Slippage on other elements of the storage project program has not developed to the extent which would allow internal transfers of funds to meet the needs of the Flaming Gorge and Glen Canyon units. The supplemental request, therefore, does not increase the overall storage project program approved by the Congress for fiscal year 1963 but represents only a partial funding of the initial underfinancing of $16,733,000 approved by the conference committee. Details of the supplemental request are as follows: Flaming Gorge Unit, $1,050,000.-The additional amount will finance $750,000 in underfinancing allocated to this project and $300,000 in increased program requirements in fiscal year 1963 over the amount shown in the U.S. printed budget. These funds will provide for continued operations of the contractor on the dam and powerplant, and for continuation of installations of power and switchyard equipment. The contractor on the dam and powerplant was able to expedite concrete placements during the latter part of the 1962 construction season and his earnings for the fiscal year through January 31, 1963, were over $1 million more than was scheduled for the entire fiscal year. In the main. supplemental funds will maintain progress on the major contracts so that all operations can be properly coordinated during the critical period of turbine. generator and switchyard installations. Delivery of initial power is scheduled for September 1963, and the unit is scheduled for completion in fiscal year 1964. Glen Canyon Unit, $2,950,000.-Slippage anticipated on the Glen Canyon unit in fiscal year 1963 on prior schedules has not developed. The supplemental funds are required to finance this and $950,000 in increased program requirements over the amount reported in the U.S. printed budget to allow contractors on the dam and powerplant and on the completion contract, to proceed at the scheduled rate. The additional funds will also cover progress payments on power and switchyard equipment and for supporting contracts such as cement and pozzolan. Initial power is scheduled for June 1964. The unit is scheduled for completion in fiscal year 1966. UNDERFINANCING PROGRAM Mr. DOMINY. Last year we had an approved program of $124.5 million for the great Colorado River storage project. The Bureau of the Budget recommended underfinancing on the approved program of $15 million and the conference committee, during its deliberations last year decided to raise the underfinancing to $16.7 million. We have supported the principle of underfinancing very enthusiastically because we agree with the committee that it is impossible for use to expect to spend every dollar of an approved program, when the funds are scattered around through the many contracts over 17 Western States. As I say, we have gone along enthusiastically with this underfinancing principle. However, it has been and remains my judgment that whenever the underfinancing amount gets above 10 percent of the approved program, we inevitably run the risk of exhausting the funds and requiring a supplemental. That is the case here. GLEN CANYON AND FLAMING GORGE CONTRACT EARNINGS The contractors on the Glen Canyon and Flaming Gorge units, which are the two principal structures on this huge project, have made expected progress this year and unless we have this $4 million we will not be able to meet their earnings. Of course, this would get us into serious problems and this is why we are here and we think the request is fully justified and supportable. Mr. KIRWAN. Up to now you have spent $75 million? Mr. DOMINY. Yes, sir. Mr. KIRWAN. You need this $4 million? Mr. DOMINY. Yes, we do. POSSIBLE TRANSFER OF FUNDS Mr. KIRWAN. Can you transfer out of some other funds into this item? Mr. DOMINY. No, sir; because in "Construction and rehabilitation" we also have substantial underfinancing. We had a very open fall generally in the West last year, Mr. Kirwan, and the contractors' progress has approached about maximum. We have religiously examined our accounts through the 17 Western States in which we operate and we feel that our "Construction and rehabilitation" item is right down to the bone. Mr. KIRWAN. You think there is no other way? Mr. DOMINY. Yes, sir. PRESENT UNOBLIGATED BALANCE Mr. KIRWAN. What is the present unobligated balance that you have on this item? Mr. DOMINY. As of February 28, our unobligated balance in the basin fund account was $22,917,692. This does not include a balance not under my administration of over $2 million of funds transferred to the National Park Service and the Bureau of Sports Fisheries and Wildlife. CONTROLLING RATE OF EXPENDITURES Mr. KIRWAN. You do control the rate of expenditures on this particular item? Mr. DOMINY. As a matter of fact, Mr. Kirwan, let me reiterate that this is part of an approved program and if the contractors can make this program, it is in the interests of the United States for them to do so. These are investments which will return funds to the Treasury as soon as they are completed and in operation. Mr. KIRWAN. I would like to see the thing finished tomorrow if they could finish it. ress. Mr. DOMINY. In this case, they are actually making very fine progWe closed Glen Canyon Dam just 2 weeks ago and we are actually storing water. The powerhouse will be on the line ready to earn revenues in June of 1964 and we are right on schedule. The contractor did make the progress we originally thought he might. Mr. KIRWAN. Any questions? EXPEDITION OF ORDERLY PROGRAM Mr. WILSON. May I ask one or two questions here? Any money that we give you in this deficiency bill will be used for that specific purpose, to expedite in an orderly fashion, and in keeping with the program that has been set forth by the Bureau of Reclamation; is that correct? Mr. DOMINY. Yes, sir. Mr. WILSON. No funds will be diverted to any other purpose? Mr. DOMINY. No, sir. This is a special account under the Colorado River storage project and will be used on Flaming Gorge unit and Glen Canyon unit, two of the key structures. Mr. WILSON. My purpose in asking this question is two-fold, I might say: First, I am interested in the orderly progress of these projects. I think it is important that we progress in an orderly fashion and money should be available because it is the most economical way to do it. The second thought I had in mind was that I believe it is the policy a certain percentage of funds that are authorized and appropriated could be diverted for other projects, such as surveying and preliminary investigations and initiation. Is that still the case? TRANSFER OF FUNDS AND INITIATION OF NEW STARTS Mr. DOMINY. We are permitted to transfer within appropriations under any given heading up to 15 percent. We are not permitted to start any new work that was not justified to the Congress without clearing with the committee. Mr. WILSON. That is right. You are assuring us here that if we give you this money, this $4 million that you are asking, the total of that will be used for expediting this particular project? Mr. DOMINY. Yes, sir. This will be used for progress payments for work performed on the Glen Canyon and Flaming Gorge units. Mr. WILSON. That is all. AVAILABILITY OF FUNDS Mr. LANGEN. Mr. Chairman, just one question. I note with regard to the $4 million, they are funds to remain available until expended. Why does it become necessary to include that in a supplemental appropriation bill? How much do you intend to spend between now and July 1? Mr. DOMINY. We expect to spend it all between now and July 1. This is just the customary language that is contained in all of our appropriations so they are available if we should slip a few days or a week or two. They would still be available to pay when the work is performed. NEED FOR SUPPLEMENTAL FUNDS Mr. LANGEN. What basically has come about in the original appropriation which requires this additional $4 million? Mr. DOMINY. The fact that our collective estimates, Mr. Langenand I say "collective" because the Bureau of the Budget recommended underfinancing of $15 million—that is, an appropriation available of $15 million less than the program approved by the Bureau of the Budget to be carried out in fiscal year 1963-and the Congress elected to increase that to $16.7 million under this item. We have just carried out a higher percentage of the program that was authorized by both the President's budget and the Congress than was financed. Mr. LANGEN. You mean more of the program than was authorized? Mr. DOMINY. No, sir. We had a program for fiscal 1963 approved by Congress for $124.5 million under this heading-Upper Colorado River storage project. We had funds available to us of only $107.8 million to perform a program of $124.5 million. In other words, it involved deliberately estimating the contractors would not earn the full amount of the approved program for the year. And the contractors are coming closer to earning it than had been predicted. Mr. LANGEN. There would not be any great harm done and you would still be on schedule without the appropriation? Mr. DOMINY. No, sir. Without this appropriation we cannot meet contractor earnings even though such earnings are within the limits. of fiscal year 1963 program as approved by the Congress. Mr. LANGEN. In just getting your regular appropriation on July 1? Mr. DOMINY. No, sir. Our problem involves the time between now and July 1, 1963. Mr. LANGEN. That is all, Mr. Chairman. Mr. WILSON. Off the record. (Discussion off the record.) Mr. KIRWAN. Thank you, Mr. Dominy, and gentlemen. Mr. DOMINY. Thank you, Mr. Chairman. BUREAU OF LAND MANAGEMENT WITNESSES JAMES P. BEIRNE, ASSISTANT DIRECTOR, ADMINISTRATION Mr. KIRWAN. The rest of the Interior items are contained in House Document No. 61. We shall take up now the Bureau of Land Management, Management of Lands and Resources. Do you have a statement? If so, please put it in the record and tell us about it briefly. (The statement follows:) STATEMENT OF KARL S. LANDSTROM We appreciate the opportunity to appear before this committee to discuss the request for a supplemental appropriation for the appropriation “Management of Lands and Resources," 1963, in the amount of $3,051,000. This request includes $2,100,000 to defray fire suppression costs and $951,000 to meet pay costs due to increases granted by Public Law 87-793. |