3. A clarification of the respective responsibilities of the Corps of Engineers and the Department of the Interior concerning drilling operations on lands of the Outer Continental Shelf.

4. Revised regulations on the issuance of public notices and the holding of public hearings on permit applications. Public hearings are to be held whenever there is an indication of significant public interest in a permit application or whenever requested by Federal, State, or responsible local public authorities.

5. By Executive Order 11574 issued on December 23, 1970, the President took positive action to control and reduce pollution of the Nation's waters establishing a new, coordinated program of water quality enforcement under the Refuse Act, designed to enhance the ability of the Federal Government to enforce water quality standards. With the participation of the Council on Environmental Quality and other interested agencies, including the Environmental Protection Agency and the Department of Justice, we have developed a Refuse Act program to assure that required permits are thoroughly coordinated with other on-going water quality programs. Proposed regulations to implement the program were published in the December 31, 1970, issue of the Federal Register. We expect these regulations to become effective about April 1, 1971.

These increased uses of the 1899 act for various public interest and environmental purposes have increased our fund requirements under protection of navigation.

Removal of wrecks in navigable waters of the United States is governed by sections 19 and 20 of the River and Harbor Act of March 3, 1899. Removal is predicated upon their being obstructive to navigation. This is an emergency-type activity and future-year fund requirements have been based on past-cost experience. Unless faced with unusual expenses for removal of wrecks such as the Chinese freighter Union Faith which sank at New Orleans during hurricane Camille, and was removed at a cost of $1,722,000, the budget estimate of $750,000 for this activity for fiscal year 1972 should be adequate. Because of the nature of the work involved in operation and maintenance activities at corps projects, the total requirements must of necessity increase from year to year because new projects are continuously being added to the program as they are completed or partially completed and come into a maintenance status. However, in looking to the future, one other factor which will have a marked impact on the funds required for O. & M. activities is the environmental considerations concerned with our maintenance activities, particularly with respect to the dredging and disposal of polluted material from the Federal project waterways. As research and studies are completed on the effects of deposition of dredge spoil on water quality as authorized by section 123 (i) of Public Law 91-611, the implementation of mitigating measures resulting from these studies, which undoubtedly will include the construction of contained disposal areas, will generate a requirement for substantially additional O. & M. funds. These additional funds will not only be required to provide for the initial cost of the remedial measures but also to cover the more costly maintenance dredging operations and dredging techniques. However, these expected increases outside the Great Lakes have not been provided for in the current budget.

RECREATION

The requirements for the recreational aspect of the operation and maintenance program will also become more costly from year to year because of the continually increased visitation to the public-use areas. This greater use of the recreational areas and facilities will require large-scale rehabilitation and modernization costs, upgrading access roads with more frequent maintenance, increased surveillance in the interest of public health and safety, and the need for new programs on pollution control and environmental improvements.

We recognize that the increase in magnitude and complexity of the civil works, operation and maintenance activities demands that the program be managed with maximum efficiency. Our efforts are being directed to achieve maximum economies in our operations so that sig nificant reductions in our annual funds requirements can be realized. To this end we have embarked on a program, utilizing the state of scientific and engineering knowledge to develop new systems, techniques, and improvements to assure maximum operational efficiencies. We are optimistic that this effort will result in significant benefits and savings in our future program activities.

Mr. EVINS. Thank you, General Koisch. We will insert at this point. in the records a summary of the O. & M. program.

(The information follows:)

Project
Classification

| OPERATION & MAINTENANCE COSTS IN BUDGET (in Thous of $)

O&M Require- No. NewProWage Board Require

shown (Increases

The total investment in Civil Works Projects through Fiscal Year 1970 is $20,432,000,000.

Under the classes, Locks & Dars, Flood Control Reservoirs and Multiple Purpose with Power, all projects therein require anruel operation and maintenance because of the nature and purposes for which these facilities were constructed.

Mr. EVINS. You are requesting $399 million for this work for the next year?

General KOISCH. Yes, sir.

Mr. EVINS. This is $100 million increase over last year?

General KOISCH. Yes, sir.

Mr. EVINS. This involves about 800 projects in which there will be work in O. & M.?

General KOISCH. Yes, sir.

Mr. EVINS. General, you say that this is a continuing activity which the public demands. They want these places maintained and kept up to date and in good order. Certainly the Federal investment justifies that action. We want the Federal exhibit to show well in appearance and not to be deteriorating.

NEW COMPLETED PROJECTS

Labor costs are up and material costs are up and more projects are coming on the line. How many new projects were completed which you have had to add to maintenance in the last year?

Mr. GURNEE. I don't have the figure for last year. In the last 10 years we have had 27 new locks and dams; 25 new multiple-purpose projects with power; 79 reservoirs; and about 180 navigation projects. Mr. EVINS. You make a better case on 10 years but you cannot tell us how many projects were completed last year?

Mr. GURNEE. I can furnish that for the record.

Mr. EVINS. Can you give us an estimate and correct it for the record?

Mr. SMET. Sixteen.

Mr. EVINS. Sixteen completed last year?

Mr. GURNEE. Yes, sir.

Mr. EVINS. You think 16 plus the cost increases justifies the $100 million increase?

Mr. GURNEE. Yes, sir. The 16 projects alone do not justify the $100 million increase. Only about $16 million of that cost is attributed to the new projects that were completed, and expanded new work at other projects such as those going into fuller maintenance status.

Mr. EvINS. In other words, an average of $1 million a project? It is costing you over $1 million a year to maintain some of these projects?

Mr. GURNEE. On some projects, yes, sir.

Mr. EVINS. Some I judge would be less?

Mr. GURNEE. Yes, sir. Some more.

Mr. EVINS. You have cited your growth in 10 years. This committee can cite your operation and maintenance tripling in 10 years.

Mr. GURNEE. Yes, sir. That is approximately correct. The last 6 or 7 years our annual increase in maintenance costs has been about $30 million per year discounting the unusual $41 million that we have for 1972 because of the Great Lakes, as General Koisch mentioned.

Mr. EVINS. Thirty million dollars a year is the inflation cost of, let's say, maintenance of Corps projects?

Mr. GURNEE. Yes, sir.

Mr. EVINS. That is averaging about $30 million a year that we have to keep adding?

Mr. GURNEE. Yes, sir.

Mr. EVINS. Is this more jobs, more weed cutting?

Mr. GURNEE. It is all of that. Roughly one-third is new workload on the average over several years, and a third is price escalation, cost increases, and a third is rehabilitation work and new things that we have not previously done on projects.

Mr. EVINS. This $100 million envisions buying more trucks, automobiles, dredges? How are you going to spend this $100 million increase?

Mr. GURNEE. It does include the things that you have mentioned if they are project owned. The new dredges are funded under our revolving fund rather than in our O. and M. appropriation. The year-toyear costs of using those dredges are included in the O. and M.

Mr. EVINS. The use is included. The payroll is included but the purchase of the dredges is out of the revolving fund?

Mr. GURNEE. Yes, sir.

Mr. EVINS. Is there any way to hold down this $30 million increase in O. and M. each year?

Mr. GURNEE. We are trying hard to reduce our operation and maintenance cost. We also have a research program included in the General Investigations budget which is directed toward accomplishing that objective, too.

Mr. EVINS. We see your breakdown here on page 2 of the general statement. New workload is $15.8 million. For the record, specify some of the new workload.

Mr. GURNEE. It is, as already noted, largely directed toward the new projects that have been brought on the line for O. and M.

Mr. EVINS. Sixteen?

Mr. GURNEE. That is correct.

PROJECT MAINTENANCE

Mr. EVINS. Didn't you have some operation and maintenance cost occurring on these new projects the year prior to this and the year prior to that? You have been maintaining them as you developed them and as they progressed toward completion?

Mr. GURNEE. Not these projects. There comes a stage in the project construction where we start maintaining the project rather than building it. Generally that is a year before the project is finished.

Mr. EVINS. Are contractors required to do all the cleanup work when you let a contract? Don't they complete it all and do the cleaning and dress it up before they deliver it to you?

Mr. GURNEE. Yes, sir, they do.

Mr. EVINS. That cost is included in the construction costs?

Mr. GURNEE. Yes, sir.

Mr. EVINS. After it is completed you begin to pick up the maintenance?

Mr. GURNEE. Yes. Things like rip-rap do require maintenance each year.

Mr. EVINS. New projects shouldn't. It deteriorates several years later.

Mr. GURNEE. The costs on any one project do escalate as time goes on for that type of work.