Thomas W. ChristensenDeputy Chief for Programs

October 30, 2006Denver, Colorado

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Thank You and Congratulations!

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Presentation Overview

• Accomplishments• Perspective• Challenges• Meeting the Challenges• The Future

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Accomplishments• Implemented appraisal policy across programs• Development of private sector appraiser capacity• Implemented HFRP and ESA landowner protections• Implemented changes to FRPP agreements and

deeds• Late year GRP rental agreement in drought states• WRP Reverse Auction Pilot• Implemented CRP streamlining•CRP General, Emergency, REX, and

Continuous/CREP sign-ups

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Accomplishments• Enrolled 150,000 acres of WRP

(includes restoration)• Enrolled 57,523 acres of FRPP• Enrolled 93,487 acres of GRP

agreements• Enrolled 495,652 acres of HFRP

(includes restoration-only acres)Total FY 2006 Enrollment

796,662 acres

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Perspective

Where we’ve been and where we are now

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Map - # of EasementsFRPP Total Easements (Number) Enrolled for

FY 1996-2006 by State

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FRPP Top 10

1. Pennsylvania2. Maryland3. Vermont4. New Jersey5. Kentucky6. New York7. Massachusetts8. New Hampshire9. Delaware10. Ohio

1. Vermont2. Pennsylvania3. Maryland4. Colorado5. Montana6. California7. Kentucky8. New York9. New Jersey10. Wyoming

Number of Enrolled Easements

Total Acres Enrolled

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WRP Total Easements (Number) Enrolled forFY 1996-2006 by State

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WRP Top 10

1. New York2. Iowa3. Louisiana4. Missouri5. Minnesota6. Wisconsin7. Mississippi8. Indiana9. Arkansas10. Nebraska

1. Louisiana2. Arkansas3. Mississippi4. Florida5. California6. Missouri7. Minnesota8. Iowa9. Texas10. Illinois

Number of Enrolled Easements

Total Acres Enrolled

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GRP Total Easements (Number) Enrolled forFY 1996-2006 by State

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GRP Top 10

1. Texas2. Kansas3. Missouri4. Indiana5. Wisconsin6. Mississippi7. Kentucky8. Nebraska9. Idaho10. Oklahoma

1. Texas2. Montana3. Kansas4. Colorado5. Oklahoma6. Alabama7. North Dakota8. Oregon9. Nevada10. Washington

Number of Enrolled Easements

Total Acres Enrolled

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HFRP Total Easements (Number) Enrolled forFY 1996-2006 by State

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Map - acres cumulative

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HFRP Top 3

1. Arkansas2. Maine3. Mississippi

1. Maine2. Arkansas3. Mississippi

Number of Enrolled Easements

Total Acres Enrolled

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Perspective

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CumulativeNumber ofEasementsEnrolled

FRPP Cumulative Numbers of Easements Enrolled, FY 1996-2006

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PerspectiveWRP Cumulative Numbers of Easements

Enrolled, FY 1996-2006

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1991

1992

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Cumulative Numberof EnrolledEasements

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NRCS Easement PortfolioSeptember 30, 2006

ProgramNumber of Easements

Acres of Easements

EWP – Floodplain Easements*

1,687 230,771

FRPP 1,575 314,763

GRP 109 42,902

WRP 7,642 1,502,667

Total 11,013 2,091,103Note: Includes only easements “recorded at the courthouse.”

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Total Estimated Value of the NRCS Easement Portfolio

$4,172,859,396

Does not include TA; Does include cost of easements recorded at the courthouse and

restoration

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That’s a lot of

money invested!

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Challenges• Audits• Real Property Management Issues• PART Goals• Getting to Green• Easement Valuation Issues• Section 1614 of 2002 Farm Bill• Continuing TA Challenges• Lack of Reliable Data to Support the

Agency Position

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A Wealth of Audits• Office of Inspector General (OIG)

– Financial Statement Audits – fund use issues– WRP Improper Payments– WRP Restoration Compliance Audit– Compensation for Easements (Valuation)– Specific Land Trust Audit (FRPP)– FRPP Selected NGOs Audit – Monitoring of Farm Bill Activities/Initiatives– Conservation Program Controls to Prevent Duplicate

Payments– NRCS/FSA Crop Base on Easements– Crop Bases on Lands with Conservation Easements -

California – Review of AGI

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A Wealth of AuditsGovernment Accountability Office (GAO)• Coastal Wetlands Protection• LRF, Beginning Farmer, and Tribal

Outreach• Coordination of Habitat Programs –

Threatened and Endangered Species• South Florida Ecosystem Restoration

Initiative

Preparation for the next WRP and FRPP PART

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A Wealth of O&E Reviews

O&E Reviews/Program Evaluations • Costs of WRP Easements Review• Farm and Ranch Lands Protection

Program Review

• GRP Ranking Criterion Review

• Easements Programs Portfolio Review

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Real Property Management Issues

• Attempted condemnations – State DOT’s, FAA• Mineral Rights – drilling and mining• Energy transmission lines, pipelines, and

right of ways• NRCS “Acceptance” of easements• Violations and enforcement• Donations of easements from prohibited

sources• Water rights

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Real Property Management Issues

• Lawsuits over Compatible Use and Misunderstanding of Reserved Rights

• OGC Title Review• Wind Farms• All Appropriate Inquiries – Brownfield

Rule• Aging Restoration Structures – O&M

NRCS & OGC Workload Increases with all of these issues – TA$$

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PART Performance Goals - FRPP

• Percent of FRPP acres protected that are classified as prime, unique, or important farmland

• Percent of FRPP farms that are in active agriculture

• Total acres of farm and ranch lands protected

• Total acres of prime, unique, and important farmland protected

• Average time to close an FRPP easement

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PART GoalsFRPP – Close Within 18 Months

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1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Average Number of Months Until Closing

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PART GoalsFRPP – Close Within 18 Months

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1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Number of PendingEasementsNumber of EasementsEnrolledNumber of EasementsClosed

*Cumulative Number of Easements

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PART Performance Goals - WRP

• Percentage increase in the number of WRP projects fully restored within three years of closing the easement

• Reduced ground and surface water contamination through reduced nutrient application (tons)

• Acres of wetlands protected by 30-year or permanent easements, cumulative

• Percentage increase of WRP easements closed within 12 months of initial project application

• Percentage of protected WRP acres enrolled each year that directly benefit federally and state listed Threatened and Endangered Species

• Acres of wetlands created, restored, or enhanced

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PART GoalsWRP – Close Within 12 Months

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4000

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12000

1991 1993 1995 1997 1999 2001 2003 2005

Number of EasementsPendingNumber of EasementsEnrolledNumber of EasementsRecorded

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Getting to Green

• Use/Movement of Funds• Improper Payments Improvement Act• Obligation Support Documentation

Issues• Close-out 1996 Farm Bill Obligations• $80 Million in Commitments at end of

FY 2006 – OBLIGATE!

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Easement Valuation Issues• Implementation of “Yellow Book”• Private sector capacity• Federal appraiser recruitment

barriers• Consistency of appraisals• Consistency of technical reviews

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Section 1614 Challenges• Lack of automated national easement

management system that integrates with SCIMS

• Customer (entity and vendor) data quality issues, including duplicates, missing data, erroneous entries

• Easement payments identified to the “warm bodies”

• Security and sensitivity issues of data

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Continuing TA Challenges

• FRPP – NRCS Cost of Programs Model shows need for $4.8 million to meet 18 month PART goals

• OMB apportionment for FY 2007 = $2.2 million TA

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Lack of Reliable Data to Support the Agency Position

May Result In:• Future need to increase reporting for

oversight and accountability• Increase in regular data calls• Increased consequences for incorrect

and incomplete data

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Response to Challenges

• Audits• Real Property Management• Database• Improved Guidance• Streamlining Efforts• Easement Valuation

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Audits• Close out 1996 Farm Bill activities in

FY 2007• Effective Immediately

– “57” funds may only be used for true cost overruns for contracts from which the funds were apportioned• Example: 2001 funds may be used only for

2001 contract cost overruns

• Immediate guidance to be provided

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Audits, Continued

• Increased internal scrutiny on land trust activities

• Manual revisions to clarify instructions for documentation of obligations and payments

• Bottom Line: Increased accountability requires teamwork between program managers, financial management, and contracting

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Real Property Management

• OGC title and easement deed reviews – protects Federal investment

• Policies to be released:– Mineral rights– Energy rights of way– Easement “acceptance”– Easement donations– Water rights– “all appropriate inquires”

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Real Property Management, Cont.

• Remote sensing for monitoring incremental implementation– Policy needed– Some on-site visits – frequency TBD– How do we pay for replacing structures that no

longer function?

• Managing for optimization of natural resource benefits– Policy needed– Watershed or important habitat areas as basis

for focusing efforts on habitat or water quality issues

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Database

• Geospatial easements business tool and database – full implementation 2008– Management tool– Reduce data calls– Increased consistency

• Improve compliance with Section 1614

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Financial Management Modernization Initiative (FMMI)

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Performance and Accountability

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Improved Guidance

• Publish HFRP and FRPP final rules – also manuals and training

• Monthly teleconferences – 3rd Thursday

• Publish Common Provisions, WRP and GRP Manuals

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Highlights of WRP Streamlining Efforts

• Consider regional or multi-state teams for real property responsibilities

• Revise WREP – landscape or watershed scale approach for larger projects

• Institutionalize reverse auction• Shift work cycle to perform certain

functions, such as appraisals, “up front” – have applications queued up

• Require legal surveys to prevent enforcement “surprises”

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CRP Technical Assistance Streamlining

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General Sign-up Reenrollments Forestry CRP EmergencyForestry CRP

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Easement Valuation• Independent review• Listening sessions• Use of streamlined procurement processes• Guidance for hiring appraisers and

technical reviewers• Enhanced training for technical reviews• Market-based compensations

– Carbon credits, wildlife credits• Safe Harbor

– Wildlife credits

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The Future

• Section 2005 Report to Congress• Streamlining Easement Programs• Farm Bill Theme Papers • NRCS Strategic Plan• Cost Effectiveness• Private Sector Markets• Auctions

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What Does the Future Hold for USDA Conservation Programs?

• USDA Section 2005 Report to Congress– Streamline and eliminate redundancies

• One cost-share assistance program?• One flexible conservation easement program?• Do we need the cost-share component of CSP?

– Market-based conservation– CRP – maintain as stand alone program

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Streamlined Approach to Conservation Easement

Programs• Flexibility to achieve local natural resource

goals, as well as national priorities• Offer three enrollment options to meet

landowner’s long-term management and estate plans:– Permanent– 30-year– Maximum allowed by State law

• Restoration component for natural resource improvement

• Safe Harbor provisions when managing for Threatened or Endangered Species

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Secretary’s 2007 Farm Bill Theme Papers

• Recognizes contribution of conservation programs in reducing offsite environmental effects of ag production– Preservation of farm and ranch lands– Restoration and enhancement of wetlands– Promotion of wildlife habitat

• Challenges public to consider the balance between Working Lands and Conservation Use Lands

• On farm energy management and biofuels will be important future considerations

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NRCS Strategic Plan Mission Goals

– High-quality, Productive Soils– Clean and Abundant Water– Healthy Plant and Animal

Communities– Clean Air– Adequate Energy Supply– Working Farm and Ranch Lands

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Cost Effectiveness – Increase Environmental Returns on Conservation Investments

• Watershed or landscape approach – focus where environmental gains are most likely

• Greater use of competitive bidding• Expanded use of performance-based

payments– Vary commensurate with environment

benefits• CEAP

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Encourage Private Sector Markets for Environmental

Services• Complement programs• Potentially replace some federal support,

allowing federal funds to reach more farmers

• Markets include:– Air quality– Water quality or quantity– Wetlands habitat– Endangered species– Greenhouse gases– Development rights

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• Reverse auction (lowest bids “wins”)• Pilot in homogenous wetlands• Professional appraisal methodology

to establish caps• Self-assessment• Ranking by bid and environmental

benefits index• Public posting of bids• Re-competition

WRP Auction

Thomas W. ChristensenDeputy Chief for Programs

October 30, 2006Denver, Colorado