alternative plans contribute to achieve the planning objectives.
Efficiency is the extent to which an alternative plan is the most cost effective means of achieving
the objectives. Acceptability is the extent to which the alternative plans are acceptable in terms
of applicable laws, regulations and public policies. Appropriate mitigation of adverse effects
shall be an integral component of each alternative plan.
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(3) In formulating alternative plans, it is essential that planners understand and fully
visualize the problems of the planning area and how their plans will address these problems.
Planners must maintain focus on the larger, complete plan(s) even while carrying out specific,
individual tasks. While these individual tasks are necessary, their value is subordinate to
successfully creating plans that work and function as visualized by those participating in the
planning process. In that regard, vision rather than accountancy shall provide the foundation for
sound planning and plan formulation.
(4) Section 904 of the Water Resources Development Act of 1986 (WRDA of 1986)
requires the Corps to address the following matters in the formulation and evaluation of
alternative plans:
• Enhancing national economic development (including benefits to particular regions
that are not transfers from other regions).
•
Protecting and restoring the quality of the total environment.
•
The well-being of the people of the United States.
•
The prevention of loss of life.
•
The preservation of cultural and historical values.
(5) Non-structural measures shall be considered as means for addressing problems and
opportunities. Non-structural measures may be combined with structural measures to produce a
plan or considered as an alternative to structural measures. Non-structural measures shall receive
equal consideration in the planning process to structural measures. Management of demand
should be considered as a non-structural alternative. Examples are inland waterway congestion
fees and changes in water pricing or drought contingency plans. Such measures can delay
optimal project on-line dates of structural measures and increase total project net benefits over
plans not including the non-structural measures.
(6) Protection of the Nation’s environment from adverse effects of each alternative plan,
in missions other than ecosystem restoration, is to be provided by mitigation (as defined in 40
CFR 1508.20) of those effects. Each alternative plan shall include mitigation as determined
appropriate. Mitigation to address effects on fish and wildlife and their habitat should be
determined in consultation with the Federal and State fish and wildlife agencies in accordance
with the Fish and Wildlife Coordination Act of 1958. Mitigation to address other adverse effects
should be determined in accordance with applicable laws, regulations and Executive Orders.
(See Appendix C). Mitigation measures determined to be appropriate should be planned for
concurrent implementation with other major project features, where practical. Cost of mitigation
measures are part of total project costs and are included in the benefit-cost analysis of alternative
plans.
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d. Step 4 – Evaluating Alternative Plans.
(1) The evaluation of effects is a comparison of the with-project and without-project
conditions for each alternative. The evaluation will be conducted by assessing or measuring the
differences between each with- and without-project condition and by appraising or weighting
those differences.
(2) Evaluation consists of four general tasks. The first task is to forecast the most likely
with-project condition expected under each alternative plan. Each with-project condition will
describe the same critical variables included in the without-project condition developed in step 2.
Criteria to evaluate the alternative plans include all significant resources, outputs and plan
effects. They also include contributions to the Federal objective, the study planning objectives,
compliance with environmental protection requirements, the P&G’s four evaluation criteria
(completeness, effectiveness, efficiency and acceptability) and other criteria deemed significant
by participating stakeholders. The second task is to compare each with-project condition to the
without-project condition and document the differences between the two. The third task is to
characterize the beneficial and adverse effects by magnitude, location, timing and duration. The
fourth task is to identify the plans that will be further considered in the planning process, based
on a comparison of the adverse and beneficial effects and the evaluation criteria.
(3) Four accounts are established in the P&G to facilitate the evaluation and display of
effects of alternative plans.
(a) The national economic development account displays changes in the economic value
of the national output of goods and services.
(b) The environmental quality account displays non-monetary effects on ecological,
cultural, and aesthetic resources including the positive and adverse effects of ecosystem
restoration plans.
(c) The regional economic development account displays changes in the distribution of
regional economic activity (e.g., income and employment).
(d) The other social effects account displays plan effects on social aspects such as
community impacts, health and safety, displacement, energy conservation and others.
(4) Display of the national economic development and environmental quality accounts is
required. Display of the regional economic development and other social effects accounts is
discretionary. Evaluation of the beneficial and adverse effects of the alternatives will provide a
basis to determine which plans should be considered further, dropped or reformulated.
Procedures to evaluate national economic development benefits for each project purpose (i.e.,
navigation, flood damage reduction, recreation, etc.) are provided in Chapter 3. Additional
procedures and requirements are provided in Appendix E.
(6) Steps in the procedures may be abbreviated by reducing the extent of the analysis and
amount of data collected where greater accuracy or detail is clearly not justified by the cost of
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the plan components being analyzed. The steps abbreviated and the reason for abbreviation shall
be documented in the planning reports. Planners can pursue the use of alternative procedures
when these would provide a more accurate estimate of benefits. The use of alternative
procedures and the consideration of new benefit categories, including the procedures to be used
to estimate them, require advance approval from HQUSACE (CECW-P).
e. Step 5 - Comparing Alternative Plans. In this step, plans (including the no action
plan) are compared against each other, with emphasis on the outputs and effects that will have
the most influence in the decision making process. A comparison of the outputs of the various
plans must be made. Beneficial and adverse effects of each plan must be compared. These
include monetary and non-monetary benefits and costs. Identification and documentation of
tradeoffs will be required to support the final recommendation. The effects include those
identified during the evaluation phase and any other significant effects identified in step 5. The
comparison step can be defined as a reiteration of the evaluation step, with the exception that in
this step each plan (including the no action plan) is compared against each other and not against
the without-project condition. The output of the comparison step shall be a ranking of plans.
f. Step 6 - Selecting a Plan. A single alternative plan will be selected for
recommendation from among all those that have been considered. The recommended plan must
be shown to be preferable to taking no action (if no action is not recommended) or implementing
any of the other alternatives considered during the planning process. The culmination of the
planning process is the selection of the recommended plan or the decision to take no action. The
criteria for selecting the recommended plan differ, depending on the type of plan and whether
project outputs are NED, NER, or a combination of both.
(1) The National Economic Development (NED) Plan. For all project purposes except
ecosystem restoration, the alternative plan that reasonably maximizes net economic benefits
consistent with protecting the Nation's environment, the NED plan, shall be selected. The
Assistant Secretary of the Army for Civil Works (ASA (CW)) may grant an exception when
there are overriding reasons for selecting another plan based upon other Federal, State, local and
international concerns. (See paragraph 2-3g(4))
(2) The National Ecosystem Restoration (NER) Plan. For ecosystem restoration projects,
a plan that reasonably maximizes ecosystem restoration benefits compared to costs, consistent
with the Federal objective, shall be selected. The selected plan must be shown to be costeffective and justified to achieve the desired level of output. This plan shall be identified as the
National Ecosystem Restoration (NER) Plan.
(3) The Combined NED/NER Plan. Projects which produce both National Economic
Development (NED) benefits and National Ecosystem Restoration (NER) benefits will result in a
“best” recommended plan so that no alternative plan or scale has a higher excess of NED
benefits plus NER benefits over total project costs. This plan shall attempt to maximize the sum
of net NED and NER benefits, and to offer the best balance between two Federal objectives.
Recommendations for multipurpose projects will be based on a combination of NED benefit-cost
analysis, and NER benefits analysis, including cost effectiveness and incremental cost analysis.
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(4) The Locally Preferred Plan. Projects may deviate from the National Economic
Development Plan and/or the National Ecosystem Restoration Plan if requested by the nonFederal sponsor and approved by ASA(CW). In some instances, a non-Federal sponsor may not
be able to afford or otherwise support the NED, NER or Combined NED/NER Plan. Plans
requested by the non-Federal sponsor that deviate from these plans shall be identified as the
Locally Preferred Plan (LPP). When the LPP is clearly of less scope and cost and meets the
Administration’s policies for high-priority outputs, an exception for deviation is usually granted
by ASA(CW). In making a decision to recommend a LPP smaller in scope and costs than the
NED, NER or Combined NED/NER plans, the district should assist the sponsor in identifying
and assessing the financial capability of other potential non-Federal interests who may be willing
and able to participate in plan development and implementation. In all cases, the LPP must have
greater net benefits than smaller scale plans, and enough alternatives must be analyzed during the
formulation and evaluation process to insure that net benefits do not maximize at a smaller scale
than the sponsor’s preferred plan. Paragraphs 4-3b(2)(a) and (b) describe the documentation
required to support recommendation of a LPP. Categorical exemptions specifically applicable
to flood control and navigation are discussed in paragraphs 3-3b(11) and 3-2b(10). If the
sponsor prefers a plan more costly than the NED plan, the NER Plan or the combined NED/NER
Plan, and the increased scope of the plan is not sufficient to warrant full Federal participation,
ASA(CW) may grant an exception as long as the sponsor pays the difference in cost between
those plans and the locally preferred plan. The LPP, in this case, must have outputs similar inkind, and equal to or greater than the outputs of the Federal plan. It may also have other outputs.
The incremental benefits and costs of the locally preferred plan, beyond the Federal plan, must
be analyzed and documented in feasibility reports (see paragraph 4-3b(2)(b)).
(5) Agency Decision Making. Decision making for the selection of a recommended plan
begins at the district level and continues at the Headquarters level through subsequent reviews
and approval. In the case of continuing authorities projects, the review and approval occurs at
the Division level. For congressionally authorized projects, the final agency decision maker is
the Secretary of the Army through the Assistant Secretary of the Army for Civil Works.
2-4. Principles of Analysis. The principles of analyses that follow are fundamental to the
planning process and are to be followed in conducting planning studies.
a. System Analysis. All Corps study initiatives shall consider broad system aspects of
problems and solutions. In some instances these system considerations will be addressed
throughout the planning process, such as in watershed or navigation systems studies. In other
instances, such as with more limited project-oriented studies, systems considerations should be
included in a reasonable and cost-effective manner as part of the initial phase of the planning
process.
b. With and Without-Project Analysis.
(1) The without-project condition is the most likely condition expected to exist in the
future in the absence of a proposed water resources project. Proper definition and forecast of the
future without-project condition are critical to the success of the planning process. The future
without-project condition constitutes the benchmark against which plans are evaluated.
Forecasts of future without-project conditions shall consider all other actions, plans and
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programs that would be implemented in the future to address the problems and opportunities in
the study area in the absence of a Corps project. Forecasts should extend from the base year (the
year when the proposed project is expected to be operational) to the end of the period of analysis.
(2) The with-project condition is the most likely condition expected to exist in the future
with the implementation of a particular water resources development project. Comparison of
conditions with the project to conditions without the project will be performed to identify the
beneficial and adverse effects of the proposed plans. These with and without-project
comparisons provide the framework for the evaluation of alternative plans.
(3) Forecasts of with- and without-project conditions should be based on consideration
of national and regional forecasts of socio-economic parameters (i.e., income, employment,
populations, etc) and other aggregate projections such as exports, land use trends and demand for
goods and services. National projections used in planning shall be based on a full employment
economy. Other plans that have been adopted for the planning area and other current planning
efforts with high potential for implementation or adoption shall be considered as part of the
forecasted without-project condition.
(4) Expected environmental conditions, especially trends in ecosystem change, shall be
considered in forecasting with- and without-project conditions. Forecasted environmental
conditions can be based on a variety of different sources of information available from Federal,
State and other natural resource management agencies and private conservation entities.
National and State environmental and health standards and regulations shall be recognized and
appropriately considered. Standards and regulations concerning water quality, air quality, public
health, wetlands protection, and floodplain management should be given specific consideration
in forecasting the with- and without-project conditions.
c. Benefit-Cost Analysis and Cost Effectiveness Analysis.
(1) Benefit-Cost analysis is a conceptual framework useful in evaluating government
(and private) investments. In principle it is uncomplicated: all pertinent costs and effects
(beneficial and detrimental) of an action are systematically tallied. The results can then be tested
against investment criteria, such as benefits greater than costs and maximum net benefits which
is the criterion used for identification of the NED Plan in accordance with the Federal objective.
(2) All of a project’s monetized benefits, which occur through time, are accumulated, and
using a process called discounting are expressed as a single total benefit figure. Costs also occur
through time, and the same accumulating and discounting process is conducted, so the costs are
also expressed as a single figure. Benefit and cost time streams are directly comparable only as
converted to single figures. If the benefits exceed the costs the project may be said to be
worthwhile.
(3) Planners may consider plans with different sizes, locations, outputs and costs of
implementation in the same study. In effect, different plans are different projects, but the
benefits and costs of each may be summarized; and all projects may be compared in a relatively
straightforward way by consistent application of benefit-cost principles.
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(4) There are similarities between benefit-cost analysis and financial appraisals, but the
two are not the same. Caution is required against too easily transferring financial appraisal
practices to benefit-cost analysis. For example, all benefits and costs must be accounted: thus (1)
donated land (with no financial cost) has a cost in benefit to cost analysis, (2) benefits are
counted wherever they accrue (even outside the study area; third party gains would not count in a
financial appraisal).
(5) When there is no monetary measure of benefits but project outcomes can be described
and quantified in some dimension, cost effectiveness analysis can be used to assist on the
decision making process. Cost effectiveness analysis seeks to answer the question: given an
adequately described objective, what is the least-costly way of attaining the objective? The
ability to identify the least costly among several alternatives having the same outcome is very
useful. However, cost effectiveness analysis cannot establish that any project is worthwhile.
Cost effectiveness can also aid choice among projects that differ in their outcomes, but in the
absence of monetized benefit estimates cannot remove all ambiguity.
d. Net Benefits (optimization). The best project may be defined as the plan that returns
the greatest excess of benefits over costs, i.e., it is not possible to improve upon a plan producing
maximum net benefits (total benefits less total costs). Benefits can be monetary or nonmonetary,
as in the case of ecosystem restoration projects. The process of optimizing net benefits should be
reasonable and practical in seeking to maximize net benefits.
e. Incremental Analysis. Incremental analysis is a process used in plan formulation to
help identify plans that deserve further consideration in an efficient manner. The analysis
consists of examining increments of plans or project features to determine their incremental costs
and incremental benefits. Increments of plans continue to be added and evaluated as long as the
incremental benefits exceed the incremental costs. When the incremental costs exceed the
incremental benefits no further increments are added. For example, fifteen levees, each of a
different height, could be designed to find the one with greatest net benefits. This is trial and
error. An alternate approach is to start with a levee of low height, then add height in steps or
increments (say one foot). For each increment of height the added (incremental) costs and added
(incremental) benefits are estimated. As long as the incremental benefits exceed the incremental
costs it makes sense to add the foot of height, because the extra foot adds more to benefits than to
costs. When incremental costs exceed incremental benefits, no further increments of height are
added. This process is more efficient than trial and error, and is thus used in formulating and
evaluating most Corps projects.
f. Trade-off Analysis. In planning for multipurpose or multiobjective projects, the Corps
needs to strike a balance between financial resources and the commodities that can be produced
(“purchased”) by the project. Trade-off analysis is the procedure used by the Corps to identify
the potential gains and losses associated with producing a larger or lesser amount of a given
output or outputs. The results of trade-off analysis are used in the formulation, evaluation,
comparison and selection of the recommended plan. For example, consider a trade-off common
in Corps planning: river flows are set by nature and cannot be augmented. In a reservoir,
therefore, each cubic foot of water sent through generators for hydropower means less retained
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behind a dam for recreation. Having more recreation water and more electricity generation is not
possible (for a fixed amount of water). It is possible to express the relationship between
electricity gains and recreation losses over a range (maybe a wide range) of gains and losses.
Assessing these types of trade-offs is common in Corps project planning. Appendix E provides
additional information on trade-off analysis.
g. Risk and Uncertainty. The P&G state that planners shall characterize, to the extent
possible, the different degrees of risk and uncertainty inherent in water resources planning and to
describe them clearly so decisions can be based on the best available information. Risk-based
analysis is defined as an approach to evaluation and decision making that explicitly, and to the
extent practical, analytically incorporates considerations of risk and uncertainty. Risk-based
analysis shall be used to compare plans in terms of the likelihood and variability of their physical
performance, economic success and residual risks. A risk-based approach to water resources
planning captures and quantifies the extent of risk and uncertainty in the various planning and
design components of an investment project. The total effect of risk and uncertainty on the
project’s design and viability can be examined and conscious decisions made reflecting an
explicit trade-off between risk and costs. Specific applications of the risk-based approach are
discussed in Chapter 3 for each Civil Works mission.
h. Planning Area. The planning area is a geographic space with an identified boundary
that includes the area identified in the study authorizing document and the locations of
alternative plans which are often called project areas. The locations of resources that would be
directly, indirectly, or cumulatively affected by alternative plans are often called the affected
area.
i. Prices. The general level of prices for inputs and outputs prevailing during or
immediately preceding the period of planning shall be used for the entire period of analysis.
Project benefits and costs must be compared at a common point in time and both must be
updated periodically. Discounting shall be used to convert future monetary values to present
values. Present values, at the base year of analysis, shall be calculated using the discount rate
established annually for the formulation and economic evaluation of plans for water and related
land resources (published by HQUSACE as an Economic Guidance Memorandum).
j. Period of Analysis. The period of analysis shall be the same for each alternative plan.
The period of analysis shall be the time required for implementation plus the lesser of: (1) the
period of time over which any alternative plan would have significant beneficial or adverse
effects, (2) a period not to exceed 50-years except for major multiple purpose reservoir projects,
or, (3) a period not to exceed 100 years for major multiple purpose reservoir projects.
Appropriate consideration should be given to environmental factors that may extend beyond the
period of analysis.
k. NED costs.
(1) Project measures, whether structural or nonstructural, require the use of various resources.
NED costs are used for the economic analysis of alternative projects and reflect the opportunity
costs of direct or indirect resources consumed by project implementation. From an economic
perspective, the real measure of cost is opportunity cost, i.e., the value of that which is foregone
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when a choice of a particular plan or measure is made. In order to capture the opportunity costs
of proposed plans, NED costs include three types of costs: implementation costs, other direct
costs and associated costs.
(2) Implementation costs are explicit costs of implementing a project. They include the
post authorization planning and design costs, construction costs, construction contingency costs,
and operations, maintenance, repair, rehabilitation and replacement costs (OMRR&R). These
also include costs for all fish and wildlife habitat mitigation, historic and archaeological
mitigation and data recovery, lands, easements, relocations, rights-of-way, disposal/borrow areas
and water and mineral rights, which are necessary to implement the project.
(3) Other direct costs are the costs of resources directly required for a project or a plan
but for which no implementation outlays are made. Examples of these costs are interest during
construction, value of donated land, uncompensated NED losses and other negative externalities.
(4) Associated costs are those costs necessary for production of project outputs for which
no project expenditure is made. An example would be the cost of transmission lines provided by
the private sector necessary for using energy provided by a hydropower improvement.
(5) Typically, opportunity costs are equal to the market prices of goods and services in
competitive markets. However, market prices can be often distorted by monopoly power, price
controls, taxes or subsidies. In cases where market prices do not reflect the opportunity cost of
resource use, other means are used to develop NED costs. Surrogate values are often used which
reflect the opportunity costs from a similar situation. For example, water rates in a community
that provides subsidized pricing for disadvantaged may not represent the true value of the water.
The true value may be better estimated using the price of water in a neighboring community
where competitive markets exist.
l. Environmental and Social Impact Assessment. A number of Federal laws, such as the
National Environmental Policy Act of 1969, the Clean Water Act of 1977, as amended and
Section 122 of the 1970 River and Harbor and Flood Control Act require consideration of a wide
range of effects in planning and decision making. In practice, this has been accomplished
through a process commonly called impact assessment. While impact assessment covers the full
range of effects, it has traditionally focused on non-monetary effects often called environmental
and social impacts. These effects may be either adverse or beneficial, intended or unintended.
The impact assessment process is synonymous with step 4 of the planning process (Evaluate
Effects of Alternative Plans) previously described.
m. Significant Resources and Significant Effects.
(1) The consideration of significant resources and significant effects is central to plan
formulation and evaluation for any type of water resources development project. In step 2 of the
planning process, significant resources are identified as important to be considered during the
study. In step 4, significant effects are identified for consideration in alternative comparison and
selection. Significance of resources and effects will be derived from institutional, public or
technical recognition. Institutional recognition of a resource or effect means its importance is
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recognized and acknowledged in the laws, plans and policies of government and private groups.
Technical recognition of a resource or an effect is based upon scientific or other technical criteria
that establishes its significance. Public recognition means some segment of the general public
considers the resource or effect to be important. Public recognition may be manifest in
controversy, support or opposition expressed in any number of formal or informal ways.
(2) In ecosystem restoration planning, the concept of significance of outputs plays an
especially important role because of the challenge of dealing with non-monetary outputs. The
three sources of significance described in paragraph 2-4m(1) and documentation on the relative
scarcity of the resources helps determine the significance of the resources to be restored. This
information is used to help establish a Federal interest in the project. The significance of
expected restoration outputs is used in conjunction with information from cost effectiveness and
incremental cost analyses to help determine whether an alternative should be recommended.
Information on effectiveness, acceptability, efficiency and completeness of ecosystem restoration
plans also contributes to this determination.
n. Regulatory considerations. In the course of planning studies, consideration of
Department of the Army regulatory programs (especially Section 10 of the River and Harbor Act
of 1899, Section 404 of the Clean Water Act of 1972 and Section 103 of the Marine Protection,
Research and Sanctuaries Act of 1972) will be incorporated into the planning process. This is
performed to facilitate the permitting of activities essential to a successful project. (See
Appendix C for more details on regulatory considerations.)
o. Project Implementation Timing. Alternative plans can differ in their implementation
timing, that is, not all plans or features have to be in place at the beginning of the period of
analysis. As project on-line dates are varied, annual benefits and costs will often vary. In
general, the more the benefits vary through time and the longer the time to implementation from
the base year (first year of period of analysis), the stronger this effect will be. The best schedule
for implementing project features shall be considered as an element in the formulation and
evaluation of alternative plans.
p. Hazardous, Toxic and Radioactive Wastes (HTRW). Consistent with the guidance in
ER 1165-2-132, the Corps will not participate in clean up of materials regulated by the
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or by the
Resource Conservation and Recovery Act (RCRA). Assessments during the feasibility phase to
determine the nature and extent of such materials within the project area shall be cost shared.
The cost of clean up of materials not covered by CERCLA and RCRA will be considered when
determining if the proposed project is justified. While measures to improve water quality
parameters may be included in projects with an ecosystem restoration component, the ecosystem
restoration portion of these projects should not principally result in treating or otherwise abating
pollution or other compliance responsibility.
q. Brownfields. Brownfields are abandoned or under-utilized properties that are
perceived to be or, at worst, are lightly contaminated. Brownfields may be included in the
preliminary planning phase of projects where they are integral to solving water resources
problems related to Corps mission areas and authorities. If the assessment determines that there
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are non-CERCLA types of materials or small, easily and cost effectively managed amounts of
CERCLA controlled materials, then these sites may be included in project formulation and any
remediation costs would be shared as project costs. If the assessment determines a CERCLA
level clean-up is required, then the site will be removed from plan formulation for processing
under CERCLA procedures. It is important that no unnecessary Federal liability be incurred
when working within a Brownfield site.
r. Congressional Adds. The planning principles described in this chapter apply to
Congressionally added studies unless specific instructions otherwise are provided through the
budget process.
2-5. Partnerships and Teamwork. The success of the planning process depends to a great
extent on establishing a successful partnership with the project sponsors and other stakeholders.
A project sponsor for a Corps study may be a State, a political subpart of a State or group of
states, a Native American (Indian) Nation, quasi-public organizations chartered under State laws
(e.g., a port authority, flood control district, water management district or conservation district),
an interstate agency and, for a limited number of authorities, a non-profit organization. Except
for non-profit organizations, non-Federal entities must meet the requirements of Section 221 of
the Flood Control Act of 1970 as amended, in order to be a sponsor for a Corps study. Project
sponsors must be afforded the opportunity to help define the water resource problems and
opportunities. They should help define the scope of the study and specific study tasks, cost
estimates and schedules. Partnerships facilitate making decisions about the type and mix of
study objectives as well as formulation, evaluation and selection of alternative plans. They
contribute to project design, including environmental and aesthetic features and ensure that, to
the extent possible, other factors that affect sponsoring communities are addressed during the
planning process.
a. Cooperation with Other Agencies.
(1) Corps efforts should complement and be complemented by the various authorities of
other Federal and State agencies, Native American (Indian) Nations and private groups. The
Corps may also be requested, or request other agencies, to participate as a cooperating agency
during the NEPA process (see 40 CFR 1501.6). While the Corps is the lead agency for studies
specifically assigned to it, the Corps may also be a cooperating agency in water resources studies
led by other Federal agencies. As a cooperating agency, the Corps can provide its special
expertise in navigation, flood damage reduction, ecosystem restoration and other mission areas
as part of integrated interagency and multipurpose planning to the U.S. Environmental Protection
Agency, the Bureau of Reclamation, the Natural Resources Conservation Service, and other
Federal Agencies. Under approved circumstances, participation as a cooperating agency may be
funded through existing Corps studies and projects in the study area, or pursued as a separate
item in the General Investigations program.
(2) Corps planners and planning team members should develop partnerships with Federal
and State agencies, Native American (Indian) Nations and non-government organizations in the
accomplishment of Corps studies and financing. Cooperative efforts may include, for example,
information and data base sharing, cooperative planning efforts, as well as collaborative and
shared construction, operation and maintenance, and monitoring activities. Cooperative efforts,
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which effectively combine Federal investments, can achieve greater economic, social, and
environmental benefits than individual agencies acting alone.
b. Public Involvement, Collaboration and Coordination.
1) The goal of public involvement, collaboration and coordination is to open and
maintain channels of communication with the public in order to give full consideration of public
views and information in the planning process. The objective of public involvement is to ensure
that Corps projects and programs are responsive to the needs and concerns of the public.
Elements critical to a good public involvement and coordination process are disseminating
information about proposed activities, understanding the public’s desires, needs and concerns,
providing for consultation with the public before decisions are reached, and taking into account
the public’s views. All this must occur, however, with the awareness that the Corps can not
relinquish its legislated decision making responsibility.
(2) All Corps planning studies are required to incorporate public involvement,
collaboration and coordination with their Federal and non-Federal partners and the public. This
should be initiated during step 1 of the planning process, Identifying Problems and
Opportunities, and continue throughout the planning process. Involvement at the initial stage of
the planning process not only helps to identify the problems and opportunities, but also extends
an invitation to the public for continued involvement and a voice in the planning and decision
making process.
(3) The team will determine, in the early phases of the planning process, the extent of
public involvement required and will establish an appropriate strategy for integrating public
involvement into the planning process. It is important to develop a strategy that creates relevant,
quality public involvement opportunities for those who have, or may have, an interest in the
study. The components of a good public involvement strategy are discussed in Appendix B. The
strategy shall reflect the scope and complexity of each particular study.
(4) Major public involvement activities conducted during the planning process are
announcing the initiation of the study, identifying the public, and, the scoping process. These
activities are described in detail in Appendix B.
c. International Consultations. When a Federal water project is likely to have a
significant impact on any land or resources situated in a foreign country or to affect treaty
obligations, the Corps, through the Department of State, must enter into consultations with the
government of the affected country.
d. Interdisciplinary Planning.
(1) Because planning problems are complex, using an interdisciplinary team is generally
the best approach to the wide range of technical issues encountered in most studies. Planning
results are usually better when they have been developed from a variety of perspectives,
including the knowledge, skills and insights of professionals from many of the natural, social,
engineering and environmental sciences.
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(2) The disciplines should be integrated so that each member of the team communicates
their various viewpoints and works together to fashion plans that truly reflect a diversity of
perspectives on the problems and opportunities that confront the planning area. An effective
plan formulation process requires that the interdisciplinary team be involved in the planning
process from the very beginning. While the mix of disciplines required for a planning team
varies from study to study, Corps teams may include the following types of experts:
archaeologists, attorneys, biologists, chemists, civil engineers, ecologists, economists,
geographers, geologists, hydraulic engineers, hydrologists, landscape architects, planners, real
estate specialists and sociologists. This list is not intended to exclude any discipline but rather
express the diversity that might be included.
2-6. A Watershed Perspective. Civil works planning should incorporate a watershed
perspective, whether that planning involves a project feasibility study or a more comprehensive
watershed study. Such planning should be accomplished within the context of an understanding
and appreciation of the impacts of considered actions on other natural and human resources in
the watershed. In carrying out planning activities, we should encourage the active participation
of all interested groups and use of the full spectrum of technical disciplines in activities and
decision-making. We also should take into account: the interconnectedness of water and land
resources (a systems approach); the dynamic nature of the economy and the environment; and
the variability of social interests over time. Specifically, civil works planning should consider the
sustainability of future watershed resources, specifically taking into account environmental
quality, economic development and social well-being.
2-7. Environmental Compliance. Civil Works studies and projects should be in compliance
with all applicable Federal environmental statutes and regulations and with applicable State laws
and regulations where the Federal government has clearly waived sovereign immunity. The
National Environmental Policy Act (NEPA) requires Federal agencies, including the Corps, to
comply with a process that includes the inventory and assessment of the environmental resources
within the study area. NEPA also requires the evaluation and comparison of alternatives to
determine the impacts to those ecological, cultural, and aesthetic resources identified and
investigated. Involvement by resource agencies and the general public during the study process
is also required. Corps NEPA guidance can be found in ER 200-2-2. The NEPA process will be
integrated with the Corps six step planning process. This should also include all measures
required for compliance with other applicable environmental statutes, such as the Endangered
Species Act, the Clean Air Act, the Clean Water Act, the Fish and Wildlife Coordination Act,
and the Historic Preservation Act, among others. (See Appendix C for compliance requirements.)
This integration is intended to reduce process overlap and duplication. The integrated process
will help assure that well-defined study conditions and well-researched, thorough assessments of
the environmental, social, and economic resources affected by the proposed activity are
incorporated into planning decisions.
2-8.
Cost Sharing.
a. General. The costs of water resources studies and projects developed by the Corps are
shared between Federal and non-Federal entities as defined in laws and administrative
provisions. The WRDA of 1986, established new cost sharing rules for all studies and projects
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conducted by the Corps. The cost sharing provisions of the WRDA of 1986 place greater
financial responsibilities on non-Federal sponsors of Corps projects. The amount of the nonFederal share varies depending upon the project purpose and the general and specific laws that
apply to each project.
b. Local Sponsor Financing. The non-Federal share of a Corps study or project usually
consists of some combination of the following components: in kind services, a cash contribution
and real estate interests. Sponsors are also responsible for operation, maintenance, repair,
replacement and rehabilitation costs as defined for each civil works mission. Sponsors may
provide their cash share of project or study costs to the Corps by one of the following means: a
check, a deposit in an escrow or similar account with interest accruing to the sponsor, an
irrevocable letter of credit or an Electronic Funds Transfer. See ER 1165-2-131 for further
information.
c. Study Cost Sharing. Corps of Engineers specifically authorized planning studies are
conducted in two phases: Reconnaissance Phase and Feasibility Phase. (See Appendix F for
process applicable to the Continuing Authorities Program (CAP).) Cost sharing policies for each
of these phases are as follows:
(1) The entire reconnaissance phase, as described in paragraph 4-3a and Appendix G, is
conducted at full Federal expense, exclusive of any costs incurred by non-Federal entities in
volunteered work or services during this phase. Costs incurred by non-Federal entities during
the reconnaissance phase are not creditable toward the non-Federal sponsor's share of the
feasibility phase.
(2) The cost of the feasibility phase, as described in paragraph 4-3b and Appendix G, will
be shared equally during the study between the Federal government and the non-Federal
sponsors. At least 50 percent of a non-Federal sponsor's share (25 percent of the total feasibility
phase cost) shall be in cash. The remainder of the non-Federal sponsor share, up to 25 percent of
the total feasibility phase cost, may be in-kind products and services. If a cost shared feasibility
study is terminated prior to completion, the non-Federal share may be less than 50 percent in
cash if the value of the in-kind services is more than one-half of the non-Federal sponsors
investment at the time of termination. No credit may be given to the non-Federal sponsor for
work prior to the start of the feasibility phase or after its completion (Sec 105 of WRDA of
1986). Guidance on cost sharing for studies conducted under Section 729 of WRDA of 1986
will be provided separately.
(3) Cost sharing is not applicable to single purpose inland navigation studies on the
nations inland waterways system. For studies where inland navigation is the primary purpose
and there are other purposes being considered, request additional guidance from CECW-P for
feasibility phase cost sharing procedures.
(4) Cost sharing exceptions. Exceptions to cost sharing rules include projects specified in
Section 103(e)(2) of the WRDA of 1986, waivers for territories as stated in Section 1156 of the
WRDA of 1986, and, ability to pay provisions stated in Section 103(m) of the WRDA of 1986,
as amended. (See Appendix E for additional details on these exceptions.)
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(5) Section 203 of the WRDA of 1996 allows a non-Federal sponsor to defer its cost
contribution for excess study costs that are not attributable to changes in Federal law or changes
in scope requested by the sponsor, until the execution of a Project Cooperation Agreement. If
the project is not authorized, payment of excess costs is due within 5 years after the date of the
Chief of Engineer’s report. If the study is terminated, payment is due within 2 years of its
termination.
d. Preconstruction, engineering and design (PED). Preparation of design documentation
reports and plans and specifications during the preconstruction, engineering and design phase
will be cost shared in accordance with the cost sharing required for project construction. Under
Corps policy, the non-Federal sponsor should provide 25 percent of the cost of PED during this
phase. Adjustments, if necessary, shall be made after initiation of the construction phase. (See
ER 1110-2-1150).
e. Project Cost Sharing. Appendix E provides project cost sharing requirements by
project purpose.
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CHAPTER 3
Corps Civil Works Missions
3-1. Purpose and Authorities. Federal interest in water resources development is established
by law. Within the larger Federal interest in water resource development, the Corps of Engineers
is authorized to carry out projects in seven mission areas: navigation, flood damage reduction,
ecosystem restoration, hurricane and storm damage reduction, water supply, hydroelectric power
generation and recreation. Navigation projects include both inland and deepwater projects.
Ecosystem restoration projects improve ecosystem structure and function. Wherever possible
and subject to budgetary policy, projects shall combine these purposes to formulate multiple
purpose projects. For example, flood damage reduction projects could include ecosystem
restoration and recreation; navigation projects could include hydroelectric power generation and
ecosystem restoration. In carrying out studies to address problems and take advantage of
opportunities within these mission areas, every effort should be made to formulate alternative
plans that reasonably maximize the economic and environmental value of watershed resources,
including urban watershed resources. In addition, every effort shall be made to be responsive to
National, State and local concerns by considering the full range of programs available to provide
solutions in a timely and cost-effective manner. Such programs may include Congressionally
authorized projects, continuing authorities projects, planning assistance to states, flood plain
management services and emergency authorities. [For a brief history of Corps involvement in
water resources planning refer to “The US Army Corps of Engineers, A Brief History”, by
Martin Reuss and Charles Hendricks to be published on the Corps web site.]
3-2. Navigation. The role of the U. S. Army Corps of Engineers with respect to navigation is to
provide safe, reliable, and efficient waterborne transportation systems (channels, harbors, and
waterways) for movement of commerce, national security needs, and recreation. The Corps
accomplishes this mission through a combination of capital improvements and the operation and
maintenance of existing projects. Capital improvement activities include the planning, design,
and construction of new navigation projects. These activities are performed for the navigation of
shallow draft (equal to or less than 14-foot draft) and deep draft (greater than 14-foot draft)
vessels on both inland waterways and harbors, and coastal and lake ports, harbors and channels.
With the exception of projects implemented pursuant to a continuing authority, Congress
specifically authorizes harbor and waterway projects. Financial responsibility for project
components is specified in the WRDA of 1986, as amended.
a. Types of Improvements. General navigation features of harbor or waterway projects
are channels, jetties or breakwaters, locks and dams, basins or water areas for vessel
maneuvering, turning, passing, mooring or anchoring incidental to transit of the channels and
locks. Also included are dredged material disposal areas (except those for the inland navigation
system, the Atlantic Intracoastal Waterway and the Gulf Intracoastal Waterway) and sediment
basins. Special Navigation Programs include removal of wrecks and obstructions, snagging and
clearing for navigation, drift and debris removal, bridge replacement or modification, and
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mitigation of project-induced damage. These programs are described in more detail in paragraph
3-2a(2).
(1) Harbor and Waterway Projects. Harbors and waterways are treated differently for
cost-sharing purposes. Harbors are places that offer vessels shelter from weather. A harbor is
also a port if it provides facilities for the loading or unloading of cargo or passengers.
Waterways are routes used by vessels. Their primary function is to facilitate the movement of
vessels and they may simply connect bodies of deep or shallow water or they may be parts of
riverine or coastal waterway systems. (See Table E-60, Appendix E for cost sharing
requirements.)
(2) Special Navigation Programs. These navigation improvements are for specific
purposes, and may be projects, elements of projects, or simply Corps activities. They are
initiated and implemented on congressional authority (specific or continuing). They are usually
subject to program or project expenditure limits, with cost sharing as specified in the original
authority or as amended.
(a) Removal of Wrecks and Obstructions (Section 19, River and Harbor Act of 3 March
1899). The Corps may remove sunken vessels and similar objects if they are determined to be
obstructions to navigation.
(b) Snagging and Clearing for Navigation (Section 3, River and Harbor Act of 1945).
The Corps may remove trees, brush and other debris that may be determined to be obstructions
to navigation or that may promote flooding.
(c) Drift and Debris Removal (Section 202, Water Resources Development Act Of 1976).
The Corps has continuing authority to study and undertake projects to remove and dispose of
derelict objects such as sunken vessels, waterfront debris and derelict structures, and other
sources of drift that may damage vessels or threaten public health, recreation, or the environment
at publicly maintained commercial boat harbors. The harbor need not be, but usually is a Corps
project. Congressional authorization is required for projects with Federal costs of $400,000 or
more.
(3) Aids to Navigation. These are buoys, lights, ranges, markers, and other devices and
systems required for safe navigation or to achieve the project benefits. Aids to navigation are
usually provided by the Coast Guard.
b. Specific Policies.
(1) Shoreline Changes. Pursuant to Section 5 of the River and Harbor Act of 1935, each
investigation on navigation improvements potentially affecting adjacent shoreline will include
analysis of the probable effects on shoreline configurations. A distance of not less than ten miles
along the shore on either side of the improvement should be analyzed.
(2) Charter Fishing Craft, Head Boats, and Similar Recreation-Oriented Commercial
Activities. Evaluation of benefits to charter fishing and other similar type craft is based on a
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change in net income to the owners or operators of all vessels that would be using harbor
facilities in the future without-project condition. Benefits to vessel operations that will be
induced by the construction of a navigation project are also evaluated as the change in net
income that would occur between the with- and without-project condition. Consideration should
be given to those vessels that transfer from other areas, so that the proper change in National net
income is estimated. Section 230 of the Water Resource Development Act of 1996 states that
benefits to cruise ships will also be estimated as commercial benefits for the purpose of
evaluating navigation projects.
(3) Subsistence Fishing. This is the activity of individuals who fish primarily for
personal or family consumption and whose incomes are normally at or below the minimum
subsistence level established by the Department of Commerce. For cost allocation purposes,
subsistence fishing is considered commercial fishing.
(4) Coast Guard Coordination. The U.S. Coast Guard is responsible for Federal aids to
navigation and enforcement of navigation regulations. Corps districts should confer directly
with the Coast Guard concerning establishment or alteration of aids to navigation, and the
regulation of lighterage areas (docking and loading areas used to off-load heavy cargo from
larger ships to smaller vessels and vice versa), anchorage and channels.
(5) Permit Coordination. During the formulation of navigation projects, a determination
must be made whether associated or ancillary sponsor activities (or project user activities) are
required to achieve project benefits, and whether Department of the Army (DA) permits are
necessary. Examples are provision of mooring and berthing areas and land based infrastructure.
Once activities are identified, a preliminary determination of whether they require DA permits,
and of what types (i.e., an individual permit, a letter of permission, an existing general permit or
a nationwide permit), will be made by the district regulatory office.
(6) Placement of Dredged Materials on Beaches. Construction and maintenance dredging
of Federal navigation projects shall be accomplished in the least costly manner possible. When
placement of dredged material (beach quality sand) on a beach is the least costly acceptable
means for disposal, then such placement is considered integral to the project and cost shared
accordingly. When placement of dredged material on a beach costs more than the least costly
alternative, the Corps may participate in the additional placement costs under the authority of
Section 145 of the WRDA of 1976, as amended. The additional cost of placement may be
shared on a 65 percent Federal and 35 percent non-Federal basis if: (1) requested by the State, (2)
the Secretary of the Army considers it in the public interest, (3) the added cost of disposal is
justified by hurricane and storm damage reduction benefits and (4) the shoreline on which the
material is placed is open to public use.
(7) Use of Dredged Material for Ecosystem Restoration. When determining an
acceptable method of disposal of dredged material, districts are encouraged to consider options
that provide opportunities for aquatic ecosystem restoration. Where environmentally beneficial
use of dredged material is the least cost, environmentally acceptable method of disposal, it is cost
shared as a navigation cost. Section 204 of the WRDA of 1992, as amended, provides
programmatic authority for selection of a disposal method for authorized projects, that provides
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aquatic restoration or environmental shoreline erosion benefits when that is not the least costly
method of disposal. The incremental cost of the disposal for ecosystem restoration purposes
over the least cost method of disposal is cost shared, with a non-Federal sponsor responsible for
25 percent of the costs. Smaller projects typically will be pursued within the programmatic
limits of Section 204, as amended. Section 207 of the WRDA of 1996 amended this authority.
Section 207 will primarily be used with new navigation projects or in conjunction with
maintenance dredging when the incremental cost is large. Projects pursued under Section 207
authority are separately budgeted and will not count towards the Section 204 programmatic limit.
(See Appendix E for more information related to Section 207 and Appendix F for additional
information regarding Section 204).
(8). Dredged Material Management Plans. Dredged material management planning for
all Federal harbor projects is conducted by the Corps to ensure that maintenance dredging
activities are performed in an environmentally acceptable manner, use sound engineering
techniques, are economically warranted, and that sufficient confined disposal facilities are
available for at least the next 20 years. These plans address dredging needs, disposal capabilities,
capacities of disposal areas, environmental compliance requirements, potential for beneficial
usage of dredged material and indicators of continued economic justification. The Dredged
Material Management Plans shall be updated periodically to identify any potentially changed
conditions.
(9) Local Service Facilities are the responsibility of non-Federal entities and shall be
required as part of the cooperation agreements if they are necessary for project benefits to accrue.
(10) Categorical Exemption to NED Plan. For harbor and channel deepening studies
where the non-Federal sponsor has identified constraints on channel depths it is not required to
analyze project plans greater (deeper) than the plan desired by the sponsor. For example, if a
sponsor only desires to deepen a channel to -40 feet and it is determined that the -40 foot channel
is economically justified and has higher net benefits than a -39 foot or -38 foot channel, etc., then
the -40 foot channel can be recommended without having to analyze deeper channel plans to
identify the NED Plan. The recommended plan must have greater net benefits than smaller scale
plans, and a sufficient number of alternatives must be analyzed to insure that net benefits do not
maximize at a scale smaller than the recommended plan. If the plan proposed to be
recommended contains uneconomical increments an exception from the ASA(CW) must be
obtained. An essential element of the analysis of the recommended plan is the identification of
trade-offs and opportunities foregone as a result of implementation of the smaller scope plan.
The analysis of alternatives must be comprehensive enough to meet the requirements of NEPA.
(11) Other guidance related to navigation projects include ER 1165-2-27, ER 1165-2123 and ER 1165-2-124.
c. Evaluation Framework. The measurement standard and conceptual basis for benefits
is willingness to pay for each increment of output from a plan. In some planning situations it is
infeasible to directly measure willingness to pay; therefore, alternative techniques are used to
estimate the total value of a plan’s output. The evaluation of navigation projects shall be
conducted following the process described in paragraph 2-3e of this regulation. The procedures
described in the following paragraphs apply to the estimation of benefits used in the economic
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evaluation of navigation projects and are only a summary of requirements and procedures.
Appendix E provides additional guidance on these procedures and requirements.
(1) National Economic Development Benefits. The base economic benefit of a
navigation project is the reduction in the value of resources required to transport commodities.
Navigation benefits can be categorized as follows:
(a) Cost reduction benefits for commodities for the same origin and destination and the
same mode of transit thus increasing the efficiency of current users. This reduction represents a
NED gain because resources will be released for productive use elsewhere in the economy.
Examples for inland navigation are reductions in costs incurred from trip delays (e.g. reduction
in lock congestions), reduction in costs associated with the use of larger or longer tows, and
reduction in costs due to more efficient use of barges. Examples for deep draft navigation are
reductions in costs associated with the use of larger vessels, with more efficient use of existing
vessels, with more efficient use of larger vessels, with reductions in transit time, with lower
cargo handling and tug assistance costs, and with reduced interest and storage costs.
(b) Shift of mode benefits for commodities for the same origin and destination providing
efficiency in waterway or harbor traversed. In this case, benefits are the difference in costs of
mode transport between the without-project condition (when rails, trucks or different waterways
or ports are used) and the with-project condition (improved locks, waterways or channels). The
economic benefit to the national economy is the savings in resources from not having to use a
more costly mode or point of transport.
(c) Shift in origin and destinations that would provide benefits by either reducing the cost
of transport, if a new origin is used or by increasing net revenue of the producer, if a change in
destination is realized. This benefit cannot exceed the reduction in transportation costs achieved
by the project.
(d) New movement benefits are claimed when there are additional movements in a
commodity or there are new commodities transported due to decreased transportation costs. The
new movement benefit is defined as the increase in producer and consumer surplus, thus the
estimate is limited to increases in production and consumption due to lower transportation costs.
Increases in shipments resulting from a shift in origin or destination are not included in the new
movement benefits. This benefit cannot exceed the reduction in transportation costs achieved by
the project.
(e) Induced movement benefits are the value of a delivered commodity less production
and transportation costs when a commodity or additional quantities of a commodity are produced
and consumed due to lower transportation costs. The benefit, in this case, is measured as the
difference between the cost of transportation with the project and the maximum cost the shipper
would be willing to pay.
(2) Without-Project Condition. The following specific assumptions are part of the
projected without-project condition.
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(a) All reasonably expected nonstructural practices within the discretion of the operating
agency, port agencies, other public agencies and the transportation industry are implemented at
the appropriate time.
(b) For deep draft navigation studies, alternative harbor and channel improvements
available over the planning period (in place and under construction) and authorized projects are
assumed to be in place. For inland navigation, only waterway investments currently in place or
under construction are assumed to be in place over the period of analysis.
(c) Normal operation and maintenance practices are assumed to be performed over the
period of analysis.
(d) In projecting commodity movements involving intermodal movements and in
projecting traffic movements on other modes, sufficient capacity of the hinterland transportation
and related facilities and the alternative modes is normally assumed.
(e) For inland navigation, user charges and/or taxes required by law are part of the
without-project condition.
(f) Advances in technology affecting the transportation industry over the period of
analysis should be considered, within reason.
(3) With-Project Condition. The with-project condition is the most likely condition
expected to exist in the future if a project is undertaken. The same assumptions as for the
without- project condition underlie the with-project condition.
(4) Evaluation Procedure for Inland Navigation. The following ten steps are used to
estimate benefits associated with improvements of the inland navigation system. The level of
effort on each step depends on the nature of the proposed improvement, the state of the art for
accurately estimating the benefits and the sensitivity of project formulation and justification to
further refinement. Appendix E provides additional guidance for each of these steps.
(a) Step 1 - Identify the Commodity Types. The types of commodities susceptible to
movement on the waterway segment under consideration are identified for new waterways and
existing waterways, as applicable. For new waterways, commodity types are identified by
interviews of shippers and by resources studies. For existing waterways, commodity types are
identified by analysis of data on existing use of the waterway segment.
(b) Step 2 - Identify the Study Area. The study area is the area within which significant
project impacts occur. The origins and destinations of products likely to use the waterway are
normally included in the study area.
(c) Step 3 - Determine Current Commodity Flow. This step identifies the total tonnage
that could benefit from using the waterway. This information is primarily obtained by interviews
of shippers. Potential commodities that might use the waterway in response to reduced
transportation costs are also identified.
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(d) Step 4 - Determine Current Cost of Waterway Use. Current cost of waterway use is
determined for all commodities that could potentially benefit from the waterway improvement.
This cost includes the full origin-to-destination costs, including handling, transfer, demurrage
and prior and subsequent hauls for the tonnages identified in the prior step. Costs are estimated
for the without-project and with-project conditions. The difference between the with and
without-project costs represents the reduction in current delays and gains in efficiencies with the
project in place.
(e) Step 5 - Determine Current Cost of Alternative Movement. The current cost of
alternative movement is estimated for all commodities under consideration. This cost includes
full origin-to-destination costs, including costs of handling, transfer, demurrage and prior and
subsequent hauls. The product of this step, combined with the products from the two previous
steps, generates a first approximation of the demand schedule for waterway transportation. In
the case of rail movements, the prevailing rate actually charged for moving the traffic shall be
used to estimate the alternative movement cost. A “competitive” rate may be used if there is no
prevailing rate. Appendix E provides a definition and guidance on how to compute
“competitive” rates.
(f) Step 6 - Forecast Potential Waterway Traffic by Commodity. Projections of potential
traffic are developed for selected years from the time of the study until the end of the period of
analysis, for time intervals not to exceed 10 years. Normally, independent studies are undertaken
to develop these projections. Available secondary data supplemented by interviews of relevant
shippers, carriers and port officials, opinions of commodity consultants and experts and historical
flow patterns are used to develop these projections.
(g) Step 7 – Determine Future Cost of Alternative Mode. The future cost of alternative
mode per unit of each commodity will normally be the same as the current cost.
(h) Step 8 – Determine Future Cost of Waterway Use. The potential changes in cost of
the waterway mode for future years for individual origin-destination commodity combinations
are estimated in this step. Also, an analysis of the relationship between waterway traffic volume
and system delays is conducted. This analysis generates data on the relationships between total
traffic volume and the cost of transportation on the waterway.
(i) Step 9 – Determine Waterway Use, With and Without-Project. The data developed in
previous steps is used to determine waterway use over time with and without the project. This
determination is made based upon a comparison of costs for movements by the waterway and by
the alternative mode and of any changes in the cost functions and demand schedules. The
“phasing in” and “phasing out” of shifts from one mode to another are also considered in this
analysis.
(j) Step 10 – Compute NED Benefits. The information produced in previous steps is
used to compute total NED benefits for each category described in Paragraph 3-2c(1), as
applicable. Total NED benefits are annualized and discounted using the applicable discount rate
(published annually by HQUSACE).
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(5) Evaluation Procedures for Deep Draft Navigation. The following nine steps are used
to estimate deep draft navigation benefits. As in the case of inland navigation benefits, the effort
expended on each step will depend on the scope and nature of the proposed improvement, the
state of the art to accurately develop the estimates and the sensitivity of project formulation and
evaluation to further refinement. Appendix E provides additional guidance for each step.
(a) Step 1 – Determine the Economic Study Area. In this step, the economic study area
is delineated. This step includes an assessment of the transportation network that is functionally
related to the harbor considered for improvement. Foreign origins and destinations are also
included in this assessment. The economic study area is likely to vary for different commodities.
In the final delineation of the economic study area, the trade area relative to adjacent ports and
any commonality that might exist with the area under study must be considered.
(b) Step 2 – Identify Types and Volumes of Commodity Flow. An analysis of commerce
that flows into and out of the economic study area is performed to estimate the types and
volumes of commodities that now move on the existing project or that may be attracted as a
result of the proposed improvement. This analysis provides an estimate of gross potential cargo
tonnage which is used to estimate the prospective commerce that may use the harbor during the
period of analysis. Current volumes of prospective commerce are developed using available
statistics on waterborne commerce. After determining the types and volumes of commodities
currently moving or expected to move in the economic study area, data on origins, destinations
and vessel itineraries are used to identify the commodity types and volumes that could benefit
from the project. Commodities that are now moving without the project but would shift origins
or destinations with the project, as well as induced movements, are segregated for additional
analysis.
(c) Step 3 – Project Waterborne Commerce. Projections of the potential use of the
harbor or waterway under study are developed for selected years from the time of the study until
the end of the period of analysis. The commodities included in the projections should be
identified, if possible, according to waterborne modes (e.g., containerized, liquid bulk, dry bulk,
etc.) and by imports, exports, domestic shipments, domestic receipts and internal trade. Usually,
independent studies are undertaken to develop these projections considering secondary data, data
from interviews to shippers, carriers and port officials, opinions of consultants and experts and
historical flow patterns. A sensitivity analysis of the projections is performed to account for
uncertainties in the estimates.
(d) Step 4 – Determine Vessel Fleet Composition and Cost. The vessel fleet composition
is determined by analyzing past trends in vessel size and fleet composition and trends in the
domestic and world fleet. The vessel fleet composition is determined for both with- and
without-project conditions. Changes in fleet composition may vary by trade route, type of
commodity and volume of traffic. Canal restrictions, foreign port depths and lengths of haul
also affect the vessel fleet composition. Vessel operating costs, by category of waterborne mode
and size, are provided annually by HQUSACE. These costs may be modified to meet the needs
of specific studies.
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(e) Step 5 – Determine Current Cost of Commodity Movements. Transportation costs
prevailing at the time of the study are determined in this step for all tonnage identified in step 2
that could benefit from the project. These costs include full origin-to-destination costs plus
handling, transfer, and storage costs, and other accessory charges. Transportation costs are
developed for both the with- and without-project conditions. For with-project conditions, these
costs reflect efficiencies that can be reasonably expected, such as use of larger vessels, increased
loads and reduction in transit time and delays (tides).
(f) Step 6 – Determine Current Cost of Alternative Movement. Alternative movement is
the movement of commodities through other competitive harbors, and through other operational
means such as lightering, lightening and topping-off operations, off-shore port facilities,
transshipment terminals, traffic management, pilotage regulations and other modes of
transportation. Transportation costs for these alternative modes of movement, as applicable, are
estimated for the with- and without-project condition. These costs are used in the analysis of
potential diversion of traffic. Factors to be considered in this analysis, in addition to
transportation costs, are handling and transfer charges, available service and schedules, carrier
connections, institutional arrangements, and other related factors.
(g) Step 7 – Determine Future Cost of Commodity Movements. Relevant shipping costs
are estimated for with- and without-project conditions considering changes in the fleet
composition, port delays and port capacity. Future transportation costs are based on the vessel
operating costs prevailing at the time of the study.
(h) Step 8 – Determine Use of Harbor and Channel With- and Without-Project. To
estimate the proposed harbor use over time, for with- and without-project conditions, the costs
for movements via each proposed plan and via each alternative mode are compared. Changes in
the cost functions and demand schedules in the current and future without-project condition and
the current and future with-project condition are analyzed. The impact of uncertainty in the use
of the harbor, the level of service provided and existing and future inventories of vessels are also
considered.
(i) Step 9 – Compute NED Benefits. The tonnage moving with and without a project and
the cost of movement via the harbor and via each alternative are used to compute total NED
benefits for each category of benefits described in paragraph 3-2c(1).
d. Cost Sharing Requirements. Paragraph 2-8 discusses general cost sharing
considerations applicable to all project purposes including navigation. Specific cost sharing
requirements for this purpose are discussed in Appendix E of this regulation.
(1) Special Cases. Special cases that require a determination of Federal responsibility or
cost sharing include, but are not limited to access channels not directly adjacent to primary
channels, barge fleeting areas, and an initial single user with potential for future multiple users.
(2) Land Creation or Enhancement at Inland Harbors. Federal participation in inland
waterway harbor improvements under the Civil Works program is not warranted when: (1) resale
or lease of lands used for disposal of excavated material can recover the cost of the
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improvements, or (2) the acquisition of land outside the navigation servitude is necessary for
construction of the improvements and would permit local entities to control access to the project.
The latter case is assumed to exist where the proposed improvement consists of a new channel
cut into land.
(3) Land Creation at Harbors (other than inland harbors). The NED Plan for harbor
projects that include land creation benefits shall be formulated using navigation benefits
exclusively; thus, land creation benefits shall not be considered in the identification of the NED
Plan. Special cost sharing will be required for land creation benefits associated with the NED
Plan in proportion to the magnitude of these benefits to the total benefits. The procedure to
estimate the cost sharing in this case is described in Appendix E. Non-Federal requests for
exceptions to the NED Plan, to include land creation benefits, may be allowed provided all
additional implementation costs are non-Federal and the incremental navigation benefits equal or
exceed the incremental operation and maintenance costs for the general navigation features. No
additional cost sharing will be required for the land creation benefits associated with the project
modifications beyond the NED Plan which are requested and paid for by the non-Federal
sponsor.
e. Other Authorities. Other authorities that may be applicable to this project purpose are
discussed in paragraph 3-10.
3-3. Flood Damage Reduction. Section 1 of the Flood Control Act of 1936 declared flood
control to be a proper Federal activity since improvements for flood control purposes are in the
interest of the general welfare of the public. The Act also stipulated that for Federal involvement
to be justified, “ . . . the benefits to whomsoever they may accrue (must be) in excess of the
estimated costs, and . . . the lives and social security of people (must be) otherwise adversely
affected.”
a. Types of Improvements.
(1) Structural Measures: Structural measures are physical modifications designed to
reduce the frequency of damaging levels of flood inundation. Structural measures include: dams
with reservoirs, dry dams, channelization measures, levees, walls, diversion channels, pumps,
ice-control structures, and bridge modifications.
(2) Nonstructural Measures. Section 73 of the Water Resources Development Act of
1974 requires consideration of nonstructural alternatives in flood damage reduction studies.
They can be considered independently or in combination with structural measures. Nonstructural
measures reduce flood damages without significantly altering the nature or extent of flooding.
Damage reduction from nonstructural measures is accomplished by changing the use made of the
floodplains, or by accommodating existing uses to the flood hazard. Examples are flood
proofing, relocation of structures, flood warning and preparedness systems (including associated
emergency measures), and regulation of floodplain uses.
(3) Major Drainage. Drainage projects are usually undertaken in rural areas to increase
agricultural outputs. Some portions of drainage improvements may be considered flood damage
reduction measures in accordance with Section 2 of the Flood Control Act of 1944. The typical
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drainage system consists of drainage ditches, dikes, and related work. An outlet structure is
provided at the downstream end where the system empties into a larger channel. The Federal
interest in these projects is normally limited to the outlet works. Drainage in urban areas can
also qualify under the 1944 Act if the major outlet works do not substitute for works that are a
local responsibility, such as municipal storm sewer improvements.
(4) Groundwater. Section 403 of the WRDA of 1986 expands the definition of flood
control to include flood prevention improvements for protection from groundwater induced
damages.
b. Specific Policies.
(1) Flood Plain Management, Executive Order 11988. Executive Order 11988 (E.O.
11988) was issued in 1977 with the intent to avoid floodplain development, reduce hazards and
risk associated with floods, and restore and preserve natural floodplain values (See ER 1165-226 for Corps policy on this directive). In the event there is no alternative to construction in the
floodplain, the Corps is required to minimize the adverse impacts induced by construction of the
project. In considering adverse impacts, planners should address induced new development in
the floodplain or induced improvements to existing development in the floodplain that would
increase potential flood damages; and, the detrimental effect of induced activities on natural
floodplain values.
(2) Project Performance and Risk Framework.
(a) Flood damage reduction studies are conducted using a risk-based analytical
framework. The risk framework captures and quantifies the extent of the risk and uncertainty and
enables quantified tradeoffs between risk and cost. Decision making considers explicitly what is
gained and what is lost. (See ER 1105-2-101 and EM 1110-2-1619 for details.)
(b) Projects are analyzed and described in terms of their expected performance, not in
terms of levels of protection. Contingencies are acknowledged and residual risk is not routinely
reduced by overbuilding or by inclusions of freeboard. The regulation identifies key variables
that must be explicitly incorporated into the risk-based analysis. At a minimum, the stagedamage function for economic studies (with special emphasis on first floor elevation, and content
and structure values for urban studies), discharge associated with exceedence frequency for
hydrologic studies, and conveyance roughness and cross-section geometry for hydraulic studies
must be incorporated in the risk-based analysis. ER 1105-2-101 further requires a probabilistic
display of benefits and eliminates freeboard to account for hydraulic uncertainty.
(c) There is no minimum level of performance or protection or size required for Corps
projects. The smaller in size or the lower the level of performance however, the higher the
residual risk. Residual risk must therefore be carefully analyzed, documented and
communicated. Departures from the NED plan may be considered options to manage this risk.
In addition, explicit risk management alternatives may be formulated.
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(3) Existing Levees/Dams. Proposals to modify existing levees must be evaluated using a
risk based approach as described in ER 1105-2-101. Downstream consequences of dams on
flood risk are also analyzed in a risk-based framework. Evaluation of dam reliability and safety
is based on engineering design criteria found in ER 1110-2-1155.
(4) Residual Damages. The analysis of any proposed flood damage reduction project
shall include an estimate of the residual expected annual damages that would occur with the
project in place.
(5) Induced Flooding. When a project results in induced damages, mitigation should be
investigated and recommended if appropriate. Mitigation is appropriate when economically
justified or there are overriding reasons of safety, economic or social concerns, or a
determination of a real estate taking (flowage easement, etc.) has been made. Remaining
induced damages are to be accounted for in the economic analysis and the impacts should be
displayed and discussed in the report.
(6) Minimum Flows, Minimum Drainage Area and Urban Drainage. In urban and
urbanizing areas provision of a basic drainage system to collect and convey local runoff is a nonFederal responsibility. Water damage problems may be addressed, under flood damage reduction
authorities, downstream from the point where the flood discharge is greater than 800 cubic feet
per second for the 10 percent flood (one chance in ten of being equaled or exceeded in any given
year) under conditions expected to prevail during the period of analysis. Drainage areas which
lie entirely within the urban area and which are less than 1.5 square miles in area, are assumed to
lack sufficient discharge to meet the above hydrologic criterion. Urban streams and waterways
that receive runoff from land outside the urban area shall not be evaluated using this 1.5 square
mile drainage area criterion. Exceptions may be granted in areas of hydrologic disparity, that is
areas producing limited discharge for the ten percent event but in excess of 1800 cubic feet per
second for the one percent event (See ER 1165-2-21).
(7) Single Properties. The Corps will not participate in structural flood damage reduction
for a single private property. Nor will it participate in nonstructural flood damage reduction
measures, unless single property protection is part of a larger plan for structural or nonstructural
measures benefiting multiple owners collectively. The Corps may consider participation in
structural and nonstructural flood damage reduction measures protecting a single, non-Federal,
public property. Work to provide protection to a single Federal property is accomplished only on
a reimbursable basis, upon request from the Federal agency. In the event such properties are
within the study area, Civil Works funds may be used for their protection.
(8) Recreation at Non-Lake Flood Damage Reduction Projects. The Corps participates in
recreation facilities at non-lake flood damage reduction projects if the recreation activities have a
strong, direct relationship to the proposed flood damage reduction measures, such as trails along
the channel or levee right-of-way. Corps participation in these projects is limited by policy as
discussed in Appendix E.
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(9) Agricultural Flood Protection. The Corps flood damage reduction programs apply to
agricultural as well as urban flood damages. Usually the NED plan for agricultural areas
provides only a low degree of flood prevention.
(10) Land Development and Floodplain Management. The following general policy
principles apply to land development benefits at structural flood damage reduction projects.
(a) Communities participating in a flood damage reduction project with the Corps of
Engineers are required to participate in FEMA’s National Flood Insurance Program (NFIP) and
to comply with the land use requirements of that program.
(b) Communities participating in a flood damage reduction project with the Corps must
also prepare a flood plain management plan designed to reduce the impact of future flood events
in the project area. This plan must be adopted within one year after signing a project cooperation
agreement and the plan must be implemented not more than one year after the construction of a
project. Although costs for the preparation of the flood plain management plan are sponsor costs,
data collected during the planning process may be used in development of the plan.
(c) Projects or separable increments producing primarily land development opportunities
do not reduce actual flood damages and therefore have low budget priority. Federal participation
in these projects will not be recommended.
(d) Flood damage reduction projects can greatly impact what is required of a local
community for participation in the NFIP. In addressing these impacts, the following should be
considered:
•
In coordination with the non-Federal sponsor and FEMA, consideration should be
given to developing flood maps and flood profiles depicting post-project conditions.
The information should be in a form useful to FEMA in revising flood insurance rate
maps.
•
The appropriate FEMA Regional office will be notified of proposed flood protection
works or of changes to established flood protection works.
(11) Categorical Exemption to NED Plan. For flood damage reduction studies, where
the non-Federal sponsor has identified a desired maximum level of protection, where the withproject residual risk is not unreasonably high, and where the plan desired by the sponsor has
greater net benefits than smaller scale plans, it is not required to analyze project plans providing
higher levels of protection than the plan desired by the sponsor. For example, if a sponsor
desires a levee of sufficient height to meet FEMA’s flood insurance requirements and it is
determined that the levee to accomplish this has higher net benefits than smaller levees, then the
levee desired by the sponsor can be recommended without having to analyze larger levees to
identify the NED Plan. The recommended plan must have greater net benefits than smaller scale
plans, and a sufficient number of alternatives must be analyzed to insure that net benefits do not
maximize at a scale smaller than the recommended plan. If the plan proposed to be
recommended contains uneconomical increments an exception from the ASA(CW) must be
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obtained. An essential element of the analysis of the recommended plan is the identification of
residual risk for the sponsor and the flood plain occupants, including residual damages and
potential for loss of life, due to exceedence of design capacity. The analysis of alternatives must
be comprehensive enough to meet the requirements of NEPA.
(12) Exception to NED Plan for Urban Areas. When the NED Plan has less than 90
percent reliability of protecting against the 1 percent chance annual flood event, an exception to
the NED Plan may be recommended. The conditions and requirements stated in Appendix E
must be met in order to grant this exception.
(13) Use Of Lands Cleared Under The FEMA Hazard Mitigation Grant Program.
(Guidance is under development)
c. Evaluation Framework. The measurement standard and conceptual basis for benefits
associated with flood damage reduction projects is willingness to pay for each increment of
output from a plan. In some planning situations it is infeasible to directly measure willingness to
pay; therefore, alternative techniques are used to estimate the total value of a plan’s output. The
evaluation of flood damage reduction projects shall be conducted following the process
described in paragraph 2-3e of this regulation. The procedures described in the following
paragraphs apply to the estimation of benefits used in the economic evaluation of flood damage
reduction projects, and summarize requirements and procedures. Appendix E provides additional
guidance on these requirements and procedures.
(1) National Economic Development Benefits. Benefits from plans for reducing flood
hazards accrue primarily through the reduction in actual or potential damages to affected land
uses. There are three primary benefit categories, reflecting three different responses to a flood
hazard reduction plan. Inundation reduction benefits are the increases in net income generated
by the affected land uses when the same land use pattern and intensity of use is assumed for
with- and without-project conditions. Intensification benefits are increases in net income
generated by intensified floodplain activities when the floodplain use is the same with and
without the project but an activity (or activities) is more intense with the project. The third
category of benefits is location benefits. If an activity is added to the floodplain because of a
plan, the location benefit is the difference between aggregate net incomes (including economic
rent) in the economically affected area with and without the project. The magnitude of location
benefits that can be claimed is limited by policy. In general, the NED Plan will be formulated to
protect existing development and vacant property that is interspersed with existing development.
Location benefits can be claimed for vacant property that is not interspersed with existing
development only if it is demonstrated that the vacant property would be developed without the
project and the benefits are based on savings in future flood proofing costs.
(2) Types of Flood Damage. Flood damages are classified as physical damages and
nonphysical damages. Each activity affected by a flood can experience loss in one or both of
these classes.
(a) Physical damages. Physical damages occur to residential, commercial, industrial,
institutional, and public property. Damages occur to buildings, contents, automobiles, and
outside property and landscaping. Physical damages include the costs to repair roads, bridges,
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sewers, power lines, and other infrastructure components. Physical damages also include the
direct costs and the value of uncompensated hours for cleanup after the flood.
(b) Nonphysical flood losses. Nonphysical flood losses include income losses and
emergency costs. Income losses are the loss of wages or net profits to business over and above
physical flood damages that usually result from a disruption of normal activities. Estimates of
these losses must be derived from specific independent economic data for the interests and
properties affected. Prevention of income losses result in a contribution to national economic
development only to the extent that the losses cannot be compensated for by postponement of an
activity or transfer of the activity to other establishments. Emergency costs include those
expenses resulting from a flood that would not otherwise be incurred. For example, the costs of
evacuation and reoccupation, flood fighting, and administrative costs of disaster relief; increased
costs of normal operations during the flood; and increased costs of police, fire, or military patrol.
Emergency costs should be determined by specific survey or research and should not be
estimated by applying arbitrary percentages to the physical damage estimates.
(3) Without-Project Condition. The without-project condition is the land use and related
conditions expected to occur during the period of analysis in the absence of the proposed project.
The following assumptions are part of the projected without-project condition:
(a) Existing flood hazard reduction plans are considered to be in place, considering the
actual remaining economic life of existing structures. If there is a high likelihood of construction
of a flood hazard reduction plan authorized for implementation but not yet constructed, the
authorized plan is assumed to be in place.
(b) The adoption and enforcement of land use regulations pursuant to the Flood Disaster
Protection Act of 1973 is assumed.
(c) For planning purposes, the Corps shall assume that communities in the floodplain belong to
the National Flood Insurance Program (NFIP) administered by the Federal Emergency
Management Agency (FEMA).
(d) Compliance with E.O. 11988 (described in paragraph 3-3b(1)), Floodplain
Management and E.O. 11990, Protection of Wetlands, is assumed.
(4) With-project Condition. The same assumptions that underlie the without-project
condition apply to the with-project condition.
(5) Evaluation Procedure. The steps required to evaluate benefits for flood damage
reduction projects are described in the following paragraphs. These steps are designed to
determine land uses and relate these uses to the flood hazard from an NED perspective. The
level of effort expended on each step will depend on the scope and nature of the proposed
improvement, the state of the art to accurately develop the estimates and the sensitivity of project
formulation and evaluation to further refinement. Appendix E provides additional guidance for
each step. The first five steps result in a determination of future land use with emphasis on
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evaluating the overall reasonableness of local land use plans with respect to State, County or
other projections of a larger area encompassing the study area.
(a) Step 1- Delineate the Affected Area. The area affected by a proposed plan consists of
the floodplain plus all other nearby areas likely to serve as alternative sites for any major type of
activity that might use the floodplain if it were protected. All areas impacted by the proposed
plan shall be included in the affected area.
(b) Step 2 – Determine Floodplain Characteristics. An inventory of the floodplain is
undertaken to determine those characteristics that make it attractive or unattractive for particular
uses as identified in the land use demand analysis. The floodplain is characterized in terms of
flooding, including the designation of high hazard areas, natural storage capabilities and
constraints, natural and beneficial values and potential for water-oriented transportation. Other
attributes, such as physical characteristics, available services and existing activities are also
included in the floodplain characterization.
(c) Step 3 – Project Activities in Affected Area. Economic and demographic projections
are developed, as needed, on the basis of current unbiased economic growth indices. Whenever
possible, the growth indices should be independent estimates.
(d) Step 4 – Estimate Potential Land Use. Demographic projections are converted to
land use needs using conversion factors from published secondary sources, from other studies or
from empirical data.
(e) Step 5 – Project land Use – Land use demand is allocated to floodplain and nonfloodplain lands for the without-project condition and for each alternative floodplain
management plan.
(f) Step 6 – Determine Existing Flood Damages. Existing flood damages are the
potential average annual dollar damages to activities affected by flooding at the time of the
study. Existing damages are those expressed for a given magnitude of flooding or computed in
the damage frequency process. The basis for the determination of existing damages is losses
actually sustained in historical floods supplemented by appraisals, application of depth-damage
curves and an inventory of capital investment within the floodplain. (Further guidance on the
use of generic depth-damage curves is provided in Appendix E.) Average annual damages are
computed using standard damage-frequency integration techniques and computer programs that
relate hydrologic and hydraulic flood variables such as discharge and stage to damages and to the
probability of occurrence of such variables. These estimates are developed using a risk-based
analytical framework as described in paragraph 3-3b(2) of this regulation.
(g) Step 7 – Project Future Flood Damages. Future flood damages are those damages to
activities identified in Step 3 that might use the floodplain in the future with- and withoutproject conditions. Hydrologic and economic changes are considered in developing these
estimates. Procedures described in step 6 are used to estimate future flood damages.
Participation in the NFIP requires communities to preclude new development in the regulatory
floodway, as defined by the community. It also requires that new development in the NFIP
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regulatory floodplain outside of the floodway be constructed at or above the median probability
100-year discharge regardless of whether or not that discharge is expected to increase in the
future during the period of analysis. Estimates of future flood damages are constrained by these
requirements.
(h) Step 8 – Determine Other Costs of Using the Floodplain. The impact of flooding on
existing and potential future occupants of the floodplain, in addition to flood losses, include
increased flood proofing costs, increased costs of administration of the NFIP and less efficient
use of existing structures. The increased cost of administration of the NFIP can be claimed as a
benefit of flood damage reduction projects. HQUSACE annually publishes data on
administration cost per policy to use in estimating this benefit. Increased flood proofing costs
are used as a measurement of potential location benefits.
(i) Step 9 – Collect Land Market Value and Related Data. If land use is different with
and without the project, the difference in income for the land is computed using flood proofing
costs as a proxy of the market value of land. If land use is the same with and without the project
but the use is more intense, the increased income is determined on the basis of direct
computation of costs and revenues. Projects or separable increments of projects that achieve
only land development benefits (protection of vacant lands) are not recommended for
implementation.
(j) Step 10 – Compute NED Benefits. To the extent that step 5 indicates that the land
use is the same with and without the project, inundation reduction benefits are computed as the
difference in flood damages with and without the project. In the evaluation of relocation and
evacuation projects considerable attention is paid to the with-project use of the land to be
evacuated, as the benefit associated with such use may be crucial for project feasibility. NED
benefits also include estimates of savings in administration costs of the NFIP, intensification
benefits, location benefits and benefits associated with the use of unemployed or underemployed
resources. Detailed procedures for computing NED benefits are provided in Appendix E.
(k) Section 219 of the WRDA of 1999 directs the Secretary of the Army to calculate
benefits for nonstructural flood damage reduction projects using methods similar to those used in
calculating the benefits of structural projects and further directs the Secretary to avoid doublecounting of benefits in these projects. Guidance for the implementation of this Section will be
included in Appendix E when finalized.
d. Cost Sharing Requirements. Paragraph 2-8 discusses general cost sharing
considerations applicable to all project purposes including flood damage reduction. Specific cost
sharing requirements for flood damage reduction are discussed in Appendix E.
e. Other Authorities. Other authorities that may be applicable to this project purpose are
discussed in paragraph 3-10.
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f. Other Related Programs. Flood Plain Management Services (FPMS)
(1) The FPMS Program was established to carry out Section 206 of the Flood Control Act
of 1960 as amended. Its objective is to encourage prudent use of the Nation's flood plains for the
benefit of the national economy and general welfare by supporting comprehensive flood plain
management planning at all appropriate governmental levels. The Corps may provide flood
plain information and planning assistance to State, county and city governments, Native
American (Indian) Nations, as well as to other Federal agencies. Flood and flood plain
information is also provided to private citizens, corporations, and groups.
(2) Assistance can be provided in the form of technical services, planning guidance and
assistance on floods and flood plain issues. The Corps also provides support to the National
Flood Insurance Program (NFIP) by conducting flood insurance studies and related technical
work. Funding for the FPMS Program is obtained through appropriations for non-reimbursable
FPMS items and through cost recovery for reimbursable services. Reimbursements for support
to the NFIP are obtained from FEMA. Upon request, program services are provided to State,
regional, and local governments, Native American (Indian) Nations, and other non-Federal
public agencies without charge. Program services also are offered to other Federal agencies and
to the private sector on a 100 percent cost recovery basis.
(3) Coordination. Program activities shall be coordinated with State and local agencies
and field offices of Federal agencies concerned with flood problems to ensure that they are
informed of the Corps FPMS Program, that the Corps is apprised of related activities of other
agencies, and that there is no overlap of effort.
3-4. Hurricane and Storm Damage Reduction. Congress has authorized Federal participation
in the cost of restoring and protecting the shores of the United States, its territories and
possessions. Under current policy, shore protection projects are designed to reduce damages
caused by wind-generated and tide-generated waves and currents along the Nation’s ocean
coasts, Gulf of Mexico, Great Lakes, and estuary shores. Hurricane protection was added to the
erosion control mission in 1956 when Congress authorized cost-shared Federal participation in
shore protection and restoration of publicly owned shore areas. Protection of private property is
permitted only if such protection is incidental to the protection of public areas, or if the
protection of private property would result in public benefits. Federal assistance for periodic
nourishment was also authorized on the same basis as new construction, for a period to be
specified for each project, when it is determined that it is the most suitable and economical
remedial measure.
a. Types of Improvements. The improvements are usually structural measures including
such features as beachfill, groins, seawalls, revetment, breakwaters, and bulkheads.
Nonstructural measures, such as property acquisition, shall also be considered.
b. Specific Policies.
(1) Geographic Applicability. The shore protection authority is applicable to the shores
of the Atlantic and Pacific Oceans, the Gulf of Mexico, the Great Lakes, estuaries, and bays
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directly connected therewith of each of the states, the Commonwealth of Puerto Rico, the US
Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana
Islands. The authority extends only that distance up streams where the dominant causes of
damage are coastal storms or ocean tidal action (or Great Lakes water motion) and
wind-generated waves. The program does not address damages caused by stream flows or
vessels.
(2) Erosion Control Measures. In the past, particularly prior to passage of the WRDA of
1986, beach fill or beach restoration was frequently considered an erosion control measure, and
erosion control was treated as a project output or project purpose. As a result of enactment of the
law, however, erosion control has no separate status as a project purpose or as a project output.
Thus, erosion control measures (e.g., beach fill) shall be treated as means to the ends of hurricane
and storm damage reduction, ecosystem restoration, or recreation; similar to breakwaters or
revetments.
(3) Historic Shoreline. Existing authority provides for restoration and protection of
beaches. It provides for extending a beach beyond its historic shoreline only when the extension
is desirable for engineering reasons, is environmentally acceptable, and is an economically
justified means to prevent or reduce storm damage behind the historic shoreline. In the case of
multi-purpose projects that include ecosystem restoration as a project purpose, extending a beach
beyond its historic shoreline is acceptable if it is environmentally justified.
(4) Formulation and Establishing Corps Participation. Single purpose shore protection
projects are formulated to provide hurricane and storm damage reduction. Highest priority is for
reducing damages to existing development. Reducing flooding on, or erosion to, undeveloped
lands is not a high priority; and Federal participation in protection of privately owned,
undeveloped shores, will not be pursued. Recreation is an incidental output.
(a) The Corps participates in single purpose projects formulated exclusively for hurricane
and storm damage reduction, with economic benefits equal to or exceeding the costs, based
solely on damage reduction benefits, or a combination of damage reduction benefits and
recreation benefits. Under current policy, recreation must be incidental in the formulation
process and may not be more than fifty percent of the total benefits required for justification. If
the criterion for participation is met, then all recreation benefits are included in the benefit to cost
analysis. Costs incurred for other than the damage reduction purpose, i.e. to satisfy recreation
demand, are a 100 percent non-Federal responsibility.
(b) The Corps also participates in multiple purpose projects formulated for hurricane and
storm damage reduction. For multi-purpose projects that include ecosystem restoration as a
project purpose, the combined NED/NER Plan will be formulated in accordance with the
guidance in paragraph 2-3g(3) and Appendix E of this regulation.
(5) Public Use and its Relation to Federal Participation. Federal involvement in shore
protection has developed historically in relation to beaches, generally with efforts to stabilize,
create or restore beaches. It is intended that beaches receiving public aid should not provide
exclusively private benefits; and therefore, whenever a hurricane and storm damage reduction
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project involves beach improvements, public ownership and use of the beach is required. Items
related to public use are discussed below.
(a) User Fees. Reasonable beach recreation use fees are allowable when used to offset
the non-Federal sponsor share of project costs.
(b) Parking. Lack of parking may constitute a restriction on public access and use.
Therefore, eligibility for Federal participation is precluded in areas where there is a lack of
sufficient parking facilities provided for the general public (including nonresident users)
reasonably near and accessible to the project beaches. In some instances non-Federal plans may
encourage or direct substitution of public transportation access for private automobile access.
(c) Access. Corps participation is conditioned on provision of reasonable public access
rights-of-way, consistent with attendance used in benefit evaluation and in accordance with local
recreational use objectives.
(d) Beach Use by Private Organizations. Federal aid to private shores owned by beach
clubs and hotels which limit beach use to members or guests, is contrary to the intent of Public
Law 826 of 1956.
(e) Public Shores with Limitations. Publicly owned beaches which limit use to residents
of the community or a group of communities are not considered to be open to the general public
and are treated as private beaches.
(6) Shore Lines Owned by Federal Agencies.
(a) Work to provide shore protection to lands under the jurisdiction of another Federal
agency shall be accomplished on a reimbursable basis, upon request from the agency. In the
event protection has not been requested and such lands are within the study area, Civil Works
funds may be used if including them in a project is more cost effective than excluding them.
(b) Protection of (non-Civil Works) Department of the Army lands shall be accomplished
with military funds, not civil works funds. If the lands are a minor part within the study area,
Civil Works funds may be used if including them in a project is more cost effective than
excluding them.
(7) Periodic Nourishment. In accordance with Public Law 826 of 1956 (Beach
Nourishment), when the Chief of Engineers determines that the most suitable and economical
remedial measures would be provided by a periodic nourishment project, the Chief may consider
the periodic nourishment as continuing construction for the length of time that the Chief
specifies. Classifying the periodic nourishment as continuing construction establishes the
Federal interest in cost sharing renourishments, usually for the economic life of the project. If
the NED plan for a shore protection project includes a combination of structures and periodic
nourishment, the renourishments may be considered continuing construction while future costs
needed to operate, maintain, repair, rehabilitate or replace the structural components are
considered operation and maintenance which is a non-Federal responsibility.
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(a) New Projects. Federal participation in periodic nourishment may be recommended to
continue for the lesser of: (1) project economic life, (2) physical life of structural features
required for the project, (3) fifty years.
(b) Existing Projects. Per authority in Section 934 of the WRDA of 1986, when the
authorized period of Federal participation in periodic nourishment at existing projects expires, it
may be extended without further Congressional action for a period not to exceed 50 years after
the date of initial construction. Reevaluation using current evaluation guidelines and policies is
necessary. Prior to the expiration of the existing periodic nourishment period the sponsor must
request the extension and express a willingness to cost share in accordance with the provisions of
WRDA of 1986. This Section 934 authority does not apply to projects using sand bypassing
plants.
(8) Outer Continental Shelf Mineral Resources. If mineral resources from the outer
continental shelf are proposed for use in Civil Works projects, the Corps and Minerals
Management Service (MMS) (U.S. Department of Interior) must enter into a memorandum of
agreement. The sponsor must also negotiate a noncompetitive lease with the MMS. Section
215(b) of the WRDA of 1999 amended Section 8(k)(2)(B) of the Outer Continental Shelf Lands
Act to exempt state and local government agencies, in addition to Federal agencies, from the
assessment of fees for the use of Outer Continental Shelf sand, gravel, and shell resources in a
shore protection, beach restoration, or coastal wetlands project or program, or in any other
construction project funded or authorized by the Federal Government.
(9) Specific policies for hurricane and storm damage reduction are presented in more detail in
ER 1165-2-130.
c. Evaluation Framework. The measurement standard and conceptual basis for benefits
is willingness to pay for each increment of output from a plan. In some planning situations it is
infeasible to directly measure willingness to pay; therefore, alternative techniques are used to
estimate the total value of a plan’s output. The evaluation of hurricane and storm damage
reduction projects shall be conducted following the process described in paragraph 2-3e of this
regulation. The procedures described in the following paragraphs apply to the estimation of
benefits used in the economic evaluation of hurricane and storm damage reduction projects and
summarize requirements and procedures. Appendix E provides additional guidance on these
requirements and procedures.
(1) National Economic Development Benefits. For hurricane and storm damage
reduction projects estimated benefits are principally reductions in actual or potential damages to
affected land uses. Damages are most frequently due directly to storms or to the resultant
shoreline erosion. Storm damage reduction benefits are categorized as wave damage reduction
benefits, inundation reduction benefits and other benefits. Erosion protection benefits include
loss of land, structural damage prevention, reduced emergency costs, reduced maintenance of
existing structures and incidental benefits. The primary benefit to be claimed in hurricane and
storm damage reduction projects is reduction of damages to existing structures. Recreation
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benefits are incidental and are measured in accordance with the guidance provided in paragraph
3-7 of this regulation and in Appendix E.
(2) With- and Without-Project Conditions. The assumptions described in paragraph 33c(3) are also applicable to hurricane and storm damage reduction studies. In addition, whenever
a hurricane and storm damage reduction project involves beach improvements, public ownership
and use of the beach is required, as described in paragraph 3-4b(5) of this regulation.
(3) Evaluation Procedure. The steps to evaluate benefits for hurricane and storm damage
prevention projects are described in the following paragraphs. The level of effort expended on
each step will depend on the scope and nature of the proposed improvement, the state of the art
to accurately develop the estimates and the sensitivity of project formulation and evaluation to
further refinement.
(a) Step 1 – Delineate the Study Area. The study area is that area affected by storms and
erosion problems and by proposed alternatives. It includes areas indirectly affected by the
problems and projects such as downdrift areas and navigation and other projects outside the
immediate project site.
(b) Step 2 – Define the Problem. In this step, existing storm damage and erosion
problems are identified and described. The description of existing conditions should include a
history of the economic and social effects of storm damage and erosion problems in the area, a
history of storms and erosion trends and historical floods and wave attack problems. A
determination of the degree of protection afforded by existing structures is also made as part of
this step. This includes an assessment of the level of protection actually provided by the
structure, its structural integrity, the remaining useful life and operation and maintenance
requirements.
(c) Step 3 – Select Planning Shoreline Reaches. Reaches are the primary economic subunit of analysis. Geomorphic conditions, land uses and type or level of existing protection are
criteria used in the designation of reaches.
(d) Step 4 – Establish Frequency Relationships. Two types of frequency relationship are
developed for the analysis. These are elevation-frequency relationship and erosion-frequency
relationship. The first one shows the relationship between wave and water level and frequency
of occurrence and is used to derive expected annual inundation damages. The second one shows
the relationship between periodic erosion (or accretion) and frequency of occurrence and is used
to estimate erosion-induced damages.
(e) Step 5 – Inventory Existing Conditions. An inventory of affected properties,
including land, is performed to estimate potential damages. The inventory is done by land use
activities (i.e., residential, commercial, industrial, etc.) and includes variables such as value, use,
ground elevation, distance from the water, construction materials, area, and number of stories.
Areas likely to be developed in the future or where land use changes could occur are also
identified.
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(f) Step 6 – Develop Damage Relationships. Damage relationships describe the expected
value of structural or contents damages caused by various factors, such as depth of flooding,
duration of flooding, sediment load, wave heights, amount of shoreline recession and warning
time. Generalized or site-specific damage relationships can be used depending on the scope of
the study and the availability of applicable generalized relationships. Generalized damage
relationships are those developed for other geographic areas with similar characteristics to the
study area. Site-specific damage relationships are usually required to estimate wave attack and
erosion damages. These damage relationships are developed using actual damage data from past
storm events. Estimates of losses for buildings, roads, protective works, and other features are
developed at current price levels for existing development. Damage relationships are developed
for each land use category. Anticipated damages from land loss due to erosion are computed as
the market value of the average annual area expected to be lost. Nearshore land values are used
to estimate the value of land lost. A risk-based analytical framework should be used to develop
the damage relationships.
(g) Step 7 – Develop Damage-Frequency Relationships. The damage-frequency
relationships represent how the damage associated with a given event (i.e., storm, wave, erosion)
is related to the frequency of that event (probability of occurrence). The damage relationships
developed in step 7 are combined with the frequency curves (developed by the hydraulic and
hydrologic engineers) to estimate the damage-frequency relationships. Damage-frequency
relationships (curves) are developed for each of the applicable damage mechanisms, i.e., longterm erosion, recession, inundation and wave attack and for each land use category. These
relationships should be developed using a risk-based analytical framework.
(h) Step 8 – Calculate Expected Annual Damages and Benefits. The expected annual
damage is the expected value of erosion losses and storm damages in any given year. Expected
annual damages are calculated by computing the area under the damage-frequency curve using a
life-cycle approach. Expected annual damages are calculated for the with- and without-project
conditions. The difference between the with- and without-project expected annual damages
represents the benefit associated with the project.
d. Cost Sharing Requirements. Paragraph 2-8 discusses general cost sharing
considerations applicable to all project purposes including hurricane and storm damage
prevention. Specific cost sharing requirements for this purpose are discussed in Appendix E.
e. Other Authorities. Other authorities that may be applicable to this project purpose are
discussed in paragraph 3-10.
3-5. Ecosystem Restoration. The Corps of Engineers incorporated ecosystem restoration as a
project purpose within the Civil Works program in response to the increasing National emphasis
on environmental restoration and preservation. Historically, Corps involvement in environmental
issues focused on compliance with NEPA requirements related to flood protection, navigation,
and other project purposes. The ecosystem restoration purpose shall be carried out in addition to
activities related to NEPA compliance as discussed in Appendix C. Ecosystem restoration
features shall be considered as single purpose projects or as a part of multiple purpose projects
along with navigation, flood protection and other purposes, wherever those restoration features
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improve the value and function of the ecosystem. Ecosystem restoration projects should be
formulated in a systems context to improve the potential for long-term survival of aquatic,
wetland, and terrestrial complexes as self-regulating, functioning systems. Similar to other
project purposes, the value of ecosystem restoration outputs shall equal or exceed their cost.
a. Types of Improvements. A wide range of improvements to ecosystem functions is
possible including, but not limited to, use of dredged material to restore wetlands, restoring
floodplain function by reconnection of oxbows to the main channel, providing for more natural
channel conditions including restoration of riparian vegetation, pools and riffles and adding
structure, modification of obstructions to fish passage including dam removal, modifications to
dams to improve dissolved oxygen levels or temperature downstream, removal of drainage
structures and or levees to restore wetland hydrology, and restoring conditions conducive to
native aquatic and riparian vegetation.
b. Specific Policies.
(1) The objective of ecosystem restoration is to restore degraded ecosystem structure,
function, and dynamic processes to a less degraded, more natural condition. Restored ecosystems
should mimic, as closely as possible, conditions which would occur in the area in the absence of
human changes to the landscape and hydrology. Indicators of success would include the
presence of a large variety of native plants and animals, the ability of the area to sustain larger
numbers of certain indicator species or more biologically desirable species, and the ability of the
restored area to continue to function and produce the desired outputs with a minimum of
continuing human intervention. Those restoration opportunities that are associated with
wetlands, riparian and other floodplain and aquatic systems are most appropriate for Corps
involvement. A more detailed discussion of Corps ecosystem restoration policy is found in ER
1165-2-501 and Appendix E of this regulation.
(2) Purposes. Projects implemented under this guidance should address the restoration
of ecosystems and not restoration of cultural or historic resources, aesthetic resources, or clean
up of hazardous and toxic wastes.
(3) Mitigation. Ecosystem restoration projects should be designed to avoid the need for
fish and wildlife mitigation. Projects implemented using restoration authorities may not be used
as wetland banks or mitigation credit for the non-Federal sponsor.
(4) Public interest. For projects where the land on which the majority of the physical
ecosystem restoration will occur is in the ownership of a single firm, individual, club, or
association with restrictive membership requirements, it must be demonstrated clearly that the
restoration benefits are in the overall public interest and that the benefits do not accrue primarily
to the property owner.
(5) Land acquisition. Land acquisition in ecosystem restoration plans must be kept to a
minimum. Project proposals that consist primarily of land acquisition are not appropriate. As a
target, land value should not exceed 25 percent of total project costs. Projects with land costs
exceeding this target level are not likely to be given a high priority for budgetary purposes.
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(6) Recreational features. Limited recreational features compatible with the ecosystem
outputs for which the project is designed are permissible. Recreational features must be justified
and appropriately cost-shared, and should not increase the Federal cost of the ecosystem
restoration project by more than 10 percent without prior approval of the ASA(CW). (See
Appendix E for additional information.)
(7) Water Quality. Water quality is an important component of ecosystem structure and
water quality improvement can be considered as an output of an ecosystem restoration project.
However, projects or features that would result in treating or otherwise abating pollution
problems caused by other parties where those parties have, or are likely to have a legal
responsibility for remediation or other compliance responsibility shall not be recommended for
implementation.
(8) Monitoring and adaptive management. Monitoring may be necessary to determine if
the predicted outputs are being achieved and to provide feed back for future projects. Cost
shared post-implementation monitoring will rarely be required. If cost shared postimplementation monitoring is being considered, it must be clearly defined, justified and the
period of cost shared monitoring shall not exceed five years following completion of
construction. The cost of monitoring included in the total project cost and cost shared with the
non-Federal sponsor shall not exceed one percent of the total first cost of ecosystem restoration
features. For complex specifically authorized projects that have high levels of risk and
uncertainty of obtaining the proposed outputs, adaptive management may be recommended. The
cost of the adaptive management action, if needed, will be limited to 3 percent of the total project
cost excluding monitoring costs. Appendix F contains guidance for the CAP.
(9) Real Estate. Requirements specified in paragraph 4-3c(4) apply to ecosystem
restoration studies. Generally, fee title is required for ecosystem restoration projects.
c. Evaluation Framework. While the planning process for single purpose ecosystem
restoration projects is the same as for any other purpose, the evaluation process is different in
that it focuses on quantitative and qualitative restoration outputs and monetary benefits are
usually incidental. (See Appendix E for more information on the evaluation process.)
(1) Ecosystem restoration outputs must be clearly identified and quantified in appropriate
units. Although it is possible to evaluate various physical, chemical, and/or biological
parameters that can be modified by management measures which would result in an increase in
ecosystem quantity and quality in the project area, the use of units that measure an increase in
"ecosystem" value and productivity are preferred. Some examples of possible metrics which
may be used include habitat units, acres of increased spawning habitat for anadromous fish,
stream miles restored to provide fish habitat, increases in number of breeding birds, increases in
target species and diversity indices. Alternate measures of ecosystem value and productivity may
be used upon approval by CECW-P. Monetary gains (e.g., incidental recreation or flood
damage reduction) and losses (e.g., flood damage reduction or hydropower) associated with the
project shall also be identified.
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(2) Cost Effectiveness-Incremental Cost Analyses – As used in this regulation, a plan is
considered cost effective if it provides a given level of output for the least cost. Cost
effectiveness analysis shall be used to identify the least cost solution for each level of
environmental output being considered. Incremental cost analysis compares the additional costs
to the additional outputs of an alternative. It is a tool that can assist in the plan formulation and
evaluation process, rather than a dictum that drives that process. Incremental analysis helps to
identify and display variations in costs among different increments of restoration measures and
alternative plans. Thus, it helps decision makers determine the most desirable level of output
relative to costs and other decision criteria. These analyses must be performed at an appropriate
level of detail for each study to identify the most cost effective plan within the identified
constraints.
(3) The significance of the outputs is a critical factor in determining if the monetary and
/or non-monetary benefits of the proposed project justify monetary and/or non-monetary costs.
The scarcity of the outputs is also a factor in this determination. The concepts of significance
and scarcity are discussed in more detail in Appendix E. The risks and uncertainties associated
with achieving the projected outputs must also be considered. (See Appendix E for additional
information.) Contingent value procedures (survey techniques) for estimating existence,
“option”, bequest, or other such non-use values will not be approved, and shall not be used, due
to several factors including the conjectural nature of estimated values and the high difficulty in
controlling bias.
d. Cost Sharing Requirements. Paragraph 2-8 discusses general cost sharing
considerations applicable to all project purposes including ecosystem restoration. Specific cost
sharing requirements for this purpose are discussed in Appendix E. Appendix F provides details
on cost sharing rules applicable to CAP authorities.
e. Other Authorities. Other authorities that may be applicable to this project purpose are
discussed in paragraph 3-10.
3-6. Hydroelectric Power Generation. Congress, through various statutes, has directed the
Corps to consider the development of hydroelectric power in conjunction with other water
resources development plans. Current policy calls for the Corps to formulate comprehensive
plans including the development of hydropower by a non-Federal sponsor. The Corps will pursue
Federal development only where such non-Federal activity would be impractical. Even in those
cases, all costs associated with development of hydroelectric power at the site of a Corps project
are borne by non-Federal sponsors.
a. Types of Improvements.
(1) New Federal Projects. Hydroelectric power development may be considered during
planning for multipurpose projects involving dams and lakes and may be recommended if
non-Federal development would be impractical. The Corps does not construct single purpose
hydroelectric power projects.
(2) Addition of Hydropower to Existing Projects. Corps projects without hydroelectric
power facilities may add facilities through Federal Energy Regulatory Commission (FERC)
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licensed non-Federal development. In rare cases, Congress may authorize Federal development.
Cost of development must be borne by non-Federal sponsors.
(3) Pumped Storage. Pumped storage may be considered in the formulation of water
resource projects. Non-Federal sponsors are encouraged to develop pumped storage facilities
determined to be feasible.
b. Specific Policies.
(1) Practicability. A hydropower project is impractical for non-Federal development if
there are compelling physical, operational, legal, competing use, institutional, environmental or
economic reasons preventing development or operation, or if non-Federal development would be
significantly less productive than Federal development (i.e., produce significantly fewer net NED
benefits considering all project outputs).
(2) Economic Justification Requirements. Corps development of single purpose
hydropower is precluded. In addition, before hydropower can be included in a multiple purpose
project, the project must be economically justified based on other outputs (e.g., flood damage
reduction or navigation).
(3) Marketing of Federal Hydropower. Although the Corps constructs and operates
power facilities, the power itself is either sold by a Federal power-marketing agency or conveyed
to a sponsor. Thus, plan formulation, financing and other implementation requirements should be
coordinated with the power-marketing agency and sponsors.
(4) Studies. New studies may be conducted in cases where non-Federal development is
impractical. This must be substantiated in order to justify a funding request. No single purpose
hydropower studies may be initiated for new sites unless specifically directed and funded by the
Congress. Non-Federal sponsors must agree to share the costs of the feasibility study with the
explicit understanding that any resultant Federal project will be financed by non-Federal funds.
(5) Technical Services. Upon request, districts may provide reimbursable technical
services to states or State subdivisions on hydropower development at sites where hydropower is
not an authorized purpose (Intergovernmental Cooperation Act of 1968). Assistance is limited to
technical services. Separate authority to construct or operate and maintain hydropower facilities
is required. The Corps Center of Expertise for hydropower projects is the Hydroelectric Design
Center (HDC) located in Northwestern Division (NWD). Some technical services must be done
by the HDC. Any technical service agreements must be coordinated with HDC.
(6) Minimum Facilities for Future Power Installations. To support future hydropower
development, penstocks and some other features (“minimum facilities”) may be included in
initial project construction, while installation of full facilities is postponed.
(7) Transmission Facilities. The placement of transmission lines and substations must be
considered with other project effects.
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(8) Hydroelectric Development at Non-Corps Sites. The Corps has no general authority
to participate in hydroelectric development at non-Corps sites.
c. Evaluation Framework. The measurement standard and conceptual basis for
hydropower benefits is willingness to pay for each increment of output from a plan. In some
planning situations it is infeasible to directly measure willingness to pay; therefore, alternative
techniques are used to estimate the total value of a plan’s output. In the absence of direct
measures of marginal willingness to pay, the benefit can be estimated using the resource cost of
the most likely alternative to be implemented in the absence of the alternatives under
consideration. Since the Corps current participation on the development of hydropower
generation projects is very limited, the evaluation procedures are not summarized in this
regulation. (See Appendix E for a detailed description, if needed). Current Corps involvement
in hydropower generation projects involves the evaluation of major rehabilitation of existing
projects. The procedures to evaluate major rehabilitation projects are also described in Appendix
E.
d. Cost Sharing Requirements. Paragraph 2-8 discusses general cost sharing
considerations applicable to all project purposes including hydropower. Specific cost sharing
requirements for this purpose are discussed in Appendix E.
3-7. Recreation. The U.S. Army Corps of Engineers is one of the Nation’s largest providers
of outdoor recreation opportunities. Although known primarily for the opportunities managed at
its lake projects, the Corps also participates in the planning, design and construction of recreation
facilities at a wide variety of other types of water resource projects. Such facilities might include
hiking and biking trails associated with a stream channel or levee primarily designed for flood
damage reduction. There is no general authority for Corps participation in a single purpose
recreation project.
a. Types of Improvements. A list of recreational facilities which may be provided in
recreation development at Corps projects is provided in Appendix E. As a general rule, the Corps
does not participate in the development of improvements that provide outputs or services
generally considered vendible. If there is no non-Federal recreation sponsor, facilities or project
modifications may not be recommended unless justified by other project purposes, in which case
recreation benefits are considered incidental. Minimum facilities needed to maintain public
health or safety are permissible. These are limited to road end turnarounds, guardrails,
barricades, warning signs, public safety fencing and vault toilets unless upgrades are required by
Federal or State regulations. Boat ramps and trailer parking justified by project operations
requirements may be provided.
b. Specific Policies.
(1) Lakes (man-made).
(a) Lakes, or reservoirs, are impoundments created behind dams, or behind navigation
locks and dams if lands not subject to navigation servitude are needed for water storage.
Recreation policies applicable to lakes are not applicable to dry dams, that is, those dams not
providing permanently impounded water. The Federal government may participate in basic
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recreation facilities on project lands or separable recreation lands if a non-Federal sponsor will
participate and cost share. Economically justified recreation facilities are cost shared 50 percent
Federal and 50 percent non-Federal. The same conditions apply to separable lands acquired for
future recreation development. Cost of recreation development at lakes may not exceed one-half
of total project costs. If recreation is a project purpose, several scales of development must be
formulated and evaluated.
(b) Reallocation of Storage. Storage reallocation for recreation which significantly
affects other authorized purposes, or involves major structural or operational changes, requires
Congressional approval. Costs reallocated to recreation and subject to cost sharing will be set to
the highest of benefits foregone, revenues foregone, replacement costs, or updated cost of
storage. Appendix E provides detailed information on how to compute these benefits, revenues
and costs. Cost sharing of facilities is 50 percent Federal and 50 percent non-Federal.
(2) Non-lake Flood Damage Reduction and Navigation Projects. General policies
described in the previous paragraphs also apply to non-lake projects, with the following
exceptions:
(a) Basic recreation facilities that take advantage of project created opportunities may be
provided, but only on lands acquired for non-recreation purposes.
(b) Separable lands acquired for access, parking and facilities, which are required for
health and safety are eligible for recreation cost sharing.
(c) Generally, if there is no non-Federally sponsored recreation development, there is no
Federal participation in minimum facilities.
(d) The Federal cost of a project including recreation may not exceed the Federal cost of
the project excluding recreation by more than ten percent without prior approval by the Secretary
of the Army.
(3) Shore Protection Projects. Policy precludes the addition of sand to a beach solely to
increase its potential for recreation. Other associated recreation developments are entirely nonFederal responsibility except on Federally-owned shores.
(4) Nonstructural Flood Damage Reduction Projects. Nonstructural flood damage
reduction projects are justified mainly by creating new uses for floodplains, and one of the most
important new uses is recreation. The limitation of increased Federal cost for recreation
development, described in paragraph 3-7b(2), does not apply to projects formulated for
nonstructural flood damage reduction that include recreation development. Cost of recreation
development may not exceed one-half of the total project costs.
(5) Recreation at ecosystem restoration projects. Recreation at ecosystem restoration
projects should be compatible with these types of projects and enhance the visitation experience
by taking advantage of natural values. The social, cultural, scientific, and educational values
should be considered within the framework of the ecosystem restoration project purpose.
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Recreation development at an ecosystem restoration project shall be totally ancillary to the
primary purpose, appropriate in scope and scale, and shall not diminish the ecosystem restoration
outputs used to justify the project. Recreation facilities may be added to take advantage of the
education and recreation potential of the ecosystem restoration project but the project shall not be
formulated for recreation. The recreation potential may be satisfied only to the extent that
recreation does not adversely impact the ecosystem restoration purpose, and the recreation
facilities are justified. The recreational experience shall build upon the ecosystem restoration
objective and take advantage of the restored resources rather than detract from them. Ecosystem
restoration projects should not encourage public use if there is no non-Federal sponsor to cost
share recreation. (Refer to Appendix E for a more detailed discussion on this matter.) Federal
participation in recreation development at ecosystem restoration projects will be limited to the
facilities shown on the list in Appendix E. Specific policies stated in paragraph 3-7b(2) of this
regulation also apply to recreation development at single purpose ecosystem restoration projects.
For multi-purpose projects that include non-structural flood damage reduction, ecosystem
restoration and recreation, the cost of recreation associated with the non-structural flood damage
reduction features may not exceed one-half of the total cost for flood damage reduction plus
recreation; and, for recreation associated with ecosystem restoration, the Federal cost of
ecosystem restoration plus the Federal cost of recreation may not exceed by more than 10
percent the Federal cost of the ecosystem restoration project without prior approval of the
ASA(CW). (See Appendix E for additional information on the implementation of this policy.)
(6) Continuing Authorities. Flood damage reduction, navigation and shore protection
continuing authorities are subject to the same recreation policies and conditions of participation
as specifically authorized projects. Additionally, all costs in excess of the statutory limitation of
Federal expenditures for these projects are entirely a local responsibility.
(7) Limitations on Corps of Engineers Participation in Recreation Projects. Budget
Policy generally precludes using Civil Works resources to implement recreation oriented projects
in the Civil Works program. An exception is where a project is formulated for other primary
purposes and average annual recreation benefits are less than 50 percent of the average annual
benefits required for justification (i.e., the recreation benefits that are required for justification
are less than an amount equal to 50 percent of project costs).
c. Evaluation Framework. The measurement standard and conceptual basis for
recreation benefits is willingness to pay for each increment of output from a plan. In some
planning situations it is infeasible to directly measure willingness to pay; therefore, alternative
techniques are used to estimate the total value of a plan’s output. The evaluation of recreation
projects shall be conducted following the process described in paragraph 2-3e of this regulation.
The procedures described in the following paragraphs apply to the estimation of benefits used in
the economic evaluation of recreation projects and summarize requirements and procedures.
Appendix E provides additional guidance on these requirements and procedures.
(1) National Economic Development Benefits. NED benefits from recreation
opportunities created by a project are measured in terms of willingness to pay. Benefits for
projects that increase the supply of recreational facilities are measured as the willingness to pay
for the increment of supply. Benefits for projects that alter willingness to pay for recreational
facilities are measured as the with- and without-project willingness to pay.
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(2) Evaluation Procedure. It is frequently not possible to estimate demand directly from
observed price-consumption data for publicly provided recreation. Thus, three alternate methods
can be used to estimate use and willingness to pay. They are the travel cost method (TCM),
contingent valuation method (CVM) and the unit day value method (UDV). Criteria to select the
method to use include availability of regional demand model, type of recreation activities
affected (general or specialized), estimated annual visits and cost of proposed facilities.
Appendix E provides details on how to apply these criteria and on how to estimate benefits using
each one these evaluation methods.
(a) Travel cost method. The basic premise of the travel cost method is that per capita use
of a recreation site will decrease as out-of-pocket and time costs of traveling to the site increases,
other variables being constant. TCM consists of deriving a demand curve by using the variable
cost of travel and the value of time as proxies for price. This method may be applied to a sitespecific study or a regional model.
(b) Contingent Valuation Method. The contingent valuation method estimates NED
benefits by directly asking individual households their willingness to pay for changes in
recreation opportunities at a given site. Individual values collected may be aggregated by
summing willingness to pay for all users in the study area. This method may be applied to a sitespecific study or a regional model. Contingent value techniques shall not be used to estimate
existence, “option”, bequest or other such non-use values, due to several factors including the
conjectural nature of estimated values and the high difficulty in controlling bias.
(c) Unit Day Value. The unit day value method relies on expert or informed opinion and
judgment to estimate the average willingness to pay of recreational users. By applying a
carefully thought-out and adjusted unit day value to estimated use, an approximation is obtained
that may be used as an estimate of project recreation benefits. This method may be applied to
site-specific studies only.
d. Cost Sharing Requirements. Paragraph 2-8 discusses general cost sharing
considerations applicable to all project purposes including recreation. Specific cost sharing
requirements for this purpose are discussed in Appendix E.
e. Other Authorities. Other authorities that may be applicable to this project purpose are
discussed in paragraph 3-10.
3-8. Water Supply. National policy regarding water supply states that the primary
responsibility for water supply rests with states and local entities. The Corps may participate and
cooperate in developing water supplies in connection with construction, operation and
modification of Federal navigation, flood damage reduction, or multipurpose projects. Certain
conditions of non-Federal participation are required.
a. Types of Improvements. The Corps is authorized to provide storage in multipurpose
reservoirs for municipal and industrial water supply and for agricultural irrigation. Some
facilities for releasing or withdrawing the stored water can be included in the project structure.
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The cost of storage and associated facilities must be repaid by the non-Federal sponsor. The
Secretary of the Army is authorized to make agreements with states, municipalities and nonFederal entities for right to storage in Corps reservoirs. Storage for agricultural irrigation may be
provided at the request of the Secretary of the Interior in 17 Western states as defined in
Appendix E. Storage for this purpose can be provided in non-Western states provided cost
sharing requirements described in Appendix E are met. Existing Corps projects may be modified
to add storage for municipal and industrial water supply. Storage may also be reallocated from
other purposes to municipal and industrial uses. Specific policies and procedures applicable to
reallocations of storage are discussed in Paragraph 3-8b(5). Permanent reallocations for
irrigation water supply may also be considered in existing projects through the submittal of a
Section 216 report (Review of Completed Projects) to Congress. Paragraph 3-10b and Appendix
G provide more information on Section 216 reports. The Secretary of the Army can also enter
into agreements with states, municipalities, private entities or individuals for the use of surplus
water as defined in, and under the conditions described in, Paragraph 3-8b(4). Surplus water
can also be used to respond to droughts and other emergencies affecting municipal and industrial
water supplies.
b. Specific Policies.
(1) Water Rights. Potential encroachment on the water rights of lawful downstream
water users by the operation of water supply storage must be carefully considered and
coordinated with responsible State and local interests. The Corps will not acquire water rights
necessary for use of stored water. This is a responsibility of the water users. Nor should the
Corps become involved in resolving conflicts among water users concerning rights to use stored
water, but will look to responsible State agencies to resolve such conflicts.
(2) Permanent Rights to Storage. Under the authority of Public Law 88-140 of 1963
(Extension of Right to Water Supply Storage), the non-Federal sponsor acquires a permanent
right to the use of storage as long as the space is physically available.
(3) New Projects. Corps provided water supply service normally means reservoir space
for storing water and, where necessary, facilities in the project structure for releasing or
withdrawing the stored water for water supply purposes. The non-Federal sponsor must pay all
costs allocated to M&I water supply storage space. Conduits for release or withdrawal of stored
M&I water may be designed as an integral part of the dam structure. Costs are identified as
specific M&I water supply costs with 100 percent payment of investment and annual costs by
users.
(a) Multi-purpose Project. Limits are placed on the percent of municipal and industrial
(M&I) water that may be included in a multi-purpose project. To be considered multi-purpose, a
project must fall in one of the following categories:
•
The project has justified, separable storage for flood damage reduction or navigation
or agricultural water supply. In this case the sum of benefits for these purposes must
be at least ten percent of total NED benefits. If M&I water supply exceeds 90
percent of total benefits the project is considered single purpose M&I water supply
and thus not eligible for Federal participation.
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•
The project has no separable storage for flood damage reduction, navigation or
agricultural water supply. In this case the sum of benefits for these purposes must be
at least twenty percent of total NED benefits. If M&I water supply exceeds 80
percent of total benefits the project is considered single purpose M&I water supply
and thus not eligible for Federal participation.
(b) Single-Purpose Water Supply. The Corps does not conduct single purpose water
supply studies, except for analysis of existing data under Section 22 of the WRDA of 1974 as
amended. This constraint does not apply to single purpose water supply modifications to
previously constructed projects having flood damage reduction or navigation purposes. Also, the
Corps may conduct reimbursable single purpose water supply studies for non-Federal interests
under provisions of the Intergovernmental Cooperation Act of 1968.
(c) Limits on Future Use Storage. The Water Supply Act of 1958, as amended, states that
not more than 30 percent of total construction costs can be allotted to water supply for future use.
In addition, Corps policy is to obtain full payment of allocated capital costs from non-Federal
entities desiring water supply storage prior to or during construction. Failing this, non-Federal
sponsors shall negotiate a repayment agreement, with payments to begin immediately after
construction completion under the provisions of Section 932 of the WRDA of 1986.
(4) Surplus Water. Under Section 6 of the Flood Control Act of 1944, the Secretary of
the Army is authorized to make agreements with states, municipalities, private concerns, or individuals for surplus water that may be available at any reservoir under the control of the
Department. These agreements may be for domestic, municipal, and industrial uses, but not for
crop irrigation. When the user desires long-term use, a permanent storage reallocation should be
performed under the authority of the Water Supply Act of 1958, as amended. Surplus water is
either water stored in a Department of the Army reservoir that is not required because the
authorized use for the water never developed or the need was reduced by changes that occurred
since authorization or construction, or water that would be more beneficially used as municipal
and industrial water than for the authorized purposes over some specific time period. Use of the
Section 6 authority is allowed only where non-Federal sponsors do not want to purchase storage
because: use of the water is needed for a short term only or use would be temporary pending
development of the authorized use and reallocation of storage is not appropriate. Terms of the
agreements are normally for five (5) years, with an option for a five (5) year extension, subject to
the space being needed for the authorized purposes, or the authorized purpose is deauthorized.
(5) Reallocation of storage. Reallocation or addition of storage that would seriously affect
other authorized purposes or that would involve major structural or operational changes requires
Congressional approval. Provided these criteria are not violated, 15 percent of the total storage
capacity allocated to all authorized project purposes or 50,000 acre feet, whichever is less, may
be allocated from storage authorized for other purposes. Or, this amount may be added to the
project to serve as storage for municipal and industrial water supply at the discretion of the
Commander, USACE. When reallocating storage from the flood control pool to municipal and
industrial water supply, the need to compensate existing water supply contract holders shall be
evaluated. Dependable yield mitigation storage (DYMS) shall be analyzed and implemented to
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compensate these users. Compensation to existing hydropower users through minor operational
changes, where appropriate, may also be considered. Procedures and requirements to analyze
and implement DYMS and operational changes are described in Appendix E.
(a) Costs of Reallocated Storage. The cost allocated to the non-Federal entity (i.e., the
price to be charged for the capital investment for the reallocated storage) will normally be
established as the highest of the benefits or revenues foregone, the replacement cost, or the
updated cost of storage in the Federal project. The methodologies to be used to compute these
benefits, revenues and costs are discussed in Appendix E. The non-Federal entity shall also be
responsible for an appropriate share of the annual costs that include specific and joint-use
operation, maintenance, repair, replacement and rehabilitation (OMRR&R) costs. In those cases
where the cost of water supply is based on hydropower replacement costs, the OMRR&R
increment of such cost is to be deleted from the total charge and then billed separately based on a
pro rata share of the actual experienced project costs.
(b) Financial Feasibility. A test of financial feasibility must be performed to demonstrate
that reallocation of storage is the most efficient water supply alternative. Appendix E provides
additional information on how to conduct this analysis.
(c) Addition of Storage. When water supply storage is added to an existing project and
storage is not reallocated, a willingness to pay concept is used to assign costs to the new water
supply purpose. Under this concept, the non-Federal sponsor is responsible for 100 percent of
the new construction costs allocated to M&I water supply. This is to be paid during the
construction period. In addition, payments equal to 50 percent of the sponsor's savings are
required.
(6) Seasonal Operations for Water Supply. Congress has not provided general authority
for including storage space in Corps projects for seasonal M&I use, either as withdrawals or to
improve groundwater supplies. However, project specific authorizations are not precluded. In
addition, project operations may be modified to enhance ground water replenishment, to increase
downstream flows, or to otherwise enhance usage of projects for M&I purposes. Modifications
must be consistent with authorized project purposes and law. Cost sharing requirements for
seasonal operations for water supply are provided in Appendix E.
(7) Water Withdrawals Contracts. The Corps will not use Section 501 of the
Independent Offices Appropriations Act of 1952 to obtain reimbursement for water supply
withdrawals. Existing contracts under this authority should be allowed to expire under the terms
of the contract. These contracts are not to be extended.
c. Evaluation Framework. The measurement standard and conceptual basis for benefits
is willingness to pay for each increment of output from a plan. In some planning situations it is
infeasible to directly measure willingness to pay; therefore, alternative techniques are used to
estimate the total value of a plan’s output. The evaluation of water supply projects shall be
conducted following the process described in paragraph 2-3e of this regulation. The procedures
described in the following paragraphs apply to the estimation of benefits used in the economic
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evaluation of water supply projects and summarize requirements and procedures. Appendix E
provides additional guidance on these requirements and procedures.
(1) National Economic Development Benefits. Where the price of water reflects its
marginal cost, that price is used to calculate willingness to pay for additional water supply. If
such direct measures of marginal willingness to pay are not available, the benefits are measured
by the resource cost of the alternative most likely to be implemented in the absence of the
proposed plan. The benefits from nonstructural measures are also computed using the cost of the
most likely alternative.
(2) With- and Without-Project Condition. Specific elements included in the definition of
the without-project condition are existing water supplies, existing and expected future water
systems, water management contracts and operating criteria, water supplies that are under
construction or authorized and likely to be constructed during the period of analysis, the
probability of delivery for each source of water supply, water quality, and conservation
measures. These six elements are also considered under the with-project condition.
(3) Evaluation Procedure. The steps required to evaluate benefits for water supply
projects are described in the following paragraphs. The level of effort expended on each step
will depend on the scope and nature of the proposed improvement, the state of the art to
accurately develop the estimates and the sensitivity of project formulation and evaluation to
further refinement. Appendix E provides additional guidance for each step.
(a) Step 1 - Identify the study area. The study area is the area within which significant
project impacts will accrue from the use of M&I water supplies, including areas that will receive
direct benefits and/or incur costs from the provision of M&I water supply.
(b) Step 2 - Estimate future M&I water supplies. All sources of supply expected to be
available to the M&I user are analyzed. The analysis is performed by time period and includes
existing water supplies, institutional arrangements, additional water supplies, probability of
water supply and water quality.
(c) Step 3 - Project future M&I water supply. Future water use is projected by sector
considering seasonal variations in use. The projections are based on an analysis of the factors
that may determine variations in levels of water use.
(d) Step 4 – Identify the deficit between future water supplies and use. Projected water
use is compared to future water supplies to determine whether any deficits exist in the study area.
An analysis of the intensity, frequency and duration of the expected deficits is performed.
(e) Step 5 – Identify alternatives without the Federal plan. Alternative plans that are
likely to be implemented by communities and/or industries in the absence of a Federal plan are
identified in this step. These plans should be identified through analysis of the total water
resources of the region, allowing for present and expected competing uses.
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(f) Step 6 – Rank and display the alternative plans based on least cost analysis. All the
alternatives are ranked in order from the highest cost alternative to the lowest. Annualized costs
for each alternative are calculated on the basis of the service (depreciable) life of the facility or
the period of analysis, whichever is less.
(g) Step 7 – Identify the most likely alternative. The least cost alternative is identified as
the most likely alternative.
(h) Step 8 – Compute M&I water supply annualized benefits. The annualized benefits of
the Federal supply plan are equal to the annualized cost of the most likely alternative.
(i) Risk-analysis techniques, required for all water resources studies, have not been
specifically developed for municipal and industrial water supply projects. Where water supply
constitutes a substantial portion of total benefits, districts are required to perform, at a minimum,
sensitivity analysis of key variables such as cost of least cost alternative, future demand for water
and future availability of water supplies.
d. Cost Sharing Requirements. Paragraph 2-8 discusses general cost sharing
considerations applicable to all project purposes including water supply. Specific cost sharing
requirements for this purpose are discussed in Appendix E.
e. Other Authorities. Other authorities that may be applicable to this project purpose are
discussed in paragraph 3-10.
3-9.
Multiple Purpose Studies.
a. Definition. Multiple purpose studies can examine more than one type of water
resources problem or opportunity and recommend projects with more than one purpose. Corps
mission areas can be combined to address multiple objectives within the localized study area.
For example, many existing flood control dams also supply water for M&I or agricultural uses,
or provide hydropower. Additionally, there may be opportunities to address some combination
of purposes which also could include ecosystem restoration and/or recreation. Oftentimes there
will be competing water resources uses; therefore environmental, social, and economic
considerations need to be evaluated. The evaluation process for these projects will demonstrate
the trade-offs for providing various combinations and levels of economic, social, and
environmental outputs. Multiple purpose studies will typically result in the recommendation of
a single project or set of projects that satisfy the range of water resources purposes identified.
b. Comprehensive studies. A comprehensive study characterizes, measures, and
evaluates a particular water resources problem or opportunity across a broad area or region.
Typically, the focus of comprehensive studies is water resources problems related to the Corps
main mission areas (flood damage reduction, ecosystem restoration or navigation). Non-Federal
entities with interests common to the Corps mission area(s) identified should be encouraged to
participate in the study investigations; the general public should not only be informed about the
study but also be canvassed for information related to needs, opportunities and constraints. Based
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on evaluation that considers existing and without-project conditions, the study will determine the
need for further Corps studies and projects.
c. Watershed Studies. Watershed studies are planning initiatives that have a multipurpose and multi-objective scope and that accommodate flexibility and collaboration in the
formulation and evaluation process. Possible areas of investigation for a watershed study include
water supply, natural resource preservation, ecosystem restoration, environmental infrastructure,
recreation, navigation, flood management activities, and regional economic development. This
multi-purpose approach is recommended since numerous entities within the boundaries of any
watershed must agree with and support watershed improvement and management initiatives in
order to successfully implement effective system-wide solutions. The outcome of a watershed
study will generally be a watershed resources management plan which identifies the combination
of recommended actions to be undertaken by various partners and stakeholders in order to
achieve the needs and opportunities identified in the study. The watershed resources
management plan may or may not identify further Corps studies or implementation projects.
d. Cost Sharing Requirements. Multiple-purpose studies and projects are cost shared in
accordance with the cost sharing policies applicable to each project purpose required. Before
determining the required cost sharing for projects, an allocation of total project costs to each
purpose must be accomplished. The following paragraphs summarize the requirements and
procedures used by the Corps for allocating costs of multiple purpose projects. Detailed cost
allocation procedures are discussed in Appendix E.
(1) Cost Allocation. The need for cost allocation stems from pricing and cost-sharing
policies that vary among purposes. Cost allocation is the process of apportioning total project
financial costs among purposes served by a project. Financial costs are implementation outlays,
transfer payments such as replacement housing assistance, and the market value of in-kind
contributions. Financial costs are to be allocated to those purposes for which the project is
formulated.
(2) Cost Allocation Standard. Cost sharing policies may differ for construction costs and
other costs such as operation, maintenance, repair, replacement and rehabilitation costs.
Allocations for each one of these types of costs shall be made, as applicable, to the particular
project. The Separable Costs/Remaining Benefits (SCRB) method shall be used for the allocation
of costs among project purposes. Costs allocated to each purpose are the sum of the separable
cost for the purpose and a share of joint cost. Joint costs may be allocated among purposes in
proportion to remaining benefits. They may also be allocated in proportion to the use of
facilities, provided that the sum of allocated joint cost and separable cost for any purpose does
not exceed the lesser of the benefit or the alternative cost for that purpose. The SCRB method is
also applicable for multi-purpose projects that include ecosystem restoration as a project
purpose. Guidance on this application is under development. If the need for a cost allocation
analysis for this type of project is foreseen, contact CECW-PD for additional guidance,
preferably during the early phases of the study.
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3-10. Other Authorities.
a. Continuing Authorities Program (CAP). The planning principles, guidelines and
process described in previous chapters also apply to studies conducted under the Continuing
Authorities Program. Specific guidance and planning requirements for studies conducted under
each section included in the Program is provided in Appendix F. The following sections are
included under the Continuing Authorities Program:
•
Section 14, Flood Control Act of 1946, as amended, for emergency streambank and
shoreline protection for public facilities and services
•
Section 103, River and Harbor Act of 1962, as amended, for protecting the shores of
publicly owned property from hurricane and storm damage
•
Section 107, River and Harbor Act of 1960, as amended, for navigation
•
Section 111, River and Harbor Act of 1968, as amended, for mitigation of shoreline
damage caused by Federal navigation projects
•
Section 204 of Water Resources Development Act of 1992, as amended, for
beneficial uses of dredged material
•
Section 205, Flood Control Act of 1948, as amended, for flood damage reduction
•
Section 206 of Water Resources Development Act of 1996, as amended, for aquatic
ecosystem restoration
•
Section 208, Flood Control Act of 1954, as amended, for snagging and clearing for
flood damage reduction
•
Section 1135 of Water Resources Development Act of 1986, as amended, for project
modifications for improvement of the environment
b. Review of Completed Projects. Section 216 of the River and Harbor and Flood
Control Act of 1970 authorizes investigations for modification of completed projects or their
operation when found advisable due to significantly changed physical or economic conditions
and for improving the quality of the environment in the overall public interest. Initial appraisal
reports are prepared under Section 216 using operations and maintenance (O&M) funds. The
cost of preparing the initial appraisal report is limited to $20,000. Results from this report can be
used to support initiation of a reconnaissance study through normal budgetary process.
Following the initial appraisal, the 216 study process is of the same as a normal General
Investigations study. A feasibility study under Section 216 authority would be appropriate for
large scale ecosystem restoration projects linked to existing Civil Works projects, but whose
costs would be too large for Section 1135, Section 206, or Section 204 authorities. Additional
guidance can be found in ER 1165-2-119.
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c. Planning Assistance to States (PAS). The PAS Program is carried out in accordance
with the provisions of Section 22 of the WRDA of 1974 as amended. This law authorizes the
Chief of Engineers to cooperate with states, the District of Columbia, the Commonwealth of
Puerto Rico, the US Virgin Islands, Guam, American Samoa, the Commonwealth of the
Northern Mariana Islands, and Federally recognized Native American (Indian) Nations in
preparing plans for the development, utilization, and conservation of water and related land
resources of drainage basins, watersheds or ecosystems located within the boundaries of the State
or Indian lands. Assistance is provided on the basis of specific requests rather than through
Congressional study authorization. (See Appendix G for details on the implementation of this
program).
d. Flood Mitigation and Riverine Restoration. Section 212 of the WRDA of 1999
provides programmatic authority for the Secretary of the Army to implement projects that reduce
flood hazards and restore the natural function and values of rivers within certain specified limits.
The program emphasizes the use of nonstructural approaches to flood damage reduction and
coordination with FEMA and other Federal, State, and local agencies, and Native American
Nations. Projects must significantly reduce potential flood damages, improve the quality of the
environment and be justified considering all costs and beneficial outputs. Funds are authorized to
be appropriated in fiscal years 2001 through 2005. Additional guidance for this program is under
development.
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CHAPTER 4
Types of Studies, Reports and Procedures
4-1. Types of Studies and Reports. The process by which projects are formulated and
evaluated is one step in the larger project delivery process. In addition to formulation and
evaluation, the project delivery process includes the preparation of the decision document, and
the technical and policy reviews of that document and its supporting material. It is intended that
the production and reviews of planning decision documents also reflect the same common sense
approach as described in the Introduction to Chapter 2. Planning decision documents should be
prepared in a timely and cost-effective manner, consistent with the size and complexity of the
project. Likewise, the time and effort spent in technical and policy review and in responses to
review comments should reflect the size and complexity of the project. Wherever possible,
technical and policy review should be incorporated positively and proactively into early phases
of the planning and documentation processes and throughout these processes, rather than at the
end. Planning studies and reports planning are:
a. Pre-authorization Studies and Reports. Studies for project authorization are undertaken
in response to either a study-specific authority or a general authority. Study-specific
authorization may be a resolution from the House Committee on Public Works and
Transportation, a resolution from the Senate Committee on the Environment and Public Works,
or included in a public law. General authorities are contained in Section 216 of the Flood
Control Act of 1970 and Section 2 of the Fish and Wildlife Coordination Act of 1958. Section
216 authorizes investigations for modification of completed projects or their operation. Section
2 allows investigation of modifications to projects that were not substantially completed prior to
August 1958 in the interest of conservation of fish and wildlife. These studies and reports are
funded with General Investigations (GI) funds. Studies under these authorities are conducted in
two phases in accordance with the WRDA of 1986.
(1) Reconnaissance Phase. The objectives of the Reconnaissance Phase are to: (1)
determine if the water resource(s) problems warrant Federal participation in feasibility studies,
(2) define the Federal interest, (3) complete a 905(b) Analysis (refers to Section 905(b) of the
WRDA of 1986) or a Reconnaissance Report, (4) prepare a Project Management Plan (PMP), (5)
assess the level of interest and support from non-Federal entities, and (6) negotiate and execute a
Feasibility Cost Sharing Agreement (FSCA). This determines whether or not planning to develop
a project should proceed to the more detailed feasibility stage. The reconnaissance phase is
Federally funded and the target for completion is 6-12 months from initial obligation of
reconnaissance funds to a signed Feasibility Cost Sharing Agreement.
(2) Feasibility Phase. The objective of feasibility studies is to investigate and recommend
solutions to water resources problems. Cost of feasibility studies, except single purpose inland
navigation studies, are 50 percent Federal and 50 percent non-Federal as defined in Section 105
of the WRDA of 1986. Typical studies should be completed in 18-36 months. The results of
these studies are documented in a feasibility report that includes documentation of environmental
compliance. (See Appendix G for additional information on the content of the feasibility report.)
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b. Post Authorization Studies and Reports. These planning studies and reports are
generally funded as a part of engineering and design studies under the General Investigation
appropriation. These studies are undertaken pursuant to project specific construction authorities.
Construction authorities imply the authority to undertake reevaluation studies. Studies may be
necessary if a significant period of time has elapsed or conditions have changed significantly
since the feasibility study was completed. The reports described below shall be used to support
post authorization changes provided they include the specific information outlined in Appendix
G, paragraph G-16.
(1) General Reevaluation. This is reanalysis of a previously completed study, using
current planning criteria and policies, which is required due to changed conditions and/or
assumptions. The results may affirm the previous plan; reformulate and modify it, as appropriate;
or find that no plan is currently justified. The results of the study are documented in a General
Reevaluation Report (GRR).
(2) Limited Reevaluation. This study provides an evaluation of a specific portion of a
plan under current policies, criteria and guidelines, and may be limited to economics,
environmental effects or, in rare cases, project formulation. A Limited Reevaluation Report
(LRR) documents the results of the analysis undertaken.
(3) Design Documentation Reports (DDR) and Engineering Documentation Reports
(EDR). During the Preconstruction, Engineering and Design (PED) phase, districts will prepare
a Design Documentation Report (DDR) which is a record of final design after the feasibility
phase. The DDR provides the technical basis for the plans and specifications and serves as a
summary of the final design. An Engineering Documentation Report (EDR) may also be
prepared to support the PCA when there are minor changes in design and costs from the
authorizing reports. The EDR may also be used in lieu of a GRR to document other information
not included in a decision document when project reformulation is not required and the changes
are only technical changes. Requirements for preparation and processing of these reports are
stated in ER 1110-2-1150. If reformulation of plans is required during PED, then districts shall
prepare a GRR or LRR, as described in paragraphs 4-1b(1) and 4-1b(2). Per guidance contained
in ER 1110-2-1150, GDM’s and DM’s will no longer be prepared.
(4) National Environmental Policy Act (NEPA) Documentation. The scope and nature of
the changes in the environmental effects of the project identified as a result of acquisition of new
information, of changed conditions, or changes in the project will determine the appropriate type
of NEPA documentation. Options include an Environmental Assessment which may result in a
Finding of No Significant Impact or a Supplemental Environmental Impact Statement. Guidance
regarding NEPA documentation is contained in ER 200-2-2
c. Other Types of Studies and Reports.
(1) Studies of Water Resources Needs of River Basins and Regions. Section 729 of
WRDA of 1986 authorizes the Corps of Engineers to study the water needs of river basins and
regions of the United States, in consultation with State, interstate and local governmental entities.
Section 729 studies may result in recommendations for more detailed feasibility studies, but this
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is not required. Section 729 studies should not result in recommendation of projects for
Congressional authorization.
(2) Flood Insurance Studies. See guidance in paragraph 3-3f of this regulation and in
Appendix G.
(3) Planning Assistance to States Studies. Guidance on Planning Assistance to States
(Section 22) studies is in paragraph 3-10c of this regulation and in Appendix G.
(4) Continuing Authorities Program (CAP) Studies. The planning Principles and
Guidelines described in previous chapters apply to studies conducted under the Continuing
Authorities Program. However, due to specific legislative requirements, the guidance for each
authority must be referenced. This guidance is contained in Appendix F of this regulation.
(5) Section 216 - Review of Completed Projects. See guidance in paragraph 3-10b of this
regulation and in ER 1165-2-119.
(6) Congressional Adds. The requirements and processes described in this chapter apply
to Congressionally added studies unless specific instructions otherwise are provided through the
budget process.
d. Deauthorization. The review of studies and projects to determine eligibility for deauthorization is covered in Paragraph 4-7.
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4-2. Corps of Engineers Final Approval Authorities. The table below summarizes the
approval responsibilities for the different planning products.
Table 4-1, Corps of Engineers Final Approval Authorities
APPROVAL RESPONSIBILITIES
PLANNING PROGRAM
Study Phase/Product
District
GENERAL INVESTIGATIONS:
Section 905(b) Analysis
Reconnaissance Report
Project Management Plan
Feasibility Cost Sharing Agreement2
Feasibility Report
Section 729 Report
Division
X
X
X
X
X1
X
CONTINUING AUTHORITIES ( Sections 14,
103, 107, 111, 204, 205, 206, 208, 1135)
Preliminary Restoration Plans
Feasibility Cost Sharing Agreement2
Planning Design Analysis Documentation
Detailed Project Report
X
X
X
X
PLANNING ASSISTANCE TO STATES
X
FLOODPLAIN MANAGEMENT SERVICES
X
POST-AUTHORIZATION REPORTS:
General Reevaluation Report1
Limited Reevaluation Report
Major Rehabilitation Reports
X
X
X
REPORTS FOR PROJECTS AUTHORIZED
SUBJECT TO A SECRETARIAL FINDING3
1
2
3
Headquarters
(HQUSACE)
Coordinated with ASA(CW).
If deviation from model agreement, HQUSACE approval required.
ASA(CW) approval required.
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4-3. Procedures for Studies and Reports.
This section provides guidance for studies for projects requiring specific authorization.
Additional guidance is found in Appendix G.
a. Reconnaissance Phase. The reconnaissance phase commences with the obligation of
appropriated reconnaissance funds, and terminates with the execution of a Feasibility Cost
Sharing Agreement (FCSA) or the division commanders’ public notice for a report
recommending no Federal action. The products are a 905(b) Analysis report, a Project
Management Plan, a letter of intent from the non-Federal sponsor, and a feasibility cost sharing
agreement (FCSA).
(1) Reconnaissance Study Period. The reconnaissance study and the Section 905(b)
Analysis, part of the reconnaissance phase, begins with the obligation of appropriated
reconnaissance funds. The target for completing the reconnaissance phase or the signing of the
FCSA for the 905(b) Analysis is 6-12 months. The cost of reconnaissance studies generally is
limited to $100,000.
(2) 905(b) Analysis Report. This report documents the results of the analyses conducted
during the reconnaissance phase. The report shall include a preliminary analysis of Federal
interest, costs, benefits, environmental impacts, and an estimate of the costs of preparing a
feasibility report. The analyses conducted shall be based on existing, readily available data and
professional and technical judgement. The 905(b) Analysis Report is prepared by the district and
approved by HQUSACE. Additional details on the content and procedures for the 905(b)
Analysis Report are provided in Appendix G.
(3) Project Management Plan (PMP). The Project Management Plan (PMP), prepared
and negotiated during the reconnaissance phase, documents the Federal and non-Federal efforts
required to conduct the feasibility phase. The PMP will ensure that the work required for the
feasibility phase has been carefully developed and considered. The PMP forms the basis for
estimating the total study cost and non-Federal sponsor share. It also is the basis for assigning
tasks between the Corps and the sponsor and for establishing the value of in-kind services.
While developing the PMP, the District Commander must discuss with the prospective
non-Federal sponsor(s) the objectives of the feasibility study, necessary level of detail, cost of
studies, and scheduling of activities for the feasibility study. During negotiations the prospective
non-Federal sponsor must be informed that the level of accuracy of alternative plan evaluation
and cost estimates to be developed in the feasibility study will depend on the extent of
uncertainties and the depth of investigations made during the feasibility study. The Division will
ensure that the PMP receives appropriate review.
(4) Feasibility Cost Sharing Agreement (FCSA). The Feasibility Cost Sharing
Agreement documents the commitments of the Department of the Army and a non-Federal
sponsor to share the cost of the feasibility phase. The FCSA is intended to promote a partnership
for the conduct of the feasibility study. The Department of Army remains responsible for
representing the Federal interest by following Federal policies and budgetary priorities. Both
parties will conduct planning within the framework established by the P&G with guidance
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provided in this regulation. The FCSA will be accompanied by a signed Certification Regarding
Lobbying and, if applicable a completed Disclosure of Lobbying Activities.
b. Feasibility Phase. The feasibility phase starts with the issuance of initial Federal
feasibility funds, following execution of the FCSA, and terminates on the date the feasibility
report is submitted to the Office of Management and Budget by the Assistant Secretary of the
Army for Civil Works (ASA (CW)) for review of consistency with the policies and programs of
the President. The feasibility phase may also be terminated if it is determined that there is no
clear Federal interest in a project or if no project would meet the current policies or budget
priorities. (See paragraph 4-3c(6)) The products of the phase are a Feasibility Report, including
NEPA documentation, and a Chief of Engineers Report.
(1) Feasibility Phase Cost. The total cost of the feasibility phase will be established
through negotiation of the PMP. The cost estimate in appropriate Code of Accounts format will
identify major costs by task and by type, and be fully supported and documented.
(2) Feasibility Report. A suggested outline for the feasibility report is provided in
Appendix G. The feasibility report should document the planning process and all assumptions
and rationale for decision making. The report will present the recommended plan and, if
applicable, the degree of, and rationale for, departure from the NED plan, the NER Plan or the
Combined NED/NER Plan. The non-Federal sponsor cost sharing requirements, including their
responsibilities for implementation and operation of the project must be clearly documented.
Two project cost estimates shall be displayed in the feasibility report; one based on constant
dollars and one based on projected inflation rates. If there is no acceptable plan, the study should
be terminated and guidance obtained from CECW-P. For deviations from the NED, NER or
Combined NED/NER, the following additional documentation is required.
(a) If the recommended plan is smaller in scope and costs than the NED, NER or
Combined NED/NER, the feasibility report will document the rationale for lack of sponsor
support for these plans, as applicable, available facts regarding how and why the LPP is less
costly and still provides high-priority outputs, information to show that alternative non-Federal
funding sources are not available and the analysis performed. (This information shall be
provided to HQUSACE thru the MSC for approval prior to submittal of the feasibility report. It
will be included in the feasibility report to document and support the decision recommend the
LPP.) In all cases, the recommended LPP must have greater net benefits than smaller scale
plans. The feasibility report shall include documentation to demonstrate that sufficient
alternatives were formulated and evaluated to insure that net benefits do not maximize at a scale
lower than the LPP and to meet the requirements of NEPA. A detailed analysis and description
of the NED, NER or Combined NED/NER plans, including a detailed final cost estimate for
these plans, are not required and do not need to be documented in the feasibility report. The
consequences of lost opportunities associated with implementing a LPP including residual risks
and potential solutions to other water resource needs and opportunities that may be foregone will
also be documented in the feasibility report. Additional documentation requirements for
categorical exemptions applicable to flood damage reduction and navigation projects are
discussed in paragraphs 3-3b(11) and 3-2b(10).
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(b) If the LPP is larger in scale and costs than the NED, NER or Combined NED/NER
plans, then a detailed analysis and description must be developed and presented for both the
selected plan and the NED plan. The incremental benefits and costs of the LPP, beyond the
NED, NER or Combined NED/NER plans, must be analyzed and documented in the feasibility
report. The rationale for selection of the LPP must be clearly documented in the feasibility
report.
(3) Environmental Compliance Documentation. Documentation of compliance with
applicable environmental laws and regulations must be prepared. This may include items such
as biological assessments required by the Endangered Species Act and the Fish and Wildlife
Coordination Act Reports, in addition to NEPA documents. In accordance with ER 200-2-2, the
NEPA document, either an EA or EIS, may either be a self-supporting document combined with
and bound within the feasibility report or integrated into the text of the feasibility report. The
EA/EIS should generally be integrated into the text of the report unless complex environmental
impacts preclude this alternative. Additional information on environmental compliance
documentation is in Appendix C.
c. General Requirements for Reconnaissance and Feasibility Phases.
(1) Study Expansion. Expansion of a study's geographic extent or purposes beyond those
specified in the congressional authorization is not allowed without additional congressional
authority. Where existing congressional authority is not a constraint, guidance on expansion of
cost or scheduling should be requested from the Division.
(2) Interagency Coordination. In the interest of improving interagency coordination on
planning studies, and of avoiding issues arising late in the planning process, the following
procedures apply:
(a) Appropriate Federal and non-Federal agencies shall be invited to participate in the
Reconnaissance Review Conference (RRC), Issue Resolution Conferences (IRC), Feasibility
Scoping Meeting (FSM), and the Alternative Formulation Briefing (AFB), as deemed
appropriate. These conferences are discussed in Appendix G.
(b) Appropriate Federal and non-Federal agencies shall have opportunity for participation
in developing the PMP.
(c) Federal agencies shall be invited to be cooperating agencies as defined by NEPA.
Cooperating agencies are agencies with jurisdiction by law or with special expertise that qualify
them to participate in a study (see 40 CFR 1508.5, Regulations Implementing the Procedural
Provisions of the National Environmental Policy Act of 1969, as amended).
(d) All issues involving other agencies (concerns or non-agreement) should be raised and
discussed in a separate section of the Memorandum for the Record (MFR) of the meetings held
during the planning process. Issues that can not be resolved at the local or regional level will be
sent forward for resolution at the Washington level.
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(3) Engineering Level of Detail in Reconnaissance and Feasibility Reports. The scope
and complexity of engineering analyses shall be commensurate with the size and complexity of
the project being evaluated. The level of detail of the engineering efforts during the feasibility
phase and the required content of the Engineering Appendix are discussed in ER 1110-2-1150.
(4) Real Estate. The Real Estate Division shall be included as part of the team early in
the planning process. The analysis of the nature and extent of real estate requirements must be
conducted in accordance with Chapter 12 of ER 405-1-12, including consideration and
identification of the specific interests, estates, and acreage required for the project.
(5) Cost Estimating. All cost estimates required to support Civil Works projects will be
prepared in accordance with ER 1110-2-1302, Engineering and Design, Civil Works Cost
Engineering.
(6) No Implementable Plan.
(a) The District Commander shall ensure that the sponsor is fully aware that the
feasibility study may be terminated if there is no clear Federal interest in a project or if no project
would meet the current policies or budget priorities. If the non-Federal sponsor wishes to
continue the feasibility study under the terms of the FCSA, continuation will be considered on a
case-by-case basis. In reaching this decision, consideration should be given to the value of the
feasibility study in identifying project alternatives that reflect the sound planning principles set
forth in the Principles and Guidelines . The sponsor shall also be made aware that, the feasibility
study may be terminated by either party under the provisions of Article X “Termination of
Suspension” of the FCSA.
(b) For those reconnaissance or feasibility studies where there is no potential for a
Federally implementable plan, the District Commander will stop all work and notify the Division
Commander to facilitate revocation of existing funds, adjustments in budget requests and
possible study reclassification except as set forth below. Criteria for making the necessary
determination are: (1) the plan is not in the Federal interest, based on current Army policies; (2)
the plan does not meet technical requirements for selection as set forth in the P&G and elsewhere
in this ER, or; (3) non-Federal interests either do not support the plan or do not intend to
provide the necessary local cooperation. If based on these criteria, no Federal action is
recommended, a final report to the Congress (usually a letter report) will be prepared, regardless
of whether the study is terminated in the reconnaissance or feasibility phase.
(c) Watershed studies may or may not result in identifying further Corps studies or
implementation projects. Thus, the procedures specified in paragraphs 4-3c(6)(a) and (b) are not
applicable to watershed studies.
(7) Responsibility for Reports. District commanders are responsible for reports,
including their content; and for the presentation of reports and findings to higher authority.
d. Washington Level Processing. Procedures for processing reports and decision
documents are discussed in Appendix H.
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4-4.
Quality Control/Quality Assurance and Policy Review of Feasibility Reports.
a. General Requirements. Feasibility reports will be reviewed for technical quality and
policy compliance. Independent technical and legal reviews are the responsibility of the
districts, and District Commanders are responsible for the quality and accuracy of the study
processes. HQUSACE is responsible for policy review and approval for decision documents
requiring Congressional authorization or ASA(CW) approval. This review will focus on the
underlying assumptions, conclusions, recommendations and analyses in the context of
established policy and guidance. For all other decision documents covered in this regulation,
districts will be responsible for policy quality control and MSCs will be responsible for policy
quality assurance. The QC/QA process will be fully documented. Documentation and
certification of technical/legal review will accompany the reports that are submitted for
HQUSACE policy compliance review.
b. Quality Control. Districts shall prepare a quality control (QC) plan for each
product/project which will describe the procedures that will be used to ensure compliance with
all technical and policy requirements. The QC plan is a component of the PMP. The District
Commander shall approve QC plans. Technical review is the process that confirms the proper
selection and application of established criteria, regulations, laws, codes, principles, and
professional procedures to ensure a quality product. Technical review also confirms the
constructability and effectiveness of the product and the utilization of clearly justified and valid
assumptions and methodologies.
c. Quality Assurance. MSCs are responsible for evaluating and recommending changes
to the district’s QC process. The MSCs’ QA process will assure that the QC plan for the project
is appropriate. The overall goal of the QA process is to assure that the districts are able to plan,
design, and deliver quality projects on schedule, within budget and acceptable to the customer
and the Federal Government. Division Commanders shall approve QA plans.
d. Policy Compliance Review. The process for accomplishing policy compliance shall
begin with study initiation, and proceed in partnership among the district, MSC and
Headquarters until project authorization. Districts are responsible for policy compliance. MSCs
are responsible for assuring policy compliance. This process is intended to assure that policy
issues are raised and resolved as early as possible in the study, and that final policy compliance
reviews of decision documents reflect the success of that process. If policy problems or conflicts
are not raised and resolved until the final policy compliance review rather than during the study,
the policy partnership between the district, MSC and Headquarters shall be considered a failure.
(1) Compliance Support. Policy compliance support will be available to districts and
MSCs on all studies leading to decision documents from initiation to completion. For feasibility
studies leading to pre-authorization decision documents, support shall include a preliminary
policy compliance review as part of a formal Alternative Formulation Briefing (AFB). The AFB
will be scheduled prior to the selection of the recommended plan during the study. It will result
in an AFB Project Guidance Memorandum (PGM) describing all policy issues and their
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resolution. Subsequent discussions and resolutions of these issues and any additional issues shall
be handled through a modification to this AFB PGM.
(2) Compliance Review, Approval and Certification. Headquarters shall be responsible
for the policy review, approval and certification of all decision documents requiring
Congressional authorization or ASA(CW) approval. Policy review involves the analysis of
decision factors and assumptions used to determine the extent and nature of Federal interest,
project cost sharing and cooperation requirements, and related issues. Policy compliance review
shall ensure that established policy and procedures are applied uniformly nationwide and
identifies policy issues that must be resolved in the absence of established criteria, guidance,
regulations, laws, codes, principles and procedures or where judgment plays a substantial role in
decision making. Policy compliance review also shall ensure that the proposed action is
consistent with the overall goals and objectives of the Civil Works program. The final approval
and certification of decision documents for policy compliance shall incorporate the AFB PGM
and its approved modifications, with sufficient review to assure that documents remain
consistent with policy; this shall not constitute a new or independent policy review. Appendix H
discusses in detail the policy compliance review process.
4-5. Post-authorization Changes. This section provides guidance for making changes to
uncompleted authorized projects. An authorized project is defined as a one specifically
authorized by Congress for construction, generally through language in an authorization or
appropriation act, or a project authorized pursuant to Section 201 of the Flood Control Act of
1965. Depending on the nature and scope of the changes, a General Reevaluation Report or
Limited Reevaluation Report will be required as discussed in paragraphs 4-1b(1) and 4-1b(2) and
Appendix G.
a. Addition of Project Purposes. General authorities allow for the addition of project
purposes, under certain circumstances, without specific congressional authorization. These
purposes include water supply, recreation, fish and wildlife enhancement (except for land
acquisition), and low flow augmentation for purposes other than water quality. Additionally,
there is authority for adding minimum provisions for future hydroelectric power, and
conservation of threatened and endangered species. (See Appendix G for additional information.)
b. Authorized Maximum Cost of Projects. Section 902 of the WRDA of 1986, as
amended, legislates a maximum total project cost. Projects to which this limitation applies and
for which increases in costs exceed the limitations established by Section 902, as amended, will
require further authorization by Congress raising the maximum cost established for the project.
No funds may be obligated or expended nor any credit afforded that would result in the
maximum cost being exceeded, unless the House and Senate committees on Appropriations have
been notified that Section 106 of the Energy and Water Development Appropriations Act of
1997 will be utilized. The maximum project cost allowed by Section 902 includes the authorized
cost (adjusted for inflation), the current cost of any studies, modifications, and actions authorized
by the WRDA of 1986 or any later law, and 20 percent of the authorized cost (without
adjustment for inflation). See Appendix G for detailed procedures to calculate these costs.
4-6. Planning Assistance to States (PAS). Within personnel and funding capabilities,
commanders shall cooperate with entities requesting assistance under the PAS program by
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providing planning assistance in an effective and timely manner and in accordance with the
guidelines in this regulation (see Appendix G). The Corps may provide technical assistance to
support State preparation of comprehensive water and related land resources development plans,
including watershed and ecosystem planning and help in conducting individual studies
supporting the State water plan. A process of review and evaluation of State work requests and
the State water plan determines eligibility for participation in the program. Because of the
limited funds available under the PAS Program and because the cost sharing requirements are
incompatible between the PAS Program and the General Investigations Program, it is not
appropriate to use the PAS Program to prepare reports to Congress.
4-7.
Study and Project Deauthorization.
a. Study Deauthorization. Section 710 of the WRDA of 1986 requires an annual
submission to Congress of a list of authorized but incomplete water resources studies which have
not had funds appropriated during the preceding five full fiscal years. The list is a list of studies
meeting the elegibility requirement. Congress has 90 days, after the submission, to appropriate
funds for the studies on the list. Studies that are not funded during the 90-day period are no
longer authorized. Appendix G contains information on annual report requirements.
b. Project Deauthorization. Section 1001 of the WRDA of 1986 as amended, provides
for the deauthorization of water resources projects on which Federal funds for planning, design
or construction have not been obligated for 7 fiscal years. Every two years, the Secretary of the
Army is required to submit to Congress a list of projects that meet this eligibility criteria.
Affected congressional delegations must be notified of the projects in their districts or states.
The projects remain on the list for 30 months, after which they are automatically deauthorized if
Federal funds are not obligated during the 30-month period. Section 1001(c) requires
publication of the lists of deauthorized projects in the Federal Register. The project
deauthorization process is managed at HQUSACE by CECW-B and that office should be
contacted for further information.
FOR THE COMMANDER:
8 Appendices
(See Table of Contents)
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APPENDIX A
References
Public Law 14, River and Harbor Act of 1945
Public Law 212, Outer Continental Shelf Lands Act
Public Law 409, River and Harbor Act
Public Law 526, Flood Control Act of 1946
Public Law 534, Flood Control Act of 1944
Public Law 738, Flood Control Act
Public Law 780, Flood Control act of 1954
Public Law 826, Beach Nourishment.
Public Law 858, Flood Control Act of 1948
Public Law 85-500, River and harbor and Flood Control Act of 1958
Public Law 85-624, Fish and Wildlife Coordination Act
Public Law 86-645, River and Harbor and Flood Control Act of 1960
Public Law 87-874, River and Harbor and Flood Control Act of 1962
Public Law 88-140, Extension of Right to Water Supply Storage.
Public Law 89-80, Water Resources Planning Act
Public Law 89-298, River and Harbor and Flood Control Act
Public Law 90-483, River and Harbor and Flood Control Act of 1968
Public Law 90-577, Intergovernmental Cooperation Act of 1968
Public Law 91-190, National Environmental Policy Act of 1969
Public Law 91-611, River and Harbor and Flood Control Act of 1970
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Public Law 92-500, The Federal Water Pollution Control Act Amendments of 1972
Public Law 92-532, Marine Protection, Research and Sanctuaries Act of 1972
Public Law 93-205, Endangered Species Act of 1973
Public Law 93-234, Flood Disaster Protection Act of 1973
Public Law 93-251, Water Resources Development Act of 1974
Public Law 93-291, Historical and Archeological Data - Preservation
Public Law 94-580, Resource Conservation and Recovery Act of 1976
Public Law 94-587, Water Resources Development Act of 1976
Public Law 95-217, Clean Water Act of 1977
Public Law 96-510, Comprehensive Environmental Response, Compensation and
Liability Act of 1980
Public Law 99-662, Water Resources Development Act of 1986
Public Law 104-206, Energy and Water Development Appropriations Act of 1997
Public Law 104-303, Water Resources Development Act of 1996
Public Law 106-53, Water Resources Development Act of 1999
River and Harbor Act of 1899
Executive Order 11988, Flood Plain Management
Executive Order 11990, Protection of Wetlands
ER 200-2-2, Procedures for Implementing NEPA
ER 405-1-12, Real Estate Handbook
ER 1105-2-101, Risk-based Analysis for Evaluation of Hydrology/Hydraulics and
Economics in Flood Damage Reduction Studies
ER 1110-2-1150, Engineering and Design for Civil Works Program
ER 1110-2-1155, Dam Safety Assurance Program
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ER 1110-2-1302, Civil Works Cost Engineering
ER 1165-2-21, Flood Damage Reduction Measures in Urban Areas
ER 1165-2-26, Implementation of Executive Order 11988 on Flood Plain Management
ER 1165-2-27, Establishment of Wetlands Areas in Connection with Dredging
ER 1165-2-119, Modifications to Completed Projects
ER 1165-2-123, Single-owner situations
ER 1165-2-124, Construction of Harbor and Inland Harbor Projects by Non-Federal
Interests
ER 1165-2-130, Federal Participation in Shore Protection
ER 1165-2-131, Local Cooperation Agreements for New Start Construction Projects
ER 1165-2-132, Hazardous, Toxic and Radioactive Waste (HTRW) Guidance for Civil
Works Projects
ER 1165-2-501, Civil Works Ecosystem Restoration Policy
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APPENDIX B
Public Involvement, Collaboration and Coordination
TABLE OF CONTENTS
Paragraph
Page B-
Public Involvement, Collaboration and Coordination......................................................... 1
B-1.
B-2.
B-3.
B-4.
B-5.
B-6.
B-7.
B-8.
B-9.
B-10.
B-11.
Purpose. .............................................................................................................. 1
Definitions........................................................................................................... 1
Goal and Objectives............................................................................................ 1
Requirements. ..................................................................................................... 1
Public Involvement Strategy............................................................................... 2
Study Management Coordination. ...................................................................... 6
Coordination with State and Local Governments Under E.O. 12372................. 6
Consultation and Coordination with Indian Tribal Governments....................... 7
Public Notices. .................................................................................................... 8
Advisory Committees. ........................................................................................ 8
Exclusions........................................................................................................... 8
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APPENDIX B
Public Involvement, Collaboration and Coordination
B-1. Purpose. This appendix provides the requirements for public involvement,
collaboration, and coordination in Civil Works planning studies. (Note: Every effort has
been made to eliminate all inconsistencies between the main body of the ER and the
appendices. If any inconsistencies are found, the information in the main body of the ER
will prevail over the one in the appendices. Please, notify CECW-PD immediately of any
inconsistencies for correction.)
B-2.
Definitions.
a. Public. The public includes any individuals, organizations, or unit of
government that might be affected by or interested in the results of the Corps planning
process. The public includes Federal, regional, State and local government entities and
officials, public and private organizations, Native American (Indian) tribes, individuals,
and study sponsor representatives.
b. Coordination. Coordination is the formal exchange of information and views,
by letter, report, meeting or other prescribed means, between the Corps and another
agency. Coordination activities are required by and in accordance with purposes and
procedures established by Federal policy (Public Law, executive order, agency
regulation, memorandum of agreement, etc).
c. Collaboration. Collaboration occurs when the Corps works jointly with other
agencies or entities throughout the planning process. Collaboration is distinguished from
coordination through the active involvement of the parties in conducting studies and or
implementing recommended projects. Collaborative efforts can range from participation
on interagency study teams through joint funding of construction, operation or
maintenance of water resource projects.
B-3. Goal and Objectives. The goal of public involvement and coordination is to open
and maintain channels of communication with the public in order to give full
consideration to public views and information in the planning process. The objectives of
public involvement are 1) to provide information about proposed Corps activities to the
public; 2) to make the public's desires, needs, and concerns known to decision-makers; 3)
to provide for consultation with the public before decisions are reached; and, 4) to
consider the public's views in reaching decisions. All this must occur, however, with the
awareness that the Corps cannot relinquish its legislated decision-making responsibility.
The outcome of any planning is subject to institutional constraints.
B-4. Requirements. District offices shall conduct planning studies in an open
atmosphere to attain public understanding, trust, and mutual cooperation and shall
provide the public with opportunities to participate throughout the planning process. In
addition, each district office shall:
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•
Develop and implement an effective public involvement strategy as an integral
part of the planning process for each study.
•
With the cooperation of the non-Federal sponsor, develop and implement an
effective management structure to insure that effective collaboration is an integral
part of the feasibility study process.
•
Discuss in the report how information gained from public and sponsor
involvement has been used in and influenced the planning process.
•
Solicit comments on the draft report and environmental document to appropriate
Federal and State agencies, cooperating agencies and other members of the public
(ER 200-2-2).
B-5.
Public Involvement Strategy.
a. Maximize Public Input. Each project should have a detailed public
involvement strategy that is keyed to maximize public input at each stage of the planning
process.
b. Administrative Procedures. The Administrative Procedures Act, (including
Section 3, the Freedom of Information Act) and the National Environmental Policy Act
(PL 91-190), are among the principal legislative acts requiring public involvement.
Federal planning policies, Corps practice, and regulations have consistently required and
encouraged open and effective public involvement. Generally, it is impossible to plan
effectively for water resources development in accordance with Federal regulations and
laws without open and effective public involvement. Public involvement is integral to all
phases and activities of the planning process.
c. Developing a Strategy. During the development of the Project Management
Plan, the study team determines the extent of public involvement required and establishes
an appropriate strategy for integrating public involvement into the planning process.
Since there is no single best approach to public involvement, the study team should
determine the best mix of public involvement methods. The important point to keep in
mind is to provide an overall strategy that creates relevant, quality public involvement
opportunities for those who have; or may have, an interest in the study. The purpose of
initiating public involvement early in planning is to obtain a clear definition of public
needs and concerns. Early involvement also provides a "sensing" stage during which an
appraisal is made of the intensity of public interest, the segments of the public most likely
to participate, and the kinds of issues which are most likely to generate additional public
interest.
(1) Components of a Strategy. A public involvement strategy should include:
(a) An analysis of the major issues likely to be addressed in the planning process.
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(b) An identification of agencies, groups, and individuals most likely to be
interested in the action under consideration.
(c) An assessment of the level of public interest likely to be generated by the
actions under consideration.
(d) A description of the preliminary consultation activities that led to
development of the public involvement approach, including the agencies, groups, and
individuals consulted.
(e) An identification of the public involvement expertise and effort that may be
needed from various organizational units.
(f) Determination of appropriate review points at which to evaluate the structure
and function of the public involvement program.
(g) A plan of sequential public involvement activities integrated with the
planning and decision-making process, and development of planning reports.
(2) Major Public Involvement Activities
(a) Announce the Initiation of the Study. The public should be informed when a
study is initiated. Announcements can be done through any of the communications
media, but it is suggested that, at a minimum, a mailing of an announcement be made to
potentially interested parties. The mailing method insures that at least those on the list
have been made aware of the study initiation. If other media methods (such as TV, radio,
newspapers, etc.) would be productive, they should also be pursued through coordination
with the public affairs officer.
(b) Identify the Public. The Corps should be sensitive to public concerns and
identify interested and affected parties including those who might be unaware of an
action that could be of concern to them. Identifying publics is crucial both initially and
throughout the planning effort. A starting point is to identify those people and groups
who believe themselves to be affected by possible study outcomes. Three ways are
typically used to identify publics: self-identification, third party identification, and staff
identification. Self-identification means that individuals or groups step forward and
indicate an interest in participating in the study. Third party identification is a technique
in which existing committees, interest groups, or representatives of known interests are
asked to identify other individuals or interests who should be involved. Staff
identification comprises a wide range of techniques including intuitive/experiential
information, existing lists of groups and individuals, and geographic, demographic, and
historical analysis. The nature of the planning study will determine who should be
contacted. As a starting point, the following organizations, among others, should be
considered: Environmental/Conservation groups; civic and neighborhood associations
and community leaders; other Federal, State and local public agencies and entities; user
groups; consumer and public interest groups; religious and ethnic groups; business
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groups, including small businesses and merchants; civil rights organizations; labor
organizations; and, organizations representing the handicapped, the elderly, low income
segments of the population, the minorities, and the disadvantaged.
(c) The Scoping Process. Council on Environmental Quality (CEQ) regulations
(40 CFR 1051.7) require that a scoping process be utilized to identify the likely
significant issues and the range of those issues. The CEQ regulations are very specific as
to what is to be determined, but the techniques are left up to the agency. Since much of
the information on significant issues rests only with the public, public involvement is the
heart of the scoping process. Therefore, the public involvement should be an integral part
of the scoping process. A scoping meeting (or meetings, if desired), should be held early
in the study. Scoping meetings may be held informally with other Federal, State, local or
private groups; however, at least one of the scoping meetings should be broadly
announced, held at a convenient location and time and open to all. Scoping should be
used to focus in one specific issue areas. Therefore, while a broad scoping meeting may
be desirable, it will not suffice for meetings that may be needed to target a specific
audience, such as those with fish and wildlife interest.
(d) Input to Feasibility Reports. The Feasibility Reports shall include a
description and evaluation of the efforts made to acquire public input and the information
and opinions expressed prior to arriving at a decision. The public involvement section of
the report shall show how public input was used in the planning and decision-making
process.
(e) Public Involvement Techniques.
(1) Dealing with the Media. Media relationships should be conducted by or
through the Public Affairs Office (PAO). PAO is skilled in techniques for the
presentation of information to the public and in techniques for dealing with various types
and levels of the media.
(2) Basic Communication Techniques. Technical experts often experience
difficulty in communicating with non-technically oriented publics. Corps planners
should know how to recognize values and develop skills to deal with different values.
"Values" information is among the most important in the planning process. Values
contain the information about what various publics think the plan "ought" to do. To be
successful, the planning process must provide forums for dialogue among those holding
different values, and facilitate discussion of meaningful tradeoffs.
(3) Meetings and Workshops. The guiding principle of designing meetings and
workshops is that "format follows functions," meaning that the design of the meeting
should reflect the purpose of the meeting. Meetings can serve five basic functions:
information giving; information receiving; interaction; consensus forming/negotiation;
and, summarizing. After determining a meeting purpose, the second most important
issue facing the planner is room arrangements. Room arrangements reflect the
relationships among the participants and are a visual demonstration to participants to
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what the Corps expects from the meeting. The third major issue the planner faces is the
choice of leadership style and meeting process. Numerous processes, most of which
revolve around variations of nominal group techniques, are available to the planner.
Within the various meeting processes, the planner should be aware of basic leadership
style difference in "facilitating" versus "controlling" meetings. In designing a workshop,
the planners should: identify the desired product; identify the resource information which
the public will need; select a series of activities which will result in the desired product;
and, design a simple mechanism for evaluating the workshop product. As the desired
function moves closer to conflict resolution, the state of the arts in meeting design
becomes more speculative.
(4) Public Meetings. The need for public meetings in a particular study will
depend on the study type and complexity. The Commander has the responsibility to
determine if the public or the Corps or both would benefit by the exchange of views or
information provided by public meetings. Public meetings should be designed to be fair
and impartial two-way communications and should be conducted informally and as
simply as possible. The person facilitating the meeting should be: thoroughly familiar
with the study; a rank or grade consistent with the audience expected; and skilled in
group facilitation techniques. The Corps presentation should contain a brief
summarization of the reason for the meeting and the progress of the study, and should
provide ample opportunity for interested parties to share their viewpoints. The process
used to achieve this exchange of views and information will be determined by the
responsible Corps official. Meetings should be held at a time and locality convenient to
the expected audience, normally in the area of the study. In cases where interest is very
widespread, it may be appropriate to hold meetings away from the study area. The
meeting announcement should be sent sufficiently in advance of the meeting to allow
attendees to plan for the meeting and should contain sufficient information to allow the
prospective attendee to decide if attendance would be beneficial. The meeting should be
held at times convenient for working people to attend without requiring them to take
leave time from their jobs. The language used in the announcement should be nontechnical and the tone should reflect a sincere intent to produce a fair exchange and
sharing of views and information. Distribution of the announcement should be as widespread as is consistent with the study and should include the members of Congress and
the Governors of the States involved. The record of the meeting should be consistent with
the type of meeting being held. A meeting involving great controversy may require a
verbatim transcript, while a meeting of less intense controversy may require simply a
short summarization.
(5) Questionnaires. Public surveys can be a valuable tool for obtaining specific
information needs and public preferences. Questions should always be organized around
very specific objectives, a data or content analysis plan, and a plan for using the survey
results in the planning. As required by the Paperwork Reduction Act of 1995, Public
Law 104-13, the Office of Management and Budget (OMB) must approve any
questionnaire to be responded to by 10 or more U.S. citizens or US firms, organizations,
or agencies outside the Federal Executive Branch. Prior to the use of questionnaires for
planning studies, field offices shall submit an SF 83 to HQUSACE (CECW-P). AR
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335-15 Chapter 4, describes required information. OMB has pre-approved a group of
questionnaires for collection of planning data. The questionnaires are found under OMBapproval number 0710-0001, Questionnaires for U.S. Army Corps of Engineers Civil
Works studies. The questionnaires cover the range of data that would generally be
collected by surveys in water resources studies. The Paperwork Reduction Act requires
OMB approval every three years. The approved questionnaires are transmitted by
memorandum every three years following OMB approval. OMB also now requires that
each individual survey effort be individually approved. The survey forms must be
submitted through a Division office point of contact to the Office of the Secretary of
Defense and OMB.
d. Analyzing Public Comment. Typically, the Corps receives large amounts of
solicited and unsolicited public comments on planning alternatives. This information
comes in the form of public comments, (written and spoken) and letters. Additionally,
written and spoken media, as well as past studies, are often available and normally
contain a wealth of public comment information. The planner should systematically
describe, analyze and evaluate the layers of information usually contained in such public
comments.
B-6.
Study Management Coordination.
a. Conduct of Reconnaissance Studies. Although the Corps is responsible for the
reconnaissance phase, efficient execution of the feasibility phase requires a cooperative
reconnaissance effort as well. Therefore, the time to begin assembling the study
management structure should be as early in the reconnaissance phase as possible. The
management structure will be formalized in the study Feasibility Cost Sharing Agreement
(FCSA).
b. Conduct of Feasibility Studies. The management structure developed during
the reconnaissance phase will remain in force during the feasibility phase. Some
adaptations may have to be made in the Study Management Team and in the Executive
Committee to reflect the sharing of study tasks as provided in the executed FCSA and
PMP.
B-7. Coordination with State and Local Governments Under E.O. 12372. Division and
District commanders shall coordinate civil works planning programs with State and local
governments in accordance with Executive Order 12372 (Intergovernmental Review of
Federal Programs) and 33 CFR 384 (Intergovernmental Review of the Department of
Army Corps of Engineers Programs and Activities).
a. Notification Requirements. Division and District commanders shall continue
to directly notify all affected and interested State, area wide and local governmental
interests and shall not rely on a state "single point of contact" (SPOC) to distribute
notifications. Notices to interested parties shall reference E.O. 12372; shall indicate
whether or not the program for which notice is being made has been selected by the
affected State, or states, for coordination under the Executive Order procedures; shall
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state that comments and responses to the notice should be sent directly to a designated
Corps official in addition to the State SPOC in those cases where the program has been
selected, and shall not state that the public will be notified, if the report recommendations
are materially modified prior to project approval.
b. Effective Coordination. Division commanders shall adopt such procedures as
may be necessary to assure coordination is effected with states in a manner consistent
with 33 CFR 384 and the processes established by the individual states. Problems should
be referred to HQUSACE (CECW-P) if they cannot be resolved to the division
commander's satisfaction in the field. Substantive comments received from a SPOC
should be acknowledged in writing, even if SPOC comments are fully accommodated.
B-8. Consultation and Coordination with Indian Tribal Governments. Division and
District commanders shall coordinate civil works planning programs with American
Indian and Alaska Native governments (hereinafter referred to as “tribes”) in accordance
with Executive Order 13084 “Consultation and Coordination with Indian Tribal
Governments” and Department of Defense policy. District and Division commanders
will fully integrate the principle and practice of meaningful consultation and
communication with tribes by:
•
recognizing that there exists a unique and distinctive political relationship
between the United States and the tribes that mandates that, whenever (DOD)
Corps actions may have the potential to significantly affect protected tribal
resources, tribal rights, or Indian lands, (DoD) the Corps must provide affected
tribes an opportunity to participate in the decision-making process that will ensure
these tribal interest are given due consideration in a manner consistent with tribal
sovereign authority;
•
consulting, consistent with government-to-government relations and in
accordance with protocols mutually agreed to by the particular tribe and DoD,
including necessary dispute resolution processes;
•
providing timely notice to, and consulting with, tribal governments prior to taking
any actions that may have the potential to significantly affect protected tribal
resources, tribal rights, or Indian lands;
•
consulting in good faith throughout the decision-making process; and
•
developing and maintaining effective communication, coordination, and
cooperation with tribes, especially at the tribal leadership-to-Division and District
Commander levels.
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B-9. Public Notices. Public notices issued by field commanders will not contain
language to the effect that the public will be notified, prior to final action, should report
recommendations be materially modified prior to project approval.
B-10. Advisory Committees. Public Law 92-463 establishes approval and other
requirements for advisory committees, boards, councils, conferences, panels, task forces,
commissions or other similar groups formed in the interest of obtaining advice or
recommendations. Advisory committees wholly comprised to full time officers or
employees of the Federal Government, local civic groups whose primary function is
rendering a public service with respect to a Federal program, or groups providing advice
to State and local governments are exempt from those requirements. If an advisory
committee not exempt from the Act is desired as a part of a study, approval shall be
requested through HQUSACE (CERM). No advisory committee shall be established
prior to approval. AR 15-1 describes information required to establish an advisory
committee under the Act.
B-11. Exclusions. The Commander shall have the discretion to modify public
involvement requirements for emergency planning studies under Section 14 of Public
Law 79-526, as amended (Continuing Authorities)
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APPENDIX C
Environmental Evaluation and Compliance
TABLE OF CONTENTS
Paragraph
Page CEnvironmental Evaluation and Compliance....................................................................................1
C-1. Introduction and Overview..................................................................................................1
C-2. Procedures for Environmental Evaluation ..........................................................................2
C-3. Ecological Resources. .........................................................................................................4
C-4. Cultural Resources. .......................................................................................................... 24
C-5. Aesthetic Resources ........................................................................................................ 37
C-6. Water Quality and Related Requirements ....................................................................... 41
C-7. Air Quality and Related Requirements ........................................................................... 47
LIST OF EXHIBITS
Exhibit C-1. Recommended Outline For Section 404(B)(L) Evaluation..................................... 48
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APPENDIX C
Environmental Evaluation and Compliance
C-1.
Introduction and Overview
a. Purpose. This appendix addresses the integration of environmental evaluation and
compliance requirements, pursuant to national environmental statutes, applicable executive
orders and other Federal planning requirements, into the planning of Civil Works water and
related land resources comprehensive plans and implementation projects. (Note: Every effort
has been made to eliminate all inconsistencies between the main body of the ER and the
appendices. If any inconsistencies are found, the information in the main body of the ER will
prevail over the one in the appendices. Please, notify CECW-PD immediately of any
inconsistencies for correction.)
b. Overview. The nation is attuned to the many ways healthy ecosystems support the
economy and provide for the public good. The Water Resources Planning Act, as amended
(WRPA) (42 U.S.C. 1962a-2) and the National Environmental Policy Act of 1969 (NEPA) (42
U.S.C. 4321-4347 guide the Civil Works planning process, serving to focus the critical
evaluation of the cost of today’s activities in terms of tomorrow’s resources. In 1962, Congress
recognized the need for coordinated planning related to the conservation, development, and
utilization of water resources and, through the WRPA, required the establishment and use of
principles, standards and procedures for the formulation and evaluation of water and related land
resources projects. In 1969, by way of the NEPA, Congress recognized the profound impact of
human activity on the interrelations of all components of the natural environment as well as the
critical importance, to humans, of restoring and maintaining environmental quality. The Federal
Government was charged with using all practicable means and measures in a manner calculated
to foster and promote the general welfare, create and maintain conditions under which humans
and nature can exist in productive harmony, and fulfill the social, economic and other
requirements of present and future generations of Americans. Numerous other laws, regulations
and Administration initiatives, have echoed this National environmental policy. Integrated, the
implementing regulations for the WRPA and the NEPA provide an effective framework for the
formulation and evaluation of water resources comprehensive plans and implementation projects,
which is responsive to the challenge of sustainable development in our Nation and the world.
c. Federal Objectives. The Federal objective for water and related land resources
planning was established in the Water Resource Council’s Economic and Environmental
Principles for Water and Related Land Resources Implementation Studies (Principles), and is
further discussed in the Economic and Environmental Guidelines for Water and Related Land
Resources Implementation Studies (Guidelines).
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(1) The Principles and Guidelines (P&G) provide that planning, which is to contribute to
national economic development, is to be consistent with protecting the Nation’s environment,
pursuant to national environmental statutes, applicable executive orders, and other Federal
planning requirements. With respect to “protecting the Nation’s environment”, the Corps has
adopted the standard that it “is achieved when damage to the environment is eliminated or
avoided and important cultural and natural aspects of our nation’s heritage are preserved”.
(2) Since implementation of the P&G, Ecosystem Restoration has become a primary
mission of the Corps. The Federal objective for this mission is to increase the net quantity and/or
quality of desired ecosystem resources. The planning of these projects must also be pursuant to
national environmental statutes, applicable executive orders, and other Federal planning
requirements.
d. Evaluation Procedures. Evaluation procedures are discussed in Section C-2. Sections C3 through C-5 provide additional details for addressing the ecological, cultural and aesthetic
resources included in the evaluation procedures. Section C-6 addresses additional evaluation
procedures related to water quality.
e. Compliance Requirements. Requirements for complying with environmental statutes are
also referenced throughout the P&G. Specific procedures for major related environmental
compliance requirements are presented in Sections C-3 through 6.
C-2.
Procedures for Environmental Evaluation
a. Purpose. Environmental evaluation is a process that integrates considerations of
environmental considerations, impacts and opportunities throughout the planning process. This
section provides guidance on applying the environmental evaluation procedures to planning
water resources implementation projects while at the same time fulfilling the requirements of the
NEPA and other statutory requirements. The P&G, 40 CFR Parts 1500-1508 and ER 200-2-2,
discussed below, provide detailed guidance and are incorporated into this appendix.
b. Environmental Planning. Implementing regulations for the WRPA are the P&G, found
at: http://www.wrsc.usace.army.mil/iwr/pdf/p&g.pdf. Provisions for environmental considerations
are integrated throughout the P&G and are specifically addressed in discussions of the
Environmental Quality (EQ) Account (Section 7 of the Principles and Chapter II, Section 1.7.3,
of the Guidelines) and the EQ Procedures (Chapter III of the Guidelines). The EQ procedures
should be applied early in the planning process so that the significant natural and cultural
resources of the study area can be identified and inventoried, used in developing planning
objectives, and accommodated in a reasonable set of alternative plans, which achieve the
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planning objectives. In later stages of planning, the procedures will be used to evaluate the
alternative plans and aid in plan selection. The final use of the procedures is in the decision
process that leads to plan selection.
c. NEPA Process. The NEPA requires that decision making should proceed with full
awareness of the environmental consequences that follow from a major Federal action, which
significantly affects the environment. Provisions for complying with the NEPA are found in the
Council of Environmental Quality Regulations (40 CFR Parts 1500-1508) and are supplemented
by ER 200-2-2.
(1) The NEPA compliance process, following ER 200-2-2, will begin with an assessment
of potential environmental impacts as judged by comparing the with and without project
conditions. These potential impacts help define the study area, and should be addressed over the
whole of that area. Also, the physical impacts (air and water quality, soils and slope) should be
explicitly addressed early in the assessment process, because of their potential influence on any,
or all, of the resource analyses. Potential significant impacts on any of these physical attributes
should be evaluated and made explicit in the decision process, in the same manner as are the
ecological, cultural and aesthetic attributes under the EQ procedures.
(2) The impact assessment process may lead to a determination that an environmental
impact statement (EIS) is required. The preparation and coordination of these is also detailed in
ER 200-2-2.
(3) Measures to avoid, lessen, mitigate or compensate for environmental impacts should
be described in the decision document. The major and significant measures should be
summarized in one table that is part of the environmental appendix. This table should describe
each measure to be taken, the objective that it is intended to fulfill, and the impact to which it
applies. If any of these are a requirement for specific compliance with a statute, legal decision,
or formal commitment, that should also be indicated in the table.
d. Additional Requirements. The integrated EQ procedures and NEPA process provide a
framework for compliance with other environmental elements with specific statutory compliance
requirements. The majority of these are listed as sources of institutional recognition in Table
3.4.3, Chapter III, of the P&G. For additional information concerning environmental statutes and
Executive Orders refer to the Civil Works Environmental Desk Reference (IWR Report 96-PS-3,
updated July 1997).
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C-3.
Ecological Resources.
a. Purpose. This section supplements the guidance for evaluation of the ecological
attributes under the EQ evaluation procedures. This section has emphasis on ecological
resources and ecosystem restoration, with particular consideration of fish and wildlife resources,
in Civil Works planning studies.
b. Explanation of Terms.
(1) Ecological Resources. A natural form, process, system or other phenomenon that is
related to land, water, atmosphere, plants or animals that has attributes or properties which
sustain and enrich human life. These properties are components of the environment and the
interactions among all its living (including people) and nonliving components that directly or
indirectly sustain dynamic, diverse, viable ecosystems. In this category are functional and
structural aspects that require special consideration because of their unusual characteristics.
Ecological Resources include fish and wildlife resources, which are provided special
consideration under various environmental statutes.
(2) Ecosystem Restoration Planning Objectives. Ecosystem restoration objectives are
clearly written statements that prescribe specific actions to be taken to improve the ecosystem, or
fish and wildlife resources, and describe units of measurement (e.g. habitat units), to be used to
evaluate contributions proposed actions make toward the stated objective.
(3) Enhancement. Enhancement is the net improvement an alternative plan, or project,
makes to ecological resources (singularly or collectively) compared with the "without" plan or
project condition. Policy under current budgetary constraints does not provide for
implementation of separable features for enhancement of fish and wildlife resources unless such
enhancement falls within the definition of fish and wildlife habitat restoration.
(4) Essential Fish Habitat: Related to marine resources, it is those waters and substrate
necessary to fish for spawning, breeding, feeding or growth to maturity (Magnuson-Stevens Act,
16 U.S.C. 1801 et seq).
(5) Fish and Wildlife Resources Stewardship. Fish and wildlife resources stewardship is
the level of preservation, conservation and protection afforded fish and wildlife resources on
project lands, consistent with the Conservation of Forest Lands Act, Public Law 86-717.
Stewardship of project lands is a Federal responsibility and should be considered when
describing the "with" and "without" project condition.
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(6) Ecosystem Restoration. Ecosystem restoration consists of separable features
undertaken to return a degraded condition to a less degraded condition. The goal of ecosystem
restoration is to reverse the adverse impacts of human activity and restore ecological resources,
including fish and wildlife habitats, to previous levels of productivity but not a higher level than
would have existed under natural conditions in the absence of human activity or disturbance.
(7) Incremental Analysis. Incremental analysis is the investigation and documentation of
the relationship between costs (dollars) incurred to realize each unit of output (improvement)
associated with the implementation of each plan increment.
(8) Incremental Cost. Incremental (or marginal) cost means extra cost. Incremental cost
is the increase in cost incurred when output is increased by one unit. For example, if it costs
$100 to produce 10 units ($10/unit) and $115 to produce 11 units, then $15 is the incremental
cost of the 11th unit.
(9) Justification. The determination that the combined monetary and non-monetary value
of the last increment of benefits realized from an ecosystem or a fish and wildlife management
action or feature (hereafter actions are included under management features) exceeds the
combined monetary and non-monetary costs of the last added increment so as to reasonably
maximize overall project benefits. For mitigation, "benefits" shall be interpreted as being the
same as "losses prevented or replaced".
(10) Management Features. Management features are established ecosystem, including
fish and wildlife resources, management procedures, activities or techniques that contribute to
mitigation and ecosystem restoration planning objectives. Examples are fencing to prevent
habitat damage by livestock or human activities; land cover manipulation designed to increase
habitat quality; fish ladders; lands acquired which provide preservation credit and/or
opportunities for achieving other mitigation or ecosystem restoration objectives, and the
development and enforcement of fish and wildlife conservation-related regulations.
(11) Management Plan Increment. A management plan increment consists of one or
more management features. Plan increments may interrelate and complement one another, but
they can not be functionally dependent upon another increment. For example, if the fencing out
of livestock is required before a constructed food plot can be effective, then the fence and the
food plot would be considered as being functionally dependent and, therefore, combined into a
single plan increment.
(12) Mitigation. Mitigation includes:
(a) Avoiding the impact altogether by not taking a certain action or part of an action;
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(b) Minimizing impacts by limiting the degree or magnitude of the action and its
implementation;
(c) Rectifying the impact by repairing, rehabilitating, or restoring the affected
environment;
(d) Reducing or eliminating the impact over time by preservation and maintenance
operations during the life of the action;
(e) Compensating for the impact by replacing or providing substitute resources or
environments. “Replacing" means the replacement of fish and wildlife resources in-kind.
"Substitute" means the replacement of fish and wildlife resources out-of-kind. Substitute
resources, on balance, shall be at least equal in value and significance as the resources lost.
(13) Mitigation Planning Objectives. Mitigation planning objectives are clearly written
statements that prescribe specific actions to be taken to avoid and minimize adverse impacts, and
identifies specific amounts (units of measurement, e.g., habitat units) of compensation required
to replace or substitute for remaining, significant unavoidable losses.
(14) Project Lands. For preauthorization studies, "project lands" are lands determined to
be required to realize benefits attributed to alternative plans. For authorized projects, project
lands are lands required for authorized project purposes. For projects under construction, or
those that have been completed, project lands are lands that have been acquired for project
purposes.
(15) Public Lands. Public lands are owned or otherwise legally entrusted to a local, State
or Federal agency.
(16) Resource Categorization. Resource categorization consists of describing and
assigning values and significance to resources. Ecological resource categorization is used to
determine if ecosystem restoration opportunities exist, if losses warrant mitigation
considerations, and for making decisions to either mitigate losses in-kind, or to allow for
substitute resource trade-offs.
(17) Separable Features. Separable features are single purpose components of a plan
designed to address ecological resources management objectives. Separable features include
lands acquired specifically for fish and wildlife resources management purposes, engineering
features, and management actions performed.
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(18) Significant Resources and Effects. The criteria for determining the significance of
resources and effects are provided in Chapter I, Section 1.7.3 and Chapter III, Sections 3.4.12 and
3.4.14 of the P&G, 40 CFR Part 1508.27 and section d(4) below.
(a) Significant National Economic Development (NED) Resources. Ecological resources
having substantial commercial and/or recreational value.
(b) Significant Environmental Quality (EQ) Resources. Ecological resources, including
fish and wildlife resources and associated habitats, that are technically, institutionally, or publicly
recognized as having substantial non-monetary value from either an ecological, cultural or
aesthetic standpoint.
(c) Significant Effects. Effects an alternative plan has on ecosystems or ecological
resources, including fish and wildlife, that are determined to have a material bearing on the
decision-making process.
c. Coordination, Consultation and Public Involvement. District commanders shall
initiate general public participation procedures, for ecosystem restoration or ecological resources
conservation purposes, consistent with guidance set forth in Appendix B of this regulation. Such
coordination and public involvement shall include, but not be limited to, government entities at
the Federal, regional, State, and local levels, and national and local public and private
organizations, including Indian tribes. Special coordination and consultation requirements are
discussed below.
(1) Fish and Wildlife Coordination Act (FWCA): Coordination and Funding. The
District Commander shall coordinate with the U.S. Fish and Wildlife Service (FWS), the
National Marine Fisheries Service (NMFS), and the appropriate head of the State agency
exercising administration over the fish and wildlife resources beginning with the initiation of the
reconnaissance report phase, and continuing through the feasibility, and planning/engineering/
design phases of project development.
(a) The District Commander shall invite the above agencies to participate in study
scoping, to identify fish and wildlife concerns, to identify available information, to obtain their
views concerning the significance of fish and wildlife resources and anticipated impacts, and to
determine those resources which shall be evaluated in the study. The District Commander shall
provide the appropriate offices of the above agencies with relevant information developed in
investigations included in reconnaissance, feasibility, and planning/engineering/design studies,
and shall provide these agencies an opportunity to comment on the formulation and evaluation of
alternative plans. Full consideration shall be given to Federal and State agency comments and
recommendations resulting from this coordination.
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(b) Funding arrangements between the Corps and FWS for FWCA activities associated
with Civil Works feasibility and planning/engineering/design studies shall be implemented
consistent with procedures set forth in the current Corps/FWS Transfer Funding Agreement. The
Corps/FWS Transfer Funding Agreement is applicable to the reconnaissance report phase, and
should be used to scope out FWCA compliance requirements for FWS involvement during the
cost-shared feasibility study, consistent with Article III of the Agreement.
(2) Endangered Species Act (ESA): Section 7 Coordination/Consultation. Section 7
provides for specific coordination and consultation with the FWS and NMFS. The District
Commander shall initiate specific coordination and consultation, as needed, for endangered and
threatened species and designated critical habitat. Coordination, consultation and
implementation of Section 7 of the ESA does not require the transfer of funds from the Corps to
the FWS or NMFS.
(a) The District Commander shall formally request from the FWS/NMFS information on
any listed or proposed species or designated or proposed critical habitat that may be in the project
area.
(1) If the FWS/NMFS identifies listed or proposed species or designated or proposed
critical habitat, then the District Commander shall conduct a biological assessment to determine
if the proposed project may affect any such species and or critical habitat. The biological
assessment should be completed within 180 days unless an extension of time is mutually
acceptable to the District and FWS/NMFS.
(2) Upon completion, the District Commander shall send the biological assessment and
conclusions to the FWS/NMFS, advising them whether plans being considered may affect or will
not affect the listed or proposed species or designated or proposed critical habitat.
(b) During the conduct of the biological assessment the District Commander, in
coordination with the FWS/NMFS and the appropriate State resource agency(s), shall identify the
location in the study area of listed and proposed endangered and threatened species and
designated or proposed critical habitat.
(1) If listed and proposed species or designated or proposed critical habitat are identified
in the study area, these data shall be used to identify areas that should be avoided or critically
considered and to determine what opportunities exist for conserving these resources during the
formulation of alternative plans.
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(2) If the biological assessment indicates that an alternative plan(s) may affect a listed
endangered or threatened species or critical habitat, the District Commander shall request formal
consultation with the FWS/NMFS. If the biological assessment determines the alternative
plan(s) is not likely to adversely affect endangered or threatened species or critical habitat, then
the District Commander may request informal consultation with FWS/NMFS to receive their
written concurrence with the determination of no adverse affect. If the FWS/NMFS does not
concur with the District Commander's no adverse determination, the FWS/NMFS may request
the District Commander to initiate formal consultation with the FWS/NMFS. This request must
be documented in a letter either from FWS/NMFS to the District Commander or from the
District Commander to FWS/NMFS which acknowledges an oral request from FWS/NMFS
made during a meeting or telephone conversation.
(c) If the biological assessment indicates that the action is likely to jeopardize the
continued existence of a proposed species or result in the destruction or adverse modification of
proposed critical habitat, the District Commander shall initiate a conference with the
FWS/NMFS. The FWS/NMFS will review the information and make advisory
recommendations, if any, on ways to avoid or minimize the adverse impact. If the species is
subsequently listed or critical habitat designated prior to completion of the action, the District
Commander must review the action to determine if formal consultation is required.
(d) The District Commander can formally request a formal conference on the proposed
species or proposed critical habitat with the FWS/NMFS. The conference may be conducted in
accordance with the procedures for formal consultation. An opinion issued at the conclusion of
the conference may be adopted as the biological opinion when the species is listed or critical
habitat is designated, but only if no significant new information is developed and no significant
changes to the proposed action are made that would alter the content of the opinion. An
incidental take statement provided with a conference opinion does not become effective unless
the FWS/NMFS adopts the opinion once the listing is final.
(e) The incidental take provision, resulting from the Endangered Species Amendments of
l982, is provided in all biological opinions, where an anticipated take may occur, whether there is
a "no jeopardy" or a "likely jeopardy". This provision permits the District Commander to "take"
a specified number of the protected species, or impact a specified acreage of habitat in the project
area, without being subject to the prohibitions (penalties) established in Section 4(d) and 9(a)(12) of the Act. The incidental take statement will also specify "reasonable and prudent" measures
necessary to minimize impacts; set forth the terms and conditions, including, but not limited to,
reporting requirements that must be complied with by the District Commander in order to
implement reasonable and prudent measures; and, specify the procedures to be used to handle or
dispose of any individuals of a species taken.
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(f) If the FWS/NMFS biological opinion indicates that an alternative plan would have the
positive effect of conserving listed species or critical habitat, the District Commander shall
consider this important feature during subsequent formulation and selection of the recommended
plan.
(g) If the FWS/NMFS provides conservation recommendations for an alternative plan to
create enhancement opportunities for listed species or critical habitat, the District Commander
shall have the discretion either to accept or reject the recommended modification. However, a
decision to reject such FWS/NMFS recommendations shall be clearly documented and the
rationale provided.
(h) In compliance with Section 7(d) of the Act, the District Commander shall not make
any irreversible or irretrievable commitment of resources during consultation which, in effect,
would preclude formulation or implementation of reasonable alternatives concerning listed
endangered and threatened species. The spending of dollars for planning studies does not
constitute an irreversible or irretrievable commitment of resources.
(i) If the FWS/NMFS biological opinion indicates that an alternative plan is likely to
jeopardize listed species or to destroy or otherwise have an adverse impact on critical habitat, the
District Commander shall either respond with additional information in support of the proposed
plan, drop the alternative plan from further consideration, accept the FWS/NMFS recommended
reasonable and prudent alternative and modify the alternative plan accordingly, or seek an
exemption. See 50 CFR, Parts 450-453, for specific guidance for seeking an exemption.
(j) For emergency actions District commanders shall meet the consultation requirements
related to the ESA to the fullest extent practicable, unless they determine that the resulting delays
will lead to unacceptable risks to health, life, property, or unacceptable economic losses.
(1) When emergency circumstances mandates the need to consult in an expedited
manner, consultation may be conducted informally by contacting the FWS/NMFS by telephone
and requesting advice. This provision applies to situations involving acts of God, disasters,
casualties, national defense or security emergencies, etc. Carrying out the directive of this
paragraph is crucial, since compliance with the ESA cannot be waived by the Corps of
Engineers.
(2) Formal consultation shall be initiated as soon as practicable after the emergency is
under control.
(3) The District Commander shall submit information on the nature of the emergency
action(s), the justification for the expedited consultation, and the impacts to endangered or
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threatened species and their habitats. The FWS/NMFS will evaluate the information and issue a
biological opinion including the information and recommendations given during the emergency
consultation.
(3) Food Security Act of 1985: Wetlands Protection and Conversion Determination
Under the Swampbuster Provisions of the Act. The Food Security Act of 1985 (Public Law
99-198) contains provisions designed to discourage the conversion of wetlands into non-wetland
areas. These, collectively, are commonly referred to as "Swampbuster" provisions, and are
implemented under Department of Agriculture (USDA) final rule, effective 17 September 1987
(7 CFR 12). The final rule sets forth the terms and conditions under which a farmer, who has
produced an agricultural commodity on converted wetlands, shall be declared ineligible for
certain benefits provided by USDA.
(a) Farmers who plant commodity crops, after 23 December 1985, on lands that were
converted from a wetland to a non-wetland condition by a Corps project will trigger
"Swampbuster" considerations, which may lead to the cited USDA program ineligibility.
(b) District commanders shall coordinate with the Department of Agriculture, Natural
Resources Conservation Service, to determine the applicability of Swampbuster to Corps flood
control projects that provide protection to agricultural lands, either through design or incidental
to other project purposes.
(c) Correspondence developed in association with this coordination shall be included in
project reports, and all pertinent information discussed in appropriate environmental documents.
(4) National Wildlife Refuge System Administration Act of 1966 (16 U.S.C. 668)(Public
Law 89-669). Part 668dd, paragraph (d), authorizes the Secretary of the Interior (Secretary) to
issue use permits for activities performed on National Wildlife Refuge whenever he determines
that such uses are compatible with the major purposes for which such areas were established.
(a) District commanders shall initiate coordination with the Regional Director, U.S. Fish
and Wildlife Service, immediately upon determining that a Corps project feature or activity
would likely involve the use of refuge lands. This coordination shall be designed to obtain a
formal written response from the Regional Director on whether or not the Corps activity will
require a compatibility determination; and, if so, the procedures that must be followed to obtain
the necessary compatibility determination.
(b) Correspondence associated with seeking a compatibility determination shall be
included in project reports, and all pertinent information shall be discussed fully in appropriate
environmental documents.
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(5) Magnuson Fishery Conservation and Management Act of 1976, as amended: Section
110 Coordination/Consultation: Public Law 99-659, Section 104, and Public Law 104-297,
Section 110, amends the 1976 Act to provide for specific coordination and consultation with a
Regional Fishery Management Council (Council) and the National Marine Fisheries Service
(NMFS), respectively. Consultation/coordination is relative to impacts a Federal activity may
have on the habitat of fishery resources. The District Commander shall coordinate and consult
with the Council relative to impacts a Federal activity may have on habitat under the Council's
jurisdiction and with the NMFS with respect to any action federally authorized, funded, or
undertaken, or proposed to be authorized, funded, or undertaken, that may adversely affect any
essential habitat identified under the Act, as amended.
(a) Coordination and consultation with the Council shall be in accordance with the
formal coordination procedures established between District Commanders and appropriate
Councils in his or her area. Such procedures shall be modified as appropriate to ensure inclusion
of review and comment procedures for feasibility reports involving coastal area development and
to respond within 30 days to comments and recommendations made by a Council.
(b) Coordination and consultation with the NMFS shall be initiated specifically, as
needed, or concurrent with activities under the FWCA and/or the ESA. Coordination,
consultation and implementation of Sections 104 or 110 does not require the transfer of funds
from the Corps to the Council or the NMFS.
(c) Correspondence shall be included in project reports, and all pertinent information
shall be discussed fully in appropriate environmental documents.
d. Plan Formulation and Evaluation.
(1) General.
(a) It is national policy that ecosystem restoration, particularly that which results in the
conservation of fish and wildlife resources, be given equal consideration with other study
purposes in the formulation and evaluation of alternative plans. Current planning guidance
specifies that the Federal objective of water and related land resources planning is to contribute
to national economic development consistent with protecting the Nation's environment, pursuant
to national environmental statutes, and applicable executive orders. Protecting the Nation's
environment is achieved when damage to the environment is eliminated or avoided; i.e.,
mitigated, and unavoidable adverse effects are compensated. Mitigation requirements shall be
pursued consistent with guidance set forth below.
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(b) Ecological resources shall be described and evaluated consistent with current policy
and planning guidance. Evaluation of ecological resources shall be based upon the significance
of the resources involved; the significance of impacts (positive and negative) alternative plans
have on these resources; and the contribution project features make toward fulfillment of
established ecological resource-oriented management objectives. Evaluation of management
features shall be based upon the features' completeness, effectiveness, efficiency and
acceptability in fulfilling established management (mitigation or enhancement) objectives.
(2) Reconnaissance Study Phase. Ecological resources considerations during the
reconnaissance stage of planning shall be of sufficient scope and detail to:
(a) Identify the presence and general location of known resources within the study area
that should be approached with care;
(b) Make a preliminary appraisal of measures for restoration including an assessment of
consistency with Army policies, costs, monetary and non-monetary benefits, impacts and
potential for local sponsorship.
(c) Make preliminary determinations of likely impacts potential alternative plans would
have on these resources;
(d) Briefly describe potential mitigation features that would address these impacts; and,
(e) Scope out resources surveys, studies and analyses to be conducted during the
feasibility study stage.
(3) Feasibility Study Phase. Ecological resources consideration during this stage of
planning will be of sufficient scope and detail to effectively quantify impacts the NED, NER and
recommended plan (if not one of the same) will have on the resources, and to justify mitigation
and restoration features being recommended. In compliance with this guidance, District
commanders shall:
(a) Conduct appropriate coordination, studies and analyses throughout the planning
process to determine the significance of ecological resources likely to be affected by alternative
plans, and the significance of these effects;
(b) Comply with the Fish and Wildlife Coordination Act by giving full consideration to
reports and recommendations furnished by the Secretary of the Interior (U. S. Fish and Wildlife
Service), the Secretary of Commerce (National Marine Fisheries Service), and the appropriate
head of the State agency exercising administration over the fish and wildlife resources;
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(c) Give special consideration, as described in section c(2)(i) above, to the reports and
recommendations of the Secretary of the Interior (U.S. Fish and Wildlife Service) and the
Secretary of Commerce (National Marine Fisheries Service) on the conservation of Federally
listed and proposed listed endangered and threatened species, and their designated critical
habitat, furnished in compliance with the Endangered Species Act;
(d) Consider comments furnished by local public officials and the general public and use
the information, as appropriate, to supplement information and recommendations provided by the
above Federal and State fish and wildlife resources agencies;
(e) Determine the need for mitigation by assessing ecological resources gains and losses
attributed to alternative plans;
(f) Assess the extent to which beneficial ecosystem management features of alternative
plans offset adverse impacts (losses) before consideration is given to separable mitigation
features;
(g) Formulate justifiable ecological resource management features based upon thorough
professional evaluations;
(h) Consider including separable ecological resources management features only when
adverse effects exceed beneficial effects, or when the adverse effects include such significant
ecological values the specific features are justified;
(i) Formulate specific ecological resources mitigation and restoration plans using
generally known and established techniques to address specific, clearly defined management
objectives;
(j) Give full consideration to the establishment of wetland habitat in alternative involving
the disposal of dredge material;
(k) For alternatives involving existing projects, give full consideration to modifications
in the structures and operations of such projects for purposes of ecosystem restoration;
(l) Demonstrate that damages to significant ecological resources have been avoided or
minimized to the extent practicable; that unavoidable damages to these resources have been
compensated to the extent justified; and, that restoration opportunities for significant ecological
resources have been given appropriate consideration;
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(m) Demonstrate that damage to wetland resources has been avoided or minimized to the
extent practicable; that unavoidable adverse impacts to wetlands have been compensated; and,
that wetland restoration opportunities associated with the study have been properly addressed.
(4) Significance Determination.
(a) Resources. The significance of ecological resources shall be based upon both their
monetary (NED) and non-monetary (EQ) values. Both monetary and non-monetary values shall
be identified and clearly described. Monetary value shall be based upon the contribution the
resources makes to the Nation's economy. Non-monetary value shall be based upon technical,
institutional, and public recognition of the ecological, cultural and aesthetic attributes of
resources within the study area. Criteria for determining significance shall include, but not be
limited to, the scarcity or uniqueness of the resource from a national, regional, State and local
perspective. Non-monetary values associated with ecological resources are subjective, and
depend on the value society places on them. Different publics may express differing values and
concerns for the non-monetary and monetary values associated with similar fish and wildlife
resources. Such differences shall be documented, including the rationale used to select values
chosen to determine resource significance.
(b) Impacts. The significance of impacts of alternative plans shall be evaluated based
upon the extent, intensity and duration of the impact on significant ecological resources,
compared to the "future without plan" condition. Refer to Section C-3, c, (3) if farmed or
converted (Swampbuster) wetlands are involved.
(5) Methodology. Monetary, as well as a number of non-monetary, values associated
with ecological resources arise primarily from the quantity and quality of fish and wildlife habitat
within the study area. Therefore, habitat-based evaluation methodologies, supplemented with
production, user-day, population census, and/or other appropriate information, shall be used to
the extent possible to describe and evaluate ecological resources and impacts associated with
alternative plans. Specific guidance for analyses required to evaluate and describe recommended
mitigation and restoration features are described below.
e. Mitigation Planning and Recommendations.
(1) General. District commanders shall ensure that project-caused adverse impacts to
ecological resources have been avoided or minimized to the extent practicable, and that
remaining, unavoidable impacts have been compensated to the extent justified. The
recommended plan and the NED plan, if not one in the same, shall contain sufficient mitigation
to ensure that either plan selected will not have more than negligible adverse impacts on
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ecological resources (Section 906(d), WRDA`86). Any such mitigation measures will be fully
justified.
(2) Justification. Justification of mitigation features recommended for inclusion in
projects shall be based upon analyses that demonstrate the combined monetary and non-monetary
values of the last increment of losses prevented, reduced, or replaced is at least equal to the
combined monetary and non-monetary costs of the last added increment so as to reasonably
maximize overall project benefits. In addition, an incremental cost analysis, to the level of detail
appropriate, will be used to demonstrate that the most cost effective mitigation measure(s) has
been selected.
(3) Separable Features. Full credit shall be given to the beneficial aspects of an
alternative plan, or project, before consideration is given to adding separable mitigation features.
The significance of the ecological resources affected by an alternative plan/project, and the
significance of adverse impacts to these resources shall be evaluated to determine the need for
separable mitigation features. Evaluation of a separable mitigation feature is appropriate when it
is determined that the net adverse impacts of an alternative plan/project exceed its net beneficial
effects, and/or when the resulting losses include values (monetary and non-monetary) of such
significance that specific consideration is justified.
(4) Range of Alternatives. To properly evaluate and compare mitigation features, and to
determine remaining unmitigated losses if any, mitigation planning shall address a range of
alternatives up to the full compensation of significant ecological resource losses. Appropriate
units of measure shall be specified in mitigation planning objectives to aid in this evaluation.
Examples of units of measure include habitat units, or other habitat quality indicators, numbers
of animals, pounds of fish, user-days, etc.
(5) Land Requirements. The District Commander shall consider utilization of both
public and private lands, and select the lands that represent the best balance of costs,
effectiveness, and acceptability consistent with incremental cost analysis guidance described
below.
(6) Special Requirements for Bottomland Hardwoods. Mitigation plans shall ensure that
adverse impacts to bottomland hardwood forests are mitigated in-kind, to the extent possible.
The intent is that the bottomland hardwood forest as an ecological system be mitigated rather
than mitigating for faunal species in an upland hardwood forest habitat type. In this instance "to
the extent possible" shall take into consideration the availability of manageable units of existing
or restorable bottomland hardwood forests and the practicability and feasibility of implementing
management measures to accomplish in-kind mitigation. In-kind does not necessarily mean
acre-for-acre, but may be restoration or the increased management of bottomland hardwood
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forests to compensate for the loss of biological productivity (habitat quality). Consultation with
appropriate Federal and non-Federal agencies is required in complying with this requirement.
(7) Wetlands. District commanders shall ensure that adverse impacts to wetland
resources are fully mitigated. Mitigation shall be accomplished through appropriate actions
taken to avoid, minimize, and compensate for unavoidable losses as required to clearly
demonstrate efforts made to meet the administration's goal of no net loss of wetlands.
(8) Incremental Cost Analysis. An incremental cost analysis shall be performed for all
recommended mitigation plans. The purpose of incremental cost analysis is to discover and
display variation in costs, and to identify and describe the least cost plan. Mitigation analysis
shall be presented in an analytical framework commensurate with other project benefits and costs
so that rational decisions regarding mitigation can be made. The least cost mitigation plan that
provides full mitigation of losses specified in mitigation planning objectives, and which is
unconstrained except for required legal and technical constraints, shall always be identified and
displayed. The recommended plan, if different, will be compared to it. Planning methods and
data shall be used which yield cost estimate accuracy and reliability commensurate with that of
other cost analysis components of the overall study. District commanders shall clearly describe
sources of data and information used in performing incremental cost analysis.
(a) Procedures. These or similar steps are required to conduct and document incremental
cost analysis. All reports recommending mitigation shall demonstrate such steps have been
performed and documented under appropriate paragraph headings.
(1) Inventory and Categorize Ecological Resources. Conduct or update, as appropriate,
ecological resources inventories. Group resources into categories based on their relative
significance considering National, regional, State or local perspectives. Categorize into groups
that distinguish resources that must be mitigated in-kind from those that need not be. Clearly
describe criteria used in the categorization of resources.
(2) Determine Significant Net Losses. Give full credit to the beneficial effects of the
water resources project. Specify in quantitative terms the amount (units) of significant net losses,
by resource category.
(3) Define Mitigation Planning Objectives. Develop mitigation planning objectives that
reflect the specific losses to be addressed. Use a single unit of measurement to describe losses
being addressed by each mitigation planning objective. For example, if the mitigation planning
objective is to replace lost habitat quality, the unit of measurement must be in habitat units, or
something equivalent. These objectives shall be clearly stated and used to guide plan
formulation, to determine appropriate mitigation management features, and to establish
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benchmarks for evaluating the performance of each increment of management included in
alternative plans. Distinguish between those objectives that address losses that must be mitigated
in-kind from those that need not be. Mitigation credit shall be given only to plan increments that
contribute towards meeting stated mitigation planning objectives.
(4) Determine Unit of Measurement. The output of mitigation plan increments shall be
described in the same units of measurement used to calculate specific ecological resource losses,
and to define mitigation planning objectives. More than one unit of measurement (i.e., habitat
units, production units, acres of like habitat, user days, etc.) may be appropriate for inclusion in
an overall mitigation plan. However, the same unit of measurement must be used for describing
increments addressing a single objective, as discussed in (c) above.
(5) Identify and Assess Potential Mitigation Strategies. Identify suitable management
features responsive to mitigation objectives. Identify potential project lands, other public lands,
and separable private lands determined suitable for applying each candidate management feature.
The identification of potential mitigation sites should not be constrained for analysis purposes.
This analysis should focus on determining the management potential of each candidate site
relative to its ability to meet mitigation objectives. For the purpose of analysis preference shall
not be given to the management of project and other public lands over the use of suitable private
lands.
(6) Define and Estimate Costs of Mitigation Plan Increments. Properly defining cost
associated with each plan increment is critical to incremental analysis. The goal is to discover
and reveal variations in their costs. This requires establishing estimates of the cost of
implementation of the management features on selected candidate sites. The cost of
implementation includes development, operation and maintenance, and acquisition cost, if any.
Express incremental cost as the annual equivalent of the present worth of costs, in dollars per
unit of output, for example $/HU. Define plan increments so that cost differences are evident
when comparing plan increments with one another. Certain features should always be considered
either a separate plan increment, or the first added feature of a separate plan increment, e.g., land
acquisition, fish hatcheries or ladders, etc. If a given mitigation feature has differing unit costs
depending on where or when it is implemented, these cost differences imply separate plan
increments for cost analysis purposes. For example, two plan increments would generally result
if on project lands a given management feature, e.g., a food plot, has a cost of $.50/HU at site A
and $1.00/HU at site B. The same management measure applied to different properties (project
vs public vs private lands) shall be treated as separate increments regardless of similarity in their
relative costs. This is necessary to allow decision makers an opportunity to choose among these
properties when factors other than cost effectiveness must be considered.
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(7) Display Incremental Costs. Once costs have been estimated for mitigation plan
increments, array them from lowest to highest cost per unit of output. Incremental costs shall be
graphically displayed so that readers can easily see and compare the unit cost of each plan
increment. For example, incremental cost can be displayed as a bar graph from lowest to highest
cost per unit. The reader must be able to tell, either from the display itself or through
accompanying text, pertinent facts about each increment's output and cost.
(b) Documentation. All reports recommending mitigation features shall document the
above or similar steps used to perform incremental analysis, and discuss findings under the same
or comparable paragraph headings.
(9) Timing of Implementation. For all water resources development projects, on which
construction has not commenced as of 17 November 1986, authorized ecological resource
mitigation features, including the acquisition of lands or interest in lands to mitigate losses to
ecological resources, shall be undertaken or acquired either:
(a) Before any construction of the project (other than such mitigation land acquisition)
commences; or
(b) Concurrently with the acquisition of lands and interests in lands for project purposes
(other than mitigation of fish and wildlife losses); whichever the Secretary, determines is
appropriate except that any physical construction required for the purpose of mitigation may be
undertaken concurrently with the physical construction of such project. Any project authorized
before 17 November 1986, on which more than 50 percent of the land needed for the project,
exclusive of mitigation lands, has been acquired shall be deemed to have commenced
construction.
(c) Mitigation measures will generally be scheduled for accomplishment concurrently
with other project features in the most efficient way. Circumstances warranting the
accomplishment of mitigation as the first or last elements of project construction will require
prior approval by HQUSACE.
(10) Monitoring. Monitoring is appropriate for all mitigation actions to insure that those
actions have achieved the objective. The level of monitoring should be consistent with the
magnitude of the project and the degree of risk and uncertainty with the probable success of the
mitigation. Forecast methods and techniques have been identified that are applicable to Corps
projects that include state-of-the-art techniques and are generally acceptable to the resource
agencies. The District Commander shall include the cost of a monitoring program in the estimate
of O&M cost for mitigation measures, if such a program has been adopted in accordance with 40
CFR part 1505.2(c) and 1505.3.
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(11) Allocation and Apportionment of Mitigation Costs. Ecological resources mitigation
costs incurred after 17 November 1986 shall be allocated among the authorized purposes which
caused the requirement for mitigation, and shall be cost shared to the same extent as project costs
allocated to these purposes.
(a) Allocation. The impact analysis shall identify the project purposes which cause
losses to be mitigated. If practicable, the analysis shall identify the extent of losses separable or
specific to each purpose. Mitigation costs not associated with specific purposes will be included
with other joint project costs.
(b) Apportionment. Once the proportionate amounts of losses and corresponding
amounts of mitigation and costs are assigned to the appropriate purposes, joint costs of
mitigation should be allocated among the causative purposes on the same basis as other joint
costs.
(12) Mitigation Cost Sharing.
(a) LERRD. Non-Federal interests shall be required to provide lands, easements,
rights-of-way, relocations and disposal areas (LERRD) where this is a requirement of the purpose
that necessitates the mitigation except where otherwise agreed for the Corps to accomplish with
non-Federal funds. As Title I of Public Law 99-662 contains a generic requirement that
non-Federal interests provide LERRD, all future mitigation features will require non-Federal
interests to provide LERRD, if required, unless the project authorization after 17 November 1986
provides differently for mitigation.
(b) Construction. Construction costs for mitigation will be treated the same as other
project construction costs for cost sharing purposes.
(c) OMRR&R. Non-Federal interests will be responsible for all costs of operation,
maintenance, repair, rehabilitation, and replacement of mitigation features except for:
(1) Inland navigation projects and harbor projects with depths up to 45 feet, which have
no requirement for non-Federal sharing of these costs; and,
(2) Harbors with depths over 45 feet which require a 50 percent non-Federal share for
those costs assigned to increments in excess of a 45-foot project.
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(d) Exception. No cost sharing will be imposed without the consent of the non-Federal
interests where contracts have previously been signed for repayment of costs or until such
contracts are complied with or renegotiated.
(13) Preconstruction Environmental Protection and Mitigation Fund. This fund was
established by Section 908 of WRDA '86. Implementation of the fund has not been sought since
timing of implementation of mitigation features will assure that mitigation features will be
available to mitigate for unavoidable adverse project impacts as they occur.
(14) Operation, Maintenance, Repair, Rehabilitation and Replacement (OMRR&R) of
Mitigation Features.
(a) Federal Responsibility. Execution and performance of OMRR&R for ecological
mitigation features of a project shall be a Corps responsibility whenever the project
authorization, or recommendation for authorization, provides for the Corps to operate, maintain,
repair, rehabilitate or replace other project features. The manner in which the District
Commander exercises this authority and responsibility will vary widely, depending on the
location of the fish and wildlife mitigation features and the type of ecological management and
administration required. Plans recommended for authorization in this category shall identify the
Corps OMRR&R responsibility. OMRR&R of ecological resources features included in an
alternative plan to mitigate losses associated with an existing Federal program (e.g., National
Migratory Bird Management Program) shall be the responsibility of the Federal agency that
administers that program.
(b) Non-Federal Responsibility. OMRR&R of fish and wildlife mitigation features shall
be a non-Federal responsibility whenever the project authorization or recommendation for
authorization provides for non-Federal interests to operate and maintain other project features,
and in some cases where there is a Federal OMRR&R responsibility but no Federal (Corps)
presence, e.g., no Corps project management office located on site. Assignment of such
responsibility shall be a part of the items of local cooperation for the project, to be fulfilled by
either a local sponsor or another agency which will provide the necessary assurances to the
Corps.
(15) Postauthorization Mitigation. Section 906(b) of the Water Resources Development
Act of 1986 authorizes the Secretary of the Army to mitigate damages to fish and wildlife
without further specific Congressional authorization within certain limits. Current budgetary
constraints do not provide for the implementation of Section 906(b).
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f. Applicability of FWCA and ESA to Postauthorization Activities.
(1) FWCA Applicability. The FWCA applies to postauthorization activities if the
activity meets the threshold test outlined in Section 2(a) of the FWCA, i.e., the authorized plan is
modified or supplemented, and these changes relate to Federal construction which would divert,
modify, impound, or otherwise control a waterway.
(2) Section 2(b) Report and Section 2(e) Funding. Sections 2(b) and (e) of the FWCA
normally apply during post-authorization activities for Federal projects where the Section 2(a)
threshold test has been met.
(a) Mandatory Compliance. Section 2(b) of the FWCA is mandatory when changes to
the authorized plan meets the Section 2(a) threshold test and the proposed changes to the
authorized plan or project require a report to Congress, or the approval of the Chief of Engineers,
or above.
(b) Discretionary Compliance. In all other instances where Section 2(a) applies,
compliance with Section 2(b) requirements would be discretionary. However, it is Corps policy
to fund the FWS for it's FWCA Section 2(b) activities associated with Corps studies and projects,
consistent with procedures set forth in the 1980 Transfer Funding Agreement, as amended
effective 21 September 1982.
(3) Discretionary Compliance Determination Criteria. The following criteria are
considered appropriate for District commanders to use for determining when Section 2(b) and (e)
of the FWCA applies to postauthorization project activities. First, the proposed activity must
meet the Section 2(a) threshold test. Second, a project document must be under preparation that
requires approval by at least the Division Commander, or above, and any of the following factors
exist:
(a) The acknowledgment by the Corps in the feasibility report, or accompanying NEPA
document, that sufficient uncertainty exists concerning impacts the recommended plan could
have on fish or wildlife resources to warrant further investigations and analysis during
postauthorization planning, engineering and design activities;
(b) Modification or supplementation of the authorized plans require the development of a
supplement to the FEIS;
(c) New information or factors are identified during postauthorization project activities
that appreciably change the extent to which the authorized project would or could impact upon
fish and wildlife resources beyond what was documented in the feasibility report;
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(d) The authorized project contains major fish and wildlife mitigation or enhancement
features, and the further planning, siting, designing and construction of such features would
benefit from involving the FWS, NMFS or State resources agencies in these activities; or,
(e) District and Division professional staff determine that continued involvement of the
FWS, NMFS or State resources agencies during postauthorization project activities would better
assure public and agency acceptance of the water resources development project, including
authorized fish and wildlife features included in the project.
(f) The new or supplemented Section 2(b) report, planning aid letter, etc., shall
accompany the project document throughout the decision-making process.
(4) ESA Applicability. Section 7 of the ESA is applicable for any project, or unit
thereof, regardless of when the project was authorized or completed.
g. Reporting.
(1) General. Feasibility reports shall describe specific considerations given to fish and
wildlife resources conservation during the study. All factors which the reporting officer
considered as contributing to the justification of the expenditures recommended for mitigation
and restoration features shall be explicitly described. Specifically, the report shall:
(a) Describe fish and wildlife resource features included in the recommended plan,
including the basis for justification, consistent with guidance set forth in this section;
(b) Include appropriate letters and reports furnished by the FWS/NMFS and State
agencies;
(c) Describe recommendations furnished by the FWS/NMFS and affected States in
compliance with the FWCA and Section 7 of the ESA, discuss specifically how each
recommendation was addressed in appropriate alternative plans, and provide reasons for adoption
or non-adoption of each recommendation;
(d) Include, as appropriate, provisions for monitoring mitigation features included in the
recommended plan;
(e) Describe consideration given to the protection and restoration of wetland resources,
including the establishment of wetlands in connection with recommended plans that include the
disposal of dredged material;
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(f) Include the necessary letters of intent from agencies and non-Federal sponsors
participating in fish and wildlife mitigation and restoration features; and,
(g) Describe how such features will be operated, managed and funded over the life of the
project.
(2) Mitigation. Reports seeking authorization or approval of any water resources
development project shall contain either:
(a) A determination that such project will have negligible adverse impacts on fish and
wildlife; or,
(b) A recommendation with a specific plan to mitigate fish and wildlife losses created by
such project.
(3) Wetlands. Feasibility reports and accompanying environmental documents shall, as
applicable, describe specific consideration given to protect, reserve, conserve, mitigate adverse
impacts, and restore wetland resources associated with the recommended plan. This information
shall be in sufficient detail to quantify (acres and appropriate quality indicator) to what extent the
recommended plan will contribute to the National goal of no net loss of wetland resources.
(4) Water Rights. If required by State water laws, rights for the use or release of stored
water, to maintain reservoir pools or regulate stream flows for fish and wildlife mitigation or
restoration, shall be provided by non-Federal sponsors. Reasonable costs of rights for water to
accomplish initial filling of the reservoir, including water for mitigation requirements, are
eligible for credit in cost sharing determinations. The computation is dependent on the manner
of repayment. Non-Federal sponsors are also required to furnish assurance that appropriate
action will be taken to prevent downstream withdrawals of water that would negate fishery
benefits credited to such releases.
C-4.
Cultural Resources.
a. Introduction. This section provides guidance for consideration of cultural resources in
Civil Works planning studies, along with compliance requirements relevant to the identification,
evaluation and treatment of these resources. This guidance is applicable to Corps of Engineers'
Reconnaissance studies, Feasibility studies and Preconstruction Engineering and Design studies.
It also applies to projects pursued under the Continuing Authority Program. This section does
not apply to operating projects or Regulatory programs administered by the Corps of Engineers.
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b. Definitions.
(1) Historic Property. An historic property is any prehistoric or historic district, site,
building, structure or object included in or eligible for inclusion on the National Register of
Historic Places (National Register). Such properties may be significant for their historic,
architectural, engineering, archeological, scientific or other cultural values, and may be of
national, regional, state, or local significance. The term includes artifacts, records, and other
material remains related to such a property or resource. It may also include sites, locations, or
areas valued by Native Americans, Native Hawaiians and Alaska Natives because of their
association with traditional religious or ceremonial beliefs or activities.
(2) Cultural Resources Study. A cultural resources study is a scientific investigation
conducted for the purposes of: discovering cultural resources; confirming their location, extent,
and character; evaluating their significance; determining their research potential; determining
potential project effects; and developing alternative preservation and/or mitigation plans. Such
studies are performed at varying levels of intensity and specificity, and include archival, aboveground field examination, sub-surface testing, laboratory studies, and other scientific and analytic
investigations. These studies should utilize professionally accepted and "state-of-the-art"
methods and techniques as well as employing or testing innovative strategies when possible. The
major study types for Civil Works planning studies are described in the following subparagraphs. Although timing of execution and level of detail will vary according to the nature of
a particular project, general guidelines are provided by phase of planning study.
(a) Literature and Records Review. A search undertaken to determine what resources are
known (or considered likely by informed sources), to be located within the planning area and to
appraise the type, extent, and validity of any cultural resources investigations already
accomplished.
(b) Sample Survey. Field examination of a representative portion of the planning area
(which may be coupled with aerial, subsurface or waterborne remote sensing applications as
appropriate), adequate to assess and predict, in general terms, the numbers, locations, affiliations,
component(s), spatial distribution, data potential and other salient characteristics of historic
properties or historic resources. The degree of coverage will be based on scientific and
systematic sampling principles. Sampling strategies “should be predicated on knowledge of
where pertinent resources are likely to be found, as well as on the degree to which they may be
impacted by . . . land use activities.” (CERL Technical Note 98/88). They may include strategies
for identifying below-ground resources and additional requirements for evaluation and testing.
(c) Evaluation and Testing. Limited or restricted subsurface excavations to determine
National Register eligibility of above-ground and below-ground resources by assessing and
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appraising their extent and depth, their data potential, potential project effects, and other relevant
characteristics that cannot be ascertained by pedestrian or surface examination alone. To
evaluate significance, mapping, archival research, detailed laboratory analysis, and controlled
surface collection of artifacts may precede, accompany or supplement such tests and evaluations.
Evaluation and testing may also extend to the preparation of measured drawings, photographs,
written data, and historical documentation to determine the National Register eligibility of
structures and/or buildings.
(d) Intensive Survey/Inventory. A comprehensive, systematic, and detailed physical
examination of an area as may be needed to identify and evaluate all historic properties which
must be taken into account. This may include pedestrian survey, subsurface testing, archival
research, and architectural studies. The inventory may be accompanied and/or followed by
analytical studies such as artifact typing, radiocarbon dating, geomorphological mapping,
archeobotanical analysis, and zooarcheology. It will also provide data required to develop
preservation and/or mitigation plans.
(3) Mitigation. Mitigation is the minimization of losses of significant scientific,
prehistoric, historic, architectural or archeological resources which will be accomplished through
preplanned actions to avoid, preserve, protect, minimize, or compensate for impacts upon such
resources, or to recover a representative sample of the data they contain by implementation of
scientific study and other professional techniques and procedures.
(4) Historic Preservation. Historic preservation is the act of identification, evaluation,
recordation, documentation, curation, acquisition, protection, management, rehabilitation,
restoration, stabilization, maintenance, research, interpretation, conservation and education and
training for cultural, built and/or engineered environments.
(5) Advisory Council on Historic Preservation (ACHP). The ACHP is a body of the
Executive branch of the Federal government that issues regulations to implement Section 106 of
the National Historic Preservation Act (NHPA) of 1966, as amended. The Council also consults
with Federal agencies and comments on undertakings and programs that affect historic
properties.
(6) State Historic Preservation Officer (SHPO). The SHPO reflects the interests of a
State and its citizens in the preservation of their cultural heritage. In accordance with NHPA
provisions, the SHPO advises and assists Federal agencies in carrying out their NHPA
responsibilities.
(7) Tribal Historic Preservation Officer (THPO). The THPO is appointed or designated
in accordance with the NHPA and is the official representative of an Indian tribe for the purposes
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of Section 106 of the NHPA. If an Indian tribe has assumed the responsibilities of the SHPO for
section 106 on tribal lands, Federal agencies shall consult with the THPO in lieu of the SHPO
regarding undertakings occurring on, or affecting historic properties on, tribal lands.
(8) Indian tribe. An Indian tribe is a tribe, band, nation, or other organized group or
community, including a Native village, Regional Corporation or Village Corporation, as those
terms are defined in Section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602),
which is recognized as eligible for the special programs and services provided by the United
States to Indians because of their status as Indians.
(9) Native Hawaiian organization. A Native Hawaiian organization is any organization
which serves and represents the interests of Native Hawaiians; has a primary and stated purpose
of the provision of services to Native Hawaiians; and, has demonstrated expertise in aspects of
historic preservation that are significant to Native Hawaiians. “Native Hawaiian” means any
individual who is a descendant of the aboriginal people who, prior to 1778, occupied and
exercised sovereignty in the area that now constitutes the State of Hawaii.
(10) One Percent of the Total Amount Authorized to be Appropriated for Such Project.
This is the statutory level set by the Archeological and Historic Preservation Act of 1974 (Public
Law 93-291) on Corps of Engineers' general authority to make expenditures for data recovery.
The Department of the Interior defines “data” as “evidence about historic and prehistoric periods
which are buried in the ground” and recovery as “the scientific excavation or removal and
preservation of that evidence . . . when construction projects pose threats that would result in
their irreparable loss or destruction.” Activities to survey, test and evaluate archeological
resources are considered to be project planning activities, not data recovery activities. Further,
mitigation, including but not limited to, protection of historic structures and engineering
elements, built environment documentation, real estate support, and engineering support may all
be appropriate activities, but, they are not data recovery activities subject to the one percent
accounting established by Public Law 93-291. Section 208 of the National Historic Preservation
Act Amendments of 1980 authorizes data recovery in excess of the one percent level when the
Assistant Secretary of the Army (Civil Works) seeks the concurrence of the Secretary of the
Interior (through the Departmental Consulting Archeologist) and notification of Congress.
(11) Significance. Significance is a term attributable to properties listed in or determined
to be eligible for listing in the National Register. Significance criteria for the purpose of this
regulation shall be those provided in 36 CFR Part 60.4. According to these criteria for
evaluation, "(t)he quality of significance in American history, architecture, archeology,
engineering, and culture is present in districts, sites, buildings, structures, and objects that
possess integrity of location, design, setting, materials, workmanship, feeling, and association,
and
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(a) that are associated with events that have made a significant contribution to the broad
patterns of our history; or
(b) that are associated with the lives of persons significant in our past; or
(c) that embody the distinctive characteristics of a type, period, or method of
construction, or that represent the work of a master, or that possess high artistic values, or that
represent a significant and distinguishable entity whose components may lack individual
distinction; or
(d) that have yielded, or may be likely to yield, information important in prehistory or
history."
(12) Undertaking. An undertaking, for purposes of compliance with Section 106 of the
NHPA, means a project, activity or program funded in whole or in part under the direct or
indirect jurisdiction of a Federal agency, including: those carried out by or on behalf of the
agency; those carried out with Federal financial assistance; those requiring a Federal permit,
license or approval; and, those subject to State or local regulation administered pursuant to a
delegation or approval by a Federal agency.
(13) Collection. A collection is the composite of all material remains that are recovered
from a cultural resources study as well as the associated records that are prepared or assembled in
connection with that study.
(14) Collections management and curation. Collections management and curation are
those services such as processing, cataloging and accessioning, as well as the application of
specialized techniques necessary for conserving and maintaining collections.
(15) Collections Management Center. A collections management center is a facility
where material remains and associated records are curated and maintained.
c. Overview. The National Historic Preservation Act (NHPA) of 1966, as amended,
states that it is the policy of the Federal government to “provide leadership in the preservation of
the prehistoric and historic resources of the United States . . .”. These are finite, non-renewable
resources which must be considered in formulating recommendations for project authorization
and implementation. Significant cultural resources, also known as historic properties, are those
listed in, or eligible for listing on the National Register of Historic Places. As early in the
planning process as is possible, historic properties should be identified, characterized and taken
into account in accordance with Section 106 of the NHPA and its implementing regulations at 36
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CFR Part 800. Consistent with this process, and as appropriate to comply with other cultural
resources laws and regulations, Corps undertakings shall be fully coordinated with State Historic
Preservation Officers (SHPO), Tribal Historic Preservation Officers (THPO), the Advisory
Council on Historic Preservation (ACHP), and all other appropriate interested parties and/or
individuals.
d. Cultural Resources Studies.
(1) Principal investigators and key consultants conducting cultural resource studies shall
meet the minimum qualifications cited in the Secretary of the Interior's Standards and Guidelines
for Archeology and Historic Preservation. Principal investigators shall be responsible for the
validity of material presented in their reports.
(2) Draft reports on the results of cultural resources studies shall be distributed for
review and comment to appropriate agencies, institutions and individuals, including, but not
limited to, the State and/or Tribal Historic Preservation Offices, the Advisory Council, and the
Department of the Interior.
(3) Copies of final reports shall be furnished to any appropriate individuals, agencies,
and organizations. Final reports should be organized to include appendices or stand-alone
volumes containing maps, site forms, references to specific site locations or other sensitive
resource data. Appendices or stand-alone volumes may warrant protection from public disclosure
under Exemption 3 of the Freedom of Information Act (FOIA), 5 U.S.C.A '552(b)(3) and
Section 304 of the National Historic Preservation Act, as amended, 16 U.S.C.A '470w-3(a).
(4) Reconnaissance Phase Studies. Cultural resources investigations conducted during
the Reconnaissance Phase of planing shall usually be limited to observations and general
predictions regarding the types, variety and frequency of cultural resources that may be affected
by potential solutions to water resources problems. These observations and predictions should be
supported by a review of in-house information, records and available data. Cultural resources
input during this phase of planning should also include projections of costs to accomplish the
necessary studies, investigations, consultations and coordination that could occur during the
subsequent planning phase.
(5) Feasibility Phase Studies.
(a) Cultural resources investigations during the Feasibility Phase of planning shall
usually begin with a literature and records review. This literature and records review shall
include manual and/or electronic searches of the National Register of Historic Places, the State
archives, State site files, other files of the SHPO/THPO and other available public records of
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prior cultural resource investigations within the planning area. It may also include interviews
with persons knowledgeable about related topics; contacts with appropriate Native Americans,
Native Hawaiians and Alaska Natives; field checks of site locations, and examinations of old
photographs, maps and other documents.
(b) In consultation with the SHPO and/or the THPO, Corps Commands shall also design
and implement such studies as are necessary to evaluate alternative plans in terms of their
relative impact on historic properties. These studies should, when conducted on a sampling
basis, provide for the efficient planning of any further cultural resource investigations that may
be needed prior to initiation of construction.
(c) The Feasibility Phase studies shall normally be accomplished on a sampling basis
formulated within a research strategy tailored to insure adequate coverage of the environmental
zones within the alternative plan impact areas. However, when considered necessary or
appropriate, a sample survey may be waived in favor of an intensive survey/inventory during the
Feasibility Phase.
(d) Sample surveys will be designed to obtain such information as is necessary to identify
and predict the presence of historic properties; to evaluate effects to such properties; and to
evaluate impacts of alternative plans and assist in plan selection.
(1) The sampling strategy shall consider costs of survey with respect to the number of
viable alternatives and the extent of the known area of potential effects.
(2) If this approach delays timely identification of historic properties and project impacts
for consideration in a NEPA document or Feasibility Report, a Programmatic Agreement can be
developed between the Corps Command, the SHPO and/or THPO, the ACHP and other
consulting parties. This Agreement should specify the process by which required surveys,
testing, evaluation, effect determination, mitigation planning, and coordination shall be achieved.
(e) The Feasibility Report and NEPA document shall briefly describe identified and
predicted historic properties which would be impacted by the alternative plans. Where the
extent, scope or significance of potentially impacted resources influence the commander's
recommendation, these considerations should be clearly set forth in the feasibility report. If
properties listed in, or eligible for listing on the National Register will be affected by the
recommended plan, comments of the SHPO and/or THPO, the ACHP, and other interested
parties shall be sought pursuant to Section 106 of the National Historic Preservation Act of 1966,
as amended, and 36 CFR 800. Comments shall also be sought in the event that for the
recommended plan, there will be "no effect" on historic properties.
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(F) Cultural resources studies completed during this phase of planning, may indicate that
the cost of data recovery could exceed one percent of the total Federal amount authorized for
appropriation. In those cases, the Feasibility Phase Report shall include a narrative on the
potential need to exceed the one percent level. This narrative shall include, but may not be
limited to, the factual basis for concern and the need or likelihood of seeking a waiver under
Section 208 of the National Historic Preservation Act Amendments of 1980.
(6) Preconstruction Engineering and Design Phase Studies.
(a) During the period between completion of the Feasibility Report and initiation of
construction, intensive surveys/inventories, if required or not previously conducted, shall be
accomplished in the area of potential environmental impact of the recommended plan or
authorized project. The results of such inventories serve as the basis for formulation of plans for
management of historic properties prior to or during the construction and operational stages of
projects.
(b) Such inventories shall be accomplished within the context of an explicit research
design, formulated in recognition of prior work by the Corps of Engineers and others, and shall
include such testing and other comparisons and evaluations as may be required to formulate a
program which provides a defensible basis to:
(1) Seek determinations of eligibility of resources for the National Register of Historic
Places.
(2) Determine when a project will have "no effect" on historic properties.
(3) Determine the need to mitigate adverse project effects on National Register and
eligible properties in light of their historic or architectural significance or their potential to
further archeological knowledge.
(4) Develop plans and cost estimates for such mitigation or other treatment of historic
properties affected by the project.
(5) Serve as the basis for negotiation of a Memorandum of Agreement (if no
Memorandum has been previously prepared) with the SHPO/THPO, and, if appropriate, the
ACHP specifying actions which will be taken by the Corps of Engineers prior to or during the
project construction period to mitigate adverse effects on National Register and eligible
properties.
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(c) Should the cost of data recovery exceed one percent of the total estimated Federal
appropriation required for construction of a project, a waiver request shall be submitted in
accordance with Section 208 of the National Historic Preservation Act Amendments of 1980.
(1) The waiver shall be submitted, through channels, to the Corps Federal Preservation
Officer (FPO), who shall serve as the headquarters technical specialist and liaison. The FPO will
review the waiver request, coordinate with all appropriate headquarters elements, informally
coordinate with the Department of the Interior, and develop any additional documentation for
approval by the Assistant Secretary of the Army (Civil Works). The waiver shall then be
submitted to the Secretary of the Interior, through the National Park Service Departmental
Consulting Archeologist, for concurrence and Congressional notification.
(2) The waiver request should be in the form of a letter report with supporting
documentation as deemed necessary. The letter report should include detailed descriptions of the
historic properties that will be adversely affected; descriptions of previous studies in the study
area; proposed data recovery efforts for each effected property; estimated data recovery costs per
property; and a detailed justification for the need to exceed the one percent level.
(3) While early planning and preparation of a waiver request is desirable, it is not always
possible. It is important to note that Corps Commands may expend data recovery funds up to the
one percent level prior to the completion of the waiver process.
e. Native American Considerations.
(1) When cultural resources studies examine lands held in fee title (or controlled to the
same extent as fee title lands) by the Corps, provisions of Section 3 of the Native American
Graves Protection and Repatriation Act (NAGPRA), Public Law 101-601, and its implementing
regulations found at 40 CFR Part 10, will apply.
(2) NAGPRA does not apply to lands in which the Corps has merely been provided
access, or a right of entry, by a landowner and/or local sponsor, for water resources development
studies or projects. A full discussion of NAGPRA applicability can be found in a 7 Dec 1995,
CECW-AO/CECW-PD/CECC Memorandum and Legal Opinion, subject: Application of the
Native American Graves Protection and Repatriation Act to Water Resources Development
Activities.
(3) A Presidential Memorandum on Government-to-Government Relations, dated 29
April 1994, reaffirmed the United States “unique legal relationship with Native American tribal
governments.” In recognition of the special considerations due to tribal interests, the President
directed Federal agencies to operate within a government-to-government relationship with
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federally recognized Indian tribes; consult, to the greatest extent practicable and permitted by
law, with Indian tribal governments; assess the impact of agency activities on tribal trust
resources and assure that tribal interests are considered before the activities are undertaken; and
remove procedural impediments to working directly with tribal governments on activities that
affect trust property or governmental rights of the tribes. In the Planning process for water
resources development, there may be many points of connection between the Corps and Indian
tribes. The following Tribal Policy Principles, developed with the Office of the Assistant
Secretary of the Army (Civil Works), shall guide Corps-Indian tribe interaction during project
planning.
(a) Tribal Sovereignty. The U.S. Army Corps of Engineers recognizes that Tribal
governments are sovereign entities, with rights to set their own priorities, develop and manage
Tribal and trust resources, and be involved in Federal decisions or activities which have the
potential to affect these rights. Tribes retain inherent powers of self-government.
(b) Trust Responsibility. The U.S. Army Corps of Engineers will work to meet trust
obligations, protect trust resources, and obtain Tribal views of trust and treaty responsibilities or
actions related to the Corps, in accordance with provisions of treaties, laws and Executive Orders
as well as principles lodged in the Constitution of the United States.
(c) Government-to-Government Relations. The U.S. Army Corps of Engineers will
ensure that Tribal Chairs/Leaders meet with Corps Commanders/Leaders and recognize that, as
governments, Tribes have the right to be treated with appropriate respect and dignity, in
accordance with principles of self-determination.
(d) Pre-Decisional and Honest Consultation. The U.S. Army Corps of Engineers will
reach out, through designated points of contact, to involve Tribes in collaborative processes
designed to ensure information exchange, consideration of disparate viewpoints before and
during decision making, and utilize fair and impartial dispute resolution mechanisms.
(e) Self Reliance, Capacity Building, and Growth. The U.S. Army Corps of Engineers
will search for ways to involve Tribes in programs, projects and other activities that build
economic capacity and foster abilities to manage Tribal resources while preserving cultural
identities.
(f) Natural and Cultural Resources. The U.S. Army Corps of Engineers will act to fulfill
obligations to preserve and protect trust resources, comply with the NAGPRA, and ensure
reasonable access to sacred sites in accordance with published and easily accessible guidance.
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(4) When Civil Works cultural resource studies include the examination of “Federal
lands,” as defined by Executive Order 13007, “Indian Sacred Sites”, the provisions of that
Executive Order apply. For the purposes of Executive Order 13007, Federal lands are any land
or interest in land owned by the United States, including leasehold interests held by the United
States, except Indian trust lands.
(a) Executive Order (EO) 13007 directs Federal agencies to accommodate access to, and
ceremonial use of, Indian sacred sites by Indian religious practitioners. It directs agencies to
avoid adversely affecting the physical integrity of such sacred sites and to maintain
confidentiality of information pertaining to such locations.
(b) Corps policy on EO 13007 is contained in Policy Guidance Letter Number 58, dated
28 June 1998. That policy is incorporated herein, by reference. In brief, though, it is Corps
policy to utilize all reasonable means to accommodate Indian tribes by providing meaningful
access to sacred sites on Federal lands. Corps Commands will ensure that Indian tribes have
reasonable opportunities to review plans for activities and projects on Federal lands that could
potentially adversely affect sacred sites. In the event that the Federal lands examined are owned
or leased by another Federal agency, Corps Commands shall ensure that representatives from
these other agencies will have a reasonable opportunity to participate in EO 13007 consultations.
(c) Corps cultural resources studies, conducted for planning purposes, on lands subject to
the provisions of EO 13007, shall include narratives on the results of tribal consultations
regarding access, and potential affects to, Indian sacred sites. These narratives shall include, but
may not be limited to: nature and extent of sacred sites within the study area (subject to tribal
approval and confidentiality concerns), access accommodations required under “with/without”
project conditions, potential affects of the project, and feasible measures to ensure the avoidance
of potentially adverse affects.
f. Curation. Collections recovered from lands in which the Corps merely has a right of
entry (i.e. no real property interest) are the property of the landowner, unless otherwise specified.
Corps Commands conducting cultural resources studies associated with these lands should
ensure that collections are properly curated in appropriate collections management centers as
long as there is a Corps interest in the collections. When the Corps interest in collections ends,
landowners should be encouraged to arrange for permanent curation with collections
management centers in a manner consistent with Federal curation requirements.
g. Continuing Authority Projects. Identification, evaluation, and mitigation of effects on
historic properties within the impact area of projects planned and implemented under Continuing
Authorities for flood control, navigation, streambank erosion control and shore protection shall
be accomplished as follows.
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(1) Section 103, 107, 111, 205. The implementation of projects under these authorities
includes two planning phases (reconnaissance and feasibility), preparation of plans and
specifications, and construction.
(a) Cultural resources investigations during the reconnaissance phase of planning should
be consistent with the overall objectives of the study as well as time and cost limitations.
Investigations during this phase of planning shall usually be limited to observations and general
predictions regarding the types, variety and frequency of cultural resources that may be affected
by a proposed undertaking. These observations and predictions should be supported by a review
of in-house information, records and available data. The review of available information may
assist in the design of more intensive investigations of the planning area and the development of
cost figures for later implementation phases. In some cases, the results of reconnaissance phase
investigations may indicate that the cost of data recovery could exceed the one percent level
specified in Section 7a of the Archeological and Historic Preservation Act of 1974 (Public Law
93-291). In those cases, the reconnaissance report shall include a narrative on the potential need
to exceed the one percent level. This narrative shall include, but may not be limited to, the
factual basis for concern and the need or likelihood of seeking a waiver under Section 208 of the
National Historic Preservation Act Amendments of 1980.
(b) The feasibility phase should complete the plan formulation process and result in the
preparation of a Detailed Project Report (DPR). If the limited observations and predictions
documented in the reconnaissance planning phase reveal the presence, or likely presence, of
historic properties within the areas of potential project effect, the Corps Command shall conduct
an intensive survey/inventory. The results of the intensive survey/inventory shall be presented in
the DPR along with the proposed plan for mitigation if adverse effects on historic properties will
occur.
(1) If historic properties will be effected by the recommended plan, comments of the
SHPO and/or THPO and the Advisory Council on Historic Preservation shall be sought pursuant
to Section 106 of the National Historic Preservation Act of 1966, as amended, and 36 CFR Part
800. Comments shall also be sought in the event that for the recommended plan, there will be "no
effect" on historic properties.
(2) Should the cost of data recovery exceed one percent of the total Federal appropriation
required for construction of a project for which Congress has not specifically authorized
expenditures in excess of this amount, a waiver request shall be submitted in accordance with
Section 208 of the National Historic Preservation Act Amendments of 1980. For Continuing
Authorities Projects, Corps Commands shall use the same waiver process described in paragraph
d(6)(c) above.
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(2) Section 14 and 208. Projects considered pursuant to these Continuing Authorities are
subject to a single planning phase prior to the preparation of plans and specifications. Section
14 and 208 projects are not exempt from compliance with the National Historic Preservation Act
of 1966 and 36 CFR Part 800.3 through 800.6. When Corps projects are in response to a
disaster or emergency declared by the President, a tribal government, or the governor of a State
or another immediate threat to life or property; and, when the undertaking will be implemented
within 30 days after the disaster or emergency has been formally declared by the appropriate
authority, Corps Commands can follow accelerated procedures established in 36 CFR Part
800.12 “Emergency situations.”
h. Costs, Apportionment, and Accountability.
(1) Funds expended for cultural resource investigations during the Reconnaissance Phase
of Planning shall be a full Federal expense.
(2) Funds expended during the Feasibility Phase for sample surveys, intensive surveys, or
other necessary cultural resource investigations are cost-shareable. These may be treated as
planning costs and thus, are not accountable under the statutory one percent data recovery
expenditures.
(3) Data recovery of significant archeological properties is a full Federal cost up to the
one percent level specified in Section 7a of Public Law 93-291. In the event that data recovery
costs exceed the one percent level, those costs that exceed the one percent level will be shared by
the Federal government and the local sponsor.
(a) For projects that will exceed the one percent level and a Project Cooperation
Agreement (PCA) has not been executed, the PCA shall include a specific provision for data
recovery cost sharing. In order to determine the cost share formula, the Corps Command shall
identify the project purpose which caused the need for the data recovery and cost share the
amount over the one percent as if it were a separate project for that purpose.
(b) For projects that will exceed the one percent level and a PCA is in place, but does not
specifically address data recovery, the Local Sponsor share of the amount over one percent shall
be dictated by the Sponsor's overall financial responsibilities as enumerated in the PCA.
(4) Cultural resources mitigation, other than data recovery, shall not be included in the
one percent accounting specified in Section 7a of Public Law 93-291. Cultural resources
mitigation, other than data recovery, shall be cost shared between the Corps and the Local
Sponsor using the same cost sharing formula established for the project purpose.
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(a) For projects that require cultural resources mitigation, other than data recovery, and a
PCA has not been executed, the PCA shall include a specific provision for mitigation cost
sharing.
(b) For projects that require cultural resources mitigation, other than data recovery, and a
PCA is in place, the Local Sponsors share of the mitigation costs shall be dictated by the
Sponsor’s overall financial responsibilities as enumerated in the PCA.
(5) For Continuing Authorities projects, when cultural resources mitigation costs
increase the Federal cost to a level in excess of the Federal Funding Limits, all mitigation costs in
excess of the specified Limits shall be the responsibility of the local sponsor. For those
Continuing Authorities efforts that are below specified Limits, funding formulas established in
paragraph h(3) and (4), above, apply.
C-5.
Aesthetic Resources
a. Purpose. This section provides guidance for consideration of aesthetic resources in
Civil Works planning studies.
b. Definitions.
(1) Aesthetic Resources. Those natural resources, landform, vegetation and man-made
structures in the environment which generate one or more sensory reactions and evaluations by
the observer, particularly in regard to pleasurable response. These sensory reactions are
traditionally categorized as visual, auditory and olfactory responses; more simply-sight, sound
and smell. The visual sense is so predominant in the observers reaction and evaluation that
aesthetic resources, for the purpose of this section, will be referred to as visual resources. The
other sensory stimulants, sound and smell, should be dealt with to the extent their presence is
perceivable.
(2) Aesthetic Quality. The significance given to aesthetic resources based on the
intrinsic physical attributes of those specific features and recognized by public, technical and
institutional sources.
(3) Landscape Unit. A distinct and visually connected portion of land which may include
compatible vegetation, water, wildlife, land use and man-made structures and forms a distinct
and describable visual component.
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(4) Procedures. The methods or process used to evaluate aesthetics for Corps of
Engineers planning studies. A procedure should be capable of being used to: (1) Identify and
assess the existing visual resources conditions affected by a Corps study; and, (2) Assess
(describe magnitude, location, duration) and appraise (determine if beneficial or adverse) the
visual impacts caused by alternatives; and, (3) Provide a replicable basis of support for any
recommended mitigation.
(5) Mitigation. For the purpose of this section, the definition of mitigation includes:
(a) Avoiding the impact altogether by not taking a certain action or part of an action.
(b) Minimizing impacts by limiting the degree or magnitude of the action and its
implementation.
(c) Rectifying the impact by repairing, rehabilitating, or restoring the affected
environment.
(d) Reducing or eliminating the impact over time by preservation and maintenance
operations during the life of the action.
(e) Compensating for the impact by replacing or providing substitute resources or
environments.
c. Guidance.
(1) General. It is National policy that aesthetic resources be protected along with other
natural resources. Current planning guidance specifies that the Federal objective of water and
related resources planning is to contribute to National Economic Development consistent with
protecting the Nation's environment. The Corps established a number of environmental goals,
including: (1) Preservation of unique and important aesthetic values; and, (2) Restoration and
maintenance of the natural and man-made environment in terms of variety, beauty, and other
measures of quality (ER 200-2-2). However, in meeting these goals, a standard of
reasonableness must be applied in defining the appropriate level of expenditures for aesthetic
quality at Civil Works projects. Current budgetary constraints and the intense competition for
Federal funds dictate that a greater level of discipline be applied in meeting the Corps
responsibilities to harmoniously blend projects with the surrounding environment while avoiding
excessive expenditures. The guidance and procedures presented herein implement these
planning and environmental policies and goals and complement the procedures developed for
planning, economic evaluation and other environmental resource evaluation.
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(2) Aesthetic Resources in Planning. Consideration of Aesthetic resources shall be
consistent with current planning guidance. Review of a study (e.g. study area, alternatives) by a
landscape architect or trained environmental resources personnel early in the planning process
can provide valuable input to the study by identifying significant visual resources as well as other
planning issues related to aesthetics that impact on plan formulation, design and engineering.
Procedures for consideration of aesthetic resources shall occur throughout the planning process
and be documented to reflect the continued effort throughout all phases of the project. This
procedure departs from the traditional practice which introduced beautification only during the
design stage.
(3) Mitigation. Appropriate mitigation shall be undertaken for adverse effects to
significant aesthetic resources. Aesthetic mitigation measures, features, and actions shall be
evaluated according to their ability to either avoid, minimize or compensate for adverse, effects
on significant aesthetic resources, or to mitigate damage to these resources shall be considered a
part of the project and allocated to the project and allocated to the project in the same manner as
other project costs.
(4) Project Relationship. Any aesthetic project features must be related to harmoniously
blending the project into the project setting and not aimed at "beautifying" the surrounding area.
This is not an issue with measures that are integral to project design but is an important
consideration for measures that are not integral. For example, plant materials can be used to
reduce visual contrast or screen projects. Landscape plantings must be limited to the land
required for the project and plantings will not extend to adjacent property even if the adjacent
property is a public park or recreation area.
(5) Project Setting. The acceptability and compatibility of aesthetic features of project
design are affected by the project setting and the expectation of the users and viewers of the
project. The land use in the area surrounding the project is an important consideration in
determining the appropriate measures for aesthetics. For example, a concrete channel without
aesthetic treatment may not be visually objectionable in a heavy industrial area but a concrete
channel in a residential area may require texturing and screening with trees and shrubs to be
visually compatible with the residential land use. Linear projects such as levees and channels
may incorporate different aesthetic features in different reaches of the same project depending on
the visual qualities and land uses of the adjacent property in that reach with an appropriately
designed transition between different treatment reaches.
(6) Partnership. Project aesthetic features will be closely coordinated with the nonFederal project sponsor. The objectives, goals, desires and values of the local sponsor will be
carefully considered in formulating the aesthetic features of the project within the limits of a
uniform application of standard Corps practices for aesthetic quality. A summary of standard
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Corps practice is contained in Appendix R. This does not preclude the incorporation of measures
into a project that would exceed the normal Corps practice if the non-Federal sponsor is willing
to bear all of the incremental costs of such measures as elements of a locally preferred plan.
Equity is also an important consideration in working in partnership with local sponsors. The
preservation and enhancement of aesthetic quality must be an important goal in all projects
regardless of the socio-economic conditions in the project area.
(7) Compatibility. All aesthetic measures must be designed so that they are fully
compatible with the project purpose and in no way compromise the safety, integrity or function
of the project. For example, it may be appropriate to screen a floodwall with vegetative plantings
but it would be inappropriate to plant trees directly on a levee that might endanger it's structural
integrity or diminish its hydraulic characteristics.
(8) Cost Allocation. Costs for aesthetic measures that are in accordance with standard
Corps practices are shared as project costs. Cost allocation would be an issue in multi-purpose
projects where aesthetic costs would be shared in accordance with the purpose to which the costs
are allocated. An example would be a hiking trail on a flood control levee. The addition of
recreation as a project purpose may introduce the need for an increased consideration of
aesthetics since it results in increased public visibility and use of the project. In these cases, any
incremental aesthetic costs associated with the recreation purpose should be allocated to the
recreation purpose and cost-shared with the non-Federal sponsor on a 50 percent basis.
d. Procedures.
(1) General. A procedure such as the Visual Resources Assessment Procedure (VRAP),
WES Instructional Report EL-88-1, or comparable method, to assess aesthetic resources shall be
included as a regular part of planning studies. The purpose of using a procedure is to have a
systematic approach to consider aesthetic resources. Advantages of a systematic and quantifiable
approach include the ability to assign a visual resource value to all of the landscape units within a
study area, identify significant aesthetic resources, and to determine causes of adverse impact.
Such a procedure provides a clear, tractable basis for including aesthetics in plan formulation,
design, reformulation, and mitigation planning.
(2) Level of Detail. The level of effort or detail used in a Procedure will vary dependent
on project size, geographical scale, costs, phase of a study, and on the availability of data,
identified alternatives, and forecasts of future conditions. The level of detail will increase with
the phase of planning and engineering, as the Planning data required, e.g., impact measurements,
increases in detail. The procedure used may vary from development of narrative descriptions of
the visual resources of a study area to implementation of a visual impact assessment study.
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(3) Reporting Requirements. Project measures to preserve and restore aesthetic quality
should be fully defined (i.e. described and displayed) in the feasibility report and reflected in the
project cost estimate. The feasibility report should include a description of the project setting
and the relationship of aesthetic features of the project to the setting. To the extent practical, all
the incremental costs of the project aesthetic features should be identified recognizing that some
aesthetic considerations are completely integral to the project design and are not separable. This
complete description and display of costs will allow any issues on the reasonableness of the
aesthetic measures to be addressed prior to project authorization and be reflected in the
authorizing document. Increases in levels of project costs for aesthetics during pre-construction
engineering and design, beyond inflation, will not be approved.
C-6.
Water Quality and Related Requirements
a. Purpose. This section provides guidance for the consideration of water quality and
related programs in Civil Works planning studies. It incorporates water quality policies embodied
in Sections 102, 401 and 404 of the Federal Water Pollution Control Act, Section 319 of the
Water Quality Act of 1987, and Sections 102 and 103 of the Marine Protection, Research and
Sanctuaries Act, which are applicable to Corps of Engineers feasibility studies and
preconstruction planning and engineering.
b. Discharge of Dredged or Fill Material into Waters of the United States. Corps of
Engineers proposed projects involving the discharge of dredged or fill material into waters of the
United States shall be developed in accordance with guidelines promulgated by the
Administrator of the Environmental Protection Agency (EPA) in conjunction with the Secretary
of the Army under the authority of Section 404(b)(1) of the Clean Water Act, as amended, unless
these activities are exempted by Section 404(f).
c. Conducting the Section 404(b)(1) Evaluation in the Planning Process. During
feasibility planning, District commanders shall conduct and, to the fullest extent practicable,
complete the investigations and analyses required by the Section 404(b)(1) Guidelines. Water
quality and related information used in the evaluation will provide documentation to demonstrate
that the recommended plan is in compliance with the Clean Water Act. A suggested format for
the Section 404(b)(1) evaluation is included as Exhibit C-1.
d. Clean Water Act: Section 404. Feasibility reports recommending projects involving
the discharge of dredged or fill material into waters of the United States, including wetlands,
shall be developed consistent with Section 404(b)(1) Guidelines. For navigation projects, if
compliance with 404(b)(1) Guidelines alone prohibit the designation of a proposed dredged
material disposal site, then the economic impact on navigation and anchorage shall be evaluated
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and the District Commander may recommend using the proposed site, even if it cannot be
officially designated under 404(h)(1) Guidelines (Section 404(b)(2)).
e. Section 404(b)(1) Evaluation Documentation. District commanders shall include in
their feasibility planning reports analyses and documentation necessary to demonstrate that the
recommended plan is in compliance with 404(b)(1) Guidelines. The 404(b)(1) analysis and
compliance determination shall be updated as required during post authorization planning and
included in appropriate project documents. Full compliance with the Clean Water Act (CWA),
Section 404(b)(1) Guidelines, must be completed prior to the initiation of project construction. A
suggested format for the required 404(b)(1) evaluation and compliance determinations is
included in Exhibit C-1.
f. State Water Quality Certification. Section 401 of the CWA sets forth requirements and
procedures for obtaining State water quality certification for activities which result in any
discharge into navigable waters. Section 404(t) provides further guidance relative to navigation
projects. State water quality certification requires the District Commander to accomplish the
following three tasks:
(1) Complete an evaluation of the effects of the proposed discharge consistent with the
Section 404(b)(1) Guidelines;
(2) Issue a public notice, with opportunity for public hearings for the proposed discharge,
including or referencing the preliminary Section 404(b)(1) evaluation; and,
(3) Obtain certification, including any required conditions, from the State or interstate
water pollution control agency that the proposed action is in compliance with established effluent
limitations and water quality standards. If the State in question has assumed responsibilities for
the 404 regulatory program, a State 404 permit shall be obtained, if applicable, which will serve
as the certification of compliance. District commanders shall provide the State with necessary
detailed information it may need to issue the water quality certification.
g. Section 404(r) Exemption. Section 404(r) of the Clean Water Act, waives the
requirement to obtain either the State water quality certificate or the 404 permit if:
(1) Information on the effects of the discharge of dredged or fill material into waters of
the United States, including the application of the Section 404(b)(1) Guidelines, are included in
an environmental impact statement (EIS) on the proposed project; and,
(2) The EIS is submitted to Congress before the actual discharge takes place and prior to
either authorization of the proposed project or appropriation of funds for its construction.
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(3) District commanders shall clearly document in the feasibility report when the 404(r)
exemption criteria have been met, regardless of whether or not the District plans to obtain State
water quality certification.
h. Section 404/NEPA Documentation. Evaluation of the effects of the discharge of
dredged or fill material, including consideration of the Section 404(b)(1) Guidelines, shall be
included in an EA, EIS or EIS Supplement prepared for all Corps actions in planning, design and
construction where the recommended plan or approved project involves the discharge of dredged
or fill material into waters of the United States.
(1) For feasibility reports going to Congress for authorization, the Section 404(b)(1)
evaluation will be discussed in the, body of the EA, EIS or EIS Supplement and included, in full,
in an Appendix to the Main Report. The degree to which the proposed project is in compliance
with the Act will be noted in the EA (FONSI), or in the Record of Decision (ROD) when an EIS
is involved.
(a) If full compliance is noted in the ROD, this will satisfy the Section 404(r) exemption
criteria.
(b) If full compliance is not reached during feasibility planning, i.e., the Section 404(b)(1)
evaluation is not completed or Section 404(r) requirements are not satisfied, then complete
compliance will not be noted until the Section 404(b)(1) evaluations are completed and included
in an EIS Supplement filed with EPA prior to project construction.
(2) To aid states and agencies in their review draft feasibility reports that include a draft
EIS shall indicate whether of not the District Commander plans to seek exemption under 404(r)
once Section 404(b)(1) compliance is met.
(3) Feasibility reports going to Congress, that includes an EA (FONSI) rather than an
EIS, must include a State water quality certificate to be in compliance with the Clean Water Act;
i.e., Section 404(r) of the, Act does not apply unless an EIS is involved.
(4) For continuing authority projects involving the disposal of dredged or fill material
into the waters of the United States, Section 404(b)(1) compliance will be included in the EA,
EIS or EIS Supplement consistent with guidance set forth above. Since Section 404(r) does not
apply to continuing authority projects (since these reports do not go to Congress) an appropriate
State water quality certification or State permit must be obtained before a decision is made on the
project.
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(5) There may be instances when the District Commander determines that it would be
prudent to seek State water quality certification even when an exemption for obtaining such
certification is possible under 404(r). In such instances, the District commanders shall
accomplish all actions necessary to obtain State water quality certification, and to meet Section
404 (r) exemption requirements. A State water quality certificate shall be obtained prior to
requesting project construction funding unless the State is legally unable, or is unwilling to
Certify the project even after receiving the necessary Section 404(b)(1) evaluation information
from the Corps. In these cases, the District Commander shall officially inform the State of his/her
intention to initiate Section 404(r) exemption procedures, and acknowledge this in the
appropriate NEPA document.
(6) States requiring final Congressional or Corps action prior to issuing a water quality
certification must be advised early in the planning process of the reporting requirements
discussed above. In those instances the State must furnish a conditional water quality
certification before Sections 401 and 404 requirements are considered met. This issue must be
resolved and appropriate documentation included before the Division Commander approves the
report and sends it forward to HQUSACE for Washington level review, approval and processing.
i. General Permits. Nationwide and regional permits fall under the category of general
permits. A general permit is issued subject to the Section 404(b)(1) Guidelines and to any
conditional standards pursuant to Section 404(e) of the Clean Water Act. The conditions of a
general permit shall be used in lieu of this regulation for those Federal activities which the
District Commander determines to be applicable. However, the use of a general permit shall not
substitute for or eliminate the need for the preparation of an appropriate NEPA document, i.e.,
EIS or EA FONSI.
j. Protection of Wetlands. Executive Order 11990 has declared wetlands to be an
important national resource warranting specific preservation measures. Policy and guidance for
considering wetland resources in the planning process is found in Section C-3 of this appendix.
k. Aquatic Disposal of Dredged Material.
(1) For projects where discharge of dredged material into the territorial sea is for the
primary purposes of fill (e.g., beach nourishment, or replenishment, underwater berm or island
construction), the discharge will be evaluated under Section 404 of the Clean Water Act.
(2) For projects involving transportation of dredged material through the territorial sea
for the purpose of ocean disposal, or involving dredged material discharge within the territorial
sea for the primary purpose of disposal, the discharge will be evaluated under Section 103 of the
Marine Protection, Research and Sanctuaries Act (MPRSA). Required consideration for
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establishing the need for ocean disposal includes compliance with applicable environmental
criteria of 40 CFR Part 227 relating to the effects of disposal, navigation, economic and
industrial development, foreign and domestic commerce and availability of practicable
alternatives to ocean disposal.
(3) In considering feasible ocean sites for the disposal of dredged material, the District
Commander will utilize ocean sites designated by EPA to the maximum extent practical. Where
no EPA designated site is available or where such sites are determined not to be feasible for use
based on the NED Plan, the District Commander may select a suitable ocean disposal site or sites
under authority of Section 103 of the MPRSA using procedures and outlined criteria in 40 CFR
228.4(e), 228.5 and 228.6. Appropriate NEPA documentation should be used to support site
selections; preferably incorporating these considerations into the project NEPA document.
(4) Where ocean disposal is determined to be necessary, the District Commander will, to
the fullest extent practicable, specify potential disposal sites in the feasibility report. The
feasibility report must fully demonstrate that there are acceptable potential disposal sites which
incorporate both economic and environmental considerations, within the zone of siting feasibility
for the project. District commanders shall conduct and, to the fullest extent practicable, complete
the Section 103 evaluation during feasibility planning when ocean dumping alternatives are being
considered. Data developed in this manner will facilitate the comparison of alternative ocean
disposal plans. If the Section 102 evaluation has not been completed for projects currently in
preconstruction planning and engineering, it shall be completed as an integral part of the
decisionmaking process for initiating or implementing the project.
(5) Dredged material will be evaluated to ensure that it is suitable for aquatic disposal.
Evaluation, and any subsequent sediment testing that may be required, will be performed in
accordance with USEPA/USACE “Evaluation of Dredged Material Proposed for Ocean Disposal
(Testing Manual)” or USEPA/USACE “Evaluation of Dredged Material Proposed for Discharge
in Inland and Near-Coastal Waters - Testing Manual”.
l. Water Quality Standards.
(1) Standards. The District Commander shall consider applicable Federal, State and local
effluent limitations, water quality standards and management practices, as part of the formulation
of alternative plans in feasibility and preconstruction planning and engineering studies. (See E.0.
12088, 13 October 1978.)
(2) Streamflow Regulation. There are two categories of reservoir capacity for the
regulation of streamflow, pursuant to Section 102(b)(1) of the Clean Water Act: (a) That which is
associated with identifiable project outputs such as navigation, recreation, fish and wildlife or the
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prevention of salt water intrusion, and (b) That which is associated with water quality control.
The need for and value of storage for the regulation of streamflow for water quality control may
be taken into account in a project only if so determined by the Administrator of EPA. Costs
allocated to streamflow regulation for water quality control are nonreimbursable if the benefits of
such regulation are widespread. (See Chapter 2, Section III regarding deletion or modification of
reservoir storage for water quality purposes in accordance with Section 65, Public Law 93-251.)
m. Water Quality Enhancement Costs. Costs for water quality enhancement must be
assigned to the appropriate project purposes and shared in the same percentages as the purposes
to which the costs are assigned (See Section 103(d) of Public Law 99-662.)
n. Exclusions for Emergencies. District commanders shall meet the evaluation and
coordination requirements related to the Sections 404 and 102 guidelines to the fullest extent
practicable, unless they determine that the resulting delays will lead to unacceptable risks to
health, life, or property or severe and unacceptable economic losses. To further reduce
administrative burdens and to expedite meeting these requirements, the District Commander
should establish procedures in cooperation with the appropriate Federal and State agencies as
recommended in ER 500-1-1. Carrying out the directives of this paragraph is crucial, since
compliance with Section 401(a) of the Clean Water Act cannot be waived by the Corps of
Engineers. Currently, Section 14 emergency stream bank erosion is the only element of the Civil
Works planning program subject to emergency procedures.
o. Non-Point Source Pollution Program. The Water Quality Act of 1987 (Section 319)
requires that Federal assistance programs and development projects be consistent with State non
point source (NPS) management programs, for those States which have such Environmental
Protection Agency (EPA) approved programs. Federal agencies are required to assure that their
programs and projects are consistent with those programs. To assist in this process, EPA has
developed a "Nonpoint Source Guidance" document dated December 1987 (52 FR 47971).
p. Coastal Zone Management. Sections 307c(1) and (2) of the Coastal Zone Management
Act require that each Federal agency conducting, supporting, or undertaking development
activities that are in, or directly affect, the coastal zone of a state shall insure that the project is, to
the maximum extent practicable, consistent with approved state management plans. Civil Works
activities of the Corps of Engineers in the coastal zone fall within this classification.
q. National Estuary Program. In 1987, Congress amended the Clean Water Act formally
establishing the National Estuary Program. The purpose of the Program is to identify nationally
significant estuaries, protect and improve their water quality, and enhance their living resources.
Section 320 of the Act allows a state's governor to nominate an estuary and convene a
management conference to develop a Comprehensive Conservation and Management Plan
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(CCMP) for the estuary. Under the law, a management conference must result in the assurance
that Federal assistance and development programs are consistent with the goals of the CCMP.
C-7 Air Quality and Related Requirements.
a. Purpose. This section provides guidance for the consideration of air quality in Civil
Works planning studies.
b. Clean Air Act. Section 176(c) of the Clean Air Act (CAA) requires that Federal
agencies assure that their activities are in conformance with Federally-approved CAA state
implementation plans for geographical areas designated as “non-attainment” and “maintenance”
areas under the CAA. The EPA General Conformity Rule to implement Section 176(c) is sound
at 40 CFR Part 93. The rule addresses how Federal agencies are to demonstrate that activities in
which they engage conform to Federally approved CAA state implementation plans. The EPA
rule contains a number of “exempted” or “presumed to conform” activities which include a
number of Corps activities. As applicable and required, CAA conformity determinations will be
completed during feasibility studies and included in feasibility reports.
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Exhibit C-1. Recommended Outline for Section 404(b)(l) Evaluation Using 24 December 1980
Guidelines (40 CFR 230) 1/
I. Project Description
a. Location
b. General Description
c. Authority and Purpose
d. General Description of Dredged or Fill Material
(1) General Characteristics of Material (grain size, soil type)
(2) Quantity of Material (cu. yds.)
(3) Source of Material
e. Description of the Proposed Discharge Site(s)
(1) Location (map)
(2) Size (acres)
(3) Type of Site (confined, unconfined, open water)
(4) Type(s) of Habitat
(5) Timing and Duration of Discharge
f. Description of Disposal Method (hydraulic, drag line, etc.)
II. Factual Determinations (Section 230.11) 2/
a.
Physical Substrate Determinations (consider items in sections 230.11(a# and 230.20
Substrate)
(1) Substrate Elevation and Slope
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Exhibit C-1 (Continued)
(2) Sediment Type.
(3) Dredged/Fill Material Movement
(4) Physical Effects on Benthos (burial, changes in sediment type, etc.)
(5) Other Effects
(6) Actions Taken to Minimize Impacts (Subpart H)
b. Water Circulation. Fluctuation and Salinity Determinations
(1) Water (refer to sections 230.11(b), 230.22 Water, and 230.25 Salinity Gradients; test
specified in Subpart G may be required). Consider effects on:
(a) Salinity
(b) Water Chemistry (PH. etc.)
(c) Clarity
(d) Color
(e) Odor
(f) Taste
(g) Dissolved Gas Levels
(h) Nutrients
(i) Eutrophication
(j) Others as Appropriate
(2) Current Patterns and Circulation (consider items in sections 230.11(b), and 230.23), Current
Flow and Water Circulation.
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Exhibit C-1 (Continued)
(a) Current Patterns and Flow
(b) Velocity
(c) Stratification
(d) Hydrologic Regime
(3) Normal Water Level Fluctuations (tides, river stage, etc.) (consider items in sections
230.11(b) and 230.24)
(4) Salinity Gradients (consider items in sections 230.11(b) and 230.25)
(5) Actions That Will Be Taken to Minimize Impacts (refer to Subpart H)
e. Suspended Particulate/Turbidity Determinations
(1) Expected Changes in Suspended Particulates and Turbidity Levels in Vicinity of Disposal
Site (consider items in sections 230.11(c) and 230.21)
(2) Effects (degree and duration) on Chemical and Physical Properties of the Water Column
(consider environmental values in section 230.21, as appropriate)
(a) Light Penetration
(b) Dissolved Oxygen
(c) Toxic Metals and Organics
(d) Pathogens
(e) Aesthetics
(f) Others as Appropriate
(3) Effects on Biota (consider environmental values in sections 230.21, as appropriate)
(a) Primary Production, Photosynthesis
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Exhibit C-1 (Continued)
(b) Suspension/Filter Feeders
(c) Sight Feeders
(4) Actions taken to Minimize Impacts (Subpart H)
d. Contaminant Determinations (consider requirements in section 230.11(d))
e. Aquatic Ecosystem and Organism Determinations (use evaluation and testing Procedures in
Subpart G, as appropriate)
(1) Effects on Plankton
(2) Effects on Benthos
(3) Effects on Nekton
(4) Effects on Aquatic Food Web (refer to section 230.31)
(5) Effects on Special Aquatic Sites (discuss only those found in project area or disposal site)
(a) Sanctuaries and Refuges (refer to section 230.40)
(b) Wetlands (refer to section 230.41)
(c) Mud Flats (refer to section 230.42)
(d) Vegetated Shallows (refer to section 230.43)
(e) Coral Reefs (refer to Section 230.44)
(f) Riffle and Pool Complexes (refer to section 230.45)
(6) Threatened and Endangered Species (refer to section 230.30)
(7) Other Wildlife (refer to section 230.32)
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Exhibit C-1 (Continued)
(8) Actions to Minimize Impacts (refer to Subpart H)
f. Proposed Disposal Site Determinations
(1) Mixing Zone Determination (consider factors in section 230.11(f)(2))
(2) Determination of Compliance with Applicable Water Quality Standards (present the
standards and rationale for compliance or non-compliance with each standard)
(3) Potential Effects on Human Use Characteristic
(a) Municipal and Private Water Supply (refer to section 230.50)
(b) Recreational and Commercial Fisheries (refer to section 230.51)
(c) Water Related Recreation (refer to section 230.52)
(d) Aesthetics (refer to section 230.53)
(e) Parks, National and Historical Monuments, National Seashores, Wilderness Areas, Research
Sites, and Similar Preserves (refer to section 230.54)
g. Determination of Cumulative Effects on the Aquatic Ecosystem (consider requirements in
section 230.11 (g))
h. Determination of Secondary Effects on the Aquatic Ecosystem (consider requirements in
section 230.11(h))
III. Findings of Compliance or Non-Compliance With the Restrictions on Discharge 3/
a. Adaptation of the Section 404(b)(l) Guidelines to this Evaluation
b. Evaluation of Availability of Practicable Alternatives to the Proposed Discharge Site Which
Would Have Less Adverse Impact on the Aquatic Ecosystem (Briefly discuss alternatives
considered and that are available and practical and state why the one selected would result in the
least amount of significant impacts. Reference should be made to other appropriate sections on
alternatives in EIS or Main Reports when the 404 Evaluation is contained in these documents.)
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Exhibit C-1 (Continued)
c. Compliance with Applicable State Water Quality Standards
d. Compliance with Applicable Toxic Effluent Standard or Prohibition Under Section 307 Of the
Clean Water Act
e. Compliance with Endangered Species Act of 1973
f. Compliance with Specified Protection Measures for Marine Sanctuaries Designated by the
Marine Protection. Research, and Sanctuaries Act of 1972
g. Evaluation of Extent of Degradation of the Waters of the United States
(1) Significant Adverse Effects on Human Health and Welfare
(a) Municipal and Private Water Supplies
(b) Recreation and Commercial Fisheries
(c) Plankton
(d) Fish
(e) Shellfish
(f) Wildlife
(g) Special Aquatic Sites
(2) Significant Adverse Effects on Life Stages of Aquatic Life and Other Wildlife Dependent on
Aquatic Ecosystems
(3) Significant Adverse Effects on Aquatic Ecosystem Diversity, Productivity and Stability
(4) Significant Adverse Effects on Recreational, Aesthetic, and Economic Values
h. Appropriate and Practicable Steps Taken to Minimize Potential Adverse Impacts of the
Discharge on the Aquatic Ecosystem
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Exhibit C-1 (Continued)
i. On the Basis of the Guidelines. the Proposed Disposal Site(s) for the Discharge of Dredged or
Fill Material (specify which) is (select one)
(1) Specified as complying with the requirements of these guidelines; or,
(2) Specified as complying with the requirements of these guidelines, with the inclusion of
appropriate and practical conditions to minimize pollution or adverse effects on the aquatic
ecosystem; or,
(3) Specified as failing to comply with the requirements of these guidelines.
Notes:
1/ This outline is furnished for guidance in preparing 404(b)(l) evaluations under the December
1980 Guidelines. The outline should be considered flexible. Each evaluation should
be tailored to fit project specific characteristics.
2/ The primary subheadings in this section (II) should be contained in every section 404(b)(l)
evaluation since these items are specified to be included by the guidelines. If a particular item is
not applicable to a project (such as salinity considerations at a freshwater site), so state.
3/ The Findings and Compliance or Non-Compliance with Restriction on the Discharge should
be a narrative and cover the items listed in Section III of the outline. The data presented in the
Factual Determination should be compared to the restrictions on #he discharge in paragraph
230.10, and a determination should be made as to whether the discharge will or will not be in
compliance. Do not repeat data given in the Factual Determination in the Finding of Compliance.
See attached example of a Finding of Compliance.
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(EXAMPLE)
FINDING OF COMPLIANCE
FOR
NO NAME PROJECT
1. No significant adaptations of the guidelines were made relative to this evaluation.
2. Three alternative open water disposal sites were available for this project. Use of alternative
sites one and three (Figure 1) would have resulted in significant alteration of water circulation
patterns and consequently, salinity patterns. These changes would have adversely affected oyster
beds and other benthic and fishery populations in the bay. Also, use of site one would cause
siltation of shellfish beds due to expected tidal transport of dredged material into these areas. Site
two, the selected disposal area, would be the least costly site to use for disposal because it is
nearer to the channel dredging area.
3. The planned disposal of dredged material at site two would not violate any applicable State
water quality standards with the exception of turbidity. Turbidity standards would be violated
outside the allowable mixing zone under extreme tidal conditions, i.e., spring tides. Dredging
will be suspended during these periods. The disposal operation will not violate the Toxic Effluent
Standards of Section 307 of the Clean Water Act.
4. Use of the selected disposal site will not harm any endangered species or their critical habitat
or violate protective measures for the Long Bay Marine Sanctuary.
5. The Proposed disposal of dredged material will not result in significant adverse effects on
human health and welfare, including municipal and private water supplies, recreation and
commercial fishing, plankton, fish, shellfish, wildlife, and special aquatic sites. The life stages of
aquatic life and other wildlife will not be adversely affected. Significant adverse effects on
aquatic ecosystem diversity, productivity and stability, and recreational, aesthetic and economic
values will not occur.
6. Appropriate steps to minimize potential adverse impacts of the discharge on aquatic systems
include cessation of disposal activities during extreme tidal velocities associated with spring
tides.
7. On the basis of the guidelines the proposed disposal site for the discharge of dredged material
is specified as complying with the inclusion of appropriate and practical conditions to minimize
pollution or adverse effects to the aquatic ecosystem.
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APPENDIX D
Economic And Social Considerations
TABLE OF CONTENTS
Paragraph
Page D-
D-1.
Background..............................................................................................................................1
D-2.
Other Direct Benefits...............................................................................................................1
D-3.
NED Cost Evaluation Procedures...........................................................................................3
D-4.
Planning Special Topics and Cautions. ................................................................................11
D-5.
Financial Analysis. ................................................................................................................21
D-6
Interest Rate and Period of Analysis ....................................................................................30
D-7.
NED Benefit Evaluation Procedures: Unemployed/Underemployed Labor Resources ....31
D-8.
Social Effects .........................................................................................................................39
LIST OF TABLES
Table D- 1:
Table D- 2:
Table D- 3:
Table D- 4:
Table D- 5:
Table D- 6:
Table D- 7:
Project Investment ........................................................................................................12
Annualized Adverse Effects..........................................................................................12
Tabulation of Current Costs and Benefits ....................................................................16
Value of Time Saved by Trip Length and Purpose......................................................20
Schedule of Estimated Federal and Non-Federal Expenditures ..................................24
Schedule of Sources and Uses of Funds .......................................................................26
Occupational Tables ......................................................................................................36
LIST OF FIGURES
Figure D- 1: Illustration of Financing Plan Outline .........................................................................27
Figure D- 2: Sample Bond Consultant's Letter ................................................................................28
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APPENDIX D
Economic and Social Considerations
D-1.
Background.
a. Introduction. This appendix covers economic and social considerations not addressed
elsewhere. Guidance for estimating NED benefits is provided in Appendix E, Civil Works Missions
and Evaluation Procedures, where the evaluation procedure for each project type is presented in its
mission context. Some aspects of economic evaluation, and of planning generally, are constant
across missions; those aspects are in this appendix.
b. Economic Considerations. Economic considerations which cut across missions and
projects include such aspects as the proper use of interest rates, how to allocate costs among project
purposes, how to test for financial solvency of a non-Federal sponsor, how to best estimate current
project benefits, how to evaluate other direct benefits, and other economic evaluation procedures.
c. Social Considerations. The social considerations which cut across various missions and
projects include such aspects as the evaluation of unemployed and underemployed labor, evaluation
of urban and community impacts such as life, health and safety factors, estimations of displacement,
evaluations in changes to long-term productivity or real income, evaluations in changes in energy
requirements and conservation, evaluations of changes in educational, cultural or recreational
opportunities, evaluations of changes in emergency preparedness.
D-2.
Other Direct Benefits.
a. Purpose. This section provides a definition of other direct benefits and procedural
guidance for the evaluation of other direct benefits attributable to water resources plans and projects.
Other direct benefits are the incidental direct benefits of a project. The other direct benefits to be
included in the NED benefit evaluation are the incidental effects of a project that increase economic
efficiency by increasing the output of intermediate or final consumer goods over and above the
direct outputs for which the plan is being formulated.
b. Conceptual Basis. Other direct benefits are incidental to the primary purposes of water
resource projects. Primary purposes of projects are those purposes for which the alternative plans
are formulated. Other direct benefits derive from incidental increases in outputs of goods and
services or incidental reductions in production costs.
c. Planning Setting. Standard planning procedures involve comparison of the with project
condition to the without project condition. In considering other direct benefits, define the boundary
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of direct influence of the plan. Economic efficiency gains to firms in production and satisfaction
gains to consumers other than those identified as the direct beneficiaries of primary project purposes
should be valued and measured as other direct benefits.
(1) Without Project Condition. Forecast future conditions expected to exist without
implementation of the plan. The without project condition is the projection of output and production
levels and costs of production likely to be achieved in the absence of a plan.
(2) With Project Condition. Future conditions expected to exist when the plan is fully
implemented. The with project condition is the projection of output and production levels and the
costs of production likely to be achieved with the plan.
d. Evaluation Procedure: General.
(1) When applicable, compute other direct benefits using the procedures of Appendix E and
the remainder of this appendix. Some benefits, such as reduced water supply treatment costs, can be
computed on the basis of reduced costs to consumers.
(2) Improvement in production possibilities of the private market sector as well as the nonmarket sector (some recreation, for example) are other direct benefits. Examples of other direct
benefits are included in the following illustration. A large water storage project is to be located
upstream on a main tributary of a river system that enters the ocean by a delta through an estuary.
The direct output of the project is flood control for communities residing on floodplains along upper
valleys of the tributary. One effect of regulating flow by reducing winter high and summer low
flows is to increase the recreational potential of land and water in the lower reaches of the river
system. A cooling of water temperatures and increased flow during summer increases fish and
wildlife productivity; riparian habitats along lower water courses expand and increase in density;
and salt water marshland receives less saline water in summer. As a result, there is an increase in
dove and pheasant hunting as these wildlife populations increase. Opportunities for sport angling
also increase as game fish productivity rises. Also, shrimp production benefits from the change to
less saline water in the marshland, and commercial shrimp harvest increases, resulting in greater
output at lower unit total cost to shrimp fishermen. Another incidental effect is the improvement in
water quality to downstream users as turbidity is reduced in winter and water hardness is reduced in
summer. Therefore, treatment costs are lower for firms and households. If the impoundment causes
the recharge of groundwater basins in the vicinity of the dam site or along the stream course, these
incidental effects are other direct benefits. Pumping costs could be reduced as well.
e. Evaluation Procedure: Problems in Application. The major problems encountered in the
estimation of other direct NED benefits are the identification of the firms, industries, and consumers
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who will be subject to these incidental effects caused by projects and plans. It must be emphasized
that it is not practical or economic to trace out all direct effects.
(1) Determining the context or system within which the major incidental impacts might be
experienced is a useful first step in identifying likely direct benefits worth measuring. The
immediate watershed or the subsystem of a river system would constitute a relevant context. The
delineation of geographical and economic market regions in which impacts are likely to be felt
cannot usually encompass the whole regional economy in a highly industrialized area. Nevertheless,
it is important to avoid delineating too small an area in which to search for possible effects.
(2) Another procedure for identifying likely impacts is tracing the hydrologic changes that
will occur as a result of the project. For example, flows downstream and in other parts of a river
system can be changed in quantities and qualities; the water’s chemical and physical characteristics,
oxygenation, turbidity, temperature, etc. can undergo change that may impact on fish and wildlife
resources and on the production functions of firms and the satisfaction of consumers.
f. Evaluation Procedure: Data Sources. An assessment of the current situation and the
economic efficiency of potentially affected firms and individuals usually entails the collection from
primary sources of data on cost, production function, and firm capacity. Studies of industrial
structure and the interdependence of firms in the supply of various inputs and the use of outputs can
provide valuable supplemental information.
g. Evaluation Procedure: Risk and Uncertainty. Other direct benefits are unique to each
project design and its location, so the historical record of data is of limited usefulness. The risk and
uncertainty attached to the hypothesized outcomes can be reduced by clearly revealing areas of
uncertainty. A physical description of other direct benefits, together with assessment of their relative
(major or minor) significance, is an integral part of such a procedure. Nevertheless, these estimates
may involve high degrees of risk and relative uncertainty, based as they are on the total mix of
project outputs and the effect these mixes would have on stimulating increased productivity.
h. Report and Display Procedures. Other direct benefits should be identified by component
and added onto the benefits of the benefit-cost analysis. The method used to value the benefits
should be presented in the report. Provide a tabular breakdown of all other direct benefits claimed
for the project.
D-3.
NED Cost Evaluation Procedures.
a. Purpose. This section defines the components of NED costs, as defined in the
Principles and Guidelines, and provides procedures for the evaluation of NED costs (costs
used for economic analysis) of structural and non-structural elements of water resources
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plans and projects. NED costs and financial costs may differ. Guidance regarding
determination of financial costs is contained in Appendix E of this regulation. Appendix E
also provides guidance on classification of costs by project purpose, cost sharing
requirements and potential credits to non-Federal sponsors.
b. Conceptual Basis.
(1) Project measures, whether structural or nonstructural, require the use of various
resources. NED costs are the opportunity costs of resource use. In evaluating NED costs, resource
use must be broadly defined to fully recognize scarcity as a component of value. This requires
consideration of the private and public uses that producers and consumers are currently making of
available resources or are expected to make of them in the future.
(2) The opportunity costs of resource use are usually reflected in the marketplace. When
market prices adequately reflect total resource values, they are used to determine NED costs. When
market prices do not reflect total resource values, surrogate values are used appropriately to adjust or
replace market prices.
(3) Total NED cost is the market value of a resource plus other values not reflected in the
market price of the resource; it therefore accounts for all private sector and public sector uses.
Market price is used to reflect the private sector use of resources required for or displaced by a
project, and surrogate value is used to reflect the public sector use.
(a) The market price approach relies on the interaction of supply and demand. Price is
determined through transactions on the margin between knowledgeable and willing buyers and
sellers, neither of whom are able to influence price by their individual decisions. Distortions in
market price occur if one or more of the conditions of perfect competition is violated.
(b) The surrogate value approach involves the approximation of opportunity costs based on
an equivalent use or condition. Surrogate values are frequently used in restricted markets and in
non-market situations.
(4) Proper NED analysis requires that project NED costs and benefits be compared at a
common point in time. Costs are calculated in annualized terms (see paragraph D-6).
c. Planning Setting. The basis for the evaluation rests in a thorough analysis of expected
conditions in the future with a project and without a project. This requires identification of those
resources that will be affected by a project; the current value of such uses is measured as the
economic worth to the Nation of the services associated with those uses.
d. Evaluation Procedure: General.
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(1) Resources required or displaced to achieve project purposes by project installation and/or
operation, maintenance, repair, replacement and rehabilitation activities represent a NED cost and
should be evaluated as such. Resources required or displaced to minimize adverse impacts and/or
mitigate fish and wildlife habitat losses are also NED costs. Costs for features not required for
project purposes, avoiding adverse effects caused by such features, and/or mitigating fish and
wildlife habitat losses caused by such features are not project-related NED costs and should not be
evaluated. Costs for features not required for project purposes will generally not be part of the Corps
project.
(2) All NED costs shall be based on current costs adjusted by the project discount rate to the
beginning of the period of analysis as defined in paragraph D-6. Compute all costs at a constant
price level and at the same price level as used for the computation of benefits. Current costs shall be
based on the price level at the time of the analysis. These costs will be updated in the year(s) the
project is submitted for authorization and/or appropriations. Deferred costs will be discounted to the
end of the installation period, using the applicable project discount rate. Costs incurred before the
beginning of the period of analysis will be increased (i.e., to estimate future value) by adding
compound interest at the applicable project discount rate from the date the costs are incurred to the
beginning of the period of analysis. All NED costs will be converted to an annual equivalent value
over the period of analysis.
(3) Project NED costs may be adjusted by an allowance for the salvage value of land
improvements, equipment, and facilities that would have value for non-project uses at the end of the
period of analysis. Significant salvage values of replaceable items (e.g., generators) will normally
become adjustments to allowances for replacement costs.
e. Evaluation Procedure: Implementation Outlays. The NED costs of implementation
outlays include the costs incurred by the responsible Federal entity and, where appropriate,
contributed by other Federal or non-Federal entities to construct, operate and maintain a project in
accordance with sound engineering and environmental principles and place it in operation. These
costs are the remaining post-authorization planning and design costs; construction costs;
construction contingency costs; administrative services costs; fish and wildlife habitat mitigation
costs; relocation costs; historical and archaeological salvage costs; land, water, and mineral rights
costs; and operation, maintenance, repair, rehabilitation, and replacement costs.
(1) Postauthorization (Preconstruction, Engineering and Design) Costs. These costs are the
direct cost for investigations, field surveys, planning, design, and preparation of specifications and
construction drawings for structural and nonstructural project measures. In the evaluation
procedure, these costs will be based on the actual current costs incurred by the responsible Federal
entity for carrying out these activities for similar projects and project measures. They may be
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computed as a percentage of construction costs when there is a documented basis for the rate used.
Make adjustments when appropriate to reflect circumstances special to the project under
consideration.
(2) Construction Costs. These costs are the direct cost of installing project measures. They
should be based on the market value of goods and services required to install project measures,
including those measures required for avoiding adverse environmental effects and public health and
safety risks. They include the cost of purchased materials (including associated transportation
costs); equipment rental or purchase; construction wages or salaries (including social security and
fringe benefit costs); and contractors’ management, supervision, overhead, and profit. These costs
will be based on current contract bid items in the project area or on the current market value of
purchased materials and services, etc.
(3) Construction Contingency Costs. These are project costs normally added to reflect the
effects of unforeseen conditions on estimates of construction costs. They are not an allowance for
inflation or for omissions of work items that are known to be required. They are included to cover
unforeseen construction problems. These costs will vary with the intensity of the surveys and
investigations performed, the variability of site conditions, and the type of project measures being
installed. They may be computed as an appropriate percentage of estimated construction costs. If
contingency costs are included in real estate costs, planners shall ascertain the basis for these
contingent costs. To the extent that contingencies are meant to account for inflation, this effect shall
be excluded from real estate costs for evaluation purposes. Only that portion of real estate
contingency cost for which there is reasonable basis for anticipating uncertainty (condemnation costs
may be an example) shall be included.
(4) Administrative Services Costs. These are the costs associated with the installation of
project measures, including the cost of contract administration; permits needed to install the project
measures; relocation assistance advisory services; administrative functions connected with
relocation payments; review of engineering plans prepared by others; government representatives;
and necessary inspection service during construction to ensure that project measures are installed in
accordance with the plans and specifications. Base these costs on the actual current costs incurred
by the responsible Federal entity for carrying out these activities for similar projects and project
measures. These costs may be computed as a percentage of construction costs if there is a
documented basis for the rate used. Make adjustments when appropriate to reflect unusual
circumstances special to the project under consideration.
(5) Fish and Wildlife Habitat Mitigation Costs. These are the costs of mitigating losses of
fish and wildlife habitat caused by project construction, operation, maintenance, repair, rehabilitation
and replacement. The mitigation measures to be included in the project will be determined by the
responsible Federal entity in coordination with Federal and State Fish and Wildlife Agencies as
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required by the Fish and Wildlife Coordination Act (Public Law 85-625). Installation of these
mitigation measures should be concurrent with the installation of other project measures, where
practical. These costs include all project outlays associated with the installation of mitigation
measures, including preconstruction, engineering and design costs; construction costs; construction
contingency costs; administrative services costs; relocation costs; land, water, and mineral rights
costs; and operation, maintenance, repair, rehabilitation, and replacement costs. These costs will be
based on current market values and the actual current costs incurred by the Federal entity for
carrying out these activities for similar mitigation measures.
(6) Relocation Costs. These are project costs associated with relocation of public highways
and other publicly owned facilities, railroads, and utility lines. The relocation cost of publicly
owned facilities (except highways), railroads and utility lines will be based on the costs of
replacement in kind. In the case of highways, the relocation cost will be based on replacement that
reflects the current traffic count and current standards of the owner, which may result in a justified
improvement over the configuration of the existing roadway. The additional relocation cost of
highways that are upgraded to increase their carrying capacity for project purposes such as
recreation is also a project cost. The relocation cost of highways, railroads, and utility lines shall
include all project outlays associated with their relocation, including planning and design costs;
construction costs; construction contingency costs; administrative services costs; fish and wildlife
habitat mitigation costs; land, water, and mineral rights costs; and historical and archaeological
salvage costs. These costs will be based on current market values and the actual current costs
incurred by the Federal entity for carrying out similar relocations.
(7) The requirements of the Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970 (Public Law 91-646), as amended, including real property acquisition
relocation payments as applicable to a displaced person, business, or farm operation. Such payments
include moving and related expenses for a displaced person, business, or farm operation; financial
assistance for replacement housing for a displaced person who qualifies and whose dwelling is
acquired because of the project; and termination payments for dislocated businesses whose owners
choose to close out. Base the NED cost of replacement housing on replacement in kind. (Costs over
and above replacement in kind are treated as financial costs for non-project purposes.) Base these
costs on current market values.
(8) Historical and Archaeological Salvage Operation Costs. These are project costs
associated with salvaging artifacts that have historical or archaeological values as prescribed by the
Preservation of Historic and Archaeological Data Act (Public Law 93-291). These costs will be
based on the current market price of salvage operations carried on during construction.
(9) Land, Water, and Mineral Rights Costs.
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(a) These NED costs include all costs of acquiring the land, water, and mineral rights
required for installing, operating, maintaining, repairing, rehabilitating, and replacing project
measures. They include all expenditures incurred in acquiring land, easements, rights-of-way leases,
and water and mineral rights. Such costs include the cost of the land (or interest therein), water, and
mineral rights minus salvage value; transactional costs including the cost of surveys incident to a
sale, legal fees and transfer costs; and severance damage payments. These costs will be based on
current market values and the actual current costs incurred by the Federal entity for carrying out
similar land, water, and mineral rights acquisitions. The market value of easements will be based on
the difference in market value of land without the easement and with the easement.
(b) Some land, water, and mineral rights are owned by Federal, State, and local governments
and have been committed to specific uses. The NED cost of using such resources for project
purposes consistent with their committed uses will be based on the surrogate value of the public
services provided by the resources. For example, if State-owned land committed to recreation use is
to be used for project recreation development, its NED cost is not the market value of the land, but
the value of the recreation services that would be provided by the land without the project. Public
domain lands not committed to specific uses should be valued at the market value of comparable
private land or a surrogate use value, or a combination if there are complementary uses.
(10) Operation, Maintenance, Repair, Rehabilitation, and Replacement (OMRR&R) Costs.
These costs represent the current value of materials, equipment, services, and facilities needed to
operate the project and make repairs, rehabilitate, and make replacements necessary to maintain
project measures in sound operating condition during the period of analysis. They include salaries
of operating personnel; the cost of repairs, replacements, or additions; and an appropriate charge for
inspection, engineering, supervision, custodial services, and general overhead. When operation,
maintenance, repair, rehabilitation, or replacement will be performed by contract, the cost should
include an allowance for contingencies and the costs of survey, planning design, and administrative
services. These costs will be based on actual current costs incurred for carrying out these activities
for similar projects and project measures. When the project is an addition to or extension of an
existing project for which the costs and benefits are not included or otherwise involved in the project
analysis, include only the additional cost of operation, maintenance, repair, rehabilitation, or
replacement necessitated by the addition or extension to the existing project. Adjustments can be
made when appropriate to reflect circumstances special to the project under consideration.
(11) Interest During Construction. This represents the opportunity cost of capital incurred
during the construction period. The cost of a project to be amortized is the investment incurred up to
the beginning of the period of analysis. The investment cost at that time is the sum of construction
and other initial cost plus interest during construction. Cost incurred during the construction period
should be increased by adding compound interest at the applicable project discount rate from the
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date the expenditures are incurred to the beginning of the period of analysis. This is comparable to
the treatment of benefits that accrue during the construction period (see paragraph D-4c) and is
performed to insure costs and benefits are evaluated on an equivalent time basis.
(a) All PED costs are included in project NED costs and are charged interest during
construction. This includes any studies performed using PED funds (i.e., physical modeling, plans
and specs, etc.) When performing economic updates, expended PED costs will be considered sunk
and not included in the benefit-cost ratio.
(b) Lands acquired are charged interest during construction from the date they are put to use
for project purposes, or the date their non project use ceases, whichever is earlier. Through lease
back or other arrangements these dates may differ from date of acquisition.
f. Evaluation Procedure: Associated Costs. Associated costs are the costs of measures
needed over and above project measures to achieve the benefits claimed during the period of
analysis. For example, associated costs include the cost of irrigation water supply laterals, if they are
not accounted for in the benefit estimate. Base associated costs on the current market prices of
goods and services required for the installation of measures needed over and above project
measures.
(1) Associated costs have often been handled through the self-liquidating cost concept. A
self-liquidating cost is the cost of a particular type of asset that can be operated in such a way that it
repays the money spent to acquire it (e.g. mooring or dock space). The use of self-liquidating costs
is limited to those cases in which appropriate associated costs are netted out of benefit measures.
(2) It is preferred that associated costs be explicitly treated as NED project related costs, and
appear as costs in benefit-cost ratios. Where the concept of self-liquidating costs has been used to
account for associated costs this procedure may continue to be used as long as:
(a) The appropriate associated costs are subtracted from the estimated benefits, and
(b) The associated costs are identified and the netting process documented in project reports.
g. Evaluation Procedure: Other Direct Costs.
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(1) These are the costs of resources directly required for a project or plan, but for which no
implementation outlays are made. Consequently, they are included in the economic costs of a plan
but not in the financial costs. These costs may be important for both structural and nonstructural
plans. For example, a zoning plan to preserve floodplain values by restricting development would
have as a cost the value of with project development opportunities foregone. A plan that responds to
demand growth by reallocating existing outputs from low value uses to high value uses through
pricing mechanisms (i.e., raising the price of existing outputs) would have as its major cost the value
of the outputs to the users who forego its use as a result of its higher price. On the other hand, a
structural project may displace recreation use at the project site and the value of foregone
recreational opportunities is a direct cost. Whenever possible, compute these costs using the
procedures set forth for computing benefits in Appendix E. If these costs are not quantified, they
should be otherwise identified.
(2) Other direct costs also include uncompensated NED losses caused by the installation,
operation, maintenance, repair, rehabilitation, or replacement of project or plan measures. All
uncompensated net losses in economic outputs (not transfers) that can be quantified shall be
considered project NED costs. The evaluation of such costs requires an analysis of project effects
both within and outside the project area.
(3) Examples of other direct costs include increased downstream flood damages caused by
channel modifications, dikes, or the drainage of wetlands; increased water supply treatment costs
caused by irrigation return flows; erosion of land along streambanks caused by dams that prevent the
replenishment of bedload material; loss of land and water recreation values through channel
modifications, reduced instream flow due to consumptive use of water by irrigated agriculture, or
inundation by reservoirs; increased transportation costs caused by rerouting traffic around a
reservoir; new or increased vector control costs caused by the creation of wetlands; and decreased
output or increased cost per unit of output of private firms caused by project-induced decreases in
raw materials. When applicable, compute such costs using the procedures for computing benefits
contained in Appendix E and this Appendix. Some costs, such as increased water supply treatment
costs, may be computed on the basis of increased costs to resource users.
h. Evaluation Procedure: Problems in Application.
(1) Application of the procedures in this section requires care to ensure that all costs are
included. The identification and determination of all associated costs and external diseconomies
require full perception of the measures required to achieve the benefits being claimed and the
impacts produced by the actions taken. It must be emphasized that it is not practical or economic to
trace out all other direct effects.
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(2) Application of the procedures in this section requires care to avoid double counting. A
full understanding of the values reflected by market and surrogate values is necessary to prevent
double counting. For example, the market value of land that includes a private recreation
development reflects the recreation value. In this case, double counting would result if a surrogate
recreation value (loss) were added as a cost. On the other hand, the market value of land that
provides free public recreation does not reflect the recreation value, so the surrogate recreation value
(loss) must be added as a cost.
(3) Market prices are relatively easy to obtain. However, some prices are subject to large
fluctuations in short periods of time, so care must be taken to determine reasonable current costs of
such items for project evaluation purposes.
i. Evaluation Procedure: Data Sources. Market price information is available from data on
comparable sales, Government publications (e.g., bulletins of the U.S. Departments of Commerce,
Agriculture, and Labor), and business reports. Data sources for those NED benefit evaluation
procedures having application to cost analysis are covered in their respective sections of
Appendix E.
j. Report and Display Procedures. Display NED costs identified through the procedures
described above as line item entries in the adverse effects section of the NED account. The
following display tables are suggested:
D-4. Planning Special Topics and Cautions. This section comprises certain topics elaborating,
amplifying, and extending ideas contained in, or implied by, the planning and evaluation procedures
presented in the main body of this regulation and Appendix E. In a few cases the guidance is mainly
for or only for particular project purpose(s) or type(s) of authorization.
a. Non-Standard Procedures. Procedures to calculate the benefit-cost ratio of a project not
approved by the Water Resources Council are considered non-standard procedures.
(1) Specific approved procedures are described in Appendix E, this Appendix, and in the
Principles and Guidelines (P&G).
(2) An alternative procedure which is not specifically contained in the NED Procedures may
be employed if the following requirements are met and the procedure is fully documented:
(a) The procedure is in accord with current policy and estimates of the magnitudes of project
effects, that is quantities, are empirically estimated.
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(b) The procedure would give a more accurate benefit estimate; or, it can be demonstrated
that the procedure reduces study time and cost and does not alter the formulation of the project.
Table D- 1: Project Investment
Alternative 1
Alternative 2
Unit
Alternative X
Unit
Unit
Amt.
1.Construction cost
2.Construction contingency
costs
3. Post-authorization planning
and design costs
4. Administrative services
costs
5. Fish and wildlife habitat
mitigation costs
Amt.
Quantity
Price
............
............
..........
..........
..........
..........
..........
..........
..........
..........
............
............
..........
..........
..............
..........
............
..............
..........
..............
..............
Amt.
Quantity
Price
..........
..........
.........
.........
..........
..........
..........
..........
............ ..........
............ ..........
.........
.........
...........
...........
..........
..........
............ ..........
.........
...........
............
..........
..........
............ ..........
.........
...........
..........
..........
............
............
..........
..........
..........
..........
............ ..........
............ ..........
.........
.........
...........
...........
..............
..........
............
..........
..........
............ ..........
.........
...........
..........
..........
..........
..........
.......
.......
.......
.......
.........
.........
.........
.........
.......
.......
.......
.......
.......
.......
.......
.......
........
........
........
........
........
........
........
........
.......
.......
.......
.......
........
........
........
........
Quantity
Price
..............
..............
..........
..........
..............
..............
6. Historical and
archeological salvage
operation costs
7. Land, water, and mineral
rights costs
8. Relocation costs
9. P.L. 91-646 Costs
10. Interest during installation
period at a rate of ___%
Total investments
Price level: _____________....
Installation period: ______......
Period of analysis:
______
Table D- 2: Annualized Adverse Effects
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Alternatives
1
2
X
Interest on investment
Amortization on investment
Annual OMRR&R
Associated costsa
Other direct costsa
Total annualized costs .............
Other adverse effects not evaluated in
monetary termsa
(d) Prior approval for each application of such alternative procedures is obtained from
HQUSACE (CECW-PD). Approval is less likely for procedures proposing use of the cost of an
alternative or administratively established values as an estimate of benefits.
b. Current Estimates of Project Benefits. It is Corps policy to report and maintain current
estimates of project benefits, costs, and economic justification of all active funded projects and
separable elements beginning with the Report of the Chief of Engineers. The purpose of the policy
is to provide reasonable estimates of economic justification to non-Federal sponsors, Congress and
Federal decision makers throughout the project development process. An analysis is considered
current if it was approved within 3 fiscal years of the pertinent decision date. As an example, in
June 1996 budget submissions, the approval date of the document containing the most recent
economic analysis could be no earlier than October 1992, since FY 1993 is three fiscal years prior to
FY 1996 and October 1992 is the first month of FY 1993. If more than three fiscal years have
elapsed since the release of the Report of the Chief of Engineers, an economic reevaluation must be
the first item of work upon receipt of any funds intended to further project implementation.
(1) Dates and general guidance for decision requests. The pertinent dates for budgetary and
investment decisions, along with guidance for various decision requests are specified below.
(a) New Start PED Budgeting. For all New Start PED funding requests the pertinent
decision date is the submission of the budget request to HQUSACE. Benefit-to-cost ratios (BCR),
which are required in support of budget requests, will be developed based on the latest approved
xiii
a
Identified by type
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economic analysis, annualized at the specified discount rates. The current project costs should be
deflated to the same price level as in the latest approved economic analysis, annualized at the current
interest rate. The report and approval date of that analysis must be cited and should not be more
than three fiscal years old. If more than three fiscal years have elapsed since the release of the Report
of the Chief of Engineers, an economic reevaluation must be the first item of work upon receipt of
PED funds. Follow-on funding will be contingent upon approval of the economic reevaluation.
(b) Continuing PED Budget requests. For all continuing PED funding requests the pertinent
decision date is the Division submittal of the budget request to HQUSACE. The same methodology,
deflating costs to the date of the approved economic analysis and adjusting costs and benefits for the
budget year discount rate applying to New Start PED budget requests, should be used for continuing
PED funding requests. The three year requirement for updates is also applicable.
(c) New Construction Start Budgeting. For all New Start Construction funding requests for
projects and separable elements, the pertinent decision date is the submission of the Division budget
request to HQUSACE. The same BCR computation and reporting requirements and the three year
updating requirements previously discussed are applicable to New Construction Start Budgeting. If
the reevaluation uncovers major changes that could affect project formulation or sizing, additional
PED funds rather than construction funds should be requested to undertake a complete General
Reevaluation (GRR) level evaluation.
(d) Project Cooperation Agreements. For all PCA’s, the pertinent decision date is the
submission of the final PCA to ASA (CW) for approval. If more than three fiscal years have elapsed
since the approval date of the latest economic analysis, a reevaluation must be performed in
sufficient detail with supporting documentation to show the project remains justified. The
reevaluation may be presented in a Limited Reevaluation Report (LRR) which supplements the
project document cited in the PCA. Submission of the LRR to HQUSACE for approval must be
accomplished prior to submission of the draft PCA.
(e) Non-PCA Projects. The pertinent decision date for approval to initiate expenditures of
Construction General appropriations for projects which do not require a PCA, such as inland
navigation, is the submission date of the request to HQUSACE. The three fiscal year and
reevaluation requirements for PCA’s are also applicable to non-PCA projects.
(2). Definition of Last Approved Official Document. The approved official document for
the Feasibility Report is the Report of the Chief of Engineers. Other approved official documents
may include General (GRR) or Limited Reevaluation Reports (LRR). If other documents are to be
used as the basis for obtaining budgetary or implementation approval, they must be approved by
CECW.
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(3) Plan for Economic Updates. Feasibility reports, General Reevaluation reports and other
project decision (formulation) documents, shall include a plan for updating project benefits for future
reporting and decision making. The economic update plan shall likewise be included in all Project
Management Plans. The actions in the plan may be limited in that no major new analyses need be
conducted but rather previous assumptions reviewed and updated with techniques such as surveys
and sampling employed to develop a reasonable estimate of current project benefits provided no
significant changes in without and/or with project conditions have occurred. However, in no event
will simple indexing of overall benefits be acceptable. The plan shall include discussions of the data
that will be required and the procedures that will be employed. Any rational set of procedures that
result in a current analysis of benefits may be acceptable except procedures which amount solely to
indexing of benefits. Examples of procedures that could be formulated during feasibility and other
studies, and which could be useful in providing current analysis in the future are sampling and
monitoring, partial benefit reanalysis, and limited indexing.
(a) Sampling or Monitoring. The focus of the effort should be on factors which are critical to
project formulation and feasibility and are representative of the major benefit categories (i.e.,
inundation reduction benefits in a flood control project or transportation cost savings in a navigation
project). For example, in a fully developed floodplain a sample of structures may be selected for
development of replacement cost less depreciation of structure values using construction cost
models. The values derived could then be used to represent values for the floodplain. For a
navigation project, if feasibility depends critically on ships of given characteristics, a plan may be
developed to monitor future use of these ships.
(b) Partial Benefit Reanalysis. This study will not have nearly the depth or breadth of a
feasibility study. It could be informative regarding current benefits and may be accomplished at
reasonable cost. For example, damage calculations at current prices for sampled structures provide
valuable information on the current level of inundation reduction benefits.
(c) Limited Indexing. Use of generalized indices such as CWCCIS may be used for specific
infrastructure benefit categories such as roads, bridges, and rail lines provided these benefit
categories do not constitute a major portion of overall project benefits. Additionally, the
reevaluation report must document that the infrastructure improvements are still present and used
and are subject to comparable flood damages as in the latest report.
(4) Content of Limited Economic Reevaluation. Limited Reevaluation Reports (LRR) may
be used to document the current economic evaluation of a project (or separable elements), or to
report some other kinds of project changes.
(a) Scope and Documentation. The limited economic evaluation information submitted to
HQUSACE for approval in a reevaluation document needs to be either complete within the
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document or accompanied by the document it is updating. Limited economic reevaluations must
include sufficient data to describe what was done in the previously approved document, what was
done in the limited reevaluation, what differences there are and the reasons for the differences.
Documentation should cover items which are not strictly socio-economic conditions such as changes
in hydrology and hydraulic characteristics or periods of record and costs. This documentation
should cover each benefit and cost item, and show net benefits and the benefit-cost ratio at the
current discount rate.
(b) Format and Displays. A good format would start with brief summary description of the
previous approved evaluation and the current reevaluation, accompanied by a tabular display of the
changes, followed by support documentation explaining the changes. The following simple display
format is a suggested guideline for the tabulation of current costs and benefits and economic
justification in a structural flood control project.
Table D- 3: Tabulation of Current Costs and Benefits
Latest Approved1
Current Estimate
Difference
Reason for
Difference
Benefit Category2
Inundation
Residential Structures
Residential Contents
Other
Cost Category
Construction
Lands
Other
Net Benefits
Benefit / Cost Ratio
1
2
Cite document, name, date, approval date, price level and interest rate.
Use categories and sub-categories of benefits in latest approved document.
(5) Project Changes Requiring More Detailed Analysis. In some instances a more thorough
reanalysis than specified in the economic update plan needs to be provided. Examples may include
instances where the previously approved project document predates cost-shared feasibility study
planning; an economic benefits update plan has not been approved; the project has not had seamless
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funding; substantial changes in the without condition, project formulation, project design and/or
project costs have occurred. The level of effort for the economic reevaluation should be based on
whether the changed conditions warrant a reformulation of a project or a reaffirmation of the
justification of the authorized plan. If reformulation, including evaluation of alternative sizes of a
project, is warranted a GRR should be prepared and the economic reanalysis should be of similar
scope as required for a feasibility study. If reformulation is not warranted a limited economic
reevaluation shall be documented in an LRR.
(6) Summary. The policy of reporting and maintaining current estimates of project benefits
and economic justification can most effectively be accomplished through quality cost estimates in
feasibility reports, seamless funding, and development of economic update plans. Through such
quality development in the early stages of planning and engineering, the necessity for laborious
reevaluation and review can be diminished. Occasionally, more full reanalysis and review are
warranted when conditions change and older projects are reintroduced into the system; the LRR and
GRR are the appropriate vehicles for these reanalyses.
c. Benefits that Accrue During Project Construction.
(1) Benefits accruing during project construction should be documented and included in the
benefit evaluation. These benefits should be brought forward from the time the benefits start to the
beginning of the period of analysis, using the project discount rate. Benefits (and costs) first are
stated in present worth terms as of the beginning of the period of analysis, and then are annualized.
(2) Benefits and costs during the construction period are calculated separately; it is not
assumed that benefits accrued are offset by interest incurred, or vice versa.
d. Most Likely Non-Federal Alternative. The cost of the most likely alternative may be used
to estimate NED benefits for a particular output if non-Federal entities are likely to provide a similar
output in the absence of any of the alternative plans under consideration and if NED benefits cannot
be estimated from market price or change in net income. This assumes that society would in fact
undertake the alternative means. Estimates of benefits should be based on the cost of the most likely
alternative only if there is evidence that the alternative would be implemented. The most likely
alternative should in general be something other than a single-purpose project constructed at the
same site by the non-Federal entity. In determining the most likely alternative, the planner should
give adequate consideration to nonstructural and demand management measures as well as structural
measures.
e. OMB-approved Survey Questionnaire. This paragraph provides guidance on the use of
OMB-approved survey questionnaires for collection of planning data.
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(1) The requirement for OMB approval of survey questionnaires is noted at several locations
in this Appendix and in Appendix E.
(2) OMB has approved a group of questionnaire items for the collection of planning data.
The questionnaire items cover the range of data that would generally be collected by survey in water
resources studies.
(3) The approved questionnaire items are transmitted by memorandum every three years, as
additions and revisions are made and OMB approval is renewed.
(4) The District Commander or his designee must thoroughly review the individual
questionnaire for quality control purposes before it is used by the district. Currently, OMB requires
that Corps questionnaires be submitted for their review and approval before implementation. The
quality control review information below must be provided to OMB when seeking survey approval.
(5) Quality control review should be based upon the need for the questionnaire and the
reasonableness and adequacy of:
(a) The research questions to be answered.
(b) The sampling strategy being employed.
(c) Data collection procedures being employed, and follow up procedures.
(d) Data analysis plan.
(6) Additional guidance for the conduct of questionnaire surveys is contained in the
memorandum transmitting the approved questionnaire items.
f. Opportunity Cost of Time. This paragraph provides guidance for evaluating the
opportunity cost of time, when time is saved or lost as a result of implementation of a project.
(1) Determine the amount of time savings or loss that results from implementation of a
project for each economic activity.
(a) The amount of and circumstances resulting in the time savings or loss should be clearly
expressed in the with and without project planning context.
(b) Savings and losses should be estimated by individual or unit economic activity. The
number of individuals or economic activities should also be specified.
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(2) Determine the alternative use of the time savings or losses. The alternate use will be
valued as either work, social/recreation or other.
(3) The following table will be used for the determination of value of time saved in Corps
planning studies. Thus, the value of time saved will be different depending on the purpose of the trip
and the amount of time saved on each trip. The percentages shown in column (3) can be applied
after the before-tax family income of drivers in the study area is estimated. The dollar values shown
in column (2) are based on $32,191, the median family income for the U.S. in 1988 (U.S. Bureau of
the Census). The value of time savings for work trips is on a per vehicle-occupant basis. Therefore,
to calculate the total value of work time saved per vehicle requires multiplication by the adults per
vehicle. For social/recreation, vacation, and other trips, the value of time saved is on a per vehicle
basis. The value of time saved for these trip purposes should not be adjusted for the number of
passengers.
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Table D- 4: Value of Time Saved by Trip Length and Purpose
VALUE OF TIME SAVED
ADJUSTED TO HOURLY BASIS
($/HOUR)
VALUE OF TIME SAVED
ADJUSTED TO HOURLY BASIS
(% OF HOURLY FAMILY
INCOME OF DRIVER )
WORK TRIPS
$0.99
6.4%
SOCIAL / RECREATION
TRIPS
0.20
1.3%
OTHER TRIPS
0.01
0.1%
WORK TRIPS
4.99
32.2%
SOCIAL / RECREATION
TRIPS
3.58
23.1%
OTHER TRIPS
2.24
14.5%
WORK TRIPS
8.33
53.8%
SOCIAL / RECREATION
TRIPS
9.29
60.0%
OTHER TRIPS
9.98
64.5%
11.63
75.1%
LOW TIME SAVINGS
(O-5 MINUTES)
MEDIUM TIME SAVINGS
(6-15 MINUTES)
HIGH TIME SAVINGS
(OVER 15 MINUTES)
VACATION
ALL TIME SAVINGS
Note: Work trip is on per person basis while all other trip purposes are on a per vehicle basis.
g. Publication of Planning Data, Information and Guidance. Various data used in planning
are circulated by Economic Guidance Memorandum. These data include:
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(1) Federal water resources discount rate;
(2) Normalized agricultural prices;
(3) Unit day values for recreation;
(4) Areas eligible for NED benefits from employment of previously unemployed labor
resources;
(5) National Flood Insurance Program operating costs;
(6) List of contacts for Corps of Engineers when seeking National Marine Fisheries Service
(NMFS) input on measuring commercial fishing benefits; and
(7) Vessel operating cost estimates.
(8) Ability-to-pay factors for qualifying counties and counties eligible for price reductions
on water storage contracts.
D-5.
Financial Analysis.
a. Purpose. This Section provides procedures and responsibilities for financial analysis in
support of construction recommendations. It also provides guidance on the relationship between
project outputs and non-Federal sponsors' ability to finance projects. Approval authority for the
financing plans has been delegated to Division commanders who have the authority to further
delegate it to District commanders.
b. Definitions.
(1) Financial Analysis. A financial analysis consists of a non-Federal sponsor's statement of
financial capability and financing plan and the District Commander's assessment of the non-Federal
sponsor's financial capability.
(2) Financial Commitment. The financial commitment is the total financial obligation a
non-Federal sponsor will be required to pay, including the acquisition of lands, easements,
rights-of-way, relocations, and disposal areas; the costs of operation, maintenance, repairs,
replacements and rehabilitation (OMRR&R), the cost of any associated work such as berthing areas
for navigation projects or interior drainage for flood control projects, and the cost of debt service.
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(3) Statement of Financial Capability. The statement of financial capability is a clear and
convincing description, submitted by the non-Federal sponsor, of its capability to meet its financial
obligations for the project in accordance with the project funding schedule.
(4) Financing Plan. A financing plan consists of a clear and convincing description of how
the non-Federal sponsor plans to meet its financial obligations for the project in accordance with the
project funding and OMRR&R schedules; the level of detail to be included should be commensurate
with the scope and complexity of the project and financing mechanisms being considered. The
financing plan is considered a working document to be used by the district commander in making
his/her capability determination and should not be included in the PCA package.
(5) Assessment of Financial Capability. The District's assessment of the non-Federal
sponsor's financial capability is to determine if it is reasonable to expect that ample funds will be
available to satisfy the non-Federal sponsor's financial obligations for the project. Districts are
expected to present rationale supporting the conclusion of the assessment. Appropriate rationale
would include discussion of prior performance of the non-Federal sponsor on similar projects,
certainty of revenue sources and method of payment, the overall financial position of the
non-Federal sponsor and/or the credit worthiness of sponsor’s debt obligations as reported by
independent credit rating service such as Moody’s or Standard & Poor’s. The district commander's
assessment of financial capability and the Allocation of Funds Table must be included in the PCA
package.
c. General Financial Analysis Philosophy. Financial analysis is required for any plan being
considered for Corps of Engineers implementation that involves non-Federal cost sharing. The
ultimate purpose of the financial analysis is to ensure that the non-Federal sponsor has a reasonable
plan for meeting its financial commitment. The financial analysis should include:
(1) The non-Federal sponsor's statement of financial capability;
(2) The non-Federal sponsor's financing plan; and
(3) The district's assessment of the non-Federal sponsor's financial capability. Financial
considerations can be expected to affect project scale as well as construction scheduling and phasing
and OMRR&R expenses.
d. Procedures and Responsibilities.
(1) Specifically Authorized Projects. The parts of the financial analysis to be submitted to
HQUSACE with the Project Cooperation Agreement (PCA) package include the District
Commander's assessment of the non-Federal sponsor's financial capability and the Allocation of
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Funds Table. The financing plan and the statement of financial capability should be prepared by the
non-Federal sponsor, with assistance from the District. These two documents are considered to be
working documents to be used by the District Commander in making his/her capability
determination and should not be included in the PCA package. If the replacement and rehabilitation
costs are significant, the sponsor should be provided schedules and costs of occurrence for assistance
in their overall financial planning.
(2) Specifically Authorized Studies.
(a) Reconnaissance Phase. The reconnaissance phase is expected to provide an assessment
of the level of interest and support of local interests in potential solutions. A letter from the
non-Federal sponsor indicating his understanding of project cost sharing requirements should
accompany the Reconnaissance Report. The letter should discuss, in general terms, the options
available to the non-Federal sponsor for financing the non- Federal share of project construction.
(b) Feasibility Phase. The feasibility report should be accompanied by supporting financial
information consisting of a preliminary financing plan and a statement of financial capability. The
preliminary financing plan will consist of a letter from the sponsor stating potential funding sources
and funding availability at the time of construction. The plan (letter) should show the total cost
sharing breakdown, not necessarily by construction year.
(3) Continuing Authorities Studies. See Appendix F.
e. Non-Federal Sponsor's Financing Plan and Statement of Financial Capability.
(1) Scope.
(a) Financing Plan. Each financing plan should include the following information:
(1) A current schedule of estimated Federal and non- Federal expenditures by Federal fiscal
year (see Table D-5), including Federal expenditures, non-Federal contributions, non-Federal lands,
easements, rights-of-ways, relocations, and disposal areas (LERRD), and, for commercial navigation
projects, non-Federal utility relocations and deep draft utility relocations. The total Federal and nonFederal shares displayed in the schedule should exactly reflect cost sharing policy and should agree
with estimated cost figures in the PCA. Current cost sharing policy requires that the non- Federal
funds (i.e. cash) be made available to the Federal Government in proportion to scheduled Federal
obligations in each Federal fiscal year; also, if there are engineering and design costs to be cost
shared, but which were not covered by a PED cost sharing agreement, then these are to be recovered
in the first year of construction.
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Table D- 5: Schedule of Estimated Federal and Non-Federal Expenditures
Fiscal Year
FEDERAL
CASH
NON-FEDERAL
LERRD
CASH
LERRD
Utility
Relocation
Other
_________________________________________________________________
Notes:
1. Federal, Non-Federal cash and LERRD should be shown for each project
purpose.
2. Any repayment for navigation projects should be shown in a footnote.
3. Include in other any associated costs such as berthing areas or interior drainage.
(2) A schedule of the sources and uses of non-Federal funds during and after construction
(see Table D-6) by Federal fiscal year. The schedule should include project outlays and income as
well as outlays and income related to project construction and financing. Outlays during construction include cash payments to an escrow account or the government; LERRD; associated costs; and,
for bonds, various insurance-related costs and interest paid to bond holders during construction.
Income during construction includes funds on hand, revenues, appropriations, grants, interest on
unexpended balances, and, for bonds, bond proceeds. Outlays after construction include bond debt
service, repayments to the government, and OMRR&R. The schedule of the sources and uses of
funds should be consistent with the schedule of estimated Federal and non-Federal expenditures.
(b) The method of finance for all non-Federal outlays including OMRR&R associated with
the project should be explained in the financing plan.
(c) Statement of Financial Capability. The non-Federal sponsor's statement of financial
capability should provide evidence of the non-Federal sponsor's authority to utilize the identified
source or sources of funds; and each statement of financial capability should provide information on
the non- Federal sponsor's capability to obtain remaining funds, if any. This information will be at a
level of detail necessary to demonstrate such capability for the particular project and the particular
non-Federal sponsor.
(1) Where the non-Federal sponsor's capability is clear, as in the instances where the sponsor
has sufficient funds currently available or has a large revenue base and a good bond rating, the
statement of financial capability need only provide evidence of such.
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(2) If capability is not clear and the non-Federal sponsor is relying on its full faith and credit
to obtain remaining funds (as in the use of general obligation bonds, appropriations or a repayment
agreement), the statement of financial analysis should include a credit analysis which demonstrates
that the sponsor is credit worthy for the required amount and purpose.
(3) If the non-Federal sponsor is relying on non- guaranteed debt (e.g. a particular revenue
source or limited tax, or bonds backed by such a source) to obtain remaining funds, the statement of
financial capability should include an analysis that demonstrates that the projected revenues or
proceeds are reasonably certain and are sufficient to cover the non-Federal sponsor's stream of costs
through time.
(4) If the non-Federal sponsor is relying on third party contributions the statement should
include comparable data for the third party together with evidence of it's legal commitment to the
non-Federal sponsor.
(2) Preparation.
(a) The District should, with input from the non-Federal sponsor, prepare the schedule of
estimated Federal and non-Federal expenditures including OMRR&R.
(b) Either the non-Federal sponsor or the District should prepare the schedule of the sources
and uses of non-Federal funds, using information provided by the other.
(c) Either the non-Federal sponsor or its financial consultant should prepare the financing
plan and the statement of financial capability. The appropriately empowered official representing
the non-Federal sponsor should sign the statement of financial capability.
(d) A financing plan and statement of financial capability should be prepared for each nonFederal sponsor which is signatory to an PCA (this applies to continuing authority projects as well as
specifically authorized projects). If a non-Federal sponsor's financing depends on the contributions
of funds by a third party or parties, and the non-Federal sponsor does not have the capability or
authority to meet its financial obligations without said contribution, a separate statement of financial
capability and financing plan should also be provided for the contributions for the third party or
parties. These should include sources of funds, authority and capability to obtain remaining funds,
and evidence of the third party's legal obligation to provide its contribution.
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Table D- 6: Schedule of Sources and Uses of Funds
FUNDS AVAILABLE FROM LOCAL SPONSOR
Begin Balance
Required Annual
Fund
Plus Annual Income
Contribution
Balance
Balance on hand
construction initiated
1st year Revenues
Interest Income
Operating Revenues
Bond Sales
etc.
2nd year Revenues
Interest Income
Operating Revenues
Bond Sales
etc.
3rd year Revenues
Interest Income
Operating Revenues
Bond Sales
etc.
.
.
.
.
.
.
Project Completion
Required Annual OMRR&R $_______ (Schedule of major replacement and rehabilitation costs
should be included if they are significant cost items which sponsor must plan for.)
Source of Funds for OMRR&R _____________________
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(e) The financing plan and the statement of financial capability may be combined in one
document.
f. Assessment of the Non-Federal Sponsor's Financial Capability. The District’s assessment
of the non-Federal sponsor's financial capability should ascertain that it is reasonable to expect that
ample funds will be available to satisfy the non-Federal sponsor's financial obligation for the project.
Districts are expected to present rationale supporting the conclusion of the assessment.
Appropriate rationale would include discussion of prior performance of the non-Federal sponsor on
similar projects, certainty of revenue sources and method of payment, the overall financial position
of the non-Federal sponsor and/or the credit worthiness of sponsor’s debt obligations as reported by
an independent credit rating service such as Moody’s or Standard & Poor’s.
g. Illustration of Financing Plan Outline.
The (enter non-Federal sponsor's name), non-Federal sponsor of the (enter
project name),
is capable of meeting cost sharing and other obligations as
required under the terms of the draft
Project Cooperation Agreement.
USES OF FUNDS
(Status of land acquisition including an estimate of the cost of real estate interests that have not
yet been acquired.)
_____
(Total cash contribution required from the non-Federal sponsor for the project during
construction.)
_____
(Annual cash required from the non-Federal sponsor for operation, maintenance and
rehabilitation.)
_____
(Total cash required by the non-Federal sponsor for any project related requirements such as
berthing areas for navigation projects and interior drainage for flood control projects.)
SOURCES OF FUNDS
_____
(Cash available for project.)
_____
(Financing to be obtained from bonds, if any.)
_____ (Financing to be obtained from other sources, e.g. operating revenues, tax revenues, interest earnings
on funds dedicated to the project, etc.)
Figure D- 1: Illustration of Financing Plan Outline
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h. Sample Bond Consultant's Letter. See Figure D-2.
"We have been working with the (enter non-Federal sponsor's name) to
develop a well-planned approach toward financing the pending project.
In this regard the (enter non-Federal sponsor's name) has taken
significant steps over the years in implementing certain actions designed
to make the project financially possible. Among these are (list actions
taken)."
"We have developed financial projections that indicate the (enter non-Federal
sponsor's name) has the financial capability to complete the project. Bonds,
in the amount of (enter amount) have been/will be authorized on (enter date)
and the (enter non- Federal sponsor's name) current bond rating according to
(enter source) is (enter bond rating)."
Figure D- 2: Sample Bond Consultant's Letter
i. Continuity of Financing Responsibilities.
(1) Status of Local Sponsor's Financing Plan and Corps Responsibilities During PED.
Between completion of the feasibility study and signing of the PCA the District Commander shall
stay informed and current regarding the continuing ability and willingness of the sponsor to meet its
financial responsibilities. This time can be used to firm up any aspects of the financing plan that
may have been weak. In addition, a mechanism shall be agreed upon whereby the sponsor will
inform the Corps of any material changes in its financing abilities. Likewise, it is the responsibility
of the District Commander to inform the sponsor in a timely way of material changes in cost
estimates resulting from PED studies, due to design changes or other reasons.
(2) Local Sponsor's Financing Responsibilities and Corps Responsibilities During
Construction. Mutual responsibilities regarding information about financing abilities and changes in
cost estimates continue after the PCA is signed and construction initiated. The District Commander
shall stay informed and current regarding the sponsor's continuing ability to meet its financial
obligations, especially so if the financing plan calls for using other than cash or direct
appropriations, or if the sponsor intends to repay its cost share. A mechanism shall be agreed upon
whereby the sponsor will inform the Corps of any material changes in its financing abilities. The
District Commander continues to be responsible for informing the local sponsor of changes in
construction costs.
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j. Ability to Pay Determination. See the latest rule as reproduced in EGM 02-03 for
procedures for determining cost shares for qualifying non-Federal sponsors under the ability to pay
provisions of Section 103 of the WRDA of 1986, as amended. Section 204 of WRDA of 2000
expanded the applicability of ability to pay to allow non-Federal cost share reductions for feasibility
studies. In addition, the purposes were expanded from flood control and agricultural water supply to
also include environmental protection and restoration, navigation, storm damage protection,
shoreline erosion, hurricane protection and recreation. Ability to pay will also include rules for
application to Federally recognized tribal governments. A new rule to implement this section is
under development.
k. Relationship Between the Feasibility Study (Economic) Analysis and Financial Analysis.
The primary purpose of the financial analysis itself is to ensure that the non-Federal sponsor has a
reasonable plan for meeting its financial commitment. Project related economic analysis can
provide data and other information potentially important in developing the financial analysis.
(1) Relationship of Financing Plans to Project Outputs.
(a) Relationship of Project Outputs to Willingness to Pay. Project outputs create willingness
to pay for the project on the part of direct beneficiaries equal to the total benefits. Frequently there
are indirect beneficiaries. Willingness' to pay of both direct and indirect beneficiaries can potentially
be captured by the local non-Federal sponsor, and can become a part of the non-Federal sponsor's
financing plan. For example, flood control for a business or commercial area has direct damages
avoided benefits, and may improve the general business climate such that property values outside
the flooded area increase as well.
(b) Financing Plan Alternatives. Some non-Federal sponsors will finance projects in a way
that directly uses the vendibility of project outputs. Examples are port user charges or user fees for
other project outputs, special taxing districts, property tax surcharges, etc. Other financing plans will
be indirectly related to project outputs. For example the non-Federal sponsor's general taxing or
bonding indebtedness capabilities may be used with the expectation that the project's beneficial
effects will create ability to pay. Others will finance in ways entirely unlinked to the captured value
of project outputs. For example, the non-Federal sponsor may have sufficient funds available, a
large revenue base or may rely on third party contributions.
(1) Procedures. The role of economic analysis in development of financing plans is to
establish relationships between project outputs, willingness' to pay on the part of direct and indirect
beneficiaries and ability to finance projects.
(a) Outputs of projects (or use of project outputs) for which there are identifiable
beneficiaries with willingness to pay that can potentially be captured should be quantified. The
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quantification should be to a degree of certainty that is useful to non-Federal sponsors in developing
a financing plan. Examples are: numbers, locations, values, and physical and use characteristics of
structures to be protected by a flood control project; expected visitation at recreation facilities; vessel
names, registries, ownership, drafts and cargo carrying abilities of ships expected to benefit from
harbor deepening, etc.
(b) Indirect effects of projects, e. g., local or regional development, should be identified and
quantified to the degree practicable. Maximum use should be made of secondary sources (i.e., found
in the literature) regarding average, or if available, location specific relationships between
investment and induced economic activities, between investment and changes in property values,
etc.
(c) Estimates of the willingness to pay of beneficiaries should be provided to local sponsors.
These should be in a useful form and of a degree of certainty that is useful in developing financing
plans. Examples are: average annual damages avoided for structures; willingness to pay for
recreation visits; and transportation cost savings for the different beneficiaries identified in (a)
above. If efforts to collect from beneficiaries would affect use of project outputs and the level of
induced or secondary effects this information shall also be provided to local sponsors.
D-6
Interest Rate and Period of Analysis.
a. Conceptual Basis. Project NED benefits and costs shall be compared at a common point
in time. The following information shall be presented in decision documents:
(1) Installation Period. The number of years required for installation of the plan. If staged
installation is proposed over an extended period of time, the installation period is the time needed to
install the first phase.
(2) Installation Expenditures. The dollar expenses expected to be incurred during each year
of the installation period.
(3) Period of Analysis. The time horizon for project benefits, deferred installation costs, and
operation, maintenance, repair, rehabilitation, and replacement (OMRR&R) costs. Use the same
period of analysis for all alternative plans. Appropriate consideration should be given to
environmental factors that may extend beyond the period of analysis.
(a) The period of analysis for comparing costs and benefits following project implementation
is further defined and limited to the lesser of:
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(1) The period of time over which any alternative plan would have significant beneficial or
adverse effects;
(2) A period not to exceed 50-years except for major multiple purpose reservoir projects; or
(3) A period not to exceed 100-years for multiple purpose reservoir projects.
(b) In cases where alternatives have different implementation periods, a common base year
will be established and costs and benefits will be compounded or discounted to that base year.
Projects that accrue benefits during the implementation period should refer elsewhere in this
document (paragraph D-4c) for specific guidance.
(4) Benefit Stream. The pattern of expected benefits over the period of analysis.
(5) OMRR&R Costs. The expected costs over the period of analysis for operation,
maintenance, repair, rehabilitation, and replacement necessary to maintain the benefit stream and
agreed-upon levels of mitigation of losses to fish and wildlife habitats.
(6) Discount Rate. The rate established annually for use in evaluating Federal water
projects.
d. Calculating Net NED Benefits In Average Annual Equivalent Terms. Net NED benefits
of the plan are calculated in average annual equivalent terms. To perform this calculation, discount
the benefit stream, deferred installation costs, and OMRR&R costs to the beginning of the period of
analysis using the applicable project discount rate. Installation expenditures are brought forward to
the end of the period of installation by charging compound interest at the project discount rate from
the date the costs are incurred. Use the project discount rate to convert the present worth values to
average annual equivalent terms.
D-7.
NED Benefit Evaluation Procedures: Unemployed or Underemployed Labor Resources.
a. Purpose. The economic effects of the direct use of otherwise unemployed or
underemployed labor resources during project construction or installation may, under certain
conditions, be included as a national economic development (NED) benefit. Because of the
dynamic nature of unemployment situations, the appropriateness of these benefits will be determined
in consideration of economic conditions existing at the time the project is submitted for
authorization and for appropriations to begin construction. This section provides procedural
guidance.
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b. Conceptual Basis.
(1) The social cost of a project is less than the market contract cost in situations in which
otherwise unemployed or underemployed labor resources are used in project construction. The
opportunity cost of employing otherwise unemployed workers in project construction or installation
is equal to the value of leisure time foregone by such workers. Because society does not give up any
alternative production of goods and services and because it would be difficult to measure the value
of leisure time foregone, a zero opportunity cost is used in these procedures. The opportunity cost of
employing otherwise underemployed workers equals their without project earnings, which, by virtue
of their underemployment, are less than their market cost. The most straightforward way to reflect
the effects of employing unemployed or underemployed labor resources would be to reduce by the
appropriate amount the project construction costs in the NED account, but this method would cause
accounting difficulties in appropriations, cost allocation, and cost sharing. Therefore, these effects
are treated as a project benefit in the NED account.
(2) Conceptually, any employment, anywhere in the Nation, of otherwise unemployed or
underemployed resources that results from a project represents a valid NED benefit. However,
primarily because of identification and measurement problems and because unemployment is
regarded as a temporary phenomenon, only those labor resources employed onsite in the
construction or installation of a project or a nonstructural measure should be counted. Benefits from
use of otherwise unemployed or underemployed labor resources may be recognized as a project
benefit if the area has substantial and persistent unemployment at the time the plan is submitted for
authorization and for appropriations to begin construction. Substantial and persistent unemployment
exists in an area when:
(a) The current rate of unemployment, as determined by appropriate annual statistics for the
most recent 12 consecutive months, is 6 percent or more and has averaged at least 6 percent for the
qualifying time periods specified in subparagraph (b) below and:
(b) The annual average rate of unemployment has been at least: (a) 50 percent above the
national average for three of the preceding four calendar years, or (b) 75 percent above the national
average for two of the preceding three calendar years, or (c) 100 percent above the national average
for one of the preceding two calendar years.
(3) Only the portion of project construction activity located in such an area is eligible for
employment benefits as calculated in accord with the procedures specified below. Any benefit
claimed should be clearly justifiable both in terms of availability of amounts of unemployed and/or
underemployed labor and their skills and occupations.
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c. Planning Setting.
(1) Without Project Condition. The without project condition is the most likely condition
expected to exist in the future in the absence of a project, including known changes in law or public
policy. The evaluation of NED benefits associated with the use of otherwise unemployed and
underemployed labor resources is linked to the number by which these resources would be reduced
over time without a project.
(2) With Project Condition. The with project condition is the most likely condition expected
to exist in the future with a given project alternative. There is a different with project condition and
thus a different employment benefit for each alternative plan. Currently, the employment benefit
cannot be estimated directly on the basis of a comparison of the size of the pools of unemployed and
underemployed labor with and without a project. Instead, the benefit procedure implicitly projects
the percentage of project labor hires estimated to come from the unemployed labor pool.
d. Evaluation Procedure.
(1) Step 1. Calculation of employment benefits is limited to onsite project construction or
installation activity in eligible regions as defined in paragraph D-7b(2). The first step therefore is to
determine whether a project is wholly or partially located in an eligible area.
(2) Step 2. Estimate the number of skilled and unskilled unemployed construction workers
in the labor area. Construction labor pool data are usually available from local offices of State
employment security agencies.
(3) Step 3. Determine the labor requirements for plan implementation as follows:
(a) Labor cost. The manpower requirements of water resource projects differ widely.
Construction cost estimate data will provide the percentage of labor cost to total construction
contract cost.
(b) Manpower requirements. Analyze the plan’s construction work force and schedule to
determine manpower requirements over the construction period for skilled and unskilled categories
of workers. Convert these data to total construction wages in skilled and unskilled categories by
year of construction. In addition, estimate the yearly wage bill of other workers needed on the
project. Use the occupational tables in Table D-7 in this section to categorize different types of
workers.
(4) Step 4. Compare the annual manpower requirements of the project to the size of the
unemployed labor pool in eligible regions. If labor availability is significantly larger than labor
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30 Jun 2004
requirements, proceed to the next step. If not, reduce the percentages in the next step based on one
or both of the following: expert interviews; or a careful match-up of requirements and availability
for specific types of jobs (e.g., carpenters).
(5) Step 5. Calculate NED employment benefits.
(a) Standard method. The following percentages are derived from An Evaluation of the
Public Works Impact Program (PWIP).1 Although the projects studied in the PWIP report are not
fully comparable to many typical water projects, the report does provide an empirical basis for
relating public works expenditures to employment of unemployed workers. Case 1, below, covers
situations in which there is no “local hire” rule; it is taken directly from the PWIP report, as PWIP
has no local hire rule. Case 2 covers situations in which there is a local hire rule; the reference data
are modified to account for an 80-percent local hire by scaling up the actual local hires (for skilled
and unskilled workers) to 80 percent, but retaining the distribution of local hires previously
employed to local hires previously unemployed.
(1) Case 1, NED benefits, no local hire rule. Multiply the total wages determined by
categories of workers (skilled, unskilled, and other) by the following percentages to obtain NED
benefits by year of construction:
Skilled--30
Unskilled--47
Other--35
(b) Case 2, NED benefits, local hire rule. Apply the following percentages in Case 2
situations:
Skilled--43
Unskilled--58
Other—35
Because the 80-percent local hire rule is a goal, not a requirement, support these percentages by data
that indicate the local hire goal is likely to be met. If this is unlikely, reduce Case 2 percentages to
numbers between the standard Case 1 and Case 2 percentages.
(2) Annual NED benefits. Convert the NED benefits by year of construction to an annual
equivalent basis using the current discount rate.
xxxiv
1
Economic Development Administration, U.S. Department of Commerce. An Evaluation of the
Public Works Impact Program (PWIP). Springfield, VA, National Technical Information Service
(PB-263 098), January 1975.
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(b) Alternative methods. The percentages of unemployment hires may be changed from
those used in the standard method if the change can be supported by an empirical study that shows
different percentages of unemployed and underemployed workers on a similar project, or on a
segment of the same project, for labor market conditions similar to those of the proposed project. In
using this method, it may be necessary to vary the categorization of construction workers used in the
standard method. The opinions of experts such as local State employment security agencies, local
construction firms, associations of contractors, and labor unions may not be substituted for empirical
data. Studies used to document alternative percentages for specific types or locations of projects
should be cited if not included in the project report.
(c) The percentages are used in the standard method to measure wages paid directly to
previously unemployed workers. Previously employed workers may vacate jobs that then become
available to unemployed workers, but there are no empirical data to support a quantification of such
indirect effects, and no estimates of these effects should be included in the NED account.
e. Report and Display Procedures. Include the employment benefits of each alternative plan
as a line item in the display of NED benefits in the system of accounts for any project or portion of a
project located in an area that contains unemployed or underemployed resources.
f. Problems in Application.
(1) An IWR publication provides guidance for estimating benefits associated with the direct
use of otherwise unemployed labor resources during project construction. The Report of Survey of
Corps of Engineers Construction Workforce (IWR Research report 81-R05) provides an empirical
basis for changing the percentages of unemployed specified in this section. The IWR report
introduces a new evaluation technique and new techniques must be approved by the Water
Resources Council. Therefore, if the approach in the IWR report is used, the techniques specified in
this section should also be used to demonstrate the sensitivity of the results to the different methods.
(2) Unemployment benefits shall not be used in project formulation, scaling, or NED plan
determination. These benefits shall not be used to justify a project where the BCR is otherwise less
than unity.
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30 Jun 2004
Table D- 7: Occupational Tables
(For use in evaluation of unemployed or underemployed labor)
Landscape Laborer
Mason Helper
Mason Laborer
Mason Tender
Mortarman
Mortarmier
Pipe Layer
Pipe Helper
Pipe Fitter
Plasterer Tender
Powerman
Pusher
Rakeman
Reboundman
Road Laborer
Roof Helper
Sand Blaster
Set-up-man
Sprinkler Apprentice
Stake Setter
Tender
Termite Operator
Tile Setter Operator
Vibrator Operator
Water Truckman
Lumberman and Nurseryman
Tree Thinner
Treeman
Treeplanter
Operating Engineer Apprentice
B. M. Apprentice
EO Group III
EO Group 222
Plumber Apprentice
Plumber Apprentice
Plumber Helper
Painter’s Helper
Sheet Metal Apprentice
BLUE COLLAR UNSKILLED
OCCUPATIONS
Bricklayer Apprentice
Carpenter Apprentice
Apprentice Carpenter
Carpenter Helper
Chairman
Deck Hand
Electrician Apprentice
Apprentice Electrician
Apprentice Wireman
Electrician Trainer
Iron Worker Apprentice
Laborer
Asphalt Distributor
Assistant Carpenter
Bottom Laborer
Brick Tender
Carpenter Aid
Carpenter Helper
Chainsawman
Common Laborer
Concrete Barker
Concrete Laborer
Concrete Saw
Construction Laborer
Ditch Laborer
Drill Helper
Flag Person
Hod Carrier
Kettleman
Laborer
Laborer Apprentice 3rd
Laborer Group I
Laborer Group V
Labor Shop Man
Laborer Topman
Laborer Utilityman
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Structural Ironworker
Steel Worker
Steel Erector
Steel Setter
Reinforcing Steel Worker
Iron Worker Foreman
Labor Foreman
Construction Foreman
Foreman
Job Foreman
Lead Foreman
Lather
Lather Foreman
Master Mechanic
Mechanic
Mechanic Welder
Repairman
Mechanic (Continued)
Repairman Leadman
Oiler
Oiler Equipment Operator
Oiler Operator Group II
Oiler Track Type
Operating Engineer
Asphalt Distributor Operator
Asphalt Heaterman
Backhoe Operator
Blade Operator
Bobcat Operator
Bulldozer Operator
Case Operator
Class A Operator
Class C Operator
Crane Operator
Digger Operator
Distributing Operator
Dragline Operator
Equipment Operator
Equipment Operator Group III
Front End Lift Fork Operator
Vibrator Operator
Watchman
Night Watchman
BLUE COLLAR SKILLED
OCCUPATIONS
Blaster
Boilermaker
Boilermaker Foreman
Bricklayer Foreman
Block Layer
Truckpointer
Brick Mechanic
Carpenter
Form Setter
Journeyman Carpenter
Soft Floor Layer
Carpenter Foreman
Carpenter Superintendent
Cement Mason
Finisher
Journeyman Finisher
Cement Mason Foreman
Diver
Driller
Drill Rig Operator
Electrician
Journeyman Electrician
Mechanical Electrician
Wireman
Journeyman Wireman
Electrical Foreman
General Foreman
General Labor Foreman
Project Foreman
Glazier
Iron Worker
Reinforcing Ironworker
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Heavy Equipment Operator
Hi-Lift Operator
Lift Fork Operator
Loader Operator
Maintenance Loadman
Motor Grader Operator
Operator Group III
Pan Operator
Park Equipment Operator
Power Drive Moister Operator
Power Equipment Operator
Operating Engineer Foreman
Leader Operator
Painter
Brush Painter
Roller Painter
Spray Painter
Painter Foreman
Pile Driver
Pipe Fitter
Sp. Box Man
Pipe Fitter Foreman
Sprinkler Foreman
Plasterer
Plasterer Foreman
Plumber
Pipe Layer
Plumber Foreman
Plumber General Foreman
Plumber Superintendent
Rigger Foreman
Roofer Sheet Metal Worker
Journeyman Sheet Metal
Sheet Metal Mechanic
Sheet Metal Operator
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D-8.
Social Effects.
a. Other Social Effects (OSE) Account. Most water and land resource plans have beneficial
and adverse effects on social well-being. These effects reflect a highly complex set of relationships
and interactions between inputs and outputs of a plan and the social and cultural setting in which
these are received and acted upon. These effects will be reported as appropriate in the system of
accounts for each alternative plan. The OSE account is a means of displaying and integrating into
water resource planning information on alternative plan effects from perspectives that are not
reflected in the other three accounts. The categories of effects in the OSE account include the
following: Urban and community impacts; life, health, and safety factors; displacement; long-term
productivity; and energy requirements and energy conservation.
b. Metric. With emphasis on their incidence or occurrence, beneficial effects on social wellbeing are contributions to the equitable distribution of real income and employment and to other
social opportunities. Since they are integrally related to the basic values and goals of society, these
effects are usually not subject to monetary evaluation. The normal market exchange process,
however, produces monetary values which can be utilized to aid in measuring the distributional
impacts of plans on real incomes.
c. Adverse Effects. Adverse effects of a plan have detrimental impacts on the equitable
distribution of real income and employment or otherwise diminish or detract from the attainment of
other social opportunities. Such adverse effects include not only those incurred in the designated
planning area, but also include adverse consequences elsewhere in the Nation resulting from
implementation of the plan.
(1) Measurement standards:
(a) Effects on income, employment, and population distribution, fiscal condition, energy
requirements, and energy conservation may be reported on a positive or negative basis. Effects on
life, health, and safety may be reported as either beneficial or adverse. Other effects may be reported
on either a positive/negative basis or a beneficial/adverse basis.
(b) Effects that cannot be satisfactorily quantified or described with available methods, data,
and information or that will not have a material bearing on the decision making process may be
excluded from the OSE account.
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(2) With and without analysis. Existing conditions encompassed by the relevant social
factors will be described and presented in terms that best characterize the planning perceptions and
social setting of the affected area in the situation without the plan. Planners will also prepare similar
descriptions for future social conditions to be expected with and without the plan throughout the
period of analysis. The situation existing before the initiation of planning will provide the data from
which to evaluate significant social effects under alternative plans.
(3) Limitations. In evaluating well-being effects the obtaining of detailed breakdowns and
analytically useful correlations relating to various indicators, index numbers, and similar
comparative statistical indicators, as well as dollar values where possible, presents many complex
definitional, data, and measurement problems. Consequently, planning studies should explicitly
recognize the limitations of present methods and explore innovative approaches to the identification
and measurement of the social well-being effects. Such procedures should be carefully documented
in the report.
d. Urban and Community Impacts. A formal treatment of urban related impacts is not
required for implementation studies. However, types and locations of significant impacts, broken
down by salient population groups and geographic areas, may be reported in the Other Social Effects
Account. The principle types of urban and community impacts are as follows:
(1) Effects on real incomes. Beneficial effects on real income occur when designated
persons or groups receive income generated as a result of the plan. Current guidelines defining the
family poverty line may be used as the data from which to measure and portray the estimated
absolute and percentage increase toward meeting or exceeding this standard for specific geographic
planning areas.
(2) Effects on employment distribution, especially the share to minorities;
(3) Effects on population distribution and composition;
(4) Effects on the fiscal condition of the State and local sponsor;
(e) Effects on educational, cultural, and recreational opportunities. Beneficial effects to this
component include contributions to (1) improved opportunities for community services such as
utilities, transportation, schools, and hospitals, (2) more cultural and recreational opportunities such
as historic and scientific sites, lakes, and reservoirs, and recreations areas. Beneficial effects to
improved community services may be described in appropriate quantitative terms, while increased
cultural and recreational opportunities will be set forth as the numerical increase in the relevant
facilities, otherwise accounting for size, use potential, and quality. Beneficial effects to improved
community services may be described in appropriate quantitative terms, while increased cultural and
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Appendix D, Amendment #1
30 Jun 2004
recreational opportunities will be set forth as the numerical increase in the relevant facilities,
otherwise accounting for size, use potential, and quality. Conversely, adverse effects are identified
and measured or described as detrimental effects on education, cultural, and recreational
opportunities
(f) Effects on security of life, health, and safety. Beneficial effects include contributions to
(1) reducing risk of flood, drought, or other disaster affecting the security of life, health, and safety;
(2) reducing the number of disease-carrying insects and related pathological factors; (3) reducing
the concentration and exposure to water and air pollution; and (4) providing a year-round consumer
choice of food that contributes to the improvement of national nutrition. In those limited situations
where historical experience is sufficiently documented to provide confidence in projecting likely
future hazards, an estimate of the number of lives saved or the number of persons affected may be
provided. In most instances, however, a descriptive-qualitative interpretation and evaluation of the
improvement and expected results will be applicable.
(g) Displacement effects include the displacement of people, businesses, and farms.
(h) Long-term productivity effects include maintenance and enhancement of the productivity
of resources, such as agricultural land, for use by future generations.
(i) Effects on emergency preparedness. Beneficial effects include contributions to (1)
extending, maintaining, and protecting major components or the national water transportation
system; (2) provision of flexible reserves of water supplies; (3) provision of critical power supplies
(ample, stable, quickly responsive); (4) provision of reserve food production potential; (5) provision
for the conservation of scarce fuels; (6) provision for dispersal of population and industry; and (7)
supplying international treaty requirements. While these beneficial effects will be measured in
appropriate quantitative units where readily practicable, they will be largely characterized in
descriptive-qualitative terms. Conversely, adverse effects are identified and measured or described
as overloading capacities of water resource systems and increasing the risk of interruption in the
flow of essential goods and services needed for special requirements of national security.
(j) Other. Other effects on social well-being may be identified and displayed as relevant to
alternative plans.
This amendment was approved by William R. Dawson, CECW-P, (202)761-0115
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APPENDIX E
Civil Works Missions and Evaluation Procedures
TABLE OF CONTENTS
Paragraph
Page E-
SECTION I - Overview ................................................................................................................ 1
E-1.
E-2.
E-3.
E-4.
E-5.
Purpose. ........................................................................................................................... 1
Project Purposes .............................................................................................................. 1
General Policies............................................................................................................... 1
Risk and Uncertainty-Sensitivity Analysis.................................................................... 11
Project Cost Estimating and Scheduling. ...................................................................... 15
SECTION II - Navigation........................................................................................................... 18
E-6.
E-7.
E-8.
E-9.
E-10.
E-11.
E-12.
E-13.
E-14.
E-15.
Federal Interest. ............................................................................................................. 18
Types of Improvements................................................................................................. 18
Specific Policies. ........................................................................................................... 21
NED Benefit Evaluation Procedures: Transportation Inland Navigation ..................... 26
NED Benefit Evaluation Procedures: Transportation, Deep-Draft Navigation ............ 37
NED Benefit Evaluation Procedure: Commercial Fishing........................................... 54
Navigation: Small Boat Harbors. ................................................................................. 60
Federal and Non-Federal Participation.......................................................................... 61
Special Considerations. ................................................................................................. 65
Dredged Material Management Plans. .......................................................................... 68
SECTION III - Flood Damage Reduction................................................................................. 84
E-16.
E-17.
E-18.
E-19.
E-20.
E-21.
Federal Interest. ............................................................................................................. 84
Types of Improvements................................................................................................. 84
Specific Policies. ........................................................................................................... 86
NED Benefit Evaluation Procedures: Urban Flood Damage ....................................... 90
NED Benefit Evaluation Procedures: Agriculture ..................................................... 113
Federal and Non-Federal Participation........................................................................ 127
SECTION IV – Hurricane and Storm Damage Prevention .................................................. 133
E-22.
E-23.
E-24.
E-25.
Federal Interest. ........................................................................................................... 133
Types of Improvements............................................................................................... 133
Specific Policies. ......................................................................................................... 133
Federal and Non-Federal Participation........................................................................ 142
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E-26. Recommendations in Feasibility Reports.................................................................... 144
SECTION V - Ecosystem Restoration..................................................................................... 145
E-27.
E-28.
E-29.
E-30.
E-31.
E-32.
E-33.
E-34.
E-35.
E-36.
E-37.
E-38.
E-39.
E-40.
E-41.
Federal Interest. ........................................................................................................... 145
Definitions................................................................................................................... 146
Types of Improvements............................................................................................... 147
Policies. ....................................................................................................................... 147
Federal and Non-Federal Participation........................................................................ 150
Planning Process. ........................................................................................................ 151
Planning Steps 1 and 2. ............................................................................................... 151
Planning Step 3 – Formulation of Alternative Plans................................................... 152
Planning Step 4 - Evaluation of Alternative Plans...................................................... 152
Cost Effectiveness and Incremental Cost Analyses (CE/ICA).................................... 153
Significance of Ecosystem Outputs............................................................................. 159
Acceptability, Completeness, Effectiveness, and Efficiency. ..................................... 162
Risk and Uncertainty Considerations. ......................................................................... 163
Planning Step 5 - Plan Comparison............................................................................. 163
Planning Step 6 - Selection of Ecosystem Restoration Plan. ...................................... 163
SECTION VI - Hydroelectric Power....................................................................................... 165
E-42.
E-43.
E-44.
E-45.
Federal Interest. ........................................................................................................... 165
Types of Improvements............................................................................................... 165
Specific Policies .......................................................................................................... 166
NED Benefit Evaluation Procedure ............................................................................ 167
SECTION VII – Recreation ..................................................................................................... 179
E-47.
E-48.
E-49.
E-50.
E-51.
Federal Interest. ........................................................................................................... 179
Types of Improvements............................................................................................... 179
Specific Policies .......................................................................................................... 180
NED Benefit Evaluation Procedure ............................................................................ 183
Federal and Non-Federal Participation........................................................................ 198
SECTION VIII - Water Supply ............................................................................................... 200
E-52.
E-53.
E-54.
E-55.
E-56.
E-57.
E-58.
Federal Interest. ........................................................................................................... 200
Types of Improvement ................................................................................................ 200
Specific Policies .......................................................................................................... 201
NED Benefit Evaluation Procedure............................................................................ 203
Federal and Non-Federal Participation........................................................................ 209
Other Authorities......................................................................................................... 212
Water Supply Agreements........................................................................................... 223
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SECTION IX - Multiple Purpose Projects.............................................................................. 228
E-59.
E-60.
E-61.
E-62.
E-63.
Federal Interest. ........................................................................................................... 228
Types of Improvements............................................................................................... 228
Specific Policies .......................................................................................................... 229
Benefit Evaluation Procedure...................................................................................... 229
Federal and Non-Federal Participation........................................................................ 232
SECTION X - Major Rehabilitation Studies......................................................................... 270
E-64. Background. ................................................................................................................ 270
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APPENDIX E
LIST OF TABLES
Page ETable E- 1 Planning Task and Approaches to Risk and Uncertainty ........................................... 14
Table E- 2 Summary of Annualized NED Benefits For Alternative Projects .............................. 38
Table E- 3 Time Phasing of NED Benefits For Recommended Project1 ..................................... 39
Table E- 4 Waterway Traffic and Delays, Without Project Condition ........................................ 39
Table E- 5 Waterway Traffic and Delays, With Recommended Project1 .................................... 40
Table E- 6 Projected Vessel Fleet Size Distribution,a .................................................................. 52
Table E- 7 Typical Vessel Dimensions of Vessel Fleet ............................................................... 53
Table E- 8 Projected Commerce for Deep-Draft Traffic.............................................................. 53
Table E- 9 Projected Vessel Trips for Deep-Draft Traffic ........................................................... 54
Table E- 10 Commercial Fishing Benefits ................................................................................... 60
Table E- 11 Navigation, PED....................................................................................................... 61
Table E- 12 Navigation, Construction and O&M ........................................................................ 62
Table E- 13 Navigation, Special Navigation Programs................................................................ 63
Table E- 14 Management Plan Report Outline ............................................................................ 79
Table E- 15 Guide to Types of Benefits..................................................................................... 103
Table E- 16 Summary of Annualized NED Benefits and Costs for Alternative Projects .......... 113
Table E- 17 Flood Damages by Decade, Alternative Projects ................................................... 115
Table E- 18 Flood Damages by Decade Without Project........................................................... 115
Table E- 19 Number of Acres (or Structures), Floodplain Without Project .............................. 116
Table E- 20 Summary of Crop Benefits (Farm Budget Analysis Method) ................................ 129
Table E- 21 Intensification Benefits (Land Value Analysis Method) ........................................ 129
Table E- 22 Shore Ownership and Levels of Federal Participation ........................................... 135
Table E- 23 Electric Power Supply Alternatives........................................................................ 176
Table E- 24 Summary of Annualized NED Benefits for Structural Measures and NED Costs for
177
Structural and Nonstructural Measures1
Table E- 25 Time Distribution of NED Electric Power Benefits............................................... 178
Table E- 26 Recreation Capacity and Use (19__)1 ..................................................................... 197
Table E- 27 Annualized Recreation Benefits, Recommended Plan........................................... 197
Table E- 28 M&I Water Supplies—Without Project Condition ................................................ 210
Table E- 29 M&I Water Supplies—Without Project Condition ................................................ 211
Table E- 30 M&I Water Supply Alternatives............................................................................. 212
Table E- 31 Water Supply Storage Agreement Approval Authority [1] .................................... 225
Table E- 32 Surplus Water Agreement Approval Authority [1] ................................................ 226
Table E- 33 Project Produces only NED benefits ...................................................................... 231
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Table E- 34 Project produces only NER outputs ....................................................................... 231
Table E- 35 Project Produces NED and NER Outputs .............................................................. 231
Table E- 36 Cost Allocation Report: Lake Pertinent Data........................................................ 252
Table E- 37 Cost Allocation Report: Lake Summary of Construction Expenditures .............. 254
Table E- 38 Cost Allocation Report: Lake Interest During Construction - Specific Power
Facilities .............................................................................................................................. 257
Table E- 39 Cost Allocation Report: Lake Interest During Construction - Joint-Use Facilities 258
Table E- 40 Cost Allocation Report: Lake Summary of Annual Operation & Maintenance and
Replacement Costs .............................................................................................................. 260
Table E- 41 Cost Allocation Report: Lake Summary of Costs, Charges, and Benefits ............. 261
Table E- 42 Cost Allocation Report: Lake Annual Benefits, Multipurpose Project .................. 263
Table E- 43 Cost Allocation Report: Lake Determination of Separable and Joint Costs .......... 265
Table E- 44 Cost Allocation Report: Lake Allocation by Separable-Cost-Remaining-Benefit
Method1 ............................................................................................................................... 266
Table E- 45 Cost Allocation Report: Lake................................................................................. 268
Table E- 46 Cost Allocation Report: Lake Summary of Cost Allocation Findings .................. 268
Table E- 47 DYMS Hypothetical Example................................................................................ 303
Table E- 48 Procedure for a Project Without Storage Allocated to Hydropower ...................... 304
Table E- 49 Procedure for a Project With Storage Allocated to Hydropower ........................... 305
Table E- 50 Greers Ferry Lake Storage Allocations, Prior to Expansion .................................. 306
Table E- 51 Routing Results ....................................................................................................... 307
Table E- 52 DYMS Holding Hydropower Storage Constant ..................................................... 308
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APPENDIX E
LIST OF FIGURES
Page EFigure E- 1 Inland Navigation Benefit Evaluation Procedure...................................................... 32
Figure E- 2 Deep-Draft Navigation Benefit Evaluation Procedure.............................................. 44
Figure E- 3 Commercial Fishing Benefits Evaluation Procedures............................................... 57
Figure E- 4 Urban Flood Damage Benefit Evaluation Procedure ................................................ 94
Figure E- 5 Agricultural Benefits Evaluation Procedure ........................................................... 121
Figure E- 6 Hurricane and Storm Damage Prevention Benefits Evaluation ............................... 138
Figure E- 8 Best Buy Plans ........................................................................................................ 157
Figure E- 9 Flowchart of Hydropower Benefit Evaluation Procedures ..................................... 170
Figure E- 10 Criteria for Selecting Procedures for Evaluating Recreation Benefits.................. 186
Figure E- 11 Recreation Benefit Evaluation Procedures............................................................ 189
Figure E- 12 Flowchart of M&I Water Supply Benefit Evaluation Procedure .......................... 206
LIST OF EXHIBITS
Page EExhibit E-1 Summary of Federal/non-Federal Cost Sharing by Civil Works Mission .............. 273
Exhibit E-2 Recreation Facilities Checklist ............................................................................... 293
Exhibit E-3 Checklist of Facilities which may be Cost Shared in Recreation Developments at
Environmental Protection and Ecosystem Restoration Projects1 ....................................... 301
Exhibit E-4 Examples of DYMS Computations ........................................................................ 303
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APPENDIX E
Civil Works Missions and Evaluation Procedures
SECTION I - Overview
E-1. Purpose. This chapter provides policy and planning guidance for project purposes of
navigation, flood damage reduction, hurricane and storm damage reduction (shore protection),
ecosystem restoration, hydroelectric power, recreation, water supply and multiple purpose
projects. It covers Federal interest as defined by law and Army policies, types of improvements,
specific policies, Federal and non-Federal participation and special considerations where
applicable. (Note: Every effort has been made to eliminate all inconsistencies between the main
body of the ER and the appendices. If any inconsistencies are found, the information in the main
body of the ER will prevail over the one in the appendices. Please, notify CECW-PD
immediately of any inconsistencies for correction.)
E-2. Project Purposes The term project purpose, as used above and elsewhere in this chapter,
means a type or kind of project, the purpose for which it is undertaken. For example, flood
damage reduction is a project purpose, as is navigation. Project purpose is also a convenient
shorthand description; there may be a number of associated implications, such as a cost sharing
formula, typically constructed features, a general notion of the type of outputs, and a legislative
and institutional history. There also may be policies concerning individual project purposes. The
term does not necessarily imply exclusive use of a particular kind or category of economic
benefits however. Corps projects are formulated for specific project purposes, that is to produce
specific outputs. This does not necessarily mean all project outputs will be exclusively those for
which formulation occurs. Thus, a project formulated only for navigation (project purpose) could
also have flood damage reduction benefits and recreation benefits.
E-3.
General Policies.
a. The Planning Process. The Corps planning process follows the six-step process
defined in the Principles and Guidelines (P&G) for Water and Related Land Resources adopted
by the Water Resources Council. This process is a structured approach to problem solving which
provides a rational framework for sound decision making. The six-step process shall be used for
all planning studies conducted by the Corps of Engineers. The process is also applicable for
many other types of studies and its wide use is encouraged. The six steps are:
Step 1 - Identifying problems and opportunities
Step 2 - Inventorying and forecasting conditions
Step 3 - Formulating alternative plans
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Step 4 - Evaluating alternative plans
Step 5 - Comparing alternative plans
Step 6 - Selecting a plan
A description of each step is provided in the main body of this ER. Corps decision
making is generally based on the accomplishment and documentation of all of these steps. It is
important to stress the iterative nature of this process. As more information is acquired and
developed, it may be necessary to reiterate some of the previous steps. The six steps, though
presented and discussed in a sequential manner for ease of understanding, usually occur
iteratively and sometimes concurrently. Iterations of steps are conducted as necessary to
formulate efficient, effective, complete and acceptable plans. The following paragraphs provide
additional guidance on selected steps.
(1) Step 1 - Identifying problems and opportunities. The first step in the planning
process is the identification of (undesirable conditions to be solved) and opportunities (positive
conditions to be improved) that the planning team seeks to address. Problems and opportunities
should be defined in terms of their nature, cause, location, dimensions, origin, time frame, and
importance. The planning team develops objectives and constraints based on those problems and
opportunities. An objective is a statement of what an alternative plan should try to achieve,
while a constraint is basically a restriction that the alternative plan should avoid. Objectives, as
well as constraints, are written statements that should generally include the following four types
of information: effect (the verb that expresses the intent to bring about an objective and not to
violate a constraint); subject (what is to be changed for the better through meeting the objective
or not changed through avoiding a constraint); location (often the study area, which defines
where the objective is to be achieved); and timing and duration (often the study period of
analysis, which define when and how long the objective is to be achieved or the constraint to be
avoided). Developing specific, flexible, measurable, realistic, attainable, and acceptable
objectives and constraints is critical to the success of the entire planning process. Objectives and
constraints are used to guide information gathering, to help identify solutions and formulate
alternative plans, to identify which plan effects will be evaluated, to compare the relative
effectiveness of alternative plans, to assist in plan selection, and ultimately, in gauging the
success of the plan implemented.
(2) Step 2 - Inventory of Existing Conditions and Forecast of Future Conditions. This
entails quantifying and qualifying the planning area resources important to clearly define and
characterize the problems and opportunities previously identified. Both existing conditions and
future conditions expected to occur without a project must be characterized. The future without
project condition forms the basis from which alternative plans are formulated and impacts are
assessed. The information gathered at this step depends on the specific nature of the study.
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However, at a minimum, information will be required to identify and adequately describe the
problems and opportunities of the study area; to estimate life cycle project costs; and to describe
important project effects. Gathering information about historic and existing resources requires an
inventory. Gathering information about potential future conditions requires forecasts, which
should be made for selected years over the period of analysis to indicate how changes in
economic, social, environmental and other conditions are likely to impact problems and
opportunities. Forecasting future conditions should be done in an iterative manner, seeking input
from Federal and non-Federal entities and other stakeholders, in order to help build consensus
about future without project conditions and what outputs the proposed project will and should
produce. Forecasting may be especially critical in the case of a plan recommended for the
protection of a given resource, where an argument must be made that there will be a decline or
degradation of the resource unless protection is provided.
(3) Step 3 - Formulate Alternative Plans. Plan formulation is the process of developing
management measures and plans that meet planning objectives and avoid planning constraints.
A management measure is a feature (a structural element that requires construction or assembly
on-site) or an activity (a nonstructural action) that can be implemented at a specific geographic
site that is intended to cause a desirable change and results, preferably, in a positive output.
Management measures are the building blocks of alternative plans. Alternative plans can be
composed of a combination of various management measures or the same measures combined in
significantly different ways. Plan formulation consists of three phases: 1) identifying
management measures; 2) formulating alternatives by combining the management measures; and
3) iterative reformulation, during which alternative plans previously formulated are modified.
Measures may be added, eliminated, re-scaled, or otherwise modified such that the reformulated
plan will better achieve a planning objective or stay within the limits of a constraint.
(4) Step 4- Evaluate alternative plans. In this step, the significant contributions or effects
of an individual plan are quantified and judged to determine which plans will continue to be
considered during the planning process. All significant contributions and effects shall be
quantified in order to succeed in evaluating the alternate plans. Significant contributions are
identified on the basis of institutional, technical and public recognition. Institutional recognition
of an effect means its importance is recognized and acknowledged in the laws, plans and policies
of government, public agencies and private groups. Technical recognition of an effect is based
upon scientific or other technical criteria that establish the significance of an effect. Public
recognition means that some segment of the general public considers the effect important. The
evaluation of alternative plans consists of four major tasks. The first task is to forecast the most
likely with-project condition expected under each alternative plan. Each with-project condition
will describe the same critical variables included in the without-project condition developed in
step 2. Criteria to evaluate the alternative plans include all significant resources, outputs and
plan effects, contributions to the Federal objective and the study planning objectives, compliance
with environmental protection requirements, the P&G’s four evaluation criteria (completeness,
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effectiveness, efficiency and acceptability) and other criteria deemed significant by participating
stakeholders. The second task is to compare each with-project condition to the without-project
condition and document the differences between the two. The third task is to characterize the
beneficial and adverse effects by magnitude, location, timing and duration. The fourth task is to
identify the plans that will be further considered in the planning process, based on a comparison
of the adverse and beneficial effects and the evaluation criteria.
(a) P&G Evaluation Criteria. The four evaluation criteria specified in the P&G are
acceptability, completeness, effectiveness and efficiency.
(1) Acceptability is the workability and viability of the alternative plan with respect to
acceptance by Federal and non-Federal entities and the public and compatibility with existing
laws, regulations, and public policies. Two primary dimensions to acceptability are
implementability and satisfaction. Implementability means that the alternative is feasible from
technical, environmental, economic, financial, political, legal, institutional, and social
perspectives. If it is not feasible due to any of these factors, then it can not be implemented, and
therefore is not acceptable. An infeasible plan should not be carried forward for further
consideration. However, just because a plan is not the preferred plan of a non-Federal sponsor
does not make it infeasible or unacceptable ipso facto. The non-Federal partner’s willingness or
unwillingness to sign a Project Cooperation Agreement should not be the test of whether a plan is
acceptable or not. The second dimension to acceptability is the satisfaction that a particular plan
brings to government entities and the public. Obviously, the extent to which a plan is welcome
or satisfactory is a qualitative judgement. Nevertheless, discussions as to the degree of support
(or lack thereof) enjoyed by particular alternatives from a community, state Department of
Natural Resources, Ducks Unlimited, or other national or regional organizations, for example,
are additional pieces of information that can help planners evaluate whether to carry forward or
screen out alternative plans.
(2) Completeness is the extent to which a given alternative plan provides and accounts
for all necessary investments or other actions to ensure the realization of the planned effects. To
establish the completeness of a plan, it is helpful to list those factors beyond the control of the
planning team that are required to make the plan’s effects (benefits) a reality.
(3) Effectiveness is the extent to which an alternative plan alleviates the specified
problems and achieves the specified opportunities. An effective plan is responsive to the
identified needs and makes a significant contribution to the solution of some problem or to the
realization of some opportunity. It also contributes to the attainment of planning objectives. The
most effective alternatives make significant contributions to all the planning objectives.
Alternatives that make little or no contribution to the planning objectives can be rejected because
they are relatively ineffective. Another factor that can impact the effectiveness of an alternative
is whether there is substantial risk and uncertainty associated with the alternative. If the
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functioning or success of an alternative is uncertain, or less certain than another alternative, its
effectiveness may be compromised and should be discussed.
(4) Efficiency is the extent to which an alternative plan is the most cost-effective means
of alleviating the specified problems and realizing the specified opportunities, consistent with
protecting the Nation’s environment (P&G Section VI.1.6.2(c)(3)).
(b) Four accounts are established in the P&G to facilitate the evaluation and display of
effects of alternative plans. The national economic development account displays changes in the
economic value of the national output of goods and services. The environmental quality account
displays non-monetary effects on ecological, cultural, and aesthetic resources including the
positive and adverse effects of ecosystem restoration plans. The regional economic development
account displays changes in the distribution of regional economic activity (e.g., income and
employment). The other social effects account displays plan effects from perspectives that are
relevant to the planning process, but are not reflected in the other three accounts (e.g.,
community impacts, health and safety, displacement, and energy conservation). Display of the
national economic development and environmental quality accounts is required. Display of the
regional economic development and other social effects accounts is discretionary.
(c) Procedures to evaluate national economic development benefits for each civil works
mission (i.e., navigation, flood damage reduction, recreation, etc.) are provided in subsequent
sections of this appendix. Procedures to evaluate environmental impacts are provided in
Appendix C. Procedures to evaluate the impacts of ecosystem restoration projects are provided
in Section V of this appendix. Steps in these procedures may be abbreviated by reducing the
extent of the analysis and amount of data collected where greater accuracy or detail is clearly not
justified by the cost of the plan components being analyzed. The steps abbreviated and the
reason for abbreviation shall be documented in the planning reports. Planners can pursue the use
of alternative procedures when these would provide a more accurate estimate of benefits. The
use of alternative procedures and the consideration of new benefit categories, including the
procedures to be used to estimate them, require advance approval from HQUSACE (CECW-P).
(d) General Considerations in NED Benefit Evaluation.
(1) When an alternative procedure provides a more accurate estimate of a benefit, the
alternative estimate may also be shown if the procedure is documented.
(2) Goods and Services: General Measurement Standard. The general measurement
standard of the value of goods and services is defined as the willingness of users to pay for each
increment of output from a plan. Such a value would be obtained if the "seller" of the output
were able to apply a variable unit price and charge each user an individual price to capture the
full value of the output to the user. Since it is not possible in most instances for the planner to
measure the actual demand situation, four alternative techniques can be used to obtain an
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estimate of the total value of the output of a plan: Willingness to pay based on actual or
simulated market price; change in net income; cost of the most likely alternative; and
administratively established values.
(a) Actual or Simulated Market Price. If the additional output from a plan is too small to
have a significant effect on price, actual or simulated market price will closely approximate the
total value of the output and may be used to estimate willingness to pay. If the additional output
is expected to have a significant effect on market price and if the price cannot be estimated for
each increment of the change in output, a price midway between the price expected with and
without the plan may be used to estimate the total value.
(b) Change in Net Income. The value of the change in output of intermediate goods and
services from a plan is measured by their total value as inputs to producers. The total value of
intermediate goods or services to producers is properly measured as the net income received by
producers with a plan compared to net income received without a plan. Net income is defined as
the market value of producers' outputs less the market value of producers' inputs exclusive of the
cost of the intermediate goods or services from a plan. Increased net income from reduced cost of
maintaining a given level of output is considered a benefit since released resources will be
available for production of other goods and services.
(c) Cost of the Most Likely Alternative. The cost of the most likely alternative may be
used to estimate NED benefits for a particular output if non-Federal entities are likely to provide
a similar output in the absence of any of the alternative plans under consideration and if NED
benefits cannot be estimated from market price or change in net income. This assumes, of
course, that society would in fact undertake the alternative means. Estimates of benefit should be
based on the cost of the most likely alternative only if there is evidence that the alternative would
be implemented. In determining the most likely alternative, the planner should give adequate
consideration to nonstructural and demand management measures as well as structural measures.
(d) Administratively Established Values. Administratively established values are proxy
values for specific goods and services cooperatively established by the water resources agencies.
An example of administratively established values is the range of unit-day values for recreation.
(3) Goods and Services: Categories. The NED account includes goods and services in
the following categories: municipal and industrial (M&I) water supply; agricultural floodwater,
erosion and sedimentation reduction; agricultural drainage; agricultural irrigation; urban flood
damage reduction; power (hydropower); transportation (inland navigation); transportation (deep
draft navigation); recreation; and, commercial fishing.
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(4) Other Direct Benefits. The other direct benefits in the NED benefit evaluation are the
incidental direct effects of a project that increase economic efficiency and are not otherwise
accounted for in the evaluation of the plan or project. They are incidental to the purposes for
which the water resources plan is being formulated. They include incidental increases in output
of goods and services and incidental reductions in production costs. For example, a project
planned only for flood damage reduction and hydropower purposes might reduce downstream
water treatment costs; this reduction in costs would be shown as another direct benefit in the
NED account.
(5) Use of Otherwise Unemployed or Underemployed Labor Resources. The opportunity
cost of employing otherwise unemployed and underemployed workers is equal to their earnings
under the without plan conditions. Conceptually, the effects of the use of unemployed or
underemployed labor resources should be treated as an adjustment to the adverse effects of a plan
on national economic development. Since this approach leads to difficulties in cost allocation
and cost sharing calculations, the effects from the use of such labor resources are to be treated as
an addition to the benefits resulting from a plan.
(a) Beneficial effects from the use of unemployed or underemployed labor resources are
limited to labor employed on site in the construction or installation of a plan. This limitation
reflects identification and measurement problems and the requirement that national projections
are to be based on a full employment economy.
(b) If the planning region has substantial and persistent unemployment and these labor
resources will be employed or more effectively employed in installation of the plan, the net
additional payments to the unemployed and underemployed labor resources are defined as a
benefit.
b. Plan Recommendations.
(1) The National Economic Development (NED) Plan. Ordinarily the plan that
reasonably maximizes net benefits, known as the NED plan, is recommended. Another plan may
be recommended if it qualifies for a categorical exemption, or if a specific Secretarial exception
from ASA(CW) is sought.
(2) The National Ecosystem Restoration (NER) Plan. For ecosystem restoration projects,
a plan that reasonably maximizes ecosystem restoration benefits compared to costs, consistent
with the Federal objective, shall be selected. The selected plan must be shown to be costeffective and justified to achieve the desired level of output. This plan shall be identified as the
National Ecosystem Restoration (NER) Plan.
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(3) The Combined NED/NER Plan. Projects which produce both National Economic
Development (NED) benefits and National Ecosystem Restoration (NER) benefits will result in a
“best” recommended plan so that no alternative plan or scale has a higher excess of NED benefits
plus NER benefits over total project costs. This plan shall attempt to maximize the sum of net
NED and NER benefits, and to offer the best balance between two Federal objectives.
Recommendations for multipurpose projects will be based on a combination of NED benefit-cost
analysis, and NER benefits analysis, including cost effectiveness and incremental cost analysis.
(4) The Locally Preferred Plan. Projects may deviate from the National Economic
Development Plan and/or the National Ecosystem Restoration Plan if requested by the nonFederal sponsor and approved by ASA(CW). In some instances, a non-Federal sponsor may not
be able to afford or otherwise support the NED, NER or Combined NED/NER Plan. Plans
requested by the non-Federal sponsor that deviate from these plans shall be identified as the
Locally Preferred Plan (LPP). When the LPP is clearly of less scope and cost and meets the
Administration’s policies for high-priority outputs, an exception for deviation is usually granted
by ASA(CW). In making a decision to recommend a LPP smaller in scope and costs than the
NED, NER or Combined NED/NER plans, the district should assist the sponsor in identifying
and assessing the financial capability of other potential non-Federal interests who may be willing
and able to participate in plan development and implementation. In all cases, the LPP must have
greater net benefits than smaller scale plans, and enough alternatives must be analyzed during the
formulation and evaluation process to insure that net benefits do not maximize at a smaller scale
than the sponsor’s preferred plan. If the sponsor prefers a plan more costly than the NED plan,
the NER Plan or the combined NED/NER Plan, and the increased scope of the plan is not
sufficient to warrant full Federal participation, ASA(CW) may grant an exception as long as the
sponsor pays the difference in cost between those plans and the locally preferred plan. The LPP,
in this case, must have outputs similar in-kind, and equal to or greater than the outputs of the
Federal plan. It may also have other outputs. The incremental benefits and costs of the locally
preferred plan, beyond the Federal plan, must be analyzed and documented in feasibility reports.
(5) Categorical Exemption for Flood Control and Navigation Projects. If the non Federal
sponsor identifies a constraint to maximum physical project size or a financial constraint due to
limited resources, and if net benefits are increasing as the constraint is reached, the requirement
to formulate larger scale plans in an effort to identify the NED plan is suspended. The
constrained plan may be recommended. If the NED plan is identified at a physical size or cost
which is less than the constraint, the NED plan requirement is satisfied and the NED plan should
be recommended.
c. Cost Sharing.
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(1) Applicability. Unless otherwise specified, the cost sharing provisions of Title I of the
WRDA of 1986, as amended and as interpreted in subsequent guidance, applies to all projects
and separable elements thereof. Specific Federal and non-Federal cost sharing requirements
applicable to each civil works mission are discussed in subsequent sections of this appendix.
Exhibit E-1, at the end of this appendix, summarizes these requirements.
(2) Separable Element. A separable element is any part of a project which has separately
assigned benefits and costs, and which can be implemented as a separate action (at a later date or
as a separate project). Separable elements so considered are similar to the planning concept of
last added increments, with the added idea of separation or detachment of the increment from the
whole. The Corps has used a separable element concept for many decades; the term itself was
coined in the WRDA of 1986 to assist in the transition to new cost sharing formulas. The WRDA
definition was more complex, yet more ambiguous than that above. There is little continuing
need for that definition. For cases where the WRDA definition (see section 103(f)) appears
necessary, consult HQUSACE; otherwise use the definition above. Separable elements usually
must be incrementally justified.
(3) Waivers for Territories (Section 1156 of the WRDA of 1986). Local cost sharing
requirements for all studies and projects in American Samoa, Guam, the Northern Mariana
Islands and the Virgin Islands will be reduced by up to $200,000 for each study and project. Cost
sharing for each study will first be established using the general cost sharing criteria; then the
non-Federal share will be reduced by $200,000 or to zero if the non-Federal share is less than
$200,000. A similar procedure will be followed for the non-Federal implementation cost share.
(4) Exceptions to the NED Plan. When the ASA(CW) grants an exception to selection of
the NED plan, the costs for the granted exception will be shared on the same percentage basis as
the NED plan.
(5) Locally Preferred Plans. Local interests may prefer a plan that is larger or smaller
than the NED plan. A locally preferred plan may generally be recommended, except that in the
geographic areas covered in (3) above, a larger than NED plan may not be recommended. The
incremental cost between the Federally supportable plan (NED), and a larger locally preferred
plan, is entirely a non-Federal responsibility. Recommended plans smaller or less costly than the
NED plan will normally be granted an exception to NED plan selection, and cost shared on the
same percentage basis as the NED plan.
d. Financing of Non-Federal Share of Project Costs. Guidance on the financing of the
non-Federal share of project costs including payment options, deferral of payments, method of
payments, source of non-Federal funds, and the rate of interest for deferred payments is contained
in ER 1165-2-131.
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e. Credit for LERRD. Specific guidance on crediting the value of LERRD toward the
non-Federal share of project costs is contained in ER 1165-2-131.
f. Replacement Costs. Repair, replacement and rehabilitation costs must be identified
and included in the estimated cost of operation and maintenance. The entity responsible for
project operation and maintenance is responsible for all rehabilitation and replacement costs
(except for some inland navigation projects, see Section II of this appendix).
g. Fish and Wildlife Mitigation.
(1) Allocating Costs. Fish and wildlife mitigation costs incurred after 17 November 1986
shall be allocated to the authorized purposes causing the need for mitigation in the same
proportions as other allocable costs are allocated to those purposes.
(2) Mitigation LERRD. When lands, easements, rights-of-way, relocations or disposal
areas (LERRDs) are a non-Federal responsibility for a project purpose, any LERRDs associated
with mitigation for that purpose is likewise a non-Federal responsibility.
h. OMRR&R Mitigation. Non-Federal sponsors will be responsible for all costs of the
operation and maintenance, repair, rehabilitation, and replacement of mitigation measures except
for: (1) inland navigation projects and harbor projects with depths up to 45 feet, which have no
requirement for non-Federal sharing of these costs, and (2) harbors with depths over 45 feet
which require a 50 percent non-Federal share for those costs assigned to increments in excess of
a 45-foot project.
i. Hazardous, Toxic and Radioactive Waste (HTRW). Policy is to avoid expenditure of
Civil Works funds for HTRW remediation by avoiding contaminated areas where practicable.
For water resource studies, emphasis should be placed on early problem identification.
Reconnaissance and feasibility studies will include a phased and documented review to provide
for early identification of HTRW potential. Efforts to determine the existence and extent of
HTRW problems will be treated as study cost and shared accordingly. Consistent with the
guidance in ER 1165-2-132, the Corps will not participate in clean up of materials regulated by
the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or by
the Resource Conservation and Recovery Act (RCRA). The cost of clean up of materials not
covered by CERCLA and RCRA will be considered when determining if the proposed project is
justified. While measures to improve water quality parameters may be included in projects with
an ecosystem restoration component, the ecosystem restoration portion of these projects should
not principally result in treating or otherwise abating pollution other compliance responsibility.
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j. Brownfields. Brownfields are abandoned or under-utilized properties that are perceived
to be or, at worst, are lightly contaminated. Brownfields may be included in the preliminary
planning phase of projects where they are integral to solving water resources problems related to
Corps mission areas and authorities. If the assessment determines that there are non-CERCLA
types of materials or small, easily and cost effectively managed amounts of CERCLA controlled
materials, then these sites may be included in project formulation and any remediation costs
would be shared as project costs. If the assessment determines a CERCLA level clean-up is
required, then the site will be removed from plan formulation for processing under CERCLA
procedures. It is important that no unnecessary Federal liability be incurred when working within
a Brownfield site.
E-4. Risk and Uncertainty-Sensitivity Analysis. Uncertainty and variability are inherent in
water resources planning. For example, there is uncertainty in projecting such factors as stream
flows, population growth, and the demand for water. Therefore, the consideration of risk and
uncertainty is important in water resources planning. This paragraph provides guidance for the
evaluation of risk and uncertainty in the formulation of water resources management and
development plans.
a. Concepts.
(1) Risk. Situations of risk are conventionally defined as those in which the potential
outcomes can be described in reasonably well known probability distributions. For example, if it
is known that a river will flood to a specific level on the average of once in 20 years, a situation
of risk, rather than uncertainty, exists.
(2) Uncertainty. In situations of uncertainty, potential outcomes cannot be described in
objectively known probability distributions. Uncertainty is characteristic of many aspects of
water resources planning. Because there are no known probability distributions to describe
uncertain outcomes, uncertainty is substantially more difficult to analyze than risk.
(3) Sources of Risk and Uncertainty.
(a) Risk and uncertainty arise from measurement errors and from the underlying
variability of complex natural, social, and economic situations. If the analyst is uncertain
because the data are imperfect or the analytical tools crude, the plan is subject to measurement
errors. Improved data and refined analytic techniques will obviously help minimize
measurement errors.
(b) Some future demographic, economic, hydrologic, and meteorological events are
essentially unpredictable because they are subject to random influences. The question for the
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analyst is whether the randomness can be described by some probability distribution. If there is a
historical data base that is applicable to the future, distributions can be described or
approximated by objective techniques.
(c) If there is no such historical data base, the probability distribution of random future
events can be described subjectively, based upon the best available insight and judgment.
(4) Degrees of Risk and Uncertainty. The degree of risk and uncertainty generally differs
among various aspects of a project. It also differs over time, because benefits from a particular
purpose or costs in a particular category may be relatively certain during one time period and
uncertain during another. Finally, the degree of uncertainty differs at different stages of the
analysis, for example, between initial screening and final detailed design, when more precise
analytic methods can be applied.
(5) Attitudes. The attitudes of decision makers toward risk and uncertainty will govern
the final selection of projects and of adjustments in design to accommodate risk and uncertainty.
In principle, the government can be neutral toward risk and uncertainty, but the private sector
may not be. These differences in attitudes should be taken into account in estimating the
potential success of projects.
b. Application.
(1) The role of the planner.
(a) The planner's primary role in dealing with risk and uncertainty is to characterize to
the extent possible the different degrees of risk and uncertainty and to describe them clearly so
that decisions can be based on the best available information. The planner should also suggest
adjustments in design to reflect various attitudes of decision makers toward risk and uncertainty.
If the planner can identify in qualitative terms the uncertainty inherent in important design,
economic, and environmental variables, these judgments can be transformed into or assigned
subjective probability distributions. A formal model characterizing the relationship of these and
other relevant variables may be used to transform such distributions to exhibit the uncertainty in
the final outcome, which again is represented by a probability distribution.
(b) At all stages of the planning process, the planning can incorporate any changes in
project features that, as a result of information gained at that stage, could lead to a reduction in
risk and uncertainty at a cost consistent with improvement in project performance.
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(2) Some risk and uncertainty are assumed in nearly every aspect of a water resources
project. Some types of risk and uncertainty are dealt with in terms of national planning
parameters; for example, ranges of population projections and other principal economic and
demographic variables. Other types of risk and uncertainty are dealt with in terms of project or
regional estimates and forecasts. When projects are related to other projects and programs in
their risk and uncertainty aspects (e.g., interrelated hydrologic systems), reasonable attempts
should be made to see that the same analyses and presumed probability distributions are used for
all of them.
(3) The risk and uncertainty aspects of projects are likely to be seen and analyzed
differently as planning proceeds from rough screening to detailed project proposals. An effort
should be made, therefore, to relate the techniques used in characterizing and dealing with risk
and uncertainty to the stage of the planning process.
(4) The resources available for analyzing aspects of risk and uncertainty should be
allocated to those assessments that appear to be the most important in their effects on project and
program design. Rather than assuming in advance that one or another variable is a more
important source of risk and uncertainty, the planner should make a thorough effort to determine
which variables will be most useful in dealing with measurement errors and natural sources of
risk and uncertainty.
(5) The aspects of project evaluation that can be characterized by a probability
distribution based on reasonably firm data, such as hydrologic risk, can be treated by standard
methods of risk evaluation developed by Federal agencies and others.
(6) Most risk and uncertainty aspects of projects cannot be characterized by probability
distributions based on well established empirical data. A first step in dealing with this problem is
to describe why the project or specific aspects of it are uncertain, as well as the time periods in
which different degrees of uncertainty are likely. A range of reasonably likely outcomes can then
be described by using sensitivity analysis, the technique of varying assumptions as to alternative
economic, demographic, environmental, and other factors, and examining the effects of these
varying assumptions on outcomes of benefits and costs. In some cases and in some stages of
planning, this approach, when accompanied by a careful description of the dimensions of
uncertainty, will be sufficient. It can be accompanied by descriptions of design adjustments
representing various attitudes toward uncertainty.
(7) It may be appropriate in some cases to characterize the range of outcomes with a set
of subjective probability estimates, but the project report should make clear that the numerical
estimates are subjective. Moreover, subjective probability distributions should be chosen and
justified case by case, and some description of the impact on design of other subjective
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distributions should be given. Design alternatives reflecting various attitudes toward uncertainty
may be suggested.
(8) Utility functions may be used in conjunction with assessments of uncertainty to
explore design adaptations reflecting specific preferences. Public preferences, if well known,
may be used to illustrate to decision makers what the best design would be, given the
uncertainties and preferences in a particular case. If public preferences are not well known,
justification could be given for the selection of various utility functions, which can be used only
to illustrate the effects on design of various preferences.
(9) At each level of analysis, the planner should take into account the differences in risk
and uncertainty among project purposes and costs, among various time periods, and among
different stages of planning.
(10) Adjustments to risk and uncertainty in project evaluation can be characterized as
general or specific. General adjustments include the addition of a premium rate to the interest,
overestimation of costs, underestimation of benefits, and limitations on the period of analysis.
Such general adjustments are usually inappropriate for public investment decisions because they
tend to obscure the different degrees of uncertainty in different aspects of projects and programs.
Specific adjustments, including explicit assessments of different degrees of risk and uncertainty
in specific aspects of a project or program and specific adjustments to them, are preferable.
(11) One guide to the use of the techniques discussed here is displayed in Table E-1. In
general, more complex techniques are appropriate as planning proceeds from the initial
development and the screening of alternatives to the analysis and presentation of the final set of
alternative plans. For example, sensitivity analysis, testing the sensitivity of the outcome of
project evaluation to variation in the magnitude of key parameters, may be most useful and
applicable in the early stages of planning, when the concern is to understand single factors or
relatively general multiple-factor relationships. Multiple-factor sensitivity analysis, in which the
joint effects or correlation among underlying parameters are studied in greater depth, may be
more appropriate in the detailed analytic stage than in the screening stage.
Table E- 1 Planning Task and Approaches to Risk and Uncertainty
<---------------------------------Planning Tasks------------------------------->
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Approaches to Risk
and Uncertainty
Detailed Analysis of
Projects
Final Presentation of
Alternatives
X
X
Use of objective and
subjective probability
distributions
X
X
Illustrative
applications of public
preference and
decision makers
attitudes
X
X
Sensitivity analysis
Screening
Alternatives
X
(12) Similarly, analysis of risk and uncertainty based on objective or subjective
probability distributions would be more appropriate in the detailed analytic stage than in the early
screening stage. Although hydrologic and economic probabilities may be used in the screening
stage, the full use of independent and joint probability distributions, possibly developed from
computer simulation methods, to describe expected values and variances, is more appropriately
reserved for the detailed stage.
(13) Although decision makers' attitudes and decision rules can be used to give
perspective on alternative designs through out the planning process, they are more appropriate at
the stage of displaying alternative designs.
(14) The differences among the underlying degrees of risk and uncertainty, the design
adaptations to them, and the preferences of decision makers should be kept clear throughout the
analysis. The first two depend primarily on technical expertise; the last is the set of preferences
based on various attitudes toward risk and uncertainty.
c. Report and Display. The assessment of risk and uncertainty in project evaluation
should be reported and displayed in a manner that makes clear to the decision maker the types
and degrees of risk and uncertainty believed to characterize the benefits and costs of the
alternative plans considered.
E-5.
Project Cost Estimating and Scheduling.
a. Accuracy and Completeness. Accuracy and completeness of project cost estimates
must be emphasized throughout the project development process, including the reconnaissance
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and feasibility phases. Even in these early phases cost estimates should represent as complete
and as accurate a picture as is practicable. This is necessary for Federal and non-Federal sponsor
planning and budgeting processes.
(1) Elements. The project cost estimate is the total cost (Federal and non-Federal) of
implementing the project and includes the construction costs, lands, easements, rights-of-way,
relocations, disposal areas (if needed), mitigation, add-ons such as engineering and design, and
supervision and administration. The project cost estimate will be developed on a constant dollar
basis.
(2) Presentation. Project cost estimates during study phases are often perceived to be
more accurate than they are, and therefore, project documents must include a discussion of the
elements that make up the project cost estimate and of their variability. The presentation of the
project cost estimate is of particular importance in the feasibility study as it forms the basis for
local decisions on project commitment and financing. It is also the basis for developing budget
requests for implementation (inflation allowances are added separately). The project estimate
prepared during the feasibility phase is generally the one presented to the Congress for
authorization, although it may be revised during the early stages of preconstruction, engineering
and design depending on the authorization cycle. Section 902 of WRDA '86 limits the
authorization of projects in the Act to a 20% increase in the cost of that project (with increases
due to inflation and increased requirements of law allowed). Without firm cost estimates and
schedules, neither the Federal government nor the non-Federal sponsors can make prudent
financial and budgetary decisions.
b. Study Management of Cost Estimates. During the feasibility study phase, the team
must ensure that plans are formulated in such a way that constructability and operability are
assured, that major cost items are adequately assessed or appraised as in the case of real estate,
and that the uncertainty associated with the estimate is properly presented. The team should also
develop plans, with appropriate consideration for Corps plan formulation criteria under the
Principles and Guidelines , with an awareness of the ultimate cost. With increased non-Federal
financial responsibility for project planning and implementation and Federal emphasis on
budgetary restraint, commanders must be sensitive to real financial constraints on project scale.
Accurate estimates of the costs of alternative plans play a vital role in plan formulation and
project scoping. In any case, financial considerations must not be the sole criteria on which plan
development rests, as the NED plan must still be identified. The goal of this approach is to
reduce significant design changes after the feasibility phase.
c. Uncertainty in Cost Estimates. Project cost estimates should be supported by a
discussion of the scope of the estimate and the uncertainties associated with each major cost item
in the estimate. Special attention will be given to large cost items and items that are sensitive to
change. Such increased effort on these high risk components will increase the reliability of the
overall project cost estimate. The goal is a final project cost that will be within 20 percent of the
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estimated project cost in the feasibility report after appropriate adjustments for inflation. Based
on such an approach, appropriate contingencies may be applied for each element to account for
information that is lacking to more accurately establish its cost. General percentage
contingencies applied to the entire project will not be used.
d. Life Cycle Costs. Life cycle costs will also be explicitly considered in the
development of project cost estimates. These life cycle costs, including operation, maintenance,
repair, replacement and rehabilitation (OMRR&R) costs as well as any necessary environmental
monitoring and compliance inspection costs, play an important role in the trade-offs between
high capital cost projects and those that have high operation and maintenance (O&M) costs. The
sponsor's financial situation may accommodate one type of project better than another. The study
management team should draw upon the O&M resources in the district to assist in developing
accurate estimates for these costs. These costs should be presented on a constant dollar basis.
e. Full Funded Cost Estimates. Project cost estimates will also be developed on an
inflated dollar basis.
f. Review of Cost Estimates. Project cost estimates will be prepared by or reviewed by
the cost engineering element in the district and the chief of that unit will sign the estimate. Real
estate estimates included in the project cost are reviewed, approved and signed by chief or
designee of the Real Estate Office.
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SECTION II - Navigation
E-6. Federal Interest. The Federal interest in navigation derives from the Commerce Clause of
the Constitution, and is limited to the navigable waters of the United States. Federal navigation
improvements must be in the public interest and thus must be open to the use of all on equal
terms. As a matter of law and policy, a distinction is made between general navigation features,
and other features or facilities serving navigation. The Corps participates financially in general
navigation features and Special Navigation Programs only (see below); all other features and
facilities (e.g., piers) are non-Federal responsibilities.
E-7. Types of Improvements. General navigation features include channels, jetties or
breakwaters; locks and dams; basins or water areas for vessel maneuvering, turning, passing,
mooring or anchoring incidental to transit of the channels and locks. The also include dredged
material disposal areas (except those for the inland navigation system, the Atlantic Intracoastal
Waterway and the Gulf Intracoastal Waterway), and sediment basins. These are eligible for
development as general navigation features of harbor or waterway projects. Special Navigation
Programs include removal of wrecks and obstructions; snagging and clearing for navigation; drift
and debris removal; bridge replacement or modification; and mitigation of project-induced
damage.
a. Harbor and Waterway Projects. These projects are specifically authorized by
Congress, except for Continuing Authorities Projects. Financial responsibility for project
components is specified in Public Law 99-662. Harbors and waterways have separate cost
sharing formulas.
(1) Harbors. Harbors are places that offer vessels shelter from weather. They are
primarily places for vessels to put in as needed, although they may serve incidentally as
connecting waterways. They are ports if they also offer port facilities. Provision of harbors
offering only shelter (Harbors of Refuge) was historically an active Corps program; no new
projects have been authorized in many years. Many of the existing harbors of refuge continue to
be maintained however. While the terms “inland harbor” and “deep draft harbor” may be used in
legislation, it is harbor depth and use which determine cost sharing, not location.
(2) Waterways. Waterways are routes used by vessels. They are rights-of-way enabling
and aiding vessel movement; vessels also may stop and stay at facilities along waterways.
Waterways may simply connect bodies of deep or shallow water, or they may be parts of riverine
or coastal waterway systems.
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(a) The waterways described in Public Law 95-502 as amended, and such other
waterways that subsequently may be determined to be parts of the inland waterway system
referred to in Public Law 99-662, are exempt from non-Federal cost sharing of studies.
(b) By action of Congress, construction (including PED) for PL 95-502 defined
waterways or other waterways may be 100 percent Federal, the Inland Waterway Trust Fund may
be used to fund all or part of the construction, and the waterway may be made subject to
waterway fuel taxes. All other waterways are treated as harbors for cost sharing purposes.
b. Special Navigation Programs.
These navigation improvements are for specific purposes, and may be projects, elements of
projects, or simply Corps activities. They are initiated and/or implemented on Congressional
authority (specific or continuing). They are usually subject to program or project expenditure
limits, with cost sharing as specified in the original authority or as amended. The following
program expenditure limits and cost sharing are as amended by Public Law 99-662 unless
otherwise stated.
(1) Removal of Wrecks and Obstructions (Section 19, River & Harbor Act of 3 March
1899). The Corps may remove sunken vessels and similar objects if they are determined to be
obstructions to navigation. The cost is 100 percent Federal; it is recoverable from the vessel or
object owner. Abandonment by the owner is not a bar to cost recovery. Sunken vessels and
objects that are not obstructions to navigation but may be nuisances or otherwise undesirable, are
treated as drift and debris removal.
(2) Snagging and Clearing for Navigation (Section 3, River & Harbor Act of 1945).
Cost-sharing for this continuing authority is according to whether it is a harbor or inland
waterway. There is no project limit, but the current program limit is $1,000,000 annually.
(3) Drift and Debris Removal (Section 202, Water Resources Development Act of 1976).
The Corps has continuing authority to study and undertake projects to remove and dispose of
derelict objects such as sunken vessels, waterfront debris and derelict structures, and other
sources of drift that may damage vessels or threaten public health, recreation, or the environment
at publicly maintained commercial boat harbors. The harbor need not be, but usually is a Corps
project. Congressional authorization is required for projects with Federal costs of $400,000 or
more. Cost sharing for the cleanup is one third non-Federal. Non-Federal sponsors are required
to recover cleanup costs if there is an identifiable owner of the source. The recovery costs do not
become part of the local share but can be applied to reduce total project cost. All costs of any
disposal facility or area and its operation are cost shared according to project depth.
(4) Navigation Projects Under the Continuing Authorities Program. Refer to Appendix F
for additional guidance concerning policies, procedures and authorities pertaining to navigation
projects conducted under the CAP.
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(a) Small Harbor and Waterway Projects, Section 107, River & Harbor Act of 1960.
Small harbor or waterway projects constructed under this authority must be complete and capable
of producing benefits as separate projects. They cannot be constructed in lieu of authorized
elements of another navigation project. The requirements for study cost sharing, construction,
and operation and maintenance are generally the same as those for specifically authorized studies
and projects. Project and annual program Federal expenditure limits are $4,000,000 and
$35,000,000.
(b) Mitigation of Shore Damage Due to Federal Navigation Projects (Section 101 of the
WRDA of 1986 and Section 111, River and Harbor Act of 1968). The Corps can recommend
measures for the prevention or mitigation of erosion or shoaling damages attributable to Federal
navigation works. Costs are shared in the same proportion as is applicable to the project, which
causes, or is projected to cause, the erosion or shoaling. The non-Federal interests shall agree to
be responsible for O&M. Guidance for Section 111 projects is presented in Appendix F.
(5) Modification of Bridges that Obstruct Navigation (Public Law 67-647, the Bridge
Alteration Act). The Bridge Alteration Act (1941), commonly called the Truman-Hobbs Act,
applies only to existing highway and rail bridges. It provides authority to require bridge
modification or replacement if a bridge causes an unreasonable obstruction to navigation, and it
sets the apportionment of costs among the bridge owner, the Federal government, and nonFederal sponsor (if any). In 1966, responsibility for administration of the act was transferred from
the Army to the Department of Transportation; the Secretary of the Army retains authority to
determine whether a bridge causes unreasonable navigation obstruction.
(a) The bridge owner must bear the part of the cost attributable to direct and special
benefits accruing to the owner; the remainder is apportioned between the U.S. and non-Federal
sponsor (if any) according to the cost sharing that would apply at the harbor or waterway
involved. (For details of cost sharing see the Act.) The bridge owner is required to absorb the
cost of betterments and an apportionment of costs representing the expired service life of the
obstructing bridge.
(b) Truman-Hobbs cost sharing applies as well when a new project or project
improvement would cause an existing bridge to become an obstruction to navigation. The cost of
constructing new bridges or replacing existing bridges over non-obstructed channels is 100
percent non-Federal. New bridges required because of land cuts for new or realigned channels
are treated as general navigation features of those projects and cost shared accordingly.
(6) Beneficial Use of Dredged Material. When determining an acceptable method of
disposal of dredged material, districts are encouraged to consider options that provide
opportunities for aquatic ecosystem restoration. Where environmentally beneficial use of dredged
material is the least cost, environmentally acceptable method of disposal, it is cost shared as a
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navigation cost. Section 204 of the WRDA of 1992, as amended, provides programmatic
authority for selection of a disposal method for authorized projects, that provides aquatic
restoration or environmental shoreline erosion benefits when that is not the least costly method of
disposal. The incremental cost of the disposal for ecosystem restoration purposes over the least
cost method of disposal is cost shared, with a non-Federal sponsor responsible for 25 percent of
the costs. Smaller projects typically will be pursued within the programmatic limits of Section
204, as amended. Section 207 of the WRDA of 1996 amended this authority. Section 207 will
primarily be used with new navigation projects or in conjunction with maintenance dredging
when the incremental cost is large. Projects pursued under Section 207 authority are separately
budgeted and will not count towards the Section 204 programmatic limit. (See Section E-14 and
Appendix F for additional information regarding Beneficial Use of Dredged Material).
(7) Environmental Dredging. Section 312 of the WRDA of 1990 as modified by Section
205 of the WRDA of 1996 provides programmatic authority for environmental dredging of
sediments not classified as HTRW where the material lies outside and adjacent to Federal
navigation channels, contributes to contamination of materials in the Federal navigation channel
and it can be demonstrated the removal and remediation, if necessary, are economically justified
based on savings in future operation and maintenance costs. Section 224 of the WRDA of 1999
amended this authority. Implementation guidance is under development.
E-8. Specific Policies. There are many components necessary to make a navigation project
work, but there is Federal financial responsibility for only some of them. The components that
are a Federal responsibility are cost-shared according to the project benefits and type of project
(harbor, waterway) as shown in a subsequent paragraph. All other components are wholly nonFederal responsibilities.
a. General Application. For most project components, the responsibility and cost sharing
has been determined by legislation, precedent, or practice. These components are described
below.
(1) General Navigation Features. This category of structural components of harbors and
waterways contains most of those components in which the U.S. will financially participate. The
components may be constructed by the project sponsor with reimbursement for the Federal cost
share if authorized by Congress under Section 204 of the WRDA of 1986.
(a) Locks and dams and river training works on coastal and inland waterways.
(b) Offshore, approach, and harbor entrance channels, which may have associated
protective works such as breakwaters or jetties.
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(c) Mainstem, or main and branch channels that are either waterways, or that connect
harbor entrances with local facilities areas.
(d) Basins, areas, or widened channels for vessel maneuvering, turning, passing, or
anchoring or mooring incidental to transit of locks or channels, and sediment basins.
(e) Bridges that are required by new or realigned channels that cut fast land. It is Corps
policy to not recommend new navigation channels cutting fast land however.
(f) Ice control structures.
(2) Aids to Navigation. These are buoys, lights, ranges, markers, and other devices and
systems required for safe navigation or to achieve the project benefits. Aids to navigation are
provided by the Coast Guard, and are a Federal cost included in economic justification, but are
not subject to project cost sharing. Absent sufficient Coast Guard funding, or adequate
justification for the navigation aids, non-Federal interests may be required to provide them.
(3) Local Service Facilities. These are the responsibility of non-Federal interests, and
they may be required as part of project cooperation agreements if they are necessary for project
benefits to accrue. Examples are:
(a) Piers, wharves, floats, and other structures or devices at or near the shoreline, where
vessels can moor or be held for the purpose of loading and unloading cargo and passengers,
fueling, repairs and other servicing, or to await orders or use.
(b) Berthing, mooring, and anchorage areas where vessels can stay whatever time is
required without obstructing the channels or other water areas provided for the movement of
vessels.
(c) Port facilities or open areas, structures, or equipment on the shore for receiving,
storing, and transferring cargo and passengers. Harbor facilities are for providing fuel, water, ice,
provisions, repairs, and other services to vessels. Recreation facilities are for launching boats via
ramps or equipment, storing boats on land, parking vehicles, and public access areas and
restrooms.
(d) Utility services, such as telephone, water and power, and public services, such as
police and fire protection.
(e) Land access via roadways or railroads.
(f) Access channels or, main or branch channel extensions providing access to facilities
usable only by exclusive private interests, i.e., not open to the general public on equal terms.
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(4) LERR. Non-Federal sponsors are required to provide all lands, easements, rights-ofway, and relocations for a navigation project or a harbor of any kind, and for waterways that are
treated as harbors for cost sharing purposes. LERRD for “inland waterways” (includes disposal
areas in this case) are 100 percent Federal, and may be funded up to 50 percent from the Inland
Waterways Trust Fund for construction when so authorized by Congress.
b. Special Cases. Special cases that require a determination of policy, Federal
responsibility, or cost sharing are described below.
(1) Access Channels. Subsidiary channels may be needed to connect main harbor
channels or inland waterways with anchorages, mooring, or berthing areas not located adjacent to
the primary channel. An access or connecting channel can be a Federal responsibility only if it
provides access to two or more areas; or if access is provided to a single area it, must contain two
or more facilities with separate owners, or a facility owned by a public entity. For a harbor
project, the cost shares are determined by the depth of the access, or interior the channel. If an
access channel serves an inland port or port facility it is cost shared based on its own depth,
unless the channel is in an area included in the inland waterway system as described in Public
Law 95-502, as amended, or as determined by Congress.
(2) Deeper Depths in Entrance Channels. Where an entrance channel is deeper than
interior channels because of the more adverse navigation conditions of the entrance channel, cost
sharing is the same as the deepest reach of the more protected interior channels.
(3) Barge Fleeting Areas. Barge fleeting areas are defined as mooring areas or temporary
anchorages used for assembling tows, making barge transfers between tows, transferring
supplies, awaiting arrival of additional barges or serving as a barge holding area. Barge fleeting
areas should generally not be recommended for Federal participation. Moorages or temporary
anchorage areas may be recommended if necessary to implement a non structural efficiency
improvement, for example if reconstitution of tows is necessary to implement a ready to serve
lockage policy. These areas should not be considered as fleeting areas in the traditional sense.
(4) Single Owner Situations and General Versus Special Interest Considerations. Section
2 of the River and Harbor Act of 5 June 1920 provides that the Chief of Engineers shall make a
determination of the general versus the special interest in an improvement, and recommend an
appropriate sharing of costs between Federal and non-Federal interests. When there is a general
interest the cost sharing prescribed by Public Law 99-662 will be the basis for recommendations.
If there is no general interest there is no Federal financial participation. The determination of
general interest requires consideration of the number and type of properties served by a proposed
project.
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(a) Single Owner Situations. The Corps will not recommend Federal cost participation,
establishment, or expansion of a Federal navigation project where the improvement would serve
only property owned by a single firm, corporation or individual, or club or association with
restrictive membership requirements. A single-owner situation exists when restrictive conditions
of any sort permit the single property owner exclusive present and future enjoyment of project
benefits. An example of exclusive benefits would be a privately owned port, even though used
by several shippers. However, the Corps may recommend Federal cost participation where the
improvement would serve only property owned publicly by a single state county, municipality or
other duly appointed public entity. Table 1 in ER 1165-2-123 summarizes single-owner situation
policy for a variety of Federal project purposes and types of improvement.
(b) Initial Single Non-Public-Owner, Later Multiple-Owner Situations. Federal
participation may be recommended in a significant increment of improvement when the
improvement would initially serve property by a single non-public-owner when reasonable
prospect exists for the improvement to later serve multiple properties with different owners. A
significant increment is defined as one involving major increases in project length, depth, or
width.
(1) The test for reasonable prospect is controlled by factors such as availability,
ownership, and suitability of adjacent waterfront land for development. Another test is location
by other industries and users, availability of land transport and other essential services. Also, the
area’s economic potential; the intent of the land owner or the potential developer; and the determination that no restrictive conditions exist that would prohibit the improvement from serving or
benefiting two or more single-owner properties (and property owners) in the foreseeable future.
(2) In these situations, non-Federal sponsors shall contribute annually, until such time as
multiple properties/owners are served by the general navigation facility, 50 percent of the annual
charges for interest and amortization of the Federal first cost of the improvement, exclusive of
aids to navigation. For new channels or extensions to existing channels, the required annual
contribution shall also include 50 percent of the operation and maintenance costs of the
improvement until such time as multiple properties/owners are served. The requirement for
annual contributions may end when the Secretary of the Army determines that the improvement
is actually serving/benefiting at least two properties that are owned by at least two different
owners. These cash contribution requirements are in addition to the other regular established
requirements of non-Federal cooperation for commercial navigation projects.
(c) Progressive Development. The Federal interest is satisfied and the regular cost
sharing requirements apply where the improvement serves/benefits two or more properties
having different owners or one publicly-owned property at the outset, or if new properties/owners
would be served immediately after project completion. A principle of progressive development
also applies. Progressive development includes situations where the last small increment of a
channel serves a non-public owner. The last property owner served may be “at the end” in terms
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of length, depth, or width, necessitating some project investment in his service alone. This is
treated as a multiple-owner situation unless a disproportionate incremental investment is
required.
(5) Project Purpose and Benefits. Navigation projects may produce both recreational
navigation outputs including sport fishing, and commercial navigation outputs including
commercial fishing. Current Army policy precludes budgeting Army Civil Works resources for
new recreation orientated projects. Civil Works funds may normally be used to support
recreational development where the level of commercial navigation benefits is equal to or
exceeds 50 percent of the average annual project cost.
(6) Entrance Channels Cost Sharing. Increased depths provided in entrance channels for
transit of vessels between protected interior channels and the wave action zone, e.g., across an
outer bar, will be cost shared the same as the deepest protected interior channel. Breakwaters,
jetties and channel width increases are cost shared in the same manner.
(7) Navigation Versus Hurricane and Storm Damage Reduction. Some measures serving
navigation may also reduce hurricane and storm damage and vice versa. The following policies
apply to cost sharing of measures affecting one or both of the navigation, and hurricane and
storm damage reduction purposes.
(a) Measures resulting in increases in net income of commercial navigation activities or in
decreases in commercial transportation costs will be evaluated and cost shared as navigation
measures (harbor). This includes measures to prevent wave induced damages to berthed
commercial vessels and to docks, piers and slips used in commercial navigation activities.
Measures to prevent wave induced damages to berthed non-commercial (recreational) vessels,
and measures to prevent wave damages to docks, piers, slips and other shoreline facilities not
used for commercial navigation, are to be evaluated and cost shared under the hurricane and
storm damage reduction provisions of sections 103(c)(5) and 103(j) of Public Law 99-662.
Measures to provide for safe and efficient movement of commercial and recreational vessels into
and within a harbor, and measures to prevent loss or damage to vessels in transit (harbors of
refuge) will continue to be evaluated and cost shared as navigation measures (harbor). The Corps
does not financially participate in provision of docks, terminal or transfer facilities, or berthing
areas (see paragraph E-8a.(3)).
(b) Above policy applies to existing berthed vessels and shoreline facilities and to vessels
and facilities that would exist in the future without project condition at the project or an
alternative location. For vessels that would not be present at any location in the without project
condition, but would be present in the future as a result of the project, benefits are evaluated as
commercial or recreational navigation benefits, as appropriate.
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(c) Where measures serve both hurricane and storm damage reduction and navigation, an
allocation of multiple purpose joint costs must be made and the joint costs shared in accordance
with the purpose to which they are allocated, along with any specific costs for features which
serve only one purpose. This cost allocation must include operation, maintenance, repair and
replacement and rehabilitation responsibility under the hurricane and storm damage reduction
purpose. No cost allocation is required where a measure is formulated to serve a single purpose
but results in incidental benefits.
(8) Federal Assumption of Maintenance. Section 204(f) of the WRDA of 1986, as
amended, and implemented by ER 1165-2-124, provides the basis for the Federal assumption of
maintenance of navigation projects constructed by non-Federal interest. (Section 204(f) was
previously Section 204(e). It was redesignated by Section 303(b)(1) of the WRDA of 1990.)
Section 204(f) provides that a non-Federal project must be approved by the Secretary of the
Army prior to construction for Federal assumption of maintenance. In view of the provisions of
Section 204(f) and in recognition of budgetary constraints, the Corps will not seek study funding
or authorization for Federal maintenance of existing non-Federal navigation projects. Only
assumption of maintenance under provisions of Section 204(f) will be considered. This policy
does not apply to traditional study, authorization and construction of improvements to nonFederal harbors, which may include subsequent Federal maintenance.
E-9.
NED Benefit Evaluation Procedures: Transportation Inland Navigation
a. Purpose. This section presents the procedure for measuring the beneficial contributions
to national economic development (NED) associated with the inland navigation features of water
resource projects and plans.
(1) Major Rehabilitation Projects. Construction of infrequent, costly structural
rehabilitation or major works that will improve reliability or efficiency of a inland navigation
project or a principal feature thereof are implemented under the Major Rehabilitation Program.
Major rehabilitation projects are budgeted under the Construction General account.
Rehabilitation is a major project feature restoration consisting of structural work on a Corps
operated and maintained facility intended to improve reliability of an existing structure, the result
of which will be deferral of capital expenditures to replace the structure. Rehabilitation is
considered when it can significantly extend the physical life of a feature and can be economically
justified by benefit-cost analysis.
(2) Major Rehabilitation Projects Evaluation Procedures. ER 1130-2-500 and EP 1130-2500 document the requirements and procedures for major rehabilitation studies and projects.
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b. Conceptual Basis. The basic economic benefit of a navigation project is the reduction
in the value of resources required to transport commodities. Navigation benefits can be
categorized as follows:
(1) Cost Reduction Benefit (same origin-destination; same mode). For traffic that uses a
waterway both with and without a project, the benefit is the reduction in the economic cost of
using the waterway. This reduction represents an economic efficiency or NED gain because
resources will be released for productive use elsewhere in the economy; for example:
(a) Reductions in costs incurred from trip delays (e.g., reduced congestion by expanding
lock sizes at congested facilities or by imposition of congestion fees).
(b) Reduction in costs because larger or longer tows can use the waterway (e.g., by
channel straightening or widening).
(c) Reduction in costs by permitting barges to be more fully loaded (e.g., by channel
deepening).
(2) Shift of Mode Benefit (same origin-destination; different mode). For traffic that
would use a waterway with the project but uses a different mode, including a different waterway,
without the project, the benefit is the difference between the costs of using the alternative mode
without the project and the costs of using the waterway with the alternatives under consideration.
The economic benefit of the waterway to the national economy is the savings in resources from
not having to use a more costly mode.
(3) Shift of Origin-destination Benefit. If a project would result in a shift in the origin of
a commodity, the benefit is the difference in total costs of getting the commodity to its place of
use with and without the project. If a project would result in a shift in the destination of a
commodity, the benefit is the difference in net revenue to the producer with and without the
project. The shift of origin-destination benefit cannot exceed the reduction in transportation
charges achieved by the project.
(4) New Movement Benefit. This benefit applies if a commodity or additional quantities
of a commodity would be transported only because of lowered transportation charge with the
project. The quantities are limited to increases in production and consumption resulting from
lower transportation costs. An increase in waterway shipments resulting from a shift in origin or
destination is not included. The new movement benefit is defined as the increase in producer and
consumer surplus; practically, it can be measured as the delivered price of the commodity less all
associated economic costs, including all of the costs of barge transportation other than those of
the navigation project. This benefit, like the preceding one, cannot exceed the reduction in
transportation costs achieved by the project.
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(5) Use of Rates For Benefit Measurement. It is currently more difficult to accurately
compute the long-run marginal costs of particular rail movements on the basis of cost estimation
studies than to determine the rates at which railroad traffic actually moves. In competitive
markets, rates (prices) correspond to marginal cost, and, given market stability, prices will settle
at long-run marginal costs. Moreover, the rates actually charged determine the distribution of
traffic among modes. For these reasons, rates will be used to measure shift of mode benefits.
Section 7a of the Department of Transportation (DOT) Act of 1966 (Public Law 89-670) requires
the use of prevailing rates, as described in paragraph E-9d(5). In the case of new waterways, this
rate may or may not represent the best estimate of long-run marginal costs. In the case of
existing waterways, prevailing competitive similar rates are the best available approximation of
long-run marginal costs.
(6) Risk-based Analysis Procedure. Institute of Water Resources and HQUSACE staff
are currently in the process of developing risk-based analysis procedures for inland navigation
studies. Although these efforts are ongoing, preliminary indications are the following variables
should be explicitly incorporated in risk-based analysis; 1) commodity forecasts, 2) alternative
mode costs, 3) reliability of existing and proposed structures, and, 4) system delays associated
with capacity constraints. Additional variables can be incorporated if appropriate for individual
study areas. Districts are expected to incorporate risk-based analysis procedures in all inland
navigation studies. Until risk-based procedures are fully developed, districts are expected to, at a
minimum, perform sensitivity analysis of key variables.
c. Planning Setting.
(1) Without Project Condition. The without project condition is the most likely condition
expected to exist in the future in the absence of the navigation project or any change in law or
public policy. The without project condition includes any practice likely to be adopted in the
private sector under existing law and policy, as well as actions that are part of broader private and
public planning to alleviate transportation problems. The following specific assumptions are part
of the projected without project condition:
(a) Assume that all reasonably expected nonstructural practices within the discretion of
the operating agency, including helper boats and lock operating policies, are implemented at the
appropriate time. Substantial analysis is required to determine the best combination of
nonstructural measures to ensure the most effective use of an existing waterway system over
time. This analysis should be documented in project reports to assure the reviewer that the best
use of existing facilities will be made in the without-project condition and that the benefits of
alternative with project conditions are correctly stated. The criteria for the best utilization of the
system are overall public interest concerns, including economic efficiency, safety and
environmental impact.
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(b) User charges and/or taxes required by law are part of the without project condition.
Proposed or possible fees, charges, or taxes are not part of the without project condition but
should be considered as part of any nonstructural alternatives in the with project condition.
(c) The without project condition assumes that normal operation and maintenance will be
performed on the waterway system over the period of analysis.
(d) In projecting traffic movements on other modes (railroad, highway, pipeline, or
other), the without project condition normally assumes that the alternative modes have sufficient
capacity to move traffic at current rates unless there is specific evidence to the contrary.
(e) Alternative modes should be analyzed as a basis for identifying the most likely route
by which commodities will be transported in the future in the absence of waterway improvement.
(f) The without project condition normally assumes that only waterway investments
currently in place or under construction are in place over the period of analysis.
(2) With Project Condition. The with project condition is the most likely condition
expected to exist in the future if a project is undertaken. The same assumptions as for without
project condition underlie the with project condition. The following discussion relates to the
alternatives considered under the with project condition.
(a) Management of demand by the use of congestion or lockage fees is a nonstructural
alternative, which alone or in combination with structural devices may produce an economic
optimum in a congested waterway. Influencing marginal waterway users through a congestion
fee can increase the net benefits of a waterway. Evaluate alternatives that influence demand on
the same basis as supply-increasing (structural) alternatives. Because lockage time is a scarce
commodity, the imposition of a congestion fee will work to allocate this commodity in an
efficient manner. HQUSACE (CECW-PD) should be consulted for assistance in analyzing
congestion fees.
(b) Additional nonstructural measures not within the current purview of the operating
agency may be considered “supply management” measures. One example is traffic management.
These supply-increasing (nonstructural) measures can be used alone or in combination with
other structural or nonstructural measures.
(c) Project alternatives can differ in their timing as well as in their physical
characteristics. Consider the optimal timing of projects and of individual project features in
project formulation, so as to maximize net benefits over time.
(d) Consider improvements in alternative transportation modes as part of the without
project condition only, as specified in paragraph E-9c.(1).
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d. Evaluation Procedure: General. Use the following 10 steps to estimate navigation
benefits. (See Figure E-1.) The level of effort expended on each step depends upon the nature of
the proposed improvement, the state of the art for accurately refining the estimate, and the
sensitivity of project formulation and justification to further refinement, especially as applied to
steps 6, 7, and 8.
(1) Step 1--Identify the Commodity Types. Identify the types of commodities susceptible
to movement on the waterway segment under consideration. The level of detail for each
commodity is not pre-specified; for example, in some cases “grains” is detailed enough, while
others, “corn,” “wheat” or “soybeans” is needed.
(a) New Waterways. Identify commodity types primarily by interviews of shippers and
by resource studies. Interviews will identify primarily the benefit potentials of a shift of mode;
resource studies will identify primarily the benefit potentials of shifts in origin-destination and in
new movements.
(b) Existing Waterways. Identify commodity types primarily by analysis of data on
existing use of the waterway segment under study; e.g., data from the Performance Monitoring
System (PMS) and the Waterborne Commerce Statistical Center (WCSC).
(2) Step 2--Identify the Study Area. The study area is the area within which significant
project impacts are incurred. The origins and destinations of products likely to use the waterway
are normally included in the study area, broken out by river segments.
(3) Step 3--Determine Current Commodity Flow. Gather current data for commodity
movements between origin-destination pairs susceptible to waterway movement as well as for
commodities currently transported by waterway.
(a) New Waterways. Identify the total tonnage that could benefit from using the
waterway. Obtain this information primarily by interviews of shippers. For benefits from shifts
in origin and destination and from new movements, care must be taken to identify whether such
movement would be likely to occur if waterway transportation were available; base this primarily
on interviews. Give particular attention to delivered price from substitute sources in the case of
benefits from shifts in origin and destination, and to resource and market analysis in the case of
benefits from new movements. Assess current transportation costs in the area.
(b) Existing Waterways. Identify uses beyond the existing use of the waterway to identify
commodities that might use the waterway in response to a reduced transportation charge.
(4) Step 4--Determine Current Costs of Waterway Use. Determine current costs of
waterway use for all the tonnage identified in step 3. Include in the waterway transportation cost
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the full origin-to-destination costs, including handling, transfer, demurrage, and prior and
subsequent hauls for the tonnages identified in step 3. Consider the effect of seasonality on
costs. In calculating the cost of prior and subsequent hauls, care must be taken to avoid
inappropriate aggregations and averaging of the costs of movements in situations in which there
is a wide geographic dispersion in ultimate origins and/or destinations, as in the case of grain
traffic.
(a) New Waterways. The current cost of the proposed waterway use represents the with
project condition; there are no without project costs for waterway transportation.
(b) Existing Waterways. Construct two arrays, one representing the without project and
one the with project condition. The difference between the two arrays reflects the reduction in
current delays and any gains in efficiencies resulting from the alternative under consideration.
(5) Step 5--Determine Current Cost of Alternative Movement. Determine the current cost
of alternative movement for all the tonnages identified in step 3. The cost includes the full
origin-to-destination costs, including costs of handling, transfer, demurrage, and prior and
subsequent hauls. Consider the effect of seasonality on costs. In calculating the costs of
gathering or distribution prior or subsequent to the primary line haul, care must be taken to avoid
inappropriate aggregations and averaging of the costs of movements in situations in which the
ultimate origins and/or destinations are widely dispersed, as the case of grain traffic. This
procedure uses price data when available as a proxy for the long-run costs of movement by other
modes. This step, combined with steps 3 and 4, generates a first approximation of the demand
schedule for waterway transportation given (1) the costs of transportation by alternative modes,
(2) current levels of production, and (3) the distribution of economic activity.
(a) New Waterways. In the case of rail movements, use the prevailing rate actually
charged for moving the traffic to be diverted to waterways. For traffic induced by the waterway
construct the rail rate as in step 5b.
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1.
Identify commodity
types
2.
Identify study areas
5.
Determine current cost
of alternative movement
3.
Determine current
commodity flow
4.
Determine current cost
of waterway
7.
Determine future costs of
alternative methods
6.
Forecast potential
waterway traffic
8.
Determine future cost of
waterway use
9.
Determine waterway
with and without project
10.
Compute benefit
Figure E- 1 Inland Navigation Benefit Evaluation Procedure
(b) Existing Waterways. Use rate and other price data when available to estimate the cost
of movement by alternative modes. In the case of rail movements, if the rate for that movement
is not now used, use prevailing rates that are (1) competitive, and (2) for movements similar to
the individual move that would occur without the project. Avoid the use of paper rates, i.e., rates
at which no significant amount of traffic is actually moved. A rate is “competitive” to the extent
that it is for traffic for which there is intra modal or intermodal competition within the relevant
markets. In identifying a “similar” movement, the factors considered may include geographic
location, degree of use, characteristics of terrain, backhaul, contract division, seasonality,
ownership of rolling stock, and physical rail connection to the shipper. It is the responsibility of
the analyst to select rates that, in his or her view, best represent the long-run marginal costs of the
movement. Cost estimates for particular movements may be useful in selecting the rate or rates
that best meet the criteria of competitiveness and similarity. If more than one competitive and
similar rate is identified, an average may be used. Assume that all water-compelled or watercompetitive rates are competitive and similar.
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(6) Step 6--Forecast Potential Waterway Traffic by Commodity. Develop projects of the
potential use of the waterway under study for selected years from the time of the study until the
end of the project life, over time intervals not to exceed 10 years. Document commodity projects
for the commodity groups identified in step 3.
(a) The usual procedure for constructing commodity projections is to relate the traffic
base to some type of index over time. Indices can be constructed by many different methods,
depending on the scope and complexity of the issue under consideration and the availability of
data and previous studies.
(b) Generally, OBERS (now BEA) projections are the demographic framework within
which commodity projections are made. There are many instances, however, in which a direct
application of OBERS-derived indices is clearly inappropriate. Frequently, there are
circumstances that distort the relationship between waterway flows and the economy described
by OBERS. Even when total commodity flows can be adequately described through the use of
indices derived from OBERS projections, factors such as increasing environmental concerns,
changes in international relations and trade, resource depletion, and other factors, may seriously
alter the relationship between waterway commodity flows and the economy described by
OBERS.
(c) If problems of the type described in paragraph b. above are identified, undertake
independent studies to ascertain the most appropriate method of projecting commodity flows.
The assessment of available secondary data forms the basis of these independent studies. These
data will assist in delineating the bounds on the rate of increase for waterway traffic, as well as
facilitate a better understanding of the problem. Supplement these data with (1) interviews of
relevant shippers, carriers, and port officials; (2) opinions of commodity consultants and experts;
and (3) historical flow patterns. Commodity projections can then be constructed on the basis of
the results of the independent studies.
(d) Generally, specific commodity studies are of limited value for projections beyond
approximately 20 years. Given this limitation, it is preferable to extend the traffic projections to
the end of project life through the use of general indices on a regional and industry basis. Such
indices can be constructed from the OBERS projections or other generally accepted multiindustry and regional models.
(7) Step 7--Determine Future Cost of Alternative Modes.
(a) Future cost per unit of each commodity will normally be the same as current cost. As
stated previously, the without-project condition normally assumes that the alternative modes
have sufficient capacity to move traffic at current rates unless there is specific evidence to the
contrary. This step combined with step 6 provides a time series of demand schedules specific to
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a particular commodity origin-destination pattern. Address the projection of any change in future
prices as indicated below.
(b) A future rate is a prevailing rate as defined in step 5. It reflects exclusively a shift in
rates because of projected changes in the volume of shipments on a given mode or a shift from
one mode to another (e.g., from rail to pipeline). To support such a shift, show that the increase
in volume is likely to lead to a change in rate; do not assume, for example, that an increase in
volume of traffic of a commodity from one area to another will automatically ensure a more
favorable high-volume rate.
(8) Step 8--Determine Future Cost of Waterway Use. Two separate analyses make up
this step. First, analyze the possibility of changes in the costs of the waterway mode for future
years for individual origin-destination commodity combinations. Second, analyze the
relationship between waterway traffic volume and system delay. Do this second analysis in the
context of the total volume of traffic on the waterway segments being studied for with and
without project conditions. This analysis will generate data on the relationship between total
traffic volume and delay patterns as functions of the mix of traffic on the waterway; it may be
undertaken iteratively with step 9 to produce a “best estimate.”
(9) Step 9--Determine Waterway Use, With and Without Project. At this point the
analyst will have a list of commodities that potentially might use the waterway segment under
study, the tonnages associated with each commodity, and the costs of using alternate modes and
the waterway, including system delay functions with and without the project over time. Use this
information to determine waterway use over time with and without the project based upon:
(a) A comparison of costs for movements by the waterway and by the alternative mode,
as modified by paragraph E-9d(7).
(b) Any changes in the cost functions and demand schedules comparing (1) the current
and future without project conditions and (2) the current and future with project condition.
Conceptually, this step should include all factors that might influence a demand schedule; e.g.,
impact of uncertainty in the use of the waterway; ownership of barges and special equipment;
level of service; inventory and production processes; and the like. As a practical matter, the
actual use of a waterway without a cost savings or nonuse of a waterway with a cost savings
depends on the knowledgeable judgment of navigation economists and industry experts.
(c) Account for the “phasing in” or “phasing out” of shifts from one mode to another in
the analysis. Base diversion of traffic from other modes to the waterway, and from the waterway
to other modes as the waterway becomes congested, on expected rate savings as adjusted by any
other factors affecting the willingness of users to pay or the speed of the response mechanism to
changes in the relative attractiveness of alternative modes. Specifically, determine diversions
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from congested waterways in the order of the willingness of users to pay for waterway
transportation. Divert users with the lowest willingness to pay first.
(d) Consideration must also be given to potential shifts in origin and destination pair due
to increased costs of future without project waterway use. Potentially, increased waterway costs
less than alternate mode costs may cause some traffic to divert to different origin – destination
pairs. This would be the case for commodities with relatively elastic demand for waterway
transportation. In these cases the analysis must be expanded to address this shift in origindestination pair.
(10) Step 10--Compute NED Benefits. Once the tonnage moving with and without a plan
is know and the alternative costs and waterway costs are known, total NED navigation benefits
can be computed at the applicable discount rate:
(a) For cost reduction benefits, the benefit is the reduction in cost of using or operating
the waterway; the cost of the alternative mode is a factor in determining whether the tonnage
would move both with and without the project but is not a factor in computing benefits. Cost
reduction benefits are generally limited to evaluation of existing waterways. The benefits for
current and future cost reductions are reflected by the difference in waterway costs (steps 4
and 8) with and without the project. Compare waterway cost data (steps 4 and 8) with the
alternative mode costs (steps 5 and 7) in order to determine the traffic flow by mode over time
(steps 3 and 6).
(b) For shift of mode benefits, the benefit is the reduction in costs when the alternative
movement is compared with the waterway. These benefits apply to new or existing waterways.
Cost differences between the alternative mode and the waterway mode (step 5 - step 4 x step 3
and step 7 - step 8 x step 6) will identify the shift of mode benefits over time.
(c) For shift or origin-destination benefits and new movement benefits, the benefit is the
value of the delivered product less the transportation and production costs with the project. The
transportation cost without the project (assuming the with project movement would have
occurred) is a factor in categorizing these benefits but is not a factor in computing them. The
upper limit of these benefits can normally be determined by computing reduction in
transportation charges achieved by the project. These can be a reduction in waterway costs (steps
4 and 8) with and without the project or changes in mode (steps 5, 4, 7 and 8).
e. Evaluation Procedure: Problems in Application.
(1) Changes in System Delays. Differences in system delays resulting from project
alternatives are difficult to compute. An assessment of system delays within the state of the
analytic art is necessary for a comprehensive benefit analysis. Delays at all points in the system
should be analyzed only to the extent that project formulation and evaluation are sensitive to such
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refinements, and to the extent that the state of the art permits accurate refinement of the estimate.
Appropriate proxy measures may be used in lieu of individual assessments at each element in the
system when evaluating system delays.
(2) Interaction of Supply and Demand Schedules. The entire evaluation procedure
(paragraph E-9d.) is based on an assumption that the supply and demand schedules are
independent; but in fact, they are not. This problem is most acute when considering the variance
in delays at high levels of lock utilization. Essentially, shippers will face not an expected delay
value but rather a highly uncertain delay value. Shippers’ response to uncertainty (as reflected in
the demand schedule) may be quite different from their response to an expected shipping cost (as
reflected by the intersect of the supply and demand schedules).
(3) User Fee Collection. The incremental collection of user charges, fees, or taxes is not
a NED benefit. It is a transfer or resources between the private and public sectors of the
economy, manifesting itself as resources committed to the proposed navigation system. The
increased collection of these charges, fees, or taxes is therefore considered a decrease in the
public sector’s contribution to the proposed system.
(4) Sensitivity Analysis. Project benefits are calculated on the basis of “the most
probable” with project and without project conditions. However, risk and uncertainty should be
addressed in the analysis of NED benefits and costs. In particular, major uncertainty exists in the
proper measure of savings to shippers, namely the difference in long-run marginal costs. To the
extent that rates or other prices vary from long-run marginal costs, savings to shippers will
contain a component of transfers varying from real resource savings. This element of uncertainty
should always be identified or acknowledged in estimates of benefits. In dealing with
uncertainty, three techniques may be used: establishing consistent sources of data, expanding the
data-gathering, and estimating the range of benefits. Use the following two specific approaches
to implement the third technique, and display the results in terms of their effects on project
benefits in tabular form in the project report.
(a) Pre-specified sensitivity analysis. Compute the following and include it in the report:
(1) Current tonnage, new waterway. For new waterways, compute benefits for the
recommended alternative on the basis of current phased-in tonnage (steps 3 and 9c), current rates,
and current fleet characteristics.
(2) Current rates, fleet. For both new and existing waterways, compute benefits for the
recommended alternative on the basis of tonnage over time, current rates (step 3), and current
fleet characteristics.
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(3) Growth beyond 20-year period. Compute the benefits for alternatives carried forward
for final display assuming no growth in tonnage or changes in fleet characteristics beyond 20
years in the future.
(4) Interest rate. For projects whose authorized discount rate is different from the current
discount rate, compute annualized benefits using the current rate.
(5) User charges. Estimate the effect on benefits of full recovery through user charges.
(b) Other. In addition, the report should contain such other sensitivity analyses as are
necessary to meet the objective of a clear, concise report presenting a range of benefit levels that
represent data and assumptions about which reasonable persons might differ. The following
discussion summarizes key data sources, including problems in their use.
(1) Interviews. Interview data may be used in steps 1 through 8. (Use only forms
approved by the Office of Management and Budget.) Collect data not available from secondary
sources by personal interviews. Use statistically sound techniques for selecting the interview
sample and for devising the questions. The questionnaire and a summary of responses should be
compiled and displayed in the final report in such a way as to prevent the disclosure of individual
sources. Describe the errors and uncertainty inherent in the sampling methods and responses.
(2) Other. The basic organizational source for systematically collected waterway data is
the Office of the Chief of Engineers.
f. Report and Display Procedures. Clear presentation of study results, as well as
documentation of key input data assumptions and steps in the analysis, will facilitate review of
the report. Tables E-2 through E-5 are suggested presentations for all reports that include
navigational objectives. In addition to detailed data on the NED benefits of a project, summary
tables may present useful information on other aspects of the project such as its impact on
commodity flows, on other modes of transportation, and on the location of economic activity.
(See tables E-2 to E-5).
E-10. NED Benefit Evaluation Procedures: Transportation, Deep-Draft Navigation
a. Purpose. This section presents the procedure for measuring the beneficial contributions
to national economic development (NED) associated with the deep-draft navigation features of
water resources plans and projects. Deep-draft navigation features include construction of new
harbors and channels and improvements to existing or natural harbors on the seacoasts to meet
the requirements of ocean going and Great Lakes shipping. Harbor improvements include such
structural projects as the construction of breakwaters and jetties to protect exposed harbors and
the provision of entrance channels, interior channels, turning basins, and anchorage areas.
Nonstructural deep-draft measures include improved traffic management and pilotage
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regulations. The Institute of Water Resources is currently developing risk-based analysis
procedures for deep-draft navigation studies. Unlike the current risk-based flood damage model,
the navigation model will integrate both benefit uncertainty, related to fleet and commodity
forecasts and vessel operating costs, with cost uncertainty related to dredging and disposal costs.
Districts are expected to continue to use risk and uncertainty techniques in all navigation studies,
at least in the form of sensitivity analyses, before field release of the risk-based navigation
models.
b. Conceptual Basis. The basic economic benefits from navigation management and
development plans are the reduction in transportation costs for commodities and the increase in
the value of output for goods and services. Specific transportation savings may result from the
use of larger vessels, more efficient use of large vessels, more efficient use of existing vessels,
reductions in transit time, lower cargo handling and tug assistance costs, reduced interest and
storage costs such as from an extended navigation season, and the use of water transportation
rather than an alternative land mode. Principal direct benefits are categorized as follows:
(1) Cost Reduction Benefits. If there is no change in either the origin or destination of a
commodity, the benefit is the reduction in transportation costs of quantities of the commodity
that would move with and without the plan resulting from the proposed improvement. Cost
reduction benefits apply in the following situations:
Table E- 2 Summary of Annualized NED Benefits For Alternative Projects
(Applicable discount rate: ____ )
Alternatives
1
2
3
X
Navigation benefits:
Cost reduction benefits ......................................................................
Shift of mode benefits........................................................................
Shift in origin-destination benefits .....................................................
New movement benefits ....................................................................
.................
.................
.................
.................
................
................
................
................
.................
.................
.................
.................
................
................
................
................
Total navigation benefits....................................................................
Other purpose benefits ........................................................................................
.................
.................
................
................
.................
.................
................
................
Total project benefits .........................................................................
Project costs.......................................................................................
.................
.................
................
................
.................
.................
................
................
Net benefits .......................................................................................
.................
................
.................
................
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Table E- 3 Time Phasing of NED Benefits For Recommended Project1
(Applicable discount rate: ____ )
Time Period1
Navigation benefits:
Cost reduction benefits:
Traffic volume
(103 tons/year) ......
Benefits ................
Shift mode benefit:
Traffic volume
(103 tons/year) ......
Benefits ................
Shift in origin-destination
benefit:
Traffic volume
(103 tons/year) ......
Benefits ................
New movement benefit:
Traffic volume
(103 tons/year) ......
Benefits ................
Decade2
Base
Years
Specify
1
2
3
4
5
AAE3
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
.................
.................
.................
.................
.................
.................
.................
.................
.................
...............
...............
...............
...............
...............
...............
...............
...............
...............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
...............
...............
...............
...............
.................
.................
...............
...............
..............
..............
..............
..............
...............
...............
...............
...............
.................
.................
...............
...............
..............
..............
..............
..............
...............
...............
.................
...............
..............
..............
..............
..............
..............
..............
..............
Total navigation benefits .........
Other purpose benefits .............................
Total project benefits ..............
1
Comparable tables may be made for all detailed alternatives.
2
Value for last year of decade. 3Average annual equivalent.
Table E- 4 Waterway Traffic and Delays, Without Project Condition
Time Period1
Current
Year
Waterway traffic (103 tons/year)...................................
(By major commodity group)......................
1
2
Base
Year
Decade
1
2
3
4
5
AAE2
................
..........
........
.......
.......
..........
........
..........
Delays (minutes/tow):
Study site ....................................................
Critical constraints ......................................
................
................
..........
..........
........
........
.......
.......
.......
.......
..........
..........
........
........
..........
..........
Total system .............................
................
..........
........
.......
.......
..........
........
..........
Delays (dollars/ton):
Study site ....................................................
Critical constraints ......................................
Total system .............................
................
................
................
..........
..........
..........
........
........
........
.......
.......
.......
.......
.......
.......
..........
..........
..........
........
........
........
..........
..........
..........
Value for last year of decade.
Average annual equivalent.
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Table E- 5 Waterway Traffic and Delays, With Recommended Project1
(Applicable discount rate: ____ )
Time Period1
Base
Year
Decade2
1
2
3
4
5
AAE3
Waterway traffic (103 tons/year).......
(By major commodity
group)................................
.............
.............
.............
.............
................
................
.............
.............
.............
.............
.............
.............
.............
.............
Delays (minutes/tow):
Study site ..........................
Critical constraints ............
.............
.............
................
.............
.............
.............
.............
.............
.............
................
.............
.............
.............
.............
.............
.............
.............
.............
................
................
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
................
.............
.............
.............
.............
Total system......
Delays (dollars/ton):
Study site ..........................
Critical constraints ............
Total system......
1
2
3
Comparable tables may be made for all detailed alternatives.
Value for last year of decade.
Average annual equivalent.benefits.
(a) Same commodity, origin-destination, and harbor. This situation occurs where
commodities now move or are expected to move via a given harbor with or without the proposed
improvement.
(b) Same commodity and origin-destination, different harbor. This situation occurs where
commodities that are now moving or are expected to move via alternative harbors without the
proposed improvement would, with the proposed plan, be diverted through the subject harbor.
Cost reduction benefits from a proposed plan apply to both new and existing harbors and
channels.
(c) Same commodity and origin-destination, different mode. This situation occurs where
commodities that are now moving or are expected to move via alternative land modes without
the proposed improvement would, with the proposed plan, be diverted through the subject harbor
or channel. Cost reduction benefits from a proposed plan apply to both new and existing harbors
and channels. Compute cost reduction benefits for alternate modes in accordance with
methodology described in paragraph E-9b.(3).
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(2) Shift of Origin Benefits. If there is a change in the origin of a commodity because of
a proposed plan but no change in destination, the benefit is the reduction in the total cost of
producing and transporting quantities of the commodity that would move with and without the
plan.
(3) Shift of Destination Benefits. If there is a change in destination of a commodity
because of a proposed plan but no change in origin, the benefit is the change in net revenue to the
producer for quantities that would move with and without the plan.
(4) Induced Movement Benefits. If a commodity or additional quantities of a commodity
are produced and consumed as the result of lowered transportation costs, the benefit is the value
of the delivered commodity less production and transportation costs. More precisely, the benefit
of each increment of induced production and consumption is the difference between the cost of
transportation via the proposed improvement and the maximum cost the shipper would be willing
to pay. Where data are available, estimate benefits for various increments of induced movement.
In the absence of such data, the expected average transportation costs that could be borne by the
induced traffic may be assumed to be half way between the highest and lowest costs at which any
part of the induced traffic would move.
c. Planning Setting. The planning setting consists of the physical, economic, and policy
conditions that influence and are influenced by a proposed plan or project over the planning
period. The planning setting is defined in terms of a without project condition and with project
condition.
(1) Without Project Condition. The without project condition is the most likely condition
expected to exist over the planning period in the absence of a plan, including any known change
in law or public policy. It provides the basis for estimating benefits for alternative with project
conditions. Assumptions specific to the study should be stated and supported. The basic
assumptions for all studies are:
(a) Nonstructural measures within the authority and ability of port agencies, other public
agencies, and the transportation industry determine changes that are likely to occur. These
measures consist of reasonably expected changes in management and use of existing vessels and
facilities on land and water. Examples are lightering, tug assistance, use of favorable tides, split
deliveries, topping-off, alternative modes and ports, and transshipment facilities.
(b) Alternative harbor and channel improvements available to the transportation industry
over the planning period include those in place and under construction at the time of the study
and those authorized projects that can reasonably be expected to be in place over the planning
period.
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(c) Authorized operation and maintenance is assumed to be performed in the harbors and
channels over the period of analysis unless clear evidence is available that maintenance of the
project is unjustified.
(d) In projecting commodity movements involving intermodal movements, sufficient
capacity of the hinterland transportation and related facilities, including port facilities, is assumed
unless there are substantive data to the contrary.
(e) A reasonable attempt should be made to reflect advancing technology affecting the
transportation industry over the period of analysis. However, the benefits from improved
technology should not be credited to the navigation improvement if the technological change
would occur both with and without the plan.
(2) With Project Condition.
(a) The with project condition is the one expected to exist over the period of analysis if a
project is undertaken. Describe the with project condition for each alternative plan. Since
benefits attributable to each alternative will generally be equal to the difference in the total
transportation costs with and without the project, the assumptions stated for the without project
condition are used to establish the with project condition for each alternative.
(b) Management practices that are sometimes within the discretion of a public entity and
are therefore subject to change in the with project condition include traffic management, pilotage
regulations, addition of berths, and additions or modifications to terminal facilities.
(3) Display. In the planning report, present the derivation and selection of with and
without project conditions in accordance with the following guidelines:
(a) State the assumptions specific to the study.
(b) Specify the significant technical, economic, environmental, social, and other elements
of the planning setting to be projected over the period of analysis. Discuss the rationale for
selecting these elements.
(c) Present the with and without project conditions in appropriate tabular and graphic
displays with respect to the elements selected above and as exemplified by Tables E-6, E-8, and
E-9.
d. Evaluation Procedures: General. Use the following steps to estimate navigation
benefits. The level of effort expended on each step depends upon the nature of the proposed
improvement, the state-of-the-art for accurately refining the estimate, and the sensitivity of
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project formulation and evaluation to further refinement. A flow chart of navigation evaluation
procedures is shown in Figure E-2. Additional detailed support material for conducting NED
evaluation may be found in Deep Draft Navigation (IWR Report 91-R-13, October 1987). This
manual provides an expanded description of benefit evaluation procedures for all commercial
navigation projects not a part of the inland waterways system. It also provides sources of
information to identify and estimate future project use. Policy statements in this regulation take
precedence in any apparent contradiction suggested by information contained within this IWR
report.
(1) Step 1--Determine the Economic Study Area. Delineate the economic study area that
is tributary to the proposed harbor and channel improvement. Assess the transportation network
functionally related to the studied improvement, including the types and volumes of commodities
being shipped, in order to determine the area that can be served more economically by the
improvement. Include foreign origins and destinations in this assessment. Consider diversion
from or to adjacent competitive harbors as well as distribution via competing modes of transport.
It should be recognized that the lines of demarcation for the economic study area are not fixed
and that the area may expand or contract as a result of innovations or technological advances in
transportation or production or utilization of a particular commodity. The economic study area is
likely to vary for different commodities. Combinations of economic areas will result in a trade
area delineated specifically for the improvement under study. However, in many cases, due to
the close proximity of adjacent harbors to the proposed improvement, the economic study area
may be the same as, or overlap with, such adjacent harbors. Therefore, the final delineation of
the economic study area for a given improvement, should adequately discuss the trade area
relative to adjacent ports and any commonality that might exist.
(2). Step 2--Identify Types and Volumes of Commodity Flow. To estimate the types and
volumes of commodities that now move on the existing project or that may be attracted to the
proposed improvement, analyze commerce that flows into and out of the economic study area.
This analysis provides an estimate of gross potential cargo tonnage; the estimate is refined to
give an estimate of prospective commerce that may reasonably be expected to use the harbor
during the period of analysis in light of existing and prospective conditions. If benefits from
economies of ship size are related to proposed deepening of the harbor, the analysis should
concentrate on the specific commodities or types of shipments that will be affected. Thus, an
historical summary of types and trends of commodity tonnage should be displayed. The
considerations generally involved in estimating current volumes of prospective commerce are
discussed in the following paragraphs.
(a) If the plan consists of further improvements to an existing project, statistics on current
waterborne commerce will provide the basis for evaluation. For new harbors with no existing
traffic, or for existing commodity movements that may be susceptible to diversion from adjacent
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Figure E- 2 Deep-Draft Navigation Benefit Evaluation Procedure
harbors, basic information is collected by means of personal interviews or questionnaires sent to
shippers and receivers throughout the economic study area. Secondary commercial data are
usually available through State and local public agencies, port records, and transportation
carriers. In the case of new movements, give attention of resource and market analyses.
(b) After determining the types and volumes of commodities currently moving or
expected to move in the economic study area, it is necessary to obtain origins, destinations, and
vessel itineraries in order to analyze the commodity types and volumes that are expected to
benefit from the proposed improvement. Commodities that are now moving without the project
but would shift origins or destinations with the project, as well as induced movements, should be
segregated for additional analysis (see steps 5 and 6). A study should be made of various
alternatives for the existing traffic and of new traffic susceptible to diversion from alternative
harbors or other modes of transportation. The objective of such a study is to determine the type
and volume of those commodities for which savings could be affected by movement via a
proposed navigation improvement and the likelihood that such movements would occur. Cost
reduction benefits sufficient to divert traffic from established distribution patterns and trade
routes are navigation project benefits. In determining the likelihood of prospective commerce,
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particular attention should be given to alternative competitive harbors in the case of new
movements and to hinterland traffic. Elements of analysis of current tonnage include: size and
type of vessel, annual volume of movements, frequency of movements, volume of individual
shipments, adequacy of existing harbor and transportation facilities, rail and truck connections,
and service considerations. Generally this prospective traffic is the aggregate of a large number
of movements (origin-destination pairs) of many commodities; the benefit from the navigation
project is the savings on the aggregate of these prospective movements.
(3). Step 3--Project Waterborne Commerce. Develop projections of the potential use of
the waterway under study for selected years from the time of the study until the end of the project
life, over time intervals not to exceed 10 years. Document commodity projections for the
commodity groups identified in step 2.
(a) The usual procedure for constructing commodity projections is to relate the traffic
base to some type of index over time. Indices can be constructed by many different methods,
depending on the scope and complexity of the issue under consideration and availability of data
and previous studies.
(b) Generally, Bureau of Economic Analysis (BEA), previously OBERS, projections are
the demographic framework within which commodity projections are made. There are many
instances, however, in which a direct application of BEA-derived indices is clearly inappropriate.
Frequently, there are circumstances that distort the relationship between waterway flows and the
economy described by BEA. Even when total commodity flows can be adequately described
through the use of indices derived from BEA projections, factors such as increasing
environmental concerns, changes in international relations and trade, resource depletion, and
other factors, may seriously alter the relationship between waterway commodity flows and the
economy described by BEA.
(c) If problems of the type described in paragraph (b) above are identified, undertake
independent studies to ascertain the most appropriate method of projecting commodity flows.
The assessment of available secondary data forms the basis of these independent studies. These
data will assist in delineating the bounds on the rate of increase for waterway traffic, as well as
facilitate a better understanding of the problem. Supplement these data with (1) interviews of
relevant shippers, carriers, and port officials; (2) opinions of commodity consultants and experts;
and (3) historical flow patterns. Commodity projections can then be constructed based on the
results of the independent studies.
(d) Generally, specific commodity studies are of limited value for projections beyond
approximately 20 years. Given this limitation, it is preferable to extend the traffic projections to
the end of project life using general indices on a regional and industry basis. Such indices can be
constructed from the BEA projections or other generally accepted multi-industry and regional
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models. Describe projection methods selected in sufficient detail to permit a review of their
technical adequacy.
(e) Sensitivity analysis of several levels of projections is used for the economic analysis.
There may be high-level projection embodying optimistic assumptions and a low-level projection
based on assumptions of reduced expectations. The high and low projections should bracket the
foreseeable conditions. The third and fourth levels of projections can reflect the with- and
without-project conditions based on the most likely estimates of the future. If a proposed plan
would not induce commodity growth, one level of projection may be shown for both the with and
without project conditions.
(f) The commodities included in the projections should be identified, if possible,
according to the following waterborne modes: containerized, liquid bulk, dry bulk, break-bulk,
etc. Projection-related variables include estimated value, density, and perishability. Imports,
exports, domestic shipments, domestic receipts, and internal trade should also categorize the
commodities. Projected tonnages by trade areas both with and without the project should be
displayed at least for the study year, the base year, fifth year, tenth year, and then by decades over
the period of the analysis.
(g) Most projections of waterborne commerce are static estimates of dynamic events;
therefore, the projections should be sufficiently current to support the report conclusions.
(4) Step 4--Determine Vessel Fleet Composition and Cost.
(a) Vessel Fleet Composition. Key components in the study of deep-draft harbor
improvements are the size and characteristics of the vessels expected to use the project. Present
data on past trends in vessel size and fleet composition, and on anticipated changes in fleet
composition over the project life. Use estimates of future fleet consistent with domestic and
world fleet trends. Undertake studies to the extent necessary to determine the appropriate vessel
fleet. The assessment of available secondary data forms the basis of the independent studies.
Data may be obtained from various sources including the U.S. Department of Transportation
(Maritime Administration), trade journals, trade associations, shipbuilding companies, and vessel
operating companies, as well as forecasts collected and prepared by IWR. Determine the
composition of the current and future fleet that would utilize the subject harbor with and without
the proposed improvement. Provide adequate lead time for anticipated changes in fleet
composition for vessels that are currently a small part of the world fleet. Size selection may vary
according to trade route, type of commodity, volume of traffic, canal restrictions, foreign port
depths, and lengths of haul. It may not be realistic to assume that the optimum size vessel is
always available for charter; the preferred approach is a fleet concept that includes a range of
vessels expected to call with and without the project. It is suggested that tabulations in the
reports show composition of vessel fleets by deadweight tonnage for each type of vessel
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beginning with the current fleet and by decades through the period of analysis. Historical records
of trips and drafts of vessels calling at the existing project should also be displayed.
(b) Vessel Operating Costs. To estimate transportation costs, obtain deep-draft vessel
operating costs for various types and classes of foreign and United States flag vessels expected to
benefit from using the proposed improvement. Since vessel operating costs are not readily
available from ocean carriers or from any central source, the Corps of Engineers, Water
Resources Support Center, will develop and provide such costs on an annual basis for use in plan
evaluation. Planners should determine to what extent these estimates of vessel costs must be
modified to meet the needs of local conditions. Document and display selected vessel operating
costs in the report.
(5) Step 5--Determine Current Cost of Commodity Movements. Determine
transportation costs prevailing at the time of the study for all tonnage identified in Step 2.
Transportation costs include the full origin-to-destination cost, including necessary handling,
transfer, storage, and other accessory charges. Construct costs for the with and without project
condition. The without project condition is based on costs and conditions prevailing at the time
of the study. Transportation costs with a plan reflect any efficiencies that can be reasonably
expected, such as larger vessels, increased loads, reduction in transit time and delays (tides), etc.
Use competitive rates, rather than costs, for competitive movements by land (See paragraphs E10b.(1)(c), E-9b.(5), and E-9d.(5)(b)). This concept also applies to Steps 6, 7, and 9 and
elsewhere where a competitive movement by land is an alternative.
(6) Step 6--Determine Current Cost of Alternative Movement. Determine transportation
costs prevailing at the time of the study for all tonnage identified in Step 2 for alternative
movements. The cost includes the full origin-to-destination cost. Such alternatives include
competitive harbors, lightering, lightening and topping-off operations, off-shore port facilities,
transshipment terminals, pipelines, traffic management, pilotage regulations, and other modes of
transportation. Consider competitive harbors with existing terminal facilities and sufficient
capacities as possible alternatives for traffic originating in or destined to the hinterland beyond
the confines of the harbor and for all other new commerce as well as all diverted traffic.
Commerce with final origins and destinations within the confines of the study harbor is normally
noncompetitive with other harbors and need not be considered for diversion unless unusual
circumstances exist. Diversion of established commerce now moving through the existing
harbor to or from the hinterland is dependent on many different cost and service factors;
therefore, to ensure that all of these factors are included in the analysis, interviews, and
consultations with shippers and receivers should be conducted prior to any determination
concerning diversion of traffic. Factors to be considered in the analysis include transportation
costs for both inland and ocean movement, handling and transfer charges, available service and
schedules, carrier connections, institutional arrangements, and other related factors. In addition,
for commodities with shifts in origins and destinations, as well as for new movements, collect
data on the value of the delivered product as well as production and transportation costs for
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shipments with the project. The specific data and method of collection will vary with the specific
situation and the nature of the benefit.
(7) Step 7--Determine Future Cost of Commodity Movements. Estimate relevant
shipping costs during the period of analysis and future changes in the fleet composition, port
delays, and port capacity under the with and without project conditions for each alternative
improvement under study. Base future transportation costs on the vessel operating cost
prevailing at the time of the study. Additional data may be needed to analyze the relationship
between total volume and delay patterns and the port capacity for the with and without project
conditions for each alternative. Changes in costs due to the project should be identified and
separated from changes due to other factors.
(8) Step 8--Determine Use of Harbor and Channel With and Without Project. At this
point, the analyst will have a list of commodities that potentially might use the proposed
improvement; potential tonnages of each commodity or commodity group; transportation costs
for alternatives and for the proposed improvement; and present and future fleet composition with
and without the proposed plan. To estimate the proposed harbor use over time, both with and
without the project, compare costs, other than projects costs, for movements via the proposed
plan and via each alternative. Analyze any changes in the cost functions and demand schedules
in the current and future without condition and the current and future with condition.
Conceptually, this step includes all factors that might influence a demand schedule. Determine
the impact of uncertainty in the use of the harbor, the level of service provided, and existing and
future inventories of vessels. Provide adequate lead time for adoption for vessels that are
currently a small percentage of the world fleet.
(9) Step 9--Compute NED Benefits. Once the tonnage moving with and without a plan
is known and the cost via the proposed harbor and via each alternative are known, compute total
NED navigation benefits will be computed using the applicable discount rate.
(a) Cost Reduction Benefits.
(1) Traffic with same commodity, origin-destination, and harbor. For traffic now using
the harbor or expected to use it, both with and without the proposed project, the transportation
benefit is the difference between current and future transportation cost for the movement by the
existing project (without project condition) and the cost with the proposed improvement (with
project condition).
(2) Traffic with same origin-destination; different harbor. For commerce shifted to the
proposed improvement from other harbors or alternatives, including future growth, the benefit is
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any reduction in current and future costs when movement via the proposed improvement is
compared with each alternative.
(3) Traffic with same commodity and origin-destination, different mode. For commerce
shifted to the proposed improvement from other modes, the benefit is any reduction in current
and future costs to the producer or shipper. (See paragraph E-10b(1)(c) when movement via the
proposed improvement is compared with each alternative.)
(b) Shift of Origin Benefits. For commerce that originates at a new point because of the
proposed improvement, the benefit is the difference between the total cost of producing and
transporting the commodity to its destination with and without the plan.
(c) Shift of Destination Benefits. For commerce that is destined to a new point because
of the proposed improvement, the benefit is the difference in net revenues to producers with and
without the plan.
(d) Induced Movement Benefits. If a commodity or additional quantities of commodity
are produced and consumed as a result of a plan, the benefit for each increment of induced
production and consumption is the difference between the cost of transportation via the proposed
improvement and the maximum cost the shipper would be willing to pay. To determine the
maximum cost other shipper would be willing to pay, estimate how much of a price increase it
would take to induce the producer to increase its output by each increment or how much of price
decrease it would take to induce consumers to increase their consumption by each increment. In
the absence of data suitable for incremental analysis, the expected average transportation costs
that could be borne by the induced traffic may be assumed to be half way between the highest
and lowest costs at which any part of the induced traffic would move.
e. Problems in Application.
(1) Multiport Analysis. This procedure calls for a systematic determination of alternative
routing possibilities, regional port analyses, and intermodal networks that may require the use of
computer modeling techniques. The data needed for such a determination are often difficult to
obtain; therefore, interviews with knowledgeable experts will often have to be relied upon.
(a) The economic study area tributary to the proposed harbor project is likely to vary for
different commodities because of differences in hinterland transportation costs and facilities, and
presence of competing ports. The trade area for any given port must be defined in cognizance of
trade areas for adjacent or competing ports.
(b) Potential reductions in transportation costs due to a proposed project result in
transportation benefits with varying degrees of certainty. The certainty of the benefit is related to
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the certainty that the commodity movements will take place, with benefits for existing
movements most certain. Analysis of potential or prospective movements must consider
competing ports, hinterland transportation, vessel itineraries, ultimate origins or destinations of
commodities, and assess the certainty with which benefits will accrue.
(c) A port study must recognize the degrees to which the ships that call or might call at
that port are part of a larger waterborne transportation system. Specifically, the characteristics of
vessels and the composition of the vessel fleet are affected in varying degrees by changes in costs
or conditions at one port. A proposed deepening at a particular port, for example, may have more
effect on some ships calling there than others if the ships have different modes of operation.
Some bulk carriers may be affected because only one other port is served, while container
operations may not be much affected because several additional ports are served. The size and
characteristics of ships expected to use a project shall be determined in light of the transportation
systems in which they operate, as well as world and domestic trends in fleet composition.
(d) US ports operate in a system(s). A study that appropriately considers a port in
isolation will be rare. In such a case the report shall document why systems considerations are
not relevant.
(2) Ultimate Origins and Destinations. The procedure calls for an analysis of full origindestination costs to determine routings as well as to measure benefits in some instances.
Problems will arise in determining the ultimate origins and destinations of commodities and in
determining costs. Therefore, the analyst should attempt to shorten the analysis to the most
relevant cost items.
(3) Underkeel Clearance and Risk Analysis. The purpose of Corps of Engineers’
underkeel design standards is to provide clearance between a ship’s bottom and a channel’s
bottom, which minimizes the risk of grounding by a design vessel under design conditions in the
design channel. That is, underkeel clearances are engineering judgment on the minimum amount
of clearance to assure safety and do not necessarily reflect actual behavior. When ships appear to
operate with substandard underkeel clearances, procedures for correct delineation of
transportation costs and project benefits may seem ambiguous.
(a) The starting point in analysis is to develop an accurate picture of the existing
conditions. Accurate information on operating practices is particularly important; without this,
reasonable without-project and with-project conditions, and hence economic analysis, is not
possible. Entering and departing vessel drafts in economic analyses shall reflect actual practices.
Adherence to Corps’ clearance standards shall not be assumed.
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(b) Determine whether observed apparent deviations from underkeel clearance standards
represent actual encroachments in the safety zone. Apparent encroachments may be due to ships’
physical characteristics (e.g. size) and operating characteristics (e.g. speed, trim) which differ
from the design ship’s characteristics, or from navigation conditions (e.g., wave climate) less
severe than the design conditions. Alternatively the apparent deviations may be due to use of
favorable tides or lake levels, or to exploitation of actual channel depths which differ from
authorized depths. Benefits shall be based on differences in transportation cost, taking into
account without-project actual operating practices and with-project actual operating practices.
Adjustments may be taken, as appropriate, to the extent that these practices themselves affect
transportation costs (e.g., tidal delays, costs of reduced speed or changing trim).
(c) For cases where it is determined that encroachment in the safety zone is taking place,
risk accepting behavior may be assumed. The following benefit evaluation logic will be used:
Transportation firms will accept risk up until the point where the incremental revenue from
accepting risk equals the incremental risk cost of doing so. Estimate the incremental revenue
associated with navigation at successively deeper drafts (I. e. smaller clearances) for those ships
which use the safety zone. Estimate the risk costs (e.g., probability weighted cost of grounding)
for those ships. Equilibrium between incremental revenue and incremental risk cost may be
assumed to occur at the actual operating drafts (clearances) of those ships. Benefits are the area
under the incremental revenue curve and costs are the area under the incremental risk cost curve,
between the without and with operating depths.
(4) User Fees. The Water Resources Development Act of 1986 enabled non-Federal
interests, as a means of financing a harbor project’s local cost share, to collect user fees from
vessels. Non-Federal interests are not directed to use fees to finance the local cost share, but if a
fee is used only the benefiting vessels may be assessed charges.
(a) At the time of feasibility studies it may not be known with certainty whether user fees
will be charged. The with-project condition for economic analysis shall use planners’ best
appraisal regarding the likelihood of fees being assessed, taking into account the intentions of the
non-Federal interest, practices at other ports, the willingness of vessels to pay user fees, and the
competitiveness of alternative ports in light of fees at the project port.
(b) As a sensitivity, conduct an analysis using the alternative assumption.
(c) For cases with user fees, assess the effect of the fees on transportation rates and the
levels of traffic at the project port, taking into account the type of use fee (e.g., ad valorem, lump
sum, etc.). That portion of transportation charges to shippers that reflects user fees is credited as a
benefit of the project. The fees are in effect a reimbursement of project costs which are otherwise
accounted for in the benefit-cost analysis.
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(5) Sensitivity Analysis. Districts are expected to use risk and uncertainty techniques in
all deep draft navigation studies at least in the form of sensitivity analysis. The uncertainty in the
estimates of critical variables should be analyzed. These variables specifically related to deepdraft navigation may be traffic projections, especially foreign shipments, fleet composition, and
cost of commodity movements.
(6) Data Sources. The following discussion summarizes key data sources including
problems in their use:
(a) Interviews. Collect data not available from secondary sources by personal interviews.
(Use only interview forms approved by the Office of Management and Budget.) Display the
questionnaire used and summary of responses in the project report in such a way that individual
sources are not disclosed.
(b) Publications. Data concerning commerce in foreign trade, United States coastal
shipping, and activities of U.S. flag vessels in foreign trade, together with limited data
concerning the world fleet, are readily available from a number of Federal agencies, trade
journals, and port publications. However, data concerning the foreign-flag fleet are often not
regularly available in up-to-date form from sources in the United States. Principal governmental
sources are the U.S. Army Corp of Engineers, the Maritime Administration and the Bureau of the
Census. For more detailed background on world fleet trends, shipping outlooks, and vessel
characteristics, available foreign literature must be carefully analyzed. A few of the available
foreign ship registers and literature are listed below to illustrate the type of data available from
foreign sources. Many of these sources are available through IWR.
•
•
•
•
•
Lloyd’s Register of Shipping, London (Annual).
The Tanker Register, H. B. Clarkson (Annual).
The Bulk Carrier Register, H. B. Clarkson (Annual).
Shipping Statistics and Economics (and special reports), H. P. Drewry, London (Weekly).
Fairplay International Shipping Journal (and special reports), London (Weekly).
f. Report and Display Procedures. Clear presentation of study results, as well as
documentation of assumptions and steps in the analysis, will facilitate review of the report.
Tables E-6 to E-9 are suggested. The number of displays will depend on the complexity of the
study.
Table E- 6 Projected Vessel Fleet Size Distribution,a
Ft. Channel Plan
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(by Percentage)
Percentage of tonnage
Vessel size (D.W.T.)
Currentb
Base
Yearc
Year
5
Year 10
Total
With Project
Total
Without Project
Year 20
Year
—
Year end
Table E- 7 Typical Vessel Dimensions of Vessel Fleet
by Type and Deadweight Tonnage
Type
Vessel characteristics
DWT
Length
Beam
Draft, loaded
Table E- 8 Projected Commerce for Deep-Draft Traffic
Commodity
1
Current
Year2
Base
Year3
Year
5
Year
10
With project
Without Project
1
Commodities should be categorized by trade area.
Study year.
3
First year of project benefits.
2
E-53
Year
20
Year
—
Year
—
Year
end
Average
Annual
ER1105-2-100
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Table E- 9 Projected Vessel Trips for Deep-Draft Traffic
Commodity
1
Current
Year2
Base
Year3
Year
5
Year
10
Year
20
Year
—
Year
—
Year
end
Average
Annual
With project
Without Project
1
Commodities should be categorized by trade area.
Study year. 3First year of project benefits.
2
g. New Waterways. Determine the origins and destinations primarily by interviews of
shippers and by resource studies.
h. Existing Waterways. Determine origins and destinations by analysis of data on
existing use of the waterway segment under study; e.g., PMS and WCSC traffic traced to its
ultimate origin and destination.
E-11. NED Benefit Evaluation Procedure: Commercial Fishing
a. Purpose. This section provides procedural guidance for the evaluation of the national
economic development (NED) benefits of water and related land resources plans to commercial
fishing. These procedures apply to marine, estuarine, and fresh water commercial fisheries for
both fish and shellfish.
b. Conceptual Basis.
(1) The NED benefits are conceptually measured as the change in consumers’ and
producers’ surplus as a result of a plan. However, since proper measurement of these quantities
ordinarily requires estimates of supply and demand elasticities, reasonable approximations may
be obtained by the following methods:
(a) When no change in aggregate fish catch is expected as a result of a plan (perhaps
because of an effective quota system), NED benefits may be measured as cost savings to existing
fish harvests.
(b) When the fish catch is projected to change as a result of a plan, but the change is too
small to affect market prices, a seasonally-weighted average of recent prices may be used to
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value the without and with plan harvests. In this case, it may be convenient for computational
purposes to break the total change in income into two parts: (a) the cost savings for the existing
(without plan) catch; and (b) the change in net income associated with the incremental catch.
This latter part may be measured as the change in total revenue due to the increased catch minus
the change in total cost due to harvesting the increased catch.
(c) When the additional fish catch is expected to affect market prices, the change in net
income may be estimated in two parts: (1) the cost savings for the existing, or without plan,
catch; and (2) the change in net income associated with the incremental catch. The incremental
gross revenue may be estimated by multiplying the change in catch by a price midway between
expected without and with plan prices. The incremental cost of the harvest is then subtracted
from the estimated incremental gross revenue.
(2) Harvest costs expected to vary between the with and without plan conditions should
be analyzed.
(a) These include the cost of equipment ownership and operation; harvesting materials;
labor and management; maintenance operation, and replacement. Examples of changed costs
include reduced travel time, reduced travel time to safe moorage in storm conditions, reduced
costs associated with more efficient or larger boats, reduced time awaiting favorable tides,
damage reduction to vessels or facilities, reduced fish spoilage, and reduced maintenance
expenditures. If costs associated with plan measures (e.g., dock costs, harbor facilities, etc.) are
included in the plan cost analysis, exclude them from harvest costs.
(b) Value purchased input at current market prices. Value all labor, whether operator,
hired or family at prevailing labor rates. Value management at 10 percent of variable harvest
costs and interest at plan discount rates.
(c) Project current production costs to the selected time periods; any changes should
reflect only changes in catch or physical conditions.
c. Planning Setting.
(1) Without Plan Condition. The without plan condition is the most likely condition
expected to exist in the future in the absence of any of the alternative plans being considered.
Several specific elements are included in the without plan condition:
(a) Habitat Condition. The biological resources consist of stocks of living resources
subject to commercial fishing, any living resources ecologically related to the stocks, the
migration pattern and reproduction rate of the stocks, and any physical characteristic of the
environment essential to these living resources.
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(b) The Institutional Setting. Existing and expected local, State, regional, national, and
international policies and regulations governing the harvest and sale of the affected species,
including the level of access to the fishery are included in the without plan condition. Other
revisions of such policies and rules of the alternative plans being studied.
(c) Nonstructural Measures. The effects of implementing reasonably expected
nonstructural measures. Nonstructural measures include prevention of pollution to the marine
environment or relocation of shore facilities.
(d) Market Conditions. Information on the without plan situation includes the projected
number of harvesters, the percentage of their time and capacity utilized, harvest technology, the
markets in which they buy inputs, fishing efforts, probable harvests, harbors and channels
utilized, ex-vessel price of harvests, and probable processing and distribution facilities. (See
paragraph E-11c(1).) Project market conditions that are consistent with the projected biological
and institutional conditions.
(2) With Plan Condition. The with plan condition is the most likely condition expected
to exist in the future with a given alternative. The elements and assumptions included in the
without plan condition are also included in the with plan condition. Special attention should be
given to tracing economic conditions related to positive or negative biological impacts of the
proposed plan.
d. Evaluation Procedure: General. Follow the steps described in the following
paragraphs to estimate NED benefits to commercial fishing from water or related land resources
plans. The level of effort expended on each step depends on the nature of the proposed project,
the reliability of data, and the degree of refinement needed for plan formulation and evaluation
(See Figure E-3). No specific risk-based procedures have been developed for commercial
fishing evaluations. In studies where commercial fishing benefits constitute a significant portion
of NED effects, FOAs are expected to perform, at a minimum, sensitivity analysis of key
variables such as harvest costs, harvest rates an/or ex-vessel prices. FOAs should incorporate
the key variables applicable to their specific study area in the risk-based analysis.
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Figure E- 3 Commercial Fishing Benefits Evaluation Procedures
(1) Step 1: Identify the Affected Areas. Identify the areas which the proposed alternative
plans will have biological impacts. Identify the areas in which the proposed alternative plans will
have economic impacts. Describe the process by which the biological and economic study areas
are linked.
(2) Step 2: Determine the Without Project Condition. Estimate the harvest of the
relevant species in physical terms if a plan is not undertaken. Include a detailed description of
the stock, including catch per unit of effort and whether the estimated harvest is at, or near, the
range of absolute decreasing returns. Describe the most likely set of institutional conditions that
would exist without a project. Estimate the total cost of harvesting the relevant species in each of
the relevant years if a plan is not undertaken. For each relevant species, determine the current
weighted ex-vessel price corrected for seasonal fluctuations.
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(3) Step 3: Determine Conditions That Would Exist With an Alternative Plan. Estimate
the harvest of the exploited stocks in each of the relevant years if an alternative plan is
undertaken. Estimate the seasonally corrected current price of the harvested species and the total
cost of harvesting in each of the relevant years if a plan is undertaken. This will require an
understanding of the economics of entry and exit for the fish harvesting industry, as well as the
effects of a change in harvest rates on the catch per unit of effort.
(4) Step 4: Estimate NED Benefits. Calculate the ex-vessel value of the harvest (output)
for each alternative plan and for the without plan condition. Determine the harvesting costs,
including non-project operation, maintenance, and replacement, for the level of catch (output)
identified by each alternative plan and the without plan condition. Compute the NED benefit
from an alternative plan as the value of the change in harvest less the change in harvesting cost
from the without plan condition to the with plan condition.
e. Problems in Application.
(1) As the harvest rate of living stocks goes up, it is possible to reach a range in which
the increases in annual harvesting efforts will actually produce a long-run decrease in the
quantities harvested. In the absence of effective limits on harvesting, it is possible that
commercial fishing will operate in this range of absolute decreasing returns. This is possible
because individual operators will compare only their revenues and costs; they will not be
concerned with the absolute productivity of the stock. This can be very important in determining
NED benefits because what may appear to be a positive effect (something that encourages an
increase in harvesting effort) may ultimately result in negative benefits (decreased total harvest
and increased total cost per unit of harvest).
(2) The fact that fish are common, as opposed to private, property creates special
problems in measuring NED benefits. Unless entry is restricted, excessive quantities of capital
and labor may enter a fishery; that is, entry may continue until the “economic rent” from the
living stock is dissipated. This excess entry will result in economic inefficiency in the utilization
of fishery resources because the value of the resulting extra output will be less than the social
opportunity cost of the entry. Some economic benefits may be realized but the total benefits will
not be as large as they might be if entry were restricted. Although evaluation of this potential has
been limited by the specification of the with and without plan condition in paragraph E-11c(1),
three specific points are worth of separate mention.
(a) Transitory benefits. Because the benefits from harvesting open-access fisheries tend
to be dissipated through entry of excess capital and labor, some NED benefits from commercial
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fishing can be transitory. It will therefore be necessary to determine how many years these
benefits will last and in what amounts for each year.
(b) Industry capacity. The excess capacity that will normally exist will make it difficult
to obtain a proper estimate of changes in cost associated with changes in harvests. In some
instances, idle boats will be available and the only additional costs will be operating costs. In
other instances, vessels that are already operating will be able to harvest the extra catch without
significant change in variable costs.
(c) Regulation. Because of the tendency of open-access fisheries to attract excess capital
and labor which can deplete the stocks, most commercial fishing operations are currently subject
to government regulations which stipulate the manner, time, place, etc., in which harvesting may
take place. These stipulations usually result in harvesting activity that is not as economically
efficient as it might be. These stipulations will therefore affect the size of NED benefits.
f. Data Sources.
(1) Data for annual harvests, demand, harvesting and processing costs, ex-vessel and
other prices, physical production, biological modeling, models or information about management
policies and regulations, and survey results are available from several Federal, State, and local
government agencies, universities (especially those with sea grant programs), private
organizations (such as industry groups, fishermen unions, or cooperatives), regional fisheries
management councils, and international commissions or organizations.
(2) Initial contacts should be made with the National Marine Fisheries Service Regional
Office, United States Coast Guard, State resource agencies having management or other
responsibility for the fishery or resource in question, and all local or regional fishery councils,
commissions, or institutes that have responsibility or jurisdiction or that are functioning within
the area affected by the project. Fisheries dynamics biologists at universities or at National
Marine Fisheries Service regional laboratories will be the best source of information on
biological effects and their repercussion in the market.
g. Report and Display Procedures.
(1) Clear presentation of study results, as well as documentation of key input data
assumptions and steps in the analysis, will facilitate review of the report. Table E-10 is a
suggested method of data presentation. Its use will provide the reader with information on
physical changes in output as well as value.
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Table E- 10 Commercial Fishing Benefits
Benefit
(1)
(2)
(3)
(4)
Years
Change in output..........................................................
Value of change in output (line 1 times
expected price).............................................................
Change in costs ............................................................
NED benefit (line 2 minus line 3)................................
1
2
3
..............
.............
.............
..............
..............
..............
.............
.............
.............
.............
.............
.............
(2) Because the benefits are broken down into annual flows, it will be possible to
determine if and when the open access nature of commercial fishing will lead to a dissipation of
any NED benefits provided by the project.
E-12. Navigation: Small Boat Harbors.
a. Introduction. Small boat harbor projects consist of Federal features (e.g. channels,
breakwaters), usually in combination with non-Federal features (e.g. docks, ramps, berthing or
mooring areas, dredging). Project outputs are enhanced access to recreational boating and sport
fishing opportunities, and commercial fishing activities. Benefit estimation for recreation
boating and sport fishing is conceptually no different than for other forms of recreation, and any
benefit estimation method may be employed as long as it reflects NED criteria. Charter fishing
craft, head boats and similar recreation oriented commercial activities are considered commercial
vessels for cost allocation purposes by law. Provided commercial recreation activities are
evaluated based on changes in net income to the owner/operator, project output will be
considered commercial navigation benefits. This change in net income measure of benefits is
appropriate only for existing vessels currently using harbor facilities.
b. Recreational Boating. Section VII of this appendix identifies three evaluation methods
for recreational boating: travel cost, contingent valuation (survey method) and unit day values.
All are acceptable for evaluating boating recreation benefits. The unit day value method is
applicable subject to restrictions (see paragraph E-48b.(4)(a).). The travel cost method employs
expenditures associated with travel to and use of a resource as input data in determination of
willingness to pay schedules. The contingent valuation method is a survey approach for
determining willingness to pay. It can be useful for a wide variety of evaluation problems, and
can be particularly applicable in valuing changes in quality (e.g. improved access in and out of
harbor due to provision of breakwater) where changes in the scale of a project are not substantial.
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Unit day values will ordinarily be chosen from the range of general recreation values (General
Recreation or General Fishing and Hunting) although selection from the range of specialized
recreation values (Specialized Fishing and Hunting and Specialized Recreation other than
Fishing and Hunting) will sometimes be acceptable when participation in specialized activities is
documented. Reduction of damage to boats and facilities may be a component of benefits. If
damage reduction benefits are estimated, care should be taken to avoid double counting of
benefits if other benefit estimation techniques are also used.
c. Commercial Fishing. Paragraph E-11 states that changes in net income to fish
harvesters or boat operators is the appropriate measure of NED benefits. Two considerations, the
habitat condition and the institutional setting, must be analyzed in planning reports. Reduction of
damage to boats and facilities is frequently a component of commercial fishing benefits, and may
apply as well to recreational boating. Reduced damages may be a part of the net income analysis
or it may proceed as a separate analysis (e.g. damage reduced to public facilities not included in
fish harvester’s net income). It is frequently convenient to treat this damage on a probabilistic
basis, i.e. product of probability of occurrence times dollar value of damage.
E-13. Federal and Non-Federal Participation.
a. Harbors and Waterways. Cost sharing is as modified by the Water Resource
Development Act of 1986 (Public Law 99-662), as amended.
(1) Studies, Planning, Engineering, and Design. See Table E-11.
Table E- 11 Navigation, PED
Non-Federal Share: Studies, Preconstruction Engineering and Design (PED)
Pre-construction
Commercial
Work
Navigation
Reconnaissance Study
-0Feasibility Study
50%
Preconstruction Engineering
and Design
25%
Recreational
Navigation
-050%
25%
Inland
Waterways
-0-0-0-
(a) Section 105(a) of Public Law 99-662 specifies a 50 percent non-Federal cost share for
all feasibility studies, except for studies of “inland waterway system” improvements. The law
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does not define that system, and current Army policy is to limit the exemption to the waterways
subject to waterway fuel taxes.
(b) Section 105(c) requires cost sharing of post-feasibility pre-construction engineering
and design. Preconstruction engineering and design (PED), is all engineering, design, and
planning, if any, accomplished after the feasibility phase. All preconstruction engineering and
design for all projects authorized in or subsequent to Public Law 99-662 is to be cost shared at 75
percent Federal and 25 percent non-Federal.
(2) Construction, Operation, and Maintenance. Sections 101, 102 and 103(c)(4) of Public
Law 99-662 specify the cost sharing for commercial harbor, inland waterway and recreational
navigation projects.
(a) Harbors, General Navigation Features. (See Table E-12) Section 101 specifies cost
shares for general navigation features that vary according to the channel depth: (20 feet or less,
greater than 20 feet but not more than 45 feet, and greater than 45 feet). For general navigation
features not changing depths, such as breakwaters, locks, channel widening, etc., cost sharing
shall be at the percentage applicable to the authorized or existing depth, whichever is greater.
The percentage applies as well to mitigation and other work cost shared the same as general
navigation features. The cost share is paid during construction. Section 101 also requires the
project sponsor to pay an additional amount equal to 10 percent of the total construction cost for
general navigation features. This may be paid over a period not to exceed thirty years, and
LERRs may be credited against it.
(b) Waterways. Section 102 of PL 99-662 and subsequent legislation specify 100 percent
Federal operation and maintenance on those parts of the inland waterways system paying fuel
taxes. Section 102 also directs that 50% of the cost of construction is to come from the general
fund of the treasury and 50% from the Inland Waterways Trust Fund. All other inland waterway
construction is cost shared as commercial or recreational harbors depending on purpose. See the
tables below, ER 1165-2-131, and Appendixes F and G for cost sharing percentages. If a project
crosses cost share depth ranges, use each applicable range to determine overall cost share.
Overdepth dredging is a maintenance strategy; cost sharing is at the nominal depth.
Table E- 12 Navigation, Construction and O&M
Non-Federal Share, Construction, Operation, and Maintenance
Commercial Navigation
Recreation
Inland
to 20’
>20 to 45’
>45’
Navigation
Waterways
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Construction
Gen‘l Nav.Features
Aids to Navigation
Service Facilities
LERR
Operation & Maint.
Gen. Nav. Features
(incl mitigation)
Aids to Nav.
Service Facilities
LERRD
10+10%1/
-0100%
100%
25+10%1/
-0100%
100%
50+10%1/
-0100%
100%
50%
-0100%
100%
-0-0-0-0-
-0-
-0-
50%
100%
-0-
-0100%
100%
-0100%
100%
-0100%
100%
-0100%
100%
-0100%
-0-
1/ Ten percent (10%) post-construction contribution is reduced by credit amount for
LERR.
b. Recreation. Section 103(c)(4) sets the non-Federal share of construction cost at 50
percent and O&M cost at 100 percent for recreation projects. For navigation projects these cost
shares apply to separable recreation costs and costs allocated to recreation.
c. Special Navigation Programs. (See Table E-13.) Cost sharing is in accordance with
program authorizations as amended by Public Law 99-662. Section 940 of Public Law 99-662
shifts all responsibility and costs for operation and maintenance of shore damage mitigation
projects to a non-Federal public agency. Section 939 of Public Law 99-662 increases Corps
authority to recover the cost of removing wrecks and obstructions from vessel owners, lessees, or
operators.
d. Land Creation or Enhancement at Inland Harbors. Federal participation in inland
waterway harbor improvements under the Civil Works program is not warranted when: (1) resale
or lease of the lands used for disposal of excavated material can recover the cost of the
improvements; or (2) the acquisition of land outside the navigation servitude is necessary for
construction of the improvements, or would permit local interest to control access to the project.
The latter case is assumed to exist where the proposed improvement consists of a new channel
cut into land.
Table E- 13 Navigation, Special Navigation Programs
Non-Federal Share, Special Navigation Programs
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Program
Removal of Wrecks, Obstruction
Snagging and Clearing
Drift & Debris Removal
Small Navigation Projects
Commercial navigation
Recreational navigation
Modification of Bridges
Project Induced Damages
Project damage only
Additional Purposes
Study
-050%
50%
Construction
100% recoverable
10+10% (<20’)
one-third
O&M
NA
NA
100%
50%
50%
-0-
10+10 (<20’)
-050%
100%
project % (after
100%
cost apportionment to
bridge owner)
-050%
project %
purpose %
100%
100%
Same as base plan
25%
100%
100%
Beneficial Uses of Dredged
Material for Ecosystem Restoration
(Section 204)
(Section 1135)
e. Land Creation at Harbors (Other Than Inland Harbors). Formulation and cost sharing
of harbor projects that include land creation benefits must be in accordance with the following
procedures.
(1) The NED plan relies on navigation benefits exclusively (land creation is not
considered in the net benefit evaluation). Special cost sharing is required; it is based on the
magnitude of land creation benefits relative to total benefits. The cost sharing formula is as
follows:
(a) Assign LERR to the non-Federal sponsor. (Full credit of LERR toward 10% of GNF)
(b) Special non-Federal (GNF) cost sharing is equal to:
(Land Creation Benefits for this plan) X (GNF Costs)
_________________________________________
Total Benefits for this Plan
(c) Remaining
GNF
costs are shared in
accordance with Section 101 of PL 99-662, as amended, as described in Paragraph E-13a.
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(2) Non-Federal requests for modification of the NED Plan formulated using navigation
benefits may be allowed provided all additional implementation costs are non-Federal and the
incremental navigation benefits equal or exceed the incremental O&M costs for the GNF. No
additional cost sharing will be required for the land creation benefits associated with the project
modifications beyond the NED Plan which are requested and paid for by non-Federal entities.
The cost sharing formula by which this policy is to be applied is as follows:
(a) The non-Federal share shall be the non-Federal costs determined in paragraph E13e.(1) plus 100 percent of the difference between the NED Plan and the cost of the requested
modified plan; or all costs not assigned to the Federal government under paragraph (b) below,
whichever is greater.
(b) The Federal share shall be the Federal costs determined in paragraph E-13e(1); or,
when the modified NED Plan results in a cost for GNF that is less than the cost for GNF for the
NED Plan, the Federal share of costs will be limited to the Federal percentage of the total GNF
derived in paragraph E-13e(1), times the cost of the GNF for the modified NED Plan.
f. Land Creation Requirements. Reports proposing land creation, where the lands are
necessary for development of port facilities to accommodate traffic, shall require the non-Federal
sponsor to ensure the lands are retained in public ownership for uses compatible with the
authorized purposes of the project. The non-Federal sponsor shall regulate the use, growth and
development on such lands for those industries whose activities are dependent upon water
transportation.
E-14. Special Considerations.
a. Study Authorities.
(1) Navigation Facilities Replacement. Continuing authority to study the replacement,
reconstruction, or rehabilitation of Congressionally authorized navigation improvements is
contained in Section 4 of the River & Harbor Act of 1884 as amended by Section 6 of the River
& Harbor Act of 1909. This study authority is no longer used.
(2) Review of Completed Projects. Authority to study completed projects and report
thereon to Congress, when advisable due to changed physical or economic conditions, is
contained in Section 216 of the River & Harbor and Flood Control Act of 1970. Studies are
initiated through the regular budget process as new reconnaissance starts.
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(3) Special Programs. Continuing authority to study certain small or special purpose
projects is contained in the legislation cited in “Special Navigation Programs” earlier in this
section. Those study authorities are used routinely.
(4) Specific Authorization. All other projects require specific authorization in the form of
legislation or resolutions by the appropriate committees of Congress.
b. Shoreline Changes. Pursuant to Section 5 of the River & Harbor Act of 1935 each
investigation on navigation improvements potentially affecting adjacent shoreline will include
analysis of the probable effects on shoreline configurations. A distance of not less than ten miles
on either side of the improvement should be analyzed.
c. Charter Fishing Craft, Head Boats, and Similar Recreation-Oriented Commercial
Activities. Section 119 of the River and Harbor Act of 1970 (Public Law 91-611), states, “The
Chief of Engineers, For the purpose of determining Federal and non-Federal cost sharing relating
to proposed construction of small-boat navigation projects, shall consider charter fishing craft as
commercial vessels.” This Act applies only to cost allocation and cost apportionment and does
not involve project evaluation in any way. Particularly, it does not determine consistency with
Corps primary missions. This depends on whether the benefits are commercial navigation or
recreation. Only if benefits to charter fishing craft are based on change in net income to the
owner/operators of vessels which would exist and operate in the without project condition can
commercial navigation benefits be claimed.
d. Subsistence Fishing. This is fishing, primarily for personal or family consumption, by
those whose incomes are at or below the minimum subsistence level set by the Department of
Commerce. For cost allocation purposes subsistence fishing is considered commercial fishing.
Subsistence fishing is not a high priority output however.
e. Coast Guard Coordination. The U.S. Coast Guard is responsible For Federal aids to
navigation and enforcement of navigation regulations. In addition to enforcing its own
regulations, the Coast Guard also administers and enforces speed limits, anchorage areas, and
other regulations issued under Corps authority. Corps districts should confer directly with the
Coast Guard concerning establishment or alteration of aids to navigation, and the regulation of
lighterage areas, anchorages and channels.
f. Permit Coordination. Formulation should consider whether associated or ancillary
sponsor activities (or project user activities) are required to achieve project benefits, and whether
Department of the Army (DA) permits are necessary. Examples are provision of
mooring/berthing areas, dredge material containment areas and landside infrastructure. Once
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activities are identified, a preliminary determination of whether they require DA permits, and of
what types (i.e., an individual permit, a letter of permission, an existing general permit or a
nationwide permit), will be made by the district regulatory element.
(1) When an activity likely will necessitate a DA permit it should be addressed in the
environmental documentation of the project as required by NEPA, the Section 404 (b) (1)
guidelines and other appropriate environmental statutes. It may be assumed that more detailed
analysis for permitting purposes will proceed concurrent with PED studies.
(2) DA permitting activities should be discussed at public meetings or workshops held
during planning or during PED. Public notices announcing meetings/workshops shall identify
sponsor activities that could require DA permits. Public meetings or workshops should be
coordinated with regulatory staff; coordination is particularly important if there is or will be an
abbreviated processing procedure or a special management plan.
(3) Normally, Coastal Zone Management (CZM) concurrence or Section 401 water
quality certification for an abbreviated processing procedure or special area management plan
should be obtained concurrently with those required for the Corps project. It remains the
responsibility of the project sponsor (or users) to obtain all required state and/or local permits.
g. Beneficial Use of Dredged Material. Construction and maintenance dredging of
Federal navigation projects shall normally be accomplished in the least costly manner possible
(ER 1130-2-520). Section 204 of the WRDA of 1992 established programmatic authority which
allows the Corps to carry out ecosystem restoration projects in connection with dredging for
construction, operation or maintenance of authorized navigation projects. Guidance for Section
204 is provided in Appendix F. Section 207 modifies Section 204 to allow the Corps select a
disposal method that is not the least cost if determined that the incremental costs are reasonable
in relation to the environmental benefits. Section 207 establishes an authority which is separate
and distinct from the authority established by Section 204. Section 207 projects are not subject
to the programmatic limitation of Section 204 and are budgeted through the standard
appropriation process. Cost-sharing and decision making criteria are described in the following
subparagraphs.
(1) Cost-Sharing. The cost-sharing for Section 207 projects is the same as Section 204
projects. The non-Federal interests must enter into a cooperative agreement in accordance with
the requirements of section 221 of the Flood Control Act of 1970 in which the non-Federal
interests agree to provide 25 percent of the cost associated with construction of the project for the
protection, restoration, and creation of aquatic and ecologically related habitats, including
provision of all lands, easements, rights-of-way, and necessary relocations; and pay 100 percent
of the operation, maintenance, replacement, and rehabilitation costs associated with the project.
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(2) Decision-Making Criteria. The decision making criteria is whether the incremental
cost is reasonable in relation to the environmental benefits achieved. Where the incremental
Federal costs is 25 percent of the total project cost or $300,000, whichever is less, the
incremental costs are judged to be "reasonable" in relation to the environmental benefits without
the need for detailed analysis. However, it must still be demonstrated that the environmental
resources to be protected, restored, or created are valuable, the environmental outputs can be
quantified and described and the environmentally beneficial disposal method is supported by
Federal and state resource agencies. The environmental disposal method would be subject to
appropriate National Environmental Policy Act requirements. For environmentally beneficial
disposal methods that have incremental Federal costs which exceed 25 percent or $300,000, the
incremental costs must be justified by demonstrating that the monetary and non-monetary
benefits (outputs) of the ecosystem restoration project justify its incremental costs using cost
effectiveness and incremental cost analysis. Where the environmentally beneficial use involves
separable increments each increment must be justified. Refer to Section V of this appendix for
further information on cost effectiveness and incremental cost analysis.
h. Placement of Dredged Material on Beaches for Hurricane and Storm Damage
Reduction. When placement of dredged material (beach quality sand) on a beach is the least
costly acceptable means for disposal, then such placement is considered integral to the project
and cost shared accordingly. In cases were placement of dredged material on a beach is more
costly than the least costly alternative, the Corps may participate in the additional placement
costs when: (1) requested by the state; (2) the Secretary of the Army considers it in the public
interest; and (3) the added cost of disposal is justified by hurricane and storm damage benefits
(see Section IV of this appendix). When all local cooperation requirements are met the Corps
may cost share the additional costs 50 percent (Section 933, WRDA 1986, as amended). In cases
where the additional costs for placement of the dredged material is not justified, the Corps may
still perform the work if the State requests it, and the state or other sponsor contributes 100
percent of the added cost. If the State requests, the Corps may enter into an agreement with a
political subdivision of the State to place the sand on its beaches, with the subdivision
responsible for the additional costs. The Corps should consider and accommodate to the degree
reasonable and practicable a state’s or subdivision’s schedule for providing its cost share. Each
placement event should be supported by a separate decision document. Subsequent decision
reports may be supplements to the original Section 933 decision document.
E-15. Dredged Material Management Plans. All Federally maintained navigation projects must
demonstrate that there is sufficient dredged material disposal capacity for a minimum of 20 years.
A preliminary assessment is required for all Federal navigation projects to document the
continued viability of the project and the availability of dredged material disposal capacity
sufficient to accommodate 20 years of maintenance dredging. If the preliminary assessment
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determines that there is not sufficient capacity to accommodate maintenance dredging for the
next 20 years, then a dredged material management study must be performed.
a. Policy.
(1) General.
(a) Sound management of dredged material is a priority mission of the Corps.
(b) The Corps is committed to conducting dredging and managing dredged material in an
environmentally sound manner.
(c) The interests of economic development and environmental sustainability will best be
served when dredged material placement proceeds according to a management plan. Therefore
each existing and proposed navigation project will have a dredged material management plan that
ensures warranted and environmentally acceptable maintenance of the project.
(d) Beneficial uses of dredged material are powerful tools for harmonizing environmental
values and navigation purposes. It is the policy of the Corps that all dredged material
management studies include an assessment of potential beneficial uses for environmental
purposes including fish and wildlife habitat creation, ecosystem restoration and enhancement
and/or hurricane and storm damage reduction. Districts and MSCs will make every effort to
ensure that sponsors and other interests understand the valuable contributions that beneficial uses
can make to management plans and will maximize use of regional forums to share experiences of
opportunities for beneficial uses.
(e) Dredged material management goals are to be achieved by District and Division
Commanders within existing delegations of authority. Exceptions to this principal are when
problems arise that are of such significance that HQUSACE or Administration commitment is
required such as changes in dredged material management practices that require substantial
capital investment.
(2) Requirements. Dredged Material Management Plans (Management Plans) shall be
prepared, on a priority basis, for all Federal navigation projects, or groups of inter-related harbor
projects, or systems of inland waterway projects (or segments).
(a) Priority will be given to projects for which existing dredged material disposal sites,
including existing confined disposal facilities, are expected to reach capacity or to no longer be
available sometime in the next 10 years, or
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(b) Existing and projected navigation usage of the project indicates that continued
maintenance of the project, or of any substantial increment thereof, may not be warranted.
(c) Management Plans shall identify specific measures necessary to manage the volume
of material likely to be dredged over a twenty year period, from both construction and
maintenance dredging of Federal channel and harbor projects. Non-Federal, permitted dredging
within the related geographic area shall be considered in formulating Management Plans to the
extent that disposal of material from these sources affects the size and capacity of disposal areas
required for the Federal project(s). In those cases where two or more Federal projects are
physically inter-related (e.g., harbors which share a common disposal area or a common channel)
or are economically complementary, one Management Plan may encompass that group of
projects.
(3) Base Plan. It is the Corps of Engineers policy to accomplish the disposal of dredged
material associated with the construction or maintenance dredging of navigation projects in the
least costly manner. Disposal is to be consistent with sound engineering practice and meet all
Federal environmental standards including the environmental standards established by Section
404 of the Clean Water Act of 1972 or Section 103 of the Marine Protection, Research and
Sanctuaries Act of 1972, as amended. This constitutes the base disposal plan for the navigation
purpose. Each management plan study must establish this “Base Plan”, applying the principles
set forth below.
b. Management Plan Development Principles.
(1) Existing Projects.
(a) Process. Management Plans are intended to cost effectively and expeditiously support
environmentally acceptable channel and harbor maintenance. Plan development shall employ a
phased process determining the appropriate scope and detail of required assessment. This
process will:
(1) Establish the Base Plan for the project;
(2) Include an assessment of the potential for beneficial uses of dredged material which is
proposed to be undertaken as separate plan elements pursuant to separate authority; and,
(3) Establish the Management Plan for the project, or if approval by higher authority is
required elsewhere in this guidance, the District Commander’s recommended Management Plan.
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(4) Demonstrate continued maintenance is economically warranted based on high priority
(non-recreation) benefits. If it cannot be demonstrated based on high priority benefits but would
otherwise be warranted considering recreation benefits, recommendations will state that project
is economically warranted using recreation benefits.
(b) Phases. Management Plan development shall proceed in the following phases:
(1) Preliminary Assessment. Preliminary assessments establish whether more detailed
study is required to establish a management plan, and, if so, provides information to justify the
study and permit its prioritization in the budgetary process. For many projects with readily
available maintenance and usage information, a preliminary assessment, based on indicators such
as annual O&M costs per ton of cargo, volume and frequency of traffic, and vessel dimensions,
may establish the Base Plan and confirm that continued maintenance appears to be warranted.
Where these conditions are met, the findings of the Preliminary Assessment would complete the
requirement for a Management Plan. Where these conditions are not met, the Preliminary
Assessment will recommend a Management Plan Study.
(2) Management Plan Studies. A Management Plan Study shall be required to establish
the Base Plan and the recommended Plan if basic indicators are inconclusive, or if attempts to
define the Base Plan disclose significant problems, a major new investment, or other significant
increase in maintenance costs. For example, the provision of a new confined disposal facility or
use of more distant ocean disposal site would trigger this requirement. Management Plan studies
shall be conducted in two phases: initial and final. The initial phase concentrates on developing
a detailed scope of work, and the final phase executes that scope of work.
(2) Proposed Projects. Feasibility and Pre-construction Engineering and Design (PED)
studies for proposed projects shall include a Management Plan in accordance with the criteria
and procedures herein, as applicable.
c. Study Authority. Preliminary Assessment and Management Plan studies shall be
conducted pursuant to existing authorities for individual navigation project feasibility studies,
PED, construction, or O&M, as provided in Congressional Committee study resolutions and
public laws authorizing specific projects. These specific study and/or project authorities are
supplemented by general authorities relating primarily to beneficial uses of dredged material, as
set forth in paragraph E-15f. Where Management Plan studies disclose the need to consider
expanding or enlarging existing projects, such studies may only be pursued under specific study
authority or under authority of Section 216 of the Flood Control Act of 1970.
d. Responsibilities.
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(1) Existing Projects. Operations functional elements have program management
responsibility for administering Dredged Material Management Plan preparation efforts for
existing Federal projects. Those responsibilities include prioritizing and budgeting studies and
providing subject matter expertise and guidance as members of the interdisciplinary study team.
Planning functional elements have study management responsibility for conducting the studies
required to implement effective dredged material management. Both elements have joint
functional responsibility to ensure efficient use of shared resources.
(2) Proposed Projects. Planning functional elements are responsible for administering
and conducting Management Plan studies for proposed projects. The Operations functional
elements are essential participants and assume on-going responsibility for dredged material
management following project completion.
e. Study Components.
(1) Alternatives. Management plan studies shall consider the full range of measures for
dredged material management including: management of existing disposal sites to extend their
life; various combinations of new disposal sites involving different disposal methods, disposal
area locations, and periods of use; and, measures to reduce dredging requirements, including
reduced dimensions. The Federal interest in continued O&M of an existing project for its
navigation purpose is defined by that project of maximum scale and extent, within project
authorization, for which continued maintenance is warranted in terms of vessel traffic and related
factors.
(2) Beneficial Uses. Each Management Plan study shall include an assessment of
potential beneficial uses of dredged material, for meeting both navigation and non-navigation
objectives, including fish and wildlife habitat creation and restoration, hurricane and storm
damage reduction, and recreation. Where a beneficial use is part of the Base Plan, it shall be
treated as a general navigation O&M component. Beneficial uses which are not part of the Base
Plan shall be considered separable elements of the management plan, and will be pursued in
accordance with guidance implementing other available authorities. However, even though
funded from different sources, the beneficial use planning effort must be pursued in conjunction
with the overall management plan effort to assure the timely availability of dredged material for
the beneficial use project. The beneficial use project site must be available to meet maintenance
dredging disposal needs.
(3) Study Involvement and Coordination. District Operations and Planning functions
must jointly ensure appropriate involvement of all resources and affected non-Federal interests in
Management Plan studies, as follows:
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(a) Interdisciplinary Analysis. The relevant professional disciplines needed to ensure
sound professional decisions are to be involved.
(b) Partnership. Project sponsors, local governments, port authorities, and other project
users and beneficiaries are partners in dredged material management, and have a key role as the
project proponents in building local consensus for the Management Plan. A potential key role is
played by the state governor to mediate sometimes competing state environmental, regulatory
and economic objectives. All those having a partnership interest must be informed and involved
throughout the course of all management plan studies.
(c) Review and Consultation. Federal, State and other public agencies with legal review,
consultation, or other regulatory responsibilities are to be involved. Dredged material disposal is
a multi-faceted issue, which involves both the water resources development, and regulatory
responsibilities of the Corps. It involves the regulatory, water quality, hazardous, toxic, and
radiological waste responsibilities of the U.S. Environmental Protection Agency (EPA) and state
agencies. It also involves the environmental resources protection and management
responsibilities of the National Marine Fisheries Service, the U.S. Fish and Wildlife Service and
various state agencies as well as the economic and regional economic development interests of
states, local governments, port authorities, maritime users and shippers.
(d) Public Involvement. Members of the public who are interested, likely to be affected,
or otherwise have a stake in outcomes are to be kept informed and appropriately involved.
(4) Environmental Consistency. Management Plans shall be consistent with protecting
the Nation’s environment, pursuant to national environmental statues, applicable executive
orders, and other Federal requirements. Management Plan studies shall address the requirements
of all applicable environmental statues for all disposal options considered, including the
requirements of the National Environmental Policy Act, Section 404 of the Clean Water Act,
Section 103 of the Marine Protection, Research and Sanctuaries Act, and the Coastal Zone
Management Act. Any dredged material assessment to determine compliance with the Clean
Water Act, Section 404(b)(1) guidelines, will be performed in accordance with the manual
“Evaluation of Dredged Material Proposed for Discharge in Inland and Near Coastal Waters:
Testing Manual”. The manual “Evaluation of Dredged Material Proposed for Ocean Disposal:
Testing Manual, commonly referred to as the “Green Book”, will be used for assessing material
proposed for ocean disposal under Section 102 of the Marine Protection, Research and
Sanctuaries Act. Regional variations of these two manuals, where approved by both the Corps
and EPA, may also be used.
f. Cost Sharing and Financing.
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(1) Management Plan Studies.
(a) Existing Projects.
(1) General. The cost of Management Plan studies for continued maintenance of existing
Federal navigation projects are O&M costs and shall be Federally funded. For harbor projects,
including inland harbors, such costs shall be reimbursable from the Harbor Maintenance Trust
Fund, subject to the following:
(a)Project sponsors, port authorities and other project users, are partners in dredged
material management and must pay the costs of their participation in the dredged material
management studies including participation in meetings, providing information and other
coordination activities.
(b) Budgeting priority for the navigation purpose is limited to the Base Plan. Therefore,
the cost for any component of a management plan study attributable to meeting local or state
environmental standards that are not provided for by the requirements of Federal laws and
regulations, shall be a non-Federal cost.
(c) Study activities related to dredged material management for the Federal project, but
not required for continued maintenance dredging and dredged material disposal, will not be
included in dredged material management studies unless funded by others.
(d) Studies of project modifications needing congressional authorization, including
dredged material management requirements related to the modification, will be pursued as
feasibility studies under the authority of Section 216 of the Flood Control Act of 1970.
(2) Beneficial Uses. The cost of studies for beneficial uses that are consistent with, and
part of, the Base Plan are Federal O&M costs. However, study costs for beneficial uses, which
are not part of the Base Plan, are either a non-Federal responsibility, or are a shared Federal and
Non-Federal responsibility. These include reconnaissance level studies needed to identify these
potential uses as part of management plan studies. Depending on the type of beneficial use, it
might also include:
(a) Ecosystem Restoration. The incremental costs of studies beyond those required for
the Base Plan for the use of dredged material to improve, restore and protect environmental
resources, pursuant to Section 204 of the WRDA of 1992 or Section 207 of the WRDA of 1996
are not navigation O&M costs. If a potential environmental improvement or ecosystem
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restoration beneficial use project exceeds the cost limitations of Section 204, it may be pursued
as a cost shared feasibility study leading to specific authorization, in accordance with existing
procedures.
(b) Placement of Materials on Beaches. The Corps of Engineers, under Section 933 of
the Water Resources Development Act of 1986, may participate in the additional costs of placing
clean sand or other suitable material on beaches. This may include material dredged by the
Corps during construction or maintenance of Federal navigation projects, and the placement onto
adjacent beaches or near-shore waters. This is only permitted if the added cost of placement is
justified primarily by the benefits associated with the hurricane and storm damage protection
provided by such beach or beaches, and the beach involved is open to the public with public
access. The non-Federal sponsor must provide 50 percent of the incremental study costs.
(c) Other Beneficial Uses. Other potential beneficial uses include placement of dredged
material for land creation or land enhancement for development purposes, disposal of material on
beaches not meeting the criteria for Corps participation, and environmental enhancement projects
not meeting the criteria for Corps participation. In these cases, all incremental study costs and
implementation costs above those costs required for the Base Plan, must be paid by non-Federal
interests.
(b) Proposed Projects.
(1) General. Management Plan studies to be included with feasibility studies shall be
subject to the cost sharing provisions set forth in the Project Study Plan. Study cost sharing for
projects in PED shall be in accordance with the specific PED cost sharing requirements for that
project as authorized.
(2) Allocation of Study Costs. The costs of Management Plan studies will be allocated
between the existing project and the feasibility study for the project modification. Costs will be
allocated by first identifying all costs that would be associated with planning for dredged material
management for the existing authorized Federal project at existing depths and widths. These
costs will be allocated to maintenance of the existing project and be funded from the Operation
and Maintenance (O&M), General, appropriation at 100% Federal cost. Increments of dredged
material management study costs above those required for planning for continued maintenance of
the existing project, shall be allocated as feasibility study costs. Those costs which are associated
with disposal of dredged material from construction of the project modification or increments of
new maintenance cost attributable to the project modification, shall also be allocated as
feasibility study costs. The definition of the required dredged material management studies and
the allocation of the costs of these studies between the existing project and the feasibility study
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Federal sponsor. While the costs for dredged material management are allocated between O&M
and the feasibility study, the dredged material management studies will be conducted as a unified
study within the context of the feasibility study.
g. Implementation.
(1) Operation and Maintenance.
(a) Existing Projects. Costs for implementing Management Plans for existing projects are
O&M costs and shall be shared in accordance with navigation O&M cost sharing provisions
applicable to the project as authorized. Dredged material disposal facility costs shall be shared in
accordance with Section 201 of the Water Resources Development Act of 1996 (P.L. 104-303).
The cost for any component of a Management Plan attributable solely to meeting state water
quality standards which are more restrictive than those upon which the Base Plan is based, shall
be non-Federal cost.
(b) Proposed Projects. Costs for implementing management plans for proposed projects
are O&M costs and shall be shared in accordance with navigation O&M cost sharing provisions
of the Water Resources Development Act of 1986. The cost for any component of a
Management Plan attributable solely to meeting state water quality standards which are more
restrictive than those upon which the Base Plan is based, shall be non-Federal cost.
(2) Beneficial Uses. Costs for beneficial uses consistent with, and part of, the Base Plan
are O&M costs and shall be shared in the same manner as other navigation O&M costs. Where
beneficial uses involve an incremental cost over the Base Plan, these incremental costs are either
a non-Federal responsibility or are a shared Federal and non-Federal responsibility depending on
the type of beneficial use, as follows:
(a) Environmental Improvement and Ecosystem Restoration. The incremental costs
above the Base Plan for the use of dredged material to improve, restore and protect
environmental resources, pursuant to Section 204 of the WRDA of 1992 or Section 207 of the
WRDA of 1996 must be shared in accordance with procedures set forth in Section E-14g.(1) of
this Appendix.
(b) Placement of Materials on Beaches. Under the authority of Section 145 of the Water
Resources Development Act of 1976, as amended by Section 933 of WRDA 86, the additional
cost, beyond the cost of the Base Plan, for the placement of materials on beaches must be shared
50 percent Federal and 50 percent non-Federal. The non-Federal sponsor must provide (without
cost sharing) any necessary additional lands, easements, rights-of-way, and relocations.
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h. Procedures for Existing Projects.
(1) Phased Plan Development Process. A phased process will be used to determine the
need for, and to develop, Management Plans on a priority basis; to manage existing projects in
the interim while Management Plans are being developed; and, to review, approve and
implement the Management Plans.
(2) Preliminary Assessment. Preliminary assessments shall be undertaken for all
navigation projects. Priority shall be given to projects for which maintenance is expected to be
required within the next ten years. Preliminary assessments shall include the following
components:
(a) An economic assessment to determine whether continuing O&M of the overall project
and separable increments appears to be warranted;
(b) A preliminary assessment of potential impediments to continuing maintenance;
(c) An evaluation of the consistency of existing environmental compliance documents
with ongoing O&M activities; and,
(d) An assessment of need for Management Plan studies;
(e) Summary of Findings and Recommendations. Preliminary assessments will produce a
summary of Findings and Recommendations, prepared in accordance with the format and
guidance presented herein, and signed by the District Commander. If applicable, the District
Commander may request for funds to initiate Management Plan studies in accordance with
instructions in annual guidance for preparation of the program and budget request.
(3) Management Plan Studies.
(a) General Requirements. The purpose of Management Plan studies (studies) is to
ensure timely and economical completion of quality reports that recommend implementable
solutions to identified management problems, in the form of Management Plans. The
Management Plan shall include sufficient detail to ensure unimpeded maintenance, with respect
to dredging, for a 20-year time horizon. The study shall be conducted in two phases: initial and
final. The initial phase shall be completed within 12 months of receipt of funds by the district,
and shall produce a Scope of Work for the final phase of the study.
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(b) Scoping. Management Plan studies are intended to cost effectively and expeditiously
support project maintenance. The scoping of the final phase of the study is the most important
activity in the initial phase. The scope of the final phase is dictated by the study objective of
formulating a plan for the continued O&M of the Federal project.
(1) The most important scoping factor, and therefore the focus of the initial phase, is the
degree of engineering, environmental and economic risk and uncertainty associated with the
project.
(2) Related activities, such as surveys of bottom sediments outside the limits of the
Federal project, identification and elimination of sources of contamination, and control of nonpoint sources of pollution, shall be included only if these activities are funded by local, state or
other Federal agencies.
(3) In some cases, the need for a project modification requiring Congressional
authorization (for example the need for an enlarged project to meet increased shipping demands)
may be identified. Studies to support recommendations for authorization of such modifications
are outside the scope of Management Plan studies. In these cases, a new feasibility study
(General Investigations funded new start Reconnaissance) under authority of Section 216 of the
Water Resources Development Act of 1970 should be sought through the budget process. O&M
study funding should be terminated unless there is an immediate need for additional planning for
continued maintenance of the existing project pending the project modification.
(c) Scope of Work. A Scope of Work (SOW) shall be prepared during the initial phase to
ensure that the work required for the final phase has been carefully developed and considered.
(1) The SOW shall be the basis for estimating the total study cost and local share, if any,
and shall allow not longer than 36 months to complete the final phase. The SOW will guide the
allocation of study funds among tasks to assure that all interests are given adequate attention.
(2) As a minimum, the SOW should address the work tasks, their milestones, negotiated
costs, and responsibility for their accomplishment. The SOW should also address the Corps and
other professional criteria to assess the adequacy of the completed work effort; the schedule of
performance; the coordination mechanism between the Corps and the non-Federal sponsor; and
references to regulations and other guidance that will be followed in conducting the tasks.
(3) The SOW will address the level of technical and scientific detail required for the final
phase. Technical studies and analysis should be scoped to the minimum level needed to establish
project features and elements that will form an adequate basis for the plan implementation
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schedules and cost estimate. Risk and uncertainty should be sufficiently identified and addressed
to provide the basis for appropriate contingencies.
(4) The SOW should include the work items typically necessary to support the review
process from the signing of the report through approval. These items could include answering
comments, attending Washington Level meetings (including the non-Federal sponsor), and minor
report revisions as a result of review by higher authority. Any significant increase in study scope
shall require HQUSACE approval in accordance with guidance provided as conditions of
approval of the Scope of Work.
(d) Management Plan Reports. Management Plan Reports (reports) should be complete
decision documents that present the results of both study phases. The reports will:
(1) Provide a complete presentation of study results and findings, including those
developed in the initial phase so that readers can reach independent conclusions regarding the
reasonableness of recommendations;
(2) Indicate how compliance with applicable statutes, executive orders and policies is
achieved; and
(3) Provide a sound and documented basis for decision makers at all levels to judge the
recommended Management Plan. The reports shall, at a minimum, address the subject matter
outlined in Table E-14, and shall identify all necessary agreements (Federal, sponsor, real estate,
etc.) and procedural requirements (appropriate NEPA documentation, long-term permits,
certifications, etc.) necessary to cover, at a minimum, the next twenty years of project
maintenance. The reports shall include executed copies of all such agreements or schedules for
obtaining them. District Commanders shall sign and submit Management Plan Reports to the
Division Commander for appropriate action.
Table E- 14 Management Plan Report Outline
Project Description(s) [include project map(s)]
Scope of Study [indicate whether single project or group of
projects; relationship to permittee dredging, etc.]
Authorization and Development History [include all project
authorizations, Section 221 agreements, Project Cooperation
Agreements (PCAs), other agreements entered into, easements
obtained, fee acquisition, construction dates, etc.]
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Description of existing conditions
Projections of future conditions in the absence of a Management Plan
Concise statement of specific problems and opportunities
Alternative plans:
Χ
Alternative disposal measures to address identified problems
and opportunities
Χ
Beneficial uses alternatives
Χ
Reasons for selecting and combining measures to form
alternative plans
Evaluation of Alternative Plans
Trade-off analysis
Selection of final plan [discuss rationale for selection,
sensitivity analysis, and risks and uncertainties]
Description of selected Management Plan
Χ
Χ
Χ
Plan components
Implementation requirements and schedules
Consistency with the Base Plan
NEPA documentation, as required
Results of coordination with local, state and Federal agencies
Recommendations
(e) Issue Resolution Conferences. Issue Resolution Conferences (IRCs) with HQUSACE
and laboratory participation shall be held for all Management Plan studies whenever significant
problems or issues require higher level guidance or concurrence during the course of the study.
Issue Resolution Conferences may be called by Division Commanders at their discretion. Upon
review of the SOW, HQUSACE may call for an IRC to resolve pertinent issues. HQUSACE
participation shall include at a minimum, senior staff of both CECW-0 and CECW-P. IRCs shall
identify required follow-up actions and assign responsibilities for their execution. These actions
and assigned responsibilities shall be documented explicitly.
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(f) Review and Approval. Division Commanders shall ensure full technical review of
Management Plan reports, and may approve Management Plans except in those cases where one
or more of the following conditions apply:
(1) Implementation of the Management Plan will require a non-recurring item of work or
aggregate item of related work which qualifies as major maintenance as defined in the annual
guidance for preparation of the program and budget request.
(2) Implementation of the Management Plan requires an adjustment to the District’s
funding targets (a Corps-wide Priority Incremental Request, CPIR) as defined in the annual
guidance for preparation of the program and budget request.
(3) Implementation requires additional congressional authority. Where one or more of
the above conditions apply, the Division commander will transmit the final report and associated
NEPA documentation by concurring endorsement to HQUSACE, CECW-0 for review and
approval. Upon approval of the report, the Major Subordinate Commander shall prepare the
draft Record of Decision following the completion of the final NEPA review, and if required,
shall file the final NEPA documentation.
(g) Implementation.
(1) Project Cooperation Agreement and Financing Plan.
(a) For Management Plans that involve new capital investments, (such as a new confined
disposal facility) relocations, or acquisition of interests in real estate, and require the execution of
a Project Cooperation Agreement (PCA), a draft PCA and financing plan shall be developed in
connection with preparation of the Management Plan report and submitted therewith in
accordance with procedures outlined in ER 1165-2-131.
(b) The full implication of PCA requirements should be discussed with the local sponsor.
The first draft PCA is prepared, by the District Commander, in coordination with the local
sponsor. However, no commitments relating to a construction schedule or specific provisions of
the draft PCA can be made to the local sponsor on any aspect of the project until the
Management Plan report and the draft PCA have been approved.
(c) Once the Management Plan has been approved, the District Commander shall begin
final negotiations with the local sponsor and submit the PCA package for review by HQUSACE,
attention CECW-A, and approval by the ASA(CW).
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(2) Monitoring and Periodic Review. Division Commanders shall ensure monitoring and
review of approved Management Plan implementation.
(3) Curtailment and Disposition. Curtailment refers to the indefinite discontinuance of
maintenance of a project or a substantial portion thereof (e.g., segment or length, depth, width
increment of channel or turning basin). Curtailment requires the development of a plan for
disposition of the project. Disposition requirements and procedures generally are project
specific; and guidance thereon should be obtained from HQUSACE. Where continued O&M of
a project, or substantial portion thereof, is determined by the District Commander to no longer be
warranted, the District Commander shall submit, subject to concurring endorsement by the
Division Commander, a report recommending disposition of the project, to HQUSACE (attn:
CECW-P).
(h) Budgeting and funding.
(1) General Requirements. Study activities required to develop Preliminary Assessments
for all eligible projects shall be funded from available project O&M funds in accordance with
priorities established annually by HQUSACE. Requests for funding to accomplish Management
Plan studies to cost no more than $150,000 to complete shall be included in project O&M
funding requests, provided that a Summary of Findings and Recommendations has been
completed in accordance with the requirements of outlined in this section. Requests for funding
to initiate Management Plan studies to cost more than $150,000 will be considered on a national
priority basis, commensurate with the urgency and significance of impediments to continued
maintenance. These will be considered upon HQUSACE review of submission documents, in
accordance with annual budget guidance, as may be supplemented by guidance to be provided
periodically by HQUSACE.
(2) Limitations. Preliminary Assessments shall be limited to an expenditure of $20,000
per project, or multiples thereof for assessments involving more than one deep draft project. If
more than $20,000 (or multiple thereof) is required, written approval must be requested from
HQUSACE (attention CECW-O). The request must include sufficient information to justify the
additional expenditure.
(i) Ongoing Studies. Ongoing O&M studies for planning, managing or regulating
dredging and dredged material disposal activities shall be phased into conformity with the
procedures and guidance of this ER. This includes any O&M studies of disposal options
including studies of alternative open water disposal sites or studies of sites for new confined
disposal facilities. The following procedures shall be used to bring the existing studies into
conformity with the new procedures.
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(1) Review of Continuing Economic Justification. Continuation of ongoing dredged
material management studies is conditioned on a confirmation that continued maintenance is
warranted. Therefore, for each ongoing study, a review of indicators of continued economic
justification will be conducted.
(2) Scope of Work. For each ongoing study, the district shall prepare a review of studies
accomplished to date, and a SOW for studies yet to be accomplished. This SOW, along with the
results of the review of indicators of continued economic justification, will be included in the
Preliminary Assessment or the Management Plan Report, as appropriate.
(3) Management Plan Report. The results of ongoing studies, when completed, will be
presented in a management Plan report conforming with the guidance for preparation, review and
approval of such reports as presented in this appendix.
i. Procedures for Proposed Projects. Feasibility reports recommending Congressional
authorization of new navigation projects or modifications of existing projects shall include a plan
for management of dredged material associated with the construction and maintenance of the
new project or project modification, consistent with the requirements for Management Plans for
existing projects. This plan shall satisfy all identified dredged material management
requirements associated with the project, to include construction dredging, projected
maintenance dredging for the established project economic life, and other dredged material
disposal requirements (for example dredging of berthing areas) needed to realize project benefits.
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SECTION III - Flood Damage Reduction
E-16. Federal Interest. The Flood Control Act of 1936 established the policy that flood control
on navigable waters or their tributaries is in the interest of the general public welfare, and is
therefore a proper activity of the Federal Government. It provided that the Federal Government,
cooperating with state and local entities, may improve streams or participate in improvements
“for flood control purposes, if the benefits to whomsoever they may accrue are in excess of the
estimated costs, and if the lives and social security of people are otherwise adversely affected.”
The 1936 Act, as amended, and more recently the Water Resources Development Act of 1986
and other acts, specify the details of Federal participation.
E-17. Types of Improvements.
a. Structural Measures. These include dams with reservoirs, dry dams, channelization
measures, levees, walls, diversion channels, ice-control structures, and bridge modifications.
b. Nonstructural Measures. Section 73 of the 1974 Water Resources Development Act
requires consideration of nonstructural alternatives in flood damage reduction studies. They can
be considered independently or in combination with structural measures. Nonstructural measures
reduce flood damages without significantly altering the nature or extent of flooding. They do this
by changing the use made of the flood plains, or by accommodating existing uses to the flood
hazard. Examples are flood proofing, relocation of structures, flood warning/preparedness
systems, and regulation of flood plain uses.
(1) Permanent Relocation/Evacuation Plans. These plans provide for permanent
evacuation and relocation/demolition of flood plain structures. There are no damages avoided
claimable as benefits for the properties which are relocated or evacuated. Benefits accrue in four
ways: a) the value of new use of the vacated land; b) reduction in damage to public property,
such as roads and utilities; c) reduction in emergency costs; and d) reduction in the administrative
costs of the National Flood Insurance Program and disaster relief. Benefits from future use of the
vacated flood plain (usually recreation) will generally be the dominant NED benefit. Nonmonetary benefits accruing from ecosystem restoration may also be considered. For evacuation
plans that are clearly formulated for flood damage reduction there is no limitation on the amount
of recreation benefits, as may exist for structural projects. Thus for these plans the recreation
benefits may exceed 50 percent of the benefits needed for justification. Separable costs for
improvements necessary to achieve ecosystem and or recreation benefits are cost shared in
accordance with specific cost-sharing provisions for those purposes.
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(2) With Project Land Use and Benefit Evaluation for Nonstructural Projects. The
central fact about nonstructural projects, changes in land use, has several important implications.
First, eliminating the existing land uses eliminates all services previously provided in the area,
not just the flood damages. That is, all housing services, all retailing or commercial services and
all other services provided by the removed structures (and associated activities) will also be
eliminated. Second, in most cases, most of the benefits for the nonstructural project will be
associated with new uses of the vacated land, yet frequently little effort is devoted to forecasting
and evaluating the new land uses. Recreational and environmental uses will be the most
common post-project uses. If non structural projects are to be justified, plans for the post-project
land use will generally be needed. In other words, just simply stating that post-project land use
will be “open space” will not be sufficient to support the benefits of the nonstructural projects.
Third, land use changes will have spillover effects, that is, they can affect nearby property values.
Most frequently, spillover effects are negative and are used to justify zoning changes, but
spillover effects for nonstructural projects will be, in all likelihood, positive and the task is
therefore not to prevent them through zoning but to estimate their magnitude through analysis.
(3) Flood Proofing Measures. These are modifications of structures to minimize flood
damages by such methods as elevating buildings, sealing walls, closing off openings, protecting
plumbing and utilities and installing pumps and valves. Corps participation in flood proofing
plans is permitted as long as they address two or more structures.
(4) Flood Warning Systems.
(a) The typical flood warning system consists of methods for determining the flood threat,
methods for disseminating the flood warning, and a preparedness plan detailing the response to
that warning. The Corps involvement in development of methods for determining the flood
threat and disseminating the warning can include selection, siting, installation, and calibration of
gages and other equipment to collect, evaluate and disseminate pertinent data. In addition, the
Corps can provide assistance and guidance to ensure that the preparedness plan is adequate and
will provide the necessary response to minimize the possibility of loss of life, and to reduce
damages. This includes coordinating with local officials, providing technical advice and planning
guidance, and developing adequate mapping to identify flood threatened areas, evacuation routes,
temporary shelters, etc.
(b) A flood warning system can be recommended as a stand-alone project, or as a
component of a more complex, flood damage reduction plan. For example flood warning could
be combined with levee closing devices or with a channel modification. In addition, a flood
warning system can be proposed as an interim measure until other structural or non-structural
measures can be implemented.
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(5) Regulation of Flood Plain Uses. Adoption and enforcement of regulations for flood
plain management are entirely a local responsibility. However, the Corps can provide technical
assistance and planning guidance in conjunction with a flood control project. Also, flood plain
management planning assistance is continuously available through the Corps Flood Plain
Management Services Program.
c. Major Drainage. Drainage projects are usually undertaken in rural areas to increase
agricultural outputs. Some portions of drainage improvements may be considered flood control
measures in accordance with Section 2 of the 1944 Flood Control Act. The typical drainage
system consists of drainage ditches, dikes, and related work. An outlet structure is provided at
the downstream end where the system empties into a larger channel. The Federal interest in
these projects is normally limited to the outlet works. Drainage in urban areas can also qualify
under the 1944 Act if the major outlet works do not substitute for works that are a local
responsibility, such as municipal storm sewer improvements.
d. Groundwater. Section 403 of the WRDA of 1986 expands the definition of flood
control to include flood prevention improvements for protection from groundwater induced
damages. Budget and authorization support is not available for a groundwater induced damage
reduction program.
E-18. Specific Policies.
a. Without Project Condition.
(1) Assume flood plain communities belong to the National Flood Insurance Program
administered by the Federal Emergency Management Agency. To participate in the program a
community must preclude new development in the regulatory floodway, and require that new
development outside the floodway, but within the median discharge 1% chance flood plain, be
constructed with first floor elevations at or above the median discharge 1% chance flood level.
(2) Uncertainties in without project conditions must be explicitly considered. For
example, for any particular damage reduction study there may be other Federal or non-Federal
flood control or drainage plans, which are authorized or in various stages of planning but, which
are not yet constructed. Whether or not some other project will actually be constructed can be
quite uncertain; when present this uncertainty should be explicitly treated in Project Study Plans
(PSP). Any such uncertainties potentially affecting study recommendations must be similarly
addressed.
b. Flood Plain Management (E.O. 11988). This executive order was issued in 1977 and
remains in effect. The intent is to avoid flood plain development, reduce hazards and risk
associated with floods, and restore and preserve natural flood plain values (ER 1165-2-26). In
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the event there is no alternative to construction in the flood plain, as is the case with flood control
projects, the Corps is required to minimize the adverse impacts induced by construction of the
project. In considering adverse impacts, the following should be addressed:
(1) Induced new development in the flood plain or induced improvements to existing
development in the flood plain that would increase potential flood damages; and,
(2) The detrimental effect of induced activities on natural flood plain values.
c. Project Performance and Risk Framework.
(1) Projects are analyzed and described in terms of their expected performance, not in
terms of levels of protection. Contingencies are acknowledged and residual risk is not routinely
reduced by overbuilding or by inclusions of freeboard. A levee, for instance, is described as
having a probability of overtopping of x percent in any given year, without implication for level
of protection. If there are particular floods of reference or interest, the levee is described as
having a probability y of containing the z percent flood, and so on. For example, a levee of a
given height is described as having a (say) two percent chance of being overtopped in any year. If
the one percent flood flow is of interest, the levee is said to have a (say) twenty-five percent
chance of containing the one percent flow event, should it occur.
(2) There is no minimum level of performance or protection or size required for Corps
projects. The smaller in size or the lower the level of performance however, the higher the
residual risk. Residual risk must therefore be carefully analyzed and communicated. Departures
from the NED plan may be considered options to manage this risk; in addition, explicit risk
management alternatives may be formulated. . Documentation requirements for deviation from
the NED plan for flood control projects should be based primarily on consideration of residual
risk. Other considerations can include reducing the non-Federal eligibility requirements for the
National Flood Insurance Program and /or unique characteristics of the protected area such as
historic structures, hospitals and public buildings essential to the operation of government or
essential public service. In all cases the incremental costs for the higher level of protection must
be shown to be reasonable with respect to total project costs.
(3) Flood damage reduction studies are conducted using a risk-based analytical
framework. Models, data, and measurement and many physical, social, economic and
environmental conditions are subject to variation and uncertainty. This has been long known, if
in the past incompletely acknowledged. Management by routine overbuilding and freeboard are
not affordable. The risk framework captures and quantifies the extent of the risk and uncertainty,
and enables quantified tradeoffs between risk and cost. Decision making considers explicitly
what is gained at what cost.
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d. Existing Levees/Dams. If there is any question about the reliability of an existing
levee, reliability should be specifically included in the risk analysis (see ER 1105-2-101). The
Corps is moving toward a risk-reliability framework for evaluation of dam reliability; methods
development is just beginning. Downstream consequences are analyzed in a risk framework
however.
e. Residual Damages. Levees interrupt interior drainage, and levee benefit analysis
should reflect any residual damages. Interior damages can be mitigated by ponding areas or
pumping. The amount and kind of recommended mitigation should be that which maximizes net
benefits, unless other considerations override.
f. Induced Flooding. When induced flooding results in induced damages, mitigation
should be investigated and recommended if appropriate. Mitigation is appropriate when
economically justified or there are overriding reasons of safety, economic or social concerns, or a
determination of a real estate taking (flowage easement, etc.) has been made. Remaining induced
damages are to be accounted for in the economic analysis and the impacts should be displayed
and discussed in the report.
g. Minimum Flows, Minimum Drainage Area and Urban Drainage. In urban and
urbanizing areas provision of a basic drainage system to collect and convey local runoff is a nonFederal responsibility. Water damage problems may be addressed under flood control authorities
downstream from the point where the flood discharge is greater than 800 cubic feet per second
for the median discharge 10 percent chance flood. Drainage areas of less than 1.5 square miles
are assumed to lack sufficient discharge to meet the above criterion. Exceptions may be granted
in areas of hydrologic disparity, that is areas producing limited discharge for the median
discharge 10 percent chance event but in excess of 1800 cubic feet per second for the one percent
event (See ER 1165-2-21).
h. Single Properties. The Corps will not participate in structural flood control for a
single private property. Nor will it participate in nonstructural flood control measures, unless
single property protection is part of a larger plan for structural or nonstructural measures
benefiting multiple owners collectively The Corps may consider participation in structural and
nonstructural flood control measures protecting a single, non-Federal, public property. Public
facilities, which are separable portions of larger protection plans, must have their own distinct
presentations in budget requests so that they compete for limited study and construction funds.
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i. Recreation at Non-Lake Projects. Recreation activities must have a strong, direct
relationship to the proposed flood control measures, for example trails along the channel or levee
right-of-way. Constraints on development and requirements for participation are discussed in
Section VII of this appendix.
j. Environmental Mitigation. There are adverse impacts associated with practically all
flood control projects. If these impacts are significant, mitigation measures should be evaluated.
If justified by tangible and intangible benefits, the measures can be included in the recommended
plan. Specific policies and planning guidance for consideration of environmental mitigation are
discussed in Appendix C.
k. Agricultural Flood Protection. The Corps flood control programs apply to agricultural
as well as urban flood damages. Usually the NED plan for agricultural areas provides only a low
degree of flood prevention. The Food Security Act of 1985 (Public Law 99-198), as amended by
the Federal Agriculture Improvement and Reform Act of 1996 (PL 104-127), contains so-called
“Swampbuster” provisions (affecting conversion of wetlands) that may be triggered with
implementation of a flood protection project.
l. Land Development. The following general policy principles apply to land development
benefits at structural flood damage reduction projects.
(1) Projects or separable increments producing primarily land development opportunities
do not reduce actual flood damages and therefore have low budget priority. Federal participation
in these projects will not be recommended.
(2) The NED plan is formulated to protect existing development, but inclusion of vacant
property interspersed with existing development is acceptable. The NED plan may also provide
for the protection of vacant property that is not interspersed with existing development,if it can
be demonstrated that the vacant property would be developed without the project, and benefits
are based on savings in future flood proofing costs or reduction in damages to future
development.
(3) If no project or separable project increment can be economically justified to protect
existing development, interspersed vacant property and/or property that would be developed
without the project, there is no interest in expanding the area of protection to achieve land
development (location) benefits, even if net benefits are increased and economic justification can
be achieved.
(4) A special case can be considered where the cost of protecting existing development
can be substantially reduced if some vacant property not interspersed with existing development
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is included in the protected area. Such cases will be considered on their individual merits.
Compatibility with Executive Order 11988 must be demonstrated.
m. Groundwater-Induced Damages. Prevention of groundwater induced damages is not a
traditional mission; restricted budgets prevent taking on this new mission.
n. Flood Insurance Considerations. Flood damage reduction projects can greatly impact
what is required of a local community for participation in the National Flood Insurance Program.
In addressing these impacts, the following should be considered:
(1) During development of the Project Management Plan (PMP) in reconnaissance, and in
concert with the sponsor, consideration should be given to including work items to develop flood
maps and flood profiles depicting post-project conditions. The information should be in a form
useful to FEMA in revising flood insurance rate maps.
(2) The appropriate FEMA Regional office should be notified of proposed flood
protection works or of changes to established flood protection works.
E-19. NED Benefit Evaluation Procedures: Urban Flood Damage
a. Purpose. This section presents the procedure for measuring the beneficial
contributions to national economic development (NED) associated with the urban flood hazard
reduction features of water resource plans and projects.
b. Conceptual Basis.
(1) General. Benefits from plans for reducing flood hazards accrue primarily through the
reduction in actual or potential damages associated with land use.
(2) Benefit Categories. While there is only one benefit standard, there are three benefit
categories, reflecting three different responses to a flood hazard reduction plan.
(a) Inundation Reduction Benefit. If floodplain use is the same with and without the
plan, the benefit is the increased net income generated by that use. If an activity is removed from
the floodplain, this benefit is realized only to the extent that removal of the activity increases the
net income of other activities in the economy. Engineering Regulation 1105-2-101, Risk-Based
Analysis for Evaluation of Hydrology/Hydraulic and Economics in Flood Damage Reduction
Studies, requires risk-based analysis in all flood-damage reduction studies. The regulation and
the complementary Engineering Manual 1110-2-1619 provide the evaluation framework to be
used in these studies. The regulation identifies key variables that must be explicitly incorporated
into the risk-based analysis. At a minimum, the stage-damage function for economic studies
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(with special emphasis in structure first floor elevation, and content and structure values for
urban studies); discharge associated with exceedence frequency for hydrologic studies; and
conveyance roughness and cross-section geometry for hydraulic studies must be incorporated in
the risk-based analysis. The ER further requires a probabilistic display of benefits and eliminates
freeboard to account for hydraulic uncertainty.
(b) Intensification Benefit. If the type of floodplain use is unchanged but the method of
operation is modified because of the plan, the benefit is the increased net income generated by
the floodplain activity.
(c) Location Benefit. If an activity is added to the floodplain because of a plan, the
benefit is the difference between aggregate net incomes (including economic rent) in the
economically affected area with and without the plan
(3) Types of Flood Damage. Flood damages are classified as physical damages or
losses, income losses, and emergency costs. Each activity affected by a flood experiences losses
in one or more of these classes.
(a) Physical Damages. Physical damages include damages to or total loss of buildings or
parts of buildings; loss of contents, including furnishings, equipment, [motor vehicles,]
decorations, raw materials, materials in process, and completed products; loss of roads, sewers,
bridges, power lines, etc.
(b) Income Loss. Loss of wages or net profits to business over and above physical flood
damages usually results from a disruption of normal activities. Estimates of this loss must be
derived from specific independent economic data for the interests and properties affected.
Prevention of income loss results in a contribution to national economic development only to the
extent that such loss cannot be compensated for by postponement of an activity or transfer of the
activity to other establishments.
(c) Emergency Costs. Emergency costs include those expenses resulting from a flood
what would not otherwise be incurred, such as the costs of evacuation and reoccupation, flood
fighting, cleanup including hazardous and toxic waste cleanup, and disaster relief; increased
costs of normal operations during the flood; and increased costs of police, fire, or military patrol.
Emergency costs should be determined by specific survey or research and should not be
estimated by applying arbitrary percentages to the physical damage estimates.
c. Planning Setting.
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(1) General. The benefit of flood hazard reduction plans is determined by comparison of
the with and without project conditions.
(2) Without Project Condition. The without project condition is the land use and related
conditions likely to occur under existing improvements, laws, and policies. There are three
significant assumptions inherent to this definition:
(a) Existing and authorized plans. Existing flood hazard reduction plans are considered
to be in place, with careful consideration given to the actual remaining economic life of existing
structures. Flood hazard plans authorized for implementation but not yet constructed are
evaluated according to the relative likelihood of actual construction. If there is a high likelihood
of construction, the authorized plan is considered to be in place.
(b) Flood Disaster Protection Act. The adoption and enforcement of land use regulations
pursuant to the Flood Disaster Protection Act of 1973 (Public Law 93-234) is assumed.
(1) Regulation certified or near certification. If the local land use regulation has been or
will be certified, partially waived, or adjusted by the Flood Insurance Administration (FIA) as
adequate under 24 CFR 1910.3(c) and/or (d) and 24 CFR 1910.5, that regulation defines the
without project condition.
(2) Regulation not yet certified. It is assumed that the local jurisdiction will adopt in the
near future land use regulations certifiable to FIA under the without project condition as a datum
and under the with project condition if a residual hazard will remain. This applies to floodplains
regulated under 24 CFR 1910.3(a) and (b); to floodplains regulated by local ordinances
independent of FIA; and to floodplains with no flood regulation in effect. For riverine situations,
the following two crucial features are included: no future confinement or obstruction of the
regulatory floodway; and no future occupancy of the flood fringe unless residences are elevated
to or above 100-year (.01 annual probability) flood level and nonresidential buildings are flood
proofed to that level.
(3) Application. It is assumed that flood proofing costs will be incurred if an activity
decides to locate in the floodplain.
(4) Executive Orders. Compliance with E.O. 11988, Floodplain Management and E.O.
11990, Protection of Wetlands, is assumed.
(5) Individual actions. In addition to the three assumptions stated above, the analyst
shall consider the likelihood that individuals will undertake certain flood hazard reduction
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measures, such as flood proofing, when the cost of such measures is reasonable compared to the
costs of potential flood damages.
(3) With Project Condition. The with project condition is the most likely condition
expected to exist in the future if a specific project is undertaken. There are as many with project
conditions as there are alternative projects.
(a) In projecting a with project condition, the analyst must be sensitive to the relationship
between land use and the characteristics of the flood hazard for the alternative project being
analyzed.
(b) The same assumptions underlie the with project condition and without project
conditions.
(c) Consideration should be given to both structural and nonstructural alternatives and to
alternatives incorporating a mix of structural and nonstructural measures. Non structural
measures include:
(1) Reducing susceptibility to flood damage by land use regulations, redevelopment and
relocation policies, disaster preparedness, flood proofing, flood forecasting and warning systems,
floodplain information, floodplain acquisition and easements; and
(2) On-site detention of flood waters by protection of natural storage areas such as
wetlands or in manmade areas such as building roofs and parking lots.
(3) Since project alternatives can differ in their physical characteristics, the optimal
timing of projects and of individual project features should be considered in project formulation.
commercial. If the potential use of the floodplain includes industrial use within a standard
metropolitan statistical area (SMSA) (now called metropolitan statistical area (MSA)), the entire
SMSA (MSA) is the affected area; for residential use, even within an SMSA (MSA), a much
smaller area may be designated the affected area.
d. Evaluation Procedure: General. Ten steps are involved in computing benefits (see
Figure E-4). The steps are designed primarily to determine land use and to relate use to the flood
hazard from a NED perspective. The level of effort expended on each step depends on the nature
of the proposed improvement and on the sensitivity of the project formulation and justification to
further refinement. The first five steps result in a determination of future land use; emphasis is
on the overall reasonableness of local land use plans with respect to OBERS (OBERS no longer
exist, but population, income and economic projections can still be obtained from the U.S.
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Department of Commerce, Bureau of Economic Analysis) and other larger area data, and to
recognition of the flood hazard.
Figure E- 4 Urban Flood Damage Benefit Evaluation Procedure
Delineate affected
Area
Determine Floodplain
Forecast activities in
affected areas
Determine
existing flood
damages
Estimate potential
land use
Estimate other
flood-related costs
Estimate future
flood damages
Allocate land use
Collect market
value data
Compute benefits
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e. Step 1--Delineate Affected Area. The area affected by a proposed plan consists of the
floodplain plus all other nearby areas likely to serve as alternatives sites for any major type of
activity that might use the floodplain if it were protected.
f. Step 2--Determine Floodplain Characteristics. The existing characteristics of the
floodplain must be determined before its actual use can be estimated; therefore, undertake an
inventory of the floodplain to determine those characteristics that make it attractive or
unattractive for the land use demands established in steps 3 and 4, with emphasis on those
characteristics that distinguish the floodplain from other portions of the affected area. Use the
following categorizations as a guide:
(1) Inherent Characteristics of a Floodplain. Floodplain characteristics may include:
(a) Flooding. Describe the flood situation, including a designation of high hazard areas.
The description should include characteristics of the flooding, such as depths, velocity, duration,
and debris content; area flooded by floods of selected frequencies, including 100-year frequency
[.01 annual probability]; historical floods, and, where applicable, larger floods. [Description of
flood characteristics for a given frequency or discharge should be based on the median
probability discharge. The regulatory floodplain as defined by the National Flood Insurance
Program will always be described.]
(b) Floodway, Natural Storage. Describe and delineate those areas which, if urbanized
or structurally protected, would affect natural storage, velocity, or stage, or would affect flood
flows elsewhere.
(c) Natural and Beneficial Values. Many floodplains, particularly those near urban areas,
are potential sites for recreation, open space, wetland, or wildlife preserves. This potential
should be recognized and presented.
(d) Transportation. Floodplains near navigable streams have inherent attractiveness for
industries that demand water-oriented transportation. Floodplains also serve as sites for
railroads, highways, pipelines, and related facilities that are not susceptible to serious flood
damage but have a tendency to attract industry to the area. [Flood damage to transportation
systems and the resulting transportation delay costs may be an important damage category in
many urban settings. Care should be taken to adequately address transportation delay costs in
both the without and with project condition.]
(e) Other Attributes. Other inherent attributes of floodplains may include soil fertility,
reliability of water supply, waste disposal, and sand, mineral, and gravel deposits.
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(2) Physical Characteristics. Describe pertinent physical characteristics, including slope,
soil types, and water table.
(3) Available Services. Most activities require some or all of the following services:
transportation (highway and rail), power, sewerage, water, labor, and access to markets. Indicate
the availability of such services in or near the floodplain, including comparisons with similar
services available in other portions of the affected area.
(4) Existing Activities. Include in the inventory of the floodplain a list of existing
activity types, the number of acres, and the density, age, and the value of structure of each
activity-type by flood hazard zone.
g. Step 3--Project Activities in Affected Areas. Base economic and demographic
projections on the most recent available studies and include the following: population, personal
income, recreation demand, and manufacturing, employment, and output. Additional projections
may be necessary for any given area, depending on the potential uses of these projections. Base
projections on assessment of trends in larger areas and appropriate data (e.g., OBERS) [Bureau
of Economic Analysis]; the relationship of historical data for the affected area to trends projected
for larger areas; and consultation with knowledgeable local officials, planners, and others. The
basis for the projections should be clearly specified in the report. [Estimates of future growth
benefits shall be based on current unbiased economic growth indices. Whenever possible the
growth indices should be independent estimates. Paragraph E-19c. requires that for the without
project condition, floodplain communities will be assumed to belong to the National Flood
Insurance Program (NFIP), administered by the Federal Emergency Management Agency. In
order to participate in this program, the local community must preclude new development in the
regulatory floodway as defined by the community, and require that new development in the NFIP
regulatory floodplain outside of the floodway be constructed with first floor elevations at or
above the .01 annual probability 100-year elevation. Therefore, future development will be
assumed to be protected to the .01 probability 100-year discharge at the end of the period of
analysis. The .01 probability discharge and elevation will be determined by the Corps consistent
with levee certification guidance. If individual communities have floodplain restrictions more
stringent than NFIP criteria, projections of future development should reflect the local criteria.
However, under no circumstances, will future development be assumed in any area subject to
flooding in the present and future median .01 probability flood.]
h. Step 4--Estimate Potential Land Use. Estimate potential land use within the affected
area by converting demographic projections to acres. The conversion factors can normally be
derived from published secondary sources, from agency studies of similar areas, or from
empirical and secondary data available in the affected area. The categories of potential land use
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need be only as detailed as necessary to reflect the incidence of the flood hazard and to establish
the benefits derived from a plan.
i. Step 5--Project Land Use. Allocate land use demand to floodplain and non floodplain
lands for the without project condition and for each alternative floodplain management plan.
(1) Basic Factors. Base the allocation on a comparison of the floodplain characteristics,
the characteristics sought by potential occupants, and availability of sought-after characteristics
in the non floodplain portions of the affected area.
(2) Criteria. The floodplain should not be used unless it has characteristics that give it a
significant economic advantage to the potential user over all other available sites within the
affected area. If such advantages exist, determine whether they overcome potential flood losses,
potential flood proofing costs, and the costs of other related hazards. Flood losses and costs
should be specific to the zone of the floodplain being considered.
j. Step 6--Determine Existing Flood Damages. Existing flood damages are the potential
average annual dollar damages to activities affected by flooding at the time of the study. Existing
damages are those expressed for a given magnitude of flooding or computed in the damage
frequency process. No projection is involved. The basis for the determination of existing
damages is losses actually sustained in historical floods; therefore, specify the year and month of
all significant recorded discharges above zero point of damage and indicated the damages
actually sustained by reach or zone and type of property and activity. Historical data are often
incomplete; urbanization and other changes will have occurred over the years. Many streams and
reaches do not have gaging stations. Therefore, data on historical flood losses should be
carefully scrutinized and supplemented by appraisals, use of area depth-damage curves, and an
inventory of capital investment within the floodplain. Further, estimates of damages under
existing conditions should be computed for floods of magnitude that have not historically
occurred. Estimate average annual losses by using standard damage-frequency integration
techniques and computer programs that relate hydrologic flood variables such as discharge and
stage to damages and to the probability of occurrence of such variables. Annual hydrologic data
are normally sufficient for urban drainage estimates. Access flood damages by activity-type and
by whether they are borne by the owner or by the public at large.
k. Step 7--Project Future Flood Damages. Future flood damages are the dollar damages
to economic activities identified in step 3 that might use the floodplain in the future in the
absence of a plan. Use this step in combination with step 5 (land use) to determine land use and
associated damages for each future with project and without project condition. “Future” is any
time period after the year in which the study is completed; in order to relate costs ultimately to
benefits, however, future damages must be discounted to the base year. Determine future flood
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damages on the basis of losses sustained both by the floodplain occupant and by others though
insurance subsidies, tax deductions for casualty losses, disaster relief, etc.
(1) Hydrologic Changes. Changes in basin land use may result in major alteration of
drainage characteristics, particularly surface runoff; project such hydrologic changes for the
planning period. Average future hydrologic conditions should not be used, since they obscure
situations in which the level of protection afforded by a project may be significantly different
from average conditions by the end of the planning period.
(2) Economic Changes. Economic changes can be expected to result in a change in the
level of future flood losses. A benefit-cost ratio for the existing condition should always be
shown. If the ratio is greater than 1:1, the projection of future benefits may be accomplished in
abbreviated form unless it would distort the comparison of alternative projects or the cost
allocation and cost sharing in multipurpose projects. In the latter situation, the detail and
accuracy of the estimates of flood control benefits should be comparable to the estimates of
benefits for other water resources purposes.
(3) Projection of Physical Damages. Base measurement and projection of flood damages
on the establishment of actual, observed relationships between damages, flood characteristics,
and those indicators used for measurement and projection. These relationships should be
modified as appropriate by consideration of constraints that change the historically derived
relationship between flood damages and a given indicator. The relationships should be made
explicit in the report and their accuracy and representativeness supported, to the extent possible,
by empirical evidence. Use three steps in measuring flood damages for a future year: estimate
the number and size of physical units; estimate the future value of units; and determine the
damage susceptibility of units.
(a) Physical Units. The first step in measuring flood damages for a future year is to
determine from step 2 (paragraph E-19f.) the number and size of physical units with potential to
use the floodplain by hazard zones for each activity type. Care must be taken to determine
whether existing structures will continue to occupy the floodplain over the period of analysis and,
if not, the future land use and damage potential of new structures.
(b) Value per Physical Unit. This step involves estimating future unit value. Increases
in the value of property in the floodplain may result from the expansion of existing facilities or
the construction of new units. The following guidance applying to content value is derived from
an empirical study of flood-prone property.
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(1) Existing development. Use the OBERS [Bureau of Economic Analysis] regional
growth rate for per capita income as the basis for increasing the real value of residential contents
in the future.
(2) Future development. Project the value of contents within new residential structures
from the year each unit is added.
(3) Translation to future flood damages. Use the projected rate of increase in the value of
flood-susceptible household contents as the basis for increasing the future unit flood damage to
household contents.
(4) Limit. The value of contents should not exceed 75 percent of the structural value of
the residence unless an empirical study proves that a special case exists (e.g., trailer parks), nor
should the increase in value of household contents be projected beyond project year 50. [Current
guidance on content-to-structure ratios is provided in paragraph E-19q.]
(5) Commercial and industrial property. The procedure described for residential
contents does not apply to commercial and industrial categories.
(c) Damage susceptibility. The third step in measuring future flood damages is to
determine the damage susceptibility of units. Once the number of physical units and the value
associated with each unit are known, examine possible future changes, if any, in damage
susceptibility relationships as a function of the total value of each physical unit and the stream’s
flood characteristics, such as velocity, depth, duration, volume, debris load, and salinity. Some
of the determinants of damage susceptibility are type of activity, vertical development, location
within the floodplain, nature of flood proofing, construction material used, and individual
response.
(1) Projection of Income Losses. Income losses may be projected to increase on the
basis of projected land use. Increases in physical losses should not be used to project income
losses.
(2) Projection of Emergency Costs. Emergency costs encompass a wide variety of
programs. Some, such as emergency shelter and food, are primarily a function of occupancy of
the floodplain but not of the value of development in the floodplain. Emergency costs should not
be projected to increase as a direct function of physical losses.
(4) Use of Assessed Value Real Estate Appraisal and Market Value Data in Flood
Damage Reduction Studies. Flooding causes physical damages to structures. In the past the
Corps frequently estimated damages and cost of repair directly. The Corps now uses a risk-based
procedure as defined by ER 1105-2-101. This procedure requires the use of depth-damage
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curves, which express an average relationship between depth of flooding and damages. Damages
are expressed as a percentage of structure value. When depth-damage curves are used, the
correct measure of structure value, consistent with cost-benefit concepts, is replacement cost less
depreciation to the existing (pre-flood) structure.
(a) Replacement cost is the cost of physically replacing (reconstructing) the structure
(only). Depreciation accounts for deterioration occurring prior to flooding, and variation in
remaining useful life of structures.
(b) Assessed value, real estate appraisal and market value data do not necessarily provide
acceptable and directly useable estimates of replacement cost less depreciation, even when
separate land and improvement values are reported. A variety of particular causes may make the
data inappropriate, but the fundamental reason is that these data are produced for and primarily
used for purposes other than estimation of flood damages, that is for other than NED benefit
estimation purposes.
(c) Such data has some advantages for Corps planners as it is generally available and can
be relatively inexpensive. Furthermore, in many cases such data may be useable, either directly
or as modified. The appropriateness of the data must be verified however.
(d) When real estate appraisals are used as a source of basic data, the appraisal process
shall be documented.
(e) Requirement. When structure value data is obtained from sources other than direct
estimation of cost of physical replacement less depreciation, these data shall be verified as being
reasonable estimates of replacement cost less depreciation. This can be done using a sampling
procedure to select a relatively small number of structures for direct estimation of replacement
cost less depreciation. The results can be used to compare to, and if appropriate, adjust the data
obtained from other sources.
l. Step 8--Determine Other Costs of Using the Floodplain. The impact of flooding on
existing and potential future occupants is not limited to flood losses. Some of the impacts are
intangible but others can be translated into NED losses. These latter include the following:
(1) Flood Proofing Costs. High flood hazards lead to high flood costs. Therefore,
compute the flood proofing costs of different activity-types and different flood hazard zones.
(2) National Flood Insurance Costs. A national cost of the flood insurance program is its
administration. The cost of servicing flood insurance policies in effect at the time of the study is
the average cost per policy, including agent commission, and the costs of servicing and claims
adjusting. FIA should be contacted to obtain these costs.
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(3) Modified Use. In some cases, the flood hazard has caused structures to be used less
efficiently than they would be with a project. For example, the first floor of garden apartments
may not be rented because of a flood hazard, or property may be configured in a different way
with the plan compared to without a plan.
m. Step 9--Collect Land Market Value and Related Data. If land use is different with
and without the project, compute the difference in income for the land. This is generally
accomplished by using land market value data. Provide supporting data in the situations
described in the paragraphs below.
(1) Land Use is Different With Project. If land use is different with compared to without
the project, collect the following data as appropriate to complete step 10.
(a) Comparable Value. If the plan does not result in a major addition to the supply of
land in the area, the value with protection is the market value of comparable flood-free land. If
the plan results in a major addition to the supply of land, the effect on the price of land should be
taken into account in estimating the value of floodplain lands with protection. The flood-free
land should be comparable in terms of physical and infrastructural characteristics.
(b) Existing Value. Use the value of nearby floodplain sites or, as appropriate, the
current value of the floodplain. In either case, report the current and, if available, past market
values of the floodplain. Use actual market values, not capitalized income values. Therefore, it
should not be assumed that the value of land being used for agriculture in an urban or urbanizing
situation is the capitalized value of agricultural returns or that any value higher than this is due to
speculation that a Federal project will be constructed or lack of knowledge. On the contrary,
without project land values in excess of agricultural land values should be expected, reflecting
the probability of future use as well as existing and anticipated infrastructural investments.
(c) Net Income Data. The net income (earned) with a project may be estimated directly
based on an analysis of a specific land use with the project. This approach would be used, for
example, for lands to be developed for recreation; the projected recreation benefits would
constitute the gross income earned on the floodplain and would be shown as a project benefit.
(d) Encumbered Title Market Value. Estimate the market value of land with an
encumbered title for inclusion as a benefit in step 10 in situations in which the floodplain is to be
evacuated, no specific public use is planned, and the land could be resold with an encumbered
title (which would ensure that future uses would be consistent with Executive Order 11988-Floodplain Management, May 24, 1977).
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(2) Land Use is Same But More Intense With Project. If land use is the same but more
intense, as when an activity’s use of the floodplain is modified as a result of the project, base
determination of the increase in income on increased land values or direct computation of costs
and revenues.
(3) Evacuation Plan. In the case of an evacuation plan, changes in market value of
properties adjacent to a restored floodplain may reflect recreation or open-space benefits to
occupants of those properties. Document such an NED benefit by empirical evidence. Care
must be taken to avoid double counting of benefits.
(4) Market Value is Lowered by Flood Hazard. If the market value of existing structures
and land is lower because of the flood hazard, restoration of the market value represents a
quantification of otherwise intangible benefits. In such cases, the benefit is the difference
between increased market value and that portion of increased market value attributable to
reductions in flood damages. Careful attention should be given to ensuring that factors not
related to the flood hazard are not included as project benefits.1
(5) No Projected Increase in Market Value. Projected increase in the market value of
land over the project life with and without a plan should not be used to measure flood hazard
reduction benefits because the current market value of land theoretically captures the expected
stream of income over time.
n. Step 10--Compute NED Benefits. At this point in the analysis, enough information is
available to compute NED benefits for structural and nonstructural measures. Table E-15
displays the types of benefits claimable for three of the major flood hazard reduction measures
and the steps in the procedure that provide the necessary data. The table applies generally;
specific cases may vary. Discount and analyze all benefits at the appropriate discount rate to the
beginning of the period of analysis. Benefits are categorized in the following way:
(1) Inundation Reduction Benefits. To the extent that step 5 indicates that land use is the
same with and without the project, the benefit is the difference in flood damages with and
without the project (step 7), plus the reduction in flood proofing costs (step 8), plus the reduction
in insurance overhead (step 8), plus the restoration of land values in certain circumstances (step
9). To the extent that step 5
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Table E- 15 Guide to Types of Benefits
Type of Benefit
(and step)
Inundation:
Incidental Flood damages (step 6)
Primary Flood damages (step 6)
Floodproofing cost reduced (step
7)
Reduction in Insurance overhead
(step 7)
Restoration of land value (step 9)
Intensification (steps 7 and 9)
Location:
Difference in use (step 9)
New use (step 9)
Encumbered title (step 9)
Open space (step 9)
Structural
Floodproofing
Evacuation
Claimable............. Claimable............ Claimable..........
Claimable............. Claimable............ Not Claimable...
Claimable............. Not Claimable..... Not Claimable...
Claimable............. Claimable............ Claimable..........
Claimable............. Claimable............ Not Claimable...
Claimable............. Claimable............ Not Claimable...
Claimable.............
Not Claimable......
Not Claimable......
Not Claimable......
Claimable............
Not Claimable.....
Not Claimable.....
Not Claimable.....
Not Claimable...
Claimable..........
Claimable..........
Claimable..........
indicates a difference in land use for an evacuation plan, the benefit is the reduction in
externalized costs of floodplain occupancy that are typically borne by taxpayers or firms
providing services to floodplain activities. Examples of such costs are subsidized flood
insurance; casualty income tax deductions; flood emergency costs; and flood damages to utility,
transportation, and communication systems. Reduction of costs not borne by the floodplain
activities may be a major benefit of projects to evacuate or relocate floodplain activities.
Reduction of flood damages borne by floodplain activities should not be claimed as a benefit of
evacuation or relocation because they are already accounted for in the fair market value of
floodplain properties.
(a) All damages avoided by flood mitigation measures are beneficial effects. Evacuation
and relocation projects provide a special case for economic analysis because the effect of damage
reductions are present in measures of both benefit and cost, therefore, double counting of this
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benefit must be carefully avoided. IWR Research Report 85-R-1, Assessment of the Economic
Benefits from Flood Damage Mitigation by Relocation and Evacuation, provides a
comprehensive discussion of NED benefit evaluation procedures for relocation and evacuation
projects. In planning for, and evaluation of, relocation and evacuation projects considerable
attention should be paid to the with project use of land which is to be evacuated, as the benefit,
associated with such use may be crucial to project feasibility.
(b) Benefit from Saving Insurance Costs. One category of costs that can be avoided by a
removal plan is public compensation for private flood damages through the subsidized Federal
Flood Insurance Program. Expressing savings in these externalized costs as project benefits is
appropriate for properties in communities that participate in the Federal Flood Insurance Program
or are expected to participate under the without project condition. This benefit is the reduction of
insurable flood damages projected over the life of the project with careful attention to the
projected without project condition.
(c) Insurable Flood Damages. Base the projection of insurable flood damages on
traditional depth-damage-frequency relationships used in projecting total flood damages. Then
reduce projected total damages by subtracting: Losses that are noninsurable either because they
are in noninsurance loss categories or because they exceed the coverage limits of the subsidized
program; the deductible portion of each expected flood damage event; and the annual cost of the
insurance premium paid by the policyholders. For this benefit calculation, assume that all
eligible parties purchase subsidized insurance. This assumption is appropriate because the
market value of properties, which determines project costs, reflects the availability of the
program, not the extent of its utilization by current floodplain occupants.
(2) Intensification Benefits. If step 5 indicates that land uses are the same with and
without the project but activity is more intense with the project, measure the benefit as the
increase in market value of land from step 9 or changes in direct income from step 6. Care must
be taken to avoid double counting.
(3) Location Benefits. If step 5 indicates that land use is different with and without the
project, measure the benefit by the change in the net income or market value of the floodplain
land and certain adjacent land where, for example, the plan creates open space (step 9).
o. Evaluation Procedure: Problems in Application. There are six major problem areas in
computing flood hazard reduction benefits:
(1) Income Losses. The loss of income by commercial, industrial, and other business
firms is difficult to measure because of the complexity involved in determining whether the loss
is recovered by the firm at another location or at a later time. Direct interview and empirical
post-flood studies are the most appropriate data sources for analyzing whether a real resource
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loss, such as the idle capital or decaying inventories, is involved. The loss of income because of
idle labor may be measured from the point of view of the firm or the household, but care must be
taken to avoid double-counting. Loss of income because of idle labor must be net of income to
labor employed in cleanup and repair of damages; unemployment compensation and other
transfer payments to idle labor are not income from an NED perspective.
(2) Intensification Benefits. This category of benefits is theoretically applicable to urban
situations, but there are to date few documented case studies. This benefit cannot exceed the
increased flood damage potential when the existing activity is compared to the intensified
activity (without the proposed plan).
(3) Location Benefits. This benefit cannot exceed the increased potential damages with
the changed land use but without the project, or the costs of fill/flood proofing, whichever is less.
The limitation applies to floodplain but not floodway land. The prohibition of development in
floodways reduces land value by more than can be attributed to flood risk alone. That is, land
value would have been higher in the absence of development prohibition. Thus, the lessor of
limitation is not an upper bound on the increase in land value due to a flood control project since
the project removes both the flood risk and the development restrictions.
(4) Risk. The analysis of response to a flood hazard is based on a probability weighing
of floods off various magnitude. This implies that floodplain occupants are risk-neutral, but
many occupants, individually or as a group, either avert or accept risk. Therefore, responses to
actual and potential flood damages should be viewed broadly in determining land use, mode of
conducting business, and even benefits. Explain any significant deviations from expected
behavior based on actual or potential flood damages computed on a risk-neutral basis.
(5) Sensitivity Analyses. The report should contain sensitivity analyses that present a
range of benefit levels representing data and assumptions about which reasonable persons might
differ. Report the benefit level that is most probable; present other levels for public information.
If increases in damages are based on increases in value, conduct a sensitivity analysis of value
per structure under the alternate assumption that there is no increase in the average value of
structure of contents and that increases in damages are due solely to increases in the number of
structures and/or shifts from one type of structure to another. If explicit risk-based analysis has
been used in the report, sensitivity analysis are not required. Sensitivity analyses could be
performed as necessary to describe the sensitivity of the formulation to inherent assumptions.
(6) Existing Levees that do not Meet Corps Criteria. Problems have often arisen in the
benefit evaluation of flood damage reduction studies when there are existing levees of uncertain
reliability. Specifically, the problem is one of engineering judgment but has implications for
benefit evaluation: engineering opinion may differ or be uncertain on the ability of the levees to
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contain flows with water surface elevations of given heights. This may lead to difficulty in
arriving at a clear, reasonable and agreed upon without project condition.
(a) General. Investigations for flood damage prevention involving the evaluation of the
physical effectiveness of existing levees and the related effect on the economic analysis shall use
a systematic approach to resolving indeterminate, or arguable, degrees of reliability. Reasonable
technical investigations shall be pursued to establish the minimum and, to the extent possible, the
maximum estimated levels of physical effectiveness. Necessary information and summary of
analyses shall be included in report presentations of plan formulation and shall be documented in
appropriate supporting materials.
(b). Sources of Uncertainty. Studies involving existing levees will focus on the sources
of uncertainty (likely causes of failure). Other than overtopping, levees principally fail due to
one or a combination of four causes: surface erosion, internal erosion (piping), underseepage,
and slides within the levee embankment or foundation soils. Reasonable investigations,
commensurate with the level of detail suitable to the planning activity underway, shall determine
the condition of existing levees with respect to the factors that can lead to failure, if this
information does not already exist.
(c). Performance Record. Existing levees either have or have not failed during previous
flood events or have shown evidence of distress such as various degrees of piping, underseepage
and sloughing. Information regarding their performance is relevant and vitally important in
forming judgments regarding future performance. However, it should not be assumed that
because a levee has passed a flood of a given frequency it will always do so in the future or vice
versa, assuming the levee has been repaired.
(d) Reliability.
(1). Reliability judgments should be based solely on physical phenomena. The question
to be answered is: what percent of the time will a given levee withstand water at height x? This
means that considerations such as meeting FIA regulatory requirements, induced damages,
induced flood heights, potential for increased risk of loss of life due to false sense of security,
etc., are not included. These considerations will be dealt with separately during the plan
formulation process.
(2). The purpose of the reliability determination is to be able to estimate the
without-project damages. Its purpose is not to make statements about the degree of protection
afforded by the existing levees. The preferred procedure is to estimate the reliability from the
levee base to its top. As a minimum, information shall be gathered to enable the identification of
two points on the existing levees. The first point is the highest vertical elevation on the levee
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such that it is highly likely that the levee would not fail if the water surface elevation were to
reach this level. This point shall be referred to as the Probable Non-failure Point (PNP). The
second point is the lowest vertical elevation on the levee such that it is highly likely that the levee
would fail. This point shall be referred to as the Probable Failure Point (PFP). As used here,
“highly likely” means 85+ percent confidence. As defined, the PNP will be at a lower elevation
than the PFP. When there are unresolved uncertainties or differences of opinion, consideration
should be given to having the range of uncertainty extend from the lower of arguable PNPs to the
higher of arguable PFPs. Because of lack of information or other reasons, if the PFP cannot be
determined then the PFP shall be the low point in the levee where the levee is first overtopped.
When determining the low point in the levee, assume that closure actions have taken place.
(3) Further technical guidance on reliability determinations is available in Engineering
Technical Letter 1110-2-556, Risk Based Analysis in Geotechnical Engineering for Support of
Planning Studies, 28 May 1999.
(e). Benefit Evaluation Procedure. Even if no PNP is claimed for an existing levee, it
does, most likely, provide some benefits. Assessment of these benefits must be in some degree
arbitrary in the absence of illuminating engineering or statistical analyses. The function of
identifying the probable failure and non-failure points is to create a range of water surface
elevations on the levee over which it may be presumed that the probability of levee failure
increases as water height increases. The requirement that as the water surface height increases
the probability of failure increases, incorporates the reasonable assumption that as the levee
becomes more and more stressed it is more and more likely to fail. If duration information is
known, explicit incorporation of the information is encouraged. If the form of the probability
distribution is not known, a linear relationship is an acceptable approach for calculating the
benefits associated with the existing levees. For benefit evaluation, assume all flood damages
will be prevented below the PNP; and no damages will be prevented above the PFP.
p. Data Sources. The following paragraphs summarize problems associated with two key
data sources.
(1) Interviews. The primary use of personal interviews is to collect flood damage data,
but interviews may also be used to collect other necessary data not available from secondary
sources. Use only interview forms approved by the Office of Management and Budget. Use
statistically sound techniques for selecting the interview sample and for devising the questions.
The questionnaire and a summary of responses should be compiled and displayed in the final
report in a way that protects the source of individual disclosures. Describe the errors and
uncertainty inherent in the sampling methods and responses.
(2) Local Land Use Plans. Local land use plans and zoning ordinances are valuable
guides to future land use in the floodplain, but caution must be exercised in the use of such plans
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and ordinances. First, the demographic implications of local plans and ordinances must be
consistent with, or convincingly distinguished from, trends in a larger area, e.g., OBERS [Bureau
of Economic Analysis]. Second, a local plan is not an acceptable projection for the without
project condition if it ignores the flood hazard. Third, the status, date, and likelihood of change
of local plans vary. Finally, local plans may not contain sufficiently detailed information to be of
direct use in benefit analysis.
(3) IWR Reports. Additional detailed support material for conducting NED evaluation
for urban flood damage may be found in the following reference documents. Policy statements
in this regulation take precedence in any apparent contradiction suggested by information
contained within these IWR reports.
(a) Urban Flood Damage (IWR Report 88-R-2, March 1988)--This manual provides an
expanded description of urban flood damage reduction benefit procedures.
(b) Urban Flood Damage, Volume II, Primer for Surveying Flood Damage for
Residential Structures and Contents (IWR Report 91-R-10, October, 1991)--This manual is a
primer for conducting comprehensive flood damage and related surveys. It explains how basic
principles of survey research can be applied to data collection for flood damage studies. Two
prototype questionnaires (one in person and one mail with a preliminary telephone supplement)
for collecting residential flood damage and related information are presented. Examples from
previous applications of these questionnaires provide insight as to how they may be adapted and
implemented for future flood damage studies.
q. Urban Flood Damage - Additional Procedures.
(1) Content Value.
(a) For feasibility studies, residential content-to-structure ratios should be based on either
site-specific surveys or surveys of comparable floodplains. In areas where surveys of comparable
floodplains are used, at a minimum, qualitative rationale will be provided to demonstrate
comparability of the survey to the study floodplain. Districts may request deviation from this
guidance if can reasonably demonstrate lack of site specific content surveys will not effect plan
formulation. Rationale for deviation from this guidance should be submitted to HQUSACE
(CECW-PD) with accompanying Project Management Plan.
(b) Commercial, industrial and public content-to-structure ratios should be based on
either site-surveys or surveys of comparable business or structure types. In areas where surveys
of comparable types are used, at a minimum, qualitative rationale will be provided to
demonstrate comparability of the survey to the study floodplain. Districts may request deviation
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from this guidance if it can reasonably demonstrate lack of site specific content surveys will not
effect plan formulation. Rationale for deviation from this guidance should be submitted to
HQUSACE (CECW-PD) with accompanying Project Study Plan.
(2) Depth-Damage Relationships. For feasibility studies, depth-damage relationships
should be developed based on site-specific data or from comparable floodplain data. In areas
where depth-damage relationships are based on comparable floodplain data, at a minimum,
qualitative rationale will be provided to demonstrate the reasonableness of use of the depthdamage relationship in the study area. Districts may request deviation from this guidance if they
can reasonably demonstrate lack of site-specific depth-damage relationships will not effect plan
formulation. Rationale for deviation from this guidance should be submitted to HQUSACE
(CECW-PD) with accompanying Project Study Plan.
(a) In FY 2000 the Corps began releasing generic depth-damage relationships developed
through the Flood Damage Data Collection Program. In flood damage reduction studies where
site-specific or comparable floodplain depth-damage information is not readily available these
curves are approved for use. As these curves are intended for nation-wide use no rationale is
required to demonstrate applicability in individual floodplains. The curves are developed for
specific building types, i.e., residential one-story without basement, and cannot be substituted for
other building types.
(b) These generic depth-damage curves relate content damages directly to structure
values. When generic depth-damage curves are used no valuation of contents is required.
Districts are therefore not required to collect or report content valuations for flood damages
analyzed through the use of generic curves.
(3) Documentation Requirements for Location Benefits. A location benefit is the increase
in aggregate net income (increases less decreases) due to efficiencies of a floodplain location
compared to the best non floodplain location. The P&G says estimated change in floodplain land
price is an acceptable benefit measure, but care must be taken that decreases in price elsewhere
are accounted for. Alternatively, when change in net income to the occupying activities is directly
estimated, accounting for compensating changes in land prices is not relevant.
(a) Provide the following documentation in addition to that required by paragraphs E19e. to E-19n.
(1) Document alternative sites for activities that might occupy the floodplain. Include
sites which are available or would likely be available for development over the planning horizon,
but which may not typically be included in a real estate study that focuses on comparable sales.
There is usually substantial industrial/commercial land available in a typical urban area.
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(2) Document specific characteristics of the protected floodplain which make it attractive
in comparison to alternative non floodplain locations, such as availability of services, etc. Some
idea of the likely nature of the occupying activity is required. Compare floodplain and non
floodplain alternative locations on a characteristic by characteristic basis.
(3) Based on economic projections for the overall area, and on the potential for land use
change in the overall area, allocate land use to floodplain and non floodplain locations in without
and with project conditions. The allocation must be explicitly based on the comparisons of
subparagraph (2) above. Significant economic advantage of the floodplain location must be
apparent as a basis for attributing predicted changes in land prices to locational advantage.
(4) If predicted changes in floodplain land values are to be the measure of benefits, the
data and procedures by which the benefit estimate results from analysis of comparable sales must
be documented.
(a) Choose comparable sales based on their similar characteristics to floodplain
locations. These data are used in estimating NED benefits as discussed in paragraphs E-19m. and
E-19n. Also, compare these sale prices to asking prices of non floodplain alternative locations
identified in subparagraph (1) above. If alternative location asking prices are less, assess whether
this means such sites would be preferable to floodplain sites. For example, if non floodplain
asking prices are lower, it must be shown that floodplain site characteristics are sufficiently
advantageous to outweigh the lower cost of non floodplain alternative sites.
(b) The spatial allocation and benefit estimates are supported when comparisons of both
relative locational characteristics and relative land prices indicate floodplain locations are
superior.
(5) If allocations are supportable by both comparisons of the locational characteristics
and comparable sales data, it should be assumed that use of floodplain land is phased in as
demand for additional land develops. Floodplain land should not be assumed to increase in value
instantaneously.
(b) Required sensitivity on the reasonableness of benefits estimated by land value
comparisons, and test of the non practicability of non floodplain locations.
(1) For representative activities estimate directly the change in net income that would
accrue when a floodplain location is chosen over the best non floodplain location. Use these
calculations to support benefits based on land value projections and for findings of non
practicability of non floodplain locations.
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(2) Estimate the increased damages which would accrue on the newly developable land
in the floodplain if the development occurred in the without project condition.
(4) Documentation Requirements for Lost Net Income and Lost Wages. The P&G allow
income loss as an NED benefit only when it can be demonstrated that postponement or transfer
does not occur. This is exceedingly difficult to demonstrate. If lost net income or lost wages is to
be claimed as a benefit, an estimating procedure must be developed and submitted to HQUSACE
CECW-PD for approval prior to inclusion of the benefits in feasibility reports or other decision
documents. The PSP is an appropriate vehicle for documenting proposed procedures when it is
desired to include lost income or lost wages benefits in feasibility studies.
(5) Documentation Requirements for Savings in Floodproofing Costs on Alluvial Fans.
Alluvial fans are triangular or fan shaped, gently sloping land forms which provide attractive
development sites due to their commanding views. Alluvial fans primarily occur in the
southwestern U.S. Active fans exhibit braided channels and erratic flowpaths that are typical of a
young fan formation. These fans have severe flood hazards which exhibit unpredictable flow
paths and high velocities that usually occur with little advance warning time. Flooding on the fan
can cause considerable erosion in some areas and deposit large amounts of sediment and debris
in other areas.
(a) The Federal Emergency Management Agency (FEMA) has provided guidance on
techniques and strategies for minimizing losses from the flood hazards when building and
developing on an alluvial fan (Alluvial Fans: Hazards and Management, May 1989) and
additionally has placed restrictions on housing developments in Special Flood Hazard Areas
(SFHA). The creation of an overall development master plan, drainage maintenance and
floodplain management is encouraged by FEMA. The Federal Register dated March 7, 1989, 44
CFR states “topographic alterations alone, by fill or other means, will not serve as a basis for
removing SFHA designations from alluvial fans.” The procedures necessary for FEMA to
recognize that a flood control measure is effective in removing or reducing the size of a SFHA on
an alluvial fan have associated costs. To ensure that development projects are protected from
alluvial fan flood hazards, FEMA’s review criteria requires that the construction include
elements which: do not cause the disturbance of natural flood processes on the fan; allow for safe
collection, passage and disposal of flood related water, sediment and debris without negative
impact to adjacent property; address erosion, scour, deposition, impact and hydrostatic forces;
provide that the design and maintenance of project elements be coordinated with the local
jurisdiction and/or agency responsible for flood control within the community.
(b) Cost associated with development compliance in accordance with FEMA alluvial fan
regulations are NED costs where it can be demonstrated that these costs will occur in the without
project condition. Removal of these costs through regional flood control solutions would
therefore be an NED benefit. FOAs must, however, carefully document the without project
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condition. It can reasonably be expected that without project development will not occur in some
areas of an alluvial fan because of prohibitively high compliance costs. This is likely true in the
high velocity areas approaching the apex of the fan. In studies where alluvial fan compliance
cost benefits constitute a major portion of total benefits, districts are required to quantitatively
demonstrate that development will occur in the without project condition. An example of an
appropriate quantitative analysis would be a comparison of developer costs and expected profits
in project alluvial fan and non-alluvial fan areas. Additionally, districts must document historic
floodproofing costs and explain any deviation from those projected for the benefit analysis.
r. Report and Display Procedures. Include in the report enough data to enable the
reviewer to follow the key steps above and, more important, the underlying rationale for the
project.
(1) Report Procedures For Risk and Uncertainty. To assist reviewers in assessing
response to risk, summarize the following separately and display the information in tabular form:
(a) Remaining Flood Damage Situations: Categorizations. The remaining damages are
those expected to occur even with a floodplain management plan in operation. Remaining
damages include:
(1) Damages to activities that would occupy the floodplain with as well as without the
plan;
(2) Damages to activities that would occupy the floodplain only with the plan; and
(3) Increased damages to activities outside the protected area with and without the plan.
This includes downstream flooding, if any, caused by the plan or project.
(b) Flood with two-tenths of 1 percent chance of occurrence. Fully describe the flood
with two-tenths of 1 percent chance of occurrence (500-year frequency) with and without the
plan. The report should contain, for example, two-tenths of 1 percent flood damages; the number
of people and towns affected; the number of structures and acres by land-use type; disruption of
essential services (e.g., water, power, fire protection, and sanitary services) and distance to
unaffected essential services; anticipated warning time; flood depths, velocity, duration, debris
content, etc.; and other indicators pertinent to catastrophic flooding. The .02 probability flood
description will be based on the median probability discharge. If protection against the .02
probability event is recommended, the Standard Project Flood (SPF) shall also be analyzed and
described, if it is larger than the .02 probability flood.
(2) Summary Tables. Tables E-16 through E-19 are suggested presentations for all
reports that include flood hazard reduction as a purpose. The summary tables should include
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pertinent land use data for computing not only NED benefits, but also environmental, social, and
regional impacts. Also present other floodplain data pertinent to the evaluation on one or more
maps: Flood limits and depths with and without the project; current and future land use; and
100-year [.01 annual probability] and other flood limits and depths.
E-20. NED Benefit Evaluation Procedures: Agriculture
a. Purpose. This section provides procedures for the evaluation of agricultural benefits
from water resources plans. The benefits attributable to flood damage reduction, drainage,
irrigation, erosion control and sediment reduction should be evaluated separately to the extent
practical.
b. Conceptual Basis.
(1) NED Benefits. The NED benefits are the value of increases in the agricultural output
of the Nation and the cost savings in maintaining a given level of output. The benefits include
reductions in production costs and in associated costs; reduction in damage costs from floods,
erosion, sedimentation, inadequate drainage, or inadequate water supply; the value of increased
production of crops; and the economic efficiency of increasing the production of crops in the
project area.
(2) Basic and Other Crops.
(a) Basic crops (rice, cotton, corn, soybeans, wheat, milo, barley, oats, hay, and pasture)
are crops that are grown throughout the United States in quantities such that no water resources
project would affect the price and thus cause transfers of crop production from one area to
another. The production of basic crops is limited primarily by the availability of suitable land.
(b) On a national basis, production of crops other than basic crops is seldom limited by
the availability of suitable land. Rather, production is generally limited by market demand, risk
aversion, and supply factors other than suitable land. Thus, production from increased acreage of
crops other than basic crops in the project area would be offset by a decrease in production
elsewhere. In some parts of the Nation analysis of local conditions may indicate that the
Table E- 16 Summary of Annualized NED Benefits and Costs for Alternative Projects
(Applicable discount rate: _____)
Alternatives
Project benefits and costs
1
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Flood hazard reduction benefits
Inundation:
Physical ....................................
Income......................................
Emergency................................
Total .........................................
Intensification ......................................
Location:
Floodplain ................................
Off Floodplain..........................
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
.............
.............
.............
.............
..............
..............
..............
..............
.............
.............
..............
..............
.............
.............
..............
..............
.............
.............
..............
..............
Total project benefits
.............
.............
..............
..............
Project costs
.............
.............
..............
..............
Net benefits
.............
.............
..............
..............
Total
Total flood benefits
Benefits from other purposes
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Table E- 17 Flood Damages by Decade, Alternative Projects
(Applicable discount rate: ____)
Time Period1
Project
No. 1.................................................................
No. 2.................................................................
No. 3………………………………………….
1
2
P0
P10
P20 etc
AAE 2
.............
.............
.............
.............
.............
.............
..............
..............
..............
..............
..............
..............
The designations P10 and P20 identify the 10th and 20th years, respectively, of project life
Average annual equivalent
Table E- 18 Flood Damages by Decade Without Project
(Applicable discount rate: ____)
Time Period1
Property Type
a (Subclassification of
residential..........................................
b........................................................
c ........................................................
Commercial .............................................
Industrial..................................................
Other........................................................
Total..................................................
1
2
P50
P40 etc
Existing
pn
P10
PN
AAE2
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...................
...................
...................
...................
...................
...................
...................
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..............
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..............
..............
..............
..............
..............
..............
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..............
..............
..............
...............
...............
...............
...............
...............
...............
...............
............
............
............
............
............
............
............
The designations P10 and P20 identify the 10th and 20th years, respectively, of project life, P50 is 1932, P40 is 1942, etc.
Average annual equivalent
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Table E- 19 Number of Acres (or Structures), Floodplain Without Project
Time Period1
1
2
Property Type
Existing
a (Subclassification of
residential units.............
b ....................................
c ....................................
Commercial.......................
Industrial ...........................
Semipublic ........................
Transportation ...................
..............
..............
..............
..............
..............
..............
..............
P0
P10
P20
P30
P40
P50
P100
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
.......
........
........
........
........
........
........
........
.........
.........
.........
.........
.........
.........
.........
......
......
......
......
......
......
......
........
........
........
........
........
........
........
Comparable tables may be made for all alternatives, if pertinent.
The designations P10 and P20 identify the 10th and 20th years, respectively, of project life
production of other crops is limited by the availability of suitable land. (Suitable land is land on
which crops can be grown profitably under prevailing market conditions.) In this case, crops
other than basic crops listed above may also be treated as basic crops when measuring
intensification benefits by farm budget analysis. (See paragraph E-20e(4) to determine when
other crops may be treated as basic crops.)
(3) Benefit Categories. Agricultural benefits are divided into two mutually exclusive
categories, depending on whether there is a change in cropping pattern:
(a) Damage reduction benefits, that is, benefits that accrue on lands where there is no
change in cropping pattern between the with and without project conditions; and
(b) Intensification benefits, that is, benefits that accrue on lands where there is a change
in cropping pattern. There is also a subcategory of intensification benefits called efficiency
benefits, which accrue from reduced costs of production.
(4) Measurement of NED Benefits.
(a) Damage reduction benefits. Damage reduction benefits are the increases in net
income due to the plan, as measured by farm budget analysis. These income increases may result
from increased crop yields and decreased production costs. ER 1105-2-101 requires risk-based
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analysis in all flood damage reduction studies. This includes studies where the primary damages
occur to agricultural crops. The ER identifies key variables that will be specifically incorporated
into the risk-based analysis. The identified hydrologic/hydraulic variables, discharge associated
with exceedence frequency and conveyance roughness and cross-section geometry, apply to
agricultural studies. However, the economic variables do not identify the key areas of
uncertainty related to the stage-damage relationship in agricultural studies. The ER suggests that
key variables in agricultural areas may be seasonality of flooding and cropping patterns. FOAs
should incorporate the key variables that apply to their specific area in the risk-based analysis.
Documentation of the key variables and the method of analysis should be incorporated in the
PSP. Districts are under no requirement to use the economic variables identified in the ER
(structure first floor elevation, content and structure values) for agricultural damages or to
perform explicit risk-based analysis of agricultural structures if they do not affect the formulation
of the project
(b) Intensification benefits. Intensification benefits are measured either by farm budget
analysis or by land value analysis. Intensification benefits from increased acreage of basic crops
and other crops that are constrained by the availability of suitable land in the WRC assessment
subarea (ASA) are measured as the net value of the increased production. Intensification benefits
from increased acreage of other crops (except for acreage of crops to be treated as basic crops
because they are land constrained) result when there are production cost savings. These
production cost savings are called efficiency benefits and are measured as the difference between
production costs in the project area and production costs on land elsewhere in the ASA.
(1) Farm budget analysis. On land where the intensification benefit is solely from
increased acreage of basic crops (and crops to be treated as basic crops), benefits are measured as
the change in net income (see paragraphs E-20e.(3). through E-20e.(6).). On land where the
intensification benefit is from increased acreage of other crops, use the efficiency procedure
found in paragraph E-20e(8).
(2) Land value analysis. Intensification benefits alternatively may be measured as the
difference in the value of benefiting lands with and without the plan. The market value of a
parcel of land reflects the capitalized value of the expected net income that can be derived from
the land. Therefore, the difference in market value of two parcels of land that are identical
except for the provision of improved water conditions reflects the present value of the additional
net income (i.e., the intensification benefit) that can be attributed to improved water management
or supply. (See paragraph E-20e(9))
c. Evaluation Components. Evaluation of the impact of water management practices or
control measures should consider the following components:
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(1) Cropping Patterns. Project the most probable cropping patterns expected to exist
with and without the project. If project measures are designed to reduce damage or associated
cost problems without changing cropping patterns, project the current cropping pattern into the
future for both with and without project conditions.
(2) Prices. Use normalized crop prices issued by the Department of Agriculture to
evaluate NED agricultural benefits; adjustments may be made to reflect quality changes caused
by floods or drought. The Department of Agriculture provides commodity prices, and indexes of
prices paid by farmers for purchased inputs, to Federal water resource agency planners for
estimating benefits from water projects. In the past, for each crop two prices and for each
purchased input two price indexes were reported. One was market clearing prices with
Government crop support programs, the other was market clearing prices without the programs.
As a result of Section 632 of Public Law 100-460 market clearing prices without Government
crop support programs will no longer be reported. Economic evaluation will therefore
necessarily use only prices with the support programs. For crops not covered above, statewide
average prices over the three previous years may be used.
(3) Production Costs.
(a) Analyze production costs that can be expected to vary between the with and without
project conditions. These may include the costs of equipment ownership and operation;
production materials; labor and management; system operation, maintenance, repair,
rehabilitation and replacement (OMRR&R); and interest payments. If costs associated with
project measures (e.g., on-farm drainage or water distribution costs) are included in the project
cost analysis, exclude them from production costs.
(b) Value purchased inputs at current market prices. Compute interest at the project
discount rate. Value all labor, whether operator, family, or hired, at prevailing farm labor rates.
Estimate management cost on the basis of the type of farming operation. The estimate normally
is expected to be at least six percent of the variable production cost (the cost of equipment
ownership and operation, production materials and labor, but excluding the cost of land and
added capital improvements).
(4) Crop Yields. Project current yields with average management in the project area to
selected time periods. Adjust future yields to reflect relevant physical changes (e.g., erosion,
drainage, water supply, and floodwater runoff) in soil and water management conditions.
Increases in yields due to future improvements in technology may be included in the evaluation
when realization of these benefits is dependent upon installation of the project. The costs
associated with these improvements in technology should be accounted for in the analysis.
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Changes in yields, both with and without the project, should be projected consistently with the
water management and production practices accounted for in the production cost analysis.
(5) Livestock Production. In geographically isolated areas increased livestock
production may depend on installation of the water resources project. Where this can be
demonstrated, net income from additional livestock production may be included as a benefit.
The test for dependency is whether the livestock feeds can economically be transported into or
out of the area. Benefits cannot exceed the delivered cost of the livestock feed if it were
purchased for use in the project area. Such purchase prices would automatically include the costs
of transporting the feeds into the area.
(6) Comparable Lands. Comparable lands are lands that have climate, aspect, slope, soil
properties and water conditions similar to those of a given category of lands benefitting from a
plan.
(7) Land Values. The market value of lands method for estimating the economic benefits
of alternative plans requires the involvement of qualified land appraisers with local experience.
Use of this procedure is appropriate when:
(a) Lands to be affected by the proposed alternative plan are comparable to lands
elsewhere which can be appraised;
(b) Water resources conditions on comparable lands are similar to those to be provided
on lands affected by an alternative plan, and they can be identified and evaluated;
(c) Current market data are used to determine the value of capital improvements and
other factors when making adjustments for these factors on comparable lands; and
(d) The estimated value of lands to be affected by the plan is not changed by speculation
that Federal action is anticipated.
d. Planning Setting.
(1) The without project condition, including conservation measures, is the condition
expected to exist in the absence of an alternative plan.
(2) The with project condition is the condition expected to exist with each alternative
plan under consideration.
(3) Agricultural income and production costs should be determined for various
conditions or levels of land and water quantity and/or quality use. (Include other resources
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associated with changes in land and water quantity and/or quality.) The level of use to be
evaluated initially is the without-plan condition. Other levels of use to be evaluated will depend
on the number of alternative plans selected for analysis.
e. Evaluation Procedure: Crops. This procedure is for the evaluation of benefits to crop
production that would accrue from an alternative plan. Steps in this procedure are summarized in
Figure E-5.
(1) Step 1. Identify Land Use and Cropping Patterns With and Without a Plan. This
information is generally developed for segments of the plan area with significantly different
characteristics. Collect appropriate data about the current and historic cropping patterns and
yields in the project area. When appropriate, collect similar data on other areas with comparable
soils to determine conditions expected with alternative plans. Analyze trends and expected
changes for without project conditions. Project future cropping patterns and yields under without
plan conditions. Include the effects of conservation and structural and nonstructural measures
expected under existing programs. Project future cropping patterns and yields for each
alternative plan. For analytical purposes, separate land in the project area into two categories:
lands on which the cropping pattern is the same with and without the plan; and lands on which
there would be a change in cropping pattern with the plan. To estimate crop production benefits
on lands where there would be a change in cropping pattern, go to Step 3. To estimate crop
production benefits on lands where there would not be a change in cropping, proceed with Step
2.
(2). Step 2. Determine Damage Reduction Benefit. For land on which the cropping
pattern would not change, determine the change in net income with and without a plan. This is
the damage reduction benefit. Income increases may result from increased crop yields and
decreased production costs. They are measured as reduced damage to crops from excessive soil
moisture, water inundation, drought and erosion, and reduced costs associated with using water
and land resources for the production of crops.
(a) Estimate reduced damage to crops from excessive soil moisture on the basis of the
change in frequency and duration of excessive soil moisture. Estimate reduced damage to crops
from water inundation on the basis of the change in frequency, depth, and duration of inundation.
Estimate reduced damage from drought on the basis of the change in frequency and duration of
inadequate soil moisture during the growing season. Estimate reduced damage from erosion on
the basis of the change in land voiding from gully and streambank erosion and on the basis of the
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Figure E- 5 Agricultural Benefits Evaluation Procedure
change in productivity losses from floodplain scour, sheet erosion, overbank deposition, and
swamping.
(b) Estimate reduced costs associated with using water and land resources for the
production of crops on the basis of the changes in the costs of equipment ownership and
operation; production materials; labor and management; and system operation, maintenance, and
replacement.
(c) Use farm budget analysis to measure changes in net income from reduced damage to
crops and reduced costs of production.
(3). Step 3. Select Evaluation Method for Estimating Intensification Benefits. For land
on which the cropping pattern would change, select either farm budget analysis or land value
analysis as the method for measuring intensification benefits. If land value analysis is selected,
go to Step 9. If farm budget analysis is selected, proceed with Step 4.
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(4) Step 4. Determine Whether Other Crops Are to be Treated as Basic Crops. If the
change in cropping pattern increases the acreage in production of other crops and if it is believed
that the production of other crops is constrained by the availability of suitable land, the following
test may be applied to determine whether these crops should be treated as basic crops in the
benefit analysis. If the test is not applied, go to Step 8.
(a) Select a representative sample of farm operations on lands comparable to lands
benefitting from the project under with project conditions where there would not be a change in
cropping pattern, proceed with Step 2.
(b) For each farm operation determine the respective acreage of basic and other crops.
(c) Use these data to compute the proportion of other crop acreage to total crop acreage
for each farm.
(d) Use farm budget analysis to identify the top 25 percent of farms in the representative
sample in terms of expected net income per acre.
(e) The average of the proportions of other crop acreage to total crop acreage for the top
25 percent of farm operations is defined as the “optimal proportion”. The optimal proportion for
these farm operations will reflect risk and uncertainty, returns to management, and prevailing
market conditions.
(f) If it can be demonstrated through standard statistical tests that the optimal proportion
is not statistically different from the proportion computed as the average of individual farm
operation proportions for the complete sample, then the production of other crops can be
considered to be constrained by the availability of suitable land in the ASA and, therefore, treated
as basic crops. Otherwise it can be inferred that production of other crops is not land constrained
in the ASA. When the crops are not land constrained, go to Step 8; otherwise, proceed with Step
5.
(5) Step 5. Determine Limit on Acreage of Other Crops That May be Treated as Basic
Crop Acreage. If the production of the other crops is found to be constrained by availability of
suitable land in the ASA, then multiply the acreage of comparable land in the project area by the
optimal proportion found in Step 4(a). This is the maximum acreage of other crops that may be
analyzed using the steps that apply to basic crops (Steps 6 and 7). To analyze benefits for any
acreage of other crops in excess of this maximum acreage, go to Step 8.
(6) Step 6. Project Net Value of Agricultural Production With and Without the Plan.
Use information from farm budget analysis to estimate the net value of agricultural production
under without plan conditions. Estimate the net value of agricultural production associated with
each of the alternative plans. Account for variable costs related to production. Include nonproject OM&R costs and associated costs for each alternative plan.
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(7) Step 7. Compute Intensification Benefits for Acreage of Basic Crops and Other
Crops to be Treated as Basic Crops. Compute intensification benefits as the change in net
income between the without project condition and conditions with an alternative plan. Express
these intensification benefits in average annual equivalent terms. This completes the analysis of
benefits for lands with increased acreage of basic crops and other crops that are to be treated as
basic crops.
(8) Step 8. Determine Efficiency Benefits. Compute efficiency benefits for acreage
producing other crops not treated as basic crops as the sum of:
(a) The difference between the cost of producing the crops in the project area and the
cost of producing them on other lands in the ASA; and
(b) The net income that would accrue from production of an appropriate mix of basic
crops on those other lands. Express this efficiency benefit in average annual equivalent terms.
(9) Step 9. Land Value Analysis. When estimating intensification benefits on the basis
of land value analysis, base appraisals on market values, not on capitalized income values.
(a) Obtain appraisals of the current market value of lands that would benefit from the
plan. These lands should be divided into various categories where values differ significantly.
(b) Obtain and appropriately adjust appraisals of non-project lands in the ASA that are
comparable to lands in each category of project lands and that have water conditions comparable
to those that would result from each alternative plan.
(1) Adjust the value of these comparable lands for facilities and other capital
improvements that are not present on project lands. For example, subtract the current market
value of improvements such as investments in orchards.
(2) In the case of irrigation projects, add to the appraised value of comparable lands the
present value of water costs incurred by the operator. These water costs include both payments
to outside suppliers and the cost of self-supplied water. Use the project discount rate to calculate
the present value of these costs.
(3) Control for other factors that may affect the value of land, such as kinds of crops
grown, distance to urban areas, availability of transportation facilities, presence of utilities,
zoning regulations, and special property tax rates. This control may be achieved by using totally
comparable parcels of lands; by collecting a sample large enough so that differences will be
averaged out; or by a statistical means such as regression analysis.
(c) Subtract the value in paragraph E-20e(9)(a) from the adjusted value in paragraph E20e(9)(b). This is the intensification benefit.
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(d) Annualize the intensification benefit found in the subparagraph (c) above at the
project discount rate.
f. Damage Reduction For Other Agricultural Properties and Associated Agricultural
Enterprises.
(1) Determine Damage Reduction for Other Agricultural Properties. The term “other
agricultural properties” includes physical improvements associated with various farm enterprises
and the agricultural community. Measure benefits to such properties as reduction in damages in
the future with the project compared to without the project. The following discussion identifies
key analytical steps in the evaluation. Benefits accrue through alterations in water conditions or
in altering the susceptibility of the property to damage (e.g., flood proofing).
(a) Inventory Damageable Improvements. Identify the location, type, number, and value
of other agricultural properties within the area that are subject to damage. This information is
most easily obtained through interviews of farmers and field reconnaissance.
(b) Determine Damage to Improvements. Gather historical data on damages to other
agricultural properties, such as equipment, improvements, and agricultural enterprises.
(c) Determine Average Annual Equivalent Damage to Improvements. Use appropriate
data to determine average annual equivalent damage to improvements. For example, use depthdamage relationships for each reach, integrated with hydrologic data, to develop average annual
flood damages with and without the plan. Include consideration of the frequency and duration of
the damage.
(2) Determine Damage Reduction Benefits for Associated Agricultural Enterprises.
Associated agricultural enterprises are economic activities that may be affected by changed water
supply or water management conditions. Evaluate damages of this type as reduced net income
under without project and with project conditions. An example of this type of damage is delay in
spring planting on flood free lands because of flooding of access roads.
(3) Calculate Average Annual Equivalent Benefits. The damage reduction benefit is the
difference between average annual equivalent damages with and without the plan.
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g. Off-site Sediment Reduction. Determine average annual equivalent sediment damages
by adding the costs in constant dollars of removing sediment from roads, culverts, channels, etc.,
over a representative period of time and dividing by the years of record. The difference in
damages with and without the project is the benefit. Extending the useful life of an existing
reservoir is another type of sediment reduction benefit. Discount the net value of the extension to
present values, and amortize it over the project life. The increased cost of providing goods and
services (e.g., additional treatment costs for removing sediment from municipal water) can also
be used to evaluate damages. Reductions in the costs of sediment removal or water treatment
provide the basis for assessing benefits with the plan.
h. Evaluation Procedures: Problems in Application.
(1) Damage Reduction Benefits. Damage reduction benefits are measured by farm
budget analysis. Proper measurement of such benefits requires accurate estimates of with and
without plan soil, water, and land use conditions. Changes in physical conditions take place at
different rates and over different time periods. Analysis can be improved by projecting changes
in physical conditions to selected time periods, analyzing net income for the time periods, and
converting net income for the time periods to an average annual equivalent value. In farm budget
analysis, double counting can be avoided by taking a holistic approach (including all soil, water
and land use conditions in a single farm budget analysis).
(2) Determination of Land Constraint. Intensification benefits for other crops are
measured either as a change in net income or as an efficiency gain depending on whether there is
an adequate supply of suitable land in the region for growing crops other than basic crops (that is,
whether production is land constrained). This determination requires a regional (ASA) analysis
of comparable lands. In order to make this determination properly, care must be exercised to
ensure that lands being evaluated are fully comparable. Care must also be exercised in order to
obtain the proper determination of aggregate acreage of basic and other crops for the top 25
percent of the farms. (See paragraph E-20e(4))
(3) Benefit Attribution. In flatland watersheds, drainage and flood damage reduction
benefits cannot be separated analytically. Therefore, they are arbitrarily allocated on a 50/50
basis. The value of benefits in other categories is determined on the basis of changes in physical
conditions with and without the plan. The benefits are assigned according to the following: the
proportion of the change in net income attributed to changes in soil moisture, water inundation,
drought and erosion; the proportion of land use changes attributed to each of the above; and
changes in production costs attributed to each of the above. Except for the problem with
drainage and flood damage reduction in flatland watersheds, benefits can be measured
independently if proper assumptions are made to avoid double counting. Double counting can be
avoided by making sure that total benefits measured independently do not exceed total benefits
from a holistic farm budget analysis.
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(4) Residual Damages. In evaluating with plan conditions, care must be taken to
consider residual damages, that is, damages that would still occur with implementation of the
plan.
(5) Land Value Analysis. Because proper real estate value(s) analysis is dependent on
accurate appraisals, the land analysis must be based on appraisals performed by qualified
appraisers. Adjustment of comparable real estate to project lands requires detailed knowledge of
local physical and financial conditions to account for capital improvements, costs of water
supply, and other factors affecting the values.
(6) Agricultural intensification benefits cannot exceed the increased flood damage
potential when the existing cropping pattern is compared to the intensified cropping pattern
(without the proposed plan).
(7) Agriculture: Swampbuster. The Food Security Act of 1985 (Public Law 99-198)
contains provisions known collectively as “Swampbuster”. Their intent is to discourage
conversion of farm wetlands. The Swampbuster provisions were implemented as a USDA final
rule (7 CFR 12), effective 17 September 1987.
(a) Conversion of wetlands is discouraged by imposing penalties on farmers who plant
commodity crops on lands that were converted from wetlands after 23 December 1985. The
penalty is loss of a wide variety of Agriculture Department program benefits, including all types
of price supports or payments; crop insurance; access to loans made, insured, or guaranteed by
FMHA; and others. If imposed, the penalty applies to all holdings of the farmer, not just to the
acres that were converted and cropped.
(b) More information about the purposes, policies, and procedures of the Swampbuster
program are contained in the final rule cited above. Details about the program, and its
management and administration, as well as determinations of its applicability to specific Corps
projects can be obtained through the regional offices of the USDA Soil Conservation Service.
(c) Without and With Project Analysis. The effects of the Swampbuster program shall
be explicitly considered in without and with project conditions.
(1) Benefit Evaluation. The effects of the program will operate through farm operator
decisions to convert and cultivate on-farm wetlands. Particularly important for benefit evaluation
is with project condition analysis, as a Corps project may by itself convert wetlands to non
wetlands, or may make additional private conversion investments more profitable. The
Swampbuster program, however, may modify incentives sufficiently to alter with project
cropping plans, and may even affect support for particular projects.
(2) Incremental Cost of Mitigation Analysis. Swampbuster will have no effect
procedurally on the analysis of the incremental cost of mitigation. It may affect the amount of
wetland loss expected in the without project condition, the amount of any wetland preservation
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credit due the project, and through these the total amount that will be considered for mitigation.
(See Appendix C.)
i. Evaluation Procedure: Data Sources.
(1) Interviews. Interviews with farmers and other area residents are important for most
of the categories of benefits to be evaluated. Interviews should not be confined to farmers in the
project area. Data collected outside the project area serves as a comparative basis for estimating
damages and yields in the project area. Use only interview forms approved by the Office of
Management and Budget. In the project report, the questionnaire and a summary of responses
should be compiled and displayed in such a way as to prevent the disclosure of individual
sources.
(2) Physical Specialists. Agronomists and soil scientists can provide data to establish
yield estimates by soil type and the effects on production of soil depletion or sediment
deposition.
(3) Universities and Federal Agencies. Many universities and the Department of
Agriculture have developed typical enterprise budgets that can be modified to reflect conditions
in the area being studied.
(4) Land Appraisers. Market values of project lands and comparable lands should be
provided by qualified real estate appraisers. The market values must be processed through the
appropriate real estate division.
(5) IWR Report. Additional detailed support material for conducting NED evaluation
may be found in Agricultural Flood Damage (IWR Report 87-R-10, October 1987). This manual
provides an expanded description of agricultural benefit evaluation procedures. Policy
statements in this regulation take precedence in any apparent contradiction suggested by
information contained within this IWR report.
j. Report and Display Procedures. A clear presentation of the study results will facilitate
review. Tables E-20 and E-21 are suggested presentations.
E-21. Federal and Non-Federal Participation. As a general rule, a PCA must be executed
between Federal and non-Federal participants prior to advertising and award of the contract.
a. Structural Measures. The 1986 and 1996 Water Resources Development Acts
modified the basic requirements for non-Federal participation in flood control projects. The
requirements for structural projects are essentially as follows:
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(1) Provide a cash contribution equal to 5 percent of structural flood control features
costs.
(2) Provide all lands, easements, rights-of-way, relocations (except existing railroad
bridges and approaches thereto) and suitable borrow and dredged material disposal areas
(referred to as LERRD).
(3) If the sum of the above two items is less than 35 percent of the costs assigned to flood
control, non-Federal sponsors will pay the difference in cash. If it is greater than 35 percent, total
non-Federal costs shall not exceed 50 percent of total project costs assigned to flood control.
Contributions in excess of 50 percent will be reimbursed by the Federal Government to the nonFederal sponsor. Total contributions in excess of 30 percent may be reimbursed to the Federal
government over a period not to exceed 15 years.
(4) Operate, maintain, repair, replace and rehabilitate the project after completion without
cost to the United States in accordance with regulations prescribed by the Secretary of the Army.
(5) Hold and save the United States free from damages due to the construction or
subsequent operation and maintenance of the project, except those damages due to the fault or
negligence of the United States or its contractors.
(6) Prevent future encroachment or modifications, which might interfere with proper
functioning of the project.
(7) Participate in the National Flood Insurance Program and other applicable Federal
flood plain management programs.
(8) Provide guidance and leadership to prevent unwise future development in the flood
plain.
b. Nonstructural Measures.
(1) Provide thirty-five percent of total project costs. A five percent cash contribution is
not required.
(2) Provide all LERRDs, credited to sponsor's share. If credited LERRDs are less than
thirty-five percent, sponsor will pay the difference in cash. Payments during construction are
preferred, but an option exists for payment beginning upon construction completion. Deferred
payments require ASA(CW) agreement. If LERRDs are more than thirty-five percent, the excess
is reimbursed by the Federal Goverment.
(3) When LERRDs are more than thirty-five percent an agreement between the sponsor
and the Federal Government on the most efficient and practical means for acquiring the excess
LERRDs is required.
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(4) Operate, maintain, repair, replace and rehabilitate completed project including, for a
flood warning system, development and adoption of a detailed response plan. This plan must be
acceptable to the Corps.
(5) Participate in the National Flood Insurance Program and other applicable Federal
flood plain management programs.
(6) Nonstructural measures are always cost shared as nonstructural measures, even if they
are mitigating for damages induced by structural measures of the same project.
(7) Other standard items included under structural measures will apply where
appropriate.
Table E- 20 Summary of Crop Benefits (Farm Budget Analysis Method)
Item
Without Plan
Acres:
basic crops.......................................
other crops ......................................
Value of agricultural
production .......................................
Agricultural
production costs ..............................
With Plan
Acres:
basic crops ....................................
other crops ....................................
Value of agricultural
production.....................................
Agricultural
production costs............................
___________________________
NED BENEFITS ..........................
Current
Base
Yeara
Yeara
Yeara
Yeara
Yeara
Annualized
Valueb
....................
....................
...............
...............
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...................
...................
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.................
....................
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...................
...................
........................
a
Annual value at the given year.
Annualized at ____ percent discount rate.
b
Table E- 21 Intensification Benefits (Land Value Analysis Method)
Item
Current
Year
Without Plan
Value of agricultural land
With plan
Value of agricultural land
INTENSIFICATION BENEFIT
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a
Annualized at ____ percent discount rate
c. Cost Sharing - Special Cases.
(1) Betterments. Non-Federal interests normally pay the incremental cost for all desired
betterments. Examples include the cost of flood control channel covering not needed for safety
(ER 1165-2-118), and the costs of departures from the NED plan not part of an exception granted
by ASA(CW).
(2) Highway Bridges. Alterations to highway bridges necessitated by a flood control
project are considered part of LERRD and are a non-Federal responsibility. However, protection
by reinforcement, underpinning, or construction to ensure the structural integrity of the bridge
foundations, piers, or abutments, are considered construction costs, and are subject to standard
cost-sharing rules. But, if new piers, foundations or abutments are required for additional spans
in the bridge crossing, the work will be considered a relocation and a non-Federal responsibility.
Highway bridges over channel cuts in fast lands are highway relocations and part of LERRD.
(3) Railroad Modifications. Existing railroad bridge (and approaches thereto) relocations
and alterations, required as part of a flood control project, are considered construction costs and
not relocations for cost-sharing purposes. This is in accordance with the intent of Section 3 of
the 1946 Flood Control Act. Any required modification to the bridge approaches can also be
evaluated as a construction cost. However, for railroad lines that are not bridges, relocation or
alteration is considered a non-Federal responsibility. An example is a rail line passing through a
reservoir site. New railroad bridges over a channel cut in fast lands that are included in
feasibility reports are considered LERRD unless specifically authorized as a construction cost
item.
(4) Abandoned Bridges/Buildings. Removal costs are considered construction costs.
(5) Covers for Flood Control Channels. If needed for safety the costs are considered
construction costs. Otherwise the costs are non-Federal and are not credited towards total project
costs.
(6) Utility Lines Under Proposed Levees. If the relocation is required as a matter of just
compensation, these costs are considered LERRD. Otherwise, such costs are removals and are
considered construction costs.
(7) Pedestrian Bridge Over Proposed Levee. A bridge provided because a levee interrupts
pedestrian traffic is considered a relocation under LERRD.
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(8) Relocation of Existing Recreation Facilities. If a proposed levee passes through an
existing park and recreation facilities will be impacted, relocated facilities are a non-Federal
responsibility under LERRD.
(9) Lands Needed for F&W Mitigation. There are no special rules for F&W mitigation
costs. All land costs are LERRD and costs of plantings or other modifications are construction
costs.
(10) Intercepted Interior Drainage. Interception and conveyance of drainage through or
over a flood control work with measures such as intercepting ditches, ponding areas, pumping
plants, gravity outlets, and pressurized conduits, are part of project construction, with the costs
shared as construction costs. All lands associated with measures for interior drainage are part of
LERRD. Any costs of increasing the size of the facilities to meet special local needs, as for
betterments, are non-Federal costs.
(11) Stormwater/Sanitary Sewer Collection Systems and Interceptor Storm Sewers.
Stormwater/Sanitary collection systems consisting of sewer pipes are utilities, and alterations of
such systems are part of LERRD. Interceptor sewers and associated features may be more
efficient than a number of separable sewer alterations, and such features are also LERRD.
Efficient design may result in a single project feature to accommodate blocked interior drainage
and the requirements for stormwater/sanitary sewers collected via interceptors. In such cases, the
costs will be apportioned on a fair share basis between LERRD and construction costs. The fair
share is to be based on the costs associated with separable facilities. The costs of measures that
provide for positive flood control, such as gated sewers, outlets and gate well structures are
project construction costs to be shared by non-Federal sponsors.
(12) Headwall Structures. Accommodation of pipes through the side slopes of channel
projects may be accomplished along with project construction, but any identifiable added costs
for end treatment of sewer pipes is part of LERRD.
(13) Levee Crossings. Where a levee or floodwall intersects a transportation facility, and
a crossing structure is necessary, a closure structure or a ramp structure will be selected on the
basis of efficiency and the appropriateness of a closure structure in view of the flood
characteristics of the area. The closure structure or an appropriate section of the ramp structure
along the line of protection (i.e., the volume of the ramp structure that would be a part of the
flood control structure in the absence of a transportation feature) shall be classified as a
construction item. Any additional work necessary to provide a ramp structure included in the
selected plan shall be classified as a LERRD item.
(14) Credit for LERRD Specific guidance on crediting the value of LERRD toward the
non-Federal share of project costs is contained in ER 1165-2-131.
(15) Windfall Benefits. Projects that provide land enhancement benefits of
unconscionable magnitude to a few beneficiaries are subject to special cost sharing. Usually a
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cash contribution is required, equal to 50 percent of the cost allocated to the windfall benefits. In
those cases where windfall benefits are minor and incidental to implementation of the project, no
special cost sharing is required. Potential windfall benefit situations should be surfaced as early
as possible in the planning process and addressed by higher authority but no later than the FRC.
(16) Other Special Cost Sharing. Section 2 of the 1920 River and Harbor Act indicates
that every report submitted to Congress should discuss special or local benefits which accrue to
localities with a recommendation as to what local cooperation should be required, if any, on
account of such benefits. This authority may be used to recommend special cost sharing for
reasons of equity. The act predates the “a-b-c” requirements of the 1936 Flood Control Act and
the landmark cost sharing requirements of the WRDA 1986. But, it remains relevant in that it
signifies that Congress is concerned with, and directs the Corps to address, equity issues arising
when identifiable localities or communities are beneficiaries to a far greater degree than they are
cost sharers.
(17) General Credit for Flood Control. Section 104 of the 1986 WRDA establishes
guidelines for crediting sponsors for constructing portions of a flood control project. ER 1165-229 outlines the procedures for crediting sponsor construction work. Sponsor work must receive
ASA (CW) approval prior to initiation of construction to be eligible for credit. Work eligible for
approved credit should be addressed in report recommendations, and recommendations must be
supported by specific report documentation of compliance with the Economic and Environmental
Principles and Guidelines for Water and Related Land Resource Implementation Studies (for
example, documentation of economic justification).
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SECTION IV – Hurricane and Storm Damage Prevention
E-22. Federal Interest. Congress has authorized Federal participation in shore protection
projects to prevent or reduce damages caused by wind and tidal generated waves and currents
along the Nation’s ocean coasts and Great Lakes shores.
E-23. Types of Improvements. The improvements are usually structural measures including
such features as beachfill, groins, seawalls, revetment, breakwaters, and bulkheads.
Nonstructural measures, such as property acquisition, may also be appropriate.
E-24. Specific Policies. These policies are presented in more detail in ER 1165-2-130.
a. Geographic Applicability. The shore protection authority is applicable to the shores of
the Atlantic and Pacific Oceans, the Gulf of Mexico, the Great Lakes, estuaries, and bays directly
connected therewith of each of the States, the Commonwealths of Puerto Rico and the Northern
Mariana Islands, and the possessions of the United States. The authority extends only that
distance up streams where the dominant causes of damage are storms or ocean tidal action (or
Great Lakes water motion) and wind-generated waves. The program does not address damages
caused by streamflows or vessels.
b. Beach Restoration and Protection and Historic Shoreline. Existing authority provides
for restoration and protection of beaches. It does not provide for extending a beach beyond its
historic shoreline unless the extension is desirable for engineering reasons, is environmentally
acceptable, and is an economically justified means to prevent or reduce storm damage behind the
historic shoreline.
c. Formulation and Establishing Corps Participation. Shore protection projects are
formulated to provide hurricane and storm damage reduction. Recreation is incidental. The Corps
participates only in those projects formulated exclusively for hurricane and storm damage
reduction, and justified (BCR ≥ 1.0 ) based solely on damage reduction benefits, or a
combination of damage reduction benefits plus (at most) a like amount of incidental recreation
benefits. In other words, recreation benefits useable to establish Corps participation may not be
more than fifty percent of the total benefits required for justification, which in turn means they
may not exceed an amount equal to fifty percent of costs. If the criterion for participation is met,
then all recreation benefits are included in the BCR. Costs incurred for other than the damage
reduction purpose, i.e. to satisfy recreation demand, are a 100% non-federal responsibility.
d. Public Use and its Relation to Federal Participation. Federal involvement in shore
protection developed historically in a beach context, generally with efforts to stabilize, create or
restore beaches. It was intended that beaches receiving public aid should not provide exclusively
private benefits, and therefore, whenever a hurricane and storm damage reduction project
involves beach improvements, real estate interest to insure public use of the Federal project is
required. (See Table E-22.) Items related to public access are discussed below.
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(1) User Fees. Reasonable beach recreation use fees used to offset the local share of
project costs are allowable.
(2) Parking. Lack of sufficient parking facilities for the general public (including
nonresident users) located reasonably near and accessible to the project beaches may constitute a
restriction on public access and use, thereby precluding eligibility for Corps participation.
Generally, parking on free or reasonable terms should be available within a reasonable walking
distance of the beach. The amount of parking should be consistent with the attendance used in
benefit evaluation. In some instances non-Federal plans may encourage or direct substitution of
public transportation access for private automobile access. Reports considering public
transportation must indicate how the public transportation system would be adequate for the
needs of projected beach users.
(3) Access. Provision of reasonable public access rights of way, consistent with
attendance used in benefit evaluation is a condition of Corps participation. Reasonable access is
access approximately every one-half mile or less.
(4) Beach Use by Private Organizations. Federal aid to private shores owned by beach
clubs and hotels which limit beach use to members or guests is contrary to the intent of Public
Law 84-826.
(5) Public Shores with Limitations. Publicly owned beaches, which limit use to residents
of the community or a group of communities, are not considered to be open to the general public
and are treated as private beaches.
e. Shore Lines Owned by Federal Agencies.
(1) Work to provide shore protection to lands under the jurisdiction of another Federal
agency is accomplished only on a reimbursable basis, upon request from the agency. In the event
protection has not been requested and such lands are within the study area, Civil Works funds
may be used if including them in a project is more cost effective than excluding them.
(2) Protection of (non Civil Works) Department of the Army lands is accomplished with
military funds, not civil works funds. If the lands are a minor part within the study area, Civil
Works funds may be used if including them in a project is more cost effective than excluding
them.
f. Evaluation. This paragraph provides general principles for evaluation of benefits from
hurricane and storm damage prevention projects.
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Table E- 22 Shore Ownership and Levels of Federal Participation
Shore Ownership (4)
and Project Purposes or Benefits
Maximum Level of Federal Participation
Construction (2)
Operation
Main,Repair,Replace
Rehabilitation
(OMRR&R)
I. Federally owned (1)
HSDR on Developed Lands
HSDR to Undeveloped Lands
Recreation (Separable Costs) (7)
100%
100%
100%
100%
100%
100%
II. Publicly and privately owned
(protection results in public
benefits) (3)
HSDR on Developed Lands
HSDR to Undeveloped Lands
Public lands (5) (6)
Private lands
Recreation (Separable Costs) (7)
65% (8)
0%
50% (8)
0%
50% (8)
0%
0%
0%
III. Privately owned, use limited
to private interests
HSDR on Developed Lands (9)
HSDR to Undeveloped Lands
Recreation (Separable Costs) (7)
0% (8)
0%
0%
0%
0%
0%
(1) See paragraph E-24e on protecting other Federal agency shores.
(2) Periodic nourishment is considered “construction.”
(3) Privately owned shores under public control, as through a sufficiently long-term lease assuring realization of
public benefits throughout the economic life of the project.
(4) The status of Indian shores depends upon the particular treaty provisions pertaining to the lands in question and
will need to be examined in each instance. Specific cases should be referred to CECW-P for guidance.
(5) Non-Federal public shores dedicated to recreation or fish and wildlife purpose.
(6) Adjusted by the ratio of public to total shore protection benefits along the protected shore.
(7) Department of Army Policy precludes civil works funding of separable recreation measures at shore protection
projects.
(8) The fair market value of LERRD is included in these cost sharing percentages, unless the land has no value or
special benefit situation considerations apply.
(9) Federal participation in construction could be 65 percent if project is only for inundation reduction or wave
damage reduction and does not provide beach erosion control or shoreline protection. Note that no Federal
participation in beach fill or restoration would be allowed due to the absence of public benefits.
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(1) Systems Analysis. Because shoreline processes are dynamic, shore protection
measures may generate both beneficial and adverse impacts beyond immediate project sites.
Impacts elsewhere may occur as a consequence of the design and implementation of site specific
hurricane and storm damage reduction projects, and navigation projects may impact or be
impacted by such projects. These impacts must be evaluated, and this requires expansion of the
study area to include reaches adjacent to the project site. Generally, the adjacent reaches are
bounded by natural features that interrupt or substantially limit the natural littoral processes (e.g.,
bays, sounds, inlets, geomorphic features, etc.). For studies which may not require a full systems
approach, the justification shall be documented in the feasibility report. A systems analysis
approach will include the following components:
(a) Physical Processes. Develop a sediment budget for the segment of coast under
investigation based on modeling of sediment movements, empirical data, and estimates of gross
and net shoreline change rates over the past fifty year period, as well as rates of change during the
most recent decade. Ascertain the effects and probability of occurrence of relevant storm events.
Identify the magnitude of the average annual volumetric changes in beach area and volume.
(b) Coastal Alterations. Identify man-made alterations to the shore (jetties,
sand-bypassing and recycling, dredging, seawalls, groins, breakwaters, beach nourishment, etc.)
and estimate their contribution to the balance of littoral processes and shoreline changes. This
information, and knowledge of the physical processes, establishes the historical and existing
conditions.
(c) Forecast Shoreline Changes. Forecast shoreline changes (including changes in
nourishment requirements, if appropriate) and navigation related dredging requirements for the
economic life of the proposed measure. Forecast this for future without and with project
conditions.
(d) Economic Benefits and Costs. Inventory potential damage centers and locations of
other project induced benefits or costs. For without and with project conditions estimate the
costs of maintaining shore protection and navigation projects. At the project site and other
impacted sites assess the extent of damages to property through analysis of storm surge and wave
damage; assess changes in recreation (if any); and evaluate project impacts to jetties, channels
and other navigation features.
(2) Evaluation Procedure. The steps to evaluate benefits for hurricane and storm damage
prevention projects are described in the following paragraphs. (See Figure E-6.) The level of
effort expended on each step will depend on the scope and nature of the proposed improvement,
the state of the art to accurately develop the estimates and the sensitivity of project formulation
and evaluation to further refinement.
(a) Step 1 – Delineate the Study Area. The study area is that area affected by storms and
erosion problems and by proposed alternatives. It includes areas indirectly affected by the
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problems and projects such as downdrift areas and navigation and other projects outside the
immediate project site.
(b) Step 2 – Define the Problem. In this step, existing storm damage and erosion
problems are identified and described. The description of existing conditions should include a
history of the economic and social effects of storm damage and erosion problems in the area, a
history of storms and erosion trends and historical floods and wave attack problems. A
determination of the degree of protection afforded by existing structures is also made as part of
this step. This includes an assessment of the level of protection actually provided by the
structure, its structural integrity, the remaining useful life and operation and maintenance
requirements.
(c) Step 3 – Select Planning Shoreline Reaches. Reaches are the primary economic subunit of analysis. Geomorphic conditions, land uses and type or level of existing protection are
criteria used in the designation of reaches.
(d) Step 4 – Establish Frequency Relationships. Two types of frequency relationship are
developed for the analysis. These are elevation-frequency relationship and erosion-frequency
relationship. The first one shows the relationship between wave and water level and frequency of
occurrence and is used to derive expected annual inundation damages. The second one shows
the relationship between periodic erosion (or accretion) and frequency of occurrence and is used
to estimate erosion-induced damages.
(e) Step 5 – Inventory Existing Conditions. An inventory of affected properties,
including land, is performed to estimate potential damages. The inventory is done by land use
activities (i.e., residential, commercial, industrial, etc.) and includes variables such as value, use,
ground elevation, distance from the water, construction materials, area, and number of stories.
Areas likely to be developed in the future or where land use changes could occur are also
identified.
(f) Step 6 – Develop Damage Relationships. Damage relationships describe the expected
value of structural or contents damages caused by various factors, such as depth of flooding, duration
of flooding, sediment load, wave heights, amount of shoreline recession and warning time.
Generalized or site-specific damage relationships can be used depending on the scope of the study
and the availability of applicable generalized relationships. Generalized damage relationships are
those developed for other geographic areas with similar characteristics to the study area. Sitespecific damage relationships are usually required to estimate wave attack and erosion damages.
These damage relationships are developed using actual damage data from past storm events.
Estimates of losses for buildings, roads, protective works, and other features are developed at current
price levels for existing development. Damage relationships are developed for each land use
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Delineate study area
Define the problem
(storm/erosion)
Assess level of protection
of existing structures
Define planning reaches
Establish frequency
relationships
Inventory existing property
Develop damage
relationships
Develop damage-frequency
relationships
Compute damages and
benefits
Figure E- 6 Hurricane and Storm Damage Prevention Benefits Evaluation
category. Anticipated damages from land loss due to erosion are computed as the market value of
the average annual area expected to be lost. Nearshore land values are used to estimate the value of
land lost. A risk-based analytical framework should be used to develop the damage relationships.
(g) Step 7 – Develop Damage-Frequency Relationships. The damage-frequency
relationships represent how the damage associated with a given event (i.e., storm, wave, erosion)
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is related to the frequency of that event (probability of occurrence). The damage relationships
developed in step 7 are combined with the frequency curves (developed by the hydraulic and
hydrologic engineers) to estimate the damage-frequency relationships. Damage-frequency
relationships (curves) are developed for each of the applicable damage mechanisms, i.e., longterm erosion, recession, inundation and wave attack and for each land use category. These
relationships should be developed using a risk-based analytical framework.
(h) Step 8 – Calculate Expected Annual Damages and Benefits. The expected annual
damage is the expected value of erosion losses and storm damages in any given year. Expected
annual damages are calculated by computing the area under the damage-frequency curve using a
life-cycle approach. Expected annual damages are calculated for the with- and without-project
conditions. The difference between the with- and without-project expected annual damages
represents the benefit associated with the project.
(3) Other Data Source. Additional detailed support material for conducting benefit
evaluation procedures for prevention of coastal storm damage and erosion is in IWR report 91-R8, dated August 1991. Policy statements in this regulation take precedence in any apparent
contradiction suggested by information contained in the IWR report.
(4) Risk Analysis. Storm damage reduction studies should adopt a life cycle approach
and probabilistic analysis (and display) of benefits and costs. Key considerations are listed
below; at a minimum, those with the greatest effect on plan formulation should be explicitly
incorporated in the analysis.
(a) The erosion damage function (with special emphasis on structure values and land
values)
(b) The stage-damage function (with special emphasis on structure first floor elevation,
content and structure values.
(c) The wave-damage function by structure class
(d) Storm-related parameters such as peak wave height and period storm duration, peak
surge elevation, and timing with respect to tidal phasing
(e) Wave height above the dune
(f) Wave penetration
(g) The shoreline retreat or eroded volume
(h) The natural post-storm recovery
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g. Periodic Nourishment. Public Law 84-826 provides that Federal participation in
periodic beach nourishment may be appropriate when it comprises a more suitable and
economical remedial measure for shore protection than retaining structures such as groins. Under
such conditions periodic nourishment can be considered construction for cost sharing purposes.
Retaining structures may be recommended, but then any required periodic nourishment is not
considered construction and is not cost shared by the Federal government. Projects with
structures included to maintain a shore alignment, but not to materially prevent littoral drift
(which may nourish downdrift beaches), such as low-profile groins and offshore breakwaters, are
eligible for periodic nourishment.
(1) New Projects. Federal participation in periodic nourishment may be recommended to
continue for the shortest of: (a) project economic life; (b) physical life of cooperating structural
features; (c) fifty years.
(2) Existing Projects.
(a) General. When the authorized period of Federal participation in periodic nourishment
at existing projects expires, it may be extended without further Congressional action for a period
not to exceed 50 years after the date of initial construction. (Section 934 of Public Law 99-662).
Reevaluation is necessary using current evaluation guidelines and policies. Prior to the expiration
of the existing periodic nourishment period the sponsor must request the extension and express a
willingness to cost share in accordance with Public Law 99-662. This Section 934 authority does
not apply to projects using sand bypassing plants.
(b) Section 934 Studies.
(1) The basic purpose of a Section 934 study is to determine if continued Federal
participation in the authorized project is economically justified given current conditions.
Justification is determined using current evaluation guidelines and policies. The cost of Section
934 studies will initially be financed by the Federal government using construction general funds.
If extension of periodic nourishment is feasible, the cost of the study will be shared in accordance
with PL 99-662 cost sharing for hurricane and storm damage reduction projects. The non-Federal
sponsor will reimburse its share of study costs to the Federal government when the first renourishment occurs.
(2) Only an extension of periodic nourishment can be implemented under Section 934.
Nevertheless, other alternatives should be evaluated as part of the Section 934 study. This
alternatives analysis should be similar in scope to an initial appraisal under Section 216 of the
1970 FCA.
(3) If the analysis indicates that the NED plan formulated for hurricane and storm damage
reduction differs from the authorized plan, additional studies should be considered. If additional
studies are needed, the Section 934 study should place an appropriate time limit on the extension
of Federal participation.
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(4) The basic purpose of a Section 934 study is to determine if continued Federal
participation in the authorized project is justified given current conditions. Thus, the without
project beach profile should reflect the conditions that existed just prior to initial construction.
The following is required: estimate current benefits (new surveys or updating of recently
estimated benefits but no indexing of benefits) of the existing project to determine justification
and consistency with current policy; develop alternatives (size and timing) for nourishment; and
recommend the most cost effective nourishment scheme for the authorized project.
(5) Environmental documentation requirements are determined by the likely impact that
Federal action would have on the environment. The extent and nature of environmental studies
therefore depends on what is expected to occur without Federal participation. If nourishment
would occur anyway, as is likely for well justified projects, incremental effects due to Federal
participation would appear less consequential. If nourishment would not occur there may be more
substantial environmental differences in the without Federal participation and with Federal
participation conditions. This would in turn require more substantial analyses. In either case the
environmental documentation must be coordinated with Federal and State agencies and others.
This coordination provides the opportunity to identify environmental concerns. Comments from
the Fish and Wildlife Service (at a level commensurate with a Planning Aid Report),
Environmental Protection Agency, National Marine Fisheries Service, the state’s coastal agency
and the state’s water quality agency should be included.
(c) Reporting. Section 934 reevaluation reports with the division commander’s
recommendation will be forwarded to HQUSACE (CECW-P) for preparation of a
recommendation to the Assistant Secretary of the Army for Civil Works (ASA(CW)). If ASA
(CW) concurs in continued participation, an amended draft project cooperation agreement (PCA)
should be developed. Extension or modification of any Section 221 agreement will require
approval by the Secretary of the Army and the signature level will be determined at the time of
approval.
h. Mitigation of Shore Damage Due to Federal Navigation Projects. Shore protection
measures undertaken using the authority of Section 111, Rivers and Harbors Act of 1968 shall
generally follow the policies provided in Appendix F.
i. Placement of Dredged Materials on Beaches. See paragraph E-14h.
j. Outer Continental Shelf Mineral Resources. If mineral resources from the outer
continental shelf are proposed for use in civil works projects, the Corps and Minerals
Management Service (MMS), U.S. Department of Interior, must enter into a memorandum of
agreement. The sponsor must also negotiate a noncompetitive lease with the MMS. Section 215
(b) of the WRDA of 1999 amended Section 8(k)(2)(B) of the Outer Continental Shelf Lands Act
to exempt State and local government agencies, in addition to Federal agencies, from the
assessment of fees for the use of Outer Continental Shelf sand, gravel and shell resources in a
shore protection, beach restoration or coastal wetlands project or program, or in any other project
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funded or authorized by the Federal Government. The MOA and lease must be executed prior to
PCA approval and execution. This is addressed in more detail in ER 1165-2-131.
k. Sea Level Rise. The National Research Council (NRC) study on sea level change
(Responding to Changes in Sea Level: Engineering Implications, 1987) is a practical and
rational review of data on relative sea level changes and the resulting impact on engineering
structures. The study should be used by the Corps for technical guidance until more definitive
data are available. The NRC study recommended that feasibility studies for coastal projects
should consider the high probability of accelerated sea level rise. Since precise estimates of
future sea level rise are unknown, the risks associated with a substantial rise should be addressed.
Feasibility studies should consider which designs are most appropriate for a range of possible
future rates of rise. Strategies that would be appropriate for the entire range of uncertainty should
receive preference over those that would be optimal for a particular rate of rise but unsuccessful
for other possible outcomes.
(1) Potential relative sea level change should be considered in every coastal and estuarine
(as far inland as the new head of tide) feasibility study that the Corps undertakes. The degree of
consideration that the possible change receives will depend upon the historical record for the
study site. Areas which are already experiencing relative sea level rise or where increases are
predicted should undertake an analysis as part of the study. Plans should be formulated using
currently accepted design criteria.
(2) For now, planning should consider what impact a higher relative sea level rises rate
would have on the design based on the historical rate. A sensitivity analysis should be conducted
to determine what effect (if any) changes in sea level would have on plan evaluation and
selection. This analysis should be based, as a minimum, on the extrapolation of the local,
historical record of relative sea level rise as the low level and Curve III from the NRC report as
the high level.
(3) If the plan selection is sensitive to sea level rise, then design considerations could
allow for future modification when the impacts of future sea level rise can be confirmed. It may
be appropriate to consider plans that are designed for today's conditions but that incorporate
features to facilitate future changes, or plans designed for future conditions. In these cases, an
evaluation of the timing and the cost of potential changes should be conducted during the plan
selection process.
E-25. Federal and Non-Federal Participation
a. General Requirements.
(1) The Federal approach to participation in shore protection is similar to that for
participation in riverine flood damage reduction. Highest priority is for reducing damages to
existing development. Reducing flooding on or erosion to undeveloped lands is not high priority.
Federal participation in the protection of private undeveloped shores is prohibited by law.
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(2) In the past, particularly prior to the WRDA of 1986, beach fill or beach restoration
was frequently considered an erosion control measure, and erosion control was thought of,
perhaps rather inexact, as a project output or project purpose. As a result of enactment of the law,
however, erosion control has no separate status as a project purpose or as a project output. Thus,
erosion control measures (beaches) are purely means to the ends of hurricane and storm damage
reduction or recreation, just as breakwaters or revetments are.
(3) Beaches can be a factor complicating analysis and decision making, however, for in
addition to reducing damages they also provide for recreation, and are in themselves highly
desired amenities. Because of these characteristics, when hurricane and storm damage reduction
plans include beach fill or restoration, Federal cost participation depends on shore ownership,
use, and types and incidence of benefits.
(4) Construction costs are assigned, as appropriate, to the purposes of hurricane and storm
damage reduction or recreation, and shared in the percentages designated in Section 103 of
Public Law 99-662, with any adjustments required to reflect conditions of ownership as
discussed below and summarized in Table E-22.
b. Project Purposes.
(1) Hurricane and Storm Damage Reduction. The Federal share is 65 percent of the costs
assigned to hurricane and storm damage reduction. The non-Federal share is 35 percent.
Participation in the National Flood Insurance Program and other applicable Federal floodplain
management programs is required. Non-Federal interests must provide LERRDs; fair market
value is credited to the non-Federal share. When the value of LERRD is less than 35 percent the
difference must be provided in cash during construction. When the value is more than 35 percent
the excess will be refunded.
(2) Recreation. Federal participation in separable recreation measures is not permitted by
current budget policies. Recreation related access facilities such as bathhouses, roads, ramps,
toilets, parking areas and so on are a non-Federal responsibility. Costs for the facilities are not
included as project costs unless they are required for recreation benefits claimed by the project,
and the costs are not being “offset” by user fees.
c. Shore Ownership.
(1) Private Shores. All costs for hurricane and storm damage protection on privately
owned shores (where use of such shore is limited to private interests) are non-Federal; except that
benefits to private shores beyond project limits, if trivial in amount, are considered incidental for
cost-sharing purposes.
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(2) Losses of Undeveloped Private Lands. All costs for hurricane and storm damage
reduction measures of any kind assigned to the prevention of losses of undeveloped private lands
are non-Federal.
(3) Federal Shores. All costs assigned to the protection of Federally owned shores are
Federal.
(4) Non-Federal Public Shores (Park and Conservation Areas). Park and conservation
areas produce recreation outputs, and cost sharing established in law is a maximum 50 percent
Federal share. Policy precludes participation in projects not principally justified by hurricane and
storm damage reduction however.
E-26. Recommendations in Feasibility Reports.
a. Cost Sharing. In a shore protection feasibility report, which includes measures for
beach creation, restoration or preservation or for beach fill, recommendations on the percentage
of construction costs to be borne by local interests or the Federal Government must be qualified
as tentative. Final apportionment will be based on conditions of ownership and project purpose
at the time of construction or subsequent nourishment.
b. Authorization Language. Authorization for shore protection projects that call for
periodic beach fill will refer to an initial construction cost and an average annual cost for periodic
nourishment as a part of construction. The recommendation wording should be as follows:
“The project for shoreline protection, (project name), as described in the Report (report to
be cited for authorization), at an initial total cost of ($100,000), with an estimated Federal
cost of ($75,000) and an estimated non-Federal cost of ($25,000), and an average annual
cost of ($600) for periodic beach nourishment over the (50) year life of the project, with
an estimated annual Federal cost of ($450) and an estimated annual non-Federal cost of
($150).”
Projects thus authorized would be subject to two cost limits in accordance with Section 902 of
the WRDA of 1986, as described in Appendix G.
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SECTION V - Ecosystem Restoration
E-27. Federal Interest. Numerous Federal laws and executive orders establish National policy
for and Federal interest in the protection, restoration, conservation and management of
environmental resources. These provisions include compliance requirements and emphasize
protecting environmental quality. They also endorse Federal efforts to advance environmental
goals, and a number of these general statements declare it national policy that full consideration
be given to the opportunities which projects afford to ecological resources. Recent water
resources authorizations have enhanced opportunities for Corps involvement in studies and
projects to specifically address objectives related to the restoration of ecological resources and
ecosystem management. Specific authorities for new individual studies and projects to restore
ecological resources have also been provided in legislation. Examples of legislation that broadly
supports Federal involvement in the restoration and protection of ecological resources include:
- Federal Water Project Recreation Act of 1965, as amended
- Water Resource Development Acts of 1986, 1988, 1990, 1992, 1996 and 1999
- Coastal Wetlands Planning, Protection and Restoration Act of 1990 (Title III of P.L.
101-646)
a. The Corps ecosystem restoration policy is described in more detail in ER 1165-2-501
and EP 1165-2-502. This policy applies to all ecosystem studies and projects. The focus of
projects implemented under this section of the guidance is the restoration of ecosystems and
ecological resources and not restoration of cultural and historic resources, aesthetic resources, or
clean up of hazardous and toxic wastes. Corps ecosystem restoration projects may not be able to
address every functional and structural characteristic, nor may it be necessary where the nature
and degree of impairment are limited to only one or a few of these parameters. Some restoration
projects may only be able to address the symptoms of the disturbance or degradation, and not the
cause(s).
b. The authorities through which the Corps can participate in ecosystem restoration and
protection studies and project implementation are summarized below.
(1) Congressionally authorized studies, pursued under General Investigations (i.e., new
start reconnaissance and feasibility studies) for single-purpose ecosystem restoration or multiple
purpose projects which include ecosystem restoration as a purpose.
(2) Programmatic authorities for study, design and implementation of ecosystem
restoration and protection projects: 1) Section 1135, Project Modifications for Improvement of
the Environment Water Resources Development Act, WRDA of 1986, as amended; 2) Section
206, Aquatic Ecosystem Restoration WRDA of 1996, as amended; 3) Section 204, Beneficial
Uses of Dredged Material, WRDA of 1992, as amended; 4) dredging of contaminated sediments
under Section 312, WRDA of 1990, as amended; and 5) Flood Mitigation and Riverine
Restoration Program Section 212 of WRDA of 1999. Sections 1135, 206 and 204 are discussed
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in Appendix F. Section 312 of WRDA of 1990 is discussed in Section II of this appendix.
Flood Mitigation and Riverine Restoration is discussed in Appendix G.
(3) Additional opportunities for ecosystem restoration and protection may also be
pursued through existing project authorities for the management of operating projects; e.g.,
through water control changes, or as part of natural resources management.
E-28. Definitions.
a. Ecosystem. An ecosystem is the dynamic and interrelating complex of plant and
animal communities and their associated nonliving environment, considered as an integrated
unit. Implied within this definition is the concept of structure and function unified through life
processes. An ecosystem may be characterized as a viable unit of community and interactive
habitat. Ecosystem restoration can be directed at different sized ecosystems within the nested set,
and may encompass multiple states, more localized watersheds, or a smaller complex of aquatic
habitats.
b. Environmental Restoration. Care should be taken in the use of this term, which is
often used interchangeably with “ecosystem restoration”. However, in the context of Corps of
Engineers programs and missions, “environmental restoration” is more commonly associated
with "cleanup" measures undertaken to achieve compliance with state and/or Federal laws or
regulations to clean up hazardous, toxic and radioactive wastes. Environmental restoration
generally refers to actions such as Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA) remedial actions, Resource Conservation and Recovery Act (RCRA)
corrective actions, and cleanups related to underground storage tanks.
c. Mitigation. Mitigation consists of those measures taken to avoid, minimize or
compensate for adverse environmental impacts. Mitigation measures are authorized by Congress
or approved by HQUSACE or MSCs to compensate for ecological resources unavoidably
affected by a Corps project or activity. Appendix C discusses natural resources mitigation in
more detail, along with other environmental compliance requirements.
d. Enhancement. Historically the term “enhancement” has been used as an indication of
a net habitat improvement over the without project condition. However, this term now implies
making the habitat better for some species than it would have been naturally in the absence of
human intervention. Since this goes beyond the goal of ecosystem restoration, the use of the
term “enhancement” is rarely appropriate in Corps documents.
e. Net Ecosystem Restoration Benefits.
(1) The recommended plan should be the justified alternative and scale having the
maximum excess of monetary and non-monetary beneficial effects over monetary and nonmonetary costs. This plan occurs where the incremental beneficial effects just equal the
incremental costs, or alternatively stated, where the extra environmental value is just worth the
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extra costs. This plan should be called the NER plan. In making these value and cost
comparisons it is assumed that each plan and scale is the minimum cost way of achieving that
level of output; i.e., that an appropriate least cost or cost effectiveness algorithm was used in
their development. Deviations from the NER Plan requires justification.
(2) For plans having both economic and restoration benefits, the plan with the greatest
net sum of economic and restoration benefits is to be selected, consistent with protecting the
Nation’s environment, unless ASA(CW) grants an exception when there is some overriding
reason for selecting another plan, based upon other Federal, State, local, and international
concerns. (For plans having both NER and NED outputs, see Section IX of this appendix for
policies and procedures related to multipurpose projects.)
E-29. Types of Improvements. Recommendations for ecosystem restoration projects will
emphasize improving degraded ecosystem function and structure through the application of the
Corps’ engineering and other technical expertise related to solving water and related land
resources problems, as opposed to projects that primarily rely on land acquisition to achieve the
projected outputs. Those restoration opportunities that are associated with wetlands, riparian and
other floodplain and aquatic systems are most appropriate for Corps involvement. The roles of
various plant and animal populations and related habitats shall be considered in the larger context
of community and ecosystem frameworks rather than maximizing habitat benefits for a single
species or a resource commodity. A wide range of improvements is possible including, but not
limited to, use of dredged material to restore wetlands, restoring floodplain function by
reconnection of oxbows to the main channel, providing for more natural channel conditions
including restoration of riparian vegetation, pools and riffles and adding structures, modification
of obstructions to fish passage including dam removal, modifications to dams to improve
dissolved oxygen levels or temperature downstream, removal of drainage structures and or levees
to restore wetland hydrology, and restoring conditions conducive to native aquatic and riparian
vegetation.
E-30. Policies. The policies specific to ecosystem restoration planning are summarized below.
a. The objective of Civil Works ecosystem restoration is to restore degraded significant
ecosystem structure, function, and dynamic processes to a less degraded, more natural condition.
However, partial restoration may be possible, with significant and valuable improvements made
to degraded ecological resources. The needs for improving or re-establishing both the structural
components and the functions of the natural area should be examined. Restored ecosystems
should mimic, as closely as possible, conditions which would occur in the area in the absence of
human changes to the landscape and hydrology. Indicators of success would include the
presence of a large variety of native plants and animals, the ability of the area to sustain larger
numbers of certain indicator species or more biologically desirable species, and the ability of the
restored area to continue to function and produce the desired outputs with a minimum of
continuing human intervention. Those restoration opportunities that are associated with
wetlands, riparian and other floodplain and aquatic systems are most appropriate for Corps
involvement.
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b. Protection may be included as part of Civil Works ecosystem restoration initiatives,
when such measures involve efforts to prevent future degradation of elements of an ecosystem's
structure and functions. Protection consists of measures undertaken to protect and preserve
elements of an ecosystem's structure and functions against future degradation. Such measures are
most appropriate if they require the Corps’ engineering expertise in accomplishing the protection
measure.
c. Planning for Ecosystem Restoration. Restoration projects should be conceived in a
systems context, considering aquatic (including marine, estuarine and riverine), wetland and
terrestrial complexes, as appropriate, in order to improve the potential for long-term survival as
self-regulating, functioning systems. This system view will be applied both in examination of
the problems and the development of alternative means for their solution. Consideration should
be given to the interconnectedness and dynamics of natural systems, along with human activities
in the landscape, which may influence the results of restoration measures. Projects for restoring
ecological resources may be recommended, based on the monetary and non-monetary benefits
anticipated from the measures recommended. Ecosystem restoration can be included as part of
multipurpose plans, which can produce both economic and environmental outputs. The planning
for ecosystem restoration objectives is essentially the same as for other water resources
development purposes. However, there are some special considerations because of limitations in
understanding the complex interrelationships of the components of ecological resources and
services which are the focus of these studies, and because the environmental outputs considered
in the evaluation process are typically not monetized. The consideration of significant resources
and significant effects is integral to plan formulation and evaluation for any type of water
resources development project. In ecosystem restoration planning, the concept of significance of
outputs plays an especially important role because of the challenge of addressing non-monetized
benefits.
d. Mitigation. Ecosystem restoration projects should be designed to avoid the need for
fish and wildlife mitigation. Projects implemented using restoration authorities may not be used
as wetland banks or mitigation credit for the non-Federal sponsor.
e. Public Interest. For projects where the land on which the majority of the physical
ecosystem restoration will occur is in the ownership of a single firm, individual, club, or
association with restrictive membership requirements, it must be demonstrated clearly that the
restoration benefits are in the overall public interests and that the benefits do not accrue primarily
to the property owner.
f. Land Acquisition. Land acquisition in ecosystem restoration plans must be kept to a
minimum. Project proposals that consist primarily of land acquisition are not appropriate. As a
target, land value should not exceed 25 percent of total project costs. Projects with land costs
exceeding this target level are not likely to be given a high priority for budgetary purposes.
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g. Water Quality. Water quality is an important component of ecosystem structure, and
good water quality is generally integral to healthy functioning ecosystems. An important Corps
contribution in rehabilitating ecosystems, where water characteristics are a critical structural
component of those ecosystems, may involve improvement of water quality characteristics using
engineering solutions. Corps restoration and protection projects may involve cost effective
solutions to improve aeration, temperature, turbidity, acidity, sedimentation and other water
quality parameters. Consideration should be given to whether the water quality improvements
will accomplish restoration of the system, because in many instances, other functional or
structural ecosystem components may require attention as well. The Corps will not propose, for
Civil Works implementation, any restoration projects or features that would result in treating or
otherwise abating pollution problems caused by other parties where they have, or are likely to
have, a legal responsibility for remediation or other compliance responsibility. (See EP 1165-2502.)
h. Recreation. It is important that proposed recreation features are appropriate in scope
and scale to the opportunity provided by ecosystem restoration projects, and that the recreation
development and anticipated use be compatible with the ecosystem restoration purpose of the
project. The recreation potential may be satisfied only to the extent that recreation does not
significantly diminish the ecosystem outputs that justify the ecosystem restoration project. More
detailed information on policy regarding recreation development at ecosystem restoration
projects is provided in Section VII of this appendix and in Appendix B of EP 1165-2-502. A list
of approved facilities for ecosystem restoration projects is provided in Exhibit E-3.
i. Monitoring and Adaptive Management.
(1) Monitoring may be necessary to determine if the predicted outputs are being achieved
and to provide feed back for future projects. The information obtained from monitoring can be
used to ascertain whether: 1) the project is functioning as per its objectives; 2) adjustments for
unforeseen circumstances are needed; and , 3) changes to structures or their operation, or
management techniques are required.
(2) Cost shared post-implementation monitoring will rarely be required. If cost shared
post-implementation monitoring is being considered, it must be clearly defined, justified and
shall be limited to no more than five years following completion of construction. The cost of
monitoring included in the total project cost and cost shared with the non-Federal sponsor should
normally not exceed one percent of the first cost of the ecosystem restoration feature(s).
(3) For complex specifically authorized projects that have high levels of risk and
uncertainty of obtaining the proposed outputs, adaptive management may be recommend. The
cost of the adaptive management action, if needed, will be limited to 3 percent of the total project
cost excluding monitoring costs. Appendix F contains guidance for the CAP.
j. Real Estate Considerations. The analysis of the nature and extent of real estate
requirements must be conducted in accordance with Chapter 12 of ER 405-1-12, including
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consideration and identification of the specific interests, estates, and acreage required. After
coordination and consultation with the non-Federal sponsor, the government will determine the
lands, easements, rights-of-way, utility or public facility relocations, and dredged or excavated
material disposal areas (LERRD) required for the implementation, operation, and maintenance of
the project.
(1) Generally fee title is required for ecosystem restoration projects in accordance with
ER 405-1-12. An easement estate may be appropriate based on the extent of the interest required
for the implementation, operation and maintenance of the project. However, if an estate less than
fee is recommended consideration should be given to the preservation of the physical integrity of
the ecosystem restoration project and to risks associated with achieving benefits that serve to
justify the project cost.
(2) A comprehensive Real Estate Plan (REP) prepared in accordance with the
requirements of Chapter 12 of ER 405-1-12 must be included in the feasibility report or other
decision document for the project. The level of detail required will vary depending on the scope
and complexity of the project.
k. Operational Effectiveness. Because self-regulation is a key goal of ecosystem
restoration, it is generally more desirable to pursue ecosystem restoration projects that have
limited maintenance requirements. However, because of irreversible cultural modifications in
the landscape, there will be instances where O&M measures may be essential to the functioning
of the project. Operation and maintenance costs should be considered in evaluating the costs and
benefits for alternatives for ecosystem restoration projects.
E-31. Federal and Non-Federal Participation.
a. Cost Sharing. For specifically authorized ecosystem restoration projects the costs of
the Feasibility phase are shared equally with the non-Federal sponsor. The non-Federal share
will be 35 percent of the project or separable element implementation costs (preconstruction,
engineering and design, and construction), or total implementation costs of a multiple purpose
project allocated to ecosystem restoration. Non-Federal sponsors shall provide 100 percent of
LERRDs, and operation, maintenance, repair, rehabilitation, and replacement (OMRR&R). The
value of LERRD shall be included in the non-Federal 35 percent share. Where the LERRD
exceeds the non-Federal sponsor’s 35 percent share, the sponsor will be reimbursed for the value
of LERRD which exceeds their 35 percent share. For more detailed discussion of these
requirements see ER 1165-2-501 and EP 1165-2-502. For information about cost sharing related
to the Continuing Authorities Program see Appendix F.
b. In the identification of ecosystem restoration opportunities, Corps field offices shall
seek the advice and cooperation of Federal, state, and tribal resource agencies, as well as input
from interested non-governmental environmental organizations. The assistance of these agencies
and other interests should be used in identifying the "boundaries" and parameters of the
ecosystem, or portions thereof; prioritizing ecosystem restoration needs taking into account
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national and regional priorities; identifying the existing and without project future conditions of
selected ecosystem(s), or parts thereof; and in defining the restoration goals and objectives
desired. See Appendix B for guidance on public involvement in planning studies.
E-32. Planning Process.
a. Consideration of ecosystems within (or encompassing) a watershed provides a useful
organizing tool to approach ecosystem-based restoration planning. Ecosystem restoration
projects that are conceived as part of a watershed planning initiative or other regional resources
management strategy are likely to more effectively meet ecosystem management goals than those
projects and decisions developed independently. Independently developed ecosystem restoration
projects, especially those formulated without a system context, may only partially and
temporarily address symptoms of a chronic systemic problem. Not all restoration studies will be
“watershed studies”, but all Corps studies should have a watershed perspective.
b. Six Steps. The six-step planning process as discussed in Chapter 2 of the main body
of this ER and defined in the P&G applies to ecosystem restoration. These steps are summarized
in the subsequent paragraphs. (See Figure E-7.)
E-33. Planning Steps 1 and 2.
a. Objective and Constraints. Problems and opportunities should be defined in terms of
their nature, cause, location, dimensions, origin, time frame, and importance. The planning team
develops objectives and constraints based on those problems and opportunities. Developing
specific, flexible, measurable, realistic, attainable, and acceptable objectives and constraints is
critical to the success of the entire planning process.
b. Inventory of Existing Conditions and Forecast of Future Conditions. Both existing
conditions and future conditions expected to occur without a project must be characterized. The
future without project condition forms the basis from which alternative plans are formulated and
impacts are assessed.
(1) Selection of Assessment Methods. Many methods and models are available to
measure existing ecosystem resource conditions and to estimate future conditions of those
resources. Habitat models developed for individual species may have limitations when used to
assess ecosystem restoration problems and objectives. They do not consider communities of
organisms and typically consider habitat in isolation from its ecosystem context. Single species
Delineate Study Area
Assess Current
Ecological Condition
E-151
Identify Restoration
Problems & Opportunities
Forecast Future
Ecological
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habitat models may be limiting if used to optimize for a particular species, but they can be useful
when carefully applied in the ecosystem context in which the habitat is situated. They can be
helpful in identifying important influential functions or structural components for ecosystem
projects to address. The assessment methodology chosen for a study should be governed by how
well the technique meets the needs of the study goals and objectives and level of detail for a
given study. The assessment methodology may include habitat models, or information derived
from community or ecosystem assessments using other scientifically based methods that are
generally accepted by state or Federal resource agencies.
(2) Gathering information about historic and existing resources requires an inventory.
Gathering information about potential future conditions requires forecasts, which should be made
for selected years over the period of analysis to indicate how changes in environmental
conditions are likely to impact problems and opportunities. Forecasting future conditions in an
ecosystem may be subjective and can be very difficult, but is essential in order to formulate
restoration projects. It should be done in an iterative manner, seeking input from State and
Federal resource agencies and the environmental community, in order to help build consensus
about future without project conditions and what outputs the restoration project will produce.
Forecasting may be especially critical to a case for protection where an argument must be made
that there will be a decline or degradation of the resource unless protection is provided.
E-34. Planning Step 3 – Formulation of Alternative Plans. Plan formulation consists of three
phases: 1) identifying management measures; 2) formulating alternatives from mixing and
matching the management measure building blocks; and 3) iterative reformulation, during which
alternative plans previously formulated are changed for one or more reasons. Measures may be
added, dropped, re-scaled, or otherwise modified such that the reformulated plan will better
achieve a planning objective or stay within the limits of a constraint.
E-35. Planning Step 4 - Evaluation of Alternative Plans. The inability to quantify ecosystem
benefits in the familiar metric of dollars probably makes the evaluation of plan effects (planning
step 4) the single biggest challenge in ecosystem planning.
a. The evaluation of effects is a comparison of the with-plan and without-plan conditions
for each alternative. At a minimum, two categories of effects will be evaluated: costs and
outputs. Environmental outputs are the desired or anticipated measurable products or results of
restoration measures and plans. The term “outputs” is often used interchangeably with
“benefits.” Ecosystem restoration proposals may possess multiple output categories, as well as
other effects that may need to be considered, but the evaluation must at least address cost and an
output category that has been determined to reasonably represent ecosystem restoration benefits.
The evaluation is conducted by assessing or measuring the differences between each with- and
without plan condition and by appraising or weighting those differences. Evaluation consists of
four general tasks: (1) forecast the most likely with-project conditions expected under each
alternative; (2) compare each with-project conditions to the without-project conditions and
document differences between the two; (3) characterize the beneficial and adverse effects by
magnitude, location, timing, and duration; and (4) qualify plans for further consideration.
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b. All Corps water resources development projects be evaluated in terms of acceptability;
completeness; effectiveness; efficiency. Ecosystem restoration alternatives are also evaluated on
the basis of cost effectiveness and incremental cost analyses of the possible restoration
alternatives and significance of ecosystem outputs. How each of these criteria is used to evaluate
alternatives is explained in the following paragraphs.
E-36. Cost Effectiveness and Incremental Cost Analyses (CE/ICA). CE/ICA are two distinct
analyses that must be conducted to evaluate the effects of alternative plans. First, it must be
shown through cost effectiveness analysis that an alternative restoration plan’s output cannot be
produced more cost effectively by another alternative. “Cost effective” means that, for a given
level of non-monetary output, no other plan costs less, and no other plan yields more output for
less money. Subsequently, through incremental cost analysis, a variety of implementable
alternatives and various-sized alternatives are evaluated to arrive at a “best” level of output
within the limits of both the sponsor’s and the Corps’ capabilities. The subset of cost effective
plans are examined sequentially (by increasing scale and increment of output) to ascertain which
plans are most efficient in the production of environmental benefits. Those most efficient plans
are called “Best Buys”. They provide the greatest increase in output for the least increases in
cost. They have the lowest incremental costs per unit of output. In most analyses, there will be a
series of Best Buy plans, in which the relationship between the quantity of outputs and the unit
cost is evident. As the scale of Best Buy plans increases (in terms of output produced), average
costs per unit of output and incremental costs per unit of output will increase as well. Usually,
the incremental analysis by itself will not point to the selection of any single plan. The results of
the incremental analysis must be synthesized with other decision-making criteria (for example,
significance of outputs, acceptability, completeness, effectiveness, risk and uncertainty,
reasonableness of costs) to help the planning team select and recommend a particular plan.
a. There are a number of ways of conducting CE/ICA, thereby determining which plans
are cost effective, and, from the set of cost effective plans, identifying those plans which are most
efficient in production (i.e., “Best Buys”). In relatively uncomplicated cases, these analyses may
simply be performed by hand with pencil and paper. In slightly larger or more complex
situations, user-built and generated spreadsheet models may suffice. In still larger and more
involved calculations, planners may need to use more sophisticated software applications
specifically designed for CE/ICA.
b. The Corps’ Institute for Water Resources (IWR) has developed procedures and
software to assist in conducting CE/ICA. Please refer to the following IWR reports for detailed
discussion of CE/ICA: IWR Report 94-PS-2, Cost Effectiveness Analysis for Environmental
Planning: Nine EASY Steps; IWR Report 95-R-1, Evaluation of Environmental Investments
Procedures Manual Interim: Cost Effectiveness and Incremental Cost Analyses; and IWR Report
98-R-1, Making More Informed Decisions in Your Watershed When Dollars Aren’t Enough.
Two software packages are also available to assist in performing CE/ICA: ECO-EASY, a DOSbased software application, and Windows-based IWR-PLAN Decision Support Software. These
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reports and the IWR-PLAN software package are available from the IWR web site at
http://www.wrsc.usace.army.mil/iwr.
c. CE/ICA Procedures:
(1) Step 1. Before starting CE/ICA, the planning team should have already identified
potentially implementable solutions for achieving the desired ecosystem outputs. The solutions
must be described in terms of their effects on costs and outputs. That is, an estimate of the cost
of each management measure/scale combination and an estimate of the environmental output it
will produce must be developed. All costs should be calculated in terms of present worth using
the appropriate discount rate and annualized (see Appendix D on Economic and Social
Considerations for more detailed information). Ecosystem restoration outputs are not
discounted, but should be computed on an average annual basis, taking into consideration that the
outputs achieved are likely to vary over time. For example, if one of the outputs is a mature oak
forest, the full benefits may not be realized for 30 years. Note that the output values listed are the
differences between with- and without-project conditions, not total values before and after the
project is implemented. The management measures, scales, costs, and outputs should then be
listed.
(2) Step 2. After estimating the costs and outputs of each solution, the next step is to
formulate all possible combinations of management measures and scales. Each possible
combination may be considered an alternative plan.
(a) By definition, scales within a management measure are mutually exclusive; they
represent the application or implementation of different amounts of a given management
measure. Formulating all possible combinations requires choosing one scale from each of the
management measures to combine in turn with one scale from each of the other management
measures, until all possible permutations have been combined. The “No action” possibility for
each management measure should also be included in the permutations.
(b) When measures and scales are combined, the cost and output of each constituent part
of the combination is summed. Each combination thus has an associated total cost and total
output.
(3) Step 3. The next step is to sort all possible combinations of management measures
and scales (which are, in effect, all possible alternative plans) in terms of increasing output. This
is done as a prelude to cost effectiveness analysis. All possible plan combinations are listed and
sorted in terms of increasing output. Costs and outputs of combined solutions may be additive or
synergistic. It is important to document the rationale for determining which of these cases
applies.
(4) Step 4. Once all possible plans have been formulated and sorted by increasing
output, the next step is conducting cost effectiveness analysis. Cost effective means that, for a
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particular level of output, no other plan costs less. Furthermore, no plan yields more output for
the same or less cost.
(a) Graphing cost effective plans in terms of their respective costs and outputs can help
visually display the relationship between the increasing financial investment required for
increasing environmental outputs.
(b). Each of the cost effective plans produces its associated level of output at the least
cost; no other plan can provide as much output for the same level of investment. This is an
important point to make in ecosystem restoration evaluations, and an important criterion in
qualifying plans for further evaluation.
(5) Step 5.
(a) The next step is to examine the efficiency of each of the cost effective plans, which is
accomplished through incremental cost analysis. In incremental analysis those cost effective
plans that are most efficient in production are identified. These plans, known as “Best Buy”
plans, provide the greatest increase in output for the least increase in cost. They have the lowest
incremental costs per unit of output. The concept of incremental changes in costs and outputs is
analogous to the concept of marginal changes, i.e., the differences in cost or output between one
plan or alternative and the next one in succession.
(b) The decision rule in incremental analysis is to select the plan with the lowest cost per
unit (i.e., the first “Best Buy” from a production perspective, producing output at the lowest unit
cost) and then remove from consideration (in this analytical process) any plans that provide a
smaller output level than the selected plan (they are less efficient in production, producing a
lower level of output at a higher unit cost).
(c) To conduct incremental cost analysis, start with the subset of cost effective plans
ranked by increasing output. Beginning with the “No Action” alternative, compute the
incremental cost, incremental output, and incremental cost per unit of incremental output
advancing from the No Action alternative to each successive alternative. The incremental cost is
the additional cost incurred in selecting one plan over another, or in this case the difference in
cost between each alternative and No Action. Similarly, the incremental output is the additional
output gained in selecting one plan over another, or in this case the difference in output between
each alternative and No Action. The incremental cost per unit of incremental output is the
incremental cost divided by the incremental output. It shows the change in cost from No Action
to each other alternative plan in a per unit basis.
(6) Step 6. The next step is to recalculate the incremental cost per unit of incremental
output of implementing each remaining plan instead of the last selected plan
(a) The same decision rule still applies: of the remaining plans (all larger than the first
Best Buy plan), select the plan with the lowest incremental cost per unit of incremental output,
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then remove from consideration (in this analytical process) any plans that provide a smaller
output level than the selected plan.
(b) This process of recalculating incremental cost per incremental unit for each
remaining plan over the last selected Best Buy plan is reiterated until the incremental unit cost for
the last remaining plan has been recalculated. The number of iterations is dependent upon the
number of plans and on the respective cost and output data of each.
(c) It should be noted that the iterative process of selecting successively larger Best Buy
plans is an arbitrary, but rational, decision process based on production efficiency. Situations
could arise where the most efficient plan produces such a large quantity of output that its total
cost makes it infeasible due to cost constraints. However, because the plan is the most efficient
in production, all plans that produce smaller output levels (possibly at lower and acceptable cost
levels) would be eliminated from consideration in the iterative process. In such situations, it may
useful to remove such a large scale plan from consideration and repeat the Best Buy iterative
process. The purpose of the iterative process is not to eliminate plans from the possibility of
being selected, but rather to identify those plans (and their corresponding level of output) where
there is a marked increase in production costs. By identifying where significant increases in
production costs occur as output levels are increased, better information is provided to assist in
determining desirable project scale.
(7) Step 7. The final step in the CE/ICA process is to tabulate and graph the incremental
costs.
(a) It is not necessary to display all such iterations in ecosystem restoration report
documentation. What should be provided, however, is a table that summarizes the pertinent
incremental cost and output information associated with the increasing size (in terms of output)
of the Best Buy plans.
(b) Graphing the Best Buy plans can help visually display the relationship between the
increasing financial investment required for increasing environmental outputs. Figure E-8 shows
the incremental costs of alternative plans (in $1000) on the y-axis and the average annual
environmental benefits (in habitat units) on the x-axis. A similar one should be provided in
ecosystem restoration report documentation.
d. CE/ICA as Evaluation Criteria. Neither cost effectiveness analysis nor incremental
cost analysis include a “one plan” selection rule similar to the “NED plan” selection rule for
NED evaluations. In the absence of such a decision-making rule, neither analysis dictates what
choice to make. However, the information developed by both analyses can inform decisionmaking by progressively proceeding through the available levels of output to ask whether the
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Figure E- 8 Best Buy Plans
next level is “worth it”; that is, whether the environmental benefit of the additional output in the
next level is worth its additional cost. In the example shown in the graph, Figure E- 6, the
question is whether the first increment of 22 habitat units are worth $440 each, as opposed to No
Action of 0 habitat units at $0 each. If it is judged that 22 habitat units are worth $440 each, then
proceed to the next level of output and repeat the questioning. At the next level there is a total of
33 habitat units, or 11 additional habitat units over the last level at a cost of $2,600 for each
additional habitat unit. Again, if the case can be made that the additional 11 habitat units are
worth $2,600 each, then proceed to the next increment.
(1) Often this questioning process will tend to continue to conclude that successive levels
of output are “worth it” until an unusual increase in incremental costs, beyond the general range
of preceding costs, is encountered. In the CE/ICA graph, Figure E-8, the last increase represents
a jump in incremental costs of $10,700 per habitat unit for each of the last five habitat units.
This doubling of unit cost for additional output (from the preceding increment) most likely
presents a situation where the value of increasing outputs to this level should be explained,
supported, or otherwise considered in more detail than previous increases.
(2) The following general decision-making guidelines related to outputs, costs, and the
display curves should be applied to the results of cost effectiveness and incremental cost analyses
to assist in making “Is it worth it?” arguments:
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(a) Curve anomalies (abrupt breakpoints, spikes, peaks, jumps, inflection points, or
changes in cost effectiveness and incremental cost curves) identify potential points that provide
decision-makers with reasons to question the causes of the changes, and whether additional
incremental costs are worth it.
(b) Output Target. If a study has established a specific resource output target to be met,
then a decision rule can be developed to meet some portion of that target. For example, a habitat
unit target could be marked on an incremental cost bar graph to provide a picture of the
relationship between the target and possible solutions. The display may be useful in focusing on
whether the incremental costs of the solutions leading to the target are worth it.
(c) Output Thresholds. In some cases it may be necessary to first produce a minimum
base amount of output, and any lesser amount would not be successful. Similarly, there may also
be a “maximum threshold” level of output where production beyond that output would no longer
contribute to the achievement of planning objectives. If minimum or maximum output
thresholds exist, they can be used to bound the range of acceptable solutions.
(d) Cost Affordability. If implementation funds are a constraint, either from the
perspective of the Corps’ or the local sponsor’s funding limitations, then decision makers can
review both the cost effectiveness curve and the incremental cost curve for information to help
them judge the best investment for the funds available.
(e) Unintended Effects. Decisions to recommend a particular cost effective or best buy
plan are not made in isolation. Other factors that matter in terms of selecting one alternative over
another could include, for example, land ownership, effects on other outputs, and effects on
nearby stakeholders. It is possible that the unintended consequences could be just as important
as the primary project purpose of ecosystem restoration. The importance and magnitude of these
unintended effects will of course vary from study to study.
(3) The results of cost effectiveness and incremental cost analyses are intended to help
decision makers make better informed decisions. In all but the most unusual cases, the NER Plan
should be derived from the final set of Best Buy solutions. Other solutions, identified as noncost effective in cost effectiveness analysis; as well as cost effective plans identified as relatively
less efficient in production (“non-Best Buys”) in incremental analysis, may continue to be
considered for selection. In some cases, the economic and environmental models used to
estimate the effects of ecosystem restoration plans are not capable of capturing the full range of
such effects, or considerable uncertainty may accompany the estimates of such effects. Other
evaluation criteria, such as environmental significance, acceptability, completeness, and
effectiveness also impact the decision process. For example, concerns about endangered species,
support by a local sponsor or other interest group, unintended effects on other economic and
ecological resources, and other factors may lead to the continuing consideration and selection of
solutions that may not be the most cost effective, or that may incur substantial incremental costs
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E-37. Significance of Ecosystem Outputs. Because of the challenge of dealing with nonmonetized benefits, the concept of significance of outputs plays an important role in ecosystem
restoration evaluation. Along with information from cost effectiveness and incremental cost
analyses, as well as information about acceptability, completeness, and effectiveness, information
on the significance of ecosystem outputs will help determine whether the proposed
environmental investment is worth its cost and whether a particular alternative should be
recommended. Statements of significance provide qualitative information to help decisionmakers evaluate whether the value of the resources of any given restoration alternative are worth
the costs incurred to produce them. The significance of restoration outputs should be recognized
in terms of institutional, public, and/or technical importance. This basically means that someone,
some entity, some law/policy/regulation, or scientific evidence indicates that a particular resource
is important. How to determine and characterize institutional, public, and/or technical
significance is an important point and explained in greater detail in the paragraphs below.
Detailed procedures for determining and describing the significance of environmental
resource(s), including a hypothetical restoration study example as well as sample significance
statements, is found in IWR Report 97-R-4, Resource Significance Protocol for Environmental
Project Planning.
a. Institutional Recognition. Significance based on institutional recognition means that
the importance of an environmental resource is acknowledged in the laws, adopted plans, and
other policy statements of public agencies, tribes, or private groups. Sources of institutional
recognition include: (1) public laws, executive orders, rules and regulations, treaties, and other
policy statements of the Federal government; (2) plans, laws, resolutions, and other policy
statements of states with jurisdiction in the planning area; (3) laws, plans, codes, ordinances, and
other policy statements of regional and local public entities with jurisdiction in the planning area;
and (4) charters, bylaws, and other policy statements of private groups.
(1) Examples of sources of information that can assist in identifying and describing
significant resources at the Federal level include the threatened and endangered plant and animal
species listed by the Endangered Species Act of 1973, as amended; the species lists of the U.S.
Fish and Wildlife Service, Office of Migratory Bird Management; species listed in the
Anadromous Fish Conservation Act of 1965; species protected by the Marine Mammal
Protection Act of 1972; the waterfowl habitat areas and habitat joint ventures of the North
American Waterfowl Management Plan; the wetlands designated in the National Wetlands
Priority Conservation Plan; the rivers identified by the National Wild and Scenic Rivers Act of
1968 - Nationwide Rivers Inventory; and the estuaries designated under the National Estuary
Program.
(2) Examples of sources of regional level information include the wetlands designated
under the Coastal Wetlands Planning, Protection, and Restoration Act of 1990 -- Annual Coastal
Wetlands Restoration Plan and Priority Project List; the rivers identified in the Northwest Power
Act of 1980 - Protected Areas Program; the aquatic habitats identified through the Water
Resources Development Act of 1986 (Section 1103) -- Upper Mississippi River System
Environmental Management Program; the marine habitats designated by the Coastal America
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Partnership; the aquatic resources identified through the Chesapeake Bay Program; and marine
resources identified in the Gulf of Mexico Program.
(3) On the state level, examples of sources of information may include the species and
habitats identified in state natural heritage programs; species listed under state endangered
species programs; habitats designated in state wetlands priority plans; marine resources identified
in state coastal zone management programs; and habitats identified by state chapters of the
Nature Conservancy.
(4) Local level sources may include zoning ordinances; wetlands regulations; master
plans; shoreline regulations; and habitat conservation plans.
b. Public Recognition. Public recognition means that some segment of the general public
recognizes the importance of an environmental resource, as evidenced by people engaged in
activities that reflect an interest or concern for that particular resource. Such activities may
involve membership in an organization, financial contributions to resource-related efforts,
providing volunteer labor, and correspondence regarding the importance of the resource.
(1) The public expresses its recognition of resource significance through membership in
many local, regional, state, national and international organizations (e.g., Arlingtonians for a
Clean Environment, Ducks Unlimited, local chapters of the Nature Conservancy, the National
Audubon Society, World Wildlife Fund); and through participation in many activities, whether
they be resource-specific (e.g., focusing on a river, a type of fish, a watershed), user-based (e.g.,
fishing, bird-watching, hiking, camping), or conservation- or management-based (e.g., wetlands
restoration projects, posting signs for no-wake zones, planting seedlings).
(2) Another form of public recognition is the role of the resource in the public’s customs
and traditions. For example, some communities may hold annual festivals, fairs and seasonal
celebrations in association with a resource that reflects its importance to the community. In the
Pacific Northwest, many tribal ceremonies revolve around salmon runs, indicating the
importance of salmon to the culture and traditions of these Native American Indian tribes.
(3) Public and agency records (e.g., newspaper articles, letters written to the Corps) and
scoping meetings with the general public as well as non-profit organizations with an interest in
the resource may help Corps planners identify sources of public recognition of resource
significance.
c. Technical Recognition. Technical recognition means that the resource qualifies as
significant based on its “technical” merits, which are based on scientific knowledge or judgement
of critical resource characteristics. Whether a resource is determined to be significant may of
course vary based on differences across geographical areas and spatial scale. While technical
significance of a resource may depend on whether a local, regional, or national perspective is
undertaken, typically a watershed or larger (e.g., ecosystem, landscape, or ecoregion) context
should be considered. Corps planners should describe technical significance in terms of one or
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more of the following criteria or concepts: scarcity, representativeness, status and trends,
connectivity, critical habitat, and biodiversity.
(1) Scarcity. This is a measure of a resource’s relative abundance within a specified
geographic range. Generally, scientists consider a habitat or ecosystem to be rare if it occupies a
narrow geographic range (i.e., limited to a few locations) or occurs in small groupings. Unique
resources, unlike any others found within a specified range, may also be considered significant,
as well as resources that are threatened by interference from both human and natural causes.
(2) Representativeness. This is a measure of a resource’s ability to exemplify the natural
habitat or ecosystems within a specified range. The presence of a large number and percentage
of native species, and the absence of exotic species, implies representativeness, as does the
presence of undisturbed habitat.
(3) Status and Trends. This concept involves evaluating the occurrence and extent of the
resource over time, how it has changed, and why. Documenting the status, or health, of the
resource, includes describing its physical attributes, the extent of degradation, and human
alterations of the resource. The trends associated with the degradation of the resource should
indicate whether the resource is declining, recovering, or maintaining a steady status, as well as
how quickly the resource is changing. Different variables may be used to describe the status of
the resource and include: the presence of pollution; biodiversity; abundance of distress-loving
and exotic species; extent of man-made barriers and other disturbances; and degree and
immediacy of threats. In general, Corps planners can consider a potential restoration site that has
declining trends and an imperiled status to be more significant than one that is recovering.
Planners should also consider the “recoverability” (i.e., the ability of human intervention to
restore the natural productivity or condition of the ecosystem) of a degraded resource in
examining a resource’s status and trends.
(4) Connectivity. This is a measure of the potential for movement and dispersal of
species throughout a given area or ecosystem, and should be considered in the context of an
entire landscape or watershed. The variation and quality of links between habitats in a landscape
or watershed determine the level of connectivity. Landscape spatial patterns that effect the level
of connectivity include the existence and suitability of habitat corridors, the degree and pattern of
habitat fragmentation, and the presence of natural and man-made barriers. Often, rivers,
waterways, and riparian forests serve as highly functional habitat corridors, and aquatic
ecosystems inherently serve a connective function to other waterways and terrestrial landscapes.
Corps planners may recognize as technically significant those restoration alternatives that serve
to improve connectivity by creating or re-establishing habitat corridors; eliminating or addressing
the pattern of fragmentation; or removing barriers, such as dams and other water blockages, that
disrupt otherwise contiguous habitats.
(5) Limiting Habitat. This is habitat that is essential for the conservation, survival, or
recovery of one or more species. Limiting habitat may serve as a criterion for both institutional
and technical significance. Under the Endangered Species Act, the Secretary of the Interior has
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designated critical habitat for a portion, but not all, of the species listed as threatened or
endangered. In that context, critical habitat is an example of limiting habitat with both
institutional and technical significance. Since the term "critical habitat" has specific legal and
regulatory ramifications, it should only be used in relation to Federally listed threatened or
endangered species. The protection or restoration of limiting habitat for non-designated or non
Federally listed species may be technically significant.
(6) Biodiversity. Most simply defined, biodiversity is a measure of the variety of distinct
species and the genetic variability within them. It can be measured at the individual level
(genetic variation), population level (species variation), and the community level (variation of
biological communities and interaction of ecosystem functions). In measuring diversity,
biologists usually attempt to describe species richness (i.e., the number of species found in a
community) as well as the distribution of individuals among species (i.e., how evenly the total
number of individuals is divided among species). Diversity is greater if individuals are more
evenly distributed. Corps planners may recognize as technically significant those restoration
alternatives that serve to improve biodiversity within a specified area.
(7) In summary, the case can be made that environmental resources are significant based
on technical recognition when, within a specified geographic range, those resources are either
scarce; are representative of their respective ecosystems; will improve connectivity or reduce
fragmentation of habitat; represent limiting habitat for important species; will improve or
increase biodiversity; or trends indicate that the health of the resource is imperiled and declining,
but can be recovered through human intervention.
E-38. Acceptability, Completeness, Effectiveness, and Efficiency. Acceptability, completeness,
effectiveness, and efficiency are the four evaluation criteria specified in the P&G (Paragraph
1.6.2(c)) in the screening of alternative plans. Alternatives considered in any planning study, not
just ecosystem restoration studies, should meet minimum subjective standards of these criteria in
order to qualify for further consideration and comparison with other plans. These concepts are
discussed in more detail in Section I of this appendix.
a. Acceptability. An ecosystem restoration plan should be acceptable to State and
Federal resource agencies, and local government. There should be evidence of broad based
public consensus and support for the plan. A recommended plan must be acceptable to the nonFederal cost-sharing partner. However, this does not mean that the recommended plan must be
the locally preferred plan.
b. Completeness. A plan must provide and account for all necessary investments or other
actions needed to ensure the realization of the planned restoration outputs. This may require
relating the plan to other types of public or private plans if these plans are crucial to the outcome
of the restoration objective. Real estate, O&M, monitoring, and sponsorship factors must be
considered. Where there is uncertainty concerning the functioning of certain restoration features
and an adaptive management plan has been proposed it must be accounted for in the plan.
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c. Efficiency. An ecosystem restoration plan must represent a cost effective means of
addressing the restoration problem or opportunity. It must be determined that the plan’s
restoration outputs cannot be produced more cost effectively by another agency or institution.
d. Effectiveness. An ecosystem restoration plan must make a significant contribution to
addressing the specified restoration problems or opportunities (i.e., restore important ecosystem
structure or function to some meaningful degree).
E-39. Risk and Uncertainty Considerations. When the costs and outputs of alternative
restoration plans are uncertain and/or there are substantive risks that outcomes will not be
achieved, which may often be the case, the selection of a recommended alternative becomes
more complex. It is essential to document the assumptions made and uncertainties encountered
during the course of planning analyses. Restoration of some types of ecosystems may have
relatively low risk. For example, removal of drainage tiles to restore hydrology to a wetland
area. Other activities may have higher associated risks such as restoration of coastal marsh in a
area subject to hurricanes. When identifying the NER plan the associated risk and uncertainty of
achieving the proposed level of outputs must be considered. For example, if two plans have
similar outputs but one plan costs slightly more, according to cost effectiveness guidelines, the
more expensive plan would be dropped from further consideration. However, it might be
possible that, due to uncertainties beyond the control or knowledge of the planning team, the
slightly more expensive plan will actually produce greater ecological output than originally
estimated, in effect qualifying it as a cost effective plan. But without taking into account the
uncertainty inherent in the estimate of outputs, that plan would have been excluded from further
consideration. This topic is discussed in more detail in Section I of this appendix.
E-40. Planning Step 5 - Plan Comparison. Alternative plans that qualified for further
consideration will be compared against each other in order to identify the plan to be
recommended for implementation. A comparison of the effects of various plans must be made
and tradeoffs among the differences observed and documented to support the final
recommendation. The effects include a measure of how well the plans do with respect to
planning objectives including NED and NER benefits and costs. Effects required by law or
policy and those important to the stakeholders and public are to be considered. Previously, in the
evaluation process, the effects of each plan were considered individually and compared to the
without-project condition. In this step, plans are compared against each other, with emphasis on
the important effects or those that influence the decision-making process. The comparison step
concludes with a ranking of plans.
E-41. Planning Step 6 - Selection of Ecosystem Restoration Plan. When selecting a single
alternative plan for recommendation from all those that have been considered, the criteria used to
select the National Ecosystem Restoration (NER) plan include all the evaluation criteria
discussed above. Selecting the NER plan requires careful consideration of the plan that meets
planning objectives and constraints and reasonably maximizes environmental benefits while
passing tests of cost effectiveness and incremental cost analyses, significance of outputs,
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acceptability, completeness, efficiency, and effectiveness. Additional factors to consider include
the following items.
a. Partnership Context. Restoration projects that were planned in cooperation with other
Federal resource agencies, and where those agencies also have a significant role in implementing
the project, using their authorities and funding, should receive higher priority than those that do
not, assuming they also satisfy the other criteria. Similarly, restoration projects that make a
significant contribution to regional or national interagency programs (e.g., North American
Waterfowl Management Plan, Coastal America, Marine Fish Habitat Creation and Restoration
Program, Chesapeake Bay Program, etc.) should also receive priority.
b. Reasonableness of Costs. All costs associated with a plan should be considered. Even
after tests of cost effectiveness and incremental cost analysis have been satisfied, the decisionmaker must ascertain that the benefits to be realized are really worth the costs. This will almost
always be a subjective decision and ultimately must rely on experience, reasonableness and
common sense.
c. Rarely will the NER plan not be among the best buy plans identified during the cost
effectiveness and incremental cost analyses. If the recommend plan is not the NER plan its
selection must be justified. The reasons for such a selection should be clearly explained in the
supporting documentation as well as the potential implications for cost sharing.
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SECTION VI - Hydroelectric Power
E-42. Federal Interest. Hydroelectric power development may be included in formulation of
water resources projects when certain criteria are met.
E-43. Types of Improvements.
a. New Federal Projects. Hydroelectric power development may be considered during
planning for multipurpose projects involving dams and lakes and may be recommended if
non-Federal development would be impractical. The Corps does not construct single purpose
hydroelectric power projects. No single purpose hydropower studies may be initiated for new
sites unless specifically directed and funded by the Congress. Non-Federal sponsors must agree
to share the cost of the feasibility study with the explicit understanding that any resultant project
will be financed by non-Federal funds.
b. Additions to Existing Projects. Existing Corps projects without hydroelectric power
facilities may have them added, either through Congressionally authorized Federal development,
or preferably through Federal Energy Regulatory Commission (FERC) licensed non-Federal
development.
c. Pumped Storage. Pumped storage may be investigated where non-Federal
development would be impractical. Pumped storage facilities are either integral or adjoining.
Integral facilities frequently consist of a conventional powerhouse with reversible units (the same
turbines alternately generate power and pump water). Adjoining facilities usually consist of an
upper or lower reservoir and powerhouse and intake separate from the multipurpose project dam
(and conventional powerhouse, if any). Adjoining facilities may be the only practical way to add
pumped storage to an existing project.
d. Minimum Facilities for Future Power Installations. To support future hydropower
development, penstocks and some other features, classified as minimum facilities, may be
included in initial project construction, while installation of full facilities is postponed. This
authority applies even to projects where hydropower is not an authorized purpose (Flood Control
Act of 1938 and subsequent authorizing acts). It requires approval by the Secretary of the Army,
on recommendation of the Chief of Engineers and the Federal Energy Regulatory Commission
(FERC). Recommendations for minimum facilities should be based on estimates of future
economic and financial viability of power, and the expected willingness of non-Federal interests
to finance the facilities (or repay). The rationale for this authority is the greater dam modification
costs, and the potentially foregone project outputs while modification takes place, compared to
the cost of initial provision of minimum facilities. Procedures for report processing and approval
are contained in ER 1110-2-1.
e. Transmission Facilities. Transmission lines and substations must be considered with
other project effects. Transmission investment plus operation and maintenance costs may be
included as project costs, or accounted for in benefit estimates (i.e., through the effect of
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differences in transmission requirements between hydropower and other (typically thermal)
alternatives).
f. Hydroelectric Development at Non-Corps Sites. The Corps of Engineers has no
general authority to participate in hydroelectric development at non-Corps sites.
g. Major Rehabilitation Projects. Construction of infrequent, costly structural
rehabilitation or major replacement works that will improve reliability or efficiency of a
hydropower generating plant or a principal feature thereof are implemented under the Major
Rehabilitation Program. Major rehabilitation projects are budgeted under the Construction
General account. Rehabilitation is a major project feature restoration consisting of structural
work on a Corps operated and maintained facility intended to improve reliability of an existing
structure, the result of which will be a deferral of capital expenditures to replace the structure.
Rehabilitation is considered as an alternative when it can significantly extend the physical life of
the feature and can be economically justified by benefit-cost-analysis. ER 1130-2-500 and EP
1130-2-500 document the requirements and procedures for major rehabilitation studies and
projects. A summary of the procedures to evaluate this type of projects is provided in Section X
of this appendix.
E-44. Specific Policies
a. Non-Federal Development Encouraged. Corps policy is to encourage non-Federal
development where feasible, and thus development should ordinarily proceed under FERC
procedures. Pursue Federal action only when non-Federal development is impractical.
b. Practicability. A hydropower project is impractical for non-Federal development if
there are compelling physical, operational, legal, competing use, institutional, environmental or
economic reasons preventing development or operation, or if non-Federal development would be
significantly less productive than Federal development (i.e., produce significantly fewer net NED
benefits considering all project outputs).
c. Economic Justification Requirements. Before hydropower can be included in a
multiple purpose project, the project must be economically justified based on other outputs (flood
damage reduction or navigation). If included, however, hydropower scale is not limited by policy.
d. Conditions of Non-Federal Payment or Repayment.
(1) The cost of Federal hydropower development is a non-Federal responsibility. The
Corps of Engineers determines the development costs, including cost allocations, if any. The
Separable Cost-Remaining Benefit method (SCRB) is the preferred cost allocation procedure
(Corps, Interior, FERC interagency agreement).
(2) Payment via reimbursement is permissible in law, but Corps policy is to seek
payment concurrent with construction. Under non-Federal sponsor financing, all or some of the
vendible power outputs may be ceded to the sponsor, or, the law permitting, the sponsor may
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receive revenue from the Federal power marketing agency selling the power. Traditional
reimbursement by Federal power marketing agencies is unlikely because of budget restraints.
(3) Although the Corps constructs and operates power facilities, the power itself is either
sold by a Federal power marketing agency or conveyed to a sponsor. Thus, plan formulation,
financing and other implementation requirements should be coordinated with the power
marketing agency or sponsor, if any.
E-45. NED Benefit Evaluation Procedure
a. Purpose. This section describes procedures for the evaluation of national economic
development (NED) benefits of hydropower features of water resources projects and plans.
These features include single-purpose hydropower (when Congressionally authorized), the
inclusion of hydropower as a function in new multipurpose projects, addition of hydropower
power-generating facilities to existing water resource projects, and expansion of existing power
plants
b. Conceptual Basis.
(1) The conceptual basis for evaluating the benefits from energy produced by
hydroelectric power plants is society’s willingness to pay for these outputs. If this is not possible
or cost effective, benefit information may sometimes be obtained through examination of market
prices. Although utility pricing of electricity is complex and usually based on average cost rather
than marginal cost, in cases where it can be determined that market price to the final consumer is
based on marginal production costs, this may be used as a measure of benefits. When using
market price as a measure of benefits the increment in supply should ordinarily be relatively
small compared to the total (i.e., little change would be expected in market price due to the
incremental supply). Continued movement of retail electricity pricing towards marginal cost
approximations (e.g., seasonal rates, time of day rates, etc.) may make market prices more
relevant for benefit evaluation in the future. In the absence of such direct measures of marginal
willingness to pay, the benefit from energy produced by hydroelectric powerplants is measured
by the resource cost of the most likely alternative to be implemented in the absence of the
alternatives under consideration. Non-Federal investment analysis generally does not provide an
adequate basis for evaluation of potential investments of Federal resources in hydroelectric
power. This is because non-Federal investments reflect financial conditions, insurance, and tax
incentives that differ from those applying to Federal investments. The procedure that follows
allows the planner to construct an NED benefit estimate based on real resource cost of the most
likely non-Federal alternative. Simplifications are encouraged for small-scale hydropower
projects. An alternative hydropower benefit evaluation procedure is provided for single-purpose
projects that are to be 100 percent non-federally financed, provided that there are no significant
incidental costs.
(2) The real resource cost of the most likely alternative can also be used to compute
benefits from nonstructural measures. However, the net benefits of certain nonstructural
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measures that alter the electric power load cannot be measured effectively by the alternative cost
procedures for the following reasons:
(a) Structural measures and many nonstructural measures (except those that alter the
load) result in similar plan outputs, whereas load-altering measures (e.g., revised rate structures)
may change levels of output; and,
(b) Load-altering measures may have fewer direct resource costs than measures based on
higher levels of output. Because of this lack of comparability, the benefits from such loadaltering nonstructural measures should not be based on the cost of the most likely alternative.
Attempts to measure the benefits of load-altering nonstructural measures on the basis of direct
willingness to pay are encouraged.
c. Planning Setting.
(1) Without Project Condition. The without project condition is the most likely condition
expected to exist in the future in the absence of a project, including any known changes in law or
public policy. The without project condition includes the following specific assumptions:
(a) Existing Resources. Existing generating resources are part of the without project
condition. Make adjustments to account for anticipated plant retirements and changes in plant
output due to age or environmental restrictions associated with existing policy and regulations.
(b) Existing Institutional Arrangements. Existing and reasonably expected future power
system and water management contracts, treaties, and non-power river operating criteria are part
of the without project condition. If revision of these arrangements is part of an alternative plan,
the new arrangement (revised contract, criteria, etc.) would be considered in the with project
condition.
(c) Alternative Actions Anticipated or Under Way. The without project condition
includes those generating resources that can reasonable be expected to be available in the forecast
period.
(d) Nonstructural Measures and Conservation. The without project condition includes
the effects of implementing all reasonably expected nonstructural and conservation measures.
(2) With Project Condition.
(a) The with project condition is the most likely condition expected to exist in the future
with the plan under consideration. Examples of alternative plans include: alternative
combinations of projects in a basin study; alternative sites in a reach study; alternative plant sizes
at a specific site; alternative reservoir sizes at a reservoir site; use of reregulation and/or
pumpback to increase firm capacity; and reallocation of storage to increase firm energy output.
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(b) Nonstructural alternatives to hydropower may be used alone or in combination with
structural measures. Nonstructural measures include but are not limited to reducing the level
and/or time pattern of demand by time-of-day pricing; utility-sponsored loans for insulation;
appliance efficiency standards; education programs; inter-regional power transfers; and increased
transmission efficiency.
d. Evaluation Procedure
(1) Follow the steps shown in Figure E - 9 and described in the following paragraphs to
estimate NED benefits that would accrue whenever the plan would be cost shared. When singlepurpose hydropower alternatives being studied would be 100 percent non-federally financed, the
market-based procedure specified in paragraph E-45 may be used. Non-federally financed means
that all construction and operating costs would be financed entirely from sources other than
federally appropriated funds. The level of effort expended on each step depends upon the nature
of the proposed development, the state of the art for accurately refining the estimate, and the
likely effect of further refinement on project formulation and justification. For the purpose of
ensuring efficiency in the use of planning resources, simplifications of the procedures set forth in
this section are encouraged in the case of single-purpose, small scale hydropower projects (25
MW or less), if these simplifications lead to reasonable approximations of NED benefits and
costs. In addition, an analysis of marketability may be substituted for determination of need for
future generation for hydropower projects up to 80 MW at existing Federal facilities.
(a) Step 1 - Identify System For Analysis. Because of the trend toward interconnection
and coordination among utilities and power systems, it is most appropriate to evaluate NED
benefits for hydropower on a system basis, rather than on the needs of an individual utility or
local area. The size of the system would depend on the situation but could consist of a power
pool, a National Electric Reliability Council (NERC) regional area, the marketing area of a
Federal Power Marketing Administration, or other geographic region. In some cases, physical or
institutional constraints may limit the analysis to a smaller area, but care must be taken to ensure
that benefits are not misstated by such analysis.
(b) Step 2 - Estimate Future Demand For Electric Power. Forecast electric power loads
in terms of the annual peak demand period. When a high proportion of the generation is from
hydropower, a forecast of annual energy demand should be made. Also forecast weekly load
shapes to represent a minimum of three periods in the year (e.g., typical summer, winter, and
spring/fall days) to assist in determining the type of load that a hydropower project could carry.
Load forecasts should reflect the effects of all load management and conservation measures that,
on the basis of present and future public and private programs, can reasonably be expected to be
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Figure E- 9 Flowchart of Hydropower Benefit Evaluation Procedures
implemented during the forecast period. Load forecasts should be made and analyzed by sectoral
use (e.g., residential, commercial, industrial). Estimate loads at increments of no more than 10
years from the present to a time when the proposed plant will be operating in a state
representative of the majority of its project life. In the case of staged hydropower development
or where generation system resource mixes may change markedly, load forecasts may be
appropriate for 20 years or more beyond the initial operation date. Account for system exports
and reserve requirements.
(c) Step 3 - Define Base System Generating Resources. Project future generating
resources and imports at various points in time without the proposed plan or any alternative plan.
Estimate resources for the time periods stated in step 2. Provide information on peak capacity
and on average annual energy production where a high proportion of the systems generation is
hydropower. Data are readily available on projected system resources for about 10 years. Base
projected resource additions beyond that time on system studies. Account for retirement of older
plants as well as the reduction of output of some plants due to age or environmental constraints.
(d) Step 4 - Evaluate Load/Resource Difference. Compare the loads identified in step 2
with the resources identified in step 3 to determine: (1) when generating resource deficits will
occur, (2) the magnitude of these deficits, and (3) what portion of these deficits could be met by
the hydropower project. If nonstructural measures are components of an alternative plan and
these measures reduce system loads, the amount of such reduction lessens system deficits.
Hydropower sites can be developed to provide either a base load, mid-range, or peaking service.
Evaluate the system demand for each class of hydropower generation. Simple tabulation of
annual peak and energy loads and resources is generally adequate for preliminary studies. Use
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system load-resource models that account for load characteristics and generating plant operating
capabilities, if available, to evaluate accurately the usability of specific projects.
(e) Step 5 - Determine the Most Likely Non-federal Alternative.
(1) General. Select the one alternative most likely to be implemented in the absence of
the proposed Federal project. Begin identification of the most likely alternative to the plan being
considered with the least costly alternative. If an alternative with a lesser cost is passed over for
a more expensive one, justify not selecting the lower cost plan.
(2) Screen Alternatives. The alternatives to a specific hydropower project must be viable
in terms of engineering, environmental quality, and other national policy considerations.
Engineering viability limits thermal alternatives to commercially available electric powerplants.
Environmental viability implies that plant costs include all equipment required to meet
environmental quality criteria. National policy considerations include factors such as legal
limitations on the use of oil, natural gas, and other “scarce” fuels for electric power generation.
Each alternative need not in itself deliver service similar in kind to the hydropower project, but
the total power system with the alternative must deliver service similar in kind to the system with
the hydropower project. If nonstructural measures or conservation are components of an
alternative plan and these measures reduce the need for additional capacity or for additional
power, the amount of such reduction constitutes provision of service similar in kind; this ensures
that evaluation procedures will not be biased against the selection of an alternative that utilizes
nonstructural measures.
(3) Identify the Most Likely Alternative. Compare the system with the hydropower
project under consideration to alternatives capable of meeting system loads within established
criteria of system reliability. Base the comparison on the basis of cost and other factors to
determine the most likely alternative, i.e., the structural and/or nonstructural measures that will
be implemented if the project under consideration is not implemented. If institutional obstacles
to implementation are noted, an alternative plan should still be considered the most likely if the
barriers are substantially within the power of the affected users to correct. A detailed description
of the institutional obstacles should be included, with a discussion of the basis for the conclusion
that the obstacles cannot be overcome. If the most likely alternative includes new thermal plants,
use those plants’ capacity costs (including amortized investment costs, transmission costs and
fixed operating and maintenance (O&M) costs) as the measure of the value of the hydropower
project’s generating capacity, and use the thermal plants’ energy costs (primary variable O&M
costs and fuel costs) as the measure of the value of the hydropower project’s energy production.
(f) Step 6 - Compute Benefits.
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(1) Compute Hydropower Plant Annual Benefits. Compute annualized benefits based on
the costs of the most likely alternative for each hydropower development and installation
component. Base the calculation of alternative costs to be used as a measure of NED benefits on
the following: (i) calculate all interest and amortization costs charged to the alternative on the
basis of the Federal discount rate; (ii) charge no costs for taxes or insurance to the alternative;
and (iii) in calculating costs of the most likely alternative, use assumptions and procedures that
parallel those used to calculate the costs of the plan being evaluated. In many cases, benefits may
vary over the life of a project. This may be due to such factors as staged development of the
hydropower project, changes in operating of the hydropower project resulting from changes in
the resource mix in the total generating system, and real escalation in fuel costs (if the most likely
alternative system includes a thermal plant). Compute project benefits by time intervals and
discount these values to derive annualized power benefits. When applicable, the evaluation shall
reflect differences in the cost of transmission, distribution, and other facilities compared to the
most likely alternative. Occasionally, the initial output of a hydropower project is large
compared to annual growth in system load; two or more years may be required to fully absorb its
output into the load. In these cases adjust the credit (benefit) to reflect the generating capacity
and energy actually used in the load in the early years of project life.
(2) Energy Value Adjustment. Account for the effect on the system production expenses
when computing the value of hydroelectric power. Adding structural or nonstructural measures
of a plan to a system instead of adding an alternative power source may result in greater or lesser
system production expenses than if a particular thermal capacity were added; the effect on
production expenses can be determined by performing a system analysis. If there is a difference
in system production expenses, adjust the energy value in the economic analysis of the plan. If
the alternative plan would increase system production expenses, the adjustment would be
positive. Consider system production expenses in determining the most likely alternative.
(3) Capacity Value Adjustment. The physical operating characteristics of hydropower
projects differ significantly from alternative thermal plants. Appropriate credit may be given to
hydropower projects to reflect their greater reliability and operating flexibility. When the value
of these characteristics cannot otherwise be quantified, an adjustment can be made to the
alternative plant capacity costs. Typically, the adjustment per kilowatt of capacity ranges from 5
to 10 percent of the cost per kilowatt of thermal capacity, depending on the operating
characteristics of the hydropower project and alternatives that include thermal capacity. The
adjustment may be applied by increasing the capacity cost of the most likely alternative by the
appropriate percentage determined by the Federal Energy Regulatory Commission (FERC).
(4) Intermittent Capacity Adjustment. The dependable capacity of hydropower project is
based on the load-carrying capacity of the project under the most adverse combination of system
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loads, hydrologic conditions, and plant capabilities. This very conservative approach is unrelated
to the dependable capacity of a hydropower project’s alternative if thermal capacity is included
and given no credit for the value of capacity that is available a substantial amount of the time.
When power system operation studies show that there is an intermittent capacity value to the
system, a capacity adjustment should be made.
(5) Price Relationships. Assume relative price relationships and the general level of
prices prevailing during the planning study to hold generally for the future, unless specified
studies and considerations indicate otherwise. Examples of the latter include escalation of
relative fuel cost (e.g., due to increasing scarcity) or increased capital costs expected to result
from changed environmental or safety criteria. Fuel costs used in the analysis should reflect
economic prices (market clearing) rather than regulated prices.
e. Data Sources. Data on existing and planned resources, loads, marketability criteria,
and alternative costs are available from various agencies and groups, including the Department of
Energy, NERC regional councils, FERC regional offices, Federal power marketing
administrations, State energy agencies, utility companies, and regional planning groups. If
specific operating characteristics of individual plants are not available, generalized data can be
obtained from other sources, including the Electric Power Research Institute. Load-resources
models based on simulated system operation may be used if available. Some of these models are
available from various sources, including FERC, Federal power marketing administrations, and a
number of consulting services.
f. Alternative Procedure: Financial Evaluation.
(1) General. This section provides an alternative hydropower benefit evaluation
procedure that may be used for evaluating single-purpose projects that are to be 100 percent
nonfederally financed, provided that there are no significant incidental costs. This approach
employs market data based on long-run (10 or more years) utility wholesale prices as an estimate
of the cost of producing equivalent power from the most likely alternative. These prices may be
used to evaluate and compare the financial feasibility of alternative plans, provided that they are
consistently applied to all of the alternatives. Through this process, the most financially attractive
alternative is identified. Because the benefits and costs of all alternative plans are evaluated in a
consistent way, the most financially attractive plan can be identified as the NED plan.
(2) Industry Long-run Wholesale Prices. The market approach must be carefully applied
to ensure that the long-term (10 or more years) contract prices reflect the energy and capacity
characteristics of the proposed hydropower project. In screening contracts for applicability, a
number of factors should be examined, including: term of contract, power and energy
availability (daily, weekly, seasonally), geographic relationship, delivery voltage, power factor,
point(s) of delivery (busbar, high voltage grid, load center), interconnecting facilities, reliability
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standards and emergency backup. Information on long-term wholesale power contracts may be
obtained from FERC, State public service commissions, the Federal power marketing
administrations, and electric generating and distribution utilities.
g. Report and Display Procedures.
(1) Tables E-23 through E-25 are suggested for presentation for reports that include
federally financed hydropower measures. Table E-23 summarizes the output of all plans by
peaking capacity and system load factor, and presents the costs of each alternative plan. Tables
E-24 and E-25 summarize the output of the structural component of each alternative, the benefits
of the structural components, and the resource costs of all structural and nonstructural
components of each alternative plan. The number of benefit categories included will carry from
project to project. Not all projects will have intermittent capacity, for example, and in some
cases it will be appropriate to account separately for firm and secondary energy. System energy
costs are sometimes included in the unit energy values; in those cases such costs would not have
to be accounted for separately.
(2) Table E-25 is suggested if the nature or magnitude of hydropower benefits changes
substantially over time. Examples are: staged construction of the hydropower project; change in
the role of hydropower in the system over time; and situations in which several years are required
to absorb a large project into the system. When the alternative financial evaluation procedure is
used to evaluate financial feasibility of plans that are to be 100 percent non-Federally financed
(see paragraph E-45f), physical data similar to that found in Tables E-23 through E-25 should be
displayed. Capacity and energy values, as developed through the financial analysis, should also
be displayed in a manner facilitating comparison among alternatives. These displays are in lieu
of the standard presentation of hydropower benefits and project costs in the NED account. Also
display any incidental benefits and costs of the alternatives. However, no benefit-cost ratio can
be presented, because the analysis of the hydropower project’s financial feasibility is not
comparable to economic analysis.
h. Major Rehabilitation Projects Evaluation Procedures. Benefits associated with major
rehabilitation projects are increases in reliability and efficiency improvements. Procedures to
estimate these benefits are found in ER 1130-2-500 and EP 1130-2-500.
E-46. Special Considerations. Upon request, districts may provide reimbursable technical
services to states or State subdivisions on hydropower development at sites where hydropower is
not an authorized purpose (Intergovernmental Cooperation Act of 1968; see ER 1140-1-211).
Assistance is limited to technical services; separate authority to construct or operate and maintain
hydropower facilities is required. The Corps Center of Expertise for hydropower projects is
located in Northwestern Division (NWD).
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b. Coordination Initiatives.
(1) FERC Coordination-Costs of Alternatives. Ordinarily the Corps collaborates with
FERC in estimating costs of alternatives to Corps hydropower projects, and frequently has
adopted FERC values as benefits. The Corps is under no requirement to use FERC values
however; if a district can perform superior analysis, it should do so.
(2) Marketing Agencies. The Corps does not market the power it produces; marketing is
done by the Federal power marketing agencies (Southeastern Power Administration,
Southwestern Power Administration, Western Area Power Administration, Bonneville Power
Administration, Alaska Power Administration) through the Secretary of Energy. The rates are set
by the marketing agency to: (a) recover costs (producing and transmitting) over a reasonable
period of years (50 years usually); and (b) encourage widespread use at the lowest possible rates
to consumers, consistent with sound business principles. The law requires that preference for
sale be given to public bodies and cooperatives. Rates are determined by the marketing agency
and approved by FERC (Section 5 Flood Control Act 1944, Public Law 78-534; see ER
1130-2-324). In compliance with Section 103(c)(1) of the Water Resources Development Act of
1986 (Public Law 99-662), any proposal to Congress for hydroelectric power authorization must
contain statements of the appropriate power marketing agency regarding its marketing of the
power to recover all costs allocated to power and any other costs assigned for power cost
recovery pursuant to law.
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Table E- 23 Electric Power Supply Alternatives
[Period of analysis, price level, discount rate]
Annualized
cost1
($1,000)
Most likely alternative ..................
Recommended plan.......................
Other plans analyzed .....................
.....................
.....................
.....................
1
Peak power supplied conserved,
and system load factor (MW)2 by
time period3
P1
P2
P3
PN
.............
.............
.............
...........
...........
...........
.............
.............
.............
.............
.............
.............
Annual equivalent cost includes system costs.
For example, for the summer season, an entry "90 10 .6" would represent the 100 MW deficit in
the summer peak use identified in the without-project condition by supplying 90 MW and
reducing the quantity used by 10 MW; the system load factor for the entire system for the
summer would be .6.
3
Show by time period and season where there are seasonal variations
2
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Table E- 24 Summary of Annualized NED Benefits for Structural Measures and NED Costs for
Structural and Nonstructural Measures1
[(Thousands of month, year dollars) Applicable discount rate: ____]
Alternative
Plant data:
Installed capacity, MW ..........
Dependable capacity, MW.....
Intermittent capacity, MW .....
Average annual energy, gWh.
Average annual capacity
factor
(percent).................................
Benefits:
Unit capacity..........................
Dependable capacity benefits.
Intermittent capacity benefits .
Unit energy value
(mills/kWh)............................
Energy benefits ......................
Unit system energy
adjustment
(mills/kWh)............................
System energy cost
adjustment..............................
Real fuel cost escalation rate
(percent).................................
Period of real fuel cost
adjustment (yrs) .....................
Real fuel cost adjustment .......
1
2
3
X
.....................
.....................
.....................
.....................
......................
......................
......................
......................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
......................
.....................
.....................
( ...................)
.....................
.....................
(................... )
......................
......................
( ...................)
.....................
.....................
(................... )
.....................
.....................
( ...................)
.....................
(................... )
......................
( ...................)
.....................
.....................
( ...................)
.....................
(................... )
......................
( ...................)
.....................
( ...................)
(................... )
( ...................)
(................... )
.....................
(................... )
(................... )
.....................
( ...................)
.....................
(................... )
......................
( ...................)
.....................
Total hydro benefits..........
Other purpose benefits (list)..........
Annualized cost.............................
Structural measures .......................
Nonstructural measures .................
.....................
.....................
.....................
.....................
.....................
......................
......................
......................
......................
......................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
Net annualized benefits ....
.....................
......................
.....................
.....................
1
Note that benefits from load-altering nonstructural measures are excluded. This table may be
used for displaying the benefits of nonstructural measures that do not alter the load (see 2.5.2(b)).
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Table E- 25 Time Distribution of NED Electric Power Benefits
for Structural Measures of Alternatives1(Applicable discount rate: ____)
Alternative
Plant data:
Installed capacity, MW .......
Dependable capacity, MW..
Intermittent capacity, MW ..
Average annual energy, gWh
Average annual capacity factor
(percent)..................
Benefits:
Unit capacity.......................
Dependable capacity benefits
Intermittent capacity benefits
Unit energy value (mills/kWh)
Energy benefits ...................
Unit system energy adjustment
(mills/kWh) ............
System energy cost adjustment
Real fuel cost escalation rate
(percent)
Period of real fuel cost
adjustment (yrs) ......
Real fuel cost adjustment....
Annualized benefits......
P1
P2
P3
PX
AAE3
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
...............
...............
...............
...............
...............
...............
...............
...............
..............
.............. .............. ...............
...............
( ...........)
..............
..............
( ...........)
..............
(........... )
..............
..............
(........... )
..............
( ............)
...............
...............
( ............)
...............
( ............)
...............
...............
( ............)
...............
( ...........)
..............
(........... ) ( ...........) ( ............)
.............. .............. ...............
( ............)
...............
( ...........)
(........... ) ( ...........) ( ............)
( ............)
( ...........)
..............
(........... ) ( ...........) ( ............)
.............. .............. ...............
( ............)
...............
..............
.............. .............. ...............
...............
E-178
( ...........)
..............
..............
( ...........)
..............
ER 1105-2-100
22 Apr 2000
SECTION VII – Recreation
E-47. Federal Interest. The legislative basis for Federal participation in recreation development
is found in the Flood Control Act of 1944, as amended, the Federal Water Project Recreation Act
of 1965 (Public Law 89-72), and the Water Resources Development Act of 1986 (Public Law
99-662). These give broad authority to include recreation as a project purpose. Policy limits
exercise of these authorities however. Recreation is a low priority output and thus the Corps will
not plan for (formulate for) single purpose recreation unless a sponsor is willing to pay one
hundred percent of the associated implementation costs. For projects with other purposes to
which separable recreation is added, the statutory cost sharing requirement is just fifty percent.
The Corps will plan for and implement projects serving other purposes (hurricane and storm
damage reduction for example) and these may have incidental recreation benefits. Benefits are
incidental when: (1) a project is formulated for other primary purposes and recreation benefits
are less than 50% of total benefits, or (2) a project is formulated for other primary purposes and
average annual recreation benefits are less than 50% of the average annual benefits required for
justification. This is equivalent to saying the recreation benefits, which are required for
justification, must be less than an amount equal to 50% of project costs. There may be additional
recreation benefits if they are not required for justification. In addition, for multiple purpose
projects recreation may be included as a primary purpose if there is a non-Federal sponsor. For
cases 1 and 2, recreation benefits are considered incidental; cost sharing (and cost allocation, if
any) is based on the formula for the primary purpose only.
E-48. Types of Improvements
a. Vendible Outputs and Services and Non-Federal Facilities. Improvements providing
outputs or services generally considered vendible are non-Federal responsibilities. Marina
facilities and telephone services are examples. Any improvement or service not closely and
directly related to enjoyment of the natural resource itself (or created resource itself) is a nonFederal responsibility, even if it is not generally considered vendible. Examples are tennis courts
and accommodations for viewing sporting or cultural events taking place on or near a lake.
b. Federal Participation, Joint Facilities and Cost Sharing. If there is no non-Federal
recreation sponsor, facilities or project modifications may not be recommended unless justified
by other project purposes, in which case recreation benefits are considered incidental. Minimum
facilities needed to maintain public health or safety, are permissible. These are limited to road
end turnarounds, guardrails, barricades, warning signs, public safety fencing and vault toilets
(unless upgrades are required by Federal or state regulations). Boat ramps and trailer parking
justified by project operations requirements may be provided. Costs are joint costs and allocated
to project purposes.
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c. Facilities Justification and Cost Sharing. When there is a recreation sponsor
economically justified facilities are cost shared 50 percent Federal and 50 percent non-Federal.
d. Check List of Facilities. Exhibit E-2 contains a list of recreational facilities which
may be provided in recreation developments at Corps water resources projects with requirements
for funding each as either: (1) joint facilities cost-shared jointly with other project features; (2)
separable recreation features dependent upon the water resource project that may be cost-shared
at 50 percent Federal and 50 percent non-Federal with the recreation sponsor; and/or, (3)
separable recreation facilities for which there will be no Federal cost-sharing and which must be
provided at 100% non-Federal cost.
E-49. Specific Policies
a. Lakes (man-made).
(1) Lakes, or reservoirs, are impoundments created behind dams, or behind navigation
locks and dams if lands not subject to navigation servitude are needed for water storage.
Recreation policies applicable to lakes are not applicable to dry dams, that is those dams not
providing permanently impounded water. The Federal government may participate in basic
recreation facilities on project lands or separable recreation lands if a non-Federal sponsor will
participate and cost share as outlined in paragraph E-51. The same conditions apply to separable
lands acquired for future recreation development.
(2) Recreation costs may not exceed one-half of total costs.
(3) If recreation is a project purpose, several scales of development must be formulated
and evaluated.
(4) Reallocation of Storage. Storage reallocations for recreation which significantly affect
other authorized purposes, or involve major structural or operational changes, require
Congressional approval. Costs reallocated to recreation and subject to cost sharing will be set to
the highest of: benefits foregone; revenues foregone; replacement costs; updated cost of storage.
Cost sharing of facilities is 50/50.
b. Other Types of Projects. These include works or improvements for commercial and
recreational navigation, hurricane and storm damage prevention, non-lake projects for flood
damage prevention and ecosystem restoration. The benefits and costs of recreation are
considered incremental. Specific policies and exceptions are provided in the following
paragraphs.
(1) Non- lake Projects.
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(a) At non lake projects basic recreation facilities exploiting project created opportunities
may be provided, but only on lands acquired for non recreation purposes.
(b) The Federal government will not participate in acquiring lands for recreation
purposes. A special case may exist when the real estate interest required for other project
purposes is insufficient for recreation development. The sponsor may obtain real estate interest
sufficient for recreation and receive a credit for the incremental cost. For example, if an easement
is adequate for other project purposes, but fee acquisition is necessary for recreation
development, the sponsor may receive credit for the incremental cost of fee acquisition. This real
estate upgrade policy does not apply to temporary construction easements, nor to disposal or
borrow areas.
(c) If there is to be recreation development, then beyond real estate interest upgrades the
only other Federal participation in land acquisition is for providing access to project lands,
parking, potable water, sanitation and related developments for public control and for health and
safety.
(d) Unlike lake projects, at non lake projects there is no routine Federal interest in
provision of minimum facilities for public health and safety. That is, if no recreation
development is sponsored by a non-Federal entity, there is no Federal participation in minimum
facilities.
(e) The Federal cost of a project including recreation may not exceed the Federal cost of
the project excluding recreation by more than ten percent without prior approval by the Secretary
of the Army.
(2) Shore Protection Project. Except for Federal shores the Corps will not participate in
the cost of beach use recreation developments. Local cooperation requirements shall include the
provision and maintenance of roads, parking, sanitary facilities and any other on-shore recreation
development necessary to accommodate anticipated beach users needed to realize recreational
benefits claimed. Also, Army policy precludes the addition of sand to a beach solely to increase
its potential for recreation.
(3) Nonstructural Flood Damage Reduction Projects. The formulation of nonstructural
flood damage reduction projects is not constrained by the limitation of increased Federal cost for
recreation development described above. This is because such projects are justified mainly by
creating new uses for floodplains, and the most important new use is frequently recreation.
(4) Recreation at Ecosystem Restoration Projects. Recreation at ecosystem restoration
projects should be compatible with these types of projects and enhance the visitation experience
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by taking advantage of natural values. The social, cultural, scientific, and educational values
should be considered within the framework of the ecosystem restoration project purpose.
Recreation development at an ecosystem restoration project shall be totally ancillary to the
primary purpose, appropriate in scope and scale, and shall not diminish the ecosystem restoration
outputs used to justify the project. Recreation facilities may be added to take advantage of the
education and recreation potential of the ecosystem restoration project but the project shall not be
formulated for recreation. The recreation potential may be satisfied only to the extent that
recreation does not adversely impact the ecosystem restoration purpose, and the recreation
facilities are justified. The recreational experience shall build upon the ecosystem restoration
objective and take advantage of the restored resources rather than detract from them. Ecosystem
restoration projects should not encourage public use if there is no non-Federal sponsor to cost
share recreation. Federal participation in recreation development at ecosystem restoration
projects will be limited to the facilities shown in Exhibit E-3 of this appendix. Specific policies
stated in paragraph E-49b also apply to recreation development at single purpose ecosystem
restoration projects.
(5) Multipurpose Projects. For multipurpose projects that include nonstructural flood
damage reduction, ecosystem restoration and recreation, the cost of recreation associated with the
non-structural flood damage reduction features may not exceed one-half of the total cost for flood
damage reduction plus recreation; and, for recreation associated with ecosystem restoration, the
Federal cost of ecosystem restoration plus the Federal cost of recreation may not exceed by more
than 10 percent the Federal cost of the ecosystem restoration project without prior approval of
the ASA(CW). For example, a multipurpose project with a total cost of $8 million for
nonstructural flood damage prevention and Federal cost of $2 million for ecosystem restoration,
may include recreational facilities associated with the nonstructural flood damage prevention
project with a cost not to exceed $8 million and recreational facilities associated with the
ecosystem restoration projects with a Federal cost not to exceed $200,000.
(6) Continuing Authorities. Flood control, navigation and shore protection continuing
authorities are subject to the same recreation policies and conditions of participation as
specifically authorized projects. Additionally, all costs in excess of the statutory limitation of
Federal expenditures for these projects are entirely a local responsibility.
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E-50. NED Benefit Evaluation Procedure
a. Purpose. This section provides the procedures for evaluating the beneficial and
adverse effects of water project recreation on national economic development (NED). The
Federal Water Project Recreation Act of 1965 requires that full consideration is given to the
opportunities that Federal multipurpose and other water projects afford for outdoor recreation
and associated fish and wildlife enhancement.
b. Conceptual Basis.
(1) General.
(a) Benefits arising from recreation opportunities created by a project are measured in
terms of willingness to pay. Benefits for projects (or project features) that increase supply are
measured as the willingness to pay for each increment of supply. Benefits for projects (or project
features) that alter willingness to pay (e.g., through quality changes) are measured as the
difference between the without and with project willingness to pay. Willingness to pay includes
entry and use fees actually paid for site use plus any unpaid value (surplus) enjoyed by
consumers. (Payment for equipment, food, transportation costs, or lodging associated with
recreation activity cannot be used as direct estimates of willingness to pay, because these
payments are not specifically for site use.) The total willingness to pay is represented as the area
under the demand curve between the old and new supply. Because most recreation is publ