Fish, Wildlife Project Spendingby Barry Espenson
Columbia Basin Fish and Wildlife Program spending in September reached unprecedented levels as project sponsors, apparently, made an 11th hour rush to get budgeted fiscal 2003 work done, and billed, to the Bonneville Power Administration.
Latest estimates are that $140.5 million in program expenses accrued during the fiscal year that ended Sept. 30, BPA's Therese Lamb told the Northwest Power and Conservation Council's Fish and Wildlife Committee Tuesday. The federal power marketing agency funds the Council's fish and wildlife program as mitigation for the construction and operation of the Columbia/Snake river hydrosystem.
With only $97 million worth of bills or invoices in hand through Sept. 15, most were predicting that only $120 million or so in project spending would actually accrue during the fiscal year. But the year ended with a flurry. Bonneville paid $17.4 million worth of invoices from project sponsors during September, an amount Lamb said was a record.
The $140.5 million in "2003 accrued expenses" includes $95 million in invoices accrued from Oct. 1, 2002 through August 2003, the $17.4 million paid in September and an estimated $28.1 million worth of invoices that BPA expects to receive and pay over the next few months for work completed in 2003. The agency had, in a letter to project sponsors, asked for estimates of those "end-of-year accruals" that would not be billed until after Sept. 30.
The accrual total "caught a lot of us by surprise," said Lamb, BPA's vice president for Environment, Fish and Wildlife.
|Dept. of Energy||Bonneville Power Administration Direct Fish Costs||$184.0||$253.3||$246.8||$280.5|
|Army Corps of Engineers||Including Columbia River Fish Mitigation, new Lower Columbia River Estuary programs, Columbia/Snake River dam fish passage improvements, FCRPS Biological Opinion.||$102.7||$108.8||$113.5||$125.1|
|Pacific Coast Salmon Recovery Fund||for Washington, Oregon, California, Alaska, (Idaho to be included 2005?)||$90.0||$110.0||$90.0||$90.0|
|Dept. of Agriculture||U.S. Forest Service and National Resources Conservation Service salmon conservation/restoration programs.||$78.2||$84.4||$44.8||$76.8|
|Dept. of Interior||Including U.S. Fish & Wildlife Service hatcheries & other, Leavenworth Fish Hatchery, Bureau of Land Management salmon conservation, Bureau of Reclamation FCRPS Biological Opinion, Bureau of Indian Affairs, U.S. Geological Service salmon program.||$43.9||$70.7||$78.3||$76.9|
|Dept. of Commerce||NOAA Fisheries, Columbia River hatcheries and facilities and Endangered Species Act recovery planning.||$25.5||$24.6||$26.2||$39.7|
|Environmental Protection Agency||Including support for tribal salmon programs, Clean Water Act and other water quality/restoration programs.||$18.2||$18.3||$18.2||$18.3|
|Total Funding||Discretionary and Mandatory||$542.5||$670.1||$617.8||$707.3|
|10% of BPA Total Sales||An estimate of Hydropower Sales from four Lower Snake River Dams||$425||$350|
Source: 2003 Check-In for the Federal Columbia River Power System and BPA Annual Report 2002
BPA in December 2001 notified the Council that the program would be funded for the balance of the rate period, through fiscal 2001, at average of $139 million in "accrued" expense -- a figure the agency said equates to the $150 million in contractual "obligations." The program had previously been managed on an obligations basis, meaning that if $150 million in contractual obligations were made, only $139 million were expected to accrue (billed and paid) during the year.
The switch in accounting methods suffered an agonizing transition when last winter -- more than one-third of the way through fiscal 2003 -- BPA estimated that the program was on target to accrue nearly $170 million as a wave of invoices from work done previous years came onto the books.
The federal agency, still trying to contain costs amidst a financial crisis of its own, asked the Council in December 2002 to defer and pare back projects to assure that accruals would not exceed a $139 million cap for the year.
That done, all parties involved moved on to planning for fiscal 2004, which began Oct. 1. The Council last month approved an expense budget of $154 million for the new year. The recommendations include estimates of individual project, and provincial, funding needs for ongoing projects. The Council staff in preparing the budget document also included estimates of work scheduled for fiscal year 2003 that will not be completed but would have to be rescheduled into fiscal 2004.
New budget management protocols established by BPA early this month removed the annual budget cap, instead allowing the program be managed to an average annual budget of $139 million over there remainder of the rate period. Those protocols allow the budget to exceed $139 million by as much as 10 percent -- say up to $153 million in 2004 -- as long spending is reduced in the 2005and 2006 to make the average $139 million.
One frame of the budget picture that remains out of focus is the estimate of end-of-year accruals -- $28.1 million.
"They may have erred on the high side," Lamb said estimates of the project sponsors. That strategy could have been employed to assure work done in 2003 would be paid from fiscal 2003, and not added to the burden for 2004. The end-of-year accrual number won't be fully known until year's end. A BPA policy requires bill be submitted within 90 days of the end of the fiscal year.
"We'll true that up with the actual invoices," Lamb said.
The NPCC's Fish and Wildlife Program director, Doug Marker, said his staff is amidst a "ground truthing" of those end-of-year estimates to determine potential impacts on the 2004 budget. A primary task is to determine how much of that end-of-year accrual estimate dispensed with work that the Council staff had assumed would be "rescheduled" into 2004.
"We're looking on a project by project basis to see if those expectations were borne out," Marker said. "Is it those projects or is it another set of projects?" Both he and Lamb pointed out that many of the program's projects -- there are about 600 contracts overall -- overspent their budgets during 2003.
If 2003 spending was $140.5 million, that would be only slightly above the average. If that is the final figure, it would leave less flexibility over the final three years of the rate period. It was thought the program would under-accrue in 2003, which would have allowed higher average spending over the balance of the rate period.
So if the need to "reschedule" projects into 2004 remains as assumed, that would leave anticipated spending based on the Council recommendations at $154 million.
Pushing the budget up to $153 million in spending ($139 million plus 10 percent) in 2004 would mean that the budgets for 2005 and 2006 would have to average $131 million, Lamb said.
"We've got a couple of months to think about this," Lamb told the fish and wildlife committee.
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