then be able to fund the community for the first year, make a firm commitment to fund at a certain level for the second year, and a tentative commitment to fund a third year subject to an additional progress review. For the first time, communities would be able to do meaningful detailed planning for intervals greater than twelve months. Years of experience in the urban renewal business have taught us many things including the fact that most developmental planning and execution activities just don't break down into convenient twelve month segments.

We will be the first to acknowledge that getting the cooperation of the House and Senate Appropriations Committees in this departure from annual funding will be no easy task. The mechanism which this bill envisions is very similar to that established by this Committee for the urban mass transit program. To date, we have ont fared particularly well in getting recognition from the Appropriations Committees of the importance of that new funding mechanism, but we continue to feel that such a key improvement must be realized as soon as possible. The Sparkman bill also responds to our concerns about the vagaries of national formulas in this area by instead basing the fund allocation arrangement upon past performances and commitments by interested, active communities. Thus, if the new block grant program goes into effect, communities that are currently involved in the various individual programs would be able to effectuate a reasonably smooth transition into the block grant system without losing any critical momentum that has been generated. Under the bill, HUD would calculate a community's "basic grant entitlement" by averaging what the community has received in the highest three of the past five full fiscal years for each of the various programs to be consolidated into the block grant. This entitlement would serve as a sort of ceiling under which the community would be able to design its plan and its case for full funding. During the second and third years of its program, the community's maximum available grant would expand by 15 percent of the base entitlement.

On the issue of whether Congress should channel Federal dollars according to stated national priorities by designing Federal "strings" to guide the flow of the money, the League of Cities and the Conference of Mayors support the usefulness and importance of having some Federal guidelines. The real issue then has to do with a question of the extent of such Federal strings. Once again, we feel that the Sparkman bill strikes a reasonable balance. In order to receive block grant funds, a community must present HUD with a detailed three-year planhere I quote directly from Section 7 of the bill-“including specific programs for (a) meeting the housing needs of families and individuals residing or working in the community, particularly those families of low or moderate income and b) preventing and eliminating slums and blight and upgrading neighborhood environment."

These are the overriding national goals toward which all communities seeking block grant funds must strive. Within these broad parameters, however, the responsibility is on the community itself to select the approaches best suited to its own particular situation. HUD would not be able to substitute its judgment for that of the local officials on what constitutes the best approach toward solving the city's development problems, except on the broad issue of the furtherance of these national goals.

Thus, HUD's review process would be sharply reduced. Communities would not be restricted in advance to activities within the narrow project boundaries which have often created barriers to rational planning and development. Instead, the community would be required to show progress in providing adequate housing and eliminating slums and blight. To help accomplish this, the bill would expand the list of eligible community development activities while protecting against it becoming a massive public works program. One additional to this list of eligible activities that we would urge upon this Committee is pre-project planning. In order to insure that communities submit carefully drafted and considered block grant applications, it will be important that there have taken place a good deal of advance planning. It would seem to be clearly within the national interest to encourage this preparation prior to filing a formal application and thus, we would hope that it could be included as a reimbursable program activity.

Two additional elements of the Sparkman bill are especially vital to the cities. First, the legislation would establish a commanding link between the community develpoment program and the actual provision of low and moderate income housing. As I have said, the community's application to HUD would indicate the Federal housing funds that would be sought during the next three years. Then-and I quote "upon the approval of any such application the Secretary shall take ap

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propriate administrative action, by reservation of subsidy or loan funds or otherwise, to insure the availability of the Federal assistance required." I cannot stress enough the importance of such a requirement upon HUD. I agree that the lack of adequate funding of the various housing subsidy programs will inhibit the maximum utility of this linkage, but even partial success in expediting the flow of these housing funds would be of inestimable value. The successful progress of a community development block grant program depends in large measure upon the ready availability of other HUD funds not included in the block grant, especially housing subsidies. The extent to which we can establish a link between these two related activities will control our ability to move forward with needed speed.

Another critical advance which this bill makes over the existing statute is in the area of the provision of social services in conjunction with physical development. Mayors involved with Model Cities programs have learned a number of important lessons, one of which is that physical renewal alone is not the answer. In order to really insure that lasting value of a city's and the Federal government's investment in community development, provision of a certain amount of related and supportive social service activity must be made. Under this bill, a community could program up to a maximum of 15 percent of the block grant for supportive "software" activity. In addition, the community could use part or all of its 10 percent of the total block grant which is available for "unspecified local option activities."

On the question of size of the Federal share of the block grant activities, we applaud the decision in the Sparkman bill to increase the Federal share to 90 percent. We also give credit to the Administration for its request for total elimination of the local share requirement. If given the option, we would prefer 100 percent Federal funding. However, we recognize that Congress may wish to retain as much as a 10 percent local share under the program. If there is a requirement for a local share, we urge that HUD be authorized to continue accepting "in kind" activity in place of actual cash. While cities would be able to live with a small requirement which could be met by providing “in-kind" services, a straight cash demand would be onerous.

Finally, I want to highlight two other elements of S. 2333 which would be quite important for my city and for those other cities that have been heavily involved in the HUD programs to date. First, on the question of transition, the bill would allow HUD to separately finance the large backlog in unfunded "amendatories" for existing conventional urban renewal projects through the end of fiscal year 1975. As you know, Mr. Chairman, the existence of this sizable backlog is a direct result of HUD's practice, only relatively recently altered, of encouraging underestimated applications for conventional renewal projects with the clear understanding that subsequent requests for additional funding under the amendatory process were expected. While we are glad that this procedure has now been dropped, we also feel strongly that HUD must honor these past "commitments" by approving all pending amendatory applications and thereby finally complete the financing of these projects.

Lastly, the Sparkman bill attempts to speak to a problem which is very severe in my experience. The review and approval process now in operation at HUD approaches a Byzantine nightmare. No amount of careful contingency planning can prepare a conscientious city for the delays and the bureaucratic "hassle" which are now the rule with HUD. We simply must design a better, speedier method for processing grant applications while retaining some broad national priority control over the use of scarce federal resources.

Under S. 2333, HUD would have to take action on an application for block grant funds within 90 days of its submission. Then, three months before the end of each program year, the community would submit a performance statement and a revised application to HUD. Unless the Department takes affirmative action within 45 days, the application would be considered automatically approved. While I am not native enough to think that we will see a wholesale reform of HUD procedures under this legislation, I am convinced that it will force significant improvements in the present situation.

For all of these and a number of other more technical reasons, we mayors and other city officials, speaking through the National League of Cities and the United States Conference of Mayors, convey our strong support for your bill. Mr. Chairman. We think S. 2333 will result in the kinds of long range reform of the present system that city officials have been seeking for many years. We hope this Committee will give sympathetic consideration to early passage of this important

measure.

POLICY STATEMENT ON COMMUNITY DEVELOPMENT GRANT CONSOLIDATION LEGISLATION APPROVED BY THE BOARD OF DIRECTORS OF THE NATIONAL LEAGUE OF CITIES, PHILADELPHIA, PENNSYLVANIA, June 14, 1971

COMMUNITY DEVELOPMENT GRANT CONSOLIDATION

There is an increasing need for placing greater reliance upon the decision-making capabilities of local elected officials regarding the setting of local priorities, particularly in the area of community development activity. A first step in accomplishing this must be the simplification and streamlining of the various physical development categorical grant programs now administered by the Department of Housing and Urban Development. In addition, the cities' recent experience with the Model Cities Program has shown that a successful community development program should include, as a supportive element, certain appropriate "software" or social service activity.

It is, therefore, necessary to develop a single, unified community development block grant program, administered by HUD, which will be given multi-year funding by Congress and which will make possible long-term funding commitments to individual communities. This new block grant program would consolidate the basic physical development programs now maintained as separate categoricals urban renewal, water and sewer facilities, rehabilitation loans, neighborhood facilities, and open space. The mechanism for dispensing federal funds under this new program would avoid arbitrary population distinctions between communities.

Each community seeking development funds from HUD would be expected to present periodic applications, substantially simplified from those currently in use, which would set out the community's development plan and its capabilities to perform according to that plan. An integral component of any such application would be a statement of the community's program to eliminate or prevent slums and blight, to promote rational growth, and to provide low and moderate income housing.

This new community development block grant would also include a feasible and equitable procedure for providing communities with relatively stable annual program amounts which could expand to meet future needs and which could be established according to actual need and past history of actual program participation. Moreover, it should insure that no community would be eligible for less annually by way of new funding commitments than it has been receiving under the total of the separate categorical programs being consolidated.

This new program should not involve an automatic distribution of federal funds but instead should contain application and eligibility requirements for all interested communities. The program, through HUD, should be designed to respond to the needs of communities of all sizes in all locations and should thereby avoid upsetting the present federal-local ability to respond to the requirements of many small communities. Finally, the new program must not jeopardize current expectations of future program growth in the many communities now participating in the various categoricals by confusing a community's need for sustained annual program levels with the liquidation of previous federal commitments.

Throughout the long and complex process necessary for the development and initiation of such an important new program by the Congress and the Administration, it is vital to the continuity and strength of the existing programs involved that they continue to be funded on a full twelve-month basis prior to and during an orderly, phased transition period.

ADOPTED, ANNUAL CONFERENCE, UNITED STATES CONFERENCE OF MAYORS, PHILADELPHIA, PENNSYLVANIA, JUNE 16, 1971

COMMUNITY DEVELOPMENT GRANT CONSOLIDATION

Whereas, there is an increasing need for greater reliance upon the decisionmaking capabilities of local elected officials regarding local priorities; and Whereas, there is a clear need for the simplification and streamlining of the various physical development categorical grant programs now administered by the Department of Housing and Urban Development; and

Whereas, recent experience has shown that a successful community development program should include, as a supportive element, certain appropriate "software" or social service activity; and

Whereas, the Department of Housing and Urban Development currently has the responsibility to respond to the community development needs of cities, towns and counties of all sizes throughout the nation; and

Whereas, the cities have long supported and called for a program which could provide increased continuity of effort, including mechanisms for multi-year funding by Congress and long-term commitments to individual communities; and Whereas, the Administration's "urban community development special revenue sharing" proposal would involve an automatic distribution of federal funds without application or eligibility requirements, would upset the present federal-local ability to respond to the requirements of many smaller communities and would seriously jeopardize current expectations of future program growth in scores of other cities by confusing a community's need for a sustained annual program level with the liquidation of previous federal commitments,

Now, Therefore, Be It Resolved that the United States Conference of Mayors supports comprehensive legislation which would consolidate the physical development categorical grant programs administered by the Department of Housing and Urban Development-urban renewal, water and sewer grants, rehabilitation loans, neighborhood facilities, and open space-into a single consolidated grant program. This program, which would avoid arbitrary population distinctions between communities for the purpose of dispensing federal funds, would be the responsibility of the Deprtment of Housing and Urban Development. Each community seeking development funds from the Department of Housing and Urban Development would be expected to present periodic applications, substantially simplified from those currently in use, which would set out the community's development plan and its capabilities to perform according to that plan. An integral component of any such application would be a statement of the community's program to eliminate or prevent slums and blight, to promote rational growth, and to provide low and moderate income housing; and

Be It Further Resolved that such legislation would also include a feasible and equitable procedure to provide communities with relatively stable annual program amounts which would expand to meet future needs and which could be established according to actual need and to past history of actual program participation. Such a program should insure that no community would be eligible for less annually by way of new funding commitments than it has been receiving under the total of the separate categorical programs being consolidated; and Be It Further Resolved that Model Cities be maintained as a separate program and that it not be included in any consolidation of physical development programs administered by the Department of Housing and Urban Development; and

Be It Further Resolved that, until such grant consolidation legislation is fully discussed and enacted, all existing Department of Housing and Urban Development programs must continue to be funded on a full twelve-month basis and that the new programs insure an orderly transition to the consolidated grant approach.