August 15, 1966, from Mayor John R. Sullivan to the AEC (a copy of which is attached).

5. Give particular consideration to the Richland atomic works for location of new atomic energy and other federal programs.

We feel that the continued economic health of the community is to a very large extent tied to the diversification efforts, particularly with research and development in non-defense fields. This diversification should take as many forms as possible and should include the diversification of the Richland atomic works' activities as much as is possible and continuation of the aggressive promotion by the AEC toward locating compatible private industries within the project

area.

6. Disposal of surplus property. We urge the expeditious disposal of surplus land still owned by the AEC in the center of the city. We feel that one of the roadblocks to commercial development has been the delay in getting vacant commercial properties in private hands. We therefore urge the Commission move as rapidly as possible on the disposal of the old women's dorm area and whatever part of the 700-Area they consider surplus.

7. Provision for future review. All our projections, as previously stated, have been based on the assumption that the Richland AEC activities will remain at the present level. If this is not the case, we need to be informed as soon as it is possible, and if there is to be any substantial reduction in the plant operations, we request that provisions be made now for a review of the City's financial position by the AEC and the Joint Committee with representatives of the City of Richland. And that such a necessity for review be included in any additional legislation by Congress with a recognition therein that the AEC and Congress recognize the possibility of additional financing to the City in the event of substantial cutbacks within a period of ten years from the termination of Public Law #221.

We believe these requests to be justified under the provisions of Public Law #221, and believe that with these actions taken the assistance payments can be discontinued on June 1, 1969.

Very truly yours,

MURRAY W. FULLER,

City Manager.

Mr. A. M. WAGGONER,

Assistant Manager for Administration,

CITY OF RICHLAND, Richland, Wash., August 15, 1966.

U.S. Atomic Energy Commission, Richland, Wash.

DEAR SIR: As you may no doubt know the City of Richland is making plans for the construction of a conference hall with banquet and exhibition facilities and a community youth and adult recreation facility. The plans have now been completed and the facilities listed, or others, may be included in one or more structures.

The City Council feels that the existing Community House, deeded to the City by the Federal Government at the time of incorporation, was and is sorely inadequate. For instance, it is only a part of a building and the remaining portion is owned and operated as a tavern. In addition, we feel strongly that as part of the diversification process of our city, we need a structure of this type for the many technical groups that meet, or would meet here if the accommodations were adequate. Our architects have given us a preliminary figure of approximately $1,000,000 for such a project.

In addition, our Richland Library Board is making plans for a new City Library and have written the City Council concerning the problem of financing the same. I am including a copy of their letter and information sheets and will not reiterate what is contained therein, except that the City Council has wholeheartedly endorsed their project.

Adding the cost of the library to the other facilities planned, we have a gross figure of approximately $1,800,000, which would have to be funded by a general obligation bond issue. The issue has to be submitted to a vote of the people and this will be done as soon as possible-perhaps during the spring of 1967.

Taking the 1967 estimated assessed valuation of our community of $23,000,000 the millage assessed per dollar of property value to each property owner will be 5.5 mills. This is because of our lack of an adequate tax base as our sole industry until diversification is successful is the non-taxable Richland Atomic

84-223-67-9

Works. We feel that such a millage added to the 1966 millage of 62.52 would be unwarrantedly burdensome to our people at this time.

To give you some figures to substantiate this position, it can be pointed out that our neighboring community of Pasco has an assessed valuation per capita of $1600, while ours is $714. An average of the assessed valuation of all the firstclass cities of our State is $1370. To us, these figures justify the wisdom and purpose of Public Law #221, which allowed your agency to aid us by sharing the annual costs of funding bonded indebtedness for necessary capital improvements.

Therefore, we would like your agency to inform us if it would pay a proportionate share of the annual bond funding of these projects between now and the proposed termination of Public Law #221 in June of 1969. It is our understanding that this presently is being done for the Richland School District No. 400 and for the City of Oak Ridge, Tennessee, which recently passed a bond issue for $4,300,000. We feel that a proportionate share for your agency to contribute would be forty percent.

We would also like your agency to consider what it will recommend to the Congress concerning the possible cessation of payments under Public Law #221 in 1969 insofar as the projects contained herein are concerned. It is our understanding that the law provides that the Atomic Energy Commission may recommend that such payments continue for a definite period after 1969.

This week our special committee created to focalize the community's attitude on this problem has made its final report. The City Council has not had the opportunity to study the report as yet, but we will do so and report our position on the matter no later than September 15.

However, as one of the items to be included, it would seem reasonable to us at this time that the Atomic Energy Commission consider recommendation of payment in full of the remaining obligation on the proposed bond issue as a lump sum payment upon termination of the payments under that law. Certainly Richland has worked hard at reducing its dependence on the federal government since 1958, and the diversification effect has been pointed to with pride by your agency among others. Keeping taxes at a reasonable level will be of great help to the furtherance of that diversification.

Sincerely yours,

JOHN R. SULLIVAN, Mayor.

TESTIMONY PRESENTED TO MEMBERS OF THE SUBCOMMITTEE ON COMMUNITIES OF THE JOINT COMMITTEE OF ATOMIC ENERGY

(By Karl Diettrich, Member of the Board of Directors, Richland School District No. 400, Richland, Wash.)

We appreciate the opportunity to present thinking and position of Richland School District No. 400 in relation to the recommendation made by the Atomic Energy Commission. We wish to emphasize that the district desires to be independent and is, we believe, willing to make maximum effort possible to support its school system. As evidence of this, we call your attention to the fact that in the past few years the district has bonded itself to capacity to provide needed facilities. It has passed special levies, with the exception of last year, to support the maintenance and operation of the schools on a current basis. This year we received a 70% majority endorsement by the largest turnout of voters in the history of the district for the highest levy ever to be proposed to the voters for maintenance and operation in the district. Even last year, when the levy failed. more than 58% of the voters endorsed the district's request. The State of Washington requires a 60% majority to pass such a levy. It is the belief of the Board that a district should use those resources available to them at the local and State level before asking for Federal assistance. This includes bonding to legal capacity. However, after this is done, we do believe that in a situation like ours, the Federal Government has the responsibility to leave the district in a position to continue the same level of education provided the residents of the area as when the Atomic Energy Commission was assuming the major responsi bility for the district's operation. This is a belief shared by the Atomic Energy Commission and I quote from its Report on Future Assistance to the Communities of Oak Ridge, Tennessee and Richland, Washington, page 18:

Their short-term school construction requirements, however, are substan tially in excess of this bonding capacity, primarily, for replacement of the wartime structures inherited from the AEC. Considering the length of time

required to retire bonds, the Richland School District could not catch up with these current requirements within any reasonable or useful period of time.

The details of the district's request can be found in the material presented to the Atomic Energy Commission, copies of which I assume are available to members of this committee. If this is not the case, we will be glad to make copies available to you. (See app. 17, p. 255.)

In support of our contention, I quote from the Report of the Richland, Washington School District Study made by Dwayne E. Gardner, Specialist Planning Educational Facilities, U.S. Office of Education and John Hulvey, Consultant Facilities and Organization, Washington State Department of Public Instruction: "The charge for the Study Committee was to determine those facilities the Richland community would need until such time as the community would have financial ability to care for its new needs. This includes: (1) replacement of existing temporary facilities, (2) renovation of existing permanent structures, and (3) additional facilities needed to accommodate enrollment growth to 1978. "1. Nearly all of the growth and financial responsibilities of the Richland School District can be attributed to AEC activities.

2. Even after returning property to individual ownership and to the tax rolls, the AEC has some responsibility in maintaining the excellence of education and adequate facilities necessary to attract and hold competent personnel.

"3. At the time AEC terminates its responsibilities to the Richland School District, all buildings should be of permanent construction and relatively low maintenance.

"4. Since the school district will not have full bonding capacity until August 1, 1977, pupil growth should be projected to approximately the same period of time. "5. AEC should assist the school district in regaining full bonding capacity and accept this responsibility in any termination contract.

"6. All pupils as of August 1, 1977, should be housed in permanent-type construction.

7. AEC should accept the responsibility for construction and replacement up to 1977."

I will also review some of the principles covered in the district's request: 1. The elementary schools in the district, with one exception, were built by the Atomic Energy Commission some twenty years ago as temporary structures. The majority of these buildings are of frame construction. Much of the plumbing is of wartime quality. The buildings are electrically underpowered insofar as meeting the present-day needs. Many buildings of the same vintage in other areas of our community have been demolished and replaced with permanent stuructures. More such buildings are slated for replacement.

2. The conditions of the buildings as they now exist demand a high level of expenditure for year-to-year maintenance. This necessitates using funds for maintenance that could be more advantageously used if applied directly to the instructional program.

3. It is the contention of our local staff that these buildings are not adequate for present-day instructional program. This contention is supported by consultants from the State Department of Public Instruction in Olympia and an educational facilities' expert from the U.S. Office of Education.

4. The Richland School District has a low tax base, ranking 60th of 63 firstclass districts in tax base per pupil, in the State of Washington. The cause of this low tax base is the amount of federally-owned property which is the major source of employment in the district. Government-owned buildings connected with the Hanford Project produce no revenue for the district and cannot be included as a tax base upon which bonding capacity is based. Again, the report of the Atomic Energy Commission confirms this position and I quote: "The long period of Government ownership of commercial and residential properties, and Government management of municipal affairs predetermined many of the basic community characteristics which now affect their financial capacity. One of the most important characteristics is the continued emphasis upon the quality of the school systems at both communities. Good school systems were, and continue to be, essential to attract and retain the technical and scientific talent required for AEC research and production activities. "It is now believed the Richland School District and the City are capable of self-sustaining operations, provided certain one-time costs (principally for school construction) are met by the AEC.

"At both Oak Ridge and Richland, AEC has major investments in plant and equipment; and conducts large and important parts of its programs. AEC and

contractor employment is currently about 13,000 in Oak Ridge and 7,800 at Richland. Consequently, AEC continues to have a vital interest in the quality and strength of each community, and in particular, in the quality of the school systems."

It is true, as diversification takes place this condition should correct itself, but it will not relieve the situation until an indefinite future time.

5. The Government-built housing comes on the tax roll at a low evaluation. This further compounds the low tax base problem faced by the district.

6. Our two junior high schools and one senior high school are currently operating above desirable capacity and an increase in enrollment is expected at these levels.

After careful study of the local situation, district officials came to the conclusion that four of six elementary schools should be replaced. That added facilities, including both elementary and secondary schools should be constructed. The remaining two elementary schools and the three secondary school buildings that are now in use are in need of a full program of renovation.

The cost of this program, as very conservatively estimated, would be $11,160,887. It is further estimated that the local district by 1970 could raise a maximum of $1,900,000 by bonding to its legal capacity of 10% of the assessed valuation. Approximately an additional $380,000 could be secured from state-matching funds, leaving a balance of approximately $8,881,000 which the district has no way of raising. This is the amount requested from the Atomic Energy Commission as a terminal capital grant. The position taken by the district is supported by consultants from the State Department of Public Instruction in Olympia and a representative from the Office of Education, who personally visited and evaluated the Richland schools at the request of the Atomic Energy Commission. In fact, the report from Olympia and the representative of the U.S. Office of Education, estimates the dollar need of the district to be $11,550,000 compared to the $11,180,000 estimated at the local level. The Atomic Energy Commission has recommended a terminal grant for capital construction purposes of approximately $5,600,000. This is approximately three and one-fourth million less than that requested by the district and approximately three and three-quarters million less than recommended by consultants from the Department of Public Instruction in Olympia and the Office of Education in Washington, D.C., who evaluated the needs in the district, and I emphasize, at the request of the Atomic Energy Commission.

The rationale for the Atomic Energy Commission's recommendation, as explained to us, was based upon three factors.

(1) The use of different capacities for the existing plant.

(2) Higher estimates of the bonding capacity of the local district than used by the district in making their request.

(3) The recommending of the remodeling, rather than the replacing of, more of the existing plant.

I will comment briefly on each of these points.

The capacity of the present plant, as rated by the consultants both from Olympia and Washington, D.C., is lower than that used by the district. The district's estimate is lower than that used by the Atomic Energy Commission. It is our sincere belief that the capacities outlined in our request are realistic and practical. The capacities used by the consultants are idealistic; those used by the Atomic Energy Commission too high for present-day educational programs. The higher bonding capacity used by the Atomic Energy Commission was, in part, based upon a scheduled construction of an $8,000,000 facility by Isochem Inc. This plant will not be constructed and hence will not go on the tax rolls. As to the third point of alteration opposed to replacement, we do not question the knowledge of the Atomic Energy Commission's engineering staff as to soundness of building structure; we do question their knowledge of how well the existing structures can be adapted to present-day educational needs and the cost thereof. Our position from this viewpoint is again supported by the survey conducted by the educational facilities' experts requested by the Atomic Energy Commission.

In conclusion, we endorse in principle the proposal presented by the Atomic Energy Commission. The Richland School District wishes to become financially independent but should acquire this independence under conditions that would insure the level of education being maintained as in the past. This admittedly is a high level but in keeping with the type of community created by, and until recently, supported to a major degree by the Atomic Energy Commission. There

is no question that the Atomic Energy Commission will continue to have a major influence on the future of this community. We believe that the amount the district requests is reasonable and justified; that the amount proposed by the Atomic Energy Commission is unrealistic in terms of need.

After several reviewings of the Atomic Energy Commission's intent and the Report of the U.S. Office of Education for Richland, Washington, it would be difficult to reconcile any manner of settlement which would be less than the school district asked for-which is much less than the supporting Federal Agencies have diagnosed as their estimated minimum based on 1967 costs.

We all know that 1968-1969-1970 costs will escalate and that these figures are not concrete but "guestimations" of future capital outlay costs. Certainly some latitude should be allowed for escalation.

We would welcome a review of the district's request by any expert of your choice. Once again we thank you for the opportunity of presenting the position of the district and would be glad to submit to you any additional information you desire.

AUGUST 24, 1967.

Representative HOLIFIELD. Mr. Mayor, will you lead off, please? We will accept your statement in full for the record. Would you like to summarize it in a few words?

Mr. SULLIVAN. Thank you, Mr. Chairman.

To summarize our position, I think basically we start out with the amendment as proposed as being satisfactory with the city.

AEC CONTRIBUTION TO COMMUNITY CIVIC CENTER

As far as the various proposals for a lump-sum payment to the city are concerned, we have one disagreement with the Atomic Energy Commission. That is how much the Federal Government will pay toward the proposed community civic center that Richland will vote on on September 19.

The AEC, in our estimation, has stated that they would pay 40 percent of the bonding cost for a period of 7 years, 2 more years, to 1969, when the present bill expires, and then 5 years after that.

We would like to have AEC or the Federal Government pay 40 percent of the entire cost of the civic center. We will have a 20-year bond issue, $2.3 million. That is one point I would like to make in

summary.

Representative HOLIFIELD. Senator Jackson?

Senator JACKSON. How urgent, Mayor Sullivan, is the civic center building? This is a problem similar to that which I believe they have at Oak Ridge.

Mr. SULLIVAN. The existing community center was built in 1943 and 1944. It has a tavern at one end of it. It is an old, wooden construction. It is a firetrap.

We would like to see a new one. We really need it. It is a basic for our people, a community center.

An additional benefit from it would be that we are getting a lot of people. There are new contractors in town, and they are having conventions and meetings: scientific groups; and this facility as an additional benefit would serve as a meeting place where they could have a convention, which we do not have in the city of Richland as it is right now.

We do feel that the law is fair. We would like for the AEC to go on record a little bit more definitely than they have today with regard to how they are going to construe this additional 10 years.