tailed plans and specifications, negotiations with the applicant on all stages of the project and provision of technical assistance as necessary, supervision of the preparation of bond instruments and the award of bonds, administrative activities in connection with construction, and servicing of bonds awarded to the Federal Government. The central office staff is responsible for the development, interpretation, and control of program policies to assure uniform administration and the most efficient management of the Federal interest; program planning and control of its execution; development, publication, and followup on the application of program procedures; and the development and refinement of technical guides. Administrative expenses also cover supporting services in the field and central office, such as legal and audit services; fiscal accounting and reporting; budget, personnel, and general services. Mr. SPENCE. If there are no further questions Mr. WIDNALL. Mr. Chairman, I have one further question. Mr. WIDNALL. Mr. Hazeltine, to sum up your answers to Mr. Ashley, what you were saying was that what the communities are willing to do is the measure of the accomplishment and not what the total need is? Mr. HAZELTINE. I would think that was a reasonably fair summation. I believe that we are always going to lag behind, because communities, just like governments and everyone else, are slow to pick up and go ahead on expenditures. I don't think we would ever be up to zero-zero on what we needed, because people are going to take a long time to try to avoid extra expenditures if they can. But I believe that as fast as they want to do that, they have the ability to do it through our free enterprise system, rather than through a direct Government subsidized loan. Mr. WIDNALL. Have you had many communities consult you' who have said that they cannot go ahead with a program for water treatment, or sewage treatment, because the interest rate is too high on the current program, or that they have exceeded their bonded indebtedness? Mr. HAZELTINE. On our current program? The interest rate that we are charging now? Mr. WIDNALL. Yes. Mr. HAZELTINE. I don't know of a case where it was said they could not proceed because of our interest rate. The only cases where the interest rate would even figure into it at all, at our price, which is reasonable, would be if the community was in no position to make any kind of a loan, that it was not a revenue repayable project. If the community wanted to do such an extravagant thing that it was not comparable to their size and ability, then, of course, we would not make them the loan. Mr. WIDNALL. Do you have any figures as to the number of communities below 10,000 population, or, say, below 35,000 population, in this bill, where they have been unable to go ahead with these programs because they had exceeded their bonded indebtedness, or reached the limit of their bonded indebtedness? Mr. HAZELTINE. They reached the limit of their bonded indebtedness on their general obligation bonds, but there would be no reason why they could not obligate the amount necessary under revenue bonds to any amount that they could pay for. Mr. WIDNALL. That is all. Mr. SPENCE. A revenue bond is not counted in the debt limitation. Mr. HAZELTINE. That is not counted. Mr. SPENCE. That is right. Mr. HAZELTINE. The income from that particular project supports that program, and the general obligation of the municipality is not involved. Mr. SPENCE. That is the reason many cities are compelled to resort to revenue bonds, and that entails a higher rate of interest. Now, you think that the cities are all perfectly satisfied that have come to your agency for your loans, with your interest rate? Do they express general satisfaction with that? Mr. HAZELTINE. They would express greater satisfaction if there was no interest rate, and then from there on up to the amount that we charge is just a matter of degree. Of course, they would like it lower, and that is one of the reasons they want to see interest rates set by statute, but it is not prohibitory as far as their actually obtaining what they need is concerned, and we believe they should have to pay for it. Mr. SPENCE. Well, what they would say to you and what they write to their Congressman are two entirely different things. You say that most of these cities that you have made loans to didnt' have a high unemployment condition? Mr. HAZELTINE. I have been asked that question this morning, sir, for the first time. We have never inquired, in the main, whether or not there was high or low unemployment. We don't have any of those figures. Mr. SPENCE. It seems to me that is immaterial, because the construction of these facilities will create employment. It will not only create employment with those employed in the actual construction, but will create additional employment in the cities or centers of population where they produce goods that are necessary in the construction of these projects. And it will create employment, in addition to that, by persuading industries to locate where there is adequate water supply. Isn't that all true? Mr. HAZELTINE. Everything that you say is correct. But there has been, in the past few years, the highest construction level that we have ever had. We have not been lacking in construction. And the contention that we make, and the contention that I made in my statement, was that the construction of public works would not be materially increased, but merely the method of financing would be shifted from the bankers to the Federal Government. Mr. SPENCE. Well, that is a debatable question. If there are no further questions Mr. ASHLEY. Mr. Chairman, if I might. Mr. Hazeltine, on April 22, we had a witness, Charles H. Callison, conservation director for the National Wildlife Federation. On the second page of his testimony, which would be available to you, I am sure, he suggests an amendment to the bill under consideration. Would you be so good as to submit for the record your evaluation of that amendment? Mr. HAZELTINE. I will be pleased to. Mr. ASHLEY. Thank you. (The information requested above is as follows:) COMMENTS BY MR. HAZELTINE ON PROPOSED AMENDMENT TO H.R. 5944 WHICH WAS SUGGESTED BY MR. CHARLES H. CALLISON, CONSERVATION DIRECTOR, NATIONAL WILDLIFE FEDERATION The proposed amendment provides: "(5) No financial assistance shall be extended under this section for the construction, repair, or improvement of any sewage, sewage treatment, or sewer facilities unless the Surgeon General of the Public Health Service finds and certifies to the Administrator, that the project is in conformity with the applicable, comprehensive program for water pollution control prepared or developed under section 2 of the Federal Water Pollution Control Act (33 U.S.C. 446a)." The Housing and Home Finance Agency does not recommend enactment of the above amendment because it is unnecessary and may upset existing satisfactory interagency clearance arrangements. It might also work toward a division of responsibility in the administration of this loan program. Following enactment of the Housing Amendments of 1955 which, under title II, established the current public facility loans program, the Housing and Home Finance Administrator undertook to work out cooperation agreements with various Federal agencies regarding their possible overlapping interests in public facility projects in order to achieve cordinated Federal Government activity. On November 14, 1955, letters were sent to the Secretary of the Army, the Secretary of Commerce, and the Secretary of Health, Education, and Welfare, proposing that cooperative arrangements be worked out between the Housing Agency and these departments to assure systematic coordination in connection with cate gories of public facilities in which the other departments had a direct interest under other Federal programs. Each of three agencies responded favorably to this proposal and effective working arranegments were developed. Each applicant for a loan under the public facility loans program must submit satisfactory evidence that its proposed project has obtained or will obtain, the required State approvals, including conformity with any State comprehensive plan. In addition, in accordance with the cooperation agreements worked out with the Departments of the Army, Commerce, and Health, Education, and Welfare, information regarding the proposed project is transmitted to the interested Federal agency for clearance. In the case of water and/or sanitary sewage facilities, the purpose of such clearance "is to avoid possible disruption of, or conflict with, any plans or projects which may be under consideration in the Public Health Service for improvement of sanitary conditions within the affected watershed. This is particularly important in view of the plans now being made for coordination of efforts by the Public Health Service and the Community Facilities Administration with respect to assisting local agencies to control water pollution." (Excerpt from HHFA instruction addressed to the regional offices, dated Jan. 7, 1957, establishing a clearance procedure with other Federal agencies. We were advised in a letter, dated Dec. 31, 1956, that this instruction for clearance was deemed satisfactory by the Department of Health, Education, and Welfare.) As will be noted, under existing procedures both the applicant and the Housing Agency take steps to assure that a proposed project is in conformity with the applicable, comprehensive program for water pollution control. The applicant must evidence that it has obtained, or will obtain, the necessary State approvals, including conformity with the State water pollution control plan, prepared by the State in order to qualify for grants under the Water Pollution Control Act (33 U.S.C. 466d (f)). Likewise, in its clearing of the proposed application, the Public Health Service takes into account whether the proposed project conforms with the applicable comprehensive program for water pollution control. Inasmuch as adequate coordination with Federal and State health agencies is now being achieved under existing procedures, the proposed amendment suggested by Mr. Callison is unnecessary. The Water Pollution Control Act applies only to sewage facilities that discharge into interstate waters and their tributaries. The projects for which the Housing Agency makes loans sometimes involve local sewage systems which do not discharge into interstate waters and tributaries thereof. In these cases it would not be possible to make the certification in the form proposed in the amendment, because the amendment requires a certification that the projects are “in conformity with the applicable, comprehensive program for water pollution con trol prepared or developed under section 2 of the Federal Water Pollution Control Act." Mr. SPENCE. I would also like to have your views on that. It is an amendment the Public Health would like to have considered. You may stand aside, Mr. Hazeltine. We are very glad to have you testify. Mr. HAZELTINE. Thank you. Mr. SPENCE. Our next witness is Mr. Silbert, of the Community Developers Council of Long Island. We are very glad to have you testify, Mr. Silbert. You may proceed with your statement, and then subject yourself to interrogation. Mr. WIDNALL. Mr. Chairman. Mr. SPENCE. Mr. Widnall. Mr. WIDNALL. I have been asked on behalf of Mr. Halpern, who is not able to be here this morning, to welcome Mr. S. Richard Silbert, president of the Community Developers Council of Long Island, and Mr. Jerome Wolk and Mr. William Safire. This is Mr. Halpern's statement, which he has asked me to read. These gentlemen are associated with Long Island's finest building and construction programs, and I am happy that they are with us this morning to present testimony on the community facilities bill. It may be of interest to the committee that Mr. Wolk's firm is the builder of the model home at the U.S. exhibition in Moscow, the home of the typical American family which, although its cost is $13,000, was denounced as a fraud by Pravda. Mr. Wolk wrote to Ambassador Menshikov after this blatant announcement, offering to escort him to Commack, Long Island, where he could purchase just such a house if he were so inclined. I wonder, Mr. Wolk, did the Ambassador ever take up your offer and deposit a downpayment on a good American home? Mr. SPENCE. You are doing a very fine service. STATEMENT OF S. RICHARD SILBERT, PRESIDENT, COMMUNITY Mr. SILBERT. Mr. Chairman and members of the committee, my name is Richard Silbert. I am here today as president of the Community Developers Council of Long Island, and with me is a former president of the council, Mr. Jerome Wolk. I should like to discuss this bill from the bedrock and grassroots position of the practical volume builder. Our organization consists of about 20 of the largest volume homebuilders in what is probably the most actively growing community in the United States. We have an interest and a responsibility toward the welfare of these communities that we have built and in their healthy development— of which proper hospitals, water systems, and sewage are vital factors. My home is in Great Neck, Nassau County, just outside New York City, and on eastward from us lies Suffolk County-the two of them stretching about 100 miles from the city border the whole length of the island. This territory, constantly expanding since the war, is the community developers' field of activity. Home construction in Nassau reached its all-time peak in 1950, with nearly 31,000 building permits authorized, gradually tapering down to 8,048 last year. This year interest is picking up, the first 3 months of 1959 showing 2,253 authorizations, as against 1,486 last year. About two-thirds of these are one-family units. Back in 1950 there were more than 29,000 one-families, more than 1,600 units in multiple dwellings. These permit authorizations are not finished houses, but they reflect the volume, and the State division of housing keeps its records in this way. And you can see that the pressure for homes on Long Island remains positive and vital. Our members of the Community Developers Council build about one-third of these homes. The problems which this bill, No. 5944, aims to relieve are as acute in Long Island as they possibly can be anywhere else in the country. But my story is not special pleading. It is a well-developed example of what is going on all over. You are all of you aware of the jet-speed growth of population in the United States, risen now from the round number figure of 151 million by the regular Census of 1950, to an estimated 174 million last summer and still zooming. We on Long Island have had to absorb a much greater than average jolt. In these same 8 years Nassau has leaped from, in round numbers, 600,000 to 1,200,000-doubled its population-and less settled Suffolk has a little more than doubled. The national gain 16 percent, Long Island's gain 100 percent. Let me assure you that the burdens of tax expenses are heavy. Where are the schools coming from to serve this population? Also hospitals, roads, parks, fire engines, waterworks, incinerators, sewers, and all the rest? Well, the people themselves are paying for them. Many a homeowner in these years has had his taxes doubled. When a potato patch is upgraded to a home community, the taxes also go up. I would like to call your attention to a very illuminating article that just coincidentally appeared in this morning's Herald Tribune, and contains in it a very interesting statistical chart. (Article referred to above is as follows:) Suburbia Today [From the New York Herald Tribune, Apr. 27, 1959] FINE SCHOOLS BUT NOT HIGH TAXES WANTED (By Terry Ferrer, Education Editor) Four years ago, the New York Herald Tribune subjected the city's fast-growing suburbs to a thorough examination in a series of articles. Since then, the suburbs have continued to grow and grow and grow. Now a team of reporters has again surveyed the suburban area to bring the findings up to date. This is the second in a new series. The citizens of suburbia are doing some split-level thinking in their split-level homes these days. As parents, they want good schools-better than those in the city. As taxpayers, most would prefer to save money. Despite the fact that hundreds of millions of dollars are being poured yearly into suburban schools, the No. 1 educational headache in communities around the city is financing. From Passaic, N.J., to Millbrook, N.Y., from Plainview, L.I., to Norwalk, Conn., |