INCREASE IN PERSONNEL INCREASED EXPENDITURES FOR MANAGE

MENT SUPERVISION

Mr. WIGGLESWORTH. I want to ask you about a few details in connection with this increase. You have pointed out the savings you have realized: but, as a matter of fact, if you compare the appropriation requested, $4,568,000, with what we gave you this time a year ago, $3,470,000, there is an increase of almost 33 percent, and your actual personnel has increased, if this request is allowed, from 655 departmental to 757, in 2 years, and to some extent also in the field.

Take the Operations and Maintenance Division. You are asking for practically a 100-percent increase in that force, if I read these justifications right. I wonder if you are not going into a tremendous amount of detail that is not necessary.

Mr. KEYSERLING. May I answer those two questions in order? Mr. FITZPATRICK. Pardon me. Is that not because of the completion of certain projects?

Mr. KEYSERLING. Yes. I will answer those two questions in order. First of all, I do not think you can compare what we are asking for this year with what was granted at a particular time last year. The fact is that the Congress allowed us $4,370,000 for operating expenses last year, and what we are asking this year is only 2.9 percent increase above that.

Mr. WIGGLESWORTH. That is true by reason of a $900,000 deficiency item given you late in the year?

Mr. KEYSERLING. That is true. I do not need to defend what Congress has done, but the fact is our administrative budget last year was $4,370,000, and, further, it was contemplated at the time the original presentation was made last year that there would be a deficiency, based upon the fact that last year, through refinancings and savings on project costs, we released about $120,000,000 for additional housing, since converted to defense, and that had not been calculated in the original presentation. That was brought before this committee, and the position taken was that a deficiency was in fact in contemplation, and all of you knew it was in contemplation.

Mr. WIGGLESWORTH. I am talking about detailed supervision all along the line here. I am just wondering why it is necessary. For instance, take your justification here. To start out with the review step, you have to go to the project planner, then to the market analyst, then to the architect and site planner, then to the civil engineer, mechanical engineer, electrical engineer, estimate and cost engineer, architectural engineer, appraiser, attorney, and finally get the approval of the President, and so forth.

Then, under "Land acquisition," the Authority's land appraiser assists the local authority in the selection of surveyors, appraisers, negotiators, and title searchers.

Also, another important function which is performed during the planning stage of a housing project is the negotiation of utility rates, and you say

this function is handled by the United States Housing Authority as an assistance to local housing authorities in order to obtain the minimum rates for public housing projects.

Then going over under "management", you even go to the point where the U. S. H. A. tenant selection advisers assist the local housing authority in the selection of tenants. Why in the world should we have to assist the local housing authorities in the selection of tenants? Mr. SNYDER. May I answer that question in a general way? There are many instances in which it would not be necessary, but the machinery has to be set up. Some of them are not experienced; therefore, you have to supervise these.

Mr. WIGGLESWORTH. I think it would be better to get a more competent set-up.

Mr. KEYSERLING. Let me give you a specific answer to your specific question. First of all, on the management side, the increased expenditures for management supervision are based upon a heavier work load, which you can see immediately from this chart [exhibiting].. Mr. WIGGLESWORTH. I realize that; I was just wondering if you are not trying through the central organization to do a lot of work that may be a duplication or that could be done more effectively and cheaply by decentralization.

Mr. KEYSERLING. I think that is a matter of gradual administrative adaptation. I am a little impressed by the fact that you are, on the one hand, very legitimately concerned about whether or not we are exercising sufficient prudence in approving land acquisitions; and then you are raising the question of whether we are going into matters too much in detail. Now, if we are going to be responsible in the ultimate analysis, and we are, for the price at which land is acquired for low-cost housing, and other economies, we have to have a staff to see that this responsibility is discharged. And the best illustration of how it is discharged is an example taken from one of the very things you mention, that is, utilities.

I will admit we have a staff working constantly upon the whole technical problem of securing the cheapest utilities and helping the localities in arranging their negotiations with the utility companies. We have not done that on a death-sentence basis; we have not antagonized any utility companies; but have had them work voluntarily with us, because we have been able to avail ourselves in the central organization of the experience throughout the whole country and to help the local authorities make a uniform approach to that problem.

Here are averages for our whole program: In small towns in the South, the typical commercial monthly cost for utilities, including water, is $9.42 per family. This is what the tenant would have to pay if special rates and economies were not achieved, and it would have to be met partly out of subsidy and partly out of his budget. The average cost on our projects is only $2.60, as compared with this $9.42. Obviously, when you compare a $2.60 monthly cost per family for utilities with a $9.42 cost, and multiply that by 190,000 families, you get a tremendous saving. And this has not been done by campaigns against business, nor by forcing the issue in any way.. It has been done by pointing out that these projects are different, because they are larger; that there is mass purchase involved; that different types of service are used-in some cases we have gotten the tenants to service the projects; and because of that, the utility companies have had less work to do.

In the larger cities in the South, our average cost is $1.78, as compared with $5.51, which is the commercial rate.

In the large cities in the Midwest, our rate is $1.94, as compared with $5.30. In New England, our rate is $4.31, as compared with a commercial rate of $12.52.

These are the results of a technical devotion to these specific problems in detail, and the resultant savings many times repay for the fact that we are spending $10,000 or $20,000 more on utility work than we might spend if we just said, "We will just let the localities handle it all in detail."

Mr. WIGGLESWORTH. I may be wrong, but I get the impression that supervision from central authority is tremendously detailed; that if a tenant wants to brush his teeth he has practically got to get permission from some Washington representative before he can do so. Mr. JOHNSON. Mr. Wigglesworth, on tenant selection we are asking for eight professional people on our central-office staff.

Mr. WIGGLESWORTH. How many have you got now?

Mr. JOHNSON. About the same number. We are not asking for an increase. These eight people service all of the regions in all of the United States. Obviously, they do not have the time to go out and sit down with each local authority and help it to select tenants, but they do help them in establishing a tenant-selection program, so that as soon as the project is ready they have the tenants selected and are ready to go in, and we do not establish a big vacancy loss. Mr. WIGGLESWORTH. Have you got a labor-relations division? Mr. KEYSERLING. Yes.

Mr. WIGGLESWORTH. How big is that?

Mr. KEYSERLING. Very few people; 8 or 10 altogether in central office; 21 including the regions. Eight of these are clerical employees. Mr. WIGGLESWORTH. Have you a racial-relations division?

Mr KEYSERLING. Yes. That totals 15, including the regions. Six of these are clerical employees.

Mr. WIGGLESWORTH. That has been put on, practically all of it, in the last 2 years?

Mr. KEYSERLING. Yes; because our program in that time entered the management stage, where the problem becomes acute. There is no real racial problem in connection with building. The problem is in connection with tenant selection and management. But nine professional people for a billion-dollar program, extending all over the United States, is not very many.

Mr. WIGGLESWORTH. Have you still got a tenant-relations division? Mr. KEYSERLING. Yes.

Mr. WIGGLESWORTH. Do I understand from your statement that the functions of that division have been revised as compared with what they were a year ago?

Mr. KEYSERLING. The work load of that division is greatly increased because of the cumulative projects entering the management stage.

Mr. WIGGLESWORTH. Have the functions been revised as compared with a year ago?

Mr. JOHNSON. I can answer that; no, as more fully explained in a table we could submit.

PERSONNEL OF THE INFORMATION DIVISION

Mr. WIGGLESWORTH. I wish you would file for the record a breakdown that would show both, in the Department and in the field, your set-ups with positions and salaries for tenant relations, racial relations, labor relations, and any other social activities that you may be carrying on.

Mr. KEYSERLING. Very well.

Mr. WIGGLESWORTH. How about the informational set-up? What is the size of that now?

Mr. KEYSERLING. That is subject to the same limitation as was imposed by the committee last year. It totals 18 people.

Mr. WIGGLESWORTH. I wish you would put in the record a detailed statement, as you have previously, as to the personnel and salaries and the work done during the past fiscal year.

Mr. KEYSERLING. Very well.

(Statement referred to is as follows:)

Personnel and miscellaneous expenses of the Information Division, fiscal year 1942