newspaper having circulation of that size then to every newspaper with a daily or weekly circulation of more than 2,500 copies in such community,

(2) To every radio and television station which regularly broadcasts local news or announcements of meetings in the community served, or proposed to be served,

(3) To any community newspaper or journal primarily serving a neighborhood or area in which the agency runs or is preparing to run a program under the Economic Opportunity Act,

(4) To each person who has submitted a written request for copies of such notices,

(5) To the State Economic Opportunity Office for the State in which the agency is located,

(6) To OEO,

(7) To every member of the principal representative board of the agency,

and

(8) To the chief elected officials in the community served or proposed to be served and other appropriate public officials.

However, agencies which serve an area larger than a single county shall consult OEO concerning the place or places where meetings shall be held and what notice shall be required. Procedures approved by OEO shall, to the extent specified by OEO, satisfy the requirements of this section.

§ 1070.2-5 Conduct of the public meetings.

(a) Each meeting shall be held before the principal representative board. It shall be held at the time and place set forth in the notice of meeting. In the event the meeting cannot be completed on that date, it may be continued from day-to-day or adjourned to a later day without notice other than the announcement of the place, day, and time by the presiding officer, and the posting of that information on the door of the originally publicized meeting place for the benefit of late arrivals.

(b) Each meeting shall be open to all members of the public. Every person expressing a desire to speak shall be heard, although the presiding officer may establish reasonable limits on the length of the statement of any one person. Should the presiding officer

determine that the opportunity to be heard is being utilized for purposes of delay, he may exclude statements essentially repetitious of statements already heard.

(c) Although meetings may be conducted in an informal manner, minutes shall be kept which fairly and accurately reflect the business of the meeting, and the basic sides of any disputed questions or issues which arise. Written statements and affidavits shall be accepted for the record of the meeting. Such statement and affidavits should preferably be submitted in triplicate, but shall be accepted even if offered in a single copy or in duplicate. Such statements shall be made public at the office of the agency.

§ 1070.4-1 Applicability.

This subpart applies to all programs financially assisted under Titles II and VII of the Community Services Act if such assistance is administered by the Community Services Administration. § 1070.4-2 Policy.

(a) Publishing a Newsletter or House Organ. CSA does not provide funds for the publication of newspapers. However, grantees are encouraged to publish newsletters or house organs which assist local anti-poverty efforts. These publications are generally financed under the administrative budget of the local agency.

(1) CSA makes the following distinctions between newspapers and newsletters:

(i) A newspaper attempts to meet a population's general information need, while the grantee newsletter has a specific information objective and a limited audience. A newsletter attempts to bridge the communication gap often existing between a grantee and the people it serves by raising the level of information about the nature, goals,

and resources of local anti-poverty efforts.

(ii) Newspapers are sold for profit, and they attempt to solicit commercial advertising. A grantee newsletter is not sold, nor is commercial advertising solicited or accepted for it.

(2) Newsletters are under local control as are all other grantee activities. Consequently, they reflect the policies and opinions of the local grantee. Newsletters are also subject to the same laws and regulations, such as those restricting partisan political activity, which govern CSA funded programs.

(3) CAA principal representative boards and boards of CDC's and limited purpose agencies have the ultimate responsibility of insuring that the content of all grantee publications coming under their jurisdiction reflect the policies and opinions of the local program and are in accord with CSA policy. To accomplish this, the board may elect to delegate the review function to the Executive Director. In all cases, publications must be reviewed prior to printing to assure compliance with this policy and the sanction of the board. Arrangements should be made by the grantee with each of its delegate agencies, neighborhood councils, and any other group it funds who may be publishing a newsletter or house organ to expedite this review process in a manner consistent with timely publication and program responsiveness. Project funds will not be spent for newsletters unless a review procedure has been established in accordance with this Instruction.

(b) Use of Advertising Time and Space as Non-Federal Share. CSA does not credit as an in-kind contribution for a grantee's non-Federal share requirement any news coverage, editorial comment, advertising or public service time or space in any communications media such as radio, television, magazines, wire services and news services. This policy does not, however, prohibit a grantee from using Federal or non-Federal funds for publishing or advertising program activities when the grantee can show that the expense is the best way of achieving a legitimate program purpose. This is an allowable expenditure although not an

spokesman for the target area residents, with additional representation from local businesses and financial institutions to strengthen the board's technical skills and involvement with the larger community.

(b) § 1076.10-3 provides the specific requirements for the composition of CDC boards. § 1076.10-3 outlines the representation requirements for the two basic categories of board members. § 1076.10-4 provides the specific requirements for selecting board members, including a discussion of the two different methods-direct and indirect for electing representatives of target area residents.

§ 1076.10-3 Composition of CDC Boards.

(a) Size of Board. CDCs are free to determine the size of their boards of directors. In doing so, CDCs must strike a balance between various, sometimes conflicting, considerations. On the one hand, they must be of a sufficient size as to provide adequate representation to both the target area residents and the business community (see paragraph (c) below), to permit the formation of working committees without requiring the same individuals to serve on more than one or two, and to insure that even a minimum quorum is still large enough to represent the community and legitimately reach basic policy and program decisions. On the other hand, the board must be small enough to permit business to be conducted in an efficient and expeditious way. It has been the experience of OED that the ideal size for a CDC board is between 15 and 30 members. Generally, anything larger tends to become unwieldly, while anything smaller overtaxes the capacity of individual members and limits the board's representativeness. Where a CDC chooses to have a board larger than 30 or smaller than 15 members, it shall explain its choice to OED.

(with the possible exception of Indian reservations) where the special impact area is a sizable land mass including middle class and affluent residential areas as well as high levels of lowincome population, there will seldom be a need to have non-residents on the board even to represent the business sector. In urban CDCs, where the special impact area is usually a lowincome neighborhood of a large city, effective spokesmen for the business and financial community may not reside within the special impact area, even if their businesses or financial institutions are located there. In most urban CDCs it will be necessary to reach out to the larger community to find adequate representation of the business sector.

(2) Nevertheless, as provided in paragraph (c) below, representatives of the special impact area residents must always constitute a controlling interest on the CDC board. Accordingly, even in a CDC where every representative of the business and financial community is a non-resident, a clear majority of the board members will be residents of the area served.

(c) Representation Requirements. There are two categories of members on CDC boards of directors: representatives of the low-income community to be served and representatives of the business, financial, and general community.

(1) Low-Income Community.

(i) In order to comply with the policy requirements that CDCs be responsive to the low-income residents of the special impact area, representatives of the low-income community must have a controlling interest on any CDC board of directors. This means that at a minimum representatives of the low-income community shall hold more than half of the seats on the board of directors. OED experience has indicated that an even larger proportion, generally around twothirds, is preferable, since a bare majority is often not enough, given the relative inexperience of some community representatives, for representatives of the low-income community to maintain effective control.

(ii) Often, the total size of the board will determine the proportion of com

munity representatives. The smaller the board, the greater the likelihood that community representatives will constitute less than the preferable two-thirds, so that a sufficient number of business sector representatives may be included on the board. On the other hand, on a larger board of, for example, 25 members, there is no reason why community representatives could not constitute at least twothirds of the board and still allow sufficient seats for effective representation of the business sector.

(iii) Representatives of the lowincome community need not themselves be low-income, provided they have been selected in a democratic fashion in accordance with § 1076.10-4. If appropriate selection procedures have been followed, however, it would normally be anticipated that many of the representatives of the low-income community will themselves be lowincome. If only a small proportion of the community representatives are themselves low-income the CDC must demonstrate why this is not an indication of inadequate representation of the community to be served.

(2) Business and Financial Community. (i) The purpose of this category of board membership is twofold: to bring to the board individuals with specialized skills and experience which are crucial if the board is to be able to effectively make policy on business and community development programs; and to provide effective bridges between the CDC and other private financial and leadership resources in the larger community. While such representatives must be willing to make a personal commitment to the CDC program and its basic objectives, their selection to the board may not be based primarily on their prior interest and involvement in the problems of the low-income community, but rather on their technical expertise and institutional contacts.

(ii) This category of board members normally includes businesspeople, accountants, officials of banks and other financial institutions, management representatives of local industrial firms, attorneys, and others exhibiting a positive interest in the Special Impact Program and the concept of

community controlled economic development. This category might also include individuals who are not technically businesspeople but who hold leadership positions of prominence in the community, including public elected officials or their representatives, and directors or senior officials of public agencies or of related private non-profit agencies (e.g. local housing agencies, community action agencies, employment services, foundations,

etc.).

(iii) To the extent the duly selected representatives of the low-income community may possess some of these skills, the effectiveness of the entire board will be improved. However, it is highly unlikely the community representatives will themselves bring to the board the total range and depth of business and leadership expertise needed to carry out an effective CDC program. Representatives of the business and financial community must be selected specifically because of their specialized skills.

§ 1076.10-4 Selection of CDC Board Members.

Because of the different purposes of the two categories of board membership, the selection process for each must necessarily be different.

(a) Low-Income Community. (1) Two methods of selecting representatives of the low-income community are generally used by CDCs and are acceptable to OED: direct election by the members (if the CDC is a non-profit corporation) or stockholders (if the CDC is a for-profit corporation) of the CDC; or indirect election by constituent community organizations within the special impact area which themselves use an acceptable democratic selection process. Often a mix of the two methods is used, with some, or most, community representatives chosen by direct election, and others by indirect election. While both methods are acceptable to OED, the direct election method is preferable. Even where it is demonstrated that the indirect election method is justified, it is preferred that a mix of the two methods be used so that at least some representatives are elected directly.

(2) The selection method used will depend primarily on whether or not the CDC has a broad membership base. Where the CDC has a large membership the direct election method is normally used. Where the CDC does not have a large membership the indirect method is often the only alternative. A broad well-informed, and active membership base is an important ingredient in building an effective and responsive CDC. Such a membership base-provided it is truly representative of the low-income residents and not only of one segment or faction-is concrete evidence of the CDC's legitimacy and support in the community to be served. A broadbased membership also helps to define who the program's beneficiaries are. Moreover, it is a way to insure that the CDC does not become an expression of a small group of self-appointed spokesmen, however well intentioned they might be.

(3) On the other hand, there may be circumstances where it would not be feasible to establish a broad-based membership, particularly in a large and diverse community where it would be hard to determine basic eligibility for membership. In such cases, where there are other well-established organizations which are clearly legitimate and effective spokesmen for the lowincome residents, and which themselves have broad-based memberships, it may be preferable to have such organizations in turn select representatives to the CDC board. The burden is on the CDC, however, to demonstrate to OED why a direct membership base is not practical or advantageous and why the indirect election method would more effectively meet the community representation objectives of the Special Impact Program.

(4) Where the direct election method is used, the representatives of the low-income community may be elected by the CDC membership at an annual meeting or at a series of area meetings of members, preceded by some acceptably democratic nomination procedure. The actual procedure should be one that is adapted to the specific CDC. It should be spelled out in the CDC's by-laws. All representatives of the low-income community