PAY INCREASE COSTS, BUREAU OF RECLAMATION, BONNEVILLE POWER ADMINISTRATION AND SOUTHWESTERN POWER ADMINISTRATION (Information submitted on the cost of pay increases, for the Bureau of Reclamation and certain power agencies of the Department of the Interior, follow :) COST OF PAY RAISE IN FISCAL YEAR 1968 Pay raises approved by Public Law 90-206 and pay raises approved by separate authorities for wage board employees will require $3,846,000 in fiscal year 1968 for the activities financed by appropriations to the Bureau of Reclamation. The full amount can be absorbed within currently available funds, and supplemental appropriations for this purpose are not required. Additional amounts for increases which apply to the shortage categories of engineers, scientists, et cetera, and additional cost of higher postal rates have also been absorbed. It will, however, be necessary to effect a transfer of funds from the operation and maintenance appropriation to the appropriations for general administrative expenses and general investigations to cover the portion of the pay raise in the latter two appropriations that cannot be absorbed. Funds for this purpose are available from moneys originally programed for purchase power and wheeling. The general investigations and general administrative expenses appropriations are currently apportioned on a deficiency basis. Programs have been curtailed and lower priority items postponed pending action on the fund transfer. In the other appropriations, the cost of the pay raise has been financed by delaying portions of the approved program. It should be noted that even though the Bureau has fully absorbed the pay raise, funds in an amount equal to the cost of the pay raise were placed in budgetary reserve in accord with administrative policy. If these funds are not released and made available for use in fiscal year 1968, it will result in a double reduction in the program: once to cover the pay raise costs for which the present reserves were established, and secondly by an additional cutback in program in 1968 which not only would double up the adverse effect on going work, but would this late in the fiscal year be extremely difficult to achieve. It should also be noted that the reserve of $3,846,000 established for the pay raise is in addition to the $24,998,000 placed in reserve as a result of Public Law 90-218. Following are the fiscal year 1968 Pay Act costs by appropriation: General investigations.-Total cost of pay raise, $299,000. Of this amount, $92,000 has been absorbed by delaying lower priority items. This amount should be released from reserve to meet pay cost. In addition, the remaining $207,000, which cannot be absorbed, must be covered by additional funds which can be made available by transfer from excess purchase power and wheeling funds in the operation and maintenance appropriation. The general investigations activity has been apportioned on a deficiency basis. Construction and rehabilitation.-Total cost of the pay raise, $1,385,000, to be obtained by release of reserved funds. Operation and maintenance.-Total cost of the pay raise, $1,380,000, to be obtained by release of reserved funds. Loan program.-Total cost of the pay raise, $7,000, to be obtained by release of Public Law 90-218 reservations. Further study indicates this amount is not needed and can be deleted from the supplemental pay bill. Upper Colorado River Basin fund.—Total cost of the pay raise, $448,000, to be obtained by release of reserved funds. General administrative expenses.-Total cost of pay raise is $327,000. This amount is to be covered by transfer of excess purchase power and wheeling funds in operation and maintenance. Because personnel compensation and related benefits comprise about 85 percent of the GAE activities, and the ever-increasing reclamation investment precludes reduction of personnel requirements, this appropriation has been apportioned on a deficiency basis by the Budget Bureau. Pursuant to this apportionment, this appropriation has been expended during fiscal year 1968 at a rate that will exhaust funds before the end of the year. Release of funds as contemplated in the deficiency apportionments is necessary to continue the Bureau's administrative responsibilities through the remainder of fiscal year 1968. BONNEVILLE POWER ADMINISTRATION PAY INCREASES, FISCAL YEAR 1968 Increased pay costs under Public Law 90-206, Federal Salary Act of 1967, amount to $740,000 ($495,000 for construction; $245,000 for operation and maintenance), for BPA appropriation accounts. Of this total amount of increased costs, BPA has absorbed, by administrative action, $19,500 within the construction appropriation. The $475,500 for construction, and $245,000 for operation and maintenance is expected to be obtained from funds previously placed in budgetary reserves pursuant to title II of Public Law 90-218. The supplemental request in House Document 316 provides for this action. The 1968 construction program, in an estimated total amount of $125,365,000. is financed by appropriations of $110,321,000, and thus includes an undistributed reduction of $15,044,000. Any further absorption of increased costs would cause further delays in scheduled actions on contract awards for transmission facilities. Since the construction appropriation is a no-year account, the budgetary reserve would be carried into fiscal year 1969 to cover the program of contract awards otherwise scheduled for fiscal year 1968. BPA expects to accomplish its full obligational program of construction for the remainder of the fiscal year. The 1968 O. & M. program estimated at $245,000 is due to the increased pay costs. Currently, our O. & M. program is running approximately 98 percent accomplishment as compared to the budgetary schedule to this period. Undue delay in obtaining authorization for release of the $245,000 budgetary reserve will cause slippages in performance of maintenance work on the transmission system. This is a one-year account and any unobligated balances in this account would lapse and be returned to the Treasury. SOUTHWESTERN POWER ADMINISTRATION PAY INCREASES, FISCAL YEAR 1968 The total pay increase costs for Southwestern Power Administration in 1968 are estimated at $55,600. Of this amount $29,600 has been absorbed. The supplemental request fer release of $26,000 from Public Law 90-218 reserves was arrived at only after full consideration had been given to other possibilities of achieving savings or economies. Any further absorption was deemed inadvisable since it would jeopardize the program. Therefore, a request was made to the Bureau of the Budget to apportion the operation and maintenance account on a deficiency basis pending authority to receive by transfer from the construction account the needed $26,000. The Bureau of the Budget approved the deficiency apportionment on that basis and the program has been operating on that basis. The following tabulation shows the current quarterly apportionment for operation and maintenance, indicating the need for additional obligating authority in the fourth quarter. Obligations for this account are largely for salaries, personnel benefits, travel costs and supplies of the maintenance crews which recur on a constant basis from month to month. If the authority to transfer $26,000 to this account was not granted at this late date, it would mean curtailment of the program to a point where continuity of service could be affected. Of course, if such a situation should develop, we would have to take emergency measures and use the continuing fund. To the extent that there are funds now on hand in a budgetary reserve, this would be an incongruous but necessary alternative. PAY INCREASE COSTS, CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY (Details of funds requested in H. Doc. 316 for pay increase costs for the Corps of Engineers, Department of the Army, follow :) JUSTIFICATION OF SUPPLEMENTAL ESTIMATES FOR CIVIL FUNCTIONS ACTIVITIES, DEPARTMENT OF THE ARMY, FISCAL YEAR 1968 General expenses, Corps of Engineers, civil An additional amount of $565,000 is required for fiscal year 1968 in general expenses appropriation to fund the salary increases during the fiscal year granted by the Federal Salary Act of 1967, Public Laws 90-206 and 90-207 approved December 16, 1967. The general expenses appropriation provides annual requirements principally for personal services in Executive direction and management functions to a large public works program. In a current expense type of appropriation, the amount appropriated will only support a minimum fixed operation in which there is no activity or function susceptible to curtailment or discontinuance to provide a dollar savings of this magnitude. The general expenses appropriation consists mainly of graded technical employees with a longtime continuous service which results in a low turnover. This supplemental estimate will only provide increased pay costs for the presently authorized staff required to manage this program. Operation and maintenance, general, Corps of Engineers, civil An additional amount of $1,834,000 is required for fiscal year 1968 in operation and maintenance, general appropriation to fund the classified salary increases during the fiscal year occasioned by the Federal Salary Act of 1967, Public Laws 90-206 and 90-207, approved December 16, 1967. The classified pay increase has increased the cost of operation and maintenance of civil works projects in the amount requested. It is essential that the amount requested be provided not only to assure essential staffing for continued operation of channels, structures, powerhouses, and other facilities but to provide repairs necessary to assure continued operation of navigation and flood control facilities and to prevent more costly repairs in subsequent years. Any reduction in personnel to absorb the total pay increase costs or reduction in other object classes such as supplies and spare parts for lock and dam maintenance would seriously affect the operation of these facilities. An additional amount of $2,400,000 is required for fiscal year 1968 in operation and maintenance general appropriation to meet the costs of wage board rate increases occurring during the period Ocotber 1, 1966, through June 1968, and not budgeted for in the fiscal year 1968 estimate. Wage board increases are established in accordance with authority contained in the Classification Act of 1949, as amended, which provides that the compensation of employees in recognized trades or crafts shall be fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates. The Army-Air Force Wage Board, established February 21, 1952 (AR 15165) by the Secretaries of Army and the Air Force, has the responsibility and jursidiction over the determination of appropriate wage rates and issuing locality wage schedules to the two departments. The Public Works Appropriation Act for the fiscal year 1968 provided for the increased cost for operation and maintenance of Corps of Engineers civil works projects necessitated by wage rate increases approved by the Army-Air Force Wage Board up to October 1, 1966. Since October 1, 1966, wage board rate increases have increased the cost of operation and maintenance of civil works projects and it is estimated that during the period October 1, 1966, through June 1968 the wage board rate increase will total $2,700,000 based on the data submitted below, which amount was not provided for in the budget estimate for fiscal year 1968. |