Hon. Pete V. Domenici, U.S. Senator from the State of New Mexico..‒‒‒ Robert R. Robinson, executive director of Michigan Townships Associa- tion, president, National Association of Towns and Townships; Francis L. Kuntz, Elk County commissioner, Ridgeway, Pa., National Associa- tion of Counties; and Ferd L. Harrison, mayor of Scotland Neck, N.C., David B. Walker. Assistant Director; Carl W. Stenberg, Assistant Direc- tor; and Michael C. Mitchell, Federal Relations Associate, Advisory Com- mission on Intergovernmental Relations, a panel__- Deirdre Riemer, staff director for the committee on Executive management and Fiscal Affairs of the National Governors' Association; and Robert Cronson, auditor general of Illinois, accompanied by Jonathan Gaciala, associate director of council of State governments, on behalf of the State Letter from Quentin M. Drunzer, city manager, Truth or Conse- quences, N. Mex., September 21, 1977- (111) Senator Danforth's introduction of the "Small Communities Act of 1978," Page Analysis of major statutes and Federal Grant-In-Aid programs affected by title I of a draft bill entitled "Federal Assistance Paperwork and Regula- tion Reduction Act of 1978," by Kathleen Shea Swendiman, legislative SMALL COMMUNITIES ACT OF 1978 WEDNESDAY, AUGUST 2, 1978 U.S. SENATE, SUBCOMMITTEE ON INTERGOVERNMENTAL RELATIONS, COMMITTEE ON GOVERNMENTAL AFFAIRS, Washington, D.C. The subcommittee met at 9:37 a.m., pursuant to notice, in room 6202, Dirksen Senate Office Building, Hon. John C. Danforth presiding. Present: Senator Danforth. Staff Present: Alvin From, staff director; Harrison Fox, assistant to Senator Danforth; Therese Jolly, research assistant; and Lucinda T. Dennis, chief clerk. OPENING STATEMENT OF SENATOR DANFORTH Senator DANFORTH. The constant complaint of local government officials is that Federal grant programs are more trouble than they are worth. The amount of money available from any one program is said not to justify the expenditure of man-hours and resources necessary to qualify for the program. Although large cities are able to hire staff for the express purpose of competing for Federal grants, small communities find it difficult to do so. As far as the country as a whole is concerned, this is no small problem, since more than 60 percent of all Americans live in communities of under 50,000 people. The Small Communities Act was introduced for the purpose of helping local governments better deal with the Federal bureaucracy. This hearing provides an opportunity for interested persons to comment on their experience in dealing with Federal grant programs and to offer their opinions as to the effectiveness of the Small Communities Act in addressing these problems. Some of the issues that I hope this hearing will raise are the following: (1) Currently some 500 Federal assistance programs are available to serve the needs of State and local governments. The theory of the Small Communities Act is that this is an excessive number of programs and that a substantial effort should be made to consolidate them. The relevant questions are: (a) Does the number of Federal assistance programs now in existence in itself make it difficult for small communities to master their purposes and their requirements? (b) Are these programs so fragmented that the funds available under each to any specific community are so small in amount as not to justify the effort to apply for them? (1) (2) Typically, local governments are required to complete extensive forms demonstrating their compliance with certain Federal standards such as affirmative action, community participation and labor standards. Sometimes the same ground must be covered time after time in applying for funds from differing programs. The Small Communities Act proposes to standardize the requirements themselves and to make it possible for communities to certify that they have met these requirements without the need of providing elaborate documentation that they have done so. The questions are: (a) How burdensome are the requirements for meeting Federal standards and applying for grants? (b) What amount of repetition is required of local governments in providing substantially the same information to a variety of agencies? (3) Once a local government is successful in its application for Federal funds, it finds that it is necessary to comply with a variety of regulations including multiple audits of their operations. The Small Communities Act would vest the Office of Management and Budget with power to modify or even waive some of these requirements where they apply to small communities. The issues here are: (a) The extent to which auditing and bookkeeping requirements imposed by Federal agencies are a burden on local governments, and (b) The feasibility of impowering the Office of Management and Budget to reduce or eliminate some of these requirements. (4) It is said that one of the problems with Federal grants is that they are unpredictable. It is difficult for local governments to plan their futures if the existence of today's Federal programs will be in doubt tomorrow. The Small Communities Act provides for appropriating funds a year in advance. It also gives small communities the option of averaging past years' receipts from categorical and block grant programs, transforming them to what amounts to revenue sharing and receiving a predictable amount for a period of 5 years. Here the issues are: (a) To what extent is unpredictability in the receipt of grants a problem to local communities, and (b) Would the cashing out of existing programs be used by local communities even if it meant the freezing of the total amount of receipts? I very much appreciate the excellent work of the staff of the governmental affairs committee in putting together this bill and in preparing for this hearing. Also, I appreciate the time that is being taken by the witnesses who are good enough to appear today in the preparation and presentation of their views. Without objection, I will have inserted in the record at this point statements by Senators Muskie and Sasser on this bill, S. 3277. [The statements of Senators Muskie and Sasser follow:] PREPARED STATEMENT OF SENATOR MUSKIE Today, the Subcommittee on Intergovernmental Relations will hold a hearing on S. 3277, the Small Communities Act of 1978. The title of the bill alone indicates that this legislation will be of interest to people in Maine. My home State contains no large cities, according to the common understanding of the term. Only one community in the State, Portland, has a population over 50,000. Many communities have very small full-time staff. Many have no full-time manager or executive. The officials of these communities are willing to work hard, and are interested in imaginative approaches to the problems their people face. A grant structure which by its very bulk and complexity is weighted toward large cities and full-time "grantsmen" too often stifles local initiative, discourages officials of small towns, or simply fails to inform small communities of the avenues for help which are available. Maine's experience with those programs which are readily accessible to small communities have been excellent. These communities ought not be denied their proper share of Federal help as a result of Federal neglect, unnecessary regulations or needless rigidity. The purpose of this bill is to make it easier for small communities to participate in the federal grant system. That is one I support. I commend Senator Danforth for his efforts on this legislation and I trust this hearing will begin an important debate in the subcommittee. PREPARED STATEMENT OF SENATOR SASSER Mr. Chairman, I have been concerned about the needs of small cities for quite a while. Nearly two-thirds of the people in Tennessee live in smaller towns or rural areas. I grew up in rural West Tennessee so I am familiar with the problems of housing, education and low per capita incomes in many small cities. Last year I introduced an amendment to the 1977 Housing and Community Development Act to set up a small cities task force to design a new national policy for federal funding patterns for small cities. One of the major problems in being responsive to the needs of small ciites in the lack of adequate census information about small cities and towns; this information is the basis for the distribution of federal funds. The Small Cities Study which will be presented to Congress in October is being conducted by the Department of Housing and Urban Development, the Census Bureau, the League of Cities and the Brookings Institution. The study will recommend steps to improve the data available about small cities; suggest means of reducing duplication in government programs; and consider the relevant differences and similarities between small and large cities, particularly in the areas of housing growth, development patterns, education, energy needs and social development. The study will be valuable to us as we look at the problems of small cities being discussed here. I would like to commend the Chairman for holding these hearings. The discussion today will no doubt serve to focus more attention on the unique and unaddressed problems confronting small and rural communities-problems which certainly concern me. I look forward to hearing the testimony presented today. Senator DANFORTH. I am delighted to have appearing first Senator Domenici, who has given attention to this question and has expressed his interest in this bill. TESTIMONY OF HON. PETE V. DOMENICI, U.S. SENATOR FROM THE STATE OF NEW MEXICO Senator DOMENICI. Thank you very much, Mr. Chairman. I will take but a few moments because I know that the list of panelists is a very distinguished list, and I am certain that the league, the counties, and others that are going to appear will offer excellent testimony about your bill and the need for it. I have a prepared statement. I would just ask that you make it a part of the record, at the conclusion of my testimony, and I would just like to talk with you and at the record for a bit. Senator DANFORTH. Fine. Senator DOMENICI. Mr. Chairman, if I were to have kept for the last 3 years a list, which I did not do, and I am only going to cite 1 |