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The city of Richland feels that it will be self-sufficient. We are not asking for annual assistance payments, but we would like the community to know and I know the Commissioners are aware of itthat if there is a substantial cutback of which we have had small ones to date at the Hanford plant, if there is a substantial cutback, we would like AEC to recognize that we might have need for financial assistance.

Representative HOLIFIELD. Do you agree that the proposed legislation fully authorizes the AEC to reevaluate its assistance payments to Richland if there is a significant curtailment of operations?

Mr. SULLIVAN. That is my understanding of what the AEC recommendation is.

Representative HOLIFIELD. I think that is our understanding, also.
Mr. Jackson, do you have any further questions of the Mayor?

Senator JACKSON. No. I think his statement covers the situation pretty well, unless the mayor has something additional on this matter.

Mr. SULLIVAN. I just would like to introduce for the record a resolution passed by the Tri-City Nuclear Industrial Council, which was formed in the tri-city area and which has been instrumental in diversification efforts, which have been successful to date, endorsing our civic center project.

Representative HOLIFIELD. Without objection the resolution will be received.

(The resolution referred to follows:)

RESOLUTION

A resolution endorsing the proposed civic center project of the City of Richland and any assistance toward it by the U.S. Atomic Energy Commission.

Whereas the Tri-City Nuclear Industrial Council has been committed to the diversification effort and industrial development of the Tri-City area : Now, therefore, be it

Resolved by the Tri-City Nuclear Industrial Council, That the proposed civic center project in the City of Richland would be of considerable assistance in the cultural and recreational development of the Tri-City area and would help in the tourist and convention plans of the area; be it further

Resolved, That any assistance given by the U.S. Atomic Energy Commission toward the fulfillment of this project would, in our estimation, aid immeasurably toward the diversification effort we are all striving to achieve; be it further

Resolved, that this Resolution shall take effect immediately.

Passed by the Tri-City Nuclear Industrial Council at a regular meeting on the 22nd day of August, 1967.

R. F. PHILIP, President. Senator Jackson. Mr. Fuller, do you have anything to add to the mayor's statement ?

Mr. FULLER. I have nothing.

Senator JACKSON. We will call on Mr. Clark, superintendent of school district No. 400.

Mr. CLARK. I defer to Mr. Diettrich.

Mr. DIETTRICH. Mr. Chairman and members of the committee, as our testimony will be put in the record in total, I will not read it, but I would like to read our concluding paragraphs to you, which I think sums up our position.

I think the testimony as presented will point out to you our differences with the sums of money which the Commission has more or less tentatively recommendedma remark which was mentioned earlier in their conversation. [Reading:]

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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 is 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 "guess-timations" 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 Fou desire.

Representative HOLIFIELD. Senator Jackson.
Senator Jackson. I have a couple of questions.

Mr. Diettrich, I wonder if you could clarify the condition of the existing school structures in Richland.

Mr. DIETTRICH. Most of the school structures in Richland were built in the early 1940's as temporary structures. They are substandard br State or Federal codes. They are overcrowded at the present time. They are in dire need constantly of rehabilitation in order to keep them running

The cost to the district in maintenance on these structures is high. We sincerely feel that this money should be employed in developing an educational program rather than keeping some ancient buildings feasibly useful to the students.

Senator Jackson. You say you are behind other cities of comparable size? Mr. DIETTRICH. Yes, sir.

Senator Jackson. There is no question about that. Have you had a building program going on at all?

Mr. DIETTRICH. We have not had funds for a capital outlay building program. We bonded our district to its fullest capacity to make an addition to the high school some several years ago.

Until 1977 this bonding capacity will not be reopened-our bonds will not be retired, I should say.

Senator Jackson. That is a very helpful statement.

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LEGAL LIMITATION ON BONDING LEVEL

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Mr. DIETTRICH. It might be interesting to note, Senator, that it is
different from the Oak Ridge situation. We can only bond ourselves
to 10 percent of our assessed valuation, which limits us.
Representative HOLIFIELD. Is that a State law?
Mr. DIETTRICH. Yes, sir.
Representative HOLIFIELD. You are at that limit?
Mr. DIETTRICH. We are at the maximum or close to it.

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Representative HOLIFIELD. Who made the school district study for Richland?

Mr. DIETTRICH. It was made by the U.S. Office of Education, Mr. Gardner.

Representative HOLIFIELD. Was that at the request of the AEC?

Mr. DIETTRICII. The Atomic Energy Commission, Washington. I have that in my report to you.

Representative HOLIFIELD. Your bonding capacity cannot be increased until the present bonds are retired in 1977?

Mr. DIETTRICH. We can increase slightly, but not enough to go into any capital program of any magnitude.

As our tax base increases, our bonding capacity will increase. But it is a slow process.

Representative HOLIFIELD. Is that still controlled by the 10 percent requirement ?

Mr. DIETTRICH. Yes, sir. Of course, the amount of the bonds that are retired which are outstanding

Representative HOLIFIELD. Do you know the basis on which the AEC estimated the capacity of the present educational plant?

Mr. CLARK. Modifications of the estimates provided by State and Federal standards, differences in interpretation.

Representative HOLIFIELD. You say on page 7 that the amount that the school district asks for is much less than the supporting Federal agencies have diagnosed as their estimated minimum based on maximum 1967 costs. Will you please explain that?

Mr. CLARK. The cost of replacement as reported by representatives of the U.S. Office of Education and representatives of the State Department of Public Instruction in Olympia was $11 million 500-someodd thousand.

The district's estimate of this need was $11,100,000-plus. We anticipate we can raise approximately $3 million through local bonding and State matching funds, leaving a balance requested by the district of $8 million 800-some-odd thousand-as compared to the AEC proposal of $5,600,000.

Senator Jackson. Because of the highly scientific and technical nature of the work at Hanford, Richland has a per capita population of persons with doctorates that is higher than any city of comparable size in the West.

A quality public school system is vital in the effort of the AEC and its contractors in attracting the best possible people to serve in the positions there that so importantly support our Government programs and our national security.

I know that the Richland School District is making an excellent effort in providing quality education for the young people of the community-most of them sons and daughters of the employees at Hanford. There is no question that this quality must be maintained. This is in the interest of both the local community and the Nation, which draws upon the Hanford complex for many important contributions to the nuclear field.

Mr. Diettrich, in his very fine statement, pointed out that the community is willing to face up to its responsibilities. He told us of the success—by a 70-percent vote-of this year's levy to provide for main

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tenance and operation of the district. All of us in politics can certainly
respect such a fine result at the polls.

The discrepancy of more than $3 million between the AEC and the
school district's thinking on the needs of the district is a sizable one.
I would appreciate some clarification of this difference.

Mr. TROSTEN. Mr. Holifield, we have a series of questions for the
Atomic Energy Commission representatives based upon the school
district's statement, and on certain other matters, which I will submit
to the Atomic Energy Commission for the record.

Representative HOLIFIELD. Without objection the questions and an-
swers will be included in the record at this point.
(The documents referred to follow:)

CONGRESS OF THE UNITED STATES,
JOINT COMMITTEE ON ATOMIC ENERGY,

Washington, D.C., August 24, 1967.
Mr. R. E. HOLLINGSWORTH,
General Manager,
U.S. Atomic Energy Commission,
Washington, D.C.

DEAR MR. HOLLINGSWORTH : In connection with the Atomic Energy Commis-
sion's testimony on August 24, 1967 concerning an extension of financial assist-
ance to Oak Ridge and Richland (S. 2220; H.R. 12087) the Committee would ap-
preciate responses to the following questions concerning the City of Richland
and the Richland School District :

1. What was the basis for AEC's calculations that AEC should pay 40% of the
bond and interest costs for a proposed civic center for only five years after 1969?

2. If the AEC projections as to the size of the City's tax base do not ma-
terialize, would AEC be willing to reconsider the amount of its assistance pay-
ments to the City to help pay for the civic center?
3. Under what legal authority would the AEC propose that the Horn Rapids
Triangle land be transferred to the City? What would be the terms and condi-
tions under which this property could be transferred? Could it be donated ?

4. In the event of a significant curtailment in the operations of the Hanford
plant, would the Commission reevaluate its plans for financial assistance to the
Richland community, as presented to the Joint Committee on August 24th?

5. What was the basis for the almost 40% cut in the School District's request,
which the AEC has made?

(a) Since the School District's request was apparently supported by com-
petent studies, did the AEC perform any further analysis which justified
the substantial reduction in the request?

(6) Was the cut made simply for budgetary reasons?
(0) Did AEC properly take into account the bonding capacity of the
School District-specifically the fact that the fission product conversion and

encapsulation facilities proposed by Isochem, Inc. is not going to be built?
In addition please inform the Committee if the AEC has received the views
of the Bureau of the Budget concerning the level of assistance payments to be
made to the City of Oak Ridge, and if so, what these views are.
Thank you for your assistance.
Sincerely yours,

JOHN T. CONWAY,

Exectuive Director.

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U.S. ATOMIC ENERGY COMMISSION,

Washington, D.O., September 7, 1967,
Mr. JOHN T. CONWAY,
Executire Director, Joint Committee on
Atomic Energy, Congress of the United States.

DEAR MR. CONWAY: During the Atomic Energy Commission's testimony on
Angust 24, 1967 with regard to extending the Commission's authority to provide
financial assistance to the communities of Oak Ridge and Richland, the JCAE
indicated that several written questions would be submitted to the Commission.
We are pleased to respond to those questions which were transmitted to the

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Commission on August 24, 1967. Our response is contained in the first enclosure to this letter which, for your convenience, also repeats each question.

Also, enclosed is a copy of the letter from the Bureau of the Budget to Chairman Seaborg dated July 27, 1967. This is furnished in response to your question as to the views of the Bureau of the Budget with regard to the AEC proposal. If we can be of further assistance in this matter, please advise. Sincerely yours,

DONALD C. KULL, (For General Manager).

REPLY TO QUESTIONS CONTAINED IN AUGUST 24, 1967, LETTER FROM

EXECUTIVE DIRECTOR, JOINT COMMITTEE ON ATOMIC ENERGY 1. “What was the basis for AEC's calculations that AEC should pay 40% of the bond and interest costs for a proposed civic center for only five years after 1969?"

The 40% rate of contribution was originally suggested by the City for AEC participation during the present assistance period which expires in 1969. Inasmuch as it is roughly proportional to the extent to which the City's assessed valuation per capita is below that of comparable Washington cities, it is believed to be a fair basis for AEC's participation at this time. If AEC's eventual withdrawal of this particular form of assistance is to be accomplished without adverse effect, the tax base would need to expand by approximately 40%. This would, then, mean that the individual taxpayer's tax rate would not be increased when the AEC contribution is eliminated; and this has been the AEC's intent in arriving at a suitable date to terminate this contribution. We believe that extending this assistance through 1974 achieves that objective.

The City's tax base in Calendar Year 1967 was approximately $23,000,000. A 40% increase in this base would be $9,200,000 or a revised total of $32,200,000. We examined the feasibility of achieving this growth using three different approaches.

The first approach was based upon the City's own projections. The Public Law 221 Study Committee for the City of Richland estimated future Richland values as follows:

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Since the City's actual value in 1967 had already reached the 1969 "low" valuation level, as estimated by the Study Committee, it seems reasonable to assume that, by 1972, the City will also have significantly passed the $27,200,000 "low" estimate of the Study Committee report. This would mean that, by 1975 and using the City's conservative case, the City should at least be very close to the $32.2 million level required to offset the termination of the 40% AEC participation.

A second approach utilized data on projected assessed valuations from the Richland School District's study of the need for future assistance. Using the District's percentage increases and the City's 1967 assessed valuation, the growth of the City's tax base, in thousands would be.

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