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NW Fishletter #383, July 2, 2018

[1] BPA's Strategic Plan Prompts Cuts From F&W Program

A handful of contractors with ongoing Bonneville Power Administration fish and wildlife projects were notified June 8 that some of their projects are on the chopping block for fiscal year 2019, which begins in October. Hundreds more found out that the BPA plans to cut a portion of their funds as the agency turns its five-year strategic plan into reality.

That plan calls for keeping the cost of its ever-growing Fish and Wildlife Program at or below inflation, even with the added costs from a court-ordered spill, or associated power purchases or forgone revenues.

Bryan Mercier, executive director of BPA's Fish and Wildlife Division, told NW Fishletter that the specific cuts were being announced in letters sent to some 600 entities that receive BPA funding for fish and wildlife projects, including government agencies, tribes, nonprofit organizations and other entities such as conservation districts. He and BPA Administrator Elliot Mainzer also briefed the Northwest Power and Conservation Council about the program reductions during a regular meeting on June 12.

"There are programs we are going to propose to phase out. Based on our analysis, they're not performing well," Mercier said. He added, "There's only a handful of contracts we're going to stop funding. Much of this is little things--work elements that are not a good use of funds."

Mercier said it's not just BPA's Fish and Wildlife Division undergoing cost reductions, and noted that the upcoming cuts come after several years of scrutiny across all BPA programs. "We have reduced the size of our workforce by almost 10 percent. We've closed our library. There are a lot of things we're doing to manage our costs," he said. A close look at the agency's Fish and Wildlife Program is part of that larger effort.

Mercier said until now, BPA's Fish and Wildlife Program has largely escaped cuts, even as the agency recognized its financial situation and began finding ways to reduce costs in other areas. "As an agency, we really believe in our environmental stewardship and in the work that we do. The challenge is, we're no longer in a position where we're able to sustain this level of commitment," he said. The cuts, he said, are to lower-performing projects that aren't delivering for fish. "It's efficiencies we think we can reasonably justify and not negatively affect fish," he said.

At the Power Council meeting, Mercier and Mainzer told the council the cuts won't be easy. But with volatile energy markets causing fiscal uncertainty, these reductions are necessary to ensure BPA's Fish and Wildlife Program continues into the future.

Although the agency has identified some $30 million in Fish and Wildlife Program cuts in fiscal year 2019--or about 10 percent of its direct program costs--specific cuts can be negotiated if the entity receiving the funds can successfully defend theM. About $4 million of those reductions are being made internally at BPA, through overhead and internal costs, and the Lower Snake River Compensation Plan.

"It's very important to me that we sustain the heart and soul of what we're doing," Mainzer told the Council. To do that, projects must be more efficient and focused on aspects that directly impact fish and wildlife. He said BPA has a shared responsibility--along with the Council and its partners that carry out the projects--to protect fish and wildlife, but also to ensure the program is financially sustainable into the future.

In answer to a question about meeting the challenges of the next decade, Mainzer said that he doesn't like being "on opposite sides of the courtroom" from Oregon and some American Indian tribes. He said he hopes the collaborative process involved in making funding cuts will help all fish managers take a close look at their resources, and help find a strategy to "rebalance" limited dollars to most benefit fish and wildlife.

"My hope--and I'm not sure it's rational--is to try to find a way to really come together," Mainzer said. He noted that Bonneville's financial issues are real, and that the agency's partners need to consider "the carrying capacity of this organization."

The meeting followed BPA's June 8 letter to hundreds of contractors, notifying them of the upcoming line-item budget adjustments.

Mercier's presentation detailed how the proposed cuts were identified. "We haven't picked winners and losers," he said. "We're really trying to squeeze efficiencies out of the existing programs."

The agency has focused on continuing to fund work on the ground, with a direct connection to the Federal Columbia River Power System (FCRPS), compliant with legal requirements and that has shown effective and efficient performance. Areas proposed for reductions include research, monitoring and evaluation (RM&E); data management; administrative costs; duplications; work with a weak connection to the FCRPS; and projects with poor performance.

BPA will also ask its contractors to find ways to share costs, either through nonprofit grants or by leveraging funds from other agencies, Mercier said.

Mercier said he planned to begin meeting with individual contractors immediately, beginning with those whose contracts expire at the end of this fiscal year, to go over next year's proposed budget that begins Oct. 1. "We'll be firm, but we will be convinced," he said. "If the information we have suggests the reductions we're making are not the right call, we'll be open to working with our partners on that."

During questions, Richard Devlin, an Oregon Council member, expressed concerns about reducing RM&E, noting they are necessary to determine project effectiveness.

Bodi responded that at $300 million a year, BPA believes its Fish and Wildlife Program is the largest ecosystem-restoration program in the country. She said the average benchmark for monitoring and evaluating effectiveness of a project is between 20 and 25 percent. "We're well above that," she said, adding that BPA has been gradually putting more into RM&E, particularly as the Independent Scientific Review Panel has requested it. "We, at Bonneville, don't need information that's good enough for scientific publications," she said. "We need information that's good enough to make a decision."She also said there is some duplication that can be eliminated.

Council Member Guy Norman of Washington noted that fish managers attending the Regional Coordinating Forum on June 11--who were also briefed on the upcoming cuts--seemed to reasonably accept and understand the cuts, and their necessity for stability of the Fish and Wildlife PrograM. He said he thinks part of that acceptance is due to BPA's pledge it will work with its contractors on the specifics. "I know when everyone quits whining and gets down to work, they can assist in this reduction that is so necessary . . . to preserve the goose that lays the golden eggs," added Idaho Council Member Jim Yost.

According to figures previously provided by the Northwest Power and Conservation Council--which writes an annual report on Fish and Wildlife Program costs to the governors of the four states represented on the council--the direct program costs started at $2.3 million in 1980, and steadily rose to $32.8 million by 1990. Then, with the ESA-listing of several Columbia River salmon and steelhead species in the 1990s, the direct costs had tripled by 2000, when program spending hit $108.2 million. By 2010, the program nearly doubled again to just under $200 million, and by last year had risen to $254.7 million.

The direct-funded program pays for projects like habitat improvements, research, and some fish hatchery costs, and is the largest part of the program's total budget. The figures do not include BPA's reimbursement to the federal treasury for expenditures by other agencies, debt service for capital investments, or costs of forgone power sales and power purchases that result from fish and wildlife requirements, such as spilling water over federal dams to help juvenile fish passage. Those costs--especially power purchases and forgone power sales--can fluctuate significantly from year to year.

"My focus is largely going to be on the Fish and Wildlife Program, and those direct-funded programs we have control over," Mainzer said. "That's what's within our realm of influence right now." He added, "We, as a region, need to decide: Is water spilled over the dam--that revenue--is that better spent as spill, or better spent on the ground for fish and wildlife?" -K.C. Mehaffey

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Publisher/Editor-in-Chief: Mark Ohrenschall, Editor: K.C. Mehaffey
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