Are the Department's Housing Assistance Programs affected?

No. Only the Rehabilitation Loan Program is included in Revenue Sharing.

Why use Standard Metropolitan Statistical Areas in allocating funds?

The greatest problems of urban community development, revitalization and growth, occur within "metropolitan areas" which includes suburbs. There has been an explosive population growth in these metropolitan areas. Today almost seventy percent of the Nation lives with the 247 designated Standard Metropolitan Statistical Areas. Urban developmental problems created by this concentration of people present high priority needs for public expenditures.

What is a Metropolitan City and what is a Metropolitan Central City?

A metropolitan central city is the largest city over 50,000 in the SMSA, generally around which the SMSA is structured. A metropolitan city is any other city within the SMSA with a population of 50,000 or more.

How will funds be divided within the SMSA?

Within each SMSA designated central cities and the other metropolitan cities will receive funds based on their population, degree of overcrowding, extent of housing deficiencies, and the number of families living below the poverty line The bal ance of allocations to each SMSA will be available for distribution to metropolitan cities, counties and smaller communities.

Could a Metropolitan City receive less than in the past?

No. Most cities would receive more. If a city received less under the formula, the "hold harmless" provision would release additional funds to bring it up to its former base.

How do we know what Metropolitan Cities received in the past?

A five-year program level average was calculated up to and including the last completed fiscal year for all metropolitan cities for all Urban Renewal and Rehabilitation Loan programs. A full twelve-month figure for Model Cities was added to the other averages.

Will funding always remain at the same level?

No. As total appropriations for Urban Community Development Revenue Sharing increase, steadily larger amounts will be distributed. In the case of the Model Cities program, however, a demonstration program with a five program year limit was contemplated. Therefore, after a community has completed the five "action years," its "hold harmless" calculation will no longer include a twelve-month Model Cities allocation.

What about smaller communities both inside and outside of the metropolitan areas?

Smaller cities clearly have community development needs, although of a lesser magnitude. Smaller communities are eligible to receive assistance from the funds administered by HUD. These funds may come from SMSA balances and the twenty percent discretionary funds. President Nixon requested an additional $100 million of Urban Community Development Revenue Sharing funds to distribute exclusively to communities below 50,000 population.

What will happen to Neighborhood Development Program Projects?

The contracts approved would continue in effect after January 1, 1972, through the end of the contract year. After January, however, these contracts would be funded from Community Development Revenue Sharing.

Funds escrowed in connection with Neighborhood Development conversions would be available to cities after January 1, 1972, if a city chooses to continue that program. However, outlays are to be deducted from the gross "hold harmless" amount, to avoid double funding.

What will happen to Urban Renewal commitments?

All metropolitan cities would get their formula share automatically. Cities could continue to receive disbursements from existing conventional urban renewal reservations However, the Federal outlays would be deducted from the city's gross "hold harmless" amount to avoid double funding. The net "hold harmless" amount, if any, would then be paid out of the Urban Community Development Revenue Sharing funds.

What will happen to Model Cities programs?

It will be up to the local community to decide if its own Model Cities program meets its local needs, or if the money can be better spent locally on some other urban development program. Model Cities action-year contracts will continue to be approved as scheduled until January 1, 1972, and will continue in effect until the end of the contract year. After January 1, the contracts already approved would be funded from Urban Community Development Revenue Sharing to avoid double funding. Unused Model Cities appropriations would lapse on June 30, 1972. The Revenue Sharing "hold harmless" formula would include the Model Cities component (that is, the 12-month funding level) until conclusion of five-action-years for the particular city. When will cities receive their Urban Community Development Revenue Sharing funds?

The formula share would be distributed automatically, probably to be disbursed as quarterly drawdowns against a letter of credit. The net "hold harmless" amount (determined after subtracting total Federal outlays to the city under categorical grant programs) would be paid to the city at the end of the year.

Revenue sharing payments released would be distributed as Urban Community Development Revenue Sharing funds in the SMSA.