Mr. TABER. Mr. Chairman.

Mr. CANNON. The gentleman from New York.

Mr. TABER. I wonder about this setup. For instance, on page BR212, part 2-A of the justifications, it shows in the first column on the Weber River Basin project, north central Utah, that there is to be charged off $4,738,000 for recreation out of a total of $97 million, and to be charged off for fish and wildlife $4,548,000. That money comes out of the appropriations that are made for the construction job. There is practically $10 million that is being charged off without its being appropriated for that particular purpose.

Mr. DOMINY. That is correct, Mr. Taber. On some of the more recent projects the Congress has recognized that fish and wildlife and recreation is a very important part of a multiple-purpose nature of the development and to the extent that those facilities are particularly provided for there can be an allocation on a nonreimbursable basis. This particular authorization for the Weber Basin project provided specially for that.

Mr. TABER. You go over on page 217 in that same book and instead of its being $9 million, it only shows a cost of $2,545,000 in prospect on recreation. The two things do not go together.

Mr. DOMINY. It would appear that the allocation to recreation is still estimated at $4,738,000 but according to your table as you point out on BR-217, the total estimated cost is to be $2,545,000.

Do you have anything you can add to that, Mr. Palmer?

Mr. PALMER. Yes. One is the total authorization in terms of allocation and that comes, pursuant to Public Law 273 of the 81st Congress. The second, the lesser amount is the specific work for recrea

tion. In other words, there is recognition in this instance of values in the joint works that permits the allocation being larger than the specific expenditures for recreation.

Mr. TABER. I still don't understand how you make out on this.

Mr. DOMINY. Mr. Palmer is explaining, Mr. Taber, that the additional costs specific to recreation that would not have been spent at all, to put in the toilets and the boat ramps and picnic tables and maybe an access road just to that part of the reservoir that would not have needed an access road except for recreational use will total $2,545,000; but in allocating to recreation, the dam and the reservoir and all of the things that make the recreation possible, we take that into account and allocate under this special act more than is actually expended as an additional cost just to recreation-to the extent of the benefits.

Mr. RABAUT. In other words, because you created the pool, et cetera, it comes to the high figure?

Mr. DOMINY. That is right, sir.

Mr. TABER. That isn't what we were told a while ago.

Mr. DOMINY. That isn't what you were told a while ago-because Mr. Palmer was referring to the 98 percent of the reclamation projects that do not have this kind of legislative authority and on those projects any expenditure is reimbursable. If we build a boat ramp, it is charged to the project and has to be paid by the irrigators. If we build a toilet, it has to be charged to and paid by the irrigators. Mr. TABER. I thought we were told a while ago that all this money that was spent for recreation was charged off.

Mr. DOMINY. It is but only in specific cases.

Mr. TABER. And was not reimbursable?

Mr. DOMINY. It is in specific cases. Under more modern authorizations we have that authority but under the great bulk of the reclamation projects we have not had that authority and had no opportunity to do it on a nonreimbursable basis.

Mr. PALMER. That was the list I referred to, Mr. Taber, to be inserted in the record, the list of allocations permitted under specific law for recreation on a nonreimbursable basis on identifiable projects. Mr. RABAUT. Are they similar to the ones you made citation of? Mr. PALMER. There are others like that.

Mr. RABAUT. That list comprises them?

Mr. PALMER. This list is the list of projects for nonreimbursable expenditures on recreational projects.

1961 REVENUES

Mr. CANNON. What is the total amount of revenues to be generated by the Bureau of Reclamation in 1961? You may supply that for the record.

(The information referred to is as follows:)

ESTIMATED TOTAL REVENUES, BUREAU OF RECLAMATION, FISCAL YEAR 1961

The total amount of revenues to be generated in fiscal year 1961 from all Bureau of Reclamation operations is estimated at $103,500,000 broken down as follows:

Construction and operation and maintenance payments-

Power revenues..

Water rentals___

$11, 800, 000

--

78, 500, 000

9, 100, 000

4, 100, 000

Miscellaneous (rental of grazing and farmlands, municipal operation, sale of land, town lots, etc.)--

Total_

-

103, 500, 000

This estimate includes income arising from facilities constructed by other Government agencies, but where collection and marketing responsibilities have been vested in the Bureau, such as the energy generated at the main stem dams of the Missouri River Basin, the plant for which has been constructed and is operated by the Corps of Engineers but the Bureau of Reclamation markets the power. Mr. CANNON. Do you have any current problems, Mr. Dominy, of which the committee should be advised?

REVIEW OF BUREAU'S ORGANIZATIONAL STRUCTURE

Mr. DOMINY. One of the things I wanted to mention in this general discussion at the start of our hearing is to report to the committee on what I am doing in studying our organizational pattern in the field and the steps that I have taken to comply with our understanding reached last year when we discussed the result of your committee staff review of some of our regional organizations.

In region 3 we have continued to reduce that staff to fit the workload in that area. For your information, the organizational changes at Boulder City have been completed and we have a further adjustment in turning over the municipality to non-Federal management under Nevada State law and by these actions we have reduced 75 positions from the Federal payroll in region 3. It is a reduction of about $600,000 annually.

In addition, we have continued our study of the organizational problems in regions 6 and 7 and you will recall that last year you urged that we give serious consideration to the possible desirability of combining those two regions into one operating organization.

After the very complete review that we did with our own and the departmental study group and taking into account the very valuable contribution that the committee's review group made, we have decided that at least for the moment-for the next year or two-that we ought to continue to operate in the two regions. But we do have a plan which will accomplish a substantial adjustment in the number of jobs required, even though we have an increasing workload. We have, for example, completely reviewed the organizational structure of both regions and have already approved and put into operation a number of changes and adjustments which will produce substantial savings. In total, we are anticipating that the hard core-the hard core as I look at it, is top management people that are needed whether you have a fairly modest program or whether you have a big construction program-you still need about the same hard core of top management and specialists to hold your work together and give it proper supervision. Now, this hard core of regional employees which represents the permanent staff that is needed to operate the regions-both 6 and 7-under good management will drop from 311 people that were on

53784-60-pt. 2—3

the payroll June 30, 1959, to 250 by June 30, 1961. There are 329 positions authorized in this group but only 311 people actually on the payroll. The other permanent employees of the regions that are scattered out on the various jobs around the regions-we had 1,662 people on June 30, 1959, and under this reorganization and to handle the increased workload programed, this will increase to 1,713 by June 30, 1961. In terms of all permanent employees-both the hard core and workload variable groups-the totals will drop from 1,973 on the payroll as of June 30, 1959, to 1,963 on June 30, 1961. Emphasis is also being placed on authorized positions, not necessarily people on the payroll. This is the basis upon which the budget is submitted. The changes contemplated, we believe, will accomplish a saving of about $1,280,000 from the positions financed in the budget for fiscal year 1961. The important figure in terms of over-all management, however, is the 20 percent reduction in the hard core administrative staff on the payroll.

We think this is a pretty good progress report in making more ef ficient operation in regions 6 and 7 area. It is a tremendously big geographical area and we are reluctant to try to combine and compress it into one regional headquarters. We will continue to study it, however.

In addition to that, we have made a study of region 4 at Salt Lake City, which is the biggest region we have in terms of workload at the moment, Mr. Chairman. Mr. E. O. Larson, who has done a very fine job for reclamation over a 40-year period is retiring effective tomorrow and we are moving an experienced regional director in there to replace him. We have made a study just prior to his taking over so that he would have the benefit of this management study of the organization that the new man is inheriting so that he can have some guidance in setting up as efficient an organization as he possibly can as he gets acquainted with his new territory. We have also just completed a similar management study in region 1 of the Pacific Northwest. Our practice is after the management study is completed to review it with the regional director in charge and then instruct him to put the management suggestions into practice as rapidly as he can work them in. We think this is a very good tool of management and we believe, sir, that we will be able to convince the committee over a period of years that we are actively looking for any waste or any inefficiency in our way of doing business.

WORK SLIPPAGE ON GLEN CANYON UNIT

There are two other matters of general interest that I want to mention. We are a very dynamic organization and our work is very dynamic and certainly we cannot anticipate with pinpoint accuracy 6 months or 8 or 10 months in advance. When this budget was put to bed, so to speak, and sent to the printer last December, the Glen Canyon strike, for example, had not been settled, although we had reason to think it would be settled. It was settled about on the date that we anticipated, but the contractor's earnings following the resumption of work did not get back up to peak levels quite as rapidly as we had anticipated so we are going to have some slippage additional to that which we have pointed out to you in our printed material-the increased slippage is in the amount of about $8,500,000. The Bureau of the Budget has been informed of this further reduction and we are advised that an amendment to the budget is being considered.

NET BILLING PROCEDURE

In addition to that we have run into a problem of purchasing power in fiscal 1960 and there is a supplemental request being considered and the committee may wish to work that out in connection with this slippage item. This is something that I think you could very well consider.

Mr. CANNON. What arrangement have you for net billing on the purchases and sale of power in the southeastern and southwestern power areas that can be applied within the Central Valley project?

Mr. DOMINY. Well, Mr. Chairman, we are delighted to have from our solicitor an opinion that indicates that we could legally, if the committee gave us authority to do so and agreed with us that this is the better way to operate, that we could follow the net billing procedure similar to what the committee has approved to be followed by southeastern and southwestern power agencies. Where we are wheeling and purchasing and selling power to and from a company-instead of them billing us for the full amount of the service they perform to us each month and we in turn bill them for the full amount of the service we perform for them and each have to send money back and forth-that there could be a net billing process so that only one or the other makes the payment. Now, if this were put into effect, Mr. Chairman, we cannot tell you now exactly how much we could reduce our 1961 budget request, if that were in effect, but we do know there would be some less money required because we would not have to be moving money one month over to a power company and the next month they would move it into the general Treasury. We would report all activities to you the same as we do now. It would not be in the nature of a revolving fund or anything like that. It just looks like good business management to do it that way.

The accounts, of course, are always subject to audit. It has worked out very well as I understand it with Southeastern and Southwestern Power Administrations. We would like to, with the committee's approval, undertake to get that into effect so that we could report it that way in fiscal year 1962.

Mr. CANNON. Net billing, then, as practiced in the Southwestern Power and Southeastern Power Administrations would be entirely feasible?

Mr. DOMINY. Yes, sir.

Mr. CANNON. Will you indicate, when the transcript of your remarks come back to you, what saving might be made if net billing were adopted?

Mr. DOMINY. I would like to give you a statement on that for the Central Valley project.

(Note: See p. 35.)

Mr. CANNON. It will be in effect next year?

Mr. DOMINY. Yes, sir.

TRANSFER OF FUNDS FOR PURCHASE OF POWER

Mr. CANNON. Is there any reason why you should not transfer funds needed in this fiscal year for purchase of power in the Central Valley project from the Upper Colorado Basin surplus on the Glen Canyon project?

Mr. DOMINY. No, sir.