WAGE-BOARD INCREASES Mr. THOMAS. We have with us this afternoon our many friends from the General Services Administration. We have Mr. Boutin, the Administrator, Mr. Griffin, Assistant Administrator, Mr. Moody, General Counsel; Mr. Turpin, Assistant Administrator for Finance and Administration; Mr. Butts, Director, Budget Division; Commissioner Daly, and Mr. Schmidt of the Public Buildings Service. We are delighted to have you distinguished gentlemen here. Mr. Boland, will you take this item? This pertains to wage-board increases in the Public Buildings Services and is contained in House Document 203. Mr. BOLAND. Have you a statement, Mr. Boutin? Mr. BOUTIN. I have no prepared statement. I can sum it up very quickly if you would like. Mr. BOLAND. Proceed. Mr. BOUTIN. Our total supplemental budget request is not very large this year; in fact, it is the smallest one in a good many years, $2,338,000. For wage-board costs in PBS, we had $110,000 in our fiscal 1964 appropriation and we are able to absorb $1,012,000 of the requirement which really is the new cost for 1964. This is what we are able to absorb. We are asking for the annualization of the 1963 increases. We also have wage-board increases in the Defense Materials Service, National Archives, and Records Service, and in Federal Supply, totaling $333,600, and we are absorbing all of that. Mr. THOMAS. A good record. Mr. BOLAND. Insert page 1 of the justifications. (The page follows:) OPERATING EXPENSES, PUBLIC BUILDINGS SERVICE APPROPRIATION LANGUAGE For an additional amount for "Operating expenses, Public Buildings Service," $2,338,000. GENERAL STATEMENT "This proposed supplemental appropriation is required to cover the costs of pay increases for wage board employees granted pursuant to law. "This appropriation was apportioned pursuant to section 3679 of the Revised Statues, as amended (31 U.S.C. 665), on a basis which indicated the necessity for a supplemental estimate for this purpose. This action was reported to the Congress by the Director of the Bureau of the Budget on January 20, 1964." (Quoted from House document.) JUSTIFICATION This supplemental estimate is for increases in salaries and payments to the retirement fund for wage board employees and covers the period from July 1, 1962, through June 30, 1964. These costs, actual through January 18, 1964, and estimated January 19, 1964, through June 30, 1964, aggregate $3,460,000. This amount, however, is reduced to $2,338,000 by (1) application of $110,000 included in the basic 1964 appropriation, and (2) absorption of $1,012,000 of the additional requirement within currently available funds by exercising stringent economies. There follows a summary detail of the overall requirements: 1. The 1964 cost for increases actually effected during fiscal year 1963. Detail of these increases by locality is set forth in pt. 1 of exhibit A which follows on pp. 2 through 6.. 2. Cost during 1964 for increases effected at the start of various pay periods during the year consisting of: Less: (a) Increases actually effected July 7, 1963, through Jan. 18, Total.. Total additional requirement_---- Application of funds provided in basic 1964 appropriation (for Net additional requirement.. $2, 448, 000 716, 000 296, 000 1, 012, 000 3, 460, 000 -110, 000 -1, 012, 000 2, 338, 000 Mr. BOLAND. All of this money is for the purpose of taking care of wage board increases which already have occurred and will occur before the end of the fiscal year? Mr. BOUTIN. That is correct. Mr. BOLAND. Questions, gentlemen? Mr. SHIPLEY. I have no questions. Mr. EVINS. How were you able to make an absorption of $1 million? Mr. BOUTIN. By keeping a tight belt and keeping the employment to a very bare minimum. We kept it substantially under our goals for the year, and it is just simply by belt tightening we have been able to do it. This applies to the other services as well where we have absorbed all of it. Mr. EVINS. All of these figures are firm figures? Mr. BOUTIN. These are all firm figures; yes, sir. Mr. BOLAND. Mr. Jonas? Mr. JONAS. It is interesting to note how these increases vary from locality to locality even within regions. Mr. BOUTIN. Å tremendous change. Mr. JONAS. How do you account for that? Mr. BOUTIN. They would be the prevailing wage rates within a given area. Some of these are established by GSA but many are by the Department of Defense where we use their figures. In our own State, Congressman Wyman, we know the great difference between Burlington and Manchester, as an example. It varies greatly. The average, interestingly enough, is an increase of 3%1⁄2 percent, or 8 cents an hour, this year. Mr. JONAS. Since they are in the first region, why would Portsmouth, N.H., be substantially lower than Manchester? Mr. BOUTIN. The type of employment which is there and the prevailing wage which would apply. Portsmouth normally is considered a high wage area because of Pease Air Force Base and the submarine base. 29-190-64- -14 Mr. JONAS. I understand the increase was lower than in Manchester. Mr. BOUTIN. But in comparing the total of the wages that are paid you will find that they are not too far different. Of course, this is the result of a recent wage survey which has been made by the Department of Defense in that area. However, you are correct; Manchester shows an increase under exhibit A of a little over 8 cents and Portsmouth, N.H., shows 51⁄2 cents. Mr. BOLAND. Mr. Ostertag? Mr. OSTERTAG. I have no questions. Mr. BOLAND. Mr. Wyman? Mr. WYMAN. I will continue along the line taken by Mr. Jonas. There are 14 employees in the aggregate affected by the determinations for Manchester and Portsmouth. You cannot draw too much from this. Mr. Boutin has said correctly that in New Hampshire, which I presume is fairly representative of the other States, there is a good 10 percent, not less than 3 percent, variation between one community from another because of industry, because of locality, because of geography, because of weather, all kinds of things. There is nothing we can do about it. Mr. BOUTIN. We have two communities up there, Nashua and Manchester, that are 18 miles apart, and the wage rates will vary greatly. Mr. BOLAND. How much did you absorb in the Federal Supply Service? Mr. BOUTIN. $235,000. Mr. BOLAND. Tell the committee what you absorbed in the other I think you have done an excellent job, and I want something in the record with regard to these other divisions. areas. Mr. BOUTIN. The amount we are absorbing is $62,000, the requirement in Strategic and Critical Materials; $36,600 in National Archives and Records Service which is mostly in the records centers themselves scattered all over the country, and which is the total requirement. In Federal Supply it is $235,000 which also is a total requirement nationwide, and then we have this $1,012,000 in Public Buildings. Mr. BOLAND. Thank you very much, gentlemen. Mr. THOMAS. That is a fine record, gentlemen. We are proud of all of you. Mr. BOUTIN. Thank you very much, gentlemen. Major Murray, we would like for you now to explain to the committee the two items under "Public safety." As you know, one is $146,000 and the other is $54,000. Major MURRAY. Mr. Chairman, if I may, Inspector Wilson will speak to this. Mr. NATCHER, Inspector Wilson, we are pleased to have you again before our committee and we will be glad to hear from you at this time. GENERAL STATEMENT Inspector WILSON. Thank you, Mr. Chairman. This item of $54,000 is a request to offset a part of the costs of the police services rendered for the march on Washington on August 28 and for police services rendered in connection with the funeral of the late President Kennedy. We had a cost of $22,000 for the rally for jobs and freedom and a cost of $59,000 for the funeral of President Kennedy, or total unbudgeted cost of $81,000. We have absorbed from that $27,000 by delaying appointments in December and January of this fiscal year. We have requested this $54,000 in order to insure that we would not have to hold back recruiting during the last months of the year and so we can come as close as possible to the 3,000-man force requested in our estimate for the fiscal year 1965. At this particular time, we have a current savings of $17,500 in personal services during the last pay period posted. This is about eight one-hundredths of 1 percent of our total personnel services fund. It is subject to some reduction if we have heavy terminal leave payments. This is requested as a buffer to avoid having to cut off recruitment and to avoid running a deficiency at the end of the year. Our request for $146,000 for pensions and relief is in order to offset an underestimation of the amount needed for pension and relief for the fiscal year. We computed, on the basis of experience in fiscal years 1961 and 1962, that we would have an increase of 7.5 percent each month in the pensions and relief payments. We find on the basis of experience this year, and of 1963 also, that the increase is running more in the neighborhood of 10 percent per month and our calculated deficiency for the year is $146,000 based on experience through March of this year. Our fiscal 1965 estimate, of course, reflects the experience of 1963 and 1964 and is based on a 10-percent increase which should avoid any need for a supplemental in 1965. Mr. NATCHER. Will you be able to absorb the $54,000? Inspector WILSON. As a calculated risk, Mr. Chairman, yes. We are running quite close but as each pay period passes, we are this much safer. For example, terminal leave payments for this pay period are going to run us $11,000. As a calculated risk, however, we can chance absorption of that amount. Mr. NATCHER. As I understand it, the recruitment program is a little slow at this time and thereby would place you in a position where you could handle this $54,000 without too much difficulty? PUBLIC SAFETY METROPOLITAN POLICE For an additional amount, fiscal year 1964, for public safety, $200,000 Metropolitan Police, $200,000.-This amount is requested to provide an additional $54,000 for personnel compensation within the activity prevention and detection of crime and $146,000 for policemen's pension and relief payments. The funds approved in the 1964 Appropriation Act were sufficient to enable the department to recruit to its full authorized strength of 3,000 police officers by the end of the fiscal year. Recruitment plans have been proceeding as scheduled. However, during the year the Police Department has been faced with two emergency situations which created expenses which had not been planned for: The rally for jobs and freedom, $22,000, and the cost of 2 days off which were canceled to provide details in connection with the funeral arrangements for the late President Kennedy, $59,000. As indicated previously, the cost of the rally for jobs and freedom has been absorbed within available funds. However, it is possible to absorb only a small portion of the additional cost of $59,000. Unless the supplemental request of $54,000 is approved, the full authorized strength of 3,000 cannot be attained on a gradual basis by the end of fiscal year 1964. This reduced manpower during the last part of the year has two harmful effects. First, it denies the District of Columbia during these months some of the police protection which it needs and which has been justified to the Congress. Second, it will have an adverse effect on our recruitment program by making it impossible for us to appoint applicants now becoming available through past recruitment efforts. Our past experience has shown us that the best applicants are often lost to the service if appointment cannot be made as soon as they become available. For policemen's pension and relief an additional $146,000 is requested to provide sufficient financing for the necessary payments to retired policemen and to widows and children of deceased policemen. This need results from an underestimation of the amounts required for these expenses during fiscal year 1964. Following is a table which reflects the amount expended during the past 2 fiscal years, the actual amount expended for the first 9 months, and estimated expenditures for the last 3 months of fiscal year 1964. Benefits for former personnel-Projected deficit, fiscal year 1964 NOTE.-1. The trend of these data is affected by increases of rates effective in September 1962 and in February 1963. 2. The gradual monthly increase in apportionment of available funds for 1964 in this table reflects actual upward trends of past years. Mr. NATCHER. We have before the committee at this time Major Murray, the Chief of Police. |