REPAYMENT OF FUNDS BORROWED

Mr. NATCHER. Now, Mr. Sykes, how would this $3 million be repaid?

Mr. SYKES. It would be over a 30-year period just as are our other loans we draw down for public building construction.

Mr. NATCHER. Over a 3-year period?

Mr. SYKES. A 30-year period. It is a long-term loan.

You see, all this law did was merely extend the $175 million authority that we had to $225 million and specify that this additional $50 million was to be used specifically for the purposes of the NCTA Act.

Mr. NATCHER. Mr. Sykes, in preparing the budget for the District of Columbia in the future, would you and Mr. Herman, the Budget Officer, and Mr. Lowe, the Director of General Administration, together with the Commissioners and all of those others responsible for the preparation of the budget, keep in mind that this money should be repaid as rapidly as possible in order to cut your interest payments, or would the entire amount to be borrowed by the District of Columbia be automatically spread out over a 30-year period?

Mr. SYKES. We can repay faster, sir, if money is available. In the case of our other loans so far the plan has been to pay them over the 30-year period.

Mr. NATCHER. The money is borrowed for the highway fund for your highway program and for the general fund for all of the other

programs.

Mr. SYKES. The specific one for the highways, of course, has been programed in with the money available for the highways from a different type of funding, but this particular one is grouped in with the general fund for public schools and other public building construction. This would have to be programed along with all of our other requirements each year.

RATE OF INTEREST

Mr. NATCHER. The rate of interest, of course, could go up or down according to the amount charged by the Treasury on the money borrowed; is that correct?

Mr. SYKES. That is correct.

Mr. Lowe. It will not change once having been fixed, Mr. ChairWhen the loan is actually made, the rate of interest is fixed

man.

for the duration of the repayment period.

Mr. NATCHER. This applies to the $50 million to be borrowed. Mr. Lowe. Yes, sir.

Mr. NATCHER. That would be under a fixed rate of interest and regardless of the rate of interest, up or down-is that what you mean to say to the committee, Mr. Lowe?

Mr. LowE. No; I mean to say the rate of interest prevailing at the time the cash is obtained from the Treasury would apply to the entire 30-year period of repayment.

Mr. NATCHER. So the rate Mr. Sykes has just testified about pertaining to the $3 million might be higher than the interest rate for

other money that might have to be borrowed as we go along with the program?

Mr. LowE. That is correct. Over the last 3 years our interest rates have ranged from a low of 3% percent to the present figure of 4%-I mean to the immediately past figure. We assume and hope that the present one is no higher.

TOTAL DISTRICT INDEBTEDNESS TO U.S. TREASURY

Mr. NATCHER. At this point in the record, Mr. Sykes, if you would, we would like for you to insert a total figure of the amount of money owed by the District of Columbia to the Treasury of the United States.

Mr. SYKES. Would that be for all funds, sir?

Mr. NATCHER. Yes.

Mr. SYKES. We can break it down.

Mr. NATCHER. You can break it down as to the divisions and we would like to have that inserted at this point in the record. (The information requested, is as follows:)

District of Columbia indebtedness to the Treasurer of the United States on loans

General fund..

Highway fund..

through Aug. 31, 1965

Water fund..

Sanitary Sewage works fund_

Metropolitan Area Sanitary Sewage Works fund.

Total_____

I Public Law 86-515, approved June 12, 1960, which authorized the construction and operation of the Potomac interceptor provides that the repayment of this loan shall be from income derived from charges made for use of this interceptor. It further provides that, when such income is not sufficient to cover the repayment of this loan and other costs of operation, the repayinent can be deferred by the Secretary of the Treasury and added to sums payable in later years.

ISSUANCE OF BONDS

Mr. NATCHER. Now, Mr. McCarter, coming back again to the overall amount to be expended for the proposed rail rapid transit system, I believe you have explained to the committee that $281 million of the overall amount would be derived from the sale of bonds. Does the legislation provide that the Government would underwrite the bonds, is that correct, Mr. McCarter?

Mr. MCCARTER. No sir. That has not been determined legislatively. The Bureau of the Budget, in its testimony has indicated that the bonds would be federally guaranteed bonds, and taxable, but the agency to issue the bonds has not yet been determined.

As I understand, the reason for that is that the President, in his statement at the time he signed the bill, and Mr. Elmer Staats, Deputy Director of the Bureau of the Budget, in testifying before the District Committees, indicated that it was hoped that Maryland and Virginia would pass legislation and form an interstate compact

53-537-65- -43

with the District of Columbia. If the interstate compact is in being at the time the funds are needed, it is the administration's hope that the compact organization would be able to issue the bonds.

Now, whether or not the Federal Government would guarantee them in that case, I don't know, but it was indicated that, if the compact was not in being, the administration would be prepared to recommend the creation of a District of Columbia corporation which would replace this agency, or that this agency be converted to a District of Columbia corporation.

FUNDS REQUESTED BY NATIONAL CAPITAL TRANSPORTATION AGENCY

Mr. NATCHER. In addition to the $3 million to be borrowed by the District of Columbia government to be used to start the rail transit system, the Federal Government is also called upon in the House document we have before the committee for how much money, Mr. McCarter?

Mr. MCCARTER. $6 million roughly.

Mr. NATCHER. What is the exact figure, $5,679,000?

Mr. MCCARTER. That is correct. This results from an unobligated balance of a previous appropriation of $320,551.

ADMINISTRATIVE BUDGET

Mr. NATCHER. Now, of the $5,679,000 and the $3 million to be borrowed, I believe that $500,000 of that is to be used by the Agencyby you as the Director of this Agency to increase your staff.

Mr. MCCARTER. This is a separate appropriation entirely. The Agency staff is financed by a separate appropriation. It is not a part of the $431 million.

Mr. NATCHER. Do you contemplate an increase in your staff that would entail the cost of some $500,000?

Mr. MCCARTER. A maximum of that, yes.

Mr. NATCHER. That would not come out of the funds that you are requesting from this committee or from the Interior Subcommittee? Mr. MCCARTER. It would come out of the appropriation request before the Interior and Related Agencies Subcommittee, but it is not a part of the

Mr. NATCHER. Overall amount.

Mr. MCCARTER. It is a separate appropriation.

EMPLOYEES

Mr. NATCHER. How many employees do you have in your agency, Mr. McCarter?

Mr. MCCARTER. 28.

Mr. NATCHER. With this $500,000 that would come out of a separate appropriation, you would then have a total of 55 employees? Mr. MCCARTER. That is right.

Mr. NATCHER. The new people you are putting on would be engineers and technicians?

Mr. MCCARTER. Yes, they would be the kind of personnel that can supervise the engineering and technical contracts we expect to enter into so that we would get from the contractors the maximum efficiency. These people would be the ones that the engineering

contractors could go to and get preliminary decisions quickly so that they could proceed without delay and without wasting time. They will be largely engineers and technicians of experience and capability in working with engineering contractors.

CONSIDERATION OF LARGER SYSTEM

Mr. NATCHER. You have informed the committee that the overall cost, as fixed at this present time, 24.9 miles of rail rapid transit would cost the sum of $431 million?

Mr. MCCARTER. Yes.

Mr. NATCHER. Now, Mr. McCarter, to complete the rail rapid transit system as originally contemplated and presented to the Congress, what do you figure the cost would be?

Mr. MCCARTER. This system?

Mr. NATCHER. Yes.

Mr. MCCARTER. The $431 million system?

Mr. NATCHER. No, to complete the system. Instead of the 24.9 miles

Mr. MCCARTER. The original system?

Mr. NATCHER. The original.

In other words, do you plan at this time in constructing, engineering and designing the present 24.9 miles, to prepare for the future to the extent that there could be a larger system?

Mr. MCCARTER. We are not at this time planning or designing the larger system. The larger system would have to be done in connection with the transit districts of Virginia and Maryland.

Mr. NATCHER. How much of the 24.9 is in the District of Columbia? Mr. MCCARTER. One route runs from Rosslyn to Pentagon City in Virginia, and there is a very short stretch in Maryland.

NO AGREEMENTS WITH MARYLAND AND VIRGINIA

Mr. NATCHER. What arrangement have you made with the State of Virginia and the State of Maryland concerning the two stretches that you have just testified to the committee about, with regard to cost, upkeep, maintenance?

Mr. MCCARTER. No detailed arrangements.

Mr. NATCHER. You have no commitment from the State of Virginia or the State of Maryland at this time concerning any of this land over in the two States.

Mr. QUENSTEDT. The arrangements with Maryland and Virginia at the present time are the general approval of our proposal on the part of the Governor of Maryland and the Governor of Virginia.

We cannot go forward with anything that affects either State without having the approval of the respective Governors in that respect.

The present approval, when I speak of it, is general in nature. Later we will go back to them with detailed plans for their approval as required by law.

Mr. NATCHER. Before rails are laid or any of the physical structure is completed in either State, would it require an agreement from the State and your agency?

Mr. QUENSTEDT. It would require express written approval from the Governor of a plan which we would present to him.

NO PART OF COST TO BE PAID BY VIRGINIA AND MARYLAND

Mr. NATCHER. Of the system that we have before us today of 24.9 miles, what part of the cost, if any, do you contemplate will be paid by the State of Virginia and the State of Maryland?

Mr. QUENSTEDT. No part by either one of them, sir. The decision to go into both States was related to the design of this system to obtain the kind of operating efficiency that we think is necessary to make this particular system a useful instrument.

Mr. NATCHER. In other words, in addition to the lines and rails and the right-of-way, you would have how many stations in Virginia? Mr. QUENSTEDT. We would have a station at what is called Rosslyn across Key Bridge.

Mr. NATCHER. You have just one on the Virginia side at the present time under this system?

Mr. QUENSTEDT. One at Rosslyn, one at the Pentagon-the Pentagon is one of the principal reasons for going over there, because it is a heavy center of Federal employment

Mr. NATCHER. This is going to cost several hundred thousand dollars on the Virginia side.

Mr. QUENSTEDT. Yes, sir.

Mr. NATCHER. And you are saying to the committee at this time that this will all be paid out of the funds that you have requested of the committee at this time and the additional funds to complete the 24.9 miles and no part of this money will be paid either by Virginia or Maryland?

Mr. QUENSTEDT. That is correct.

Mr. NATCHER. Now, isn't that a mistake?

Mr. QUENSTEDT. We don't think so because the decision was made, Mr. Natcher, to complete this system both from the point of view of physical operation and also from the point of view of certain revenues that would be obtained from those stations.

COST OF SYSTEM IN VIRGINIA AND MARYLAND

Mr. NATCHER. How much of the overall cost for this entire system as contemplated at this time would be expended in Virginia and in Maryland?

Mr. QUENSTEDT. Mr. Lyon, the Director of our Office of Engineering, will be able to answer that, sir.

Mr. LYON. May I furnish that figure at a later time?

Mr. NATCHER. You will have to give us some idea, Mr. Lyon, because it is right important. We will have to have an estimate.

Mr. LYON. This is merely a guess, Mr. Chairman, and I can verify it on relatively short notice, but I would estimate $20 or $30 million per jurisdiction.

Mr. NATCHER. You can correct that when you get the transcript. You might want to qualify it by giving some statement as to what it would entail.

Mr. LYON. I can give you the precise figure in each of the two jurisdictions. I am attempting to give the total.