Congressman Evans' office to assist us in getting our payment for the first quarter, and I categorize this as just in a category of plain outright red tape and bureaucratic bungling. The other aspect I will not try to develop, but they do involve applications by the city of Pueblo for FAA grants, for the city of Salida, which is concerned with a HUD grant requesting moneys for a water and sewage project. I have a letter from the Las Animas County Commissioners concerning a request for assistance from the Federal Aviation Administration, and a letter from the Pueblo Regional Planning Commission concerning their request for HUD funds, which is very similar to the situation that I alluded to in requesting our continuation grant. Mr. WRIGHT. Do you want to submit these for the record? Mr. WRIGHT. Without objection, those documents will be made a part of the hearing. (Pueblo Planning Commission letter follows:) Mr. JIM GIGOUX, PUEBLO REGIONAL PLANNING COMMISSION, Pueblo, Colo., June 18, 1971. DEAR JIM: In reply to your request for ammunition for your testimony in Washington, I will just list three specific situations I remember as illustrative of the federally inspired slow-down-the-action problem. HELPFUL ASSISTANCE FROM THE FEDS Two years ago the BPR required a report on the "Continuing Phase of the Pueblo Area Transportation Study." The list of contents were set in Washington and were fine for the big studies in New York, Detroit, Philadelphia and the like with their million dollar budgets. It took us one and a half man-months to produce and several meetings with BPR and State personnel. Between them the several BPR and State personnel consumed one and a half man-months tell us what to do, by the time you add in four hours' driving time from Denver for each meeting. In short, it took them one and a half months to tell our staff what to do in one and a half man-months to described to them what we were going to spend only a few man-months to produce. This has happened on health and other projects too. I call this the "overhead" problem. They throw the same red tape and completeness problems on us for a $100,000 project as they throw on a big city with a $1,000,000 program. Thus, federal aid multiplies the diseconomies of small scale. Its like forcing a guy to fill out the same report on a $100 rural septic tank as you require for a $1,000,000 city sewer project. A CASH FLOW CRISIS About two years ago a local official in San Francisco succeeded in stealing about a half-million dollars in federal funds "advanced" to the local agency for which he worked. HUD then decided not to advance 701 funds anymore and put everyone in the country on a reimbursible basis. They thought they would prevent further theft. I estimate they effectively set the entire $50,000,000 701 program back 20% by that one move from advance payment to a reimbursible basis. The story goes this way. We had a $100,000 budget of which 701 was $50,000. We had $20,000 cash reserve. We had been operating successfully for ten years. Then, the theft in San Francisco and the shift to reimbursement procedure. Instead of getting our federal money a month or two ahead of time, we started getting it two to three months late-after it was spent. At between $8,000 and $10,000 a month expenses our $20,000 reserve was wiped out and three times since then we have had to finance payroll with a bank loan, despite our over abundance of federal 701 receivables. *Retained in subcommittee file. Last August three staff members departed for lack of raises and the shaky local financial and political situation. (Had the finances been good they would not have panicked at the political situation.) By not replacing them immediately, we saved enough to weather some of the financial crisis and by taking on a $17,000 contract in another country, we further solidified our financial situation. All of this inured to the injury of our prime clients, the City and County of Pueblo. They got two years of shaky planning service. I estimate we were set back thirty to forty percent in our productivity for Pueblo in each of those two years, with at least half of that set back due to the shift to the reimbursement method. Accordingly, I suspect the setback nationally could have amounted to 20% of the $50,000,000 annual 701 appropriation. I suspect most agencies now carry a cash carry-over balance of about 20% of their annual budgets. In turn, that means a 20% increase in productivity could be achieved simply by having HUD-701 return to advance payment method. And God knows planning needs a 20% boost. (For those agencies forced to use bank loans, you can add the interest level to the total setback). More important, planners need courage to tell the truth. Harassed by a shaky agency's financial situation, they tend to soften their recommendations and not rock any boats. One or two months of this kind of planner retrenchment can set up a whole new local urban crisis with a twenty-year negative impact if it occurs at the time a critical decision is about to be made. (You can tell a somewhat similar story about what happened because of your recent EDA cutback in actual allocations. If you add the inflation factor. I bet you too got hit by a 20% to 40% decrease in overall effectiveness. Agencies of our type need a regular cash flow, not a sporatic one. We also need a bank balance for emergencies since the ability to act quickly in an emergency is the real basis of agency strength and effectiveness. I did not ask for or budget for the NASA space shuttle site study, but it is here and it is costing us two to three man-months] It was the same with the 1965 flood study.) OVERLY SPECIFIC CRITERIA On the Sangre de Cristo Fine Arts and Conference Center project the EDA required a showing of direct new jobs to be produced both here and in the depressed counties of the San Luis Valley. EDA also required a showing of benefit to the poor and to the minorities. The true and basic purpose of the Arts Center was and is to make Pueblo more attractive to management and scientific professional and technical personnel and their families. It is supposed to make it easier for existing firms to hire better top level people and to give us a better edge on our main competitors for new industry, which are Colorado Springs, Denver, Boulder, Greeley, etc. All of them currently have an edge on "culture" and the other community intangibles that management considers after the hard facts of labor force, transportation, etc., are found to be "generally equal." We know the Arts Center will not directly create jobs, but will do so indirectly. Yet, because of the specific EDA criteria, we had to delete the true purpose paragraphs like the above and "generate" paragraphs aimed at the totally inappropriate criteria. I believe the criteria are at fault, because the EDA "goals" are achieved by the project even through the "criteria" are not met. In short, criteria should be replaced by goals, and project should be measured by ability to meet goals, not by ability to meet criteria. Sincerely, C. ALLAN BLOMQUIST, Mr. GIGOUX. Then one other project, the history and timing of the Walsenburg industrial park project, which I would also like to submit, and this particular summary by Stu Huntington, who has been the project coordinator on this program-it is a summary of what we went through. Here again I must say that EDA was justified in some of the requests that they made on this particular project, because the engineering aspects of it were incomplete. But I feel a couple of items in there which requested the use of our Xerox machine could have just as well been done in Austin as back in Colorado. I think the biggest problem that I see with this is that why cannot we get the Environmental Protection Agency and EDA to accept a common application for a particular project where they are participating. Whether it is EDA or the Farmers Home Administration or Housing and Urban Development, I feel from the standpoint of the local grassroots we need to have one common application that will meet the requirements for all Federal agencies when it is a joint project. Mr. WRIGHT. You are saying that in a joint project where several Federal programs are involved, and several Federal agencies are acting as administrators, it is necessary for the locality to make a number of different applications rather than one? Mr. GIGOUX. Yes. Right. I feel it would simplify it from an evaluation standpoint, and on this particular Walsenburg project Mr. WRIGHT. Which agencies were involved in the Walsenburg project? Mr. GIGOUX. The regional commission, the Environmental Protection Agency and EDA. Mr. WRIGHT. Separate application forms had to be filled out for each of these three entities? Mr. GIGOUX. Yes. Mr. WRIGHT. You feel it would be a lot simpler for the applicant in the local community if he could make out one form to satisfy the requirements of all three? Mr. GIGOUX. Yes. In the summary sheet it could still require that the factors be broken out for-EPA will not fund the feeder lines on a search project. I think it could be covered and simplified, but I still think it should be one application. As an example, in this particular application a total of 43 copies of the application had been prepared for these various agencies. Our Xerox bill is killing us, quite frankly. Mr. WRIGHT. No wonder you wanted them to use their machine in Austin. Mr. GIGOUX. In this respect the first application that I submitted to EDA back in 1967 approximated about 70 pages, and on this Walsenburg application we have in excess of 200 pages. The request came back with 13 deficiencies, and of these 13, two represented direct contradictions to what we were told should have been in it-and this is separating the project and putting it togetherfive asked for data not requested at the time of the original preparation, and one request indicates that the application was not thoroughly examined, because it asks for data already included in the application. The rest of them were legitimate deficiencies on the part of our staff, inadequately preparing the application. Mr. WRIGHT. You are offering the summary of the Walsenburg project for the record also? Mr. GIGOUX. Yes. Mr. WRIGHT. Without objection, that will be part of the record at this point. (The documents referred to follow :) OPW-PR APRIL 8, 1971. Subject: City of Walsenburg, Colo., Water and Sewer Improvenments (Two Projects). Mr. R. P. RINNE, Economic Development Representative The above referenced projects have been through preliminary reviews in the Regional Office. So many deficiencies were noted that it becomes necessary to return all copies so that the necessary corrections and/or additions may be made by the applicant, the engineer and by you as the EDR. Particular attention should be drawn to Item 3, below, which is the pivotal correction that needs to be made in both applications. All deficiencies are listed as follows: 1. We need a copy of the EPA Grant Offer on the "02" project. 2. We need an Engineering Report on all of the proposed improvements. The report should include layout maps showing existing and proposed improvements, design criteria, detailed cost estimates, etc. 3. Part of the sewer improvements included in the "02" project are not eligi ble for EPA-PL 660 participation. These need to be deleted from the "02" project and added to the "01" project. 4. The maintenance and operation statement Exhibit 21 is needed. 5. The Engineering agreement needs to be amended to include the 12 EDA required services. 6. We need a city map of the entire City of Walsenburg which shows the location of all existing and proposed water and sewer facilities. On this map the project beneficiaries and the low income-minority areas need to be shown. 7. A copy of this application be delivered to bond counsel for his completion of the Legal Data part of the application(s). 8. Who owns the 27-acre park? Are there any mortgages? If so, to whom and how much? Does mortgages allow partial releases so city can sell to industry? How will city pay for land? 9. The owner of the industrial park will need to execute Form ED-153. 10. How many acres will Hanover occupy in the park? 11. We need the EDR signature across the face of each copy of the applications (Form ED-101, page 1). 12. We need the application Check Sheet (filled out and signed by the EDR). 13. Engineering will need two extra copies of the engineering report (in addition to a copy for each file). The applications may again be submitted when they are in condition for processing. A. L. MILLER, Chief of Public Works. HISTORY AND TIMING OF WALSENBURG INDUSTRIAL PARK PROJECT This is a "typical" public works project which involves requests to three applications for federal funds. It is considered a good project from the standpoint of Economic Development because it will result in the creation of 130 jobs in a county which has been designated as a redevelopment area by the Economic Development Administration of the Department of Commerce. 1968: Land was acquired for commercial development around the south Walsenburg interchange of Interstate Highway 25. Summer, 1970: Hanover Modular Homes, a Texas based firm expressed an interest in locating a plant in Walsenburg. Plans were finalized, a site near the south Interchange of Interstate 25 was chosen, and ground was broken. September, 1970: The overall Economic Development Program update was prepared by the OEDP Committee and the SCEDD Staff. This, together with labor surveys done by SCEDD in March, 1970, resulted in the redesignation of Huerfano County as a redevelopment area. October, 1970: An application was prepared and submitted to the U.S. Environmental Protection Agency for assistance with the sewer treatment and collection portion of the project. (Submitted October 15, 1970) November 4, 1970: Economic Development Administration pre-application conference held in Walsenburg. November 23, 1970: EDA determined that an application could be submitted to them for the Walsenburg Industrial Park Project. December-January: EDA application prepared, but could not be submitted until determination was made by EPA. February, 1971: EPA approved funding of project. EDA application submitted to the Four Corners Regional Commission. March, 1971: Assurance of funding received from the Four Corners Regional Commission. April, 1971: EDA application returned for changes and additions (see attached). Four Corners forced to withdraw their grant offer due to delay of EDA funding. EPA asked to extend their grant offer. May, 1971: Additional EDA requirements fulfilled. Engineers asked to produce more extensive report on the project. June, 1971: EDA and Four Corners applications resubmitted. To date, the city of Walsenburg has prepared more than two hundred pages of data for the applications for assistance to the Economic Development Administration, the Four Corners Regional Commission and the Environmental Protection Agency. We have submitted a great deal of resources to these applications and have made every effort to submit them in accordance with the directions supplied us by the various agencies including EDA. Therefore, it is more than a little disconcerting to be informed that the EDA applications have been returned from the Austin office to our office and that thirteen revisions and additions are being requested. However, let us consider the thirteen requirements one by one. 1. EDA needs one additional copy, of the EPA application. We can certainly Xerox these for you, but one wonders if it would not have been quicker to reproduce these in Austin. 2. EDA needs an engineering report on all of the proposed improvements. This report should include layout maps showing existing and proposed improvements, design criteria, detailed cost estimates, etc. We have worked closely with our engineers, Nelson, Ealey, Patterson, and Quirk of Greely, throughout the course of the preparation of these applications. The EDA applications included copies of all of the engineer's correspondence including all cost improvements, relevant existing CIP's and areas to be served together with their present or proposed land use, were included with the applications. Because of the numbers of copies of the various applications required (a total of 43 copies of the application have been prepared for this project). each copy could not be accompanied by a map. However, at least one map accompanied every set of applications sent to each agency. We were told this would be sufficient. 3. Sewer improvements included in the 02 projects are ineligible for EPA-PL 60 participation. These need to be deleted from the 02 project and added to the 01 project. This third item, in affect, required the City of Walsenburg to redo the entire applications submitted to EDA. The City first assumed that it could submit a single application for assistance to EDA. However, EDA informed us that because of the application for EPA funds, two separate applications must be submitted, one for water and access road and one for sewer. This was done. Now EDA is telling us that we must separate out the relatively small portion of the sewer project in which EPA can participate and submit a separate EDA application for that portion. Since we were told to separate the applications, water, access road, and sewer, it would seem that EDA could abstract the information needed for an evaluation. 4. The Maintenance and operation statement. The improvements brought about by this project will be administered, operated, and maintained by the Walsenburg Utilities. 5. The Engineering agreement needs to be amended to include the 12 EDA required services. We were never, nor have we yet been, informed of any "12 EDA required services." If EDA wishes the engineering agreement to read a certain way, or to touch on certain points, I suggest potential applicants must be informed of these requirements. 6. EDA needs a city map of the entire city of Walsenburg, which shows the location of all existing and proposed water and sewer facilities. On the map, the project beneficiary and the low income minority areas need to be shown. |