LEASE OF RAND-M'NALLY BUILDING Senator MAGNUSON. Now you have $2 million for the Rand-McNally Building. Mr. BOUTIN. This is a building that we were leasing in Chicago. We had a rental on it that was judged by the General Accounting Office to be too high. In the meantime we had made substantial improvements in the property at our own expense and then condemned. the title. So it was vested in the United States. We estimated a a total of $3 million would cover the entire cost. This has gone through two stages of court proceedings, and the court has ruled that the fair value to the owners is $4,825,000. We just did not have the money available. We had appropriated back in 1956, I believe, $3 million; and with the accumulation of interest and the balance of the principal payment, an additional $2,703,000 is needed. The owners have gone to the courts, and the courts, in turn, have gone to the U.S. attorney and in effect said either the Government pay the bill that has been determined by the court or get out of the property. The Government is using this building exclusively. Senator MAGNUSON. Will you put in the record the number of square feet? Mr. BOUTIN. I will be happy to. Senator MAGNUSON. And the cost per square foot. If you have some information as to prevailing rates in the area, the cost per square foot. Mr. BOUTIN. Very good. May we supply that for the record? Senator MAGNUSON. Yes. (The information referred to follows:) RAND MCNALLY BUILDING Gross area: 600,000 square feet. Net assignable area: 485,000 square feet. Court award of $4,825,000 represents a unit cost of $8.04 per square foot gross area, or $9.95 per square foot net area. Rental of comparable space in the Chicago area is currently costing about $2.50 per square foot per annum exclusive of the cost of operation and maintenance. Senator HOLLAND. Is this a procedure where you took possession at once or where you were waiting the final judgment before you decided to go one way or another? Mr. BOUTIN. We took the property at once. We have been in there since 1951. Senator HOLLAND. I understand. That is under lease? Mr. BOUTIN. June 18, 1956, is when we took title to the property. Senator HOLLAND. In other words, it was a taking procedure? Mr. BOUTIN. Yes. Senator HOLLAND. Now you have to meet the judgment of the court? Mr. BOUTIN. Yes, sir. Senator HOLLAND. This is like any other judgment. HOUSING AND HOME FINANCE AGENCY OFFICE OF THE ADMINISTRATOR STATEMENT OF SIDNEY H. WOOLNER, COMMISSIONER; ACCOMPANIED BY DOROTHY BOYCE, DIRECTOR, ADMINISTRATIVE MANAGEMENT; AND NATHANIEL J. EISEMAN, ACTING AGENCY BUDGET OFFICER PUBLIC WORKS PLANNING REVOLVING FUND Senator MAGNUSON. Housing and Home Finance. Mr. Woolner is here. I note that the Administrator has withdrawn the two items requested for the Public Housing Administration. Now, you have a new supplemental request, in Senate Document No. 83, for $2 million additional for the public works planning revolving fund. We will place the estimate and justification in the record, and Mr. Woolner, you can proceed with your statement. (The information referred to follows:) SUPPLEMENTAL ESTIMATE (S. Doc. 83) "HOUSING AND HOME FINANCE AGENCY "OFFICE OF THE ADMINISTRATOR "PUBLIC WORKS PLAYING FUND "For an additional amount for the revolving fund established pursuant to section 702 of the Housing Act of 1954, as amended (40 U.S.C. 462), $2,000,000.” This supplemental appropriation will make it possible to continue to approve applications on an orderly basis for this program of interest-free advances to State and local governments for the planning of specific public works without waiting for funds to become available from repayments or from fiscal year 1963 appropriations. The level of approvable applications has been higher than anticipated and the amounts of repayments of prior advances becoming available are now estimated to be about $1 million lower than was originally contemplated. HOUSING AND HOME FINANCE AGENCY COMMUNITY FACILITIES ADMINISTRATION APPROPRIATION LANGUAGE "HOUSING AND HOME FINANCE AGENCY "Office of the Administrator "Public Works Planning Fund "For an additional amount for the revolving fund established pursuant to section 702 of the Housing Act of 1954, as amended (40 U.S.C. 462), $2,000,000.” Summary Available, Independent Offices Appropriation Act, 1962 (Public Law 87-141). Supplemental, Senate Document No. 83, dated Apr. 3, 1962.......... Revised estimate_ $7, 000, 000 2, 000, 000 9, 000, 000 JUSTIFICATION As indicated in Senate Document No. 83, there are three primary reasons for the pending supplemental request: (1) The level of approvable applications received by the Agency is higher than was anticipated in the original budget program for the fiscal year 1962; (2) The amount of receipts through repayment of advances is lower than was anticipated in the budget; and (3) The availability of the additional $2 million requested will permit approval of advances on an orderly basis for the balance of the fiscal year. In addition, it would be unfortunate to interrupt operations in the public works planning program at the same time that the President is seeking to place emphasis on public works programs, including advance planning of public works, as a means of mitigating unemployment problems in many areas of the country. Introduction The public works planning advance program, authorized by section 702 of the Housing Act of 1954, as amended, was enacted to permit the Federal Government to provide interest-free advances to States, municipalities, local public agencies, and metropolitan areas and regions in order to encourage them to prepare and maintain a current and adequate reserve of planned public works, which could readily be placed under construction, as well as to promote economy and efficiency in planning and building public works. Summary of program results Planning advances amounting to $45.9 million were approved through the end of fiscal year 1961. The construction cost of facilities to be built based upon these plans is estimated at $2.8 billion. Under the program for the current year and that proposed for fiscal year 1963, net approved advances will reach $78.9 million representing a total estimated construction cost of over $4.8 billion. Public works planning fund Through successive enactments in the Housing Acts of 1954, 1955, and 1961, the Congress has provided a total authorization for appropriations to the Public Works Planning Fund of $58 million. Appropriations to date have amounted to $43 million and the budget for fiscal 1963 assumes a further appropriation of $13 million-bringing total appropriations to $56 million and leaving an unappropriated authorization of $2 million. Thus, the current supplemental request, if approved, would exhaust the existing statutory authorization. Repayment of advances The revolving fund also receives repayments of advances which are then available for new approvals. The applicant community or local public agency to which an advance has been made is required to repay promptly when construction is started on a project for which planning funds were advanced. These repayments are made by the applicant community or local public agency to which the advance has been made when construction is started on the project planned with the money advanced under this program. Fiscal 1962 budget program The following table compares the original and revised program for the current fiscal year 1962 (dollars in thousands): The comparison shows that the $2 million supplemental appropriation would be used to offset the estimated $1 million decline in repayments and to increase the net approval level by $1 million. During the first 8 months of the fiscal year through February 28, 1962, repayments received have amounted to $2,680,000 and $1,320,000 of repayments are anticipated for the remaining 4 months of the year. This total of $4 million is $1 million less than the budget estimate. During the 8-month period, net approval of planning advances amounted to $8.7 million. At the present time, the Community Facilities Administration has on hand applications for approval involving some $8 million in advances requested, while the uncommitted balance of funds in the public works planning fund is less than $1 million. Conclusion Approval of the supplemental appropriation request of $2 million for the public works planning fund is strongly recommended, so that the Community Facilities Administration will be in a position to continue program operations without the necessity of imposing artifical restrictions during the latter months of the fiscal year. 1962 PROGRAM LEVEL Mr. WOOLNER. I have a justification here of which I think you have copies. I would like to make several preliminary points. We had begun operations this year at a program level of some $12 million for advances for public works planning. There are the interest-free advances that are used to plan for specific public works. We find now that applications are coming into the agency at a considerably higher rate a little better than 10 percent higher-than we anticipated for fiscal 1962. PURPOSE OF SUPPLEMENTAL REQUEST At the same time the receipts for repayments of advances that have already been made are coming in at a somewhat lower rate. So we are asking now for a supplemental of $2 million, $1 million of which would be to make up the schedule of repayments which, instead of coming to $5 million, will probably only total about $4 million. The second $1 million will increase our net program level from $12 to $13 million. Senator MAGNUSON. Why is this in the category of a new item? Why was not this presented to the House? Mr. WOOLNER. We had not had enough experience at the time, Mr. Chairman, when the supplementals first went into the House. We had been anticipating higher repayments which simply did not materialize this year. So we did not feel we were in a position to make the request at that time. Senator MAGNUSON. We were reminded here today that the House only closed their hearings on March 22. That is only about 10 days ago. EMPHASIS ON PUBLIC WORKS Mr. WOOLNER. At the same time, the President has been placing an emphasis on public works programs, and one of the important factors in any type of emergency public works program would be the plans that are available and in being for projects that would go into construction. Senator MAGNUSON. This has been the situation for a long time. Your statement is correct, but we have realized that for a long time. Mr. WOOLNER. We simply anticipated better results than we have been getting on our repayments. Senator MAGNUSON. That was apparent in your operation for months, was it not? Mr. WOOLNER. No, sir. TIMING OF ESTIMATE Senator MAGNUSON. It showed up in the last 10 days? Mr. WOOLNER. It fell off in January and February, and we are about 3 or 4 weeks in accumulating those figures. So it has been only apparent in the last few weeks. Mr. EISEMAN. Although the House recently closed the hearings, I understand they had an agreement with the Bureau of the Budget sometime before that that they would not accept any new items for this bill. That is why this came to the Senate first. NEED FOR SENATE CONCURRENCE Senator MAGNUSON. What? Do you mean that the House could make an agreement with the Budget Bureau without the Senate concurring? Mr. EISEMAN. I do not think it is that kind of agreement. Senator HILL. They could have an agreement that the Bureau of the Budget would not send up any more supplemental estimates, which would mean the only forum left would be the Senate. Senator MAGNUSON. Maybe we better get an agreement with the Bureau of the Budget, too, and save us all this trouble. Of course, it is true that this has been a program that has been growing. Any beefing, as it were, of public works projects revolves around the planning in this program and the lack of planning in the program would slow up any of these things naturally. PROJECTS READY FOR APPROVAL Mr. WOOLNER. Yes; Mr. Chairman, I would like to add that we have ready for approval today some $1,960,000 in projects. We do not have enough funds available to make such approvals. This is part of our backlog. These projects would be ready to go today if we had the funds. POPULATION AREAS APPLYING Senator MAGNUSON. What is the category of the requests in relation to population areas or urban areas? Is it mainly small communities? It used to be mainly small communities. Mr. WOOLNER. Let me give you some figures. Senator MAGNUSON. Is it still run that way? Mr. WOOLNER. Primarily, yes, Mr. Chairman. These figures are cumulative through November 30, 1961. They represent applications, not necessarily final approvals, but they follow the same general pattern. The total received from the beginning of the program was some 3,500 applications, of which 1,332 were from communities under 5,000 population; another 523 were from communities of 5,000 to 10,000. Communities of 10,000 to 50,000, there were 880. Communities of 50,000 to 100,000, there were 239. There were only 493, or a little less than 15 percent, from communities over 100,000. |