Mr. BUSH. Two people right now will deal with the backlog and keep us at our present level. If we were to have more personnel, it would certainly give us the additional resources we need to move forward and to develop the programmatic agreement approach, which we had indicated we wish to do in the beginning.

But, yes, Mr. Chairman, I can only say that dealing with the backlog, dealing with the other areas that we have to in terms of the approximate over-the-board 40 percent increase in our workload, additional personnel would be very helpful.

AGENCY COMPLAINTS ON CASE BACKLOG

Mr. YATES. How important is it to those who come before you in keeping current? Do you get complaints about the fact that cases are lagging?

Mr. BUSH. I have had only some phone calls to me personally indicating that people would say, "When can we expect this MOA to be signed?"

Mr. YATES. I would have suspected that they would be knocking your doors down.

Mr. BUSH. What we have attempted to do, Mr. Chairman, and have been so far somewhat able to absorb the shock, of that increasing workload through some internal management reorganizing to try and bring the resources we have to bear on this whole problem of resolving cases.

For example, I have taken one position out of my office and moved that person who happened to be trained in historic preservation specialist work, on detail to the Eastern Office in order to absorb some of the shock.

We have been able to compensate for those persons assigned to working on the West Point study by picking up on a part-time basis, a person to fill some of those responsibilities that were vacated by the project manager moving over to the West Point study. There are some other points here. John?

Mr. FOWLER. Mr. Chairman, if I could offer a comment. Dr. Bush has said he has received a few calls about timely responses and so on. Where we are really getting telephone calls is at the office director level and the historic preservation specialist level.

We pride ourselves on being responsive within our capabilities. We also try to keep the phones from ringing on the Chairman's desk and on the Executive Director's desk. But certainly, I can tell you, from my greater involvement now in the management of the case load that we are receiving more pressure from the agencies, developers and so on to move promptly with cases, and that that is directed at the operating level at the office.

Mr. YATES. Mr. Atkins?

PROJECT DELAY COSTS

Mr. ATKINS. Do you have an estimate of total cost to commercial developers due to the delays that are incurred through your section 106 process?

Mr. BUSH. I don't have anything right off the top of my head.
Mr. ATKINS. Roughly.

Mr. BUSH. We certainly could check and provide such information if we have it for the record.

Mr. ATKINS. I would have to assume that that cost is substantially more than your total budget. You just look at the――

Mr. BUSH. Probably per day.

Mr. FOWLER. I think the best way to respond to that is that the potential for the cost is great. I would like to think that we try and be sensitive to the non-governmental costs that are involved with projects, and we try to cooperate with the agencies that are working with developers.

We structure our priorities to meet what comes into us. Quite often we will have an agency approve a project and then they will come in and say they forgot to do Section 106. They come to us and say they need a signed memorandum agreement yesterday.

So we sort of bend ourselves into a pretzel to accommodate those needs where we think it is important. I would say that we would not be able to estimate costs that in the past have been incurred because of delays from the 106 process.

One, it is hard to tell whether they are generated by the 106 process or other delays in the federal planning process. I think the important thing is that the potential is great for costing both the government and the private sector money if we are unable to respond in a timely fashion.

[The information follows:]

COST OF PROJECT DELAYS

We have no data in our records that documents actual cost increases incurred by private developers due to project delays caused by the Section 106 process. It seems that most projects are submitted to the Council with sufficient lead time to complete the process before cost increases occur. Our experience indicates that when the consequences of delay would be increased costs to a developer, we have rearranged our work priorities to avoid the problem. This, of course, results in delaying other project reviews that would have been completed sooner, but slipping their timetables has not created the same kind of monetary problems due to the nature of the project or the stage of planning. The potential for delay is the critical factor; as the Council's caseload increases, our ability to reschedule our work to meet pressing demands of a private developer or a State or local government decrease. When confronted with escalating project costs or contractor down time, this can result in actual monetary impacts on businesses.

STATE REVIEWS

Mr. ATKINS. Have you identified some states that have state law preservation review processes that you are comfortable could be substituted for the 106 process?

Mr. BUSH. We are presently working with three states which have approached us. They are New Mexico, California and New York.

Mr. FOWLER. Rhode Island also.

Mr. BUSH. Rhode Island has expressed an interest.
Mr. ATKINS. Where are you in that process?

Mr. BUSH. We are at the point of consultation. Again, that would be a major programmatic agreement that we created in the management plan or those kinds of reviews. We are working with those states now through this consultation process to see exactly how it can be.

But I do not think we have anything in the way of a formal proposal yet from any of those states as to how this could be done. It is in our regulations that it can be done, and the Council has been encouraging it to be done.

Mr. ATKINS. Do you have a time schedule for when you might make a final determination if it is feasible-to have a state law preservation review substitution-to put that into place to relieve your case load?

Mr. BUSH. Not at the present time. I would like to ask Dr. King, if he has any update he would care to add.

Tom?

Mr. KING. Thank you.

Mr. Chairman, I can say that we are working with the four states that have expressed interest in this program. Since my office at present has exactly one person assigned to deal with all kinds of programmatic activities, this has not been something that we have been able to give high priority to.

We do think that it is a good way to reduce our case load as well as to make the process work better at a local level and be less redundant with other reviews that occur. There are simply only so many hours in the day.

We have not been able to give this high priority.

BENEFITS OF PROGRAMMATIC AGREEMENTS

Mr. ATKINS. I would presume if you gave high priority to entering into those programmatic agreements that you would have a very beneficial effect on your case load?

Mr. KING. Absolutely.

Mr. ATKINS. Wouldn't it make sense, then, to take more of your resources, put them into those kinds of programmatic agreements so that you can get to a point where you have a small enough case load that you can comfortably handle it?

Mr. KING. It would make excellent sense. As the Chairman indicated, there are agencies beating on our doors. When they beat on our doors, we have got to either open them or hold them closed, and that takes resources.

The states are not beating on our doors to get these agreements out.

INSUFFICIENT RESOURCES

Mr. BUSH. I simply don't have anymore resources is the answer to your question, sir. The resources that we presently have allocated are, I think, reflected in that chart.

Management-wise, we have adjusted to absorb what is really the shock of the increasing case responsibility, and through some management decisions we have shifted personnel internally. We have moved some budget categories around to deal with the needs that we have there for dealing with our increasing case load.

What we had projected and what we had put in the original budget request is that the programmatic agreements would go up, case load would level of, and as programmatic efforts continue to go up on a broader base, the individual case load would then start down. What that chart reveals is, it has not happened that way.

Mr. ATKINS. One would presume that as people are more familiar with the 106 process and more sensitive to it that you will have increasing numbers, that your case load will continue to increase. Mr. BUSH. Yes, sir.

Mr. ATKINS. I think it is, it would appear at least from past history that it is unlikely that you will receive major budgetary increases, at least if past history is a guide on that, and that it would make sense to take a small amount of your resources now, shift them to the programmatic side and get your case load under control. Otherwise, you are always going to be behind that curve.

Mr. YATES. What is happening is that the case load is increasing and the resources are decreasing. As the case load goes up and requires greater activity, they are losing money. They are having to absorb pay increases. Last year was particularly hurtful, and this year it looks like it is going to be even more hurtful, especially if the pay increases goes in.

We are going to have to increase the pay of senior executives, and they are not going to have the money to do that.

Mr. BUSH. No, sir, we are not.

I might add in terms of the question you raised earlier about the increase in the grades and our increase in our cost. As you recall, Mr. Chairman, I was relatively new when I appeared before you last year and since then have had the opportunity to meet with my staff to discuss a number of the things that were currently in need, and how we were going to address this.

RESTRUCTURING

The responsibility for deciding to go ahead with the higher grades despite the budget tightness was something that I take responsibility for. It just seemed to me that our staffs must work with mayors, city councils, developers, state agencies, federal agencies, at senior levels. When I looked at the profile of our personnel, I discovered that many staff members that had been there for eight, nine, ten years and yet they were locked in the same grade for the past five or six years.

Management-wise, in terms of the level of responsibility_and what is required in order for those people to be able to have flexibility, and also for the two offices that deal directly with those cases who have the case workers working for them, it was my assessment that what we really needed to do was to have a lot of those decisions made at that level by key managers so that by the time that any case arrived to John or to myself, it had been sort of filtered by the case worker, by the regional office director.

That is part of the reason for the restructuring in the management plan. Another component of that was to deal specifically with the programmatic agreements. We had been doing it piecemeal by creating an office and putting Tom in charge of that office to bring some of these resources together, to try and move those programmatics. And systematically developing them for easing our case load seemed to be a very sound management strategy.

STATE REVIEW

Mr. YATES. It seems like, in accordance with your suggestion, you would turn all this activity back to the states because you can't handle it yourselves with the resources that OMB wants to give you. Isn't that correct?

Inevitably your backload is going to grow. You are going to fall further and further behind as your expenses go up, and you don't get the resources to deal with it. I think if you were a private organization, you would need to be in receivership or bankruptcy soon, wouldn't you?

Mr. BUSH. I don't know whether it is possible for us to declare Chapter 13.

Mr. YATES. Chapter 11.

Go ahead, Chet.

Mr. ATKINS. It seems to me you are involved in a situation from my perspective that is irrational; that you are potentially going to cost millions and millions of dollars in added expense unnecessarily to the private sector as backlogs grow.

You are responding to the immediate pressure of this. You say people are banging down your doors. Obviously state historic preservation organizations aren't the ones who are banging down your doors.

It is developers who have got projects that are going up. It would seem to me that it makes sense for states to enter into programmatic agreements with you. We have reached a position of sufficient maturity with the review process where states have the technical capability and that you are comfortable with the judgments that they make with some kind of review on your part.

If you allocate a staff person over to the programmatic side, while it may hurt you for a period of a couple of months, once you sign an agreement with the State of California, say, to do the review, it is going to immediately have a very positive impact in decreasing your case load, not just this year, but next year and the year after and the year after.

Given the situation that the Chairman has postulated for your future, you have to make a choice as to whether you are going to make some strategic decisions now which may cause short-term pain, but may in the long run give you the capacity to do your job correctly.

Mr. BUSH. I think if we can use a metaphor, I think what has happened is strategically we have had to give way to tactics. That is where you are right in terms of the assessment. We have put the particular pieces in place from the one year approximate period of time that I have had to look at our annual work plans, which each of the three field directors provide us.

But we are just right here dealing with the responsibilities. If those projections are correct, we are going to start to get some water in the boat.

Mr. FOWLER. Mr. Chairman, if I may make a comment on Mr. Atkins' observation. We certainly recognize the wisdom of what you are saying. We have attempted to balance the need for responding to the cases that come to us with the best effort we could