Reference is made to our recent discussion regarding the multitude of administrative and financial burdens mandated upon small towns. The complexity and redundancy of federal regulations are particularly onerous for small "non-hold harmless" towns that are not eligible for yearly funding or "up front" financial aid for planning services. The lack of a strong tax base makes it almost impossible to maintain basic services, employ additional personnel to plan for and administer federal/state programs and simultaneously set aside matching funds required by mandated federal/state programs. This lack of capability to employ an in-house staff, places a small town at the mercy of 1) professional management/engineering firms whose income is largely based upon project dollar totals, and 2) the federal/state bureaucracy who mandate the regulations under which the various programs are carried out. Further, both federal/state agencies, in turn, exercise design supervision, monetary and administrative control over the majority of participatory programs. Local governments have little, if any, say so in their own community as to the scope and/or costs of mandated programs. However, should a local government decline to participate in a mandated program, they are subject to federal court jurisdiction and may be legally coerced into participation regardless of desire or financial ability. An example of project aggrandizement, which I do not believe is unique, is our Wastewater Collection and Treatment Project as conceived in 1970, costs were estimated at $138,284, after intervention of State (EIA) and Federal (EPA) agencies, estimated costs were increased to $1,023,707 as of January, 1973 from January 1973 to date there were a number of mandated scope and design changes, (I am not counting routine administrative changes) which have resulted in today's estimated cost of $2,002,923 for a project that is not scheduled for completion until February 1978. Should there be additional changes it is impossible to estimate the final cost of this project. It must be said that a considerable percentage of cost increases have root in environmental pollution control standards and of recent years runaway inflation. Page -2 September 21, 1977 With your kind indulgence, I will attempt restructuring high points of one project in hope it will give you an insight into the problems of a small town, that has literally no control of its own destiny, as far as federal/ state governments bureaucracy is concerned. See Attachment I Should you become bored and/or confused by perusal of Attachment 1, which is an abreviated account of just one project imagine the problems associated with being simultaneously involved with ten federal and five state agencies, (plus consulting engineers). All with a different set of regulations, financial accounting systems, reporting procedures, and with assumed authority to make decisions, (which in many cases are retroactive for the convenience of the agency) effecting the day to day operations of a municipal government, and in many cases do not reflect the intent of the Congress. For small towns who by and large are governed by elected laymen serving on a part time basis, with no experience or exposure to federal/state agencies (except IRS), these part time governments are confronted with the identical federal/state regulations and paper work load as is Albuquerque, which is a hold-harmless city with funding for planning and administrative costs, for the federal/state bureaucracies to demand a perfect level of performance from small towns who are not funded to employ qualified personnel to cope with the endless stream of federal/state paper and maintain daily operations is at best ludicrous. A further problem is the lack of qualified personnel familiar with federal/ state rules and regulations, to watch over the best interest of small municipalities, results in "Management by default" either the consulting engineer or the bureaucracy. My recommendations on this problem are: 1 A % 1. Establish a firm fixed % of all grant programs for planning and administrative costs regardless of population of the community involved. figure would provide samll local governments with foreknowledge of funding available to assist in the payment of the additional planning/administrative costs entailed in all federal/state programs. These funds should be made available on an "up front" basis - of course, contingent upon agency acceptance of a local grant request for federal/state assistance. 2. Establish for all agencies a standard engineering services contract that clearly sets forth responsibilities and compensation factors for contracted engineering services. To my knowledge the best example is: FmHA, Form FHA 44219 (Revised 7-21-67), which is specific as to responsibilities and FmHA in this contract specifically establishes compensation limits - there is no leeway for project design change, scope increase, etc., without prior consultation and approval by FmHA, local government concerned. 3. Standardization and simplification of administrative and financial reporting regulations, basic assurances relating to civil rights, discrimination, equal opportunity, utilization of small and/or minority businesses, pecuniary Page -3 September 21, 1977 responsibilities etc., are spelled out in the U. S. Code, why the necessity of each agency re-working and requiring a different reporting format to comply with one basic law; an example the HUD - CDBG program grant agreement - 15 pages in length contains 46 references to various Public Laws, CFR's, USC's, Executive Orders, and the Housing and Community Development Act of 1974 - none of which say anything not contained in the codes of the Law other than being couched in HUD terminalogy. Recommendation one simplified standard compliance form for all agencies to be signed and executed by the responsible local governmental officials. 4. Without doubt HUD is the epitomy of repetitious bureaucratic paper work, an example is the completed 27 page "grantee performance report" (enclosure 2) concerning HUD Project B-75-DN-35-0003 Water Systems Improvements (Drilling of 2 Wells) as you may note from the enclosure the vast majority of information requested concerns "housing" which by the wildest stretch of the imagination cannot be associated with drilling water wells. On February 9, 1976 the 1st copy of this report was forwarded - on May 11, 1976, a 2nd (revised form) copy with the identical information was forwarded as a part of an application for a paving assistance grant on January 5, 1977 the same essential information was forwarded as a part of an application for Storm Drainage and Paving Assistance - on March 11, 1977 another complete 27 page copy (the 3rd) was forwarded, the only change in information context was that the project had been completed. All of the information requested directly relating to drilling the wells could have been answered by a half page letter report. Recommendation: elimination of repeatitive reporting requirements for the same information, particularly information unrelated to the project in question. 5. Another quaint habit of the bureaucracy is ignoring their own regulations while at the same time demanding alsolute compliance by local governments an example is the attached correspondence (enclosure 3) from the city to HUD, Dallas - to date no reply has been received. 6. The continuous revision of rules and regulations (HUD and EPA are the worst offenders) which are primarily administrative and by and large do not alter the basics of a program, impose a considerable amount of unnecessary paper work on a small community, and on the surface appear to be a bureaucratic "make work" operation rather than an attempt to improve program content. 7. Attachment #4 is a sequential report of funding for the Wastewater Facilities project, which I do believe will indicate the financial uncertainties faced by a local government in paying their bills when due. I wish to express my gratitude to you for taking time out of a busy schedule to look at this problem. I do appreciate the fact that this letter with all of its enclosures is VOLUMINOUS, but do not know a better way to illustrate the magnitude of paper work requirements faced by Truth or Consequences and hundreds of small towns across the nation. Page -4 September 21, 1977 In conclusion, I do hope this will be of assistance to you in your continuing efforts to reduce federal/state red tape. My sincere best wishes to you for the future. Senator DANFORTH. What I would like to do for the balance of the witnesses is to set up three panels and then have representatives from each of the groups present in a panel whatever statements you would like to present. Then we can have a single question-and-answer session and proceed in the same manner with panels 2 and 3. I would like to have on panel 1, if these people are here, Robert Robinson of the National Association of Towns & Townships; Francis Kuntz of the National Association of Counties; and Ferd Harrison of the National League of Cities. Senator DANFORTH. Shall we go from left to right. TESTIMONY OF A PANEL CONSISTING OF ROBERT R. ROBINSON, Mr. KUNTZ. Yes, Senator, I would be happy to begin this morning. I am Francis L. Kuntz, county commissioner from Elk County in Pennsylvania. I serve on the NACO Rural Affairs Committee, which is responsible for recommending rural policy to our national organization. First of all, I would like to thank you, Senator, and members of your committee, for giving me the opportunity to be here this morning and to comment on some of the problems which face our rural communities. I will try not to repeat some of the instances which have been cited by the previous speaker other than to reinforce, perhaps, the critical situation that the small rural communities face and the municipalities within those small rural counties. The high cost of administering and making for Federal application grants, I think, is one of the paramount problems and one of the paramount reasons why small communities do not avail themselves of funding grants to any great extent. Most of the small rural counties, I think, are forced to hire professional people-consultants and engineering firms, if you willto take care of the absolute maze of material and information that is required in the various applications for Federal grants. The mere fact that small communities are small does not give them the opportunity to have on their staffs the expertise the professional people to put these applications together. This one item, I think, deters a lot of small communities from availing themselves of Federal grants. Another item, which I think is significant, is that in many instances, one of the eligibility requirements for a number of grants is the unemployment figure which is current at a particular point in time. I should like to point out for the information of your committee that in most instances the unemployment figures used are those sup |