Getting a water project included in a Water Resources Development Act (WRDA) or otherwise authorized and funded through a U.S. Army Corps of Engineers process has clear potential benefits for a municipality or water supply agency, but the process can be daunting. With thousands of staff members, numerous local offices, and a national headquarters, the Army Corps is complicated enough, but its actions are also influenced by Congress, the administration, and agencies such as the Office of Management and Budget (OMB). In this interview, retired Army Corps Director of Civil Works Steve Stockton tells Municipal Water Leader readers about how to get water projects funded and authorized.
Municipal Water Leader: Please tell us about your background in the Army Corps.
Steve Stockton: I had an amazing 41‑year career with the U.S. Army Corps of Engineers. I was with the Portland District for 20 years, where I worked on projects such as the Applegate Dam, Lost Creek Lake, the Bonneville Second Powerhouse, and the Bonneville Second Navigation Lock. I helped with the recovery efforts following the eruption of Mount St. Helens in 1980. In Portland, I began as an entry-level temporary civil engineer and became the chief of planning and engineering. From there, I went to Washington, DC, as the chief of civil works engineering, then moved to the South Pacific Division regional office in San Francisco for 7 years. In 2004, I spent 7 months in Iraq as director of regional business, overseeing the reconstruction of Iraqi infrastructure. I returned to Washington, DC, as the director of civil works in 2005, just 2 months before Hurricane Katrina hit. I served as director of civil works for 11 years and was responsible for oversight of a multibillion-dollar program.
Municipal Water Leader: Would you briefly describe the mission of the Army Corps?
Steve Stockton: The Army Corps’ civil works program has three principal missions: flood-risk reduction, navigation, and aquatic ecosystem restoration. Since the Army Corps manages 700 dams and thousands of miles of levees and waterways, it also gets into other associated mission areas, such as fish and wildlife enhancement, recreation, and hydropower. The Army Corps also supports the Federal Emergency Management Agency in disaster preparedness and response and administers the Clean Water Act permitting program. Water supply is also a mission, but it’s not one of the three primary missions.
Municipal Water Leader: The Army Corps’ primary interaction with Congress comes through WRDA legislation. If someone were interested in getting a project included in a water bill, how would they start that process, and how can they be successful?
Steve Stockton: I could write a book about that. Basically, you identify a water resource need and contact your local Army Corps district office as a nonfederal sponsor to determine whether the Army Corps has authority to meet that need. In 1986, the Army Corps went from a system under which its projects were 100 percent federally funded to a system under which costs were shared. There are different cost-share percentages—for example, flood-risk reduction is 65 percent federally and 35 percent nonfederally funded, but the nonfederal sponsors are responsible for providing lands, easements, rights of way, relocations, and disposal areas. Once the project is complete, the nonfederal sponsor is responsible for the operation, maintenance, rehab, repair, and replacement of the project. However, the Army Corps also has thousands of legacy projects for which it maintains operations and maintenance responsibilities.
To get an Army Corps study started, you first identify a need, such as aquatic ecosystem restoration, flood risk, or navigation. Almost every project needs a nonfederal sponsor. Then, you prepare a letter to the local Army Corps district stating your interest in pursuing a feasibility study. The Army Corps district will propose the study to the division and headquarters during its annual appropriations process and at the biannual authorization process, when studies and projects are authorized and funds are appropriated. This is a competitive process, as there are limits on how many studies can be funded.
Once a feasibility study has been completed, it is submitted to Congress for authorization. Once it’s authorized, you need to get funding through the appropriations process, which is not easy. It’s fairly straightforward to get an authorization, but it’s much harder to get funding, because you’ve got to work through the administration, the Army Corps headquarters, the Office of the Assistant Secretary of the Army for Civil Works (ASA[CW]), and OMB. There is lots of competition for dollars during the appropriations process. The authorizers are willing to consider any worthwhile project and authorize it, but OMB has strict criteria for including projects in the president’s budget. Typically, OMB wants a benefit-cost ratio of 2.5:1 at a 7 percent discount rate, which is hard to achieve. That said, if there are life safety considerations, you can make the case more easily. All projects must have a minimum benefit-cost ratio of 1, because you don’t want to pay more for a project than you’ll gain in economic benefits on the back end.
At one point, Congress got upset with the Army Corps because we kept going around telling everybody that we had a $100 billion backlog of authorized projects, and in 2014, Congress instituted its own deauthorization process to reduce that backlog. Since then, Congress has relaxed that approach, because it came under pressure from nonfederal sponsors who wanted their projects to remain authorized so they could continue to compete for funding.
Municipal Water Leader: How do you get decisionmakers in both the executive and legislative branches to buy into the idea that your project responds to a legitimate need?
Steve Stockton: It helps to have a good relationship with your local Army Corps district office and to make periodic trips to Washington to talk to Army Corps headquarters, the ASA(CW) office, and OMB to let them know that you’re still interested in the project so that it doesn’t lie there dormant. Sometimes, the door opens after an event like Hurricane Katrina or Hurricane Sandy, and Congress suddenly decides to fund previously authorized projects. After Hurricane Sandy, many authorized-but-unfunded projects received funding through an emergency supplemental. While this may sound cynical, if you go through the regular process, a lot of projects will never get funded, but after a disaster, money flows much more freely. The argument we used with OMB was, “You can pay us now to prevent future damages, or you can pay us later, after the damages have occurred.”
The recently passed Infrastructure Investment and Jobs Act and the regular and supplemental appropriations for fiscal year 2022 will appropriate billions for Army Corps projects, programs, and activities. When these large amounts are appropriated, Congress often doesn’t have the time to specify which projects the funds should be used for, so it asks the Army Corps to prepare a work plan or a spend plan to tell it how the Army Corps is going to spend all this money.
Currently, the Army Corps has around $80 billion in civil works money. It is a challenge to manage that amount of work and hire enough people quickly enough, so the Army Corps relies heavily on architect-engineer firms and
construction contractors. As much as 99 percent of the construction work is done by contractors. The Army Corps is responsible for construction management, oversight, and quality assurance, but most of those responsibilities are turned over to private-sector contractors.
Municipal Water Leader: How important is it to have a relationship with your local Army Corps office? If people do not have an existing relationship, how would you recommend they establish one?
Steve Stockton: It’s important that you engage both as an individual sponsor and as part of an industry group, such as the National Water Resources Association, the National Association of Flood and Stormwater Management Agencies, the Association of State Floodplain Managers, the Waterways Council, or the National Waterways Conference. Through these industry groups, you can pull in Army Corps leaders at both the district and headquarters levels and ask them to address the things that might impede the funding process. There is strength in numbers.
Moreover, the nonfederal sponsor and the local Army Corps district need to act as a team. If they are at odds with one another, the project is not going to go anywhere. Many nonfederal sponsors are sophisticated; sometimes, they know more about the Army Corps processes than the Army Corps does. It’s better to have a long-term relationship than to try to do a one-off project.
Municipal Water Leader: Is it accurate to say that if the Army Corps headquarters in Washington, DC, hears about concerns in local areas, it will reach out to the local office?
Steve Stockton: Yes. During the budget process, every Army Corps district prepares justification sheets for its projects. Those are submitted through the division office to the program’s business line manager at headquarters, who then applies criteria and establishes a cutline. Then, headquarters proposes the budget to the ASA(CW) office, where political priorities are applied, and then it goes to OMB, which has to sign off on it as well. Some 80 percent of the decisions are based on objective criteria only, while about 20 percent are influenced by political considerations, such as advancing the agenda of the president or a specific congressman or senator. I’m not saying there’s anything untoward going on; I’m just saying that it was much harder for the Appropriations Subcommittee chairs to advance projects in the absence of earmarks. Now that they can have congressionally directed funding or community project funding (earmarks), appropriations chairs have more leverage to keep membership in line. It is also important to remember that there are 38 civil works districts in the United States, and each one has its own personality.
Municipal Water Leader: You mentioned that the Army Corps’ decisionmaking process is often influenced by entities such as Congress or OMB. If folks want to engage with the Army Corps, should they familiarize themselves with OMB as well?
Steve Stockton: It depends. OMB has a bandwidth problem. There are only a few people in the Water and Power Branch, and it’s difficult to get on their agendas because they apply narrow, stringent criteria. There’s not much flexibility there. If I were doing advocacy work, I’d work with the local Army Corps district, Army Corps headquarters, industry groups, and my congressional delegation.
Municipal Water Leader: The Army Corps has some input into the proposed change to the definition of the Waters of the United States (WOTUS). If people want to express their opinion about this issue, would you recommend that they reach out to their local Army Corps district?
Steve Stockton: That is a conversation that will happen in DC at the Army Corps headquarters and the ASA(CW) office. Local Army Corps districts aren’t going to have much influence on the outcome. The local districts must execute the WOTUS rules, whatever they are. The question is going through another Supreme Court test now. This administration is trying to come up with a durable rule, one that doesn’t keep flip-flopping back and forth. I went through the whole process at the tail end of the
Obama administration, and it’s messy. There are a lot of conflicts between the U.S. Environmental Protection Agency (EPA) and the Army Corps. I always felt bad for the GS-11-level regulators who had to make jurisdictional determinations when not even the Supreme Court would provide clear guidance and direction. Given the issue’s complexity, I think the Army Corps tries to stay as apolitical as possible.
Municipal Water Leader: Based on your experience at both the local and leadership levels, what traits would you say you have seen in projects that move forward in the process and find success?
Steve Stockton: I think projects that are straightforward and policy compliant have the best chance of success. Any time I see somebody trying to get creative, I have doubts about their chances. You may not like the rules, but the more policy compliant you are, the better your odds.
Municipal Water Leader: Do you anticipate that the Army Corps will help address the long-term effects of drought?
Steve Stockton: Exceptional drought is not an Army Corps mission. This is really within the Bureau of Reclamation’s and the states’ purviews. That said, if the Army Corps is directed by Congress to work on the issue, it will execute.
Municipal Water Leader: It is 2022, and there are still provisions from WRDA 2020 for which implementation guidance has not been developed. What recommendations do you have on how to speed that along?
Steve Stockton: Army Corps headquarters will list all the WRDA provisions to figure out which ones need implementation guidance. If the language is clear enough, they don’t need implementation guidance. If a district-specific provision does need implementation guidance, the district will prepare a draft, send it to headquarters, and then coordinate with the ASA(CW) office. Most of the policy provisions that require guidance are ones that are based on all the previous policy provisions—all the prior WRDAs, flood control acts, and navigation acts. There is a bandwidth problem in the Army Corps headquarters when it comes to providing implementation guidance: The Army Corps headquarters is still largely working virtually, and it is difficult to do this type of coordination in virtual environments.
Municipal Water Leader: It sounds like your recommendations are first, to identify your need within the context of the Army Corps’ mission areas; second, to get to know employees at your local district office and talk to your members of Congress and contacts at Army Corps headquarters; third, to build coalitions and join industry groups or regional organizations; and fourth, to take a long view.
Steve Stockton: I think those are fair recommendations. I think the most important thing is to remember that while the Army Corps has a lot of capabilities on the civil, military, and research and development sides, it can’t solve all water resource problems. For instance, it doesn’t have authority to fix nonfederal dams. That’s where people get frustrated. Don’t pursue projects that fall outside the Army Corps’ mission areas and authorities. If projects are policy noncompliant, they are not likely to get authorized or funded.
Municipal Water Leader: Would you tell us about public-private partnerships (PPPs), the Water Infrastructure Finance and Innovation Act (WIFIA), and other new tools the Army Corps is using?
Steve Stockton: After realizing that there would never be enough federal appropriations to meet all the demands, we did a lot of work trying to develop PPPs and ended up setting up a hybrid PPP for the Fargo-Moorhead Area Diversion Project. So much of what the Army Corps does is based on legacy rules, regulations, and processes, and this was something different, so we made some inroads.
WIFIA is basically a loan guarantee program, and administering it requires a complete administrative infrastructure. The Army Corps is going to piggyback on what the EPA does and rely on the EPA to administer the program. I think there’s an appetite within the Army Corps to have alternate financing tools in its toolbox, but without a lot of money behind it, I’m not sure how effective it can be.
One of the interesting things I’m doing now is working down in Brazil with the U.S. Treasury’s Office of Technical Assistance. We are working with Brazil’s Ministry of Regional Development to figure out what funds are available for water, sewer, sanitation, and waste disposal projects and to link up municipalities with banks and funding sources. You have to do prefeasibility studies and have somebody structure the agreement; then, you put them out for concessions. It’s really a financial deal. The Army Corps doesn’t have a lot of financial dealmaking expertise. It is more focused on the technical side of construction. I think financial dealmaking is a skill set the Army Corps needs to further develop.
Steve Stockton is a private water resources consultant, a senior advisor at Water Strategies, and the president of Stockton Global Strategies LLC. He can be reached at the Water Strategies office at (202) 698-0690, at firstname.lastname@example.org, or at (571) 645‑1666.