USCG Fiscal Year 2011Budget and Project Highlights

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LCDR Greg MatyasOffice of Budget and Programs (CG-821)

April 27, 2010

Outline: • FY 2011 Strategic Overview and

Priorities

• FY 2011 Budget Request

• Project Overview

Agenda

2

3

FY 2011Here to Protect, Ready to Rescue

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FY 2011 CG Strategic Overview

• Continued recapitalization of aging assets and infrastructure is

the Coast Guard’s top priority – Recapitalization is vital to maintaining future surface, air, and shore asset capability -

an essential investment for DHS and the Nation

– Redirects savings from efficiencies, consolidation initiatives, decommissionings, and

capability reallocations to support highest priority acquisitions.

– Supports efforts to constrain Government spending

• Coast Guard will continue to provide superior value and service

to the American public– Operational Commanders will use risk management to allocate available resources

to meet the Nation’s highest order maritime safety, security, and stewardship needs.

Sustaining long-term Coast Guard performance ultimately depends on the pace and stability of future recapitalization – the

President’s FY11 Budget supports this imperative.

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FY 2011DHS Strategic Priorities

FY 2011 Budget aligns with five main missions:• Preventing Terrorism and Enhancing Security

• Securing and Managing the Our Borders

• Enforcing and Administering Our Immigration Laws

• Safeguarding and Securing Cyberspace

• Ensuring Resilience to Disasters

Quadrennial Homeland

Security Review (QHSR)– Released with President’s Budget

– Bottom Up Review (BUR) on-going

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FY 2011 Budget Request

Budget Activity($K)

FY09 Enacted

FY10 Enacted

FY11President's

Request

FY10-11 Change

%

Operating Expense (OE)** 6,428,718 6,563,888 6,650,950 1.3% Reserve Training (RT) 130,102 133,632 135,675 1.5% Environmental Compliance & Restoration (EC&R) 11,317 13,198 13,329 1.0% Acquisition Construction & Improvements (AC&I) 1,229,101 1,536,280 1,381,228 -10.1% Alteration of Bridges 13,997 4,000 --- Research, Development, Test & Evaluation (RDT&E) 19,592 24,745 20,034 -19.0%

Health Care Fund Contribution (HFC) 257,305 266,006 265,321 -0.3% Total (Discretionary Funding) 8,090,132 8,541,749 8,466,537 -0.9%

Requests $10.08 billion for FY 2011 – discretionary & mandatory

Net reduction of 773 positions (-1,112 military & +339 civilian FTP)

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** Does not include funding for Overseas Contingency Operations (OCO) and Polar Icebreaking operations and maintenance. Full funding for FY11 OCO and Polar is included in USN and NSF requests, respectively.

FY 2011 Budget Request Operating Expenses

Annualization of Prior Year Funding(+$44.2M):

• Continue new programs and assets started in FY 2010

Mandatory Entitlements (+$143.4M):

• Annualization of FY 2010 Pay Raise

• FY 2011 Pay Increase

• Military Allowances

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• Analyze current contract support & bring appropriate work in-house

• Must generate savings

DHS Balanced Workforce

Strategy (-$14.5M, +300 FTP):

Overall net change: an increase of $87M and a decrease of 773 FTP

FY 2011 Budget Request Operating Expenses

Operation & Maintenance (O&M) of New Assets (+$17.5M, +38 FTP):

• Shore facilities, Response Boat-Mediums, Rescue 21, Nationwide Automatic Identification System, Rescue Swimmer Training Facility

Surface & Asset Follow-On (+$62.5M, +336 FTP):

• Operations and Maintenance for NSC #3 and logistics support for NSC

• Crews and Operations and Maintenance for FRCs & shore-side support

• Maritime Patrol Aircraft (HC-144) simulator follow-on

• AIRSTA Miami and ATC Mobile transition support

• Operations and Maintenance for HC-144 aircraft

• Airborne Use of Force sustainment

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FY 2011 Budget Request Operating Expenses

9

Asset Decommissionings:

− Four High Endurance Cutters (-$28.2M, -764 FTP)

• JARVIS, RUSH, HAMILTON, CHASE; backfill 2 HECs in Honolulu and 1 HEC in San Diego

• NSC#1 fully operational, NSC#2 operational 4th Qtr FY11; homeport in Alameda

− One Medium Endurance Cutter – ACUSHNET (-$2.8M, -86 FTP)

− Four HU-25 Aircraft (-7.7 M, -62 FTP)• Three HU-25s will be replaced with new HC-144

at AIRSTA Miami, FL• One HU-25 – removed from service at AIRSTA

Cape Cod, MA• HC-144s programmed for 1,200 flight hrs per

year vs. HU-25 programmed at 800 flight hours per year

FY 2011 Budget Request Operating Expenses

Program Decreases: Rotary Wing Capacity− Remove five H-65s out of service (-$5.5M, -68 FTP)− Move four H-60’s to AIRSTA Traverse City; two from

OPBAT support & two from MSRT support− Close seasonal air facilities (AIRFAC Waukegan and

AIRFAC Muskegon)

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173nm

196nm

95nm

151nm

214nm

208nm 32nm

104nm

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Rotary Wing Re-alignment – Great Lakes

AIRSTA Traverse City

AIRFAC Muskegon

AIRFAC Waukegan

AIRSTA Detroit

Chicago

FY 2011 Budget Request Operating Expenses

− Decommission Five MSSTs (-$18.2M, -391 FTP) − New York, King’s Bay, New Orleans, San Francisco

and Anchorage − Move towards regional concept

− Reinvest in Law Enforcement Detachments (LEDETs)

− (+3.6M, 50 FTP) to add 18th LEDET and increase size from 11 to 12 on 17 others

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Program Decreases: Deployable Force Capacity

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FY 2011 MSST Decommissioning Plan

MSST Boston

MSST Miami

MSST New Orleans

MSST Galveston

MSST Honolulu

MSST Anchorage

MSST San Diego

MSST San Francisco

MSST Seattle/Tacoma

MSST LA Long Beach

Remaining MSST locations

MSRT location

MSST Decommissionings in FY-2011:

• MSST New York, NY• MSST Kings Bay, GA• MSST New Orleans, LA• MSST San Francisco, CA• MSST Anchorage, AK

MSRT Chesapeake

MSST Kings Bay

MSST New York

FY 2011 Budget Request Minor Appropriations – Current Services

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Environmental Compliance & Remediation:

• Request $13.3M (+0.1M) and 24 FTE (0)

Reserve Training:

• Request $135.7M (+2.0M) and 536 FTE (0)

Research, Development Testing & Evaluation:

• Request $20.0M (-$4.7M) and 101 FTE (0)

Health Care Fund:

• Request $265.3M (-$0.7M)

Boating Safety:

• Request $119M (-$9.9M) and 8 FTE (0)

Oil Spill Recovery:

• Request $92M (+$1M)

FY 2011 FTP Reduction*(Discretionary)

01 February 2010

* Note: Does not include OCO or Polar Icebreaking funding/positions

+ 3

39

CIV

ILIA

NS

(+ 4

.3%

)

MILITARY (-1,112 FTP)

• Follow-on for new assets (NSC, MPA, FRC, RB-M): + 308 FTP• Balanced Workforce Strategy (i.e. insourcing): +115 FTP• Technical Adjustment – FY09 Mil/Civ Conversion: -103 FTP• Decomm four HECs: -747 FTP• Decomm five MSSTs – LEDET Reinvestment: -395 FTP• Decomm ACHUSHNET: -86 FTP• Rotary Wing Realignment: -68 FTP• Decomm four HU-25s: -62 FTP• Reduce Mission Support: -27 FTP• HEC Logistics Support: -17 FTP• MIFC Consolidation: -11 FTP• Eliminate MCSA Follow-on: -12 FTP• DECOM NSFCC: -5 FTP• CGIS Realignment: -2 FTP

$-7

5.2

M (

- 0.9

%)

Net

Red

ucti

on

: -7

73

FTP

(-

1.5

%)

FY 2010– Enacted ($8,541.7M) • Military: 42,329 FTP• Civilian: 7,927 FTP• Total: 50,256 FTP

FY 2011– PB ($8,466.5M) • Military: 41,217 FTP• Civilian: 8,266 FTP• Total: 49,483 FTP

-1

,112

MIL

ITA

RY

(-

2.6

%)

FY 2011 PB

CIVILIAN (+ 339)

• Follow-on for new assets (NSC, MPA, FRC): + 66 FTP• Balanced Workforce Strategy (i.e. insourcing): +185 FTP• Technical Adjustment – FY 09 Mil/Civ Conversion: +103 FTP• Decomm five MSSTs- LEDET Reinvestment: +4 FTP• Reduce Mission Support: -7 FTP• MIFC Consolidation: -1 FTP• DECOM NSFCC: -4 FTP• CGIS Realignment: -7 FTP

Key Project Highlights FY 11 Comment

Response Boat – Medium $42M 10 boats; 115 of 180 boats funded through FY 11

National Security Cutter $538M Production for NSC 5; 5 of 8 NSCs through FY 11

Offshore Patrol Cutter $45M Supports pre-acquisition design and engineering

Fast Response Cutter $240M 4 cutters; 12 of 58 cutters funded through FY 11

MEC Sustainment $30M 3 x 270’ cutters; All 210’s funded through FY 11

Note: +$3M for cutter boats.

Surface: $898M

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Fiscal Year 2011Acquisition Construction and Improvement (AC&I) Highlights

Air: $101MKey Project Highlights FY 11 Comment

Maritime Patrol Aircraft $40M 1 aircraft; 15 of 36 aircraft funded through FY 11

HH-60 $32M 8 aircraft sustained in conjunction with depot maintenance

HC-130H / J $29M 2 center wing boxes plus design for H; logistics for J

Note: HH-65 to execute prior-year funding to continue sustainment projects.

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Fiscal Year 2011Acquisition Construction and Improvement (AC&I) Highlights

Key Project Highlights FY 11 Comment

Rescue 21 $36M Deploy to LA/LB, Detroit, Buffalo, Honolulu, Guam and San Juan, PR.

Shore $69M Rehabilitate buoy-tender moorings Newport, RI; Phase III of Chase Hall (CGA); Phase II of Thrun Hall (ATTC) barracks; minor shore, ATON and S&D.

Military Family Housing $14M Build/acquire housing in Upper Keys & MontaukNote: No funding requested for Interagency Operations Centers (IOC) or Nationwide AIS (NAIS).

Other Equipment/Shore: $119M

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Fiscal Year 2011Acquisition Construction and Improvement (AC&I) Highlights

Other: $263MKey Project Highlights FY 11 Comment

Government Program Management; Systems Engineering Integration

$74M Supports CG assumption of systems integrator

C4ISR/ Technology Obsolescence Prevention $31M Design and engineering for NSC, FRC and MPA

DW Logistics $50M Facilities & training for NSC & FRC; deploy CG-LIMS

Personnel $108M Annualize FY10 growth; 785 FTP for acquisition & tech auth

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Fiscal Year 2011Acquisition Construction and Improvement (AC&I) Highlights

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FY 2011 Budget Request Summary

Questions?

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FY 2011 Budget Request Summary

Backup Slides

Mandatory Spending Increase

17 Nov 09

Total Discretionary Spending vs. Mandatory Spending in Inflation-Adjusted Dollars (2008)

Future Discretionary Decline

17 Nov 09

Social Security20%

Medicare13%

Medicaid8%

Other (manda-tory)18%

Defense w/ OCO

21%

Non-De-fense: Other19%

Non-De-

fense: DHS1%

2010 President's Budget ($3.4T)

“d

iscre

tion

ary

” s

pen

din

g

“mandatory” spending

59% of Federal Budget funds ‘mandatory bills’

DHS is only 3% of federal discretionary spending17 Nov 09

17 Nov 09

DOD Topline Funding ($ in Billions)(Not adjusted for inflation)

0

100

200

300

400

500

600

700

800

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14Guidance Submission Level* President's Request* Appropriated Level

Leveraging acquisition processes to field greater quantities of less exquisite technology Balancing long-term, high end costly programs with low-tech lest-costly solutions implemented immediately Continued investment to maintain the size of the workforce

*Source: OMB

17 Nov 09

DHS Topline Funding Profile($ in billions)

$42.4 $42.8 $43.2 $43.6 $42.0 $50.0

$40.1 $42.7

$0

$10

$20

$30

$40

$50

$60

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Guidance Submission Level OMB Submission Appropriated Level

17 Nov 09

CG Topline Funding ($ in Billions)(not adjusted for inflation)

0

1

2

3

4

5

6

7

8

9

10

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Guidance Submission Level OMB Submission Appropriated Level ARRA OCO Supplemental Funding

FY10 – Budgetary High Water mark?FY11-FY15 -Average Discretionary Growth ~1.5%

Potential Out-year Impacts

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015$0

$2,000

$4,000

$6,000

$8,000

$10,000

$8.6

0 B

illi

on

$9.1

2 B

illi

on

AC&I: At FY11-FY15 CIP Level

-$348M-$629M

-$924M -$1223M

Discretionary top-line growth at guidance (FY11-FY15 RAD)= ~1.5% (~$130M/Yr)

17 Nov 09

Defense Readiness $639,546

8%

Drug Interdiction $1,231,169

15%

Living Marine Resources $818,359

10%

Search and Rescue$963,457

11%Ports, Waterways &

Coastal Security $1,787,521

20%

Marine Safety $565,938 7%

Aids to Navigation $1,208,984

15%

Ice Operations $167,375

2%

Marine Environmental Protection$201,857

3%

Other Law Enforcement $139,846

2%

Migrant Interdiction $492,255

6%

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What we do with our money ?FY 2009 Enacted Budget OE $6.195B

FY09 Enacted - Operating Expenses $6.195B 30

Sounds like a lot – But…

Centrally Managed

Accounts, 4%

Training and Recruiting, 3% Civilian Pay and

Allowances, 9%

Operating Funds and Unit Level

Maint, 18%

Military Pay and Allowances,

54%

Intermediate and Depot Level Maint, 12%

Formulation(Aug – Feb)

DHS(Mar - Aug)

OMB(Sep – Jan)

Congress(Feb – Sep)

Enactment(Oct: Ideal)

Apportion Execution

FY10

FY11

FY12

FY13

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The Budget Cycle: Four Budgets At Once

USCG FY 2010 ENACTED

• Recapitalizes Aging Assets• Enhances Maritime Safety & Security• Improves Command and Control• Modernizes Business Practices

* FY10 5.1% discretionary growth does not include Overseas Contingency Operations (OCO) funding.

APPROP ($K)

FY09 EnactedLevel

FY10 President's

RequestFY10

Appropriation

AppropriationOver President's

Request

OE 6,194,925 6,556,188 6,563,888 7,700OCO     241,503 241,503RT 130,501 133,632 133,632 0EC&R 13,000 13,198 13,198 0AC&I 1,494,576 1,383,980 1,537,080 153,100BRIDGES 16,000 0 4,000 4,000RDT&E 18,000 19,745 24,745 5,000HFC 257,305 266,006 266,006 0

SUBTOTAL 8,124,307 8,372,749 8,784,052 411,303RETIRED PAY 1,236,745 1,361,245 1,361,245 0

TOTAL 9,361,052 9,733,994 10,145,297 411,303

5.1% discretionary growth over FY 09 enacted*

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Fiscal Year 2010 Operating Expense Highlights

• Increase Marine Inspector, Investigator, and Naval Engineering Capacity

– Includes $8.6M for 74 marine inspectors– Increase staff for five National Centers of Expertise

• Enhance Biometrics at Sea System– 4 permanent positions

• Counternarcotics Enforcement– Increased Armed Helicopter deployment capacity– Increase LEDET capacity

• Sustain SeaHawk Charleston - Interagency Operations Center– $1.1M for Charleston O&M

• Improve Financial Management– $20M and 86 new positions

• $10M for Depot Level Maintenance

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$6.81B FY10 Enacted (6.0% growth over FY09 Enacted)*

* FY10 6.0% OE growth does not include Overseas Contingency Operations (OCO) funding.

Fiscal Year 2010 AC&I Highlights

$1.54B FY10 Enacted (4.2% growth over FY09 Enacted)

Project FY 2010 ($M)

Comment

Response Boat - Medium 121.0 Funds 39 boats; 105 of 180 boats funded through FY 2010

Maritime Patrol Aircraft (HC-144A)

138.5 Funds 2 aircraft, missionization, and simulator. 14 of 36 aircraft funded through FY 2010

National Security Cutter 389.5 Production for NSC4 and LLTM for NSC5

Offshore Patrol Cutter 9.8 Supports pre-acquisition analysis and documentation

Fast Response Cutter 243.0 Funds 4 cutters; 8 of 58 cutters funded through FY 2010

Polar Icebreaker Sustainment

32.5 Fully funds POLAR STAR sustainment project Phase II

Rescue 21 117.0 Deploy R21 in CA, New England, & Great Lakes. Anticipate completing lower 48 & outer islands in FY’12

Interagency Ops Centers 10.0 Deploy Watchkeeper software tool to Sectors

Shore 27.1 S&D, ATON & Congressionally directed projects. CG received $88M in supplemental funding for shore in ‘09

Various > $100M Program Mgt, Systems Engineering and C4ISR design; 100 new Full-time positions for AC&I 34