# Presentation: 199133

## Lower Snake River Fish & Wildlife Compensation Plan

- Lower Snake River Fish & Wildlife Compensation Plan

- Scott Marshall
- LSRCP Program Manager
- US Fish & Wildlife Service

## Topics

- Legislative History
- Goals & Benefits
- Conservation Actions
- Operations
- Budget
- History
- Operations
- Non-recurring maintenance
- Equipment
- Summary
- Pending Legal Obligations

## Legislative History 

- Public Law 85-264(1958):  Required the U.S. Army Corps of Engineers (COE) to develop a plan to compensate for fish & wildlife losses caused by construction & operation of  the four Lower Snake River dams.
- Public Law 94-587 (1976):  Authorized construction & operation of the LSRCP in accordance with the COE plan.
- Public Law 103-672 (1995): Authorized construction of fall Chinook acclimation facilities to support conservation efforts.
- LSRCP funding is “a Power Related Expenses” i.e. an inherent cost of operating the four dams.

## Goals

- Locating hatcheries guided by desire to replace lost salmon, steelhead & trout “in place and in kind”.
- Goals for adult return above Lower Granite Dam
- Fall Chinook Salmon – 18,300
- Spring Chinook – 58,700
- Steelhead – 55,100
- Rainbow Trout:  86,000 lbs (about 215,000 fish)
- Anticipated benefits (COE cost/benefit study):
- 817,000 days of recreational fishing (150,00 fish harvest),
- 260,000 coastwide commercial harvest.

## LSRCP Conservation Activities

- Developing  endemic local broodstocks
- Grande Ronde spring Chinook,
- Tucannon & Touchet steelhead.
- Juvenile supplementation strategies – increase natural stock abundance & distribution:
- Not marked with adipose clip,
- Released in locations where returning adults can spawn naturally,
- 56% of fall Chinook,
- 20% of steelhead,
- 7% of spring Chinook.
- Adult supplementation - increase abundance & distribution.

## Operational Overview

- COE constructed facilities.
- FWS owns facilities & administers program.
- States, tribes & FWS operate facilities & evaluate program.
- BPA  funds LSRCP through Memoranda of Agreement.

## FY 10 – FY 11 Budget

## LSRCP Budget Development for FY 10-FY11

- History FY 02 – FY 07 Budgets
- Factors & Assumptions
- Operations Budget
- Non-Recurring Maintenance
- Equipment
- Forecasted Total

## Budget History

## Three ways to examine budget
Prior to FY 06 LSRCP obligations were 2% greater than planned expenses.
In FY 06 obligations were reduced to match actual needs.
Differences between obligations & expenses for FY 06 and 07 are result of:
 BPA desire to move nonrecurring maintenance costs to FY 07 – 09 period.
LSRCP desire to delay expending limited nonrrecurring maintenance funds.     

**Prior to FY 06 LSRCP obligations were 2% greater than planned expenses.**
**In FY 06 obligations were reduced to match actual needs.**
**Differences between obligations & expenses for FY 06 and 07 are result of:**
** ****BPA desire to move nonrecurring maintenance costs to FY 07 – 09 period.**
**LSRCP desire to delay expending limited nonrrecurring maintenance funds.****     **

## Apparent large increase in costs between FY 04 and FY 05 related to forcing all cooperators to adhere to a common fiscal year.
Aggressive cost containment first evident in FY 06.
Actual inflation between FY 06 and FY 08 is 6%. 
FY 08 is an estimate. 

**Aggressive cost containment first evident in FY 06.**
**Actual inflation between FY 06 and FY 08 is 6%. **
**FY 08 is an estimate. **

## FORECASTED FY 10- FY 11 OPERATING  BUDGET

## FY 10 -11 Operations Budget Assumptions

**Generally stable  program.**
**FWS will continue aggressive cost containment. **
**High inflation rate seen in FY 06 – 08 for fish food, energy, commodities, heath insurance and salaries of 6% will moderate.**
**Assumed inflation rate is 4.25%. **
**Assume that 75% expenses accrue in current year and 25% in following year.**
**Efforts to close books quickly could skew accruals higher to current year / current rate case period (FY 07-09)**
**FWS will limit total actual expenses for FY 07 - 09 obligation years  to agreed maximum of $59.243 million.  If accruals shift earlier into the FY 07 – 09 period, the same, but a lower amount will accrue in FY 10-11 and costs will be neutral over time.**** **

## FY 02 – 07 Actual Expenses
FY 08   Assumes current obligations are fully expended.
FY 09 – 11 assumes 4.25% inflation & that all funds obligated are fully expended. 
All expenses are shown regardless of fiscal year of accrual.

- FY 02 – 07 Actual Expenses
- FY 08   Assumes current obligations are fully expended.
- FY 09 – 11 assumes 4.25% inflation & that all funds obligated are fully expended.
- All expenses are shown regardless of fiscal year of accrual.

## FY 10 – FY 11 Nonrecurring  Maintenance

## Nonrecurring Maintenance Budget

- LSRCP assets
- Background from FY 07 – 09 Rate Case
- How Needs are Assessed
- How Projects are Prioritized
- What is Included
- Current Backlog
- Action Plan

## LSRCP Hatcheries & Labs

**LSRCP Hatcheries & Labs**

- Oregon
- Lookingglass (Imnaha)
- Wallow (LSC,BC)
- Irrigon
- Washington
- Lyons Ferry (Cotton & DP)
- Tucannon (Curl Lk)
- Snake River Lab
- Idaho
- Clearwater (CR, Red, Powell)
- Magic Valley
- Hagerman NFH
- McCall (S. Fork)
- Sawtooth (E. Fork)
-  Capt J. - Pitt.  & Big Canyon
- Dworshak (joint with COE)
- Idaho Fish Health Lab

## 26 Facilities located in three states
Present value of assets (less land) is $265 million.
Most (75%) built in 1980’s now 20+ years old.
Maintenance is an inherent cost of ownership and public trust

- 26 Facilities located in three states
- Present value of assets (less land) is $265 million.
- Most (75%) built in 1980’s now 20+ years old.
- Maintenance is an inherent cost of ownership and public trust

## Lyons Ferry Hatchery

## Background FY 07 - 09 Rate Case 

**FY 07 – 09 Rate Case – three scenarios proposed varying amounts (none to FWS recommended).**
**Final nonrecurring maintenance budget was $1.2 million/yr less than FWS recommended.**
**FWS and BPA exchanged letters. **
**FWS emphasizing need for more funding.**
**BPA emphasized need for better understanding of FWS nonrecurring maintenance program.**
**FWS has worked hard to explain & document nonrecurring maintenance program to BPA thru JMC.**
**Actual amount provided only about $2.2 million.**

## A Structured Approachto Assessing Needs

- Annual Condition Assessments
- Safety Inspections
- Seismic Surveys
- Bridge Inspections
- Environmental Compliance Audits
- ADA Inspections
- ESA Consultations (fish passage, screening)
- Other State & Federal Legal  Compliance Audits

## Prioritizing Projects

- All projects ranked through a formal process:
- Importance of asset
- Substitutability of asset
- Human safety
- Fish Security
- ADA compliance
- ESA compliance
- Environmental compliance
- Risk of further deterioration
- Energy efficiency
- Visitor services
- General application is to ensure human safety, fish security and legal obligations are met first.

## Program Components  

- Deferred – fix broken items
- Preventative – minimize untimely failures of mission critical assets
- Corrective – meet current standards (e.g. ESA)
- Improvements – meet current mission needs
- Some Routine Maintenance – LSRCP purchase to save agency overhead.

## Current Backlog

| Deferred Maintenance | $2.79 million |
| --- | --- |
| Corrective Maintenance | $1.30 million  |
| Preventative Maintenance | $1.01 million |
| Facility Improvements | $0.33 million |
| Routine  Maintenance | $0.17 million |
| Total | $5.60 million |

## FWS Action PlanFY 10 –FY 11

- Eliminate backlog.
- Plan for untimely breakdowns.
- If  critical breakdowns occur that  exceed funds, reprioritize to the extent advisable, if necessary seek re-opener per MOA.
- Initiate comprehensive preventative maintenance program beginning in FY 12 – assuming backlog eliminated.

## Forecasted FY 10 -11 Budget

- Current Back Log ...................     $ 5.60 m
- Minus FY 08 – 09 Projects ......... - _$ 1.09 m_
- FY 10 – 11 Backlog ..................     $4.51 m
- Untimely Breakdowns FY 10-11 ....   $ 0.6 m
- Routine Maintenance.................     $ 0.01 m
**FY 10 -11 Total Need ..................$ 5.12 m**

## EQUIPMENT

## LSRCP Equipment 

| Category | Useful Life |  Cost (Replace)  |
| --- | --- | --- |
| Fish Tanks | 25 -30 Years | $ 3.87 million |
| Vehicles | 7 Years | $ 1.53 million |
| Heavy Equipment | 25 -30 Years  | $ 1.50 million |
| Field Equipment | 10-20 Years | $ 1.45 million |
| Scientific Equip. | 12- 15 Years | $ 0.90 million |
| Tools | 12 – 15 Years | $ 0.36 million |
| Office Electronics |  5 – 8 Years | $ 0.27 million |
| Misc.  | 15 years | $ 0.16 million |
| Total |  | $ 10.4 million |

## Deferred replacement of $3.3 million thru FY 08
Substantial costs to replace ageing equipment will occur over next 10 years.   

- Substantial costs to replace ageing equipment will occur over next 10 years.

## Replacement Decisions

- Current needs assessment
- Actual condition
- Consequence of failure (human & fish Safety)
- Maintenance vs. replacement cost comparison
- Substitutability
- Facility sharing
- New vs. used vs. surplus

## FY 10 -11 Forecasted equipment Needs

- Prioritize FY 08 – 09 projects  to meet  available funds.
- Estimated carry forward shortfall       $0.33 m
- Replace 10% of backlog per year      $0.66 m
- Replace FY10 - FY11  on schedule   $0.28 m
- Total Need ...........................        $1.27 m

## SUMMARY

## Summary FY 10 - 11 Forecasted Total Expenses for a Fiscal Year’s Obligations 

| Category | FY 10 | FY 11 |
| --- | --- | --- |
| Operations | $16.08 m | $16.77 m |
| Evaluation | $ 4.32 m | $  4.51 m  |
| Non-recurring maintenance | $ 2.56 m | $  2.56 m |
| Equipment | $ 0.64 m | $  0.64 m |
|           Total | $23.60 m | $24.48 m |

## FWS believes FY 10 – 11 budget reflects realistic and reasonable effort to:
Address nonrecurring maintenance and equipment needs while,
Control ongoing operation costs required to meet mitigation responsibilities. 

**FWS believes FY 10 – 11 budget reflects realistic and reasonable effort to:**
**Address nonrecurring maintenance and equipment needs while,**
**Control ongoing operation costs required to meet mitigation responsibilities. **

## 2007  and earlier years are actual values 
Most notable differences are 2008 & 2012

**Most notable differences are 2008 & 2012**

## In 2002 LSRCP expenses for operations and evaluation was $14.96 million.
By 2007 general inflation raised the costs to pay for the same program to $17.5.
The LSRCP expenses in 2007 were only $0.05 more than the inflation adjusted costs. 

- By 2007 general inflation raised the costs to pay for the same program to $17.5.
- The LSRCP expenses in 2007 were only $0.05 more than the inflation adjusted costs.

## FWS has been a good steward of rate payer funds.

**Annual Savings from Aggressive Cost Containment**
**Waiver of full FWS overhead  -  $0.3 million / year.**
**Aggressive cost containment by purchasing items for state & tribal agencies to save  overhead & sales taxes.**
** ****Supplies & utilities –      $ 0.9 million /yr**
** ****Construction & equipment - $0.15 Million / yr**
**Total annual Savings – $ 1.35 Million/yr.**
**Expenses for operations in 2007 was the same amount (adjusted for general inflation) as in 2002.**** **
**FWS believes we have addressed BPA concerns and can now move forward to present  the public a unified approach during the upcoming Rate Case.**

## ESA & Other Legal Obligations

- Hydro System RPA’s
- Best Management Practices (Hatchery Reform & Site Specific Section 7 Consultations)
- US. Vs. Oregon Settlement Agreement
- Tribal Term Sheet (Not included)