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Cannon Files at the Gerald R. Ford Presidential Library.
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Digitized from Box 39 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
5/4/76
THE WHITE HOUSE
At good- to
WASHINGTON
April 9, 1976
we
ALL wt
MEMORANDUM FOR:
JIM CANNON
pls
FROM:
STEVE McCONAHEY & PAT DELANEY
we
As a followup to our last meeting on Urban Issues and Art
Sun
Quern's memorandum of April 8 on that subject, we have (1)
developed a brief analysis of the current financial status
of several American cities and (2) drafted a procedure for
handling calls and inquiries from cities claiming "financial
crisis.
FINANCIAL PROFILE
There are two problems involved in developing a list of
financially plagued cities. First, it is difficult to secure
reliable and up-to-date data. Secondly, we feel it would be
unwise to create such a list given the possibility that it
would be circulated outside the White House. If circulated,
it would be potentially hazardous to these cities as they
sought financing. Nevertheless, we have described the con-
dition of several cities in three ways:
1.
Based on the 1972 ACIR financial study: In its
original analysis, ACIR identified six warning
signs:
BIG DEFICIT IN WARENT YEAR
a.
an operating fund revenue-expenditure imbalance
in which current expenditures significantly
exceeded current revenues in one fiscal period.
DEFICITS For
b.
a consistent pattern of current expenditures
exceeding current revenues by small amounts
for several years.
C.
an excess of current operating liabilities
7
over current assets (a fund deficit).
d.
short-term operating loans outstanding at the
conclusion of a fiscal year (or in some in-
stances the borrowing of cash from restricted
funds or an increase in unpaid bills in lieu
of short-term loans.
Bonrowny from Restricted fords
FORD i LIBRARY 938870
-2-
Required owners can't pey tax e
e. a high and rising rate of property tax delinquency.
f. a sudden and substantial decrease in assessed
OMP in amend Hope ty value
values for unexpected reasons.
aggiogate
Tables 1,2,4 and 5 indicate the financial condition of
cities identified by ACIR in its analysis. We have not
been able to develop the information for all of these in-
dicators because of the lack of consistent data.
2. Based on Standard & Poor's Ratings
We have also provided the Standard & Poor rating for
the selected list of 30 cities and the USCM list (see
attached). This chart could be misleading in that it
seems to portray a very strong picture for the financial
condition of these cities. Those cities with a AA or
A could in fact, during a period of tight money, run
into difficulty with financing. The cities with a AAA
would be the first in line in the money market. All of
these, of course, would stand in back of Federal borrow-
ing to finance the current deficits. For example, Detroit
with a A rating during the New York City crisis could
not find an underwriter. There was just no market for
their bonds. So these ratings must be considered in
tandem with "market conditions".
United States
ducyon
3. Based on the USCM Analysis
We also have attached a somewhat different list prepared
by the USCM at our request. This list contains cities
that they have identified as problems (see attachment).
This list contains several of the descriptors of the
conditions found in Detroit, Cleveland, Yonkers, Newark,
Boston, Baltimore and Buffalo. Again, one should note
the incomplete nature of these data.
These three analyses provide a sense of the financial con-
ditions found in many cities. However, these data do not
provide a good profile of smaller cities. Data for these
jurisdictions is even more incomplete. Again, we want to
caution against developing a specific problem list for White
House monitoring. Our contact with cities and their public
interest organizations should provide us with an adequate
warning system.
BERRLD R. FORD
-3-
INTERNAL PROCEDURE
In response to the second request, we have drafted a
procedure for the handling of specific inquiries from
cities claiming a financial crisis (see attachment).
ACIR STUDY
Table I
Revenue-Expenditure Comparison
General Operating Fund
Large Cities
(Cash Basis)
Excess or (Deficiency) of Revenues
Compared to Expenditures
Cities
($ millions)
(in order of population)
1971*
1974*
New York
$ (656.2)
$ (807.8)
Chicago
14.0
36.7
Los Angeles
(5.5)
40.7
Philadelphia
(48.8)
5.5
Detroit
17.5
8.6
Houston
(4.1)
(8.0)
Baltimore
(8.3)
23.9
Dallas
(.9)
1.2
Cleveland
(13.2)
0
Indianapolis
.2
(.7)
Milwaukee
12.2
7.3
San Francisco
13.4
9.8
San Diego
2.1
4.9
San Antonio
( .4)
1.6
Memphis
3.5
NA
Boston
1.5
(15.9)
St. Louis
(4.5)
(10.7)
New Orleans
0
9.8
Phoenix
(1.0)
8.5
Columbus
1.0
3.2
Seattle
1.8
(1.1)
Jacksonville
(2.5)
11.0
Pittsburgh
5.2
.3
Denver
4.2
4.0
Kansas City
(1.3)
1.1
Atlanta
(2.0)
8.7
Buffalo
(5.4)
(6.1)
Cincinnati
( .5)
1.6
Nashville
2.6
.5
Minneapolis
1.1
(7.3)
*Source: Compiled from available published financial reports for each city;
see accompanying list.
Table II
Accumulated Fund Balance or Deficit
General Operating Fund
Large Cities
(Pro Forma Cash Basis)
Balance or (Deficit)
Cities
($ millions)
(in order of population)
1971*
1974*
New York
$ (657.6)
$ (1,492.3)
Chicago
(188.3)
(179.0)
Los Angeles
115.0
160.3
Philadelphia
(29.2)
(6.7)
Detroit
(17.2)
(25.6)
Houston
13.6
6.8
Baltimore
9.2
15.4
Dallas
3.8
(1.2)
Cleveland
(13.6)
0
Indianapolis
2.0
3.1
Milwaukee
17.5
37.8
San Francisco
79.9
114.2
San Diego
4.8
2.8
San Antonio
2.8
1.4
Boston
25.9
(22.6)
Memphis
5.6
NA
St. Louis
(3.5)
(14.6)
New Orleans
( .8)
2.8
Phoenix
3.0
.4
Columbus
1.7
6.9
Seattle
14.7
10.1
Jacksonville
15.4
14.1
Pittsburgh
7.3
16.5
Denver
7.2
3.9
Kansas City
.7
.8
Atlanta
10.1
20.5
Buffalo
1.6
(21.8)
Cincinnati
1.3
11.1
Nashville
2.8
10.4
Minneapolis
5.4
6.6
*Source:
Compiled from available published financial reports for each
city; see accompanying list.
Table IV
Annual Percentage Change in
General Operating Fund Revenues
and Expenditures, 1974*
Large Cities
Cities
Percentage
Percentage
(in order of
Increase (Decrease)
Increase (Decrease)
population)
Revenues
Expenditures
New York
3.7%
10.1%
Chicago
12.0
12.4
Los Angeles
9.7
(2.5)
Philadelphia
( .1)
3.1
Detroit
0
1.6
Houston
9.1
12.7
Baltimore
4.1
.1
Dallas
9.6
7.7
Cleveland
13.0
1.5
Indianapolis
5.1
6.8
Milwaukee
9.4
.6
San Francisco
(1.9)
2.3
San Diego
17.9
11.4
San Antonio
19.5
16.0
Boston
19.6
15.4
Memphis
NA
NA
St. Louis
14.8
17.7
New Orleans
21.6
15.3
Phoenix
13.3
16.8
Columbus
8.1
8.4
Seattle
8.1
8.7
Jacksonville
20.9
9.8
Pittsburgh
(10.0)
(7.1)
Denver
19.4
8.6
Kansas City
5.3
6.7
Atlanta
12.8
3.1
Buffalo
3.3
(8.0)
Cincinnati
4.5
8.7
Nashville
19.4
10.1
Minneapolis
(2.4)
5.8
Average
9.3%
7.0%
Median
9.1%
8.4%
*Source: Compiled from available published financial reports for each
city; see accompanying list.
GERALD LIQUEST R. FORD
Table V
General Obligation Bonded Debt
Large Cities
December 31, 1971 and April 30, 1974
Cities
Debt as a
(in order of
Debt Per Capita
Percentage of Value*
population)
12/31/71
4/30/74
12/31/71
4/30/74
New York
$612
$850
7.5
8.1
Chicago
204
357
2.7
3.8
Los Angeles
331
362
3.1
3.0
Philadelphia
456
445
12.5
6.6
Detroit
293
372
3.9
4.6
Houston
509
535
5.5
3.6
Baltimore
374
262
6.4
3.8
Dallas
521
666
5.0
5.8
Cleveland
369
369
3.9
3.9
Indianapolis
275
338
3.8
5.0
Milwaukee
316
357
4.5
4.0
San Francisco
455
564
3.4
4.0
San Diego
237
181
2.6
1.6
San Antonio
240
344
5.3
6.4
Memphis
435
386
6.6
4.8
Boston
536
456
17.2
5.7
St. Louis
338
259
4.7
3.2
New Orleans
486
504
6.9
5.4
Phoenix
230
304
3.7
3.3
Columbus
330
413
4.9
5.6
Seattle
422
540
3.6
4.5
Jacksonville
173
293
3.5
4.2
Pittsburgh
285
626
5.4
10.1
Denver
75
309
0.9
2.4
Kansas City
387
471
4.5
5.3
Atlanta
458
474
4.8
3.5
Buffalo
345
464
8.2
11.0
Cincinnati
432
409
4.6
3.5
Nashville
367
367
7.2
7.2
Minneapolis
254
467
2.6
5.1
Average
358
425
5.3
5.0
Median
356
398
4.8
4.6
Source: Municipal Bond Selector, Standard and Poor's Corporation, III,
No. 6, December 31, 1971 and April 30, 1974.
*Assessed Value
STANDARD & POOR
February 1976
Standard & Poor's Municipal Bond Ratings for 30 Selected Cities
General Obligation Bonds (except where designated otherwise)
Cities
(in order of population)
*
New York
AA
Chicago
(TAN)
AA
Los Angeles
(County)
A-
Philadelphia
A
Detroit
(I.S.D.)
AA
Houston
A
Baltimore
AA
Dallas
(I.S.D.)
AA
Cleveland
(Water Rev)
AAA
Indianapolis
(Various Authority & S.D.)
AAA
Milwaukee
(County)
AA
San Francisco
(BART-Revenue)
AA
San Deigo
(County)
AA
San Antonio
A
Boston
AA
Memphis
A
St. Louis
A
New Orleans
(SWR & WTR Bonds)
AA
Phoenix
(U.H.S.D.)
AA
Columbus
AA
Seattle
AA
Jacksonville
AA
Pittsburgh
AAA
Denver
(S.D. #1)
AA
Kansas City
AA
Atlanta
A
Buffalo
AA
Cincinnati
A+
Nashville
(Various Revenue Bonds)
AAA
Minneapolis
(USCM LIST) --
NR
Yonkers
BBB
Newark
AA
Saginan
(County)
AA
Flint
(S.D.)
AA
Grant Rapids
(S.D.)
AA
Royal Oak
(S.D.)
*Rating Suspended
AAA Prime--These are obligations of the highest quality. They have
the strongest capacity for timely payment of debt service.
AA High Grade--Bonds rate AA have the second strongest capacity for
payment of debt service.
A
Good Grade Principal and interest payments on bonds in this category
are regarded as safe.
BBB Medium Grade--This is the lowest investment grade security rating.
NR No rating
February 1976
Standard & Poor's Municipal Bond Ratings for 30 Selected Cities
General Obligation Bonds (except where designated otherwise)
Cities
(in order of population)
*
New York
AA
Chicago
(TAN)
AA
Los Angeles
(County)
A-
Philadelphia
A
Detroit
(I.S.D.)
AA
Houston
A
Baltimore
AA
Dallas
(I.S.D.)
AA
Cleveland
(Water Rev)
AAA
Indianapolis
(Various Authority & S.D.)
AAA
Milwaukee
(County)
AA
San Francisco
(BART-Revenue)
AA
San Deigo
(County)
AA
San Antonio
A
Boston
AA
Memphis
A
St. Louis
A
New Orleans
(SWR & WTR Bonds)
AA
Phoenix
(U.H.S.D.)
AA
Columbus
AA
Seattle
AA
Jacksonville
AA
Pittsburgh
AAA
Denver
(S.D. #1)
AA
Kansas City
AA
Atlanta
A
Buffalo
AA
Cincinnati
A+
Nashville
(Various Revenue Bonds)
AAA
Minneapolis
(USCM LIST) --
NR
Yonkers
BBB
Newark
AA
SaginanA
(County)
AA
Flint
(S.D.)
AA
Grant Rapids
(S.D.)
AA
Royal Oak
(S.D.)
*Rating Suspended
AAA Prime--These are obligations of the highest quality. They have
the strongest capacity for timely payment of debt service.
AA High Grade Bonds rate AA have the second strongest capacity for
payment of debt service.
A
Good Grade Principal and interest payments on bonds in this category
are regarded as safe.
BBB Medium Grade--This is the lowest investment grade security rating.
NR No rating
USCM STUDY
Detroit
Cleveland
Yonkers
Newark
Boston
Baltimore
Buffalb
Unemployment Rate (Dec.75) 17.4
(Nov75) 10.8
16.9
Total Budget FY 75-76
808.0 Million
324.8 Million
124.0 Million
209.8 Million
661.0 Million
1,425.5 Million
480.0 Mill
(with School)
(1/75-12/75)
(with school)
(with schools)
Federal Revenue Sharing
39.5 Mill.
16.0 Mill.
1.6 Mill.
8.7 Mill.
25.0 Mill.
27.0 Mill.
8.2 Mill
State Revenue Sharing or
Aid
67.2 Mill.
-
10.2 Mill.
2.5 Mill.
140.0 Mill.
-
21.4 Mil
Projected Deficit
44.3
0 22
8.5 Mill.
5.5 Mill.
33.0 Mill.
0
34.0 Mill
Previous Year Carry over
17.2
0
6.5 Mill.
0
14.7 Mill.
0
20.0 Mil
Highest Level of
Employment
19,942 (1/75)
13,000 (1970)
5,500 (1975)
6,100 (1/75)
23,327 (2/1/74)
31,000
6,330 (19
Present Level of
Employment
18,314 (12/75)
10,992
4,683
5,100
14,282
32,882
5,250
Projected Level 7/1/76
?
10,800
4,500
4,900
13,700
32,882
4,050
CETA Employment (Current)
2,864
1,700
?
?
1,310
200
1,600
Areas of Past Employer
Waste,Health,
Across the Bd.
Across the Bd.
Mostly garba
Reduction
Across the Bd.
Rec, Finance
Parks but
Across the D
Areas of Anticipated
Pks. to go 0
Employee Reduction
Across the Bd.
Recreation &
Across the Bd.
Parks & Rec.
of business
Property
Shorter work week
Yes
Work Without Pay
Reduced Services
GERALD
Mounted Squad
No backyard
Disbanded
garbage
FORD
Closed Facilities
Library, Museum
Printing plant
Closed Parks
shorter hours
closed
Rec Centers
-2-
Detroit
Cleveland
Yonkers
Newark
Boston
Baltimore
Buffalo
Pay Freeze
Municipal increase
Pay freeze 11/75
negotiated
Pay Cut
Tax Increase
Referendum Rejected
Real Prop. Tax
by voters
increased to max.
Bonding Operating Exp
85.0 Mill.
54.0 Mill
or Tax Anticipation Notes
8.5 Mill.
15.0 Mill.
Interest Rate
9.0 %
8.75 %
7.30 %
9.0%
GERALD FORD
-2-
Grand
Royal
Seattle
Atlanta
Philadelphia
Saginaw
Flint
Rapids
Oak
Tax Increases
Prop. Tax Increase
Tax increases in
Prop. Tax Increase
In 1974
virtually all
3 mils. for 5 year:
categories
Bonding Operating Exps. or
Tax Anticipation Notes
Interest Rate
100 Million
GERALD
FORD
Seattle
Atlanta
Philadelphia
Saginaw
Flint
Grand
Royal
Rapids
Oak
Unemployment Rate
8.8
12.0
(Metro) 9.4
(Jan.76) 8.5
12.0
Total Budget FY 75-76
279.9 Million
130.5 Million
1,160.0 Million
36.6 Million
49.9 Million
?
13.0 Mill
Federal Revenue Sharing
-
7.0 Mill.
52.2 Mill.
2.7 Mill.
4.2 Mill.
3.5 Million
.5 Mill
State Revenue Sharing
or Aid
8.7 Mill.
2.5 Mill.
-
2.6 Mill.
5.1 Mill.
6.9 Mill.
2.2 Mill
Projected Deficit
0
0
80.0 Mill.
0
0
0
3.0 Mill
Previous Year Carry Over
0
0
11.0 Mill.
0
0
0
0
part of
Mill.
Highest Level of
Employment
12,000 (1973)
35,000
1,073
2,000
2,517
461
Present Level of
Employment
9,090
35,000
1,073
2,000
2,447
451
Projected Level 7/1/76
9,090
35,000
1,073
1,800
2,447
451
?
CETA Employment (Current)
600
400
417
74
Areas of Past Employee
Reduction
Across the Bd.
Across the Bd
Across the Bd
Areas of Anticipated
Employee Reduction
Across the Bd.
Across the Bd.
Shorter Work Week
Work Without Pay
Rextuced Services
Closed Facilities
GERALD
Close Hospital
Pay Freeze
FORD
Freeze being negotiated
Pay Cuts
DRAFT PROCEDURE
PROPOSED PROCEDURE FOR MONITORING
CITY FINANCIAL PROBLEMS
Outlined below is a suggested procedure for responding to
calls and correspondence outlining a city's financial problem
and/or requesting assistance. The process would provide a
focal point for information and would insure a coordinated
White House response. The procedure would involve the
following steps:
1.
Complete check list of information based on tele-
phone conversations or written correspondence, and
forward this information to the Office of Inter-
governmental Affairs. The check list should
include the following information:
A.
Name of City
B.
State
C.
Name of Mayor
D.
Provider of information/position
E.
Brief description of the problem
- -Nature of problem
Amount of money involved
State action and response to date
Alternatives available
Proposed solution
Availability of documentation
- Nature of request to Federal
Government
- Other groups involved, e.g.
banks, business
2.
Develop and maintain in the Office of Intergovern-
mental Affairs a file on the city in question.
The files should include the following items:
A.
Completed check list
B.
Log of calls and discussions along with
description of actions taken
C.
Correspondence
D.
Assignment of lead responsibility
E.
Copies of memoranda and decision papers
3.
Assign day-to-day responsibility for monitoring and
follow up with the city. (This would likely be IGA
staff or specific agency representatives)
4.
Alert the President of the situation through Jim
Cannon's weekly report.
5.
Circulate check list from Jim Cannon to the Urban
Task Force. The circulation list should include
at a minimum the following:
A.
Cannon
B.
Seidman
C.
O'Neill
D.
Simon
E.
Fletcher
F.
Quern
G.
McConahey
H.
Appropriate Domestic Council Staff
6.
Convene Urban Task Force as necessary to review the
situation, receive analysis and information from
the city in question, and develop necessary memoranda
and recommendations for the President.
7.
Make recommendations to the EPB as necessary.
Cities May Flourish
In South and West,
Decline in Northeast
But Manhattan Could Be
A Rich Enclave; Suburbia
To Expand Everywhere
A Downturn in Violence?
By ROGER RICKLEFS
Stoff Reporter of THE WALL STREET JOURNAL
NEW YORK-Only a dozen years ago,
32
THE WALL STREET JOURNAL, Tuesday, April 6, 1976
The Future Revised: Cities Likely
To Flourish in the South and West
THE WHITE HOUSE
WASHINGTON
April 9, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
STEVE McCONTHEY & PAT DELANEY
As a followup to our last meeting on Urban Issues and Art
Quern's memorandum of April 8 on that subject, we have (1)
developed a brief analysis of the current financial status
of several American cities and (2) drafted a procedure for
handling calls and inquiries from cities claiming "financial
crisis.
FINANCIAL PROFILE
There are two problems involved in developing a list of
financially plagued cities. First, it is difficult to secure
reliable and up-to-date data. Secondly, we feel it would be
unwise to create such a list given the possibility that it
would be circulated outside the White House. If circulated,
it would be potentially hazardous to these cities as they
sought financing. Nevertheless, we have described the con-
dition of several cities in three ways:
1.
Based on the 1972 ACIR financial study: In its
original analysis, ACIR identified six warning
signs:
a.
an operating fund revenue-expenditure imbalance
in which current expenditures significantly
exceeded current revenues in one fiscal period.
b.
a consistent pattern of current expenditures
exceeding current revenues by small amounts
for several years.
C.
an excess of current operating liabilities
over current assets (a fund deficit).
d.
short-term operating loans outstanding at the
conclusion of a fiscal year (or in some in-
stances the borrowing of cash from restricted
funds or an increase in unpaid bills in lieu
of short-term loans.
-2-
e. a high and rising rate of property tax delinquency.
f. a sudden and substantial decrease in assessed
values for unexpected reasons.
Tables 1,2,4 and 5 indicate the financial condition of
cities identified by ACIR in its analysis. We have not
been able to develop the information for all of these in-
dicators because of the lack of consistent data.
2. Based on Standard & Poor's Ratings
We have also provided the Standard & Poor rating for
the selected list of 30 cities and the USCM list (see
attached). This chart could be misleading in that it
seems to portray a very strong picture for the financial
condition of these cities. Those cities with a AA or
A could in fact, during a period of tight money, run
into difficulty with financing. The cities with a AAA
would be the first in line in the money market. All of
these, of course, would stand in back of Federal borrow-
ing to finance the current deficits. For example, Detroit
with a A rating during the New York City crisis could
not find an underwriter. There was just no market for
their bonds. So these ratings must be considered in
tandem with "market conditions".
3. Based on the USCM Analysis
We also have attached a somewhat different list prepared
by the USCM at our request. This list contains cities
that they have identified as problems (see attachment).
This list contains several of the descriptors of the
conditions found in Detroit, Cleveland, Yonkers, Newark,
Boston, Baltimore and Buffalo. Again, one should note
the incomplete nature of these data.
These three analyses provide a sense of the financial con-
ditions found in many cities. However, these data do not
provide a good profile of smaller cities. Data for these
jurisdictions is even more incomplete. Again, we want to
caution against developing a specific problem list for White
House monitoring. Our contact with cities and their public
interest organizations should provide us with an adequate
warning system.
-3-
INTERNAL PROCEDURE
In response to the second request, we have drafted a
procedure for the handling of specific inquiries from
cities claiming a financial crisis (see attachment) .
Note: Attached is a Wall Street Journal Article
ACIR STUDY
Table I
Revenue-Expenditure Comparison
General Operating Fund
Large Cities
(Cash Basis)
Excess or (Deficiency) of Revenues
Compared to Expenditures
Cities
($ millions)
(in order of population)
1971*
1974*
New York
$ (656.2)
$ (807.8)
Chicago
14.0
36.7
Los Angeles
(5.5)
40.7
Philadelphia
(48.8)
5.5
Detroit
17.5
8.6
Houston
(4.1)
(8.0)
Baltimore
(8.3)
23.9
Dallas
( .9)
1.2
Cleveland
(13.2)
0
Indianapolis
.2
( .7)
Milwaukee
12.2
7.3
San Francisco
13.4
9.8
San Diego
2.1
4.9
San Antonio
( .4)
1.6
Memphis
3.5
NA
Boston
1.5
(15.9)
St. Louis
(4.5)
(10.7)
New Orleans
0
9.8
Phoenix
(1.0)
8.5
Columbus
1.0
3.2
Seattle
1.8
(1.1)
Jacksonville
(2.5)
11.0
Pittsburgh
5.2
.3
Denver
4.2
4.0
Kansas City
(1.3)
1.1
Atlanta
(2.0)
8.7
Buffalo
(5.4)
(6.1)
Cincinnati
(.5)
1.6
Nashville
2.6
.5
Minneapolis
1.1
(7.3)
*Source: Compiled from available published financial reports for each city;
see accompanying list.
Table II
Accumulated Fund Balance or Deficit
General Operating Fund
Large Cities
(Pro Forma Cash Basis)
Balance or (Deficit)
Cities
($ millions)
(in order of population)
1971*
1974*
New York
$ (657.6)
$ (1,492.3)
Chicago
(188.3)
(179.0)
Los Angeles
115.0
160.3
Philadelphia
(29.2)
(6.7)
Detroit
(17.2)
(25.6)
Houston
13.6
6.8
Baltimore
9.2
15.4
Dallas
3.8
(1.2)
Cleveland
(13.6)
0
Indianapolis
2.0
3.1
Milwaukee
17.5
37.8
San Francisco
79.9
114.2
San Diego
4.8
2.8
San Antonio
2.8
1.4
Boston
25.9
(22.6)
Memphis
5.6
NA
St. Louis
(3.5)
(14.6)
New Orleans
( .8)
2.8
Phoenix
3.0
.4
Columbus
1.7
6.9
Seattle
14.7
10.1
Jacksonville
15.4
14.1
Pittsburgh
7.3
16.5
Denver
7.2
3.9
Kansas City
.7
.8
Atlanta
10.1
20.5
Buffalo
1.6
(21.8)
Cincinnati
1.3
11.1
Nashville
2.8
10.4
Minneapolis
5.4
6.6
*Source:
Compiled from available published financial reports for each
city; see accompanying list.
Table IV
Annual Percentage Change in
General Operating Fund Revenues
and Expenditures, 1974*
Large Cities
Cities
Percentage
Percentage
(in order of
Increase (Decrease)
Increase (Decrease)
population)
Revenues
Expenditures
New York
3.7%
10.1%
Chicago
12.0
12.4
Los Angeles
9.7
(2.5)
Philadelphia
( .1)
3.1
Detroit
0
1.6
Houston
9.1
12.7
Baltimore
4.1
.1
Dallas
9.6
7.7
Cleveland
13.0
1.5
Indianapolis
5.1
6.8
Milwaukee
9.4
.6
San Francisco
(1.9)
2.3
San Diego
17.9
11.4
San Antonio
19.5
16.0
Boston
19.6
15.4
Memphis
NA
NA
St. Louis
14.8
17.7
New Orleans
21.6
15.3
Phoenix
13.3
16.8
Columbus
8.1
8.4
Seattle
8.1
8.7
Jacksonville
20.9
9.8
Pittsburgh
(10.0)
(7.1)
Denver
19.4
8.6
Kansas City
5.3
6.7
Atlanta
12.8
3.1
Buffalo
3.3
(8.0)
Cincinnati
4.5
8.7
Nashville
19.4
10.1
Minneapolis
(2.4)
5.8
Average
9.3%
7.0%
Median
9.1%
8.4%
*Source: Compiled from available published financial reports for each
city; see accompanying list.
Table V
General Obligation Bonded Debt
Large Cities
December 31, 1971 and April 30, 1974
Cities
Debt as a
(in order of
Debt Per Capita
Percentage of Value*
population)
12/31/71
4/30/74
12/31/71
4/30/74
New York
$612
$850
7.5
8.1
Chicago
204
357
2.7
3.8
Los Angeles
331
362
3.1
3.0
Philadelphia
456
445
12.5
6.6
Detroit
293
372
3.9
4.6
Houston
509
535
5.5
3.6
Baltimore
374
262
6.4
3.8
Dallas
521
666
5.0
5.8
Cleveland
369
369
3.9
3.9
Indianapolis
275
338
3.8
5.0
Milwaukee
316
357
4.5
4.0
San Francisco
455
564
3.4
4.0
San Diego
237
181
2.6
1.6
San Antonio
240
344
5.3
6.4
Memphis
435
386
6.6
4.8
Boston
536
456
17.2
5.7
St. Louis
338
259
4.7
3.2
New Orleans
486
504
6.9
5.4
Phoenix
230
304
3.7
3.3
Columbus
330
413
4.9
5.6
Seattle
422
540
3.6
4.5
Jacksonville
173
293
3.5
4.2
Pittsburgh
285
626
5.4
10.1
Denver
75
309
0.9
2.4
Kansas City
387
471
4.5
5.3
Atlanta
458
474
4.8
3.5
Buffalo
345
464
8.2
11.0
Cincinnati
432
409
4.6
3.5
Nashville
367
367
7.2
7.2
Minneapolis
254
467
2.6
5.1
Average
358
425
5.3
5.0
Median
356
398
4.8
4.6
Source: Municipal Bond Selector, Standard and Poor's Corporation, III,
No. 6, December 31, 1971 and April 30, 1974.
*Assessed Value
STANDARD & POOR
February 1976
Standard & Poor's Municipal Bond Ratings for 30 Selected Cities
General Obligation Bonds (except where designated otherwise)
Cities
(in order of population)
*
New York
AA
Chicago
(TAN)
AA
Los Angeles
(County)
A-
Philadelphia
A
Detroit
(I.S.D.)
AA
Houston
A
Baltimore
AA
Dallas
(I.S.D.)
AA
Cleveland
(Water Rev)
AAA
Indianapolis
(Various Authority & S.D.)
AAA
Milwaukee
(County)
AA
San Francisco
(BART-Revenue)
AA
San Deigo
(County)
AA
San Antonio
A
Boston
AA
Memphis
A
St. Louis
A
New Orleans
(SWR & WTR Bonds)
AA
Phoenix
(U.H.S.D.)
AA
Columbus
AA
Seattle
AA
Jacksonville
AA
Pittsburgh
AAA
Denver
(S.D. #1)
AA
Kansas City
AA
Atlanta
A
Buffalo
AA
Cincinnati
At
Nashville
(Various Revenue Bonds)
AAA
Minneapolis
(USCM LIST) --
NR
Yonkers
BBB
Newark
AA
Saginan
(County)
AA
Flint
(S.D.)
AA
Grant Rapids
(S.D.)
AA
Royal Oak
(S.D.)
*Rating Suspended
AAA Prime--These are obligations of the highest quality. They have
the strongest capacity for timely payment of debt service.
AA High Grade--Bonds rate AA have the second strongest capacity for
payment of debt service.
A
Good Grade--Principal and interest payments on bonds in this category
are regarded as safe.
BBB Medium Grade--This is the lowest investment grade security rating.
NR No rating
USCM STUDY
Detroit
Cleveland
Yorkers
Newark
Boston
Baltimore
Buffalt
employment Rate (Dec.75) 17.4
(Nov75) 10.8
16.9
otal Budget FY 75-76
808.0 Million
324.8 Million
124.0 Million
209.8 Million
661.0 Million
1,425.5 Million
480.0 Mi
(with School)
(1/75-12/75)
(with school)
(with schools)
ederal Revenue Sharing
39.5 Mill.
16.0 Mill.
1.6 Mill.
8.7 Mill.
25.0 Mill.
27.0 Mill.
8.2 Mi
tate Revenue Sharing or
id
67.2 Mill.
-
10.2 Mill.
2.5 Mill.
140.0 Mill.
-
21.4 MA
rojected Deficit
44.3
0 22
8.5 Mill.
5.5 Mill.
33.0 Mill.
0
34.0 Mi
revious Year Carry over
17.2
0
6.5 Mill.
0
14.7 Mill.
0
20.0 Mi
ighest Level of
mployment
19,942
(1/75)
13,000 (1970)
5,500 (1975)
6,100 (1/75)
23,327 (2/1/74)
31,000
6,330 (In
resent Level of
mployment
18,314 (12/75)
10,992
4,683
5,100
14,282
32,882
5,250
rojected Level 7/1/76
?
10,800
4,500
4,900
13,700
32,882
4,050
ETA Employment (Current)
2,864
1,700
?
?
1,310
200
1,600
reas of Past Employer
Waste,Health,
Across the Bd.
Across the Bd.
Mostly gart
eduction
Across the Bd.
Rec, Finance
Parks but
Across the
reas of Anticipated
Pks. to go
mployee Reduction
Across the Bd.
Recreation &
Across the Bd.
Parks & Rec.
of business
Property
horter work week
Yes
brk Without Pay
GERALD
educed Services
FORD
Mounted Squad
No backyard
Disbanded
garbage
losed Facilities
Library, Museum
Printing plant
Closed Parl
shorter hours
closed
Rec Center:
-2-
Detroit
Cleveland
Yonkers
Newark
Boston
Baltimore
Buffalo
Freeze
Municipal increase
Pay freeze 11/75
negotiated
Cut
Increase
Referendum Rejected Real Prop. Tax
by voters
increased to max.
ding Operating Exp
85.0 Mill.
54.0 Mill
Tax Anticipation Notes
8.5 Mill.
15.0 Mill.
erest Rate
9.0 %
8.75 %
7.30 %
9.0%
GERALD
LIBRANT FORD ?
Scattle
Atlanta
Philadelphia
Saginaw
Flint
Grand
Royal
Rapids
Oak
employment Rate
8.8
12.0
(Metro) 9.4
(Jan.7 8.5
12.0
otal Budget FY 75-76
279.9 Million
130.5 Million
1,160.0 Million
36.6 Million
49.9 Million
?
13.0 Mi
ederal Revenue Sharing
-
7.0 Mill.
52.2 Mill.
2.7 Mill.
4.2 Mill.
3.5 Million
.5 Mi
tate Revenue Sharing
or Aid
8.7 Mill.
2.5 Mill.
-
2.6 Mill.
5.1 Mill.
6.9 Mill.
2.2 Mi
rojected Deficit
0
0
80.0 Mill.
0
0
0
3.0 Mi
revious Year Carry Over
0
0
11.0 Mill.
0
0
0
0
part of
Mill.
ighest Level of
mployment
12,000 (1973)
35,000
1,073
2,000
2,517
461
resent Level of
mployment
9,090
35,000
1,073
2,000
2,447
151
rojected Level 7/1/76
9,090
35,000
1,073
1,800
2,447
451
?
ETA Employment (Current)
600
400
417
74
reas of Past Employee
Reduction
Across the Bd.
Across the Bd
Across the Bd
reas of Anticipated
Employee Reduction
Across the Bd.
Across the Bd.
horter Work Week
lork Without Pay
Services
losed Pacilities
Close Hospital
ay Freeze
FORD
Freeze being negotiated
LISSANY
ay Cuts
Grand
Royal
Seattle
Atlanta
Philadelphia
Saginaw
Flint
Rapids
Oak
X Increases
Prop. Tax Increase
Tax increases in
Prop. Tax Increa
In 1974
virtually all
3 mils. for 5 ye
categories
nding Operating Exps. or
IX Anticipation Notes
terest Rate
100 Million
GERALD FORD
DRAFT PROCEDURE
PROPOSED PROCEDURE FOR MONITORING
CITY FINANCIAL PROBLEMS
Outlined below is a suggested procedure for responding to
calls and correspondence outlining a city's financial problem
and/or requesting assistance. The process would provide a
focal point for information and would insure a coordinated
White House response. The procedure would involve the
following steps:
1.
Complete check list of information based on tele-
phone conversations or written correspondence, and
forward this information to the Office of Inter-
governmental Affairs. The check list should
include the following information:
A.
Name of City
B.
State
C.
Name of Mayor
D.
Provider of information/position
E.
Brief description of the problem
- Nature of problem
Amount of money involved
State action and response to date
- Alternatives available
-
Proposed solution
-
Availability of documentation
-
- Nature of request to Federal
Government
-
Other groups involved, e.g.
banks, business
2.
Develop and maintain in the Office of Intergovern-
mental Affairs a file on the city in question.
The files should include the following items:
A.
Completed check list
B.
Log of calls and discussions along with
description of actions taken
C.
Correspondence
D.
Assignment of lead responsibility
E.
Copies of memoranda and decision papers
3.
Assign day-to-day responsibility for monitoring and
follow up with the city. (This would likely be IGA
staff or specific agency representatives)
4.
Alert the President of the situation through Jim
Cannon's weekly report.
5.
Circulate check list from Jim Cannon to the Urban
Task Force. The circulation list should include
at a minimum the following:
A.
Cannon
B.
Seidman
C.
O'Neill
D.
Simon
E.
Fletcher
F.
Quern
G.
McConahey
H.
Appropriate Domestic Council Staff
6.
Convene Urban Task Force as necessary to review the
situation, receive analysis and information from
the city in question, and develop necessary memoranda
and recommendations for the President.
7.
Make recommendations to the EPB as necessary.
THE WHITE HOUSE
WASHINGTON
April 12, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
ART QUERN Artor
SUBJECT:
Follow-Up to April 9, 1976, Urban
Issues Meeting
The following are the next steps to be taken in exploration
of urban issues:
1.
Annexation
Steve and Pat will look into the existing research
on the use of annexation by cities to expand their
revenue base.
2.
Free Trade Zones
Lynn will look into concept of "free trade zones"
for urban areas.
3. EDA
Quern will inquire about EDA's programs which have
been directed toward urban areas.
4.
HUD
Lynn will circulate copies of HUD urban issues paper
and each member of the working group will provide
Lynn with comments in anticipation of a meeting with
Secretary Hills.
5.
Johnson and Johnson
Art Fletcher will proceed to set up a briefing session
by drafting a letter for Jim Cannon's signature.
2
6.
U.S. Chamber of Commerce
Art Fletcher will suggest Fletcher/Quern meeting with
Chamber Washington Urban Affairs Representative.
7.
Briefing on Revenue Sharing
Quern will invite Paul Myer to next working session to
brief on Revenue Sharing.
8.
Allied Services
Steve will have more detailed work prepared examining
Allied Services and Joint Funding Simplification Act.
9.
Tax Incentives
Quern will get further information on Administration's
tax incentive proposal.
Sir.
THE WHITE HOUSE
WASHINGTON
April 13, 1976
MEMORANDUM FOR THE MEMBERS OF THE DOMESTIC COUNCIL STAFF
URBAN POLICY STUDY
FROM:
LYNN MAY
hyn q
SUBJECT:
Legislation
In the interest of making our group more aware of background
material related to urban policy questions, I will be
forwarding to you relevant items of information from my
sources. Please note the attached item. It is from the
Housing and Development Reporter, Vol. 3, #23, April 5,
1976.
Attachment
Housing and Development Reporter
Vol. 3, #23 April 5, 1976
WAYS AND MEANS PASSES 35 PERCENT
INTEREST SUBSIDY FOR TAXABLE BONDS
The House Ways and Means Committee reported out the
"Municipal Taxable Bond Alternative Act of 1976" to provide
federal payment of 35 percent of the interest on taxable
municipal bonds beginning July 1, 1977.
The bill, (H.R. 12774), which passed the committee on
March 29 by four votes, faces an uncertain future on the House
floor later this month. Despite Administration support of the
measure, only one Republican, second ranking Barber B.
Conable, Jr., of New York, voted in favor of it. Republicans
and Southern conservative Democrats are expected to launch a
strong campaign against it on the floor.
Proponents, led by the bill's sponsor, Ways and Means Com-
mittee Chairman Al Ullman (D-Ore), argue that the new tax-
able bond bill will provide state and local governments an op-
tional route to the corporate bond market when they are having
or inadequate agency safeguards, but expressed amazement
that despite these warnings, HUD did little to head off impend-
ing disaster.
Specifically, the committee found that HUD lost millions of
dollars in insurance claims and caused personal tragedy to
foreclosed homebuyers because it did not monitor closely
enough the activities of approved mortgagees.
Partly as a result of the committee's hearings, the depart-
ment wrested control over the mortgagees from the office of the
FHA Commissioner, where it had been for over 40 years, and
placed it in the hands of a four-party committee, the Mortgagee
Review Board. This group has already moved against a number
of mortgagees, including the Advance Mortgage Corp., a sub-
sidiary of Citicorp, and the second largest mortgage banking
firm in the country.
The report points out, however, that this could have been
done years ago, since the department was aware of servicing
shortcomings long before it took any action.
"Perhaps the most disturbing fact about this situation was
that everyone knew of the inadequacies in mortgage servicing,"
the committee wrote, "but felt powerless to do anything to cor-
rect them."
The report scored private lenders participating with the
government in HUD-FHA insurance programs for failing to
live up to the standards laid out in guidelines issued both by
HUD and the Federal National Mortgage Association (FN-
MA), the organization which holds much of the government-in-
sured debt.
Once homes are foreclosed, the report states that the abuses
for
THE WHITE HOUSE
WASHINGTON
April 15, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
ART QUERN
Hrter
SUBJECT:
Discussion Paper on Cities
It seems to me that our general discussion of urban issues
has produced a number of threads of thought which are
worth summarizing and pursuing.
The following brief rundown of these "threads" is offered
only as a means of promoting our continued explorations
of particular urban questions.
1.
Private Sector Involvement
A.
Corporations
-- What is it that leads a corporation
to commit itself to the betterment of
an urban area.
B. Banks
-- What roles do banks play in assisting
urban areas to weather fiscal crisis and
restore fiscal stability.
2.
Expanding Revenue Base
A. Annexation
-- What are the various possibilities,
advantages and disadvantages of
annexation.
B.
"Free trade zones"
-- Whether this concept offers any advantages
to urban areas.
2
3.
Use of Federal Funds
--
We are exploring the "allied services"
concept for cities to see if we can enable
much greater flexibility in their use of
Federal funds. In effect this is an "urban
block grant" concept.
4.
Economic Development
A.
We are examining current EDA policies toward
cities.
B.
We are reviewing a type of urban development
bank concept.
5.
Welfare Reform
--
The welfare reform studies we are engaged in
could offer some relief to cities.
6.
General Revenue Sharing
--
We are monitoring the current deliberations
on the Revenue Sharing issue as it relates
to cities.
7.
Gauging Fiscal Health
A.
Steve and Pat have compiled basic information
on the major cities as judged by outside
groups.
B.
Norm Hurd's intergovernmental finance project
could assist by identifying better tools to
be used in gauging fiscal conditions of cities.
8.
Current Federal Programs
A.
HUD
-- Carla Hills will be meeting with us soon
to review HUD's approach to urban questions.
B.
Transportation
-- Judy Hope has been reviewing "urban"
questions with DOT staff.
CC: Art Fletcher
Steve McConahey
Pat Delaney
Lynn May
Allen Moore
THE WHITE HOUSE
WASHINGTON
April 15, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
ART QUERN
Hrter
SUBJECT:
Discussion Paper on Cities
It seems to me that our general discussion of urban issues
has produced a number of threads of thought which are
worth summarizing and pursuing.
The following brief rundown of these "threads" is offered
only as a means of promoting our continued explorations
of particular urban questions.
1.
Private Sector Involvement
A.
Corporations
-- What is it that leads a corporation
to commit itself to the betterment of
an urban area.
B. Banks
-- What roles do banks play in assisting
urban areas to weather fiscal crisis and
restore fiscal stability.
2.
Expanding Revenue Base
A. Annexation
-- What are the various possibilities,
advantages and disadvantages of
annexation.
B.
"Free trade zones"
-- Whether this concept offers any advantages
to urban areas.
2
3.
Use of Federal Funds
--
We are exploring the "allied services"
concept for cities to see if we can enable
much greater flexibility in their use of
Federal funds. In effect this is an "urban
block grant" concept.
4.
Economic Development
A.
We are examining current EDA policies toward
cities.
B.
We are reviewing a type of urban development
bank concept.
5.
Welfare Reform
:
The welfare reform studies we are engaged in
could offer some relief to cities.
6.
General Revenue Sharing
--
We are monitoring the current deliberations
on the Revenue Sharing issue as it relates
to cities.
7.
Gauging Fiscal Health
A.
Steve and Pat have compiled basic information
on the major cities as judged by outside
groups.
B.
Norm Hurd's intergovernmental finance project
could assist by identifying better tools to
be used in gauging fiscal conditions of cities.
8.
Current Federal Programs
A.
HUD
-- Carla Hills will be meeting with us soon
to review HUD's approach to urban questions.
B.
Transportation
-- Judy Hope has been reviewing "urban"
questions with DOT staff.
CC: Art Fletcher
Steve McConahey
Pat Delaney
Lynn May
Allen Moore
12A
THE WICHITA EAGLE
Thursday, April 15, 1976
Urban
Drive to Fight Bias
"What we have already done is to
Ford Aide Hits
racialize public service programs so
much that nobody wants them.
"You know there are while blks in
the inner city who are without jobs
Campaign Hate
too.
There are white folks there who
shoot other people and who take dope.
Public service service programs are
By BOB HEATON
for everyone who needs them."
Staff Writer
Fletcher said he feels more cities
will follow New York City into radical
A presidential advisor, visiting in
programs of financial reform.
Wichita Wednesday, lashed out at
"They are going to have to hold the
"race baiting" and "hate baiting" by
line on expenses, I think," he said. "I
presidential candidates.
can see more and more cities taking
Art Fletcher, deputy assistant to the
advantage of bankruptcy laws to get
President for urban affairs and a
their houses in order."
former Kansan, was here to address
Fletcher was critical of public
THE WHITE HOUSE
WASHINGTON
April 12, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
ART QUERN Art
SUBJECT:
Follow-Up to April 9, 1976, Urban
Issues Meeting
The following are the next steps to be taken in exploration
of urban issues:
1. Annexation
Steve and Pat will look into the existing research
on the use of annexation by cities to expand their
revenue base.
2.
Free Trade Zones
Lynn will look into concept of "free trade zones"
for urban areas.
3. EDA
Quern will inquire about EDA's programs which have
been directed toward urban areas.
4. HUD
Lynn will circulate copies of HUD urban issues paper
and each member of the working group will provide
Lynn with comments in anticipation of a meeting with
Secretary Hills.
5.
Johnson and Johnson
Art Fletcher will proceed to set up a briefing session
by drafting a letter for Jim Cannon's signature.
2
6.
U.S. Chamber of Commerce
Art Fletcher will suggest Fletcher/Quern meeting with
Chamber Washington Urban Affairs Representative.
7.
Briefing on Revenue Sharing
Quern will invite Paul Myer to next working session to
brief on Revenue Sharing.
8.
Allied Services
Steve will have more detailed work prepared examining
Allied Services and Joint Funding Simplification Act.
9.
Tax Incentives
Quern will get further information on Administration's
tax incentive proposal.
Urbangolicy
THE WHITE HOUSE
At
WASHINGTON
April 15, 1976
Let two To
yood -
Review, when
MEMORANDUM FOR:
JIM CANNON
ART QUERN Hitor
week, are.
FROM:
we
SUBJECT:
Discussion Paper on Cities
June
It seems to me that our general discussion of urban issues
has produced a number of threads of thought which are
worth summarizing and pursuing.
The following brief rundown of these "threads" is offered
only as a means of promoting our continued explorations
of particular urban questions.
1.
Private Sector Involvement
Dut you England
Corporations
What is it that leads a corporation
to commit itself to the betterment of
an urban area.
Banks
is B.
in my!?
-- What roles do banks play in assisting
urban areas to weather fiscal crisis and
restore fiscal stability.
2.
Expanding Revenue Base
A.
Annexation
-- What are the various possibilities,
advantages and disadvantages of
annexation.
B.
"Free trade zones"
-- Whether this concept offers any advantages
to urban areas.
GERRLD 8. FORD
2
3.
Use of Federal Funds
good
--
We are exploring the "allied services"
concept for cities to see if we can enable
much greater flexibility in their use of
Joint
Federal funds. In effect this is an "urban
block grant" concept.
4.
Economic Development
I'd like to an a
A.
We are examining current EDA policies toward
cities.
defunter of (2) A Policy
B.
We are reviewing a type of urban development
bank concept.
5.
Welfare Reform
--
The could welfare offer reform some relief studies to we cities. are engaged in Pight
6.
General Revenue Sharing
--
We are monitoring the current deliberations
on the Revenue Sharing issue as it relates
to cities.
7.
Gauging Fiscal Health
A.
Steve and Pat have compiled basic information
on the major cities as judged by outside
groups.
B.
Norm Hurd's intergovernmental finance project
could assist by identifying better tools to
be used in gauging fiscal conditions of cities.
8.
Current Federal Programs
A. HUD
-- Carla Hills will be meeting with us soon
to review HUD's approach to urban questions.
B.
Transportation
-- Judy Hope has been reviewing "urban"
questions with DOT staff.
CC: Art Fletcher
Steve McConahey
Pat Delaney
GERALD LIQUEST = FORD
Lynn May
Allen Moore
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"ocrText": "The original documents are located in Box 39, folder \"Urban Policy (2)\" of the James M.\nCannon Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 39 of the James M. Cannon Files at the Gerald R. Ford Presidential Library\n5/4/76\nTHE WHITE HOUSE\nAt good- to\nWASHINGTON\nApril 9, 1976\nwe\nALL wt\nMEMORANDUM FOR:\nJIM CANNON\npls\nFROM:\nSTEVE McCONAHEY & PAT DELANEY\nwe\nAs a followup to our last meeting on Urban Issues and Art\nSun\nQuern's memorandum of April 8 on that subject, we have (1)\ndeveloped a brief analysis of the current financial status\nof several American cities and (2) drafted a procedure for\nhandling calls and inquiries from cities claiming \"financial\ncrisis.\nFINANCIAL PROFILE\nThere are two problems involved in developing a list of\nfinancially plagued cities. First, it is difficult to secure\nreliable and up-to-date data. Secondly, we feel it would be\nunwise to create such a list given the possibility that it\nwould be circulated outside the White House. If circulated,\nit would be potentially hazardous to these cities as they\nsought financing. Nevertheless, we have described the con-\ndition of several cities in three ways:\n1.\nBased on the 1972 ACIR financial study: In its\noriginal analysis, ACIR identified six warning\nsigns:\nBIG DEFICIT IN WARENT YEAR\na.\nan operating fund revenue-expenditure imbalance\nin which current expenditures significantly\nexceeded current revenues in one fiscal period.\nDEFICITS For\nb.\na consistent pattern of current expenditures\nexceeding current revenues by small amounts\nfor several years.\nC.\nan excess of current operating liabilities\n7\nover current assets (a fund deficit).\nd.\nshort-term operating loans outstanding at the\nconclusion of a fiscal year (or in some in-\nstances the borrowing of cash from restricted\nfunds or an increase in unpaid bills in lieu\nof short-term loans.\nBonrowny from Restricted fords\nFORD i LIBRARY 938870\n-2-\nRequired owners can't pey tax e\ne. a high and rising rate of property tax delinquency.\nf. a sudden and substantial decrease in assessed\nOMP in amend Hope ty value\nvalues for unexpected reasons.\naggiogate\nTables 1,2,4 and 5 indicate the financial condition of\ncities identified by ACIR in its analysis. We have not\nbeen able to develop the information for all of these in-\ndicators because of the lack of consistent data.\n2. Based on Standard & Poor's Ratings\nWe have also provided the Standard & Poor rating for\nthe selected list of 30 cities and the USCM list (see\nattached). This chart could be misleading in that it\nseems to portray a very strong picture for the financial\ncondition of these cities. Those cities with a AA or\nA could in fact, during a period of tight money, run\ninto difficulty with financing. The cities with a AAA\nwould be the first in line in the money market. All of\nthese, of course, would stand in back of Federal borrow-\ning to finance the current deficits. For example, Detroit\nwith a A rating during the New York City crisis could\nnot find an underwriter. There was just no market for\ntheir bonds. So these ratings must be considered in\ntandem with \"market conditions\".\nUnited States\nducyon\n3. Based on the USCM Analysis\nWe also have attached a somewhat different list prepared\nby the USCM at our request. This list contains cities\nthat they have identified as problems (see attachment).\nThis list contains several of the descriptors of the\nconditions found in Detroit, Cleveland, Yonkers, Newark,\nBoston, Baltimore and Buffalo. Again, one should note\nthe incomplete nature of these data.\nThese three analyses provide a sense of the financial con-\nditions found in many cities. However, these data do not\nprovide a good profile of smaller cities. Data for these\njurisdictions is even more incomplete. Again, we want to\ncaution against developing a specific problem list for White\nHouse monitoring. Our contact with cities and their public\ninterest organizations should provide us with an adequate\nwarning system.\nBERRLD R. FORD\n-3-\nINTERNAL PROCEDURE\nIn response to the second request, we have drafted a\nprocedure for the handling of specific inquiries from\ncities claiming a financial crisis (see attachment).\nACIR STUDY\nTable I\nRevenue-Expenditure Comparison\nGeneral Operating Fund\nLarge Cities\n(Cash Basis)\nExcess or (Deficiency) of Revenues\nCompared to Expenditures\nCities\n($ millions)\n(in order of population)\n1971*\n1974*\nNew York\n$ (656.2)\n$ (807.8)\nChicago\n14.0\n36.7\nLos Angeles\n(5.5)\n40.7\nPhiladelphia\n(48.8)\n5.5\nDetroit\n17.5\n8.6\nHouston\n(4.1)\n(8.0)\nBaltimore\n(8.3)\n23.9\nDallas\n(.9)\n1.2\nCleveland\n(13.2)\n0\nIndianapolis\n.2\n(.7)\nMilwaukee\n12.2\n7.3\nSan Francisco\n13.4\n9.8\nSan Diego\n2.1\n4.9\nSan Antonio\n( .4)\n1.6\nMemphis\n3.5\nNA\nBoston\n1.5\n(15.9)\nSt. Louis\n(4.5)\n(10.7)\nNew Orleans\n0\n9.8\nPhoenix\n(1.0)\n8.5\nColumbus\n1.0\n3.2\nSeattle\n1.8\n(1.1)\nJacksonville\n(2.5)\n11.0\nPittsburgh\n5.2\n.3\nDenver\n4.2\n4.0\nKansas City\n(1.3)\n1.1\nAtlanta\n(2.0)\n8.7\nBuffalo\n(5.4)\n(6.1)\nCincinnati\n( .5)\n1.6\nNashville\n2.6\n.5\nMinneapolis\n1.1\n(7.3)\n*Source: Compiled from available published financial reports for each city;\nsee accompanying list.\nTable II\nAccumulated Fund Balance or Deficit\nGeneral Operating Fund\nLarge Cities\n(Pro Forma Cash Basis)\nBalance or (Deficit)\nCities\n($ millions)\n(in order of population)\n1971*\n1974*\nNew York\n$ (657.6)\n$ (1,492.3)\nChicago\n(188.3)\n(179.0)\nLos Angeles\n115.0\n160.3\nPhiladelphia\n(29.2)\n(6.7)\nDetroit\n(17.2)\n(25.6)\nHouston\n13.6\n6.8\nBaltimore\n9.2\n15.4\nDallas\n3.8\n(1.2)\nCleveland\n(13.6)\n0\nIndianapolis\n2.0\n3.1\nMilwaukee\n17.5\n37.8\nSan Francisco\n79.9\n114.2\nSan Diego\n4.8\n2.8\nSan Antonio\n2.8\n1.4\nBoston\n25.9\n(22.6)\nMemphis\n5.6\nNA\nSt. Louis\n(3.5)\n(14.6)\nNew Orleans\n( .8)\n2.8\nPhoenix\n3.0\n.4\nColumbus\n1.7\n6.9\nSeattle\n14.7\n10.1\nJacksonville\n15.4\n14.1\nPittsburgh\n7.3\n16.5\nDenver\n7.2\n3.9\nKansas City\n.7\n.8\nAtlanta\n10.1\n20.5\nBuffalo\n1.6\n(21.8)\nCincinnati\n1.3\n11.1\nNashville\n2.8\n10.4\nMinneapolis\n5.4\n6.6\n*Source:\nCompiled from available published financial reports for each\ncity; see accompanying list.\nTable IV\nAnnual Percentage Change in\nGeneral Operating Fund Revenues\nand Expenditures, 1974*\nLarge Cities\nCities\nPercentage\nPercentage\n(in order of\nIncrease (Decrease)\nIncrease (Decrease)\npopulation)\nRevenues\nExpenditures\nNew York\n3.7%\n10.1%\nChicago\n12.0\n12.4\nLos Angeles\n9.7\n(2.5)\nPhiladelphia\n( .1)\n3.1\nDetroit\n0\n1.6\nHouston\n9.1\n12.7\nBaltimore\n4.1\n.1\nDallas\n9.6\n7.7\nCleveland\n13.0\n1.5\nIndianapolis\n5.1\n6.8\nMilwaukee\n9.4\n.6\nSan Francisco\n(1.9)\n2.3\nSan Diego\n17.9\n11.4\nSan Antonio\n19.5\n16.0\nBoston\n19.6\n15.4\nMemphis\nNA\nNA\nSt. Louis\n14.8\n17.7\nNew Orleans\n21.6\n15.3\nPhoenix\n13.3\n16.8\nColumbus\n8.1\n8.4\nSeattle\n8.1\n8.7\nJacksonville\n20.9\n9.8\nPittsburgh\n(10.0)\n(7.1)\nDenver\n19.4\n8.6\nKansas City\n5.3\n6.7\nAtlanta\n12.8\n3.1\nBuffalo\n3.3\n(8.0)\nCincinnati\n4.5\n8.7\nNashville\n19.4\n10.1\nMinneapolis\n(2.4)\n5.8\nAverage\n9.3%\n7.0%\nMedian\n9.1%\n8.4%\n*Source: Compiled from available published financial reports for each\ncity; see accompanying list.\nGERALD LIQUEST R. FORD\nTable V\nGeneral Obligation Bonded Debt\nLarge Cities\nDecember 31, 1971 and April 30, 1974\nCities\nDebt as a\n(in order of\nDebt Per Capita\nPercentage of Value*\npopulation)\n12/31/71\n4/30/74\n12/31/71\n4/30/74\nNew York\n$612\n$850\n7.5\n8.1\nChicago\n204\n357\n2.7\n3.8\nLos Angeles\n331\n362\n3.1\n3.0\nPhiladelphia\n456\n445\n12.5\n6.6\nDetroit\n293\n372\n3.9\n4.6\nHouston\n509\n535\n5.5\n3.6\nBaltimore\n374\n262\n6.4\n3.8\nDallas\n521\n666\n5.0\n5.8\nCleveland\n369\n369\n3.9\n3.9\nIndianapolis\n275\n338\n3.8\n5.0\nMilwaukee\n316\n357\n4.5\n4.0\nSan Francisco\n455\n564\n3.4\n4.0\nSan Diego\n237\n181\n2.6\n1.6\nSan Antonio\n240\n344\n5.3\n6.4\nMemphis\n435\n386\n6.6\n4.8\nBoston\n536\n456\n17.2\n5.7\nSt. Louis\n338\n259\n4.7\n3.2\nNew Orleans\n486\n504\n6.9\n5.4\nPhoenix\n230\n304\n3.7\n3.3\nColumbus\n330\n413\n4.9\n5.6\nSeattle\n422\n540\n3.6\n4.5\nJacksonville\n173\n293\n3.5\n4.2\nPittsburgh\n285\n626\n5.4\n10.1\nDenver\n75\n309\n0.9\n2.4\nKansas City\n387\n471\n4.5\n5.3\nAtlanta\n458\n474\n4.8\n3.5\nBuffalo\n345\n464\n8.2\n11.0\nCincinnati\n432\n409\n4.6\n3.5\nNashville\n367\n367\n7.2\n7.2\nMinneapolis\n254\n467\n2.6\n5.1\nAverage\n358\n425\n5.3\n5.0\nMedian\n356\n398\n4.8\n4.6\nSource: Municipal Bond Selector, Standard and Poor's Corporation, III,\nNo. 6, December 31, 1971 and April 30, 1974.\n*Assessed Value\nSTANDARD & POOR\nFebruary 1976\nStandard & Poor's Municipal Bond Ratings for 30 Selected Cities\nGeneral Obligation Bonds (except where designated otherwise)\nCities\n(in order of population)\n*\nNew York\nAA\nChicago\n(TAN)\nAA\nLos Angeles\n(County)\nA-\nPhiladelphia\nA\nDetroit\n(I.S.D.)\nAA\nHouston\nA\nBaltimore\nAA\nDallas\n(I.S.D.)\nAA\nCleveland\n(Water Rev)\nAAA\nIndianapolis\n(Various Authority & S.D.)\nAAA\nMilwaukee\n(County)\nAA\nSan Francisco\n(BART-Revenue)\nAA\nSan Deigo\n(County)\nAA\nSan Antonio\nA\nBoston\nAA\nMemphis\nA\nSt. Louis\nA\nNew Orleans\n(SWR & WTR Bonds)\nAA\nPhoenix\n(U.H.S.D.)\nAA\nColumbus\nAA\nSeattle\nAA\nJacksonville\nAA\nPittsburgh\nAAA\nDenver\n(S.D. #1)\nAA\nKansas City\nAA\nAtlanta\nA\nBuffalo\nAA\nCincinnati\nA+\nNashville\n(Various Revenue Bonds)\nAAA\nMinneapolis\n(USCM LIST) --\nNR\nYonkers\nBBB\nNewark\nAA\nSaginan\n(County)\nAA\nFlint\n(S.D.)\nAA\nGrant Rapids\n(S.D.)\nAA\nRoyal Oak\n(S.D.)\n*Rating Suspended\nAAA Prime--These are obligations of the highest quality. They have\nthe strongest capacity for timely payment of debt service.\nAA High Grade--Bonds rate AA have the second strongest capacity for\npayment of debt service.\nA\nGood Grade Principal and interest payments on bonds in this category\nare regarded as safe.\nBBB Medium Grade--This is the lowest investment grade security rating.\nNR No rating\nFebruary 1976\nStandard & Poor's Municipal Bond Ratings for 30 Selected Cities\nGeneral Obligation Bonds (except where designated otherwise)\nCities\n(in order of population)\n*\nNew York\nAA\nChicago\n(TAN)\nAA\nLos Angeles\n(County)\nA-\nPhiladelphia\nA\nDetroit\n(I.S.D.)\nAA\nHouston\nA\nBaltimore\nAA\nDallas\n(I.S.D.)\nAA\nCleveland\n(Water Rev)\nAAA\nIndianapolis\n(Various Authority & S.D.)\nAAA\nMilwaukee\n(County)\nAA\nSan Francisco\n(BART-Revenue)\nAA\nSan Deigo\n(County)\nAA\nSan Antonio\nA\nBoston\nAA\nMemphis\nA\nSt. Louis\nA\nNew Orleans\n(SWR & WTR Bonds)\nAA\nPhoenix\n(U.H.S.D.)\nAA\nColumbus\nAA\nSeattle\nAA\nJacksonville\nAA\nPittsburgh\nAAA\nDenver\n(S.D. #1)\nAA\nKansas City\nAA\nAtlanta\nA\nBuffalo\nAA\nCincinnati\nA+\nNashville\n(Various Revenue Bonds)\nAAA\nMinneapolis\n(USCM LIST) --\nNR\nYonkers\nBBB\nNewark\nAA\nSaginanA\n(County)\nAA\nFlint\n(S.D.)\nAA\nGrant Rapids\n(S.D.)\nAA\nRoyal Oak\n(S.D.)\n*Rating Suspended\nAAA Prime--These are obligations of the highest quality. They have\nthe strongest capacity for timely payment of debt service.\nAA High Grade Bonds rate AA have the second strongest capacity for\npayment of debt service.\nA\nGood Grade Principal and interest payments on bonds in this category\nare regarded as safe.\nBBB Medium Grade--This is the lowest investment grade security rating.\nNR No rating\nUSCM STUDY\nDetroit\nCleveland\nYonkers\nNewark\nBoston\nBaltimore\nBuffalb\nUnemployment Rate (Dec.75) 17.4\n(Nov75) 10.8\n16.9\nTotal Budget FY 75-76\n808.0 Million\n324.8 Million\n124.0 Million\n209.8 Million\n661.0 Million\n1,425.5 Million\n480.0 Mill\n(with School)\n(1/75-12/75)\n(with school)\n(with schools)\nFederal Revenue Sharing\n39.5 Mill.\n16.0 Mill.\n1.6 Mill.\n8.7 Mill.\n25.0 Mill.\n27.0 Mill.\n8.2 Mill\nState Revenue Sharing or\nAid\n67.2 Mill.\n-\n10.2 Mill.\n2.5 Mill.\n140.0 Mill.\n-\n21.4 Mil\nProjected Deficit\n44.3\n0 22\n8.5 Mill.\n5.5 Mill.\n33.0 Mill.\n0\n34.0 Mill\nPrevious Year Carry over\n17.2\n0\n6.5 Mill.\n0\n14.7 Mill.\n0\n20.0 Mil\nHighest Level of\nEmployment\n19,942 (1/75)\n13,000 (1970)\n5,500 (1975)\n6,100 (1/75)\n23,327 (2/1/74)\n31,000\n6,330 (19\nPresent Level of\nEmployment\n18,314 (12/75)\n10,992\n4,683\n5,100\n14,282\n32,882\n5,250\nProjected Level 7/1/76\n?\n10,800\n4,500\n4,900\n13,700\n32,882\n4,050\nCETA Employment (Current)\n2,864\n1,700\n?\n?\n1,310\n200\n1,600\nAreas of Past Employer\nWaste,Health,\nAcross the Bd.\nAcross the Bd.\nMostly garba\nReduction\nAcross the Bd.\nRec, Finance\nParks but\nAcross the D\nAreas of Anticipated\nPks. to go 0\nEmployee Reduction\nAcross the Bd.\nRecreation &\nAcross the Bd.\nParks & Rec.\nof business\nProperty\nShorter work week\nYes\nWork Without Pay\nReduced Services\nGERALD\nMounted Squad\nNo backyard\nDisbanded\ngarbage\nFORD\nClosed Facilities\nLibrary, Museum\nPrinting plant\nClosed Parks\nshorter hours\nclosed\nRec Centers\n-2-\nDetroit\nCleveland\nYonkers\nNewark\nBoston\nBaltimore\nBuffalo\nPay Freeze\nMunicipal increase\nPay freeze 11/75\nnegotiated\nPay Cut\nTax Increase\nReferendum Rejected\nReal Prop. Tax\nby voters\nincreased to max.\nBonding Operating Exp\n85.0 Mill.\n54.0 Mill\nor Tax Anticipation Notes\n8.5 Mill.\n15.0 Mill.\nInterest Rate\n9.0 %\n8.75 %\n7.30 %\n9.0%\nGERALD FORD\n-2-\nGrand\nRoyal\nSeattle\nAtlanta\nPhiladelphia\nSaginaw\nFlint\nRapids\nOak\nTax Increases\nProp. Tax Increase\nTax increases in\nProp. Tax Increase\nIn 1974\nvirtually all\n3 mils. for 5 year:\ncategories\nBonding Operating Exps. or\nTax Anticipation Notes\nInterest Rate\n100 Million\nGERALD\nFORD\nSeattle\nAtlanta\nPhiladelphia\nSaginaw\nFlint\nGrand\nRoyal\nRapids\nOak\nUnemployment Rate\n8.8\n12.0\n(Metro) 9.4\n(Jan.76) 8.5\n12.0\nTotal Budget FY 75-76\n279.9 Million\n130.5 Million\n1,160.0 Million\n36.6 Million\n49.9 Million\n?\n13.0 Mill\nFederal Revenue Sharing\n-\n7.0 Mill.\n52.2 Mill.\n2.7 Mill.\n4.2 Mill.\n3.5 Million\n.5 Mill\nState Revenue Sharing\nor Aid\n8.7 Mill.\n2.5 Mill.\n-\n2.6 Mill.\n5.1 Mill.\n6.9 Mill.\n2.2 Mill\nProjected Deficit\n0\n0\n80.0 Mill.\n0\n0\n0\n3.0 Mill\nPrevious Year Carry Over\n0\n0\n11.0 Mill.\n0\n0\n0\n0\npart of\nMill.\nHighest Level of\nEmployment\n12,000 (1973)\n35,000\n1,073\n2,000\n2,517\n461\nPresent Level of\nEmployment\n9,090\n35,000\n1,073\n2,000\n2,447\n451\nProjected Level 7/1/76\n9,090\n35,000\n1,073\n1,800\n2,447\n451\n?\nCETA Employment (Current)\n600\n400\n417\n74\nAreas of Past Employee\nReduction\nAcross the Bd.\nAcross the Bd\nAcross the Bd\nAreas of Anticipated\nEmployee Reduction\nAcross the Bd.\nAcross the Bd.\nShorter Work Week\nWork Without Pay\nRextuced Services\nClosed Facilities\nGERALD\nClose Hospital\nPay Freeze\nFORD\nFreeze being negotiated\nPay Cuts\nDRAFT PROCEDURE\nPROPOSED PROCEDURE FOR MONITORING\nCITY FINANCIAL PROBLEMS\nOutlined below is a suggested procedure for responding to\ncalls and correspondence outlining a city's financial problem\nand/or requesting assistance. The process would provide a\nfocal point for information and would insure a coordinated\nWhite House response. The procedure would involve the\nfollowing steps:\n1.\nComplete check list of information based on tele-\nphone conversations or written correspondence, and\nforward this information to the Office of Inter-\ngovernmental Affairs. The check list should\ninclude the following information:\nA.\nName of City\nB.\nState\nC.\nName of Mayor\nD.\nProvider of information/position\nE.\nBrief description of the problem\n- -Nature of problem\nAmount of money involved\nState action and response to date\nAlternatives available\nProposed solution\nAvailability of documentation\n- Nature of request to Federal\nGovernment\n- Other groups involved, e.g.\nbanks, business\n2.\nDevelop and maintain in the Office of Intergovern-\nmental Affairs a file on the city in question.\nThe files should include the following items:\nA.\nCompleted check list\nB.\nLog of calls and discussions along with\ndescription of actions taken\nC.\nCorrespondence\nD.\nAssignment of lead responsibility\nE.\nCopies of memoranda and decision papers\n3.\nAssign day-to-day responsibility for monitoring and\nfollow up with the city. (This would likely be IGA\nstaff or specific agency representatives)\n4.\nAlert the President of the situation through Jim\nCannon's weekly report.\n5.\nCirculate check list from Jim Cannon to the Urban\nTask Force. The circulation list should include\nat a minimum the following:\nA.\nCannon\nB.\nSeidman\nC.\nO'Neill\nD.\nSimon\nE.\nFletcher\nF.\nQuern\nG.\nMcConahey\nH.\nAppropriate Domestic Council Staff\n6.\nConvene Urban Task Force as necessary to review the\nsituation, receive analysis and information from\nthe city in question, and develop necessary memoranda\nand recommendations for the President.\n7.\nMake recommendations to the EPB as necessary.\nCities May Flourish\nIn South and West,\nDecline in Northeast\nBut Manhattan Could Be\nA Rich Enclave; Suburbia\nTo Expand Everywhere\nA Downturn in Violence?\nBy ROGER RICKLEFS\nStoff Reporter of THE WALL STREET JOURNAL\nNEW YORK-Only a dozen years ago,\n32\nTHE WALL STREET JOURNAL, Tuesday, April 6, 1976\nThe Future Revised: Cities Likely\nTo Flourish in the South and West\nTHE WHITE HOUSE\nWASHINGTON\nApril 9, 1976\nMEMORANDUM FOR:\nJIM CANNON\nFROM:\nSTEVE McCONTHEY & PAT DELANEY\nAs a followup to our last meeting on Urban Issues and Art\nQuern's memorandum of April 8 on that subject, we have (1)\ndeveloped a brief analysis of the current financial status\nof several American cities and (2) drafted a procedure for\nhandling calls and inquiries from cities claiming \"financial\ncrisis.\nFINANCIAL PROFILE\nThere are two problems involved in developing a list of\nfinancially plagued cities. First, it is difficult to secure\nreliable and up-to-date data. Secondly, we feel it would be\nunwise to create such a list given the possibility that it\nwould be circulated outside the White House. If circulated,\nit would be potentially hazardous to these cities as they\nsought financing. Nevertheless, we have described the con-\ndition of several cities in three ways:\n1.\nBased on the 1972 ACIR financial study: In its\noriginal analysis, ACIR identified six warning\nsigns:\na.\nan operating fund revenue-expenditure imbalance\nin which current expenditures significantly\nexceeded current revenues in one fiscal period.\nb.\na consistent pattern of current expenditures\nexceeding current revenues by small amounts\nfor several years.\nC.\nan excess of current operating liabilities\nover current assets (a fund deficit).\nd.\nshort-term operating loans outstanding at the\nconclusion of a fiscal year (or in some in-\nstances the borrowing of cash from restricted\nfunds or an increase in unpaid bills in lieu\nof short-term loans.\n-2-\ne. a high and rising rate of property tax delinquency.\nf. a sudden and substantial decrease in assessed\nvalues for unexpected reasons.\nTables 1,2,4 and 5 indicate the financial condition of\ncities identified by ACIR in its analysis. We have not\nbeen able to develop the information for all of these in-\ndicators because of the lack of consistent data.\n2. Based on Standard & Poor's Ratings\nWe have also provided the Standard & Poor rating for\nthe selected list of 30 cities and the USCM list (see\nattached). This chart could be misleading in that it\nseems to portray a very strong picture for the financial\ncondition of these cities. Those cities with a AA or\nA could in fact, during a period of tight money, run\ninto difficulty with financing. The cities with a AAA\nwould be the first in line in the money market. All of\nthese, of course, would stand in back of Federal borrow-\ning to finance the current deficits. For example, Detroit\nwith a A rating during the New York City crisis could\nnot find an underwriter. There was just no market for\ntheir bonds. So these ratings must be considered in\ntandem with \"market conditions\".\n3. Based on the USCM Analysis\nWe also have attached a somewhat different list prepared\nby the USCM at our request. This list contains cities\nthat they have identified as problems (see attachment).\nThis list contains several of the descriptors of the\nconditions found in Detroit, Cleveland, Yonkers, Newark,\nBoston, Baltimore and Buffalo. Again, one should note\nthe incomplete nature of these data.\nThese three analyses provide a sense of the financial con-\nditions found in many cities. However, these data do not\nprovide a good profile of smaller cities. Data for these\njurisdictions is even more incomplete. Again, we want to\ncaution against developing a specific problem list for White\nHouse monitoring. Our contact with cities and their public\ninterest organizations should provide us with an adequate\nwarning system.\n-3-\nINTERNAL PROCEDURE\nIn response to the second request, we have drafted a\nprocedure for the handling of specific inquiries from\ncities claiming a financial crisis (see attachment) .\nNote: Attached is a Wall Street Journal Article\nACIR STUDY\nTable I\nRevenue-Expenditure Comparison\nGeneral Operating Fund\nLarge Cities\n(Cash Basis)\nExcess or (Deficiency) of Revenues\nCompared to Expenditures\nCities\n($ millions)\n(in order of population)\n1971*\n1974*\nNew York\n$ (656.2)\n$ (807.8)\nChicago\n14.0\n36.7\nLos Angeles\n(5.5)\n40.7\nPhiladelphia\n(48.8)\n5.5\nDetroit\n17.5\n8.6\nHouston\n(4.1)\n(8.0)\nBaltimore\n(8.3)\n23.9\nDallas\n( .9)\n1.2\nCleveland\n(13.2)\n0\nIndianapolis\n.2\n( .7)\nMilwaukee\n12.2\n7.3\nSan Francisco\n13.4\n9.8\nSan Diego\n2.1\n4.9\nSan Antonio\n( .4)\n1.6\nMemphis\n3.5\nNA\nBoston\n1.5\n(15.9)\nSt. Louis\n(4.5)\n(10.7)\nNew Orleans\n0\n9.8\nPhoenix\n(1.0)\n8.5\nColumbus\n1.0\n3.2\nSeattle\n1.8\n(1.1)\nJacksonville\n(2.5)\n11.0\nPittsburgh\n5.2\n.3\nDenver\n4.2\n4.0\nKansas City\n(1.3)\n1.1\nAtlanta\n(2.0)\n8.7\nBuffalo\n(5.4)\n(6.1)\nCincinnati\n(.5)\n1.6\nNashville\n2.6\n.5\nMinneapolis\n1.1\n(7.3)\n*Source: Compiled from available published financial reports for each city;\nsee accompanying list.\nTable II\nAccumulated Fund Balance or Deficit\nGeneral Operating Fund\nLarge Cities\n(Pro Forma Cash Basis)\nBalance or (Deficit)\nCities\n($ millions)\n(in order of population)\n1971*\n1974*\nNew York\n$ (657.6)\n$ (1,492.3)\nChicago\n(188.3)\n(179.0)\nLos Angeles\n115.0\n160.3\nPhiladelphia\n(29.2)\n(6.7)\nDetroit\n(17.2)\n(25.6)\nHouston\n13.6\n6.8\nBaltimore\n9.2\n15.4\nDallas\n3.8\n(1.2)\nCleveland\n(13.6)\n0\nIndianapolis\n2.0\n3.1\nMilwaukee\n17.5\n37.8\nSan Francisco\n79.9\n114.2\nSan Diego\n4.8\n2.8\nSan Antonio\n2.8\n1.4\nBoston\n25.9\n(22.6)\nMemphis\n5.6\nNA\nSt. Louis\n(3.5)\n(14.6)\nNew Orleans\n( .8)\n2.8\nPhoenix\n3.0\n.4\nColumbus\n1.7\n6.9\nSeattle\n14.7\n10.1\nJacksonville\n15.4\n14.1\nPittsburgh\n7.3\n16.5\nDenver\n7.2\n3.9\nKansas City\n.7\n.8\nAtlanta\n10.1\n20.5\nBuffalo\n1.6\n(21.8)\nCincinnati\n1.3\n11.1\nNashville\n2.8\n10.4\nMinneapolis\n5.4\n6.6\n*Source:\nCompiled from available published financial reports for each\ncity; see accompanying list.\nTable IV\nAnnual Percentage Change in\nGeneral Operating Fund Revenues\nand Expenditures, 1974*\nLarge Cities\nCities\nPercentage\nPercentage\n(in order of\nIncrease (Decrease)\nIncrease (Decrease)\npopulation)\nRevenues\nExpenditures\nNew York\n3.7%\n10.1%\nChicago\n12.0\n12.4\nLos Angeles\n9.7\n(2.5)\nPhiladelphia\n( .1)\n3.1\nDetroit\n0\n1.6\nHouston\n9.1\n12.7\nBaltimore\n4.1\n.1\nDallas\n9.6\n7.7\nCleveland\n13.0\n1.5\nIndianapolis\n5.1\n6.8\nMilwaukee\n9.4\n.6\nSan Francisco\n(1.9)\n2.3\nSan Diego\n17.9\n11.4\nSan Antonio\n19.5\n16.0\nBoston\n19.6\n15.4\nMemphis\nNA\nNA\nSt. Louis\n14.8\n17.7\nNew Orleans\n21.6\n15.3\nPhoenix\n13.3\n16.8\nColumbus\n8.1\n8.4\nSeattle\n8.1\n8.7\nJacksonville\n20.9\n9.8\nPittsburgh\n(10.0)\n(7.1)\nDenver\n19.4\n8.6\nKansas City\n5.3\n6.7\nAtlanta\n12.8\n3.1\nBuffalo\n3.3\n(8.0)\nCincinnati\n4.5\n8.7\nNashville\n19.4\n10.1\nMinneapolis\n(2.4)\n5.8\nAverage\n9.3%\n7.0%\nMedian\n9.1%\n8.4%\n*Source: Compiled from available published financial reports for each\ncity; see accompanying list.\nTable V\nGeneral Obligation Bonded Debt\nLarge Cities\nDecember 31, 1971 and April 30, 1974\nCities\nDebt as a\n(in order of\nDebt Per Capita\nPercentage of Value*\npopulation)\n12/31/71\n4/30/74\n12/31/71\n4/30/74\nNew York\n$612\n$850\n7.5\n8.1\nChicago\n204\n357\n2.7\n3.8\nLos Angeles\n331\n362\n3.1\n3.0\nPhiladelphia\n456\n445\n12.5\n6.6\nDetroit\n293\n372\n3.9\n4.6\nHouston\n509\n535\n5.5\n3.6\nBaltimore\n374\n262\n6.4\n3.8\nDallas\n521\n666\n5.0\n5.8\nCleveland\n369\n369\n3.9\n3.9\nIndianapolis\n275\n338\n3.8\n5.0\nMilwaukee\n316\n357\n4.5\n4.0\nSan Francisco\n455\n564\n3.4\n4.0\nSan Diego\n237\n181\n2.6\n1.6\nSan Antonio\n240\n344\n5.3\n6.4\nMemphis\n435\n386\n6.6\n4.8\nBoston\n536\n456\n17.2\n5.7\nSt. Louis\n338\n259\n4.7\n3.2\nNew Orleans\n486\n504\n6.9\n5.4\nPhoenix\n230\n304\n3.7\n3.3\nColumbus\n330\n413\n4.9\n5.6\nSeattle\n422\n540\n3.6\n4.5\nJacksonville\n173\n293\n3.5\n4.2\nPittsburgh\n285\n626\n5.4\n10.1\nDenver\n75\n309\n0.9\n2.4\nKansas City\n387\n471\n4.5\n5.3\nAtlanta\n458\n474\n4.8\n3.5\nBuffalo\n345\n464\n8.2\n11.0\nCincinnati\n432\n409\n4.6\n3.5\nNashville\n367\n367\n7.2\n7.2\nMinneapolis\n254\n467\n2.6\n5.1\nAverage\n358\n425\n5.3\n5.0\nMedian\n356\n398\n4.8\n4.6\nSource: Municipal Bond Selector, Standard and Poor's Corporation, III,\nNo. 6, December 31, 1971 and April 30, 1974.\n*Assessed Value\nSTANDARD & POOR\nFebruary 1976\nStandard & Poor's Municipal Bond Ratings for 30 Selected Cities\nGeneral Obligation Bonds (except where designated otherwise)\nCities\n(in order of population)\n*\nNew York\nAA\nChicago\n(TAN)\nAA\nLos Angeles\n(County)\nA-\nPhiladelphia\nA\nDetroit\n(I.S.D.)\nAA\nHouston\nA\nBaltimore\nAA\nDallas\n(I.S.D.)\nAA\nCleveland\n(Water Rev)\nAAA\nIndianapolis\n(Various Authority & S.D.)\nAAA\nMilwaukee\n(County)\nAA\nSan Francisco\n(BART-Revenue)\nAA\nSan Deigo\n(County)\nAA\nSan Antonio\nA\nBoston\nAA\nMemphis\nA\nSt. Louis\nA\nNew Orleans\n(SWR & WTR Bonds)\nAA\nPhoenix\n(U.H.S.D.)\nAA\nColumbus\nAA\nSeattle\nAA\nJacksonville\nAA\nPittsburgh\nAAA\nDenver\n(S.D. #1)\nAA\nKansas City\nAA\nAtlanta\nA\nBuffalo\nAA\nCincinnati\nAt\nNashville\n(Various Revenue Bonds)\nAAA\nMinneapolis\n(USCM LIST) --\nNR\nYonkers\nBBB\nNewark\nAA\nSaginan\n(County)\nAA\nFlint\n(S.D.)\nAA\nGrant Rapids\n(S.D.)\nAA\nRoyal Oak\n(S.D.)\n*Rating Suspended\nAAA Prime--These are obligations of the highest quality. They have\nthe strongest capacity for timely payment of debt service.\nAA High Grade--Bonds rate AA have the second strongest capacity for\npayment of debt service.\nA\nGood Grade--Principal and interest payments on bonds in this category\nare regarded as safe.\nBBB Medium Grade--This is the lowest investment grade security rating.\nNR No rating\nUSCM STUDY\nDetroit\nCleveland\nYorkers\nNewark\nBoston\nBaltimore\nBuffalt\nemployment Rate (Dec.75) 17.4\n(Nov75) 10.8\n16.9\notal Budget FY 75-76\n808.0 Million\n324.8 Million\n124.0 Million\n209.8 Million\n661.0 Million\n1,425.5 Million\n480.0 Mi\n(with School)\n(1/75-12/75)\n(with school)\n(with schools)\nederal Revenue Sharing\n39.5 Mill.\n16.0 Mill.\n1.6 Mill.\n8.7 Mill.\n25.0 Mill.\n27.0 Mill.\n8.2 Mi\ntate Revenue Sharing or\nid\n67.2 Mill.\n-\n10.2 Mill.\n2.5 Mill.\n140.0 Mill.\n-\n21.4 MA\nrojected Deficit\n44.3\n0 22\n8.5 Mill.\n5.5 Mill.\n33.0 Mill.\n0\n34.0 Mi\nrevious Year Carry over\n17.2\n0\n6.5 Mill.\n0\n14.7 Mill.\n0\n20.0 Mi\nighest Level of\nmployment\n19,942\n(1/75)\n13,000 (1970)\n5,500 (1975)\n6,100 (1/75)\n23,327 (2/1/74)\n31,000\n6,330 (In\nresent Level of\nmployment\n18,314 (12/75)\n10,992\n4,683\n5,100\n14,282\n32,882\n5,250\nrojected Level 7/1/76\n?\n10,800\n4,500\n4,900\n13,700\n32,882\n4,050\nETA Employment (Current)\n2,864\n1,700\n?\n?\n1,310\n200\n1,600\nreas of Past Employer\nWaste,Health,\nAcross the Bd.\nAcross the Bd.\nMostly gart\neduction\nAcross the Bd.\nRec, Finance\nParks but\nAcross the\nreas of Anticipated\nPks. to go\nmployee Reduction\nAcross the Bd.\nRecreation &\nAcross the Bd.\nParks & Rec.\nof business\nProperty\nhorter work week\nYes\nbrk Without Pay\nGERALD\neduced Services\nFORD\nMounted Squad\nNo backyard\nDisbanded\ngarbage\nlosed Facilities\nLibrary, Museum\nPrinting plant\nClosed Parl\nshorter hours\nclosed\nRec Center:\n-2-\nDetroit\nCleveland\nYonkers\nNewark\nBoston\nBaltimore\nBuffalo\nFreeze\nMunicipal increase\nPay freeze 11/75\nnegotiated\nCut\nIncrease\nReferendum Rejected Real Prop. Tax\nby voters\nincreased to max.\nding Operating Exp\n85.0 Mill.\n54.0 Mill\nTax Anticipation Notes\n8.5 Mill.\n15.0 Mill.\nerest Rate\n9.0 %\n8.75 %\n7.30 %\n9.0%\nGERALD\nLIBRANT FORD ?\nScattle\nAtlanta\nPhiladelphia\nSaginaw\nFlint\nGrand\nRoyal\nRapids\nOak\nemployment Rate\n8.8\n12.0\n(Metro) 9.4\n(Jan.7 8.5\n12.0\notal Budget FY 75-76\n279.9 Million\n130.5 Million\n1,160.0 Million\n36.6 Million\n49.9 Million\n?\n13.0 Mi\nederal Revenue Sharing\n-\n7.0 Mill.\n52.2 Mill.\n2.7 Mill.\n4.2 Mill.\n3.5 Million\n.5 Mi\ntate Revenue Sharing\nor Aid\n8.7 Mill.\n2.5 Mill.\n-\n2.6 Mill.\n5.1 Mill.\n6.9 Mill.\n2.2 Mi\nrojected Deficit\n0\n0\n80.0 Mill.\n0\n0\n0\n3.0 Mi\nrevious Year Carry Over\n0\n0\n11.0 Mill.\n0\n0\n0\n0\npart of\nMill.\nighest Level of\nmployment\n12,000 (1973)\n35,000\n1,073\n2,000\n2,517\n461\nresent Level of\nmployment\n9,090\n35,000\n1,073\n2,000\n2,447\n151\nrojected Level 7/1/76\n9,090\n35,000\n1,073\n1,800\n2,447\n451\n?\nETA Employment (Current)\n600\n400\n417\n74\nreas of Past Employee\nReduction\nAcross the Bd.\nAcross the Bd\nAcross the Bd\nreas of Anticipated\nEmployee Reduction\nAcross the Bd.\nAcross the Bd.\nhorter Work Week\nlork Without Pay\nServices\nlosed Pacilities\nClose Hospital\nay Freeze\nFORD\nFreeze being negotiated\nLISSANY\nay Cuts\nGrand\nRoyal\nSeattle\nAtlanta\nPhiladelphia\nSaginaw\nFlint\nRapids\nOak\nX Increases\nProp. Tax Increase\nTax increases in\nProp. Tax Increa\nIn 1974\nvirtually all\n3 mils. for 5 ye\ncategories\nnding Operating Exps. or\nIX Anticipation Notes\nterest Rate\n100 Million\nGERALD FORD\nDRAFT PROCEDURE\nPROPOSED PROCEDURE FOR MONITORING\nCITY FINANCIAL PROBLEMS\nOutlined below is a suggested procedure for responding to\ncalls and correspondence outlining a city's financial problem\nand/or requesting assistance. The process would provide a\nfocal point for information and would insure a coordinated\nWhite House response. The procedure would involve the\nfollowing steps:\n1.\nComplete check list of information based on tele-\nphone conversations or written correspondence, and\nforward this information to the Office of Inter-\ngovernmental Affairs. The check list should\ninclude the following information:\nA.\nName of City\nB.\nState\nC.\nName of Mayor\nD.\nProvider of information/position\nE.\nBrief description of the problem\n- Nature of problem\nAmount of money involved\nState action and response to date\n- Alternatives available\n-\nProposed solution\n-\nAvailability of documentation\n-\n- Nature of request to Federal\nGovernment\n-\nOther groups involved, e.g.\nbanks, business\n2.\nDevelop and maintain in the Office of Intergovern-\nmental Affairs a file on the city in question.\nThe files should include the following items:\nA.\nCompleted check list\nB.\nLog of calls and discussions along with\ndescription of actions taken\nC.\nCorrespondence\nD.\nAssignment of lead responsibility\nE.\nCopies of memoranda and decision papers\n3.\nAssign day-to-day responsibility for monitoring and\nfollow up with the city. (This would likely be IGA\nstaff or specific agency representatives)\n4.\nAlert the President of the situation through Jim\nCannon's weekly report.\n5.\nCirculate check list from Jim Cannon to the Urban\nTask Force. The circulation list should include\nat a minimum the following:\nA.\nCannon\nB.\nSeidman\nC.\nO'Neill\nD.\nSimon\nE.\nFletcher\nF.\nQuern\nG.\nMcConahey\nH.\nAppropriate Domestic Council Staff\n6.\nConvene Urban Task Force as necessary to review the\nsituation, receive analysis and information from\nthe city in question, and develop necessary memoranda\nand recommendations for the President.\n7.\nMake recommendations to the EPB as necessary.\nTHE WHITE HOUSE\nWASHINGTON\nApril 12, 1976\nMEMORANDUM FOR:\nJIM CANNON\nFROM:\nART QUERN Artor\nSUBJECT:\nFollow-Up to April 9, 1976, Urban\nIssues Meeting\nThe following are the next steps to be taken in exploration\nof urban issues:\n1.\nAnnexation\nSteve and Pat will look into the existing research\non the use of annexation by cities to expand their\nrevenue base.\n2.\nFree Trade Zones\nLynn will look into concept of \"free trade zones\"\nfor urban areas.\n3. EDA\nQuern will inquire about EDA's programs which have\nbeen directed toward urban areas.\n4.\nHUD\nLynn will circulate copies of HUD urban issues paper\nand each member of the working group will provide\nLynn with comments in anticipation of a meeting with\nSecretary Hills.\n5.\nJohnson and Johnson\nArt Fletcher will proceed to set up a briefing session\nby drafting a letter for Jim Cannon's signature.\n2\n6.\nU.S. Chamber of Commerce\nArt Fletcher will suggest Fletcher/Quern meeting with\nChamber Washington Urban Affairs Representative.\n7.\nBriefing on Revenue Sharing\nQuern will invite Paul Myer to next working session to\nbrief on Revenue Sharing.\n8.\nAllied Services\nSteve will have more detailed work prepared examining\nAllied Services and Joint Funding Simplification Act.\n9.\nTax Incentives\nQuern will get further information on Administration's\ntax incentive proposal.\nSir.\nTHE WHITE HOUSE\nWASHINGTON\nApril 13, 1976\nMEMORANDUM FOR THE MEMBERS OF THE DOMESTIC COUNCIL STAFF\nURBAN POLICY STUDY\nFROM:\nLYNN MAY\nhyn q\nSUBJECT:\nLegislation\nIn the interest of making our group more aware of background\nmaterial related to urban policy questions, I will be\nforwarding to you relevant items of information from my\nsources. Please note the attached item. It is from the\nHousing and Development Reporter, Vol. 3, #23, April 5,\n1976.\nAttachment\nHousing and Development Reporter\nVol. 3, #23 April 5, 1976\nWAYS AND MEANS PASSES 35 PERCENT\nINTEREST SUBSIDY FOR TAXABLE BONDS\nThe House Ways and Means Committee reported out the\n\"Municipal Taxable Bond Alternative Act of 1976\" to provide\nfederal payment of 35 percent of the interest on taxable\nmunicipal bonds beginning July 1, 1977.\nThe bill, (H.R. 12774), which passed the committee on\nMarch 29 by four votes, faces an uncertain future on the House\nfloor later this month. Despite Administration support of the\nmeasure, only one Republican, second ranking Barber B.\nConable, Jr., of New York, voted in favor of it. Republicans\nand Southern conservative Democrats are expected to launch a\nstrong campaign against it on the floor.\nProponents, led by the bill's sponsor, Ways and Means Com-\nmittee Chairman Al Ullman (D-Ore), argue that the new tax-\nable bond bill will provide state and local governments an op-\ntional route to the corporate bond market when they are having\nor inadequate agency safeguards, but expressed amazement\nthat despite these warnings, HUD did little to head off impend-\ning disaster.\nSpecifically, the committee found that HUD lost millions of\ndollars in insurance claims and caused personal tragedy to\nforeclosed homebuyers because it did not monitor closely\nenough the activities of approved mortgagees.\nPartly as a result of the committee's hearings, the depart-\nment wrested control over the mortgagees from the office of the\nFHA Commissioner, where it had been for over 40 years, and\nplaced it in the hands of a four-party committee, the Mortgagee\nReview Board. This group has already moved against a number\nof mortgagees, including the Advance Mortgage Corp., a sub-\nsidiary of Citicorp, and the second largest mortgage banking\nfirm in the country.\nThe report points out, however, that this could have been\ndone years ago, since the department was aware of servicing\nshortcomings long before it took any action.\n\"Perhaps the most disturbing fact about this situation was\nthat everyone knew of the inadequacies in mortgage servicing,\"\nthe committee wrote, \"but felt powerless to do anything to cor-\nrect them.\"\nThe report scored private lenders participating with the\ngovernment in HUD-FHA insurance programs for failing to\nlive up to the standards laid out in guidelines issued both by\nHUD and the Federal National Mortgage Association (FN-\nMA), the organization which holds much of the government-in-\nsured debt.\nOnce homes are foreclosed, the report states that the abuses\nfor\nTHE WHITE HOUSE\nWASHINGTON\nApril 15, 1976\nMEMORANDUM FOR:\nJIM CANNON\nFROM:\nART QUERN\nHrter\nSUBJECT:\nDiscussion Paper on Cities\nIt seems to me that our general discussion of urban issues\nhas produced a number of threads of thought which are\nworth summarizing and pursuing.\nThe following brief rundown of these \"threads\" is offered\nonly as a means of promoting our continued explorations\nof particular urban questions.\n1.\nPrivate Sector Involvement\nA.\nCorporations\n-- What is it that leads a corporation\nto commit itself to the betterment of\nan urban area.\nB. Banks\n-- What roles do banks play in assisting\nurban areas to weather fiscal crisis and\nrestore fiscal stability.\n2.\nExpanding Revenue Base\nA. Annexation\n-- What are the various possibilities,\nadvantages and disadvantages of\nannexation.\nB.\n\"Free trade zones\"\n-- Whether this concept offers any advantages\nto urban areas.\n2\n3.\nUse of Federal Funds\n--\nWe are exploring the \"allied services\"\nconcept for cities to see if we can enable\nmuch greater flexibility in their use of\nFederal funds. In effect this is an \"urban\nblock grant\" concept.\n4.\nEconomic Development\nA.\nWe are examining current EDA policies toward\ncities.\nB.\nWe are reviewing a type of urban development\nbank concept.\n5.\nWelfare Reform\n--\nThe welfare reform studies we are engaged in\ncould offer some relief to cities.\n6.\nGeneral Revenue Sharing\n--\nWe are monitoring the current deliberations\non the Revenue Sharing issue as it relates\nto cities.\n7.\nGauging Fiscal Health\nA.\nSteve and Pat have compiled basic information\non the major cities as judged by outside\ngroups.\nB.\nNorm Hurd's intergovernmental finance project\ncould assist by identifying better tools to\nbe used in gauging fiscal conditions of cities.\n8.\nCurrent Federal Programs\nA.\nHUD\n-- Carla Hills will be meeting with us soon\nto review HUD's approach to urban questions.\nB.\nTransportation\n-- Judy Hope has been reviewing \"urban\"\nquestions with DOT staff.\nCC: Art Fletcher\nSteve McConahey\nPat Delaney\nLynn May\nAllen Moore\nTHE WHITE HOUSE\nWASHINGTON\nApril 15, 1976\nMEMORANDUM FOR:\nJIM CANNON\nFROM:\nART QUERN\nHrter\nSUBJECT:\nDiscussion Paper on Cities\nIt seems to me that our general discussion of urban issues\nhas produced a number of threads of thought which are\nworth summarizing and pursuing.\nThe following brief rundown of these \"threads\" is offered\nonly as a means of promoting our continued explorations\nof particular urban questions.\n1.\nPrivate Sector Involvement\nA.\nCorporations\n-- What is it that leads a corporation\nto commit itself to the betterment of\nan urban area.\nB. Banks\n-- What roles do banks play in assisting\nurban areas to weather fiscal crisis and\nrestore fiscal stability.\n2.\nExpanding Revenue Base\nA. Annexation\n-- What are the various possibilities,\nadvantages and disadvantages of\nannexation.\nB.\n\"Free trade zones\"\n-- Whether this concept offers any advantages\nto urban areas.\n2\n3.\nUse of Federal Funds\n--\nWe are exploring the \"allied services\"\nconcept for cities to see if we can enable\nmuch greater flexibility in their use of\nFederal funds. In effect this is an \"urban\nblock grant\" concept.\n4.\nEconomic Development\nA.\nWe are examining current EDA policies toward\ncities.\nB.\nWe are reviewing a type of urban development\nbank concept.\n5.\nWelfare Reform\n:\nThe welfare reform studies we are engaged in\ncould offer some relief to cities.\n6.\nGeneral Revenue Sharing\n--\nWe are monitoring the current deliberations\non the Revenue Sharing issue as it relates\nto cities.\n7.\nGauging Fiscal Health\nA.\nSteve and Pat have compiled basic information\non the major cities as judged by outside\ngroups.\nB.\nNorm Hurd's intergovernmental finance project\ncould assist by identifying better tools to\nbe used in gauging fiscal conditions of cities.\n8.\nCurrent Federal Programs\nA.\nHUD\n-- Carla Hills will be meeting with us soon\nto review HUD's approach to urban questions.\nB.\nTransportation\n-- Judy Hope has been reviewing \"urban\"\nquestions with DOT staff.\nCC: Art Fletcher\nSteve McConahey\nPat Delaney\nLynn May\nAllen Moore\n12A\nTHE WICHITA EAGLE\nThursday, April 15, 1976\nUrban\nDrive to Fight Bias\n\"What we have already done is to\nFord Aide Hits\nracialize public service programs so\nmuch that nobody wants them.\n\"You know there are while blks in\nthe inner city who are without jobs\nCampaign Hate\ntoo.\nThere are white folks there who\nshoot other people and who take dope.\nPublic service service programs are\nBy BOB HEATON\nfor everyone who needs them.\"\nStaff Writer\nFletcher said he feels more cities\nwill follow New York City into radical\nA presidential advisor, visiting in\nprograms of financial reform.\nWichita Wednesday, lashed out at\n\"They are going to have to hold the\n\"race baiting\" and \"hate baiting\" by\nline on expenses, I think,\" he said. \"I\npresidential candidates.\ncan see more and more cities taking\nArt Fletcher, deputy assistant to the\nadvantage of bankruptcy laws to get\nPresident for urban affairs and a\ntheir houses in order.\"\nformer Kansan, was here to address\nFletcher was critical of public\nTHE WHITE HOUSE\nWASHINGTON\nApril 12, 1976\nMEMORANDUM FOR:\nJIM CANNON\nFROM:\nART QUERN Art\nSUBJECT:\nFollow-Up to April 9, 1976, Urban\nIssues Meeting\nThe following are the next steps to be taken in exploration\nof urban issues:\n1. Annexation\nSteve and Pat will look into the existing research\non the use of annexation by cities to expand their\nrevenue base.\n2.\nFree Trade Zones\nLynn will look into concept of \"free trade zones\"\nfor urban areas.\n3. EDA\nQuern will inquire about EDA's programs which have\nbeen directed toward urban areas.\n4. HUD\nLynn will circulate copies of HUD urban issues paper\nand each member of the working group will provide\nLynn with comments in anticipation of a meeting with\nSecretary Hills.\n5.\nJohnson and Johnson\nArt Fletcher will proceed to set up a briefing session\nby drafting a letter for Jim Cannon's signature.\n2\n6.\nU.S. Chamber of Commerce\nArt Fletcher will suggest Fletcher/Quern meeting with\nChamber Washington Urban Affairs Representative.\n7.\nBriefing on Revenue Sharing\nQuern will invite Paul Myer to next working session to\nbrief on Revenue Sharing.\n8.\nAllied Services\nSteve will have more detailed work prepared examining\nAllied Services and Joint Funding Simplification Act.\n9.\nTax Incentives\nQuern will get further information on Administration's\ntax incentive proposal.\nUrbangolicy\nTHE WHITE HOUSE\nAt\nWASHINGTON\nApril 15, 1976\nLet two To\nyood -\nReview, when\nMEMORANDUM FOR:\nJIM CANNON\nART QUERN Hitor\nweek, are.\nFROM:\nwe\nSUBJECT:\nDiscussion Paper on Cities\nJune\nIt seems to me that our general discussion of urban issues\nhas produced a number of threads of thought which are\nworth summarizing and pursuing.\nThe following brief rundown of these \"threads\" is offered\nonly as a means of promoting our continued explorations\nof particular urban questions.\n1.\nPrivate Sector Involvement\nDut you England\nCorporations\nWhat is it that leads a corporation\nto commit itself to the betterment of\nan urban area.\nBanks\nis B.\nin my!?\n-- What roles do banks play in assisting\nurban areas to weather fiscal crisis and\nrestore fiscal stability.\n2.\nExpanding Revenue Base\nA.\nAnnexation\n-- What are the various possibilities,\nadvantages and disadvantages of\nannexation.\nB.\n\"Free trade zones\"\n-- Whether this concept offers any advantages\nto urban areas.\nGERRLD 8. FORD\n2\n3.\nUse of Federal Funds\ngood\n--\nWe are exploring the \"allied services\"\nconcept for cities to see if we can enable\nmuch greater flexibility in their use of\nJoint\nFederal funds. In effect this is an \"urban\nblock grant\" concept.\n4.\nEconomic Development\nI'd like to an a\nA.\nWe are examining current EDA policies toward\ncities.\ndefunter of (2) A Policy\nB.\nWe are reviewing a type of urban development\nbank concept.\n5.\nWelfare Reform\n--\nThe could welfare offer reform some relief studies to we cities. are engaged in Pight\n6.\nGeneral Revenue Sharing\n--\nWe are monitoring the current deliberations\non the Revenue Sharing issue as it relates\nto cities.\n7.\nGauging Fiscal Health\nA.\nSteve and Pat have compiled basic information\non the major cities as judged by outside\ngroups.\nB.\nNorm Hurd's intergovernmental finance project\ncould assist by identifying better tools to\nbe used in gauging fiscal conditions of cities.\n8.\nCurrent Federal Programs\nA. HUD\n-- Carla Hills will be meeting with us soon\nto review HUD's approach to urban questions.\nB.\nTransportation\n-- Judy Hope has been reviewing \"urban\"\nquestions with DOT staff.\nCC: Art Fletcher\nSteve McConahey\nPat Delaney\nGERALD LIQUEST = FORD\nLynn May\nAllen Moore"
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