Detailed Information on the
Bureau of Reclamation - Water Reuse and Recycling Assessment

Update the existing Title XVI Guidelines for Preparing, Reviewing, and Processing Water Reclamation and Reuse Project Proposals under Title XVI of Public Law 102-575, as amended. The revision is necessary to reflect the new requirements and process identified in the recently completed Reclamation Manual Directive and Standard. This update will describe the relationship and process of the planning, construction, and demonstration components of the program.

Re-evaluate the existing performance measures and determine if the measures should be modified, retained, or replaced to improve monitoring of activities for which Reclamation has direct control.

Because this program serves a function that is a local responsibility, the 2004 Budget scales back funding.

The Administration will consider Reclamation's water research functions in the context of any re-alignment of federal water research priorities, and based on that analysis either expand or transfer those functions to another agency.

Reclamation will establish clear objectives for how water reuse and recycling will contribute to Reclamation's conservation goals of improving the security of the water supply in the west through diversification.

The Administration will clarify requirements for a Title XVI Water Reclamation and Reuse feasibility study and will communicate to the public the feasibility determination process.

The Administration will identify improved business practices for the Title XVI Water Reclamation and Reuse Program. Goals and performance measures will be developed to meet those business practices.

Measure: Acre-feet of water delivery capacity made available through completion of Title XVI Projects.

Explanation:This is a component of a current GPRA goal. It only includes only authorized projects having received Federal funding as of FY04.

Measure: Average total Federal cost per acre-foot of reclaimed water made available through Title XVI projects.

Explanation:This goal measures the program's ability to leverage funding and provide additional reclaimed water for beneficial use at a reduced Federal unit cost.

Measure: Total annual acre-feet of reclaimed water delivered by Federally funded Title XVI projects.

Explanation:This goal measures the program's ability to increase the amount of reclaimed water delivered due to incremental completion of project components.

Is the program purpose clear?

Explanation: Purpose is to identify and investigate opportunities for reclaiming and reusing wastewater and naturally impaired ground and surface water, and to provide financial and technical assistance to local water agencies for planning and development of water recycling projects. This program helps Reclamation meet its mission to manage and develop water and related resources in an economically and environmentally sound manner.

Evidence: Title XVI of P.L. 102-575, as amended. "Guidelines for Preparing, Reviewing, and Processing Water Reclamation and Reuse Project Proposals Under Title XVI of Public Law 102-575, as Amended".

Does the program address a specific interest, problem or need?

Explanation: Municipalities in the west are facing increases in fresh water demand due to changing population trends, decreasing water supplies and drought. This program helps local agencies reduce demand for new sources of non-recycled potable water, improve water supply reliability, and protect against future droughts by reclaiming and reusing treated wastewater for nonpotable purposes and naturally impaired ground and surface water.

Evidence: Southern California must reduce its use of water from the Colorado River from about 5.2 to 4.4 million acre-feet per year, its legal entitlement. When completed, ongoing Title XVI projects will provide as much as a half million acre-feet per year of reclaimed water for non-potable uses, thereby reducing demand on imported supplies. Other Title XVI examples of reductions in demand for potable water include Albuquerque, NM; San Jose, CA; El Paso, TX; and Las Vegas, NV.

Is the program designed to have a significant impact in addressing the interest, problem or need?

Explanation: This program is designed to provide the incentive to local agencies to implement water recycling projects by providing seed money that helps to defray the cost of these expensive alternative water supply projects. Many water recycling projects would not be feasible without Federal financial assistance and would not be implemented at the local level. This program leverages Federal dollars with funds from state agencies and the sponsoring local agencies.

Evidence: Federal funding can account for as much as 25% of total project costs subject to legislated ceilings. Funding for appraisal and feasibility studies can be as much as 100% and 50%, respectively. Research can be funded at 50%. Since Congress first appropriated funding in FY1994, Reclamation has expended more than $260 million for Title XVI activities. This funding leverages significant local dollars. Federal participation also helps local partners improve their bond rating status, improving their financial performance.

Is the program designed to make a unique contribution in addressing the interest, problem or need (i.e., not needlessly redundant of any other Federal, state, local or private efforts)?

Explanation: No other Federal program provides assistance to local agencies to develop water recycling projects. Congress designed this program to provide the incentive to local agencies to implement water recycling projects by providing seed money that helps to defray the cost of these expensive alternative water supply projects. The program also assists local agencies, particularly in small communities lacking sufficient staff and expertise, with technical support for planning, design and construction of the water reuse and recycling projects.

Evidence: EPA and state agencies provide funds through State Revolving Fund programs. These agencies, however, do not provide direct technical support or project management assistance. Other Federal agencies do not have formal programs. EPA and others have received Congressional write-ins for various reuse projects, but have a very limited or no role in project development or technical support.

Is the program optimally designed to address the interest, problem or need?

Explanation: This program funds as many projects as possible by limiting the funding provided to any one project in any given year, thereby providing incentives to the greatest number of local agencies to move forward with project implementation. Federal funds are leveraged in such a way as to have the greatest net benefit to the most local project sponsors. Although taken by itself the program is well-designed, it works at cross-purposes with other Reclamation projects. Traditional water development projects produce cheap, subsidized water with a price that does not reflect its true cost, thereby discouraging the expansion of more expensive water reuse and recycling.

Evidence: This program is designed to provide funds as an incentive for local agencies to plan, design and construct projects. Ownership to the title of facilities remains with the local sponsor who is also responsible for operation and maintenence costs (O&M). Although Title XVI allows for cost-sharing on O&M for research and demonstration projects, it is Reclamation policy to not provide funds for this purpose. Thus, the Federal exposure to long-term funding is avoided. The Federal cost-share limitations ensure that the project sponsor, who typically designs and constructs the project, does so in an efficient and cost effective manner, as it is the sponsor who pays the great majority of the total project cost. The Federal participation ends when the cost-share ceiling has been reached. Refer to P.L. 102-575 and the "Guidelines for Preparing, Reviewing, and Processing Water Reclamation and Reuse Project Proposals Under Title XVI of Public Law 102-575, as Amended".

Does the program have a limited number of specific, ambitious long-term performance goals that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: Although the Title XVI program has long-term goals, they do not meet all the criteria necessary to receive a 'Yes'. In particular, they do not have clear timeframes, which compromises the usefulness of data indicating progress toward meeting the long-term goal of attaining 500,000 acre-feet per year of recycled and reused water. The principal long-term desired outcome is to increase the total water supply availability in critical water short regions (e.g. southern California) without causing undue harm to the environment by constructing new dams and reservoirs, or to the agricultural community by requiring a change of use from irrigation to Municipal and Industrial (M&I) use in order to meet the growing demand for fresh water in urban areas of the western US. The current long-term goals for water reuse and recycling projects are to increase the reclamation and reuse of reclaimed water by 500,000 acre-feet per year, and reduce the cost of treating wastewater by 10%.

Evidence: Draft FY 2004 End Outcome Goal in Reclamation's Strategic Plan: Deliver Water in an Environmentally Responsible and Cost-efficient Manner. The long-term goal for southern California is to reduce the use of Colorado River water to the state's legal entitlement of 4.4 million acre feet by 2015. Implementing ongoing and future water recycling projects can help to make up most of the water supply shortfall, without the need to import additional supplies from northern California or build new storage facilities.

Does the program have a limited number of annual performance goals that demonstrate progress toward achieving the long-term goals?

Explanation: The principal annual goal is to make all funding provided by Congress available to project sponsors in the year funds were appropriated, and in as timely a manner as possible during the course of the year. This is achieved by expeditiously completing or approving feasibility studies and environmental compliance activities, and entering into cost-share agreements so that water recycling project sponsors can meet work schedules and projects can be implemented as soon as possible. While this goal is useful in indicating progress in meeting the long-term goals, it would be more useful if the long-term goals had timeframes, which in turn could be shown to drive the setting of short-term goals.

Evidence: Project data. Program accomplishment data is available from previous fiscal years.

Do all partners (grantees, sub-grantees, contractors, etc.) support program planning efforts by committing to the annual and/or long-term goals of the program?

Explanation: All project sponsors have consistently met or exceeded their cost-share requirements in a timely manner such that projects remain on schedule to the degree possible.

Evidence: Project sponsors are required to enter into cost-share agreements (Cooperative Agreements) before funds can be made available. These agreements define the funding arrangements and each entities' responsibility. Funds are only provided to the sponsor after actual costs have been incurred and the cost-share requirement has been met. All submittals for reimbursement are scrutinized to ensure that only eligible project costs are being reimbursed.

Does the program collaborate and coordinate effectively with related programs that share similar goals and objectives?

Explanation: Increasing total water supply availability at the Federal level through water recycling is optimized when planning and project implementation is coordinated with local and state efforts and when done in a regional context, which is generally beyond the jurisdiction of individual water agencies. Also, maximum efficiencies are achieved when regional recycling activities are combined with water conservation programs, conjunctive use programs and other innovative alternative water supply strategies, including integrated resources planning.

Evidence: Reclamation has established partnerships and entered into cooperative agreements with non-Federal project sponsors for each project and program Congress has funded. These partnerships ensure that project specific goals are achieved, the National Environmental Policy Act is adhered to, and benefits are maximized to the extent possible. Reclamation emphasizes a regional approach to project planning and formulation when such opportunities arise by cooperating and coordinating with similar reuse activities in neighboring districts.

Are independent and quality evaluations of sufficient scope conducted on a regular basis or as needed to fill gaps in performance information to support program improvements and evaluate effectiveness?

Explanation: Most of the activities required to implement a recycled water project are being conducted by local project sponsors and their contractor. These water districts are ultimately responsible for program accomplishment and undergo periodic audits conducted by independent auditors, because they are local governmental agencies that are subject to state regulations. In addition, Reclamation requires yearly single audits of projects in order to ascertain project progress and the appropriateness of expenditures incurred during the year.

Evidence: Reclamation staff are intimately involved with the project sponsors on all aspects of project development. However, staff are not involved in independent audits conducted by water agency contractors. Reclamation is involved with single audits conducted at the end of each year and upon completion of the project when the cooperative agreement is closed and a single audit is conducted by Reclamation finance staff.

Is the program budget aligned with the program goals in such a way that the impact of funding, policy, and legislative changes on performance is readily known?

Explanation: Funding is prioritized each year to support on-going authorized projects which have had strong local participation and are showing progress towards project completion. Reductions in the Bureau's budget proposal result in participation in fewer projects, and can delay completion of ongoing projects. Although Reclamation generally provides its cost-share after the local sponsors have expended funds for a particular phase of project implementation, future phases may not be completed as scheduled if subsequent year Federal funding is inadequate to justify the outlay of 100% financing by the non-Federal project sponsor for the next phase of development. This can lead to delays in realizing full project benefits.

Evidence: Schedules which indicate funding requirements by project, expectations of Federal contributions by fiscal year, and anticipated acre-feet of water recycled/produced by project operation.

Has the program taken meaningful steps to address its strategic planning deficiencies?

Explanation: Solid criteria are in place to evaluate potential projects prior to funding, and also to monitor and evaluate projects under construction. The strong degree of local participation (including local funding) ensures cost-efficient designing, value engineering, and monitoring of costs and quality control during the planning and construction phases.

Evidence: Guidelines for Preparing, Reviewing, and Processing Water Reclamation and Reuse Project Proposals Under Title XVI of Public Law 102-575, as Amended.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Reclamation staff are in frequent contact with the project sponsors on all aspects of project development. Local Reclamation staff maintain on-going communication with local project sponsors and monitor the progress of each project. Federal funds are requested and dispersed only for qualified projects exhibiting the required local participation and adherence to planning/construction schedules. Each cooperative agreement includes a requirement for regular progress reports, at least quarterly.

Evidence: Project experts in several Reclamation offices; field reports from site visits; planning and construction reports; and progress reports from local sponsoring agencies. Progress reports are used to compare available funding with actual needs, and can result in moving funds from one component to another in order to maximize efficient use of Federal funds.

Are Federal managers and program partners (grantees, subgrantees, contractors, etc.) held accountable for cost, schedule and performance results?

Explanation: See above. Since the Title XVI projects are construction projects, interim goals are well-defined and easy to monitor.

Evidence: All program managers have performance measures tied to program accomplishments. All grantees are required to document accomplishments and justify funding needs prior to modification of cooperative agreements. No reimbursements are made to grantees until actual work has been accomplished and documented.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: The Title XVI construction projects have obtained an obligation rate of over 95% almost every fiscal year. The funds have been spent for the intended purpose, which is to support authorized water recycling projects. In large part, projects have proceeded on schedule once funds are made available. The high degree of local participation and funding ensures the local sponsor uses all funds in a timely and responsible fashion.

Evidence: Project data. Program accomplishment data is available from previous fiscal years.

Does the program have incentives and procedures (e.g., competitive sourcing/cost comparisons, IT improvements) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: No formal mechanisms are in place. However, as stated previously, the strong degree of local participation and funding ensures cost-efficient planning and design, and the timely and responsible use of all funds. Congress specifically authorizes each Title XVI construction project, and the effectiveness of the program is measured by program accomplishment, or how much of the appropriated funds are actually obligated each fiscal year. Since the Title XVI construction projects obligate over 95% of their funds for authorized projects almost every fiscal year, there is a high confidence level that funds are being used for their intended purpose.

Evidence: Program accomplishment data is available from previous fiscal years.

Does the agency estimate and budget for the full annual costs of operating the program (including all administrative costs and allocated overhead) so that program performance changes are identified with changes in funding levels?

Explanation: "Present cost accounting systems of the Department of the Interior comply with Federal Accounting Standards Advisory Board #4 - Managerial Cost Accounting. Full costs are reported at the segment level from the Department of the Interior perspective and also from the bureau perspective. This includes full cost reporting by Department strategic goals in the Department's Annual Accountability Report and by bureau mission goals in bureau-level annual financial statements. Cost accounting at lower levels, as requested by individual PART reviews, does not currently accumulate full costs as defined in the PART instructions and OMB Circular A-11; for example, ""the full employer share of the annual accruing cost of retiree pension and health benefits is not included"". "

Evidence:  

Does the program use strong financial management practices?

Explanation: Financial management practices are in place, and auditors have noted no deficiencies. While there have been payment errors, they have always been promptly discovered and corrected.

Evidence: Financial records are kept and tracked in the Denver Finance Office, the Regional Office, and the Area Office so that two offices always check the third whenever an action is processed.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: Program management is primarily the responsibility of the Area Offices, with Reclamation-wide coordination and oversight provided by Reclamation's Office of Policy in Washington and Denver.

Evidence: "In June 1997, the Department of the Interior Office of the Inspector General (OIG) issued a Survey Report on the Title XVI program, and two minor deficiencies were noted. They are: 1. Implement the 1994 ""Procedures for Reviewing Cost-Share Agreements,"" and 2. Follow up on the Single Audit Act process by: --Obtaining copies of single audit reports from project grantees and following up on any identified reportable conditions or material weaknesses; --Requesting copies of management letters and information on deficiencies communicated orally to the grantees; --Obtaining information on corrective actions planned or taken. Reclamation agreed with the two recommendations, and has implemented corrective actions."

Are grant applications independently reviewed based on clear criteria (rather than earmarked) and are awards made based on results of the peer review process?

Explanation: Funding for the construction portion of Title XVI projects is not subjected to a grant application process, but is determined by the annual appropriations process. However, the research aspect of Title XVI involves an independent review of grant applications. Sec. 1605 of Title XVI of P.L. 102-575 authorizes research. Congress has directed Reclamation to support the WateReuse Foundation's research agenda. The Foundation assists Reclamation by providing competed, merit reviewed research projects to address national needs. The Foundation also provides management of the research projects and continued peer review through completion and dissemination of the final report.

Evidence: Reclamation uses a ranking and priority process to decide on which new-starts to fund when budget targets allow for such new-starts. The criteria Reclamation uses to set priorities are based, in part, on the authorizing legislation and are described in the "Guidelines for Preparing, Reviewing, and Processing Water Reclamation and Reuse Project Proposals Under Title XVI of Public Law 102-575, as Amended".

Does the grant competition encourage the participation of new/first-time grantees through a fair and open application process?

Explanation: Major funding comes in the form of Congressional add-ons for new projects, and not through a traditional grant process. This question does not apply because nearly the entire budget each year is dedicated to ongoing obligations associated with previously initiated projects. Because of many years of limited funding in comparison to the large number of authorized projects, Reclamation's focus has been to complete and adequately fund existing projects already under construction, and thus fulfill its commitment to the local sponsors. Thus, new applicants have been at a disadvantage. Funding to support the Research component of the program is competed annually through a well-defined process, however, the budget for reseach is only about 3% of Reclamation's annual request for Title XVI activities. Generalized needs and specific projects are determined at an annual WateReuse Foundation Research Conference jointly sponsored by Reclamation, EPA, and three other nonprofit research foundations.

Evidence: Reclamation uses a ranking and priority process to decide which new starts to fund when budget targets allow for such new-starts. The criteria Reclamation uses to set priorities are based, in part, on the authorizing legislation and are described in the "Guidelines for Preparing, Reviewing, and Processing Water Reclamation and Reuse Project Proposals Under Title XVI of Public Law 102-575, as Amended". Because the research program started two years ago, all the contractors are first-time grantees.

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: Reclamation staff are in close communication with the project sponsors on all aspects of project development. See response to #1 above. The research program has been developed to include a Reclamation employee on the Research Committee, and all Project Advisory Committees.

Evidence: Progress reports are used to compare available funding with actual needs, and can result in moving funds from one component to another in order to maximize efficient use of Federal funds. See response to #1 above. Each research project has a Project Advisory Committee responsible for evaluating proposals, monitoring accomplishment, and checking budget expenditures.

Does the program collect performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: Due to the nature and variability of the projects, no formal procedure is in place to collect performance data. Information is collected on a case by case basis as the grantee submits requests for reimbursement or a modification to a cost-share agreement is negotiated. This information is not made readily available to the public.

Evidence: The research program sponsors an annual research conference held by the WateReuse Foundation. Proceedings from the conference are publicly available and include information on the program and projects.

Has the program demonstrated adequate progress in achieving its long-term outcome goal(s)?

Explanation: The program has been successful at making progress toward meeting its long-term goals, but because of the lack of any timetable associated with meeting those goals, it is not possible to ascertain whether the progress is sufficient.

Evidence:  

Does the program (including program partners) achieve its annual performance goals?

Explanation: The program has largely met its annual performance goals.

Evidence:  

Does the program demonstrate improved efficiencies and cost effectiveness in achieving program goals each year?

Explanation: From a budget perspective, the program is being administered at a 97% success rate and has little margin for demonstrating improved efficiencies and cost effectiveness. From a project perspective, in almost all cases to date Reclamation has little actual responsibility or control over project implementation and schedule.

Evidence: See Section IV, Question 2 above.

Does the performance of this program compare favorably to other programs with similar purpose and goals?

Explanation: Reclamation's program performance is based on actual work accomplished, as evidenced by obligation or expenditure of Federal funds for project implementation and research.

Evidence: Within budgetary limitations, Reclamation has consistently met its cost-share requirements and obligations to the non-Federal project sponsor in a timely manner, and therefore, performance equals or exceeds that of the non-Federal programs of similar nature, such as the various State Revolving Fund programs. Funds that were not obligated in the past 2 years were carried over due to schedule slippage on the part of the non-Federal program. (See performance goals in question IV.2)

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: Most of the activities required to implement a recycled water project are being conducted by local project sponsors and their contractor. These water districts are ultimately responsible for program accomplishment and undergo annual single audits to account for the expenditure of Federal funds during the year.

Evidence: Yearly single audits of the funded projects conducted for Reclamation have yet to disclose any issues or misappropriation of Federal funds for project purposes, which is evidence that the program is being effective in meeting the goal of providing financial assistance to local agencies for water reuse project implementation.