For the first time an effort has been made to estimate EAC requirements for technical assistance and financial support to communities without completing in-depth analyses of each local situation and validating each local need. Validating actions normally include: (a) in-depth appraisal of the manner in which Defense actions affect a community; (b) an on-site assessment of community assets and deficiencies; (c) preparation of an action plan to offset the Defense impact; (d) an assessment of non-Federal resources (local, State and private sector) available to implement the recovery strategy; and (e) an identification of Federal inputs required to complement available resources.

The Committee has not been able to complete all of the foregoing steps for all 28 communities in the four months that have elapsed since April 17. Consequently, the following estimate is a product of experienced judgment and a limited appraisal based on brief discussions and observations during initial visits to impacted communities. When the above steps have been completed with respect to each impacted community, the specific requirements for Federal technical and financial assistance will be identified for each community on a project-by-project basis. In the interim, it is estimated that Defense-impacted communities will require up to $65 million in Federal financial assistance to organize, plan and carry out economic adjustment projects and that these resources can be made available without additional appropriations. This estimate includes provisions for the following kinds of assistance:

Organization

Management Assistance (Personnel)
Development Centers

Conversion Plans

Base Utilization Plans

Regional Development Strategies

Industrial Diversification Plans

Industrial District Plans

Terminal Tourism Studies

701 Comprehensive Development
Business Feasibility Studies
Comprehensive Health Planning

The nature and extent of the assistance required in individual communities varies widely with the impact, the local economic situation, the condition of the infrastructure and other related factors. An indication of the cost range follows:

Establishing Local Development Organization. This may require funds for hiring a single professional to setting up a "Center for Economic Development" in an area where the expertise of a university may be required. The cost range is $20,000 to $200,000.

Impact and Conversion Planning. This includes the updating comprehensive community plans, base use and industrial district plans, technical engineering studies for access roads, sanitary systems, airports and other public facility requirements associated with civilian use of excess Defense installations. A range of special studies is required to identify business and industry candidates for plant location, to assess the feasibility and job potential for various alternative development possibilities (such as recreation, tourism or historic development) and to ascertain impacts in specific areas of economic conern (e.g., housing, labor market and small business). Individual planning projects and studies may range from $5,000 to $30, 000 in small communities up to

99-970 0 733

plans and studies may exceed $1 million in large communities where a large installation is to be converted to productive civilian

use.

Manpower Training and Retraining. Unemployed persons may need substantial training in order to fill existing and new jobs. Estimates of training needs and costs for any area are based on the number of civilian jobs lost due to the Defense realignment and past experience in other impacted communities.

The number of affected individuals required training ranges from 5% to 20%, depending upon the match of available skills to skills needed for the new civilian jobs. The cost of individual training ranges from $500 to $2,000.

Capital Expenditures. Grants and loans are required to convert former Defense facilities to productive civilian use and to construct other projects clearly related to the conversion of an installation or facility for new industry. At this point in time, projects requiring grants cannot be categorically distinguished from those eligible for loans. Further, the scope of individual projects cannot be determined prior to completion of the plans and engineering studies. Costs for individual projects that are considered an integral part of the community effort to generate new jobs through conversion of a base or establishment of new industry at the earliest possible time range from $100,000 to more than $1 million.

In some impacted communities, the EAC has encountered a requirement for Federal funds for major capital improvement projects in various stages of planning or construction. Although these projects have not been initiated as part of the economic adjustment effort, the job generating potential appears to warrant EAC support in selected instances. Costs for these projects range from a half million to several million dollars.

Business Development Loans. Financial assistance often becomes a critical need in the efforts to attract new industry to impacted communities. In some instances a firm requires financial assistance to build and equip a plant. In other instances a local development organization may need funds to build and equip the plant for a business firm on a long term lease. In either case, inability to

finance an otherwise sound project precludes the creation of vitally needed new jobs.

Based on experience with SBA Section 502 loans, $200,000 is the average size loan required for the establishment of a new plant location.

The initial community reaction to a Defense cutback is normally one of dismay at the loss of jobs and income. A second reaction is apprehension that the cutback will occur more rapidly than any offsetting adjustment action that might be undertaken locally. A third reaction is concern about the amount of military real and personal property that could be acquired by the community. If excess property is available, there is an immediate community interest in the "when and how" of its availability.

The orderly and timely conversion of excess Defense installation property, both real and personal, to productive civilian use requires close cooperation and coordination among the Federal Government, the community and the State concerned. The role of the Economic Adjustment Committee is to serve as the catalyst and coordinator in ensuring that the right actions are taken at the right time.

Following an announcement of the closure or realignment of a military installation which will cause all or part of the property to become excess to the needs of the holding military department, the excess must be screened with other military departments to identify their requirements for it, if any. DoD regulations provide that when a military department determines that real property is excess to its needs, a memorandum to that effect is sent to the other military departments, to each Defense agency, and to the U.S. Coast Guard, advising of its availability and describing the property in sufficient detail to permit a reasonable evaluation of need. After a period of 30 days has elapsed without receiving written notice of a tentative requirement, the holding military department may proceed with the disposal action. Further, if the notice of a tentative requirement is not confirmed by a firm requirement within an additional 30 days, the disposal action may proceed, notwithstanding prior receipt of a tentative requirement.

Following the April 17, 1973 announcement, DoD sought to expedite excess determinations by requesting the military departments to submit lists of excess real property within 45 days. As of July 17, 1973, excess determinations had been completed for 14 installations.