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 PIMM 
 WORKS 
 PROGRAM 
 
 
 V 
 
 ll\ U REPORT 
 
 U.S. DEPARTMENT OF COMMERCE • Economic Development Administration 
 
LOCAL 
 PUBLIC 
 WORKS 
 PROGRAM 
 
 Creating Jobs Through 
 Public Works Projects 
 in Areas of 
 High Unemployment 
 
 FINAL 
 REPORT 
 
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 U.S. DEPARTMENT OF COMMERCE 
 Philip M. Klutznick, Secretary 
 
 Robert T. Hall, Assistant Secretary 
 for Economic Development 
 
 DECEMBER 1980 
 
Digitized by the Internet Archive 
 
 in 2012 with funding from 
 
 LYRASIS Members and Sloan Foundation 
 
 http://archive.org/details/localpublicworksOOunit 
 
FOREWORD 
 
 This report and the supporting evaluation studies present the 
 major results of the $6 billion Local Public Works Program (LPW) 
 which the Economic Development Administration (EDA) implemented in 
 1977. The program had two phases: LPW I at $2 billion was 
 initiated by Congress in the closing days of the Ford 
 Administration, and LPW II at $4 billion was a keystone in the 
 economic stimulus program initiated by President Carter at the onset 
 of his Administration. 
 
 Given the magnitude of the funds and the policy issues involved 
 in the use of public works as a tool for stimulating the economy, it 
 was incumbent upon EDA to carry out a thorough evaluation of the 
 program and publicly report its findings. This document (Report A) 
 summarizes those findings, which are presented in detail in the 
 following evaluations conducted by EDA staff or outside researchers 
 working for the Department of Commerce: 
 
 o Analysis of Construction Employment Generation by Project Types 
 in the Local Public Works Program (Report B) 
 
 o Report on the Characteristics of LPW Employees (Report C) 
 
 o On-Site Data Collection and Analysis in Support of a 
 
 Microeconomic Evaluation of the Local Public Works Program 
 (Report D) 
 
 o The Timing of the Construction Employment Impacts of the LPW 
 Program Relative to Local Area Employment Cycles (Report E) 
 
 o The Net Cost of the Local Public Works Program (Report F) 
 
 o Evaluation of the National Impacts of the Local Public Works 
 Program (Report G) 
 
 Our purpose in this document is to report on our stewardship of 
 significant public resources and to provide guidance to future 
 policy makers. 
 
 LPW, the largest countercyclical public works program under- 
 taken since the depression, had three basic objectives: 
 
 providing a stimulus to the national economy and distressed 
 local economies; 
 
 generating employment opportunities in construction and 
 related industries; and 
 
 constructing or renovating needed public facilities. 
 
As this report documents, the program was largely successful in 
 meeting these objectives, as well as several secondary goals. In 
 addition, the LPW experience revealed valuable insights about a more 
 effective structure for both an accelerated public works program 
 like LPW and a countercyclical public works program like that 
 advocated by the House in 1979 and 1980 as part of the expansion and 
 extension of EDA's legislation. I will use this "Foreword" as a 
 forum for discussing these insights, as well as outstanding issues, 
 in the context of examining the utility of public works as a 
 countercyclical tool, a subject that has been hotly debated for more 
 than a decade. 
 
 At the outset, it is important to note that much of the 
 criticism of public works as a countercyclical instrument stemming 
 from the LPW Program is misdirected in that it was based on LPW's 
 failure to meet objectives that were not set forth for the program. 
 LPW, particularly LPW II which I helped design and had responsi- 
 bility for administering, was not directed at soaking up large 
 numbers of the long-term unemployed, nor was it conceived as a skill 
 training mechanism. Moreover, since both rounds of the program were 
 initiated long after the trough of the recession, they clearly could 
 not perform as countercyclical measures in the classic sense. 
 
 One of the factors that is often overlooked in discussing this 
 subject is that public works is not the only instrument in the 
 panoply of economic or employment stimulus tools. Tax cuts, public 
 service employment, expansion of training programs, extended 
 unemployment insurance, and fiscal assistance aid are among the 
 other measures which are or could be brought to bear when such 
 micro-economic policies are called for. 
 
 There are, however, some "open" issues which need to be 
 addressed in the use of public works as a countercyclical tool. 
 First and foremost is the utility of traditional economic stimulus 
 programs in the changed economic circumstances characterized as 
 "stagflation." Certainly the advent of persistent inflationary 
 pressures simultaneous with declining or lagging economic growth and 
 employment must now be considered in determining the appropriateness 
 of public works as a countercyclical effort. 
 
 In addition, there have been three historically persistent 
 problems in using public works as a countercyclical tool, each of 
 which is related to the difficulty in obtaining the anticipated 
 impact within the desired timeframe. One involves the ability of 
 Federal, State, and local governments to propose, review and 
 initiate construction on useful public works projects within a short 
 period of time. Under the LPW Program, it was demonstrated that 
 this can be accomplished. A second relates to the length of time 
 required to complete projects. Again, the LPW experience revealed 
 that there are certain types of projects that are completed more 
 rapidly, such as repair and renovation projects involving less than 
 $500,000. 
 
A third problem relates to the timing of program initiation. 
 Too often in the past, the programs have begun so late that the 
 major effects are produced after the economy has turned around or at 
 least is well on its way to recovering. Indeed, some of the impact 
 of such programs may well have exacerbated inflationary pressures 
 which are latent in a strong economic growth period. LPW II, for 
 example, may well have had such an effect given the enactment and 
 implementation of the program so many months after the 1975 
 recessionary trough. To counteract such lags, proposals for "auto- 
 matic trigger" devices for standby public works program have been 
 made. The translation of this concept into an appropriate 
 legislative and administrative mechanism, however, is fraught with 
 difficulties. No single or group of "trigger" measurement devices 
 can address the myriad economic considerations (e.g., inflationary 
 factors and size of the budget deficit) that must be assessed in 
 determining the efficacy of mounting a countercyclical public works 
 program. Thus, even a mechanism that accurately predicts a reces- 
 sion before it ensues, cannot be used in isolation to trigger such a 
 program. 
 
 The objectives of a countercyclical public works program might 
 also be reexamined. Goals other than the traditional ones of 
 generating a timely stimulus, creating short-term employment and 
 providing useful facilities can be identified. For example, more 
 labor intensive projects with greater impact on the general 
 unemployed and long-term unemployed might be sought. More timely 
 completion of projects might also be pursued to maximize the 
 stimulus effort and reduce any procyclical effect. In addition, 
 more return on the expenditures for public infrastructure might be 
 achieved if greater emphasis were given to the rehabilitation of 
 deteriorating public infrastructure, thereby assisting communities 
 by bringing that infrastructure to "like new" condition and delaying 
 full capital replacement costs. 
 
 Another set of policy issues involve the multiplicity of sub- 
 objectives which may be appended to a countercyclical public works 
 program, such as minority business involvement, the use of American- 
 made materials, employment for veterans, etc. All of these are 
 desirable and legitimate public policy objectives, but the admin- 
 istrative implications for a rapid implementation effort are sub- 
 stantial, and should be carefully weighed before such requirements 
 are added. 
 
 As a result of my experience with LPW and other stimulus 
 programs, I believe it would behoove the framers of any possible 
 future countercyclical public works program to explore the possi- 
 bilities of increasing the program's impact on the long-term 
 unemployed and the rehabilitation needs of deteriorating public 
 infrastructure. Indeed, a labor intensive public works program 
 primarily directed at the rehabilitation and weather ization of 
 
existing public facilities which had hiring linkages with the long- 
 term unemployed could be considered not only as a countercyclical 
 device, but as an ongoing, regular program. Organized training 
 could be structured as part of the program, and the work would 
 largely be performed through competitive bids by contractors. Only 
 a portion of each contractor's workforce would have to be drawn from 
 the long-term unemployed, and they would be paid a training wage. 
 As a result of these features, such a program would continue the 
 objectives of upgrading infrastructure and providing meaningful 
 private sector employment experiences for the long-term unemployed. 
 These as well as other characteristics give it obvious advantages 
 over the Public Service Employment Program. 
 
 In closing, I would be remiss not to cite the unparalled public 
 administration effort involved in the implementation of the LPW 
 Program — an effort not explicitly documented in this report and 
 the supporting evaluation studies. Special recognition must go to 
 the hundreds of dedicated men and women who worked long hours and 
 weeks in processing and managing over 10,000 public works projects. 
 Since public praise for the civil servant is scarce, the 
 achievements of the LPW staff have not received the attention 
 warranted by the resulting benefits to so many communities and 
 individuals throughout the country. To each of them, I extend my 
 own deep appreciation and a "well done." 
 
 Robert T. Hall 
 
 Assistant Secretary 
 
 for Economic Development 
 
TABLE OF CONTENTS 
 
 Page 
 FOREWORD 
 
 SUMMARY i 
 
 I. PROGRAM DESIGN 1 
 
 A. LPW 1 1 
 
 1. Legislative History 1 
 
 2. Program Implementation 2 
 
 B. LPW II 4 
 
 1. Legislative History 4 
 
 2. Program Implementation 6 
 
 II. PROGRAM ADMINISTRATION 10 
 
 A. Pre-approval Monitoring 10 
 
 B. Post-approval Monitoring 11 
 
 C. Financial Management 12 
 
 1. Cost Accounting 12 
 
 2. Disbursements 12 
 
 3. Audits 12 
 
 D. Construction Management and Progress 13 
 
 1. Construction Starts 13 
 
 2. Project Completions 14 
 
 III. PROGRAM ACCOMPLISHMENTS 15 
 
 A. Introduction 15 
 
 B. Economic Stimulus 17 
 
 1. Substitution and Addition of Funds 18 
 
 2. Program Timing 19 
 
 3. Local Fiscal Relief 22 
 
 4. Inflationary Impacts 26 
 
 C. Employment 26 
 
 1. Employment Generation 27 
 
 2. Factors Influencing Project Cost Effectiveness 
 
 and Build-Up Rates 39 
 
 3. Employee Characteristics 42 
 
 4. Net Cost 49 
 
 D. Infrastructure 50 
 
 1. Description of Projects Funded 52 
 
 2. Types of Grantees 58 
 
 3. Long Term Impact 61 
 
 E. MBE and Other Special Impacts 62 
 
 1. Background 63 
 
 2. Enforcement Procedures 63 
 
 3. Assistance to Minority Firms 66 
 
 4. Current Status 67 
 
 5. Impact of the MBE Requirement 
 
 on Firms and Grantees 70 
 
 F. Detailed Individual LPW Reports 71 
 
IV. APPENDICES A-l 
 
 Appendix A: LPW Employment Build-Up Patterns A-l 
 
 Appendix B: Maps of LPW Project Counts and 
 
 Funding Levels B-l 
 
 Appendix C: LPW Evaluation Studies Conducted by 
 
 or for the Department of Commerce C-l 
 
 Appendix D: Other LPW Evaluation Studies D-l 
 
LIST OF ILLUSTRATIONS 
 
 Table 1 
 Table 2 
 Table 3 
 Figure 1 
 Figure 2 
 
 Figure 3 
 
 Figure 4 
 
 Table 4 
 Table 5 
 Table 6 
 
 Table 7 
 
 Figure 5 
 Table 8 
 Figure 6 
 
 Table 9 
 
 Table 10 
 
 Table 11 
 Table 12 
 Table 13 
 Figure 7 
 Figure 8 
 Table 14 
 Table 15 
 Table 16 
 
 Table 17 
 
 Appendix A 
 Appendix B 
 
 Page 
 
 LPW I Chronology of Events 3 
 
 LPW II Chronology of Events 9 
 
 LPW Disbursements 20 
 
 LPW I and II Disbursement Pattern 21 
 
 Comparison of Employment and Disbursement 
 
 Patterns — LPW 1 23 
 
 Comparison of Employment and Disbursement 
 
 Patterns — LPW II 24 
 
 Comparison of Employment and Disbursement 
 
 Patterns — LPW I and II 25 
 
 LPW Total Employment and Cost Per Job 29 
 
 LPW On-Site Employment by Skill Levels 31 
 
 Total LPW Wage Payments and 
 
 Average Earnings by Worker Category 33 
 
 Percentages of Round I and Round II 
 
 Workers and Person-Months by Occupation 34 
 
 LPW On-Site Employment by Round 3 6 
 
 Monthly LPW Construction Employment 37 
 
 Build-Up and Cost-Effectiveness 
 
 by Project Type and Round 40 
 
 Comparison of LPW Employees with 
 
 Construction Labor Force 43 
 
 Comparison of LPW Labor Force Occupations 
 
 with Construction Labor Force Occupations. ... 45 
 
 Net Cost of the LPW Program 51 
 
 LPW Funding by Project Function 53 
 
 Types of LPW Projects 55 
 
 LPW Project Cost by Size and Round 56 
 
 Composition of Average LPW Project Dollar .... 57 
 
 Types of LPW Construction Activity 59 
 
 LPW Funding by Type of Grantee 60 
 
 Distribution of LPW Contracts 
 
 by Minority Groups 6 9 
 
 Comparison of New Firms by Majority and 
 
 Minority Ownership 72 
 
 LPW Employment Build-Up Patterns A-l 
 
 Maps of LPW Project Counts and Funding Levels . .B-l 
 
SUMMARY 
 
 A. BACKGROUND 
 
 The Local Public Works (LPW) Program implemented by the Economic 
 Development Administration (EDA) during FY 1977 was divided into two 
 distinct segments: a $2 billion Round I program (LPW I); and a 
 $4 billion Round II program (LPW II). LPW I (the Local Public Works 
 Capital Development and Investment Act of 1976) was a Congressional 
 initiative enacted in July of 1976 over President Ford's veto and 
 funded in October 1976. LPW II (the Public Works Employment Act of 
 1977) was proposed by President Carter in January 1977 as part of a 
 comprehensive economic stimulus package, and was enacted and funded 
 in mid-May 1977. 
 
 Both Rounds provided grants for State and local government 
 public works projects for the interrelated purposes of: 
 
 o stimulating the national economy and distressed local 
 economies through the infusion of Federal public works 
 funds; 
 
 o generating employment opportunities, particularly in 
 
 construction trades and related industries and services; and 
 
 o constructing or rehabilitating useful public facilities. 
 
 Both Rounds also contained the unprecedented statutory requirements 
 that a decision be made on each project with 60 days of its sub- 
 mission and that construction on each project begin within 90 days 
 of its approval. 
 
 Under LPW I, 2,062 projects representing $2 billion were funded 
 on the basis of a seven-factor formula that scored approximately 
 25,000 applications totalling more than $24 billion. LPW I applica- 
 tions were submitted between late October and early December 1976, 
 and projects were approved between late December 1976 and early 
 February 1977. 
 
 In recommending a $4 billion LPW II Program, President Carter 
 stressed the need for an improved project selection process that 
 would target funding to areas of highest unemployment in each State, 
 emphasize local priorities, reduce LPW I's funding inequities among 
 different areas and types of governmental units, and increase the 
 program's efficiency by limiting project submissions to those that 
 applicants knew in advance could be funded. By working closely with 
 Congress during the spring of 1977, EDA officials succeeded in 
 having the LPW II legislative history reflect this improved project 
 selection process, which consisted of methods for: 
 
o allocating funds (planning targets) to eligible areas and 
 types of governments; and 
 
 o selecting projects to be funded within those planning 
 targets. 
 
 Fund allocation was accomplished on the basis of area unemployment 
 statistics and participation of various types of government under 
 LPW I, while project selection within certain basic guidelines was 
 determined by State and local officials in accordance with their own 
 prior ities. 
 
 Using this approach, EDA provided LPW II planning targets to 
 thousands of State and local governments and Indian tribes during 
 June and July of 1977. Eligible applicants, including school 
 districts, prioritized projects within these targets and either 
 resubmitted LPW I applications or submitted new projects. Between 
 July 21 and September 30, 1977, EDA approved 8,554 LPW II grants 
 totalling $4 billion, of which 4,086 projects representing $1.8 bil- 
 lion were approved during the last two weeks of the fiscal year. 
 
 In January of 1978, EDA published a Status Report on the LPW 
 Program that provided detailed information on the evolution and 
 implementation of both rounds, as well as available data on program 
 impacts. This was followed in September of 1978 by the publication 
 of an Interim Report on the LPW II 10 percent minority business 
 enterprise (MBE) requirement, an unprecedented provision which 
 stipulated that 10 percent of every LPW II grant be expended with 
 one or more minority firms. Both documents, as well as periodic 
 testimony by EDA officials, indicated that the comprehensive evalua- 
 tion of LPW being conducted by Commerce staff and private firms 
 would be the primary source of final information on the results of 
 LPW I and LPW II. 
 
 This Final Status Report summarizes the results of that compre- 
 hensive evaluation, the various components of which are listed in 
 Appendix C and are available under separate cover from EDA. It also 
 presents information on a variety of different aspects of the LPW 
 Program such as the status of project audits and disbursements, and 
 updated data on minority business participation in LPW project con- 
 struction. Because this report is intended to serve as a comprehen- 
 sive summary document, it repeats some of the information presented 
 in previous publications. 
 
 B. AREA AND APPLICANT CHARACTERISTICS 
 
 Both the LPW I and LPW II statutes emphasized assistance to 
 areas with unemployment rates above the national average* and 
 
 The LPW I statute, however, required that 30 percent of the 
 funds be used to finance projects from areas with unemploy- 
 ment rates below the national average. 
 
 li 
 
stipulated that States, territories, cities, counties, towns, 
 parishes, Indian tribes, and other political subdivisions were 
 eligible for funding. Moreover, as indicated in the preceding sec- 
 tion, two of the guiding principles in LPW II were to target funds 
 to areas of greatest distress and to distribute funds equitably 
 among different types of governments and types of areas. The 
 following data compare the respective performances of LPW I and 
 LPW II in providing funds to areas of high unemployment and in 
 distributing funds among eligible State and local governments and 
 urban and rural communities. Given the explicit priority assigned 
 to ensuring greater targetting and equity in LPW II, its superiority 
 in the various categories is not surprising. 
 
 o Percentage of project funding in areas with unemployment 
 rates above the national average 
 
 63.4 percent under LPW I 
 
 72.0 percent under LPW II 
 
 o Average unemployment rate for areas receiving funds 
 
 8.9 percent under LPW I 
 9.4 percent under LPW II 
 
 o Percentage of project funding in areas with unemployment 
 rates of 9 percent or more 
 
 46.2 percent under LPW I 
 
 54.1 percent under LPW II 
 
 o Percentage of project funding in areas with less than 
 6.5 percent unemployment 
 
 23.3 percent under LPW I 
 13.8 percent under LPW II 
 
 o Percentage of funds to cities of more than 50,000 popula- 
 tion, which had 45.9 percent of the Nation's unemployed 
 between March 1976 and February 1977 
 
 38.4 percent under LPW I 
 47.1 percent under LPW II 
 
 o Participation by 100 largest cities 
 
 65 percent under LPW I 
 
 93 percent under LPW II (The remaining cities had 
 received a disproportionate share of the LPW funds in 
 LPW II and therefore did not receive any LPW II funds.) 
 
 in 
 
o Number of communities under 5,000 population receiving funds 
 
 5 70 under LPW I 
 1,580 under LPW II 
 
 o Number of communities under 2,500 population receiving funds 
 
 385 under LPW I 
 1,000 under LPW II 
 
 o Number of State governments receiving projects 
 
 15 under LPW I 
 50 under LPW II 
 
 o Number of county governments receiving projects 
 
 190 under LPW I 
 
 901 under LPW II (another 78 used their planning 
 
 targets to fund other applicants 1 projects) 
 
 LPW II' s improved performance in directing a greater proportion of 
 the funds to areas with higher unemployment rates is more noteworthy 
 because unemployment had declined somewhat between the LPW I and II 
 periods. 
 
 C. ECONOMIC STIMULUS 
 
 One of the three major objectives of the LPW Program was to 
 stimulate the national economy and distressed local economies 
 through the infusion of public works funds. As reflected in the 
 previous section, both rounds and particularly LPW II targetted 
 funds to distressed local areas. To determine LPW's net stimulus to 
 the economies of such areas as well as to the national economy 
 requires consideration of such key factors as: 
 
 o the extent to which activities generated by LPW would have 
 taken place within the same time period in the absence of 
 LPW; 
 
 o the extent to which LPW funding stimulated other spending 
 
 that would not have taken place within the same time period 
 in the absence of LPW; and 
 
 o the time required to initiate and terminate LPW-related 
 
 activities, which reveals the ability of LPW to stimulate 
 economies quickly and at a significant level. 
 
 The evaluation of LPW I and II revealed that the total construction 
 expenditure solely attributable to LPW is $6,096 billion. This 
 figure excludes LPW expenditures of $510 million (8.5 percent) which 
 would have occurred in the absence of LPW within the same general 
 time frame. Conversely, it includes supplementary funding of 
 
 IV 
 
$606 million (10.1 percent)* that would not have occurred within the 
 same time period in the absence of LPW. Thus, contrary to the 
 expectations of those who believed that localities would in many 
 cases simply substitute LPW funds for their own funds, thereby pro- 
 ducing no net stimulus, every Federal LPW dollar was in fact respon- 
 sible for stimulating $1.02 in public works construction that would 
 not have taken place within the same time frame in the absence of 
 LPW. 
 
 The local impacts of the expenditures attributable to LPW began 
 relatively soon after passage of the legislation and were concen- 
 trated within a two-year period following enactment. LPW I was 
 better timed than LPW II since Congress made LPW I funds available 
 in October 1976 and projects were ready to begin at the start of the 
 1977 construction season, while LPW II projects were not approved 
 until the latter part of the 1977 construction season. Conse- 
 quently, LPW I performed somewhat better than LPW II in terms of the 
 timing and concentration of local stimulus. Under LPW I, 42 percent 
 of all employment, which translates into wages paid and circulating 
 in local economies, occurred within one year following enactment, 
 while 88 percent of all employment was generated within two years. 
 Comparable figures for LPW II are 33 percent and 85 percent 
 respectively. 
 
 LPW II, on the other hand, performed better than LPW I with 
 regard to concentrated impacts when expenditures for comparable 
 periods are examined. For example, during its first full construc- 
 tion season of May through October 1978, LPW II generated 46 percent 
 of its total construction employment, as compared to 39 percent for 
 LPW I during its first construction season. This difference is 
 attributable to the fact that LPW II projects, as noted in Sec- 
 tion E, were much smaller than LPW I projects and thus could be 
 completed more rapidly. 
 
 In terms of calendar year timing, LPW I and II began generating 
 employment (i.e., a local stimulus) in early 1977. LPW-induced 
 construction employment peaked during the summer of 1978, when both 
 LPW I and II projects were under construction; continued at greatly 
 reduced levels in 1979; and with minor exceptions terminated in 
 1980. During this period, the national construction unemployment 
 rate (seasonally adjusted) ranged from 9.8 percent to 14.6 percent, 
 with rates dropping as LPW employment rose and vice versa. An 
 examination of on-site LPW employment in 70 Labor Market Areas 
 revealed that LPW did not "crowd out" (i.e., delay or replace) other 
 public or private construction activity. 
 
 The primary sources of these added funds, most of which 
 were provided in LPW II, consisted of local bond issues 
 (26 percent) , State grants (20 percent) , and local capital 
 budgets (14 percent) . State and local surpluses accounted 
 for only 1 percent. 
 
 v 
 
In considering the nature of LPW's economic stimulus, it is 
 important to examine its inflationary impacts. At the national 
 level these were minimal because of the program's relatively small 
 share (1.8 percent) of total construction spending. As would be 
 expected given the targetted nature of the program, particularly 
 Round II, it produced some inflationary impacts in a few local 
 areas. Evaluation data indicate that these impacts involved 
 material costs rather than labor. 
 
 D. EMPLOYMENT OPPORTUNITIES 
 
 Another of the three major objectives of the LPW Program was to 
 generate employment opportunities, particularly in construction 
 trades and related industries. Evaluation data and employment 
 multipliers show that total employment attributable solely to LPW 
 amounted to between 343,000 and 371,000 person-years. Of this 
 employment, 158,000 person-years were in on-site construction 
 (direct jobs) or supply and service firms (indirect jobs). The 
 remaining employment (induced jobs) was in private firms that 
 produced increased goods and services as a result of additional 
 consumption by LPW workers, contractors, and suppliers. 
 
 The traditional method of calculating the cost per job for the 
 LPW Program would be to divide $6 billion by the total number of 
 person-years created, which would produce a cost per job of between 
 $16,100 and $17,400. Since leveraging (i.e., addition of non-LPW 
 funds to projects) and substitution (i.e., replacement of local 
 funds with LPW funds) effects basically offset each other in LPW, 
 this figure can be said to reflect both. It does not, however, 
 reflect returns to the Federal government or local governments 
 through taxes and transfer payment savings. 
 
 Accounting for savings to the Federal government associated with 
 LPW reduced the Federal cost to just over $5.5 billion. This 
 results in a net Federal cost per job of $14,900 to $16,100. When 
 State and local savings are added to those of the Federal govern- 
 ment, the net LPW cost is reduced to just over $5.1 billion. 
 Dividing this by the employment generated results in a total public 
 net cost per job of between $13,900 and $15,000. 
 
 During the course of LPW I and II, more than a million different 
 persons were employed on-site in construction jobs. Of these, 
 67 percent were skilled workers and 29 percent unskilled workers, 
 with 4 percent administrative or clerical. Twenty-eight percent of 
 the persons employed were laborers, nine percent carpenters, and 
 nine percent operating engineers, with all but four percent of the 
 remaining workers distributed among a variety of other construction 
 occupations. Average employment on an individual LPW project was 
 146 hours or four weeks, and average earnings were $1,360, for an 
 average hourly rate of $9.36 including overtime. Total wages were 
 $1.6 billion or 22 percent of all LPW project funding ($6 billion 
 Federal plus $1.1 billion from other sources). Primarily because of 
 the statutory requirement that Davis-Bacon wage rates be paid, 
 average salaries for all categories of workers were higher than the 
 workers' usual wages. 
 
 vi 
 
LPW employees were similar to other construction industry 
 workers in most respects. However, although there was a strong 
 representation of white males from ages 25 to 44, 22.5 percent of 
 all LPW employees were minorities. This is more than 100 percent 
 higher than the construction industry norm of 9.5 percent and is 
 presumed to be primarily attributable to the LPW II 10 percent 
 minority business enterprise requirement, as discussed in Section F 
 of this Summary. 
 
 Thirteen percent of all LPW employees were jobless prior to 
 taking their LPW jobs, as compared to an average of 10 percent 
 unemployment in the construction labor force in 1978 when the LPW 
 employee survey was conducted. The LPW work force also included 
 more veterans, particularly Vietnam-era veterans, than the overall 
 construction labor force. This circumstance reflects the priority 
 given to hiring such individuals in the LPW II statute. 
 
 As expected, analysis of the LPW labor force revealed that 
 approximately 90 percent of the employees considered construction to 
 be their major field of work. The rate of union membership was 
 found to be 55 percent, which is comparable to the 60 percent union 
 membership among on-site construction workers nationwide. The 
 evaluation also revealed that LPW workers travelled an average of 
 34 miles from their residences to the LPW project site, with workers 
 on urban area projects (those in Standard Metropolitan Statistical 
 Areas — SMSAs) traveling an average of 24 miles and those of rural 
 area projects (those in non-SMSAs) traveling 49 miles. 
 
 E . INFRASTRUCTU R E IMPROVEMENTS 
 
 Unlike most other countercyclical programs (e.g., anti- 
 recessionary revenue sharing and expanded public service employ- 
 ment) , the LPW program produced long-lasting physical results in the 
 form of improved public infrastructure. Of the 10,616 projects, 
 almost 5,300 (50 percent) representing more than $2.7 billion 
 (46 percent) went to construct or rehabilitate facilities that 
 promote long-term economic development, such as water and sewer 
 systems, access roads, port facilities, and shell industrial 
 buildings. As a result, these projects, which are comparable to 
 those funded by EDA under its regular economic development 
 facilities program, not only provide services to the residents of 
 the areas and short-term employment for workers in construction and 
 related industries; they also help to stimulate private investment 
 in industrial and commercial development ventures. These in turn 
 generate long-term private sector employment opportunities. 
 
 Since the creation of long-term employment opportunities was not 
 an objective of the LPW Program, the evaluation did not attempt to 
 determine the extent to which such impacts occurred. However a 
 
 VLl 
 
general estimate can be obtained under the assumption that the cost 
 of generating such opportunities is the same for LPW economic 
 development projects as for EDA's regular public works projects. 
 Using this approach, it can be estimated that LPW economic develop- 
 ment projects will generate an additional 125,000 person-years of 
 permanent private sector employment. 
 
 In addition to providing support for facilities that promote 
 long-term economic development, the LPW Program financed a wide 
 range of community development projects including schools, public 
 housing, and health facilities. These projects received more than 
 $1.6 billion, or 28 percent of all LPW funds. LPW grants also 
 supplied $1.1 billion (19 percent of all funds) for the construction 
 or renovation of public service facilities such as police and fire 
 stations, as well as $470 million for cultural and recreational 
 projects, such as parks, theaters, and gymnasiums. These projects, 
 particularly those funded under LPW II 's local prioritizing system, 
 are now meeting the public works needs of communities in every State 
 and territory and will continue to do so far into the future, since 
 the LPW grant recipients estimated that the average life of their 
 new or reconstructed public works facilities was 42 years. 
 
 A related finding of significance is that the average number of 
 years before renovations to public works facilities become necessary 
 is the same (i.e., 23 years) for both new projects and renovations. 
 Thus, LPW's repair and renovation projects succeeded in bringing 
 existing public infrastructure to "new" condition. Under LPW I, 
 these types of projects accounted for just over 15 percent of the 
 funds, while 25 percent of LPW II funds were used to finance repair 
 and renovation projects. This compares with 75 percent of LPW I 
 funds going to projects involving new construction, and only 
 62 percent of LPW II funds for such projects. 
 
 Consistent with the larger percentage of repair and renovation 
 projects and the broader distribution of funds under LPW II, the 
 average size of second round grants was almost 50 percent less than 
 that under LPW I. Specifically, the average size of LPW II grants 
 was approximately $470,000, as compared to almost $965,000 in 
 LPW I. Furthermore, 70 percent of LPW II 's 8,554 projects involved 
 EDA grants for less than $500,000, as opposed to only 44 percent of 
 LPW I's 2,062 projects. 
 
 F . MINORITY BUSINESS IMPACTS 
 
 As a result of EDA's implementation of the LPW II statute's 
 minority business requirement, minority contractors and suppliers 
 received contracts totalling $700 million, or 18 percent of all 
 LPW II program funds. This level is higher than in any previous 
 Federally funded construction program and far exceeds the 10 percent 
 requirement set by law. Approximately 7,240 minority firms received 
 more than 16,300 contracts under LPW II. These contracts ranged 
 
 viii 
 
from less than $1,000 to a few for more than $1 million, with an 
 average size of approximately $43,000. It was necessary to waive 
 the 10 percent requirement on some projects, primarily because firms 
 selected in good faith by the grantee were found not to be bona fide 
 minority businesses after they had already performed the work. 
 However, in only 306 cases (2.2 percent of LPW II funds) was the 
 requirement waived altogether. In all other cases, at least some 
 portion of the grant went to bona fide minority firms. 
 
 Firms owned by members of all major minority groups benefitted 
 under the LPW II program. More than 4,000 Black-owned firms 
 received approximately $270 million in LPW II-related contracts, 
 while almost 2,000 Hispanic-owned firms received almost $300 million 
 in contracts. Firms owned by Indians and Orientals also received 
 considerable business under LPW II. 
 
 Evaluation data suggest that the minority firms that benefitted 
 from the 10 percent requirement were substantially newer than their 
 minority counterparts, but had for the most part been in business 
 for close to 10 years. More than 90 percent of the participating 
 minority firms were still in business two years after the approval 
 of the last LPW II grant, although the success rate was lower for 
 minority suppliers and subcontractors than for general contractors. 
 A survey of participating minority businesses indicated a profitable 
 LPW experience. A longer term assessment of the impact of the 
 LPW II requirement on minority firms, including its effects on 
 establishing continuing working relationships between minority and 
 majority firms, is being conducted now under an EDA evaluation 
 project. 
 
 G. CONCLUSIONS 
 
 With the completion of the comprehensive evaluation of both 
 rounds of the LPW Program and the finishing of construction on all 
 but a few LPW projects, it is possible to draw final conclusions on 
 the LPW Program, many of which should be considered in developing 
 any future programs of this nature. The final conclusions discussed 
 in this section include those preliminary conclusions presented in 
 the January 1978 Local Public Works Program Status Report that are 
 still appropriate in light of additional data. Because of the 
 importance ascribed to these conclusions and the need to place them 
 in proper context, they are described in more detail than would 
 ordinarily be the case in a summary section. Conclusions are 
 presented in regard to: 
 
 o each of the LPW Program's primary objectives; 
 
 o LPW II' s secondary objectives; and 
 
 o mechanics of program implementation. 
 
 3.x 
 
1. Economic Stimulus 
 
 The LPW Program produced relatively concentrated economic im- 
 pacts in areas experiencing high unemployment. It resulted in the 
 expenditure of approximately $6.1 billion in construction-related 
 expenditures that would not otherwise have occurred in the same time 
 period, and data show that it did not crowd out private or other 
 public sector construction that would have occurred in its absence. 
 Moreover, employment data indicate that just over 85 percent of 
 these funds were circulating in local economies within two years 
 after passage of the legislation. This accelerated expenditure of 
 funds occurred in the absence of any requirement that construction 
 move quickly once underway. Consequently, to obtain more concen- 
 trated and rapid impacts in future programs, some construction com- 
 pletion deadlines should be included in the statute, and the man- 
 datory project start date should occur as close to the beginning of 
 the peak construction season (April through October) as possible. 
 
 The importance of the timing of such a program in relation to 
 the start of the construction season raises the issue of how the 
 initiation of such programs is determined. In the case of the LPW 
 Program, the Congress decided in LPW I and the Administration in LPW 
 II that the economy should be stimulated, jobs should be generated, 
 and public infrastructure needed to be constructed or renovated. No 
 specific data, such as national unemployment rates, construction 
 industry employment figures, or leading economic indicators, played 
 a formal role in the decisions to enact either round of the 
 program. 
 
 There is widespread agreement on the desirability of including 
 in any future program of this nature a mechanism for triggering its 
 start to coincide not only with the construction season, but — if 
 a program objective is to produce a countercyclical stimulus — also 
 with the period of recession. In addition, there are some who ad- 
 vocate regional triggers. There is also, however, widespread recog- 
 nition that the development of workable mechanisms of this nature is 
 a complex, perhaps impossible, task. Predicting recessions is a 
 task that economists and others working in the field have yet to 
 master. Existing data have substantial shortcomings. Unemployment 
 rates, for example, are a lagging indicator of economic problems and 
 thus — if used in isolation — would either trigger a program too 
 late to produce a countercyclical stimulus (if a high rate were used 
 as a trigger) or (if a lower rate were used as a trigger) start 
 programs at times when recessions are not imminent. Nonetheless, 
 efforts are underway to develop an appropriate trigger and, if 
 successful, should enable future programs to produce the types of 
 countercyclical stimulus sought by proponents of an LPW III in 1979 
 and 1980. 
 
 Evaluation data and construction industry figures lead to the 
 conclusion that smaller projects, which were more typical of LPW II, 
 are completed more rapidly. For example, the smaller LPW II 
 
projects produced more employment (i.e., a greater stimulus) during 
 their first full construction season than the larger LPW I pro- 
 jects. Therefore, limitations on project size in future programs 
 would accelerate the economic stimulus. 
 
 The LPW II implementation approach, which distributed funds 
 among States and substate areas on the basis of unemployment, pro- 
 duced a more targetted economic stimulus than LPW I. Adoption of 
 the LPW II approach, together with reduction or elimination of sta- 
 tutory minimum State funding requirements would maximize stimulation 
 of the economies of the most distressed areas in future programs. 
 
 As indicated previously, on an industry-wide level, the infla- 
 tionary impact of LPW on construction costs was minimal, whereas on 
 the local level, some shortages of materials caused small inflation- 
 ary impacts. However, it must be recognized that the LPW Program 
 did result in the expenditure of at least $6.1 billion that would 
 not otherwise have been spent in the same time period and thus some 
 inflationary impact was unavoidable. 
 
 2. Employment 
 
 The LPW program generated employment in construction and related 
 industries at a reasonable cost to the Federal government and to the 
 public sector overall. The average Federal cost per person-year of 
 employment of between $14,900 and $16,100 and the average public 
 cost per person-year of between $13,900 and $15,000 compare favor- 
 ably with the $13,500 cost per person-year of EDA's ongoing develop- 
 ment facility program. Nonetheless, data indicate that the cost per 
 person-year could be cut by increasing the labor intensity of proj- 
 ects (22 percent for both LPW rounds) , an approach that would reduce 
 — although not eliminate — the responsiveness to local priorities 
 that characterized LPW II. One way of increasing labor intensity is 
 the funding of smaller renovation and rehabilitation projects which, 
 as discussed in the following section, have the added advantage of 
 giving existing infrastructure approximately the same useful life 
 span as new infrastructure through means that are less costly — and 
 therefore less inflationary. 
 
 The LPW Program proved to be an effective means of generating 
 on-site construction employment for white and minority males. The 
 program did not, however, prove a useful approach to generating 
 on-site construction employment for women, who received a somewhat 
 smaller percentage of LPW project employment (0.9 percent) than 
 their percentage representation (1.7 percent) in the non-admin- 
 istration construction labor force. 
 
 XI 
 
If a goal of future programs is to generate construction 
 jobs for women, it is clear that more than the equal opportun- 
 ity provisions in LPW I and II will be required. Although the 
 employee characteristic data for LPW I and II did not provide 
 conclusive evidence that the high level of minority participa- 
 tion was attributable to the LPW II MBE requirement, the 
 analysts' judgment was that it was a major contributing fac- 
 tor. Consequently, to ensure significant levels of employment 
 for minorities and women in future programs, specific statutory 
 preferences for such employees or for minority and women-owned 
 firms would appear to be necessary. 
 
 Skilled workers proved to be the primary beneficiaries of 
 LPW-generated construction jobs, receiving 70 percent of the 
 project wages. Skilled and unskilled laborers also fared well 
 under the program, representing 28 percent of the total persons 
 employed on LPW projects. If a goal of future programs were to 
 generate more construction jobs for unskilled workers, prefer- 
 ence should be given to site clearing and park projects, in- 
 cluding the preparation of industrial parks, which have long- 
 term economic development impacts. However, as would be the 
 case if an effort were made to increase projects' labor inten- 
 sity, such an approach might reduce the responsiveness of the 
 program to local priorities. 
 
 The goals of the LPW Program did not include the generation 
 of job opportunities for the long-term unemployed. Given the 
 nature of the construction industry labor market and the ab- 
 sence of any legislative requirement to employ the unemployed, 
 it is not surprising that only 13 percent of the LPW workers 
 were previously unemployed and only 0.7 percent had been unem- 
 ployed for more than 27 weeks. To ensure employment for the 
 long-term unemployed, who are generally unskilled workers, in 
 future programs would require special emphasis in the legis- 
 lation and regulations on hiring such individuals. In add- 
 ition, emphasis on rehabilitation projects with greater labor 
 intensity would be important, as would agreements with unions 
 to permit penetration of the construction work force by the 
 long-term unemployed. 
 
 3 . Infrastructure 
 
 The LPW Program left a legacy of new or "like new" public 
 infrastructure that is currently serving residents of commun- 
 ities in every State and territory. Moreover, the new facil- 
 ities and those renovated with LPW dollars have an average use- 
 ful life of 42 years, with neither new or rehabilitated facil- 
 ities needing renovations for an average of 23 years. Thus, it 
 can be concluded that any future LPW program could meet the ob- 
 jective of creating new infrastructure, bringing existing in- 
 frastructure to "new" condition; or doing both. 
 
 Xll 
 
As demonstrated by the results of the local prioritizing 
 approach employed in LPW II, cities, counties, and other appli- 
 cants do not use a program like LPW to fund frivolous, poten- 
 tially burdensome projects. Aproximately half of all projects 
 and all funds in both rounds went to support primary economic 
 development projects identical to those funded by EDA under its 
 regular development facilities program (e.g., water and sewer 
 lines for industrial or commercial areas). Since these proj- 
 ects generate both short-term construction and related employ- 
 ment opportunities and permanent private sector jobs, they 
 would be preferable in future programs if long-term job genera- 
 tion were an additional objective. Given the LPW II experi- 
 ence, it should not be necessary to establish statutory or 
 regulatory procedures favoring such projects unless it is 
 desired that more than half of the funds should be directed to 
 them. 
 
 When permitted to select which projects to fund, LPW appli- 
 cants chose smaller projects. They also increased by almost 80 
 percent the percentage of funding for rehabilitation and repair 
 projects, while still using almost half of their funds for 
 projects involving new construction. As noted previously, 
 limitations on project size, which may increase the number of 
 rehabilitation projects, would accelerate and concentrate the 
 economic stimulus effects of a future program, while still 
 resulting in facilities that will provide many years of ser- 
 vice. At the same time, it should be noted that an increase in 
 the percentage of funds spent for rehabilitation projects would 
 reduce the number of permanent jobs created since new construc- 
 tion is more likely to generate new economic activity than 
 renovation which, except in special circumstances, is generally 
 directed toward maintaining employment and other economic 
 activity. 
 
 A final related conclusion involving infrastructure is that 
 both LPW I and II provided convincing evidence that a residual 
 stock of State and local public works needs exists which can be 
 used in a fiscal stimulus effort. The 25,000 project appli- 
 cations received by EDA during the six-week period between 
 October 26 and December 3, 1976 were indicative of the demand 
 for such projects, as were subsequent communications received 
 by EDA from numerous other communities, counties, school dis- 
 tricts, and special purpose authorities which for a variety of 
 reasons failed to submit applications within the required time 
 frame. The study of public works investment recently conducted 
 for the Commerce Department's Office of Domestic Economic 
 Policy Coordination (see Appendix C, number 8) also provided 
 evidence of the substantial public facility needs of State and 
 local governments. As noted previously, the projects sought 
 under LPW were utilitarian in nature, meeting water, sewer, 
 transportation, education, and other basic infrastructure 
 needs. 
 
 xm 
 
4. Secondary LPW II Objectives 
 
 The LPW II experience demonstrated convincingly that a 
 rigorously enforced requirement that at least 10 percent of 
 each grant go to minority businesses will result in a signifi- 
 cant level of contracts for firms owned by members of all major 
 majority groups. It also demonstrated that such a requirement 
 will not substantially raise project costs nor cause major 
 delays in project implementation. In addition, the LPW II 
 effort, under which $700 million or 18 percent of the LPW II 
 program funds went to bona fide MBEs, revealed that in most 
 areas there are ample numbers of qualified minority firms 
 available to work on public construction projects. There were, 
 however, grantees in areas with small minority populations who 
 experienced difficulties in obtaining bona fide minority firms 
 to work on their projects. Consequently, in any future public 
 works program where minority business development and minority 
 employment are established as objectives, the statutory MBE 
 requirement should be modified to exclude or at least reduce 
 MBE participation in areas with small minority populations. 
 Such a requirement could range, for example, from five percent 
 for areas with at least five percent minority populations to 
 fifteen percent for areas with significantly larger minority 
 populations. 
 
 The LPW Program also proved to be an incentive for the for- 
 mation of new construction and supply firms, particularly LPW 
 II with its $4 billion worth of projects. The 10 percent MBE 
 requirement was particularly influential in the formation of 
 new minority firms. Although future evaluations of these MBEs 
 will be necessary to determine whether they can remain in 
 business and maintain relationships with LPW II majority 
 contractors, a minority business requirement is an effective 
 way of stimulating the creation of new minority firms, 
 particularly as subcontractors and suppliers. 
 
 Although the preceding conclusions make it clear that 
 minority firms did receive substantial benefits from the MBE 
 requirement, the accompanying problems raise questions as to 
 its appropriateness in an effort in which accelerated 
 construction is an objective. As indicated above, the 
 10 percent MBE requirement did not substantially delay 
 construction. On the other hand, more than a thousand 
 purported minority firms (many of which were suppliers) 
 participated in LPW II contracts only to be disqualified as 
 non-bona fide, a situation that would not have occurred if more 
 time had been available to examine firms thoroughly prior to 
 the awarding of contracts. Moreover, com- piling lists of bona 
 fide MBEs for use in future programs is not a solution since it 
 would preclude the development of new minority construction and 
 supply firms — one of the primary objectives of such a 
 requirement. 
 
 XIV 
 
5 . Program Implementation 
 
 a . Expeditious Implementation 
 
 Among the unique features of both LPW I and II were the 
 statutory deadlines for project review (60 days from 
 receipt of application) and construction starts (90 days 
 from project approval) . Devised to enhance the fiscal 
 stimulus impacts of LPW funding, these time constraints 
 mandated unprecedented speed on the part of EDA and LPW 
 grant recipients. Through its performance in conjunction 
 with both programs, EDA demonstrated that a Federal agency 
 can review and approve thousands of individual public works 
 projects in a very short period of time. Under LPW II, the 
 average processing time for applications was 44 days, and 
 EDA processed and approved 8,554 LPW II projects in a 
 71-day period in the summer and early fall of 1977. 
 Similarly, it is clear that State and local governments are 
 capable of accelerating pre-construction activities to have 
 construction underway within 90 days of project approval. 
 The average period between applicants' receipt of grant and 
 start of construction under LPW I was 77 days. Primarily 
 because the timing of LPW II did not coincide with the con- 
 struction season, the record was less satisfactory. How- 
 ever, 85 percent of all LPW II projects were underway 
 within the 90-day deadline. 
 
 b. Local Priorities 
 
 As reflected in preceding sections, another important con- 
 clusion emanating from the LPW II experience concerns proj- 
 ect selecton. As demonstrated by the LPW II process, local 
 project selection is feasible. Fears that local prioritiz- 
 ing would lead to frivolous projects or conflicts that 
 would impair jurisdictions' abilities to submit appli- 
 cations on a timely basis proved groundless. To operate a 
 fiscal stimulus public works program expeditiously, the 
 Federal government does not have to resort to complicated 
 project scoring procedures which really cannot be that 
 selective or impose Washington's priorities on State and 
 local communities. City and county officials and school 
 boards can agree upon project priorities that reflect local 
 needs. In turn, their agreement can form the basis for 
 final project decisions at the Federal level. 
 
 c. Involvement of Different Types of Government 
 
 The LPW II experience also showed that a public works fis- 
 cal stimulus can involve each of the different types of 
 goverment that administer capital improvement programs. 
 
 xv 
 
Significant percentages of LPW II funds went to State, 
 county, and municipal governments, as well as school dis- 
 tricts. Special purpose authorities and Indian tribes also 
 received funding. It is believed that the LPW II system 
 resulted in a relatively equitable distribution of funds 
 among these types of government. However, any future 
 programs would benefit from more detailed analyses of the 
 varying public infrastructure responsibilities of these 
 types of governments — responsibilities that differ from 
 State to State. 
 
 d. Leverage Effect 
 
 Another conclusion that can be reached on the basis of the 
 LPW II Program is that an allocation approach such as that 
 employed under LPW II can generate other funding. Under 
 LPW I, applicants generally requested funding for total 
 project costs. Since applicants whose projects scored high 
 enough received the full amount requested, other funds con- 
 stituted less than 10 percent of total LPW I project 
 costs. Conversely, under LPW II, applicants received 
 allocations representing their fair share of the available 
 funds. There was no relationship between the total costs 
 of available projects and those allocations. As a result, 
 in many instances, the costs of priority projects exceeded 
 allocations, leading applicants to use funds from other 
 sources — Federal, State, and local — to complete project 
 financing. In total, more than $1 billion was contributed 
 to LPW II projects from other sources, thus enhancing the 
 program's fiscal stimulus effect. 
 
 e. Davis-Bacon and Related Wage Requirements 
 
 As a result of EDA's active enforcement of Davis-Bacon and 
 other wage acts from the outset, fewer than one percent of 
 the more than 150,000 contractors and subcontractors par- 
 ticipating in the LPW Program have been found in violation 
 of such acts. Only 671 cases required investigation, and 
 many of these were due to inadequate grantee recordkeeping 
 rather than actual wage underpayments. Only four contrac- 
 tors were required to make restitution of more than 
 $10,000, while only 22 of the more than 150,000 were recom- 
 mended for debarment. 
 
 f . Other Fraud and Abuse 
 
 As was the case with wage payment requirements, grantees 
 and contractors operated the LPW Program with a minimum of 
 fraud or abuse. Despite the fact that many of the grant 
 recipients and contractors had no previous experience with 
 
 xvi 
 
Federal construction programs, and certainly not with dead- 
 lines like those imposed by LPW, the instances of fraud and 
 abuse were few. This experience makes it clear that State 
 and local governments can administer a program such as LPW 
 efficiently while complying with the numerous Federal rules 
 and regulations involved. 
 
 Administrative Burden 
 
 A final conclusion resulting from the LPW experience con- 
 cerns the Federal staff support required to implement a 
 temporary program of this magnitude. In the case of LPW, 
 term employees — supplemented at times by regular EDA 
 staff — carried out the Federal responsibilities 
 associated with the program. Not only was it difficult to 
 locate engineers and other professionals willing to accept 
 limited term appointments; once hired, it was difficult to 
 retain them throughout the two- to three-year implemen- 
 tation process. This frequently necessitated the detailing 
 of regular EDA personnel to assist in carrying out 
 essential LPW tasks. Although assigning responsibility for 
 a temporary program like LPW to an Agency with an ongoing 
 program is preferable to establishing a new organization to 
 administer it, the strain such an action places on the 
 existing agency — both in terms of its ability to carry 
 out its own program effectively and to manage the new 
 program efficiently — should not be taken lightly. 
 
 XVI 1 
 
CHAPTER ONE 
 PROGRAM DESIGN 
 
 The Local Public Works Program (LPW) included two similar yet 
 different phases. Round I or LPW I, a Congressional initiative 
 enacted on July 22, 1976, resulted in the availability of $2 billion 
 for public construction grants. Round II or LPW II, proposed by 
 President Carter on January 31, 1977, and enacted on May 13, 1977, 
 included an appropriation for $4 billion in public construction 
 grants. In this chapter, a brief legislative history and chronology 
 of program implementation are presented separately for LPW I and 
 LPW II. 
 
 A. LPW I 
 
 1. Legislative History 
 
 The Public Works Employment Act of 1976 (P.L. 94-369) became law 
 on July 22, 1976. Title I of this Act — The Local Public Works 
 Capital Development and Investment Act — became known as the Local 
 Public Works Program or LPW. Along with the countercyclical 
 revenue-sharing program authorized by Title II, LPW I constituted a 
 response of the Congress to the recession of 1973-1975 and its 
 lingering after-effects. The legislation was part of a package 
 which the Congress passed July 22, 1976 after President Ford's 
 July 6 veto. 
 
 The LPW legislation authorized the Economic Development 
 Administration (EDA) to approve up to $2 billion in 100 percent 
 Federal grants for State and local public works projects that would 
 stimulate the economy, generate employment, and provide useful pub- 
 lic facilities. The funds could also be used to supplement public 
 works projects funded by other Federal agencies, and State and local 
 governments . 
 
 The LPW I legislation required that: 
 
 o EDA prepare regulations and procedures for implementing the 
 program within 30 days of enactment; 
 
 o EDA approve or deny a project within 60 days of receipt of 
 the application; 
 
 o on-site labor begin within 90 days of project approval; 
 
 o 70 percent of the funds go to areas with unemployment rates 
 in excess of the national average; 30 percent of the funds 
 go to areas with rates of unemployment below the national 
 average, but above 6.5 percent; 
 
o unemployment rates be based on the most recent three-month 
 period for which accurate data were available; 
 
 o priority be given to local government projects (including 
 those of school districts); and 
 
 o EDA consider the extent to which proposed projects would 
 contribute to reducing unemployment. 
 
 On September 22, 1976, an appropriation conference report was 
 adopted providing $2 billion (of which $10 million was reserved for 
 program administration) to implement the LPW program. The ap- 
 propriations bill was signed into law by President Ford on 
 October 1, 1976. 
 
 2. Program Implementation 
 
 As displayed in Table 1, EDA published final guidelines for the 
 program on October 18 and announced that it would begin to accept 
 applications on October 26. The LPW I Program Guidelines estab- 
 lished an allocation of funds among the States based on severity and 
 magnitude of unemployment. After adjustments for the statutory 
 minimum State allocation of $10 million and the maximum of 
 $250 million, 65 percent of the funds were allocated on the basis of 
 the number of unemployed in each State and 35 percent on the basis 
 of each State's unemployment rate. Within each State, projects in 
 areas with an unemployment rate higher than the national average 
 would compete for 70 percent of the State's allocation, while proj- 
 ects in areas with rates between the national average (then 
 7.78 percent) and 6.5 percent would compete for 30 percent of the 
 State's allocation. 
 
 The scoring procedure for selection of projects within each 
 State was based on area unemployment rate (25 percent) ; number of 
 unemployed in the project area (30 percent) ; ratio of labor costs to 
 total project costs (30 percent) ; per capita income of the applicant 
 jurisdiction (15 percent) ; and bonus points for long-term project 
 benefits (5 to 10 percent) , type of applicant (5 percent bonus for 
 local government, 3 percent for others) , and the relationship of the 
 project to local plans (5 percent) . 
 
 Project eligibility criteria included: 
 
 o a $5 million maximum (of EDA funds) for each project; 
 
 o labor intensity ratio (labor costs/total costs) of at least 
 10 percent, but no more than 80 percent, since it was as- 
 sumed that projects with a labor intensity ratio of more 
 than 80 percent might include only routine maintenance, not 
 the construction of new facilities or improvements to 
 existing ones; 
 
1976 
 
 July 22 
 
 August 23 
 
 October 1 
 October 8 
 
 October 26 
 December 3 
 
 December 23 
 December 27 
 
 TABLE 1 
 LPW I - CHRONOLOGY OF EVENTS 
 
 Congress enacts Local Public Works Program 
 with $2 billion authorization over President 
 Ford's veto 
 
 EDA publishes draft guidelines and ap- 
 plications (Meets 30-day legislative 
 requirements) 
 
 $2 billion appropriation enacted for LPW I 
 
 EDA issues first edition revised guidelines 
 (Final guidelines issued October 18) 
 
 First applications received 
 
 Cutoff for submission of applications 
 (December 9 for resubmission of corrected 
 applications) 
 
 Preliminary approvals/denials announced 
 
 First grant awards made 
 
 1977 
 
 Early February 
 
 Last grant awards made 
 
o a certification by the applicant that other funds were not 
 immediately available to enable the project to get under- 
 way, thus attempting to minimize the substitution of Fed- 
 eral funds for State and local funds; and 
 
 o assurances that plans and specifications were sufficiently 
 complete to enable a construction start within 90 days of 
 project approval. 
 
 Because of the large volume of projects, EDA established a pro- 
 cedure for avoiding undue concentrations of funds in areas within a 
 State (or county). Funding benchmarks based on the sub-state area's 
 percentage of State (or county) unemployment were established. 
 Projects were then selected by score until the funding awarded ex- 
 ceeded the area benchmark. 
 
 EDA received more than 25,000 applications between October 26, 
 1976 and the December 3, 1976 cutoff. Of these, more than 22,000 
 projects were determined to be eligible and were scored. All proj- 
 ects which were not to be approved were denied on December 23, 1976, 
 meeting the 60-day statutory deadline. Final project processing and 
 awards took place between December 27, 1976 and early February 
 1977.* 
 
 B. LPW II 
 
 1. Legislative History 
 
 During the period when LPW I applications were being accepted, 
 Jimmy Carter was elected President. One of the major efforts during 
 the Presidential transition period was the development of an econ- 
 omic stimulus package which contained an expanded Local Public Works 
 Program. On January 31, 1977, eleven days after taking office, 
 President Carter proposed to the Congress a $31.2 billion package 
 which included a two-year, $4 billion LPW II Program. In his 
 message, the President indicated that some of the legislative pro- 
 visions of LPW I were under review and that changes would be made in 
 provisions which had proven inequitable. 
 
 Anticipating President Carter's support for an additional 
 $4 billion Local Public Works Program, leadership of the House Com- 
 mittee on Public Works and Transportation and the Senate Committee 
 on Environment and Public Works had already introduced extension 
 
 For a more detailed description of the LPW I program, see 
 pages 1-7 of the Local Public Works Program Status Report , 
 Department of Commerce, Economic Development 
 Administration, January 1978. 
 
legislation. In late January and early February the Committees held 
 hearings* on LPW I and the LPW II bills at which Commerce Secretary 
 Kreps discussed the Carter Administration's objectives for LPW II, 
 as well as several operational principles. 
 
 Following the hearings, EDA officials worked closely with Congress- 
 ional staff in designing an improved LPW Program that would meet six 
 policy objectives: 
 
 o maximize the stimulus effect of the program by starting 
 
 construction as soon as possible and shortening the periods 
 within which the construction would take place; 
 
 o target funds to areas of highest unemployment in each State 
 in order to reach the areas of highest economic distress 
 and to minimize effects on wages and prices; 
 
 o reduce LPW I funding inequities among different areas and 
 types of governmental units; 
 
 o place maximum emphasis on local decisionmaking in the 
 selection of projects; 
 
 o make the program more predictable by allowing eligible ap- 
 plicants to know in advance how their projects would fare, 
 thus avoiding unrealistic expectations and excessive ap- 
 plication submissions, as well as facilitating State and 
 local planning; and 
 
 o increase the program's efficiency by reducing the admin- 
 istrative workload on LPW applicants as well as on EDA. 
 
 In addition to recommending such specific changes as eliminating 
 the 70 percent/30 percent fund distribution requirement and estab- 
 lishing a separate fund for Indian projects, EDA officials and staff 
 provided the Congressional Committees with suggested legislative 
 language for making the proposed modifications. 
 
 This type of cooperation continued throughout the legislative 
 process, which culminated with Congressional approval of the LPW II 
 statute on May 3. Ten days later on May 13, President Carter signed 
 both the LPW II bill and an accompanying $4 billion appropriations 
 bill into law, just over 100 days after he proposed the program. 
 
 For a detailed discussion of the approaches and changes 
 made by the House and the Senate, see pages 7-13 of the 
 Local Public Works Program Status Report , Department of 
 Commerce, Economic Development Administration, January 1978 
 
Like LPW I, the new statute, the Public Works Employment Act of 
 1977, outlined a timetable for implementation, allowing 30 days for 
 the publication of regulations, 60 days for decisions on applica- 
 tions, and initiation of on-site labor within 90 days of approval. 
 Based on EDA's LPW I experience, however, the new statute made 
 several changes in the implementation of LPW II. These changes in- 
 cluded the elimination of the LPW I requirement that, within States, 
 70 percent of the funds go to areas with unemployment rates above 
 the national average, and 30 percent to areas with rates below the 
 national average — a requirement which had proven overly advan- 
 tageous to areas with unemployment rates below the national average. 
 In addition, the statute adopted the LPW I approach of allocating 
 funds among the States according to a formula that distributed 
 65 percent of the funds on the basis of the number of unemployed in 
 each State and 35 percent on the basis of each State's unemployment 
 rate. However, Congress modified the LPW I approach by raising the 
 minimum allocation for a State from one-half of one percent to 
 three-quarters of one percent. This meant that under the $4 billion 
 LPW II Program the minimum State funding level was $30 million, 
 versus $10 million under the $2 billion LPW I Program. 
 
 The LPW II legislation also contained several provisions in- 
 cluded by the Congress as secondary objectives. In recognition of 
 discrimination against minorities in the construction and supply in- 
 dustries, at least 10 percent of each LPW II grant was required to 
 be expended with minority business enterprises (MBEs) . In addition, 
 hiring preference was to be given to disabled and Vietnam-era 
 veterans, and all materials used on the projects were to be pro- 
 duced, mined, or manufactured in the United States. Buildings were 
 to be designed and constructed to insure access to the handicapped 
 and to the elderly. 
 
 2 . Program Implementation 
 
 In addition to the changes already outlined, both the law and 
 procedures were modified under LPW II to permit the development of 
 sub-state allocations called planning targets. These planning tar- 
 gets divided the $3,795 billion that remained after the following 
 initial deductions had been made: 
 
 o $100 million for Indian projects; 
 
 o $70 million to fund projects whose Round I applications had 
 been erroneously denied; 
 
 o $20 million for territories; and 
 
 o $15 million for program administrative costs. 
 
Within their planning target amount, local governmental units could 
 set their own project priorities. These planning targets were cal- 
 culated using the same 65/35 formula that divided funds among the 
 States and reflected any funding received in Round I. Planning tar- 
 gets in amounts greater than $75,000 were determined for three cate- 
 gories of applicants: (1) "primary cities" (i.e., those with popu- 
 lations greater than 50,000); (2) jurisdictions in the balance of 
 counties with primary cities; and (3) jurisdictions in counties 
 without primary cities. Within States, EDA also set planning tar- 
 gets for pockets-of-poverty , with $1 million set aside for each 
 pocket-of-poverty city to a maximum of $20 million per State.* 
 These changes over the LPW I approach resulted in the following 
 general improvements: 
 
 o the targeting of funds to areas of greater unemployment 
 
 (e.g., 72 percent of LPW II funds went to areas with rates 
 above the national average versus 63 percent in LPW I, the 
 average unemployment rate for areas receiving funds was 
 8.9 percent for LPW I versus 9.4 percent for LPW II, only 
 46 percent of the LPW I funds went to areas with unemploy- 
 ment rates of 9 percent or more versus 54 percent under 
 LPW II, 23 percent of LPW I funds went to areas with 
 unemployment rates below 6.5 percent versus only 14 percent 
 under LPW II) ; 
 
 o the distribution of a greater proportion of funds and 
 
 projects to areas with the largest numbers of unemployed 
 persons (e.g., cities over 50,000 with 45.9 percent of the 
 nation's unemployed population received 47 percent of 
 LPW II funds versus 38 percent of LPW I monies) ; 
 
 o a wider participation by different types of government 
 
 (e.g., all 50 State governments received funds under LPW II 
 versus 15 under LPW I, while over 900 county governments 
 received funds under LPW II versus 190 under LPW I); 
 
 o an increase in the participation rate of the 100 largest 
 cities (65 percent under LPW I versus 93 percent under 
 LPW II) ; 
 
 o an increase in the number of small communities receiving 
 funds (e.g., 570 communities under 5,000 population 
 
 For a more detailed discussion of planning targets, see 
 pages 16-18 of the Local Public Works Program Status 
 Report , Department of Commerce, Economic Development 
 Administration, January 1978. 
 
received funds under LPW I versus 1,580 under LPW II and 
 385 communities under 2,500 population received funds under 
 LPW I versus 1,000 under LPW II); and 
 
 o more funds were leveraged from other sources ($1 billion in 
 LPW II versus $160 million in LPW I). 
 
 As reflected in Table 2, planning targets were established for thou- 
 sands of State and local jurisdictions in mid-July, and by September 
 30, 71 days later, 8,554 LPW II projects totalling approximately 
 $4 billion had been processed and approved. 
 
TABLE 2 
 LPW II - CHRONOLOGY OF EVENTS 
 
 1977 
 
 January 31 
 
 May 13 
 May 16 
 June 20 
 July 15 
 
 July 21 
 August 1 
 
 President Carter proposes $31.2 billion 
 Economic Stimulus Package including 
 $4 billion for LPW II 
 
 LPW II legislation and appropriations signed 
 into law by President 
 
 Initial allocations of LPW II funds among 
 States announced 
 
 Planning targets announced for Indian tribes 
 and Alaskan native villages 
 
 Final sub-state planning targets of funds 
 made available for State governments, county 
 governments/school districts, and primary 
 and non-primary city governments/school 
 distr icts 
 
 First LPW II grant awards made 
 
 Planning targets announced for 
 pock ets-of -poverty 
 
 September 30 
 
 Last grant awards made 
 
CHAPTER TWO 
 PROGRAM ADMINISTRATION 
 
 A. PRE-APPROVAL MONITORING 
 
 Because many LPW applicants were unfamiliar with the Federal 
 grants process, the application form for LPW was designed to sim- 
 plify the preparation of applications and EDA review. For example, 
 whenever possible, applicants needed only to provide an assurance of 
 compliance with a requirement, rather than a detailed description of 
 how the applicant would comply. Projects under both Rounds were 
 required to comply with civil rights, environmental, Davis-Bacon, 
 and other standard Federal requirements germane to construction 
 projects. In addition, LPW II projects had to comply with the 
 10 percent Minority Business Enterprise (MBE) and "Buy American" 
 requirements, as well as the access for the handicapped and 
 veteran's preference provisions. As a result, EDA had to develop 
 procedures to provide adequate review of the assurances for these 
 requirements. 
 
 Environmental reviews can often be complicated and lengthy. In 
 LPW I, EDA discouraged projects which required processing or reviews 
 that might exceed the 60-day project decision deadline. Moreover, 
 since projects in LPW I were selected by formula, a policy which 
 excluded potentially difficult projects was considered more effi- 
 cient and of little consequence to applicants. In LPW II, however, 
 project selection was based on local priorities. As a result, there 
 was concern that excluding projects requiring extensive review could 
 be inimical to local priorities. In addition, there was a legal 
 precedent which required that the Agency make every effort to comply 
 with statutes such as the National Environmental Policy Act (NEPA) 
 within the legislatively mandated timetable. Extra resources were 
 therefore devoted to conducting environmental reviews. If neces- 
 sary, projects were modified to eliminate or reduce adverse impacts, 
 within the processing time available. As a result, local priorities 
 were respected without disregarding environmental considerations. 
 
 EDA performed a pre-approval civil rights compliance review on 
 every LPW project. The review focused on an assessment of each 
 applicant's current civil rights posture to determine if they were 
 in compliance with Federal civil rights laws, and an examination of 
 the project service benefits to assure that a proposed project or 
 group of projects would not deny benefits to minorities. 
 
 Because of the time pressures generated by the LPW Program, some 
 of the reviews were less thorough than those conducted under EDA's 
 "regular" public works program. However, EDA's Regional Offices 
 were still able to identify potentially serious problems and resolve 
 them prior to disbursing funds. This informal resolution of poten- 
 tial problems kept the number of formal complaints to a minimum. 
 For example, Round II of LPW produced only 15 formal civil rights 
 complaints, all of which were resolved. 
 
 10 
 
B. POST-APPROVAL MONITORING 
 
 Compliance with many provisions of the LPW Act necessarily 
 required action by grantees and their contractors after approval of 
 the project. EDA monitored grantee compliance, but attempted to do 
 so with a minimum of red tape and intrusion. Since adherence to the 
 90-day construction start deadline was essential to the fiscal 
 stimulus purpose of the program, and since the LPW II 10 percent MBE 
 requirement was entirely new to Federal programs and could poten- 
 tially present great difficulties for grantees and contractors, 
 these provisions received special attention in the project moni- 
 toring phase. 
 
 Under LPW II, EDA took two steps to assist grantees in complying 
 with the standard Federal requirements with which many already had 
 some experience. The first was publication of "Legal Requirements 
 Applicable to Projects Funded under the Public Works Employment Act 
 of 1977." This document restated the requirements established in 
 the regulations, explained them, and offered suggestions on how 
 compliance might be achieved. The second step was a mid-term test 
 of compliance which could lead to further guidance or corrective 
 action if necessary. As the projects were getting under way, EDA 
 developed a sample project site monitoring effort to test compliance 
 with requirements during construction. This review, conducted by 
 EDA Regional Office staff during mid-1978, consisted of structured 
 visits to 455 projects. This sample group of projects (just over 
 5 percent) reflected the universe of project size, type, location, 
 and type of grantee in the LPW II program. The results of the 
 monitoring effort showed that compliance was improved by: 
 
 o familiarity with requirements and means for complying with 
 them. For example, most grantees and contractors had 
 experience with the Davis-Bacon requirement and had little 
 difficulty complying; 
 
 o ability to determine easily the existence of facts or con- 
 ditions which relate to compliance. For example, many 
 grantees and contractors had difficulty ensuring compliance 
 with the "Buy American" provision, since labels and even 
 brand names do not provide full information on the source 
 of products and supplies; 
 
 o specificity and clarity of the requirements; and 
 
 o screening by EDA during application processing, particu- 
 larly for information which had a direct relationship to a 
 requirement or prohibition. For example, project applica- 
 tions which did not comply with the prohibition against 
 channelization or other alterations of natural watercourses 
 were either modified or denied by EDA. 
 
 11 
 
C. FINANCIAL MANAGEMENT 
 
 1. Cost Accounting 
 
 Accounting for project costs, disbursements, and audits followed 
 the standards and procedures established by Federal Management 
 Circular (FMC) 74-7. Grantees were asked to determine if their 
 existing financial management systems met the FMC 74-7 requirements. 
 Grantees could request and receive EDA guidance in establishing a 
 system that met the requirements, if necessary. 
 
 2 . Disbursements 
 
 When on-site construction work on a project began, EDA issued a 
 U.S. Treasury Letter of Credit for 50 percent of the grant amount. 
 When construction was 40 percent complete, a second Letter of Credit 
 for the remaining 50 percent of the grant amount was issued. 
 Grantees could draw on the credit as costs were incurred. By 
 February 5, 1980, all initial letters of credit had been issued; by 
 September 30, 1980, final letters of credit had been issued for all 
 but 46 LPW I Projects and all but 343 LPW II Projects. 
 
 3 . Audits 
 
 Of the 10,616 LPW grants awarded by EDA, 9,133 grants repre- 
 senting 98.7 percent of funding are being audited. All grants of 
 $120,000 or more (8,453 grants representing 98.2 percent of funding) 
 are subject to audit. However, to avoid the burden and expense of 
 audits for projects of relatively small dollar value, EDA and the 
 Department of Commerce's Office of the Inspector General agreed that 
 only a sample of projects involving grants less than $120,000 would 
 be audited. Of the 2,163 grants under $120,000, 280 (0.2 percent of 
 funding) are included in the sample, with an additional 400 
 (0.3 percent of funding) to be audited pursuant to State law. 
 
 The LPW audit is concerned with both financial and compliance 
 issues. The auditors must meet the criteria established by the U.S. 
 General Accounting Office (GAO) . Grantees make the arrangements for 
 the audits in most cases by engaging independent public accountants. 
 In addition to audits arranged for by grantees, the Inspector 
 General's Office is performing audits on a sample of 5 percent of 
 all grants, and projects of other Federal agencies which have 
 received LPW supplementary funds are undergoing a single audit to 
 satisfy all Federal requirements. Those LPW projects involving 
 extended construction time are subject to interim audit at least 
 once every two years, as well as upon the completion or termination 
 of the projects. All others are audited at completion. A waiver of 
 a final audit may be granted if the funds expended between the time 
 of the interim audit and final project completion are not signifi- 
 cant. By September 30, 1980 4,795 projects had completed final 
 audits, 3,573 final audits were underway, and 765 projects had not 
 yet begun final audit. 
 
 12 
 
In the 5,454 completed audits (including 4,795 final audits and 
 659 interim audits), costs of $2,761,762,893 were claimed of which 
 $2,669,774,811 or 96.7 percent have been allowed, $26,610,605 or 
 1 percent have been disallowed, and $65,377,477 or 2.3 percent are 
 still under consideration. The disallowed costs were spread over 
 1,000 projects and were attributable to: 
 
 o ineligible methods of contracting or fee determination for 
 architectural and engineering (A/E) services — 24 percent; 
 
 o ineligible costs claimed for services provided prior to 
 application — 19 percent; 
 
 o failure of grantee's administrative system to meet one or 
 
 more of the Federal criteria relating to the maintenance of 
 records or effective control over the use of funds -- 
 16 percent; 
 
 o premature drawdowns on letters of credit — 9 percent; 
 
 o failure to comply with Davis-Bacon requirements — 
 8 percent; 
 
 o failure to meet 10 percent MBE requirement or obtain a 
 waiver — 2 percent; 
 
 o failure to comply with other LPW Program requirements -- 
 2 percent; and 
 
 o miscellaneous violations — 20 percent. 
 
 The recovery of funds representing ineligible costs claimed has 
 been somewhat complicated by the letter of credit disbursement ar- 
 rangement. The letter of credit system was imposed government-wide 
 at the time of LPW by U.S. Treasury Circular 1075 and Treasury 
 Fiscal Requirements Manual 2000. Although EDA found the letter of 
 credit system to be generally efficient, EDA suggested that a 
 10 percent holdback be imposed on LPW grants; however, this sugges- 
 tion was not consistent with directives of the Office of Management 
 and Budget. Subsequently, at the time of final audit, many grantees 
 have found themselves owing the Federal government funds which had 
 long since been spent. This has significantly impeded the expedi- 
 tious recovery of funds and slowed project close-out by months. 
 
 D. CONSTRUCTION MANAGEMENT & PROGRESS 
 
 1. Construction Starts 
 
 Of the 2,062 projects approved under LPW I, three projects were 
 terminated for the convenience of the grantees and the U.S. Govern- 
 ment. Of the remaining 2,059 projects, 2,041 projects or 99 percent 
 were underway within the 90-day post-approval deadline. Ninety-day 
 
 13 
 
extensions of the deadline were granted to 18 projects, 2 of which 
 received a second extension. In LPW I, extensions were granted for 
 the following reasons: 
 
 o bid problems, with grantees receiving no bids or bids that 
 substantially exceeded available funds (3 extensions) ; 
 
 o weather conditions (6 extensions) . Weather conditions were 
 not responsible for many delays in Round I, since deadlines 
 fell between the end of March and early May; and 
 
 o other reasons, including litigation (9 extensions). 
 
 In LPW II, 7,266 projects or 85 percent were underway within the 
 90-day deadline in spite of the severe winter weather during the 
 months (November and December 1977) when the deadlines fell. Exten- 
 sions were granted to 1,288 projects for the following reasons: 
 
 o weather conditions (264 extensions) ; 
 
 o bid problems (448 extensions); 
 
 o grantee problems with the MBE requirement (183 extensions) ; 
 and 
 
 o other reasons, primarily litigation and other problems, 
 
 such as local opposition or failure to gain State legisla- 
 ture approval (393 extensions) . 
 
 Second extensions were granted to 770 projects, with third and 
 fourth extensions granted to 171 and 26 projects, respectively. 
 Weather conditions and bid problems were the prime reason cited for 
 these additional extensions. 
 
 2. Project Completions 
 
 By September 30, 1980, construction was completed on 1,868 or 
 91 percent of the LPW I projects and 7,264 or 85 percent of the 
 LPW II projects. 
 
 14 
 
CHAPTER THREE 
 PROGRAM ACCOMPLISHMENTS 
 
 A. INTRODUCTION 
 
 One objective for the implementation of the LPW I Program, was 
 "to carry out a comprehensive evaluation of both the direct employ- 
 ment impact and the indirect or stimulative impact of the projects 
 funded."* To this end, evaluation of the LPW Program must determine 
 the extent to which the program goals — to provide an economic 
 stimulus, to provide employment, and to build needed infra- 
 structure — were met. The program's accomplishments presented in 
 the following sections represent the results of the various evalua- 
 tion tasks completed by or for the Department of Commerce as part of 
 the comprehensive evaluation of LPW. With the exception of the 
 employment generation report, which is presented in its entirety in 
 Section C of this chapter, all evaluation task reports are being 
 released under separate cover. The various reports conducted by or 
 for the Commerce Department are listed in Appendix C, while LPW 
 studies carried out by other organizations are identified in 
 Appendix D. 
 
 The major component of the evaluation of the LPW Program was the 
 microeconomic evaluation. This evaluation investigated the impacts 
 of the program on job creation and on local areas that received LPW 
 grants, including an examination and assessment of the various 
 economic, demographic, political, and locational characteristics of 
 individual communities. The various issues considered in this 
 microeconomic evaluation were organized into a four-part evaluation 
 framework that focused on program outcomes and their relation to 
 specific program policy parameters. This framework consists of: 
 
 o local government response to the LPW Program; 
 
 o local economic stimulation; 
 
 o construction industry job creation; and 
 
 o program impact in the form of tax returns and savings in 
 transfer payments. 
 
 "Local Public Works Capital Development and Investment 
 Program, Final Rulemaking," 13III (316. f), Federal 
 Register , Vol. 41, No. 164, August 23, 1976, p. 35670. 
 
 15 
 
The portion of the microeconomic evaluation devoted to local 
 government response focused on the budgetary and capital expenditure 
 decisions made by the local governments that received LPW funds, as 
 well as the net benefit of the LPW projects ultimately constructed. 
 Key areas of concern were: 
 
 o the budgetary impacts of LPW funds on the local community; 
 
 o the process by which local governments selected projects in 
 making application for LPW funds; and 
 
 o the valuation of the facilities created by the program. 
 
 A sample of 250 projects within 100 local governmental units was 
 analyzed by Abt Associates, Inc. under contract to EDA (Report D) . 
 Summaries of the results of the analyses of the application 
 development process, local fiscal response, and the long-term 
 impacts are presented throughout the following sections. 
 
 The portion of the microeconomic evaluation dealing with local 
 economic stimulation focused on the interactions between existing 
 local economic conditions and the stimulus provided by the program. 
 Beyond the impacts of LPW on direct job creation, several issues 
 were assessed relating to the broad range of economic impacts of LPW 
 funding in different local market contexts. These issues included: 
 
 o the major secondary employment effects of the program; 
 
 o possible inflationary impacts; 
 
 o the timing of direct job creation in relation to local area 
 employment cycles; and 
 
 o the impact of the MBE and other special LPW Program 
 requirements . 
 
 Local economic impacts, degree of utilization of the capacity of 
 construction and related supply industries, inflationary impacts, 
 and the impact of the MBE and other special program requirements 
 were analyzed by Abt Associates, Inc. under the same contract to EDA 
 mentioned above (Report D) . The timing of direct job creation in 
 relation to local employment cycles was examined by EDA's Program 
 Evaluation Division staff (Report E) . 
 
 The portion of the microeconomic evaluation devoted to the crea- 
 tion of jobs in the construction industry estimated and monitored 
 the number, composition, duration, and timing of LPW construction 
 employment over the life of the program, based on payroll data 
 reported to EDA on the LPW Payroll Reporting Form. Payroll data 
 were collected from a 10 percent sample of projects, stratified by 
 project cost, infrastructure category, type of construction 
 
 16 
 
activity, EDA region, and SMSA/non-SMSA location to represent the 
 universe of 10,616 projects. In addition, a survey was conducted by 
 the Bureau of the Census to produce a socioeconomic profile of LPW 
 employees. Finally, five broad infrastructure categories, or 
 project types, were compared in terms of cost-effectiveness (as 
 measured by the direct person-months of employment generated per 
 $100,000 expenditure) as well as rate of employment build-up (as 
 measured by the percentage of direct employment created in the first 
 six months of on-site activity) . EDA staff carried out the analyses 
 of the payroll (in Report A), the employee characteristics 
 (Report C) , and the project type (Report B) data. 
 
 The last portion of the LPW microeconomic evaluation, which was 
 also conducted by EDA Program Evaluation staff, involved an examina- 
 tion of program returns from taxation and savings in transfer pay- 
 ments to determine the net cost of the LPW Program (Report F) . In 
 this analysis, the budgetary cost to the Federal government was 
 estimated, as well as the total net cost of the LPW Program to all 
 levels of government. 
 
 In addition to the microeconomic evaluation, numerous other 
 studies of LPW were conducted. Notable among these is the evalua- 
 tion of the national impacts of LPW prepared by Chase Econometric 
 Associates, Inc. under contract to the Office of Domestic Economic 
 Policy Coordination in the Department of Commerce. Summaries of the 
 results of this evaluation are included in the following sections, 
 and the final report (Report G) is being published as are the other 
 individual LPW evaluations listed in Appendix C. 
 
 B. ECONOMIC STIMULUS 
 
 An assessment of the economic stimulus generated by the 
 $6 billion in LPW expenditures requires consideration of several 
 factors that must be taken into account in assessing any program's 
 ability to produce an economic stimulus. These factors include: 
 
 o the extent to which a program stimulates activities that 
 would have been undertaken within the same time period in 
 the program's absence; 
 
 o the extent to which the Federal funding stimulates other 
 spending; 
 
 o the time required to initiate and terminate a program's 
 
 stimulus-producing activities (that is, whether a program 
 can produce concentrated impacts) ; 
 
 o a program's fiscal relief to state and local governments; 
 and 
 
 o a program's inflationary impacts, particularly at the local 
 level. 
 
 17 
 
1. Substitution and Addition of Funds 
 
 As described below, Abt Associates, Inc. estimated net substitu- 
 tion of LPW funds for State and local funds at only 8.5 percent and 
 net leveraging of non-LPW funds at 10.1 percent. Consequently, the 
 net impact of LPW is estimated at $6 billion plus 1.6 percent 
 ($96 million) to account for net substitution and leveraging. 
 
 The effect of an injection of Federal funds into the economy is 
 diluted to the extent that fiscal substitution occurs. In the case 
 of LPW, this means the extent to which previously appropriated or 
 planned local expenditures for public works construction were 
 replaced with funds provided through the LPW grant. This phenomenon 
 should not, however, be considered in isolation. The impacts of the 
 LPW funding on the timing of public works expenditures, the end use 
 of funds released as a result of substitution, and the leveraging of 
 funds from other sources must also be taken into account. 
 
 In terms of the timing of the stimulus, the examination of 
 fiscal substitution should include "project acceleration," which 
 occurs when a planned local project is begun ahead of the original 
 construction schedule because of the grant inducement. With regard 
 to the end use of the funds released as a result of substitution, it 
 should be recognized that if the released funds are used to finance 
 another capital project for the locality during the LPW construction 
 period, the substitution impact is negated. Finally, the funds 
 leveraged by the LPW grant from non-LPW sources (especially state 
 and local governments) must be added to LPW resources to determine 
 the total stimulative effect of LPW. However, some of this le- 
 veraging shifts resources out of other capital projects, and this 
 amount must be subtracted from total leveraged funds. In summary, 
 then, to understand the real stimulus effect of LPW, it is necessary 
 to estimate the proportion of LPW obligations representing deferred 
 and accelerated expenditures as well as the end use of released 
 funds. 
 
 On the basis of an Abt Associates, Inc. survey of 100 randomly- 
 selected state and local governments, it is estimated that 20.8 per- 
 cent of the sample LPW funding represented substitution of LPW grant 
 funds for local funds where the capital project would have been 
 undertaken within the year. This is comparable to a macroeconomic 
 estimate of gross substitution by Chase Econometric Associates, Inc. 
 of roughly 26.6 percent, an estimate based on an non-random sample 
 of 50 LPW grantees. However, of the 20.8 percent found by Abt to be 
 available as a consequence of LPW grants, 12.3 percent was spent on 
 construction of another capital project for the locality within the 
 year. Thus, as indicated above, net substitution is estimated at 
 8.5 percent. 
 
 Funds leveraged from non-LPW sources, on the other hand, are 
 estimated at 13.7 percent. Accounting for the extent to which 
 leveraged resources were shifted out of other capital projects 
 
 18 
 
results in a reduction of the total leveraging estimate to 10.1 per- 
 cent. Considering both net leveraging and net substitution, the 
 total funding impact attributable to LPW includes an additional 
 1.6 percent, for a total of approximately $6,096 billion. In other 
 words, even considering the impact of substitution, every LPW grant 
 dollar resulted in almost $1.02 in public works construction that 
 would not have taken place in the absence of LPW within the same 
 time frame. 
 
 2 . Program Timing 
 
 As described in more detail below, a substantial portion of the 
 construction on both LPW I and LPW II projects occurred within 12 
 months after passage of program appropriations, while most of the 
 remaining construction took place within the succeeding 12 months. 
 In other words, the construction and related activities stimulated 
 by LPW produced major impacts relatively quickly after Congress made 
 funds available and continued to do so for two years following the 
 appropriation of funds. 
 
 The timing of LPW construction activities was accelerated by the 
 requirement in both LPW statutes that construction be initiated on 
 all projects within 90 days of their approval. There were no 
 requirements in the statutes concerning timing of subsequent project 
 activities or project completion. However, as indicated above and 
 confirmed by data on the disbursement of LPW program funds and con- 
 struction employment, even in the absence of such requirements, 
 project activity moved at a fairly rapid pace. 
 
 Traditionally, the timing of disbursements of Federal funds 
 (i.e., Treasury payments) has been used to estimate the timing of a 
 program's impacts. However, in the case of LPW, such disbursements 
 lagged substantially behind actual expenditures at the local level. 
 For example, despite EDA's encouragement to grantees (e.g., cities 
 and counties) to expedite requests for disbursements, many reim- 
 bursed contractors, who had already paid employees and sometimes 
 suppliers, with funds available from non-LPW sources. It was only 
 subsequently, when other sources were exhausted, that the grantee 
 applied for LPW funds, a procedure which ultimately resulted in 
 Treasury disbursements. Despite this built-in delay, within the 
 first year after enactment of the LPW I legislation, 34 percent of 
 the program's funds had been disbursed; by the end of the second 
 year after enactment, 81 percent had been disbursed. In the case of 
 LPW II, 24 percent of program funds had been disbursed by the end of 
 the first year after enactment, with 81 percent disbursed by the end 
 of the second year. The first-year lag under LPW II is primarily 
 attributable to the timing of the start of LPW II on-site construc- 
 tion during the winter of 1977. LPW disbursement data for each 
 round of the program is presented in Table 3, with disbursement 
 patterns presented in Figure 1. 
 
 19 
 
TABLE 3 
 
 LPW Disbursements 
 (Amounts in Millions! 
 
 FY 1977 
 
 LPW I 
 
 LPW II 
 
 Total 
 
 Cumulative 
 
 
 
 
 
 February 
 
 * 
 
 
 
 * 
 
 * 
 
 March 
 
 10 
 
 
 
 10 
 
 10 
 
 April 
 
 25 
 
 
 
 25 
 
 1 35 
 
 May 
 
 70 
 
 
 
 70 
 
 105 
 
 June 
 
 100 
 
 
 
 100 
 
 205 
 
 July 
 
 108 
 
 
 
 108 
 
 313 
 
 August 
 
 116 
 
 
 
 116 
 
 429 
 
 September 
 
 147 
 
 
 
 147 
 
 576 
 
 FY Total 
 
 576 
 
 
 
 576 
 
 
 FY 1978 
 
 
 
 
 
 October 
 
 111 
 
 
 
 111 
 
 687 
 
 November 
 
 117 
 
 4 
 
 121 
 
 808 
 
 December 
 
 118 
 
 39 
 
 15 7 
 
 965 
 
 January 
 
 95 
 
 93 
 
 188 
 
 1,153 
 
 February 
 
 69 
 
 151 
 
 220 
 
 1,373 
 
 March 
 
 87 
 
 191 
 
 278 
 
 1,651 
 
 April 
 
 74 
 
 208 
 
 282 
 
 1,933 
 
 May 
 
 68 
 
 258 
 
 326 
 
 2,259 
 
 June 
 
 74 
 
 296 
 
 370 
 
 2,629 
 
 July 
 
 57 
 
 270 
 
 327 
 
 2,956 
 
 August 
 
 64 
 
 289 
 
 353 
 
 3,309 
 
 September 
 
 47 
 
 261 
 
 308 
 
 3,617 
 
 FY Total 
 
 981 
 
 2,060 
 
 3,041 
 
 
 FY 1979 
 
 
 
 
 
 October 
 
 56 
 
 25 7 
 
 313 
 
 3,930 
 
 November 
 
 49 
 
 210 
 
 259 
 
 4,189 
 
 December 
 
 36 
 
 164 
 
 200 
 
 4,389 
 
 January 
 
 24 
 
 145 
 
 169 
 
 4,558 
 
 February 
 
 31 
 
 101 
 
 132 
 
 4,690 
 
 March 
 
 18 
 
 96 
 
 114 
 
 4,804 
 
 April 
 
 23 
 
 91 
 
 114 
 
 4,918 
 
 May 
 
 19 
 
 86 
 
 105 
 
 5,023 
 
 June 
 
 17 
 
 80 
 
 97 
 
 5,120 
 
 July 
 
 15 
 
 65 
 
 80 
 
 5,200 
 
 August 
 
 11 
 
 52 
 
 63 
 
 5,263 
 
 September 
 
 11 
 
 51 
 
 62 
 
 5,325 
 
 FY Total 
 
 310 
 
 1,398 
 
 1,708 
 
 
 FY 1980 
 
 
 
 
 
 October 
 
 10 
 
 51 
 
 61 
 
 5,386 
 
 November 
 
 8 
 
 46 
 
 54 
 
 5,440 
 
 December 
 
 8 
 
 40 
 
 48 
 
 5,488 
 
 January 
 
 6 
 
 34 
 
 40 
 
 5,528 
 
 February 
 
 4 
 
 27 
 
 31 
 
 5,559 
 
 March 
 
 5 
 
 25 
 
 30 
 
 5,589 
 
 April 
 
 3 
 
 34 
 
 37 
 
 5,626 
 
 May 
 
 4 
 
 26 
 
 30 
 
 5,656 
 
 June 
 
 5 
 
 21 
 
 26 
 
 5,682 
 
 July 
 
 1 
 
 21 
 
 22 
 
 5,704 
 
 August 
 
 2 
 
 12 
 
 14 
 
 5,718 
 
 September 
 
 2 
 
 12 
 
 14 
 
 5,732 
 
 FY Total 
 
 58 
 
 349 
 
 407 
 
 
 Total 
 
 1,925 
 
 3,807 
 
 5,732 
 
 
 Less than $100,000, 
 
 20 
 
FIGURE 1 
 
 (millions 
 
 of 
 dollars) 
 
 LPW I and II Disbursement Pattern 
 February 1977 through September 1980 
 
 TOTAL 
 
 LPW I 
 
 LPW II — \ 
 
 FN AM J J A S i'J D J F MA M J J A S it D J F >\ A M J J A SO N D J F fl A A J j A 
 FY 1977 FY 1978 FY 1979 FY 198Q 
 
 21 
 
Because of the delays described above, disbursement patterns are 
 not as useful as the timing of construction employment on LPW proj- 
 ects in providing an accurate reflection of the timing of the pro- 
 gram's economic stimulus and the extent to which that stimulus was 
 concentrated. As illustrated in Figures 2, 3, and 4 which compare 
 disbursement and employment build-up patterns, LPW employment gener- 
 ation began in January 1977, only three months after LPW I funds 
 were appropriated, and continued at significant levels through 
 October 1978. Within one year of enactment of Round I, 42 percent 
 of the total construction employment for that Round had been gener- 
 ated, with 88 percent generated by the end of the second year. 
 Round II generated 33 percent of its total construction employment 
 within the first year after enactment, with 85 percent generated by 
 the end of the second year. Again, the differences between the two 
 programs are primarily attributable to seasonal factors. During its 
 first full construction season, which includes the key construction 
 months of May through October, LPW I generated 39 percent of its 
 construction employment, as compared with 46 percent for LPW II. 
 This difference is probably attributable to LPW II' s smaller project 
 size, which permitted faster completion of projects. 
 
 In terms of calendar year timing, the data indicate that 
 combined LPW I and LPW II monthly disbursements peaked in the second 
 quarter of 1978, while direct program employment commenced in early 
 1977, peaked in 1978, and continued into 1979 and 1980. At the time 
 LPW I and II were generating employment opportunities, the construc- 
 tion unemployment rate was approximately 10 percent. An examination 
 of LPW on-site employment for a sample of 70 Labor Market Areas or 
 LMAs revealed that LPW employment did not "crowd out" other con- 
 struction activity. 
 
 3 . Local Fiscal Relief 
 
 An additional side benefit of the LPW Program -- particularly 
 LPW II, which permitted grantees to submit project applications in 
 order of local priority — was its provision of local budgetary 
 relief (i.e., its role in funding the construction or renovation of 
 public facilities that would otherwise not have been funded, or have 
 been funded through the assumption of debt or other less appealing 
 measures) . This type of impact requires careful examination, par- 
 ticularly in light of evidence that often in the past, local govern- 
 ments tended to build up surpluses during economic expansions and 
 draw down surpluses during contractions. To assess the extent of 
 local fiscal relief attributable to LPW, local budgets were examined 
 to determine the sources of leveraged funding and the end use of 
 funds freed by fiscal substitution. Major sources of leveraged 
 funds included local bond issues (26 percent), state grants (20 per- 
 cent), and local capital budgets (14 percent). Surpluses were the 
 source for only 1 percent of leveraged funds. The pattern of uses 
 of substituted funds also tends to refute the surplus-adjusting 
 hypothesis. Fully 59 percent of substituted funds were used for 
 capital expenditures, with almost 13 percent used to offset 
 
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 25 
 
 
operating expenses. Only 28 percent was used for debt reduction or 
 the accumulation of surpluses. Thus, the greatest local fiscal 
 relief provided by LPW was to local capital budgets, as opposed to 
 the building up of surpluses or the reduction of debt. 
 
 4 . Inflationary Impacts 
 
 The final factor to be considered in conjunction with LPW's 
 stimulus effects is the inflationary impact of LPW labor and 
 materials demand. On an industry-wide, macroeconomic basis, the 
 inflationary impact was minimal by virtue of the program's rela- 
 tively small share of total construction spending. During the peak 
 period of combined LPW I and LPW II activity in the second quarter 
 of calendar 1978, monthly program outlays averaged less than 
 4 percent of the total value of new non-residential construction put 
 in place. Including the residential sector, LPW demand amounted to 
 only 1.8 percent of total construction spending. The sizeable 
 increases in construction costs over the past few years have been 
 attributed by the industry to rising fuel, raw material, transporta- 
 tion, labor and regulatory costs borne by the producers, distrib- 
 utors, and users of construction materials, as well as to escalating 
 costs of construction financing and equipment. 
 
 At the local level, the situation was found to be similar, 
 although there appeared to be some inflationary impacts, particu- 
 larly with regard to materials costs. The analysis of responses 
 from the general contractors, subcontractors and suppliers surveyed 
 by Abt Associates, Inc. clearly indicates that there were very few 
 shortages of either labor or materials, in spite of the fact that 
 the bulk of the LPW expenditures occurred during a time of substan- 
 tial construction activity. Less than 2 percent of the contractor 
 sample indicated that they had difficulty hiring labor due to a 
 general labor shortage. Some 10 percent of the general and sub- 
 contractors interviewed indicated that they had had difficulty 
 obtaining materials. About 20 percent of those who reported dif- 
 ficulty cited cement (the most frequently purchased material) as 
 being in short supply; this is not surprising considering the 
 national shortage of cement in 1977 and 1978. About 5.5 percent of 
 interviewed contractors delayed other work or passed up bids because 
 of the LPW project. Since they were predominantly larger and more 
 successful firms, their over-abundance of work may have opened up 
 opportunities for new and/or smaller contractors. 
 
 C. EMPLOYMENT 
 
 The second of the three major goals of the LPW Program was to 
 generate employment opportunities, particularly for workers in con- 
 struction and related industries. To assess LPW's progress in 
 meeting this goal, the following factors were examined: 
 
 o the total number of employment opportunities in 
 
 construction and other industries stimulated by the program; 
 
 26 
 
o the composition, duration and timing of the construction 
 employment generated over the life of the program; 
 
 o the factors influencing project cost effectiveness and 
 rates of employment build-up; 
 
 o the characteristics of those employed in LPW construction; 
 and 
 
 o the net cost per job of the employment created. 
 
 1. Employment Generation 
 
 Unlike jobs programs which emphasize occupational training or 
 periods of direct public sector employment such as those funded 
 under the Comprehensive Employment and Training Act, public works 
 construction is uniquely suited to the broad diffusion of employment 
 opportunities and income. As a result of the materials demand 
 generated by public facility projects, LPW s greatest employment 
 impact occurred in allied supply industries and through the induce- 
 ment of increased private sector consumption. Thus, LPW job crea- 
 tion and demand stimulus was channeled through , rather than direct 
 solely at, the construction sector. Accordingly, tha program's 
 employment effects must be considered in terms of: 
 
 rected 
 
 o Direct employment — "on-site" construction jobs involving 
 skilled and unskilled construction workers, as well as 
 administrative, clerical, and service workers employed by 
 project construction contractors and subcontractors; 
 
 o Indirect employment — jobs in supply industries that 
 produce, market, and/or service project equipment and 
 materials; and 
 
 o Induced employment — private sector jobs that result from 
 increased goods and services consumed by LPW project 
 workers, construction contractors, and materials suppliers. 
 
 A central component of EDA's evaluation of LPW employment 
 impacts has been the monitoring of on-site payroll data for separate 
 samples encompassing 10 percent of the projects approved in both 
 Round I and Round II of the program. Data for these 1,062 projects, 
 including employee counts, hours, and wages, were reported to EDA on 
 the LPW Payroll Reporting Form (ED-746) by construction contractors 
 and subcontractors working on sample projects for the duration of 
 on-site work. 
 
 Samples comprising 10 percent of the projects funded in each 
 round were large enough to permit stratification of the sample 
 projects according to grant size, construction activity, and 
 functional category, as well as EDA region and urban-rural mix. 
 
 27 
 
a. Total Employment 
 
 Based on actual direct employment data and employment multi- 
 pliers, it is projected that LPW I and LPW II, through their 10,616 
 projects, generated between 343,000 and 371,000 person-years of 
 total employment*. As shown in Table 4, this included an estimated 
 93,000 person-years of on-site (direct) employment. In addition to 
 direct employment, LPW generated jobs in supply industries (indirect 
 jobs) and industries affected by increased private sector consump- 
 tion (induced jobs). It is estimated that the indirect jobs 
 totalled approximately 66,000 person-years, while induced jobs 
 accounted for between 184,000 and 212,000 person-years of LPW 
 employment. 
 
 These employment estimates represent gross employment projec- 
 tions based on sample data reported since the start of LPW project 
 construction in December 1976. They are expressed in gross terms 
 and thus do not reflect the fiscal substitution or "crowding out" 
 effects of the program, i.e., the extent to which LPW project fund- 
 ing replaced or displaced planned public or private construction 
 spending. These effects, however, were revealed to be minimal by 
 the analysis summarized in Section B, which also showed that such 
 effects were negated by the addition of non-LPW funds to help 
 finance LPW projects. Estimates of total employment effects are 
 derived by applying a secondary employment multiplier to the number 
 of direct jobs extrapolated from the payroll reporting sample.** 
 
 * The number of "jobs" created in each of these categories is 
 expressed in terms of full-time equivalent person-years, as 
 opposed to actual numbers of individuals employed. For 
 example, a person-year of direct employment in the con- 
 struction industry is defined as 1,800 hours of on-site 
 work — a standard developed by the Bureau of Labor 
 Statistics (BLS) to accommodate the typically short dura- 
 tion of construction project employment. 
 
 ** The indirect and induced employment multipliers used in 
 
 this study were derived from an analysis of procedures used 
 by the Rand Corporation (Georges Vernez et al., Regional 
 Cycles and Employment Effects of Public Works Investment , 
 January 1977.) and public works project impact data 
 collected and analyzed in a previous EDA study (Anthony J. 
 Sulvetta and Norman L. Thompson, An Evaluation of the 
 Public Works Impact Program (PWIP) , April, 1975.) These 
 analyses indicate that approximately 1.1 person-years of 
 indirect employment are created for each $100,000 expended 
 for construction. In total, 2.7 to 3.0 induced and 
 indirect person-years of employment are generated for each 
 on-site person-year generated. 
 
 28 
 
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 29 
 
b. Gross Cost per Person-Year 
 
 On the basis of LPW grant award amounts, the gross cost of one 
 person-year of employment created in construction and secondary 
 industries — total employment -- was an estimated $16,119 to 
 $17,426. The cost of a person-year of direct employment in 
 construction was $64,477, while the cost of creating a person-year 
 of employment in construction and supply industries was $37,723. 
 Comparing the gross cost per person-year by round, Round I ranged 
 from $15,840 to $17,125 for a person-year of total employment 
 whereas in Round II the cost of creating a person-year of employment 
 was between $16,262 and $17,581. In direct construction employment 
 a person-year cost $63,362 in Round I and $65,050 in Round II. Net 
 cost figures, which take into account transfer payment savings and 
 taxes paid to Federal, State, and local governments, are presented 
 in Section C.4. below. 
 
 c. Cost Effectiveness 
 
 Looking at cost effectiveness in terms of the number of 
 person-years of employment per $100,000 expended, LPW generated 1.6 
 person-years of direct employment per $100,000 of expenditures. 
 Application of the multiplier for secondary employment mentioned 
 earlier, results in an estimated 4.3 to 4.8 person-years per 
 $100,000 expended. These results do not vary across rounds of the 
 program. 
 
 d. On-Site Employment and Earnings 
 
 LPW employed over one million different persons in construc- 
 tion. Of these employees, 67 percent were skilled workers and 
 29 percent unskilled workers. The remaining 4 percent were adminis- 
 trative, clerical, and service workers. Looking at the two rounds 
 separately, Table 5 indicates that although the magnitude of employ- 
 ment was significantly greater in Round II than in Round I, there is 
 little difference between Round I and Round II in the distribution 
 of the employment between skilled and unskilled workers. 
 
 Administrative and clerical workers represented a greater 
 proportion of the total person-years of employment than the number 
 of persons would suggest. As indicated in Table 5, administrative, 
 clerical and service employees, while accounting for only 4 percent 
 of the LPW work force, accounted for 9 percent of the person-years 
 of employment. The significantly longer average employment duration 
 for administrative, clerical, and service workers — 297 hours per 
 workers as compared with 138 hours per skilled worker and 142 hours 
 per unskilled worker — is a function of their continuous, sup- 
 portive role in the construction of projects. 
 
 As Table 5 shows, average employment duration under the LPW 
 Program was 146 hours, or four weeks, for all types of workers. 
 Under LPW I the average was 179 hours, as compared to 134 hours 
 under LPW II. The generally smaller size of the Round II projects 
 
 30 
 
TABLE 5 
 LPW ON-SITE EMPLOYMENT BY SKILL LEVELS 
 
 Number of Projects 
 
 Round I 
 
 Round II 
 
 Total 
 
 2,062 
 
 8,554 
 
 10,616 
 
 Persons Employed 
 
 315,678 
 
 824,757 
 
 1,140,435 
 
 Skilled 
 
 215,838 
 
 547,265 
 
 763,103 
 
 (Percentage) 
 
 (68%) 
 
 (66%) 
 
 (67%) 
 
 Unskilled 
 
 88,191 
 
 239,015 
 
 327,206 
 
 (Percentage) 
 
 (28%) 
 
 (29%) 
 
 (29%) 
 
 Administrative, Clerical, 
 
 11,649 
 
 38,477 
 
 50,126 
 
 and Service 
 
 
 
 
 (Percentage) 
 
 (4%) 
 
 (5%) 
 
 (4%) 
 
 Person-Years of Employment 
 
 31,407 
 
 61,261 
 
 92,668 
 
 Skilled 
 
 20,225 
 
 38,312 
 
 58,537 
 
 (Percentage) 
 
 (64%) 
 
 (63%) 
 
 (63%) 
 
 Unskilled 
 
 8,526 
 
 17,340 
 
 25,866 
 
 (Percentage) 
 
 (27%) 
 
 (28%) 
 
 (28%) 
 
 Administrative, Clerical, 
 
 2,656 
 
 5,609 
 
 8,265 
 
 and Service 
 
 
 
 
 (Percentage) 
 
 (9%) 
 
 (9%) 
 
 (9%) 
 
 Average Employment Durative 
 
 179 
 
 134 
 
 146 
 
 (hours per worker) 
 
 
 
 
 Skilled 
 
 169 
 
 126 
 
 138 
 
 Unskilled 
 
 174 
 
 131 
 
 142 
 
 Administrative, Clerical, 
 
 410 
 
 262 
 
 297 
 
 and Service 
 
 
 
 
 31 
 
is a probable reason for the substantially shorter average employ- 
 ment durations experienced in Round II. Skilled workers were emp- 
 loyed an average of 126 hours in Round II, as compared with 169 
 hours in Round I. The differences betwen rounds for unskilled 
 workers and administrative, clerical and service workers is equally 
 as great. 
 
 Total LPW project wages amounted to an estimated $1.6 billion of 
 the $7.16 billion in total expenditures on LPW projects. Using 
 these wage payments to compute a labor intensity (wage pay- 
 ments/total project expenditures) for LPW resulted in an estimated 
 labor intensity of 21.9 percent. Round I exhibited a slightly 
 higher labor intensity of 23.8 percent compared with 21 percent for 
 Round II. 
 
 Skilled construction workers received 70 percent of total wage 
 payments, compared with 21 percent for unskilled construction 
 workers and 9 percent for administrative, clerical, and service 
 workers as shown in Table 6. Average earnings received by workers 
 were $1,370, at a average hourly rate of $9.36 including overtime 
 payments. Adjusting for the relatively short duration of on-site 
 construction employment, an average salary of $16,855 is estimated 
 for an 1800-hour person-year of employment. 
 
 e. Occupations 
 
 Although influenced by factors such as local construction codes, 
 union work rules, climatic conditions, and the use of mechanized 
 alternatives to labor, the amount of direct employment generated 
 through public works is generally determined by the technical 
 requirements of specific project types. These requirements are 
 ultimately reflected in the skill level and occupational composition 
 of the on-site work force. 
 
 The on-site employment characteristics of occupations involved 
 in the construction of LPW projects are provided in Table 7. As 
 shown, persons engaged in construction (non-administrative) occupa- 
 tions account for 96 percent of the LPW work force, and account for 
 91 percent of total on-site person-months generated during the 
 program. The largest single occupational group consists of skilled 
 and unskilled laborers (28 percent of the total persons employed) . 
 Specific construction trades (excluding laborers and drivers) repre- 
 sent 58.8 percent of the persons employed and 52.4 percent of 
 person-months worked. 
 
 Average employment durations vary considerably among construc- 
 tion occupations, ranging from a low of 82 hours per worker for 
 other construction occupations (such as roofers and welders) to a 
 high of 227 hours for carpenters. As indicated previously, the 
 average duration of employment for all LPW construction workers 
 amounts to 146 hours. There were no significant variations in the 
 occupational mix between LPW I and LPW II. 
 
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f . Employment Build-Up Patterns 
 
 Employment build-up patterns, which were discussed in the sec- 
 tion on "Program Timing" and reflected in Figures 2, 3, and 4, as 
 well as Figure 5 on the following page, represent the person-months 
 of full-time equivalent employment generated on-site in each suc- 
 cessive month of project construction. In addition to providing a 
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 ment build-up patterns reveal both immediate construction sector im- 
 pacts and the peak period of on-site employment generation. The 
 employment build-up patterns exhibited by Rounds I and II are pre- 
 sented in Table 8. 
 
 The build-up of Round I on-site employment accelerated in the 
 spring of 1977, coinciding with the expiration of mandatory 90-day 
 deadlines for the start of on-site labor and with the beginning of 
 the spring construction season. The number of direct person-months 
 generated doubled between April and May 1977 alone, and increased 
 steadily thereafter to a Round I peak in August 1977. The greatest 
 monthly employment generation occurred in the months of July and 
 August of 1977, with each of these months accounting for approx- 
 imately 7.5 percent of total Round I person-months created. Fully 
 91 percent of cumulative direct employment was generated during the 
 first two years of Round I ending December, 1978, as opposed to only 
 5 percent in the following year. Calendar year 1977 accounted for 
 54.2 percent of Round I direct job creation, with calendar years 
 1978, 1979, and 1980, accounting for 36.8 percent, 5.2 percent, and 
 3.8 percent, respectively. 
 
 Initial employment build-up occurred more slowly in Round II 
 after full-scale construction began in the late fall of 1977. The 
 adverse climatic conditions in the ensuing winter months of 1978 
 restricted employment generated through March 1978 to 15.7 percent 
 of total person-months created by Round II projects. The level of 
 on-site employment generation rose dramatically in the spring of 
 1978 and remained strong through the peak construction season ending 
 in October 1978. More than 54 percent of the total direct employ- 
 ment was generated in those seven months alone. By the end of 
 calendar year 1978, over 73 percent of total person-months had been 
 generated. Between January and December 1979, during which 
 14.9 percent of total employment was generated, monthly percentages 
 of total person-months gradually fell to . 6 percent by December, 
 the lowest level since November 1977. This was due to the comple- 
 tion of most of the Round II projects and the arrival of winter. 
 
 Employment build-ups for skilled and unskilled construction 
 labor categories generally reflected those of the total work forces 
 in Rounds I and II (see figures in Appendix A). However, individual 
 patterns for skilled and unskilled labor did differ to some extent 
 as a result of the phasing of project construction and seasonal 
 effects. For example, monthly unskilled employment for Round I 
 peaked as early as June 1977, compared with September 1977 for 
 skilled construction employment. Likewise, the seasonal decline 
 
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 38 
 
that affected both skilled and unskilled employment after October 
 1977 had a greater impact on the unskilled. In Round II, unskilled 
 construction leveled off starting in February 1978, while skilled 
 construction employment continued to increase until May of that 
 year. Both skilled and unskilled construction employment declined 
 rapidly after June 1978. 
 
 2. Factors Influencing Project Cost-Effectiveness and Build-Up Rates 
 
 In an effort to identify which types of projects were most 
 effective in generating on-site employment quickly, the evaluation 
 included an analysis of the factors that influenced the relative 
 performance of five distinct infrastructure categories.* However, 
 cost-effectiveness was found to be influenced to a greater degree by 
 project cost and construction activity (i.e., new construction 
 versus renovation) than by project type. 
 
 The principal factor affecting the immediate employment impacts 
 of project types (i.e., the percentages of total on-site hours 
 generated in the initial months of construction) was the seasonal 
 timing of construction start-up. Regardless of the type or size of 
 projects, construction timed to coincide with the peak construction 
 season (June through September) accelerated direct employment 
 generation. To illustrate, the proximity of mandatory deadlines for 
 the initiation of on-site labor to the start of the annual construc- 
 tion season generally expedited initial employment build-up in Round 
 I, which led to a concentrated direct impact during the summer and 
 fall of 1977. Conversely, labor deadlines occurring after the peak 
 season delayed the overall rate of employment generation in Round II 
 during the initial months of on-site construction (October 1977 
 through March 1978) . Seasonal employment fluctuations were most 
 pronounced among Roadways projects. The percentage of direct 
 employment created in the first six months of on-site activity (by 
 project type and round) is presented in Figure 6. 
 
 The broad infrastructure categories, or project types, 
 defined for the analysis grouped LPW projects according to 
 a common structural or physical property. This method of 
 classification produced the following five categories: 
 
 1. Buildings 
 
 (LPW I - $1,170 million) (LPW II - $2,185 million); 
 
 2. Water, Sewer, and Other Utilities 
 
 (LPW I - $423 million) (LPW II - $758 million) ; 
 
 3. Roadways and Related Improvements 
 
 (LPW I - $253 million) (LPW II - $689 million) ; 
 
 4. Park, Commercial, and Other Site Development 
 (LPW I - $95 million) (LPW II - $232 million) ; 
 
 5. Combined or Other Structures 
 
 (LPW I - $49 million) (LPW II - $142 million) . 
 
 39 
 
FIGURE 6 
 
 Percent of Direct Employment Created in the First Six Months of On-Site Activity 
 
 Total 
 Projects 
 
 Direct Person-Months Created Per $100*000 Expenditure 
 
 PRO 
 
 40 
 
Not surprisingly, the cost effectiveness of on-site employment 
 generation was primarily determined by the average hourly wage 
 rate. Differences by project type and round in the number of direct 
 person-months of employment created per $100,000 expenditure are 
 also shown in Figure 6. A direct trade-off was found to exist 
 within each project type between higher wage rates and direct 
 employment generation. 
 
 Generally, projects costing under $1.0 million generated con- 
 siderably more direct employment per dollar of expenditure than 
 larger-scale projects. Rehabilitation or repair activities were 
 particularly cost-effective among projects costing less than 
 $500,000. Only Roadways projects were relatively cost-effective at 
 costs of $3 million or more. In addition, smaller projects generate 
 a larger proportion of their employment within the first six months 
 of on-site activity. 
 
 In addition to the more obvious implications of seasonal timing 
 and project size, other factors which influenced the rate of initial 
 employment generation included: 
 
 o project phasing: project types and construction activities 
 which demonstrated the greatest differentiation in required 
 crafts and direct labor hours at successive stages of con- 
 struction had generally slower initial build-up rates; and 
 
 o metropolitan (SMSA) or non-metropolitan (non-SMSA) project 
 location: the greater availability and accessibility of 
 construction labor, materials, and supplies in economically 
 integrated metropolitan areas, as opposed to more remote 
 geographic locations, tended to promote faster rates of 
 initial employment build-up on Buildings projects, as well 
 as on Water/Utilities and Park/Site projects costing 
 $1 million or more. 
 
 Among LPW project types, greater cost effectiveness implied 
 greater labor intensity (i.e., a larger ratio of wages to total 
 project expenditures). However, as revealed in Figure 6, greater 
 cost effectiveness did not necessarily coincide with a more rapid 
 build-up of on-site employment. Only Roadways projects started in 
 the spring of 1977 (LPW I) and Water/Utilities projects averaging 
 less than $500,000 in approved total cost (LPW II) were both 
 relatively cost-effective and timely in terms of generating direct 
 employment. Generally lower labor intensity among large scale 
 projects appears to have been the primary cause of the trade-offs 
 between cost effectiveness and immediate impact that occurred among 
 non-Roadways projects in Round I. In Round II, however, the 
 off-season start of project construction, which slowed initial 
 employment build-up, was largely responsible for the trade-offs that 
 affected project types other than Water/Utilities. 
 
 41 
 
Each project- type category was considerably more cost-effective 
 in LPW II, following sizeable reductions in the average total cost 
 of projects and increased funding of Rehabilitation activities. 
 Despite greater labor intensity and employment generating capacity, 
 project types in the second round were generally slower to create 
 direct employment in the initial six months of construction. As 
 noted earlier, the delayed build-up of LPW II employment is at- 
 tributable to construction starts in traditionally "of f -season" 
 months, i.e., late fall 1977. 
 
 3. Employee Characteristics 
 
 a. Basic Personal Characteristics 
 
 In addition to estimating the magnitude and timing of employment 
 opportunities created by the LPW Program, the evaluation results 
 also present a detailed picture of the characteristics of those 
 employed on the projects. The LPW labor force appears to have 
 shared many of the basic characteristics of the construction labor 
 force at large. As illustrated in Table 9, employment on LPW 
 projects was generally consistent with employment in the construc- 
 tion trades, with a very strong representation of white males from 
 ages 25 to 44. However, the data also points to certain divergences 
 between the characteristics of the LPW work force and those of the 
 industry work force at large. 
 
 An examination of the racial characteristics of LPW employees 
 reveals that the program had a substantial impact on minorities. As 
 indicated in Table 9, the broadly defined category of black and 
 other minority groups represents 22.5 percent of the LPW labor 
 force, or 13 percentage points above its representation in the con- 
 struction labor force at large. This finding takes on added sig- 
 nificance when one considers that the representation of minorities 
 in LPW exceeded their disproportionate share (16.1 percent) among 
 unemployed construction workers. 
 
 In contrast to its impact on minorities, the LPW Program seems 
 to have provided employment for fewer women than would be expected 
 given the construction labor market of 1978. The disparity 
 (0.9 percent for LPW versus 6.8 percent industry) is, in large part, 
 attributable to the fact that the high concentration of women in 
 clerical occupations was not captured in the employee sample because 
 it was found that these administrative support jobs were not 
 dependent on LPW funding. With dependence determined usually by the 
 amount of time the employee spent on LPW-r elated work, most clerical 
 jobs "fell out" of the sample, taking with them the majority of 
 female employees. However, focusing only on the women who would 
 have been expected to benefit from the increase in construction 
 labor demand resulting from LPW (i.e., those employed in on-site 
 construction activities) reveals significantly less discrepancy. 
 
 42 
 
TABLE 9 
 
 COMPARISON OF LPW LABOR FORCE WITH CONSTRUCTION LABOR FORCE 
 AT LARGE BY BASIC EMPLOYEE CHARACTERISTICS 
 
 Basic 
 
 LPW 
 
 Construction 
 
 Unemployed 
 
 Employee 
 
 Labor 
 
 Labor 
 
 Construction 
 
 Character is tics 
 
 Force 
 
 Force* 
 
 Labor Force* 
 
 Sex 
 
 
 
 
 Male 
 
 99.1% 
 
 93.2% 
 
 94.6% 
 
 Female 
 
 0.9 
 
 6.8** 
 
 5.4 
 
 Age 
 
 
 
 
 16-19 
 
 4.1 
 
 7.2 
 
 — 
 
 20-24 
 
 15.2 
 
 16.9 
 
 -- 
 
 25-44 
 
 51.6 
 
 46.2 
 
 — 
 
 45-59 
 
 25.1 
 
 23.9 
 5.7 
 
 __ 
 
 60 + 
 
 4.1 
 
 — 
 
 Race 
 
 
 
 
 White 
 
 77.5 
 
 90.5 
 
 83.9 
 
 Black and 
 
 22.5 
 
 9.5 
 
 16.1 
 
 Other 
 
 
 
 
 * - Source: The Bureau of the Census, Current Population 
 Survey, 1978. 
 
 ** _ 
 
 LPW Labor Force data include primarily those employed in 
 on-site construction, with very few administrative or 
 clerical support jobs. Of the 6.8 percent women in the 
 Construction Labor Force, only 1.7 percent were engaged in 
 on-site construction. 
 
 43 
 
These women, usually in skilled craft occupations, make up roughly 
 1.7 percent of the construction labor force, as compared to . 9 per- 
 cent of the LPW labor force. Thus, from what is a more realistic 
 comparison, it is evident that although women received a dispropor- 
 tionately small share of the employment benefits resulting from LPW, 
 they were less under-represented than suggested by the aggregate 
 figures. 
 
 Both seasonal and cyclical fluctuations in labor demand affect a 
 large proportion of the construction labor force, and in 1978, an 
 average of nearly 10 percent of the construction labor force was 
 unemployed. By contrast, 13 percent of LPW employees were jobless 
 prior to finding work on a program project. Conversely, there ap- 
 pears to have been a smaller proportion of long-term unemployed 
 (persons unemployed for 27 or more weeks) in the LPW labor force 
 (0.7 percent) than in the construction labor force of 1978 (8.9 per- 
 cent) . 
 
 An occupational breakdown of the LPW labor force provides some 
 interesting insights into the types of workers who benefited from 
 the LPW program. Table 10 presents a comparison of the LPW labor 
 force with the construction labor force at large by occupation. As 
 indicated, there is a notable difference in the "white collar" occu- 
 pations of professional, managerial and administrative, and clerical 
 occupations, with the LPW labor force below the industry norm in all 
 three categories. Furthermore, differences exist in the laborer 
 category, with LPW showing a much stronger representation of 
 laborers than was found in the construction labor force. 
 
 b . Socioeconomic Characteristics of LPW Employees 
 
 The economic status of LPW employees, as measured in terms of 
 income in 1977, the frequency and duration of unemployment in 1977, 
 and employment status immediately before LPW hire, was analyzed 
 relative to the basic personal characteristics described above. In 
 this analysis it was found that prior to LPW: 
 
 o Blacks and other minorities represented in the LPW program 
 had experienced greater difficulty finding work and re- 
 maining employed. 
 
 o Women in on-site construction occupations had been unem- 
 ployed in 1977 with greater frequency and for longer dura- 
 tions than men. Moreover, nearly 32 percent of these women 
 had been unemployed prior to being hired by LPW con- 
 tractors, while over 12 percent of all men had been jobless 
 before LPW hire. As a consequence, the distribution of 
 1977 income earned by women in on-site construction 
 occupations displays a skew in the direction of the lower 
 income ranges. 
 
 44 
 
TABLE 10 
 
 COMPARISON OF PRIMARY LABOR FORCE OCCUPATIONS 
 WITH CONSTRUCTION LABOR FORCE OCCUPATIONS 
 
 
 
 i 
 
 
 LPW 
 
 Construction 
 
 Occupation 
 
 Labor 
 
 Labor 
 
 
 Force 
 
 Force 
 
 Professional 
 
 1.7% 
 
 2.8% 
 
 Managerial and 
 
 7.0 
 
 11.8 
 
 Administrative 
 
 
 
 Clerical 
 
 0.3 
 
 7.1 
 
 Crafts and Kindred 
 
 49.6 
 
 55.3 
 
 Driver or Equipment 
 
 14.2 
 
 7.7 
 
 Operator 
 
 
 
 Laborer 
 
 25.8 
 
 14.8 
 
 Other 
 
 1.3 
 
 0.5 
 
 45 
 
o The duration of unemployment and income of LPW employees 
 had followed a pattern with age which suggested that only 
 the youngest construction labor force members (under 24 
 years) had encountered unusual problems finding work and 
 remaining employed. 
 
 o Employees in the 24 or younger age group had earned incomes 
 in 1977 which were considerably below industry norms. The 
 data show that as labor attachments and experience in- 
 creased along with age, so also did personal income from 
 construction. 
 
 o Veterans in the LPW labor force had fared slightly better 
 than did non-veterans in the construction labor markets of 
 1977. 
 
 c • Wag es a nd Ea r nings Analysis of L PW Labor Force 
 
 Through the Davis-Bacon requirement, the LPW program was in- 
 tended to create job opportunities for members of the construction 
 labor force that paid wages equivalent to wages paid for similar 
 work in private construction. For this reason, all LPW contractors 
 were instructed to pay prevailing wages for work performed on the 
 LPW project by contractor employees. From data gathered in the 
 survey of LPW employees, it is evident that the application of 
 Davis-Bacon wage regulations on LPW contractors had the effect of 
 raising average wages in every major occupation represented in the 
 program labor force. 
 
 The average LPW wage was higher than the usual wage in every 
 occupation where a significant differential was observed. Moreover, 
 the same pattern exists between the previous and LPW wages. Al- 
 though the effects of Davis-Bacon are largely responsible for the 
 higher LPW wages, this difference is also attributable to job 
 shifting, i.e., to the shifting back into construction of some 
 workers who were employed outside construction on their last job 
 before LPW. 
 
 The results of a regional analysis of LPW wages and earnings are 
 closely related to the concentration of "non-union shop" states in 
 the southeastern and southwestern regions of the United States 
 (where a lower than average wage prevailed in all occupations) , and 
 to the urban (and urbanizing) influences of the East, Midwest, Rocky 
 Mountain, and West (where higher than average LPW wages prevailed) . 
 
 d . Characteristics of Workers Employed by Minority Contractors 
 
 The results of the survey indicate that 18.3 percent of the LPW 
 fall 1978 labor force was in the employ of minority contractors. A 
 comparison of the characteristics of minority contractor employees 
 with those of non-minority contractor employees revealed a con- 
 siderably greater representation of blacks and other minorities 
 
 46 
 
among minority contractor employees. Moreover, a detailed breakdown 
 
 of the racial and ethnic origins of minorities indicated a stronger 
 
 showing of every minority group in the minority contractor labor 
 force. 
 
 e. Urban/Rural Analysis of LPW Employee C haracteristics 
 
 The results of the LPW survey indicate that, in the fall of 
 1978, projects in urban areas (those located in Standard Metro- 
 politan Statistical Areas or SMSAs) accounted for 58.1 percent of 
 LPW employment, while projects in rural (non-SMSA) areas accounted 
 for 41.9 percent of total employment. These proportions are some- 
 what different from the proportions of total LPW funds allocated to 
 urban and rural areas (68 and 32 percent respectively) . The dis- 
 crepancy between program funding and employee representation in 
 urban and rural areas can be attributed to a higher rate of comple- 
 tions among projects in urban areas by the fall of the construction 
 season; as a result, these projects were not within the scope of the 
 survey. 
 
 A comparison of the basic characteristics of LPW employees who 
 worked on urban projects and of those who worked on rural projects 
 revealed that: 
 
 o Urban projects employed a greater proportion of Blacks and 
 other minorities than did projects located in rural areas. 
 
 o LPW workers on urban projects had higher incomes than did 
 employees on rural projects. This finding is consistent 
 with the strong union presence which has historically 
 maintained the incomes of urban construction workers above 
 
 those of construction workers in rural areas. 
 
 "- 
 
 o There was virtually no difference in the employment status 
 immediately prior to LPW hire, and workers on urban 
 projects appeared to have experienced only slightly longer 
 and more frequent periods of unemployment in 1977 than did 
 workers on rural projects. 
 
 f . Occupational Analysis of LPW Labor Force 
 
 In general, LPW employees exhibited considerable experience in 
 construction employment and considered construction to be their 
 major field of work. Nearly 77 percent of the LPW labor force was 
 employed in the construction industry, both in their usual and pre- 
 vious jobs. Of the roughly 23 percent who displayed some pattern of 
 industrial mobility, more than half had usual jobs in construction. 
 Only the remaining 11 percent came to their LPW jobs from a usual 
 job in some non-construction industry. When the previously unem- 
 ployed LPW workers are removed from the analysis, the incidence of 
 industrial shifting goes down considerably. Apparently, the shift 
 
 47 
 
by construction workers to some non-construction job in the previous 
 job was strongly related to the difficulty they experienced in 
 finding work during the period before LPW hire. 
 
 Roughly 74 percent of all LPW employees worked in one occupation 
 on their usual, previous, and LPW jobs. Of the remaining 26 percent 
 who displayed some pattern of occupational mobility, only about 
 seven percent worked in occupations which were different from their 
 usual occupations. 
 
 As might be expected, the great majority of all industrial 
 mobility displayed by LPW workers represents movement into the con- 
 struction industry. The survey results indicate a low degree of 
 industrial mobility among LPW workers who usually worked in con- 
 struction. In many cases when the employee had a job outside his 
 major field of work before LPW hire, the program job provided a 
 bridge back to his usual occupation. Among workers who usually 
 worked outside the construction industry, however, the incidence of 
 industrial mobility was considerably higher. It must be emphasized 
 that in the occupations which account for the majority of construc- 
 tion employment (Managerial and Administrative, Crafts and Kindred, 
 and Driver and Equipment Operator), very little job shifting was 
 observed. 
 
 g . Incidence and Effects of Union Membership Among LPW Employees 
 
 The LPW labor force displayed a 54.6 percent rate of union 
 membership, which is slightly lower than the industry average of 
 60 percent for on-site construction occupations. The study found 
 that workers with usual jobs in construction had a higher rate of 
 union membership (57.3 percent) than did workers who came to the LPW 
 job from a non-construction industry (22.6 percent). Owing to the 
 strong identification of union members with their union trade or 
 occupations, and the rules within most labor unions prohibiting 
 members from working outside their union trade, it was expected that 
 both occupational and industrial mobility would be lower among union 
 members . 
 
 These expectations were confirmed in a comparison of job 
 shifting patterns of union and non-union workers in the LPW pro- 
 gram. In fact, fully 83 percent of union workers displayed no 
 industrial mobility, as compared to approximately 70 percent of all 
 non-union workers and 77 percent of the program labor force as a 
 whole. The same strong pattern of non-mobility among union workers 
 is found to exist within the major occupations represented in the 
 LPW labor force. Nearly 80 percent of all union workers displayed 
 no occupational mobility, as opposed to roughly 67 percent of 
 non-union workers and to 74 percent of the LPW labor force as a 
 whole. 
 
 48 
 
h . Analysis of Workers Who Had Concl u ded LPW Employment 
 
 Workers whose LPW employment had terminated prior to the survey 
 made up a large proportion of the LPW sample due to the timing of 
 the survey late in the construction season. These workers displayed 
 characteristics which were much like those of workers who were still 
 employed at the LPW project site in the fall of 1978. The analysis 
 revealed that the duration of LPW employment averaged 2.6 months, 
 with only minor variation explained by most of the basic charac- 
 teristics of LPW workers (e.g., age, race, and sex). 
 
 The data gathered on post-LPW employment permitted an extension 
 of the analysis of job shifting as a result of the addition of 
 information on the post-LPW job. The findings indicate that the LPW 
 job fit into some pre-existing pattern of employment and industrial 
 mobility. For workers with an unbroken history of construction 
 employment, the LPW program provided continuity (74 percent of the 
 workforce) . For construction workers who had displayed some pattern 
 of mobility before LPW hire (23 percent), the LPW job provided a 
 point of re-entrance into the construction industry. However, a 
 considerable proportion (14.4 percent) of these employees shifted to 
 a non-construction industry on the post-LPW job. Finally, workers 
 who displayed desultory shifting among industries prior to the LPW 
 job went into some non-construction industry job or became 
 unemployed after the LPW job. 
 
 i . Geographic Mobility of the LPW Labor Force 
 
 The results of the analysis of geographic mobility indicated 
 that LPW workers travelled an average of 34 miles from their usual 
 residences to the project site, with considerable variation around 
 this program average. Workers who were employed on projects located 
 in urban areas travelled an average of 24 miles to the project site, 
 while workers on rural projects travelled an average of 49 miles. 
 Moreover, nearly 56 percent of all workers on rural projects were 
 not residents of project areas, as compared with 20.9 percent for 
 workers on urban projects. These observations suggest two flows of 
 construction labor under LPW: 
 
 o a rather strong movement of urban labor (which accounts for 
 a vast majority of all skilled construction labor) to rural 
 projects and a somewhat weaker reverse flow of rural 
 workers to urban projects; and 
 
 o a strong movement of workers in rural areas to projects in 
 other rural areas. 
 
 4. Net Cost of LPW 
 
 To determine the net cost of creating construction industry 
 (direct and indirect) jobs under LPW, consideration was given to tax 
 returns and savings in transfer payments from gross project expendi- 
 tures. These savings and returns include Federal, state, and local 
 
 49 
 
taxes on personal and corporate income, sales and excise taxes, and 
 reduced unemployment insurance compensation. An analysis of these 
 factors resulted in the finding that the LPW program had produced 
 total returns and savings of $831.9 million. This effectively 
 reduced the budgetary cost to the Federal government of the LPW 
 Program by $464.4 million (7.8 percent), from $5,975 billion* to 
 just over $5.5 billion. Considering returns to all levels of 
 government, the net cost of LPW was reduced by $831.9 million 
 (13.9 percent), to a total net cost of approximately $5.1 billion. 
 
 Considering returns and savings, the budgetary net cost to the 
 Federal government is $14,900 to $16,100 per person-year of total 
 employment, $59,466 per person-year of on-site (direct) employment; 
 and $34,791 per person-year of construction industry (direct and 
 indirect) employment. The net cost to all levels of government is 
 even lower. For all jobs, the public net cost is between $13,900 
 and $15,000 per person year; for direct jobs, it is $55,500; and for 
 direct and indirect jobs, it is $32,471. 
 
 As shown in Table 11, the Federal share of these returns/savings 
 was 56 percent, while the share for state and local governments was 
 44 percent. The distribution of this reverse flow of funds indi- 
 cates an additional shifting of revenues from the Federal to state 
 and local governments. Thus, savings and returns attributable to 
 LPW became an additional source of local fiscal relief. 
 
 D. INFRASTRUCTURE 
 
 The principal characteristic that differentiates the Local 
 Public Works Program from other Federal stimulus programs is the 
 long-term benefits of the infrastructure created. As a result, any 
 analysis of the contributions of LPW must consider the physical 
 structures left behind. In general, projects were chosen (by EDA in 
 Round I and by the grantees in Round II) that would serve basic 
 economic development needs. Almost half of the projects in each 
 round could be categorized as primary economic development projects, 
 including water/sewer/utilities, site development, shell industrial 
 buildings and roadways. Grantees, projecting an average project 
 useful life of approximately 42 years, cited no difference in the 
 expected number of years until the next renovation (23 years) 
 between new construction and rehabilitation/renovation projects. 
 Thus, LPW left a legacy of economic development infrastructure in 
 "new" condition. The infrastructure created with LPW grant awards 
 served the population of every state and territory in the country. 
 
 This figure reflects $6 billion minus the $25 million used 
 by the Federal Government for program administration. The 
 $25 million is subtracted from the LPW cost because the 
 returns in taxes and transfer payments from that $25 mil- 
 lion are not reflected in the total returns and savings 
 figure. 
 
 50 
 
TABLE 11 
 NET COST OF THE LOCAL PUBLIC WORKS PROGRAM 
 
 Measure 
 
 Federal 
 Government 
 ($millions) 
 
 State/Local 
 
 Governments 
 
 ($millions) 
 
 Total 
 ($millions) 
 
 Tax Returns from Direct 
 Labor Costs 
 
 $ 75.6 
 (49%) 
 
 $ 80.3 
 
 (51%) 
 
 $155.9 
 (100%) 
 
 Unemployment Compensation 
 1 Savings 
 
 3.7 
 (4%) 
 
 78.7 
 (96%) 
 
 82.4 
 
 (100%) 
 
 Tax Returns from 
 Non-Labor Costs 
 
 385.1 
 (65%) 
 
 208.5 
 (35%) 
 
 593.6 
 (100%) 
 
 Total Returns/Savings 
 
 464.4 
 (56%) 
 
 367.5 
 (44%) 
 
 831.9 
 (100%) 
 
 Budgetary Cost of LPW to the Federal Government: $5,510.6 
 Net Cost of LPW: $5,143.1 
 
 51 
 
Appendix B presents the geographic distribution of LPW funding and 
 projects, by round, within the contiguous states. These maps show 
 that while the heaviest concentration of program assistance was 
 provided to the populations of the Northeast, Southwest and West, 
 the overall effect of LPW was to distribute funds to every region 
 and state in the United States. 
 
 In the analysis that follows, the physical characteristics of 
 the 10,616 LPW projects are considered in terms of their cost, the 
 recipients of the project funds, the type of construction activity 
 and their value in meeting long-term economic, community, cultural, 
 and recreational objectives. 
 
 1. Description of Projects Funded 
 
 In an investigation of the infrastructure created by LPW, a 
 variety of classifications schemes are possible due to the numerous 
 variables that may identify a project. For this summary, four major 
 classification systems are used, which highlight the salient 
 features of the diverse LPW projects. The first system groups the 
 projects by their function (e.g., primary economic development, 
 community development, etc.), while the second system groups 
 projects by their physical structure, (e.g., school buildings, 
 streets or courthouses) . The third system groups projects by the 
 kind of construction activity involved (e.g., new construction, 
 renovation, or demolition) , and the fourth system looks at LPW 
 projects in terms of size, grouping them into meaningful cost 
 categories. 
 
 In analyzing project functions, four categories were established: 
 
 o Primary Economic Development (e.g., utilities, site 
 development, shell industrial buildings, etc.); 
 
 o Community Development (e.g., schools, housing, social 
 services, health facilities, etc.); 
 
 o Public Services (e.g., police and fire buildings, etc.); and 
 
 o Cultural and Recreational (e.g., theaters, gymnasiums, park 
 development, etc.). 
 
 As shown in Table 12, projects that met primary economic 
 development needs comprised approximately half of all projects 
 funded in both Rounds. However, under LPW II when grantees selected 
 their priority projects for funding, the percentage of funds going 
 to such projects increased from 43.9 percent in LPW I to 46.6 per- 
 cent. These projects, which are comparable to those financed under 
 EDA's regular development facilities program, not only provide 
 services to area residents and short-term employment for workers in 
 
 52 
 
TABLE 12 
 LPW FUNDING BY PROJECT FUNCTION 
 
 Project Function 
 
 Number of Projects 
 (Percent) 
 
 LPW-EDA Funding 
 ($000) 
 (Percent) 
 
 ' 
 
 LPW I 
 
 LPW II 
 
 LPW I 
 
 LPW II 
 
 Primary Economic 
 Development 
 
 1,022 
 (49.6%) 
 
 4,245 
 1 (49.6%) 
 
 $ 874,000 
 (43.9%) 
 
 $1,868,000 
 (46.6%) 
 
 Community 
 Development 
 
 513 
 (24.9%) 
 
 2,071 
 (24.2%) 
 
 613,000 
 (30.8%) 
 
 1,047,000 
 (26.2%) 
 
 Public Services 
 
 426 
 (20.6%) 
 
 1,555 
 (18.2%) 
 
 399,000 
 (20.1%) 
 
 722,000 
 (18.0%) 
 
 Cultural and 
 Recreational 
 
 101 
 (4.9%) 
 
 683 
 (8.0%) 
 
 103,000 
 (5.2%) 
 
 369,000 
 (9.2%) 
 
 Total 
 
 2,062 
 (100.0%) 
 
 8,554 
 (100.0%) 
 
 $1,989,000 
 (100.0%) 
 
 $4,006,000 
 (100.0%) 
 
 53 
 
construction and related industries, but also help to stimulate 
 private investment in industrial and commercial development 
 ventures. As quantified in Section D.3. below, such ventures in 
 turn generate long-term employment opportunities. 
 
 Another 25 to 30 percent of the project funds under LPW I and 
 II, respectively, financed projects that met community development 
 needs, while approximately 20 percent of the funds in both Rounds 
 supported public service facilities. An interesting change between 
 LPW I and II was the increase in support for cultural and 
 recreational projects under the local priority project selection 
 system under LPW II. 
 
 Projects funded under LPW I and LPW II involved the construction 
 or improvement of 46 varieties of public buildings and capital 
 facilities. In Table 13, similar projects are grouped into 12 
 project type groups displaying the distribution of the 2,062 LPW I 
 and 8,554 LPW II projects and their share of EDA funding from each 
 round. In both rounds of LPW, water, sewer and utility systems were 
 the most frequently funded types of projects and received the 
 largest share of funding. These projects were generally construc- 
 tion of new facilities (55 percent) , additions (19 percent) , and 
 repair/renovations (18 percent) to pre-existing capital stock. 
 
 The average project size, measured in EDA dollars, was about 
 half as large in the second round of funding for LPW than in the 
 first round. In Figure 7, projects in both rounds are examined with 
 respect to their distribution over different cost categories and 
 their mean size. During LPW II, the program-wide project mean was 
 just under one-half million dollars ($468,306), as compared to 
 almost $1 million ($964,675) under LPW I. Furthermore, fully 
 70 percent of LPW II 's 8,554 projects were under one-half million 
 dollars while only 44 percent of LPW I projects were under that 
 amount. 
 
 Under both LPW I and II, Park Developments were the smallest 
 projects with average costs of $586,302 and $340,354, respectively. 
 The highest average project costs during LPW I were $1.3 million for 
 educational facilities, specifically new buildings or additions and 
 renovations. Under LPW II, housing projects were the largest 
 projects with a mean of $900,000, although as a group they consumed 
 less than one-half of one percent of EDA monies. Consistent with 
 the overall differences in average project costs between Round I and 
 Round II, the mean for the most popular project type -- water, 
 sewer, and utilities systems — dropped by 51 percent from $847,093 
 in LPW I to $413,763 in LPW II. 
 
 To examine LPW only in terms of EDA monies would be to present 
 an incomplete picture of project cost. In total, LPW generated over 
 $1 billion in additional capital investment. As shown in Figure 8, 
 the percentage of funds leveraged varied greatly by round, with 
 LPW II accounting for over $996 million and LPW I for over $163 mil- 
 lion. Well over half of this leveraged investment was generated by 
 
 54 
 
TABLE 13 
 TYPES OF LPW PROJECTS 
 
 Project Type 
 
 Number of Projects 
 LPW I LPW II 
 
 EDA Funding Level 
 ($000) 
 LPW I LPW II 
 
 Water/Sewer/Utilities 
 
 Transportation (e.g., 
 streets and bridges) 
 
 Education 
 
 General Government Adminis- 
 tration (i.e., municipal 
 office buildings) 
 
 Cultural and Recreation 
 (e.g., museums and 
 gymnasiums) 
 
 Public Safety (e.g, 
 police and fire stations) 
 
 Miscellaneous Economic/ 
 Community Development 
 (e.g., shell industrial 
 buildings, warehouses) 
 
 Community and Social 
 Service (e.g, 
 community centers) 
 
 Public Health (e.g. , 
 hospitals) 
 
 Site Development (e.g, port 
 facilities) 
 
 Park Development 
 
 Housing 
 
 Total 
 
 551 
 (26.7%) 
 
 361 
 (17.5%) 
 
 329 
 (16.0%) 
 
 285 
 (13.8%) 
 
 95 
 (4.6%) 
 
 141 
 (6.9%) 
 
 79 
 (3.8%) 
 
 103 
 (5.0%) 
 
 50 
 
 (2.4%) 
 
 31 
 (1.5%) 
 
 26 
 (1.3%) 
 
 11 
 (0.5%) 
 
 2,062 
 (100.0%) 
 
 1,991 
 (23.3%) 
 
 1,765 
 (20.6%) 
 
 1,253 
 (14.6%) 
 
 1,037 
 (12.1%) 
 
 640 
 (7.5%) 
 
 518 
 (6.0%) 
 
 338 
 
 (4.0%) 
 
 382 
 (4.5%) 
 
 203 
 (2.4%) 
 
 151 
 (1.8%) 
 
 255 
 (3.0%) 
 
 21 
 (0.2%) 
 
 8,554 
 (100.0%) 
 
 $ 466,748 
 (23.5%) 
 
 298,127 
 (15.0%) 
 
 427,845 
 (21.5%) 
 
 291,660 
 (14.6%) 
 
 91,065 
 (4.6%) 
 
 107,694 
 (5.4%) 
 
 70,267 
 (3.5%) 
 
 107,312 
 (5.4%) 
 
 60,405 
 (3.0%) 
 
 39,103 
 (2.0%) 
 
 15,244 
 (0.8%) 
 
 13,689 
 (0.7%) 
 
 $1,989,159 
 (100.0%) 
 
 $ 823,803 
 (20.6%) 
 
 801,202 
 (20.0%) 
 
 659,991 
 (16.5%) 
 
 465,061 
 (11.6%) 
 
 330,249 
 (8.2%) 
 
 256,902 
 (6.4%) 
 
 158,966 
 (4.0%) 
 
 178,108 
 
 (4.4%) 
 
 141,634 
 (3.5%) 
 
 83,804 
 
 (2.1%) 
 
 86,791 
 (2.2%) 
 
 19,379 
 (0.5%) 
 
 $4,005,890 
 (100.0%) 
 
 55 
 
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 56 
 
FIGURE 8 
 
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 (PRODUCTION OF ADDITIONAL INVESTMENT) 
 
 ROUND I 
 
 ROUND II 
 
 OTHER 
 FUNDS 
 
 57 
 
projects with total costs of over $3 million. The increased addi- 
 tional funding in the largest cost categories for LPW II is par- 
 tially attributable to the provision of planning targets for 
 applicant groups and the additional lead time available before 
 LPW II, both of which allowed localities and other applicants to 
 more fully integrate LPW funds with their capital budget plans. 
 Those projects that form the core of economic development -- water, 
 sewer and utility systems — were financed with more additional 
 non-EDA funding than any other category of project type for both 
 LPW I and II. 
 
 In addition to examining project type and size, the evaluation 
 analyzed the major construction activity associated with the LPW 
 projects. In Table 14, the 10,616 LPW projects are presented by 
 construction activity, round and funding. The primary feature of 
 LPW construction activity is that over 60 percent of the total pro- 
 gram funds were invested in new construction. Despite the 
 applicant-dominated selection procedures of LPW II, funding among 
 seven different construction activities was highly similar between 
 LPW I and II with two exceptions: 
 
 o The percentage of projects involving new construction 
 
 declined from 72.3 percent in Round I to 61.5 percent in 
 Round II, with a corresponding decrease in funding from 
 
 74.7 percent of LPW I to 61.8 percent of LPW II. 
 
 o The percentage of rehabilitation and repair projects rose 
 from 15.3 percent in Round I to 24.6 percent in Round II, 
 with funding increasing from 13.3 percent of LPW I to 
 
 23.8 percent of LPW II. 
 
 2. Types of Grantees 
 
 The LPW grantees were generally drawn from six constituent 
 groups: states, counties, cities and towns, school districts, 
 special purpose authorities* and Indian tribes. In Table 15, the 
 types of grantees are presented in terms of their share of projects 
 and funding. The largest, most frequently funded grantee type was 
 cities and towns, which received 59 percent of the funds in LPW I 
 and 60 percent in LPW II, 
 
 The participation rates of the various types of grantees in- 
 creased in LPW II as a result of the allocation of planning targets 
 While only 15 state governments received funding in LPW I, all 50 
 received a planning target (representing 8 percent of the total 
 state allocation) in LPW II. The number of county governments 
 receiving project grants increased from 190 in Round I to 901 in 
 Round II, with 78 additional counties using their planning targets 
 to endorse the projects of other applicants within the county area. 
 
 Special purpose authorities were generally municipal 
 utilities boards, i.e., transportation, water/sewer , or 
 power commissions. 
 
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 59 
 
TABLE 15 
 LPW FUNDING BY TYPE OF GRANTEE 
 
 Grantee Type 
 
 Number of Projects 
 (Percent) 
 
 LPW-EDA Funding 
 ($000) 
 (Percent) 
 
 LPW I 
 
 LPW II 
 
 LPW I 
 
 LPW II 
 
 State 
 
 122 
 (6%) 
 
 524 
 (6%) 
 
 116,000 
 (6%) 
 
 412,000 
 (10%) 
 
 County 
 
 236 
 (11%) 
 
 1,470 
 (17%) 
 
 243,000 
 (12%) 
 
 544,000 
 (14%) 
 
 City/Town 
 
 1,301 
 (63%) 
 
 4,984 
 (58%) 
 
 1,168,000 
 (59%) 
 
 2,391,000 
 (60%) 
 
 School District 
 
 242 
 (12%) 
 
 1,176 
 (14%) 
 
 324,000 
 (16%) 
 
 499,000 
 (13%) 
 
 Special Purpose 
 Author ity 
 
 67 
 (3%) 
 
 155 
 (2%) 
 
 65,000 
 (3%) 
 
 58,000 
 (1%) 
 
 Indian Tribe 
 
 94 
 (5%) 
 
 245 
 (3%) 
 
 73,000 
 (4%) 
 
 102,000 
 (2%) 
 
 Total 
 
 2,062 
 (100.0%) 
 
 8,554 
 (100.0%) 
 
 1,989,000 
 (100.0%) 
 
 4,006,000 
 (100.0%) 
 
 60 
 
Under LPW II , grantees exhibited different preferences for 
 project types, but all grantee groups except two favored projects 
 that served basic economic development needs: water/sewer/ 
 utilities, transportation and site preparation. Only Schools and 
 Indian Tribes presented an alternative mix of projects. As ex- 
 pected, schools districts developed educational facilities, while 
 Indian Tribes favored social and community welfare projects. As 
 indicated above, grantees were more strongly attracted to projects 
 serving cultural and recreation needs under LPW II, and some 
 grantees had stronger preferences for Cultural and Recreational 
 projects than did others. States increased their share of these 
 projects from zero in LPW I to 5.9 percent in LPW II. Overall, the 
 largest users of Cultural and Recreational projects were cities; 
 their share remained constant at 60 percent of these projects for 
 both rounds. 
 
 3. Long-Term Impact 
 
 While it is still too soon to address fully the long-term 
 impacts of the infrastructure created, several benefits are already 
 evident. Prime among these is LPW's role in bringing existing pub- 
 lic infrastructure to "new" condition. Grantees projected an 
 average useful life of approximately 42 years per project. Water 
 and sewer projects had the longest expected useful life 
 (47.3 years), while streets and highway projects had the shortest 
 (33.4 years). Projects involving new construction had a longer 
 expected life (45.7 years) than did repair and rehabilitation proj- 
 ects (37.9). It is notable that there is no significant difference 
 in the average number of years until the next renovation (approxi- 
 mately 23) for these two types of construction activity. Ap- 
 parently, repair and renovation projects, more prevalent in LPW II, 
 brought the public infrastructure up to "new" condition. 
 
 Additional insight into long-term local benefits and costs was 
 provided through a survey of local government officials. Expected 
 fiscal implications of LPW projects were examined for a sample of 
 140 projects to determine increases in operating and maintenance 
 costs, as well as possible revenue sources. Net revenue for this 
 sample amounted to $19,791,226. This is somewhat misleading, as one 
 auditorium project in Florida expects revenues of over $20,000,000. 
 Excluding this project, the findings revealed that the projects 
 examined would result in a net cost to the governments involved of 
 $278,774, or $2,006 per project. 
 
 Another long-term benefit of the LPW Program involves the many 
 permanent employment opportunities generated as a result of private 
 sector investments stimulated by LPW projects. As noted above, 
 almost half of all LPW funds went to support water and sewer systems 
 and other development facilities comparable to those funded under 
 
EDA's regular program. Since the creation of long-term employment 
 opportunities was not an objective of the LPW Program, the evalua- 
 tion did not attempt to determine the extent to which such impacts 
 occurred. However, a general estimate can be obtained under the 
 assumption that the cost of generating such opportunities is the 
 same for LPW economic development projects as for EDA's regular 
 public works projects (i.e., $13,500 per job). Using this approach, 
 it can be estimated that new construction of LPW economic 
 development projects, which accounted for $1.69 billion in LPW 
 funds, will generate an additional 125,000 person-years of permanent 
 private sector employment. 
 
 E . MBE AND OTHER SPECIAL IMPACTS 
 
 The accomplishments of Round II of the Local Public Works 
 Program in meeting two of its secondary goals — the provision of 
 employment opportunities for disabled and Vietnam-era veterans, and 
 the 10 percent Minority Business Enterprise requirement — are con- 
 sidered in the following section. Since the LPW II legislation 
 stipulated that preferential hiring treatment be accorded qualified 
 disabled veterans and qualified Vietnam-era veterans, data was 
 collected on the extent to which such individuals were employed on 
 LPW projects. The timing of the LPW employee survey late in the 
 construction season of 1978 resulted in a disproportionately low 
 representation of workers employed on LPW I projects, thus pro- 
 hibiting comparisons of the LPW employee characteristics by round of 
 the program. However, an examination of veteran status indicates 
 that LPW contractors hired veterans at levels which exceed the norms 
 in the construction industry, 39 percent versus 32 percent. This 
 observation is also true for Vietnam-era veterans who represented 
 13 percent of the LPW labor force and 11 percent of the construction 
 labor force. Veterans employed by the LPW contractors were not, by 
 and large, discharged from the military for medical reasons, nor did 
 they receive disability ratings from either the military or the 
 Veterans Administration. 
 
 The second round of LPW legislation also contained the unprece- 
 dented requirement that at least 10 percent of the amount of each 
 LPW grant (with the exception of 79 projects funded under the 
 $70 million set aside for project applications erroneously denied in 
 Round I) be expended with minority businesses. These were defined 
 by the legislation as " ... a business at least 50 per centum of 
 which is owned by minority group members or, in the case of a 
 publicly owned business, at least 51 per centum of the stock of 
 which is owned by minority group members." The Act identified 
 minority group members as citizens of the United States who are 
 Negroes, Spanish-speaking, Orientals, Indians, Eskimos, or Aleuts. 
 The legislation also authorized the Secretary of Commerce to waive 
 the provision in situations where it was unreasonable to require its 
 fulfillment. The purpose of this requirement, which was introduced 
 by Congressman Parren Mitchell of Maryland during the floor debate 
 in the House, was to help eliminate discrimination in construction 
 and related industries and to help bring minority firms into the 
 mainstream of those industries. 
 
 62 
 
1. MBE Background 
 
 In response to enactment of the 10 percent MBE requirement, EDA 
 launched an intensive management effort directed toward insuring 
 that at least $400 million of the $4 billion appropriation went to 
 minority contractors and suppliers. From the outset, it was 
 recognized that implementation of this requirement was perhaps the 
 single most challenging task in the LPW program. Prior to the LPW 
 program, only a small percentage of the public works funds expended 
 by Federal, State, and local governments were going to MBEs. As a 
 result, few possessed the experience, capital, credit, or bonding 
 capacity to compete successfully for prime contracts. In addition, 
 few non-minority prime contractors were accustomed to working with 
 minority subcontractors or suppliers, and, understandably, most had 
 no desire to abandon established relationships to work with minority 
 firms with which they had no previous experience and which often had 
 no track record. The task of implementing the program to meet the 
 10 percent requirement was further complicated by the legislatively 
 required rigid timetable for overall implementation of the LPW 
 Program. 
 
 To overcome these and related problems in carrying out the MBE 
 requirement, an implementation approach was developed that combined 
 rigorous standards and procedures for its enforcement, expanded 
 assistance to minority construction and supply firms and strongly 
 supportive public statements on the requirement. Commerce Depart- 
 ment officials, White House staff, and Members of Congress, on 
 numerous occasions, publicly expressed their commitment to meeting 
 the MBE requirement, and President Carter cited it as one means of 
 helping to address the economic needs of minority citizens. The 
 public statements were backed up with numerous meetings to discuss 
 MBE participation and request assistance from minority contractors 
 and suppliers, majority contractors, representatives of surety 
 companies and lending institutions, and LPW grant recipients. 
 
 2. Enforcement Procedures 
 
 EDA staff developed and enforced strict procedures to ensure 
 that prime contractors would seek out and use qualified minority 
 subcontractors and suppliers. These procedures were set forth in 
 detailed Guidelines and a Technical Bulletin which were mailed to 
 all grantees in August through October of 1977. 
 
 The procedures established by EDA to assure that the 10 percent 
 MBE requirement was met included the following steps. 
 
 o All bids for prime contracts included the name and address 
 of MBE subcontractors and suppliers the bidder intended to 
 use, a description of the work to be performed by each MBE, 
 and the aggregate amount to be paid to all MBEs. Bids 
 without this information were non-responsive and therefore 
 ineligible for award of contract. 
 
 63 
 
o Prior to release of the first letter-of-credit for 50 per- 
 cent of grant funds, EDA responded to all complaints and 
 reviewed a report from the grantee listing the name and 
 address of each proposed MBE, a description of the work to 
 be performed by each MBE, and the amount to be paid each 
 MBE. 
 
 o Following the execution of each contract with an MBE, 
 
 grantees filed with EDA a report signed by the MBE which 
 verified the amount of the contract. 
 
 o When construction of a project was 40 percent complete, the 
 grantee filed a second report listing the name and address 
 of each MBE, a description of the work to be performed by 
 each MBE, and the amount to be paid each MBE. The second 
 letter-of-credit for the remaining 50 percent of grant 
 funds was issued only if this report was substantiated by 
 the verification of contracts by the MBEs or if satis- 
 factory explanations and assurances were obtained from the 
 grantee. 
 
 o As part of project close-out, auditors are verifying the 
 
 amount paid to MBEs by cancelled checks or statements from 
 MBEs. Grantees have been advised that if an audit reveals 
 that insufficient funds were expended for MBEs reported to 
 and cleared by EDA and if a waiver is inappropriate under 
 established criteria, EDA will require reimbursement of 
 grant funds equal to the amount of the shortfall. As of 
 September 30, 1980, no such situation had occurred. 
 
 In order to process the reports and perform other monitoring 
 responsibilities, EDA established special 10 percent MBE monitoring 
 units in Washington and in each Regional Office. In addition, EDA's 
 legal and project management staffs devoted considerable time to the 
 MBE requirement. 
 
 The most difficult monitoring responsibility involved the deter- 
 mination on a case by case basis of whether, and to what extent, 
 each proposed MBE expenditure should be counted toward fulfillment 
 of the 10 percent MBE participation requirement. Such determina- 
 tions were necessary if the program was to achieve its objective of 
 helping to develop and strengthen independent minority-owned firms 
 that could ultimately compete in the construction industry. In its 
 effort to verify the eligibility of the proposed MBE expenditures, 
 EDA sought to determine whether: 
 
 o at least 50 percent of each MBE was owned by members of a 
 minority group; 
 
 o those minority group members managed and controlled the MBE 
 as distinguished from being passive agents or mere paper 
 owners; and 
 
 64 
 
o the MBE was to perform substantial and commercially useful 
 functions as distinguished from acting as a mere "front" 
 for or "conduit" to a non-minority firm. 
 
 During December 1977 and January 1978, grantees applied for 
 their first letters of credit for some 7,000 projects and submitted 
 lists of over 10,000 MBE contracts for those projects. Despite use 
 of all available personnel, full review of each contract was impos- 
 sible without substantial delays in project construction. In view 
 of the program's stringent legislative deadlines, EDA instead chose 
 to rely primarily on lists of minority-owned firms which it had 
 gathered from the Small Business Administration (SBA) , from local 
 organizations receiving grants or contracts from what was then the 
 Office of Minority Business Enterprise (OMBE),* and from other State 
 and local public and private organizations. 
 
 When an MBE firm did not appear on such a list, EDA staff 
 attempted to verify that the firm was a legitimate MBE by telephone 
 checks with the best available source, usually an OMBE affiliate. 
 Through this procedure, EDA was able to approve project starts and 
 initial applications for letters of credit for the thousands of LPW 
 projects with little or no delay. Such an approach was necessary to 
 meet the legislatively imposed requirement that LPW project con- 
 struction begin within 90 days of project approval. 
 
 By March 1978, EDA staff had noted danger signals sufficient to 
 recommend an intensive investigation into the legitimacy of those 
 MBEs listed as having either large numbers of contracts or widely 
 dispersed contracts. Another target of the investigation were those 
 projects where MBE participation credit was being claimed for the 
 full cost of materials and supplies. Earlier, EDA had established a 
 rule that where an MBE acted merely as a purchasing agent or a 
 broker in connection with the provision of services or materials, 
 only the commission or fee earned by the MBE was to be counted 
 toward the 10 percent requirement, even though the MBE provided a 
 legitimate and necessary service. 
 
 Additional detailed discussion of the methods used for such 
 verification are included in an EDA interim report on the MBE 
 requirement issued in September 1978.** That report also includes 
 the complete texts of the Guidelines for 10% Minority Business 
 Participation in LPW Grant s and the EDA Minority Business Enterprise 
 Technical Bulletin. 
 
 ** 
 
 Now the Minority Business Development Agency. 
 
 Local Public Works Program Interim Report on 10 Percent 
 Minority Business Enterprise Requirement , Department of 
 Commerce, Economic Development Administration, September 
 1978. 
 
 65 
 
3 . Assistance to Minority Firms 
 
 Because of the past exclusion of most minority firms from the 
 vast majority of public works construction projects, it was expected 
 that many such firms would need technical and financial assistance 
 to take advantage of the 10 percent MBE provision of the LPW Pro- 
 gram. Several steps were taken to increase the level of aid 
 available to such firms and to insure that they were aware of its 
 availability. 
 
 In mid-June 1977, EDA signed an agreement with OMBE, committing 
 OMBE-funded organizations to provide all possible assistance to 
 minority firms wishing to participate in the LPW Program. EDA sub- 
 sequently provided OMBE with $1 million to enable key OMBE grantees 
 to hire temporary staff to work with minority firms wishing to par- 
 ticipate in LPW II construction projects. EDA also contracted with 
 SBA to expedite processing of loan guarantees to qualified MBEs , 
 particularly in 25 key cities. In addition, SBA agreed to provide 
 technical and management assistance through its regular programs to 
 minorities desiring to participate in the LPW Program. EDA also 
 provided funds to three private organizations — the National Asso- 
 ciation of Minority Contractors, the National Institute for Advanced 
 Studies, and the Urban Development and Management Corporation — to 
 furnish a wide range of technical assistance to minority firms. 
 
 As a result of the arrangements made by EDA, technical help was 
 provided to some MBEs participating in the LPW program. However, it 
 was not possible to provide technical assistance at the management 
 level to more than a small percentage of the minority-owned firms 
 participating in the LPW Program. As a consequence, the local 
 organizations funded by OMBE and two of the three private firms were 
 used principally to help verify the legitimacy of MBEs. While the 
 amount of technical assistance furnished was limited, almost all of 
 the minority-owned firms working on LPW projects apparently were 
 able to overcome technical and managerial problems by themselves or 
 through private sources of assistance. As part of the evaluation of 
 LPW, Abt Associates interviewed 570 minority general contractors, 
 subcontractors, and suppliers, as well as local government officials 
 representing 97 grantees. These interviews indicated that few MBEs 
 failed to complete a contract for such reasons, and few LPW projects 
 suffered because of a lack of Federally provided technical assist- 
 ance to MBEs. The interview results were confirmed by the fact that 
 EDA received few reports of such occurrences. 
 
 SBA was responsive to MBE requests for surety bond guarantees 
 and for guarantees of working capital loans, but there was much less 
 demand for SBA's services than expected. Although guarantees were 
 given promptly to virtually all applicants, only 164 MBEs availed 
 themselves of the SBA performance bond guarantee service. In addi- 
 tion, SBA approved loan guarantees aggregating $6.5 million for 121 
 MBEs. 
 
 66 
 
There are several reasons for this relatively small use of SBA 
 assistance. A contractor cannot obtain an SBA surety bond guarantee 
 unless he first obtains a bond, and in some cases, MBEs lacked the 
 track record, working capital or financial records to qualify even 
 for a bond guaranteed by SBA. Furthermore, surety agents are reluc- 
 tant to write small bonds because they are unprofitable, particu- 
 larly when they involve the extra paperwork of an SBA guarantee. In 
 any event, in most cases the prime contractor did not insist that 
 the MBE subcontractors be bonded. This action increased the risk 
 exposure of the prime contractors, but it was often the simplest way 
 of dealing with the bonding problem. Evaluation data indicate that 
 the majority of the prime contractors did not increase their bid 
 prices to compensate for this added risk. 
 
 The small number of working capital loans is more difficult to 
 explain. Again, SBA can only provide a guarantee if a bank is 
 willing to make a loan, and some MBEs were probably not in a posi- 
 tion to apply for a bank loan. On the other hand, some MBEs were 
 able to obtain loans without an SBA guarantee, and others were able 
 to do so after qualifying for a bond guaranteed by SBA. It has been 
 suggested that many MBEs believed they could perform successfully 
 without a loan and wanted to save the interest costs; however, they 
 appeared to be in need of working capital as evidenced by widespread 
 dissatisfaction with the slowness of payment of MBE contractors by 
 their prime contractors. In this regard, it should be noted that 
 slow payment seems to be prevalent in the construction industry, 
 regardless of the type of subcontractor. 
 
 The LPW Program did not provide solutions to all of the problems 
 of capital and bonding for small business in the construction 
 field. It may be that these problems are inevitable. Nevertheless, 
 as noted above, most MBEs seem to be fulfilling their LPW contract 
 responsibilities satisfactorily, which suggests that bonding and 
 working capital problems are not insurmountable obstacles to 
 minority business development in the construction industry. Fur- 
 thermore, it is expected that the LPW Program will provide a number 
 of MBEs with enough added experience and capacity to qualify for 
 bonding in future jobs, and that their LPW earnings will ease 
 working capital problems or make conventional financing more acces- 
 sible. 
 
 4 . Current Status 
 
 Final data on MBE participation will not be available until 
 final audits of all LPW projects have been completed. However, 
 sufficient information is available to make reliable projections of 
 total MBE participation. As of September 30, 1980, 3,903, or 
 46 percent of the projects subject to the MBE requirement, had been 
 audited. These projects total $960 million, or 25 percent of the 
 
 67 
 
total project dollars. Their audit reports verify that $171 million 
 or 18 percent of the project funds had been expended with the MBEs 
 approved by EDA for the particular project. After comparing the 
 audit results with the initial MBE reports from the same projects, 
 EDA estimates that total participation by bona fide MBEs will equal 
 $700 million, or 18 percent of the funds subject to the MBE require- 
 ment. Thus, LPW will not only meet, but exceed its 10 percent MBE 
 requirement, an unprecedented accomplishment in public works 
 construction. 
 
 As of September 30, 1980, EDA's records showed that 7,243 
 minority-owned firms are working or have worked on LPW projects. 
 Many firms worked on more than one project, and the total number of 
 MBE contracts exceeds 16,300. Contracts with MBEs range from those 
 that involved less than $1,000 to a few involving over $1 million. 
 The average MBE contract was approximately $43,000. More than 630 
 MBE contracts to 467 firms exceeded $200,000, while another 765 were 
 between $100,000 and $200,000, thus demonstrating that there are 
 many minority-owned firms capable of performing substantial con- 
 struction or construction-related work. The distribution of these 
 contracts by minority group is shown in Table 16. 
 
 By September 30, 1980, EDA had granted 1,430 waivers (repre- 
 senting 15 percent of the $3,905 billion in grant funds subject to 
 the MBE requirement) to grantees unable to meet the 10 percent MBE 
 requirement. In 1,124 of these situations (representing 12.8 per- 
 cent of grant funds), the grantees did use minority-owned firms, but 
 spent less than 10 percent of the grant funds for those firms, 
 specifically, projects receiving partial waivers expended an average 
 of 6.1 percent of their LPW grant funds (over $30 million) with 
 MBEs. In only 306 cases (representing 2.2 percent of grant funds) 
 were full waivers granted, primarily because of the disqualification 
 of firms as bona fide MBEs by EDA and the inability of the grantee 
 to replace them or other firms with bona fide MBEs. This inability 
 was generally attributable to the fact that all contracts had 
 already been signed or the lack of MBEs qualified to carry out the 
 project tasks for which contracts had not been let. Very few 
 waivers were granted in the early stages of the program because EDA 
 required each grantee to take all possible steps to locate and use 
 qualified MBEs. 
 
 Throughout the LPW II effort EDA worked to involve minority 
 banks in the program with the hope that the benefits would extend 
 beyond the term of the LPW Program and lead to an expanded future 
 use of minority banking services by State and local governments. 
 Early in the program, EDA sent letters to all grantees in areas 
 served by minority-owned banks encouraging them to designate such 
 banks to handle the EDA letter of credit. The initial response was 
 disappointing. Believing that the poor response was due, in large 
 part, to a Treasury requirement that each grantee use only one bank 
 for all its LPW letters of credit, EDA staff in early May of 1978 
 asked Treasury to relax that rule so that cities could use minority- 
 owned banks for part of their LPW projects. Treasury permission was 
 
 68 
 
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 69 
 
received, and the Assistant Secretary for Economic Development wrote 
 to the mayors of major cities at the beginning of August of 1978 
 urging them to establish a letter of credit with a minority-owned 
 bank and transfer funding for certain projects. 
 
 The result of this effort was that 70 LPW projects, with total 
 obligations exceeding $79,585,000, were financed by letters of 
 credit placed through minority banks. Of the 845 projects totalling 
 $1,120,728,000 awarded in cities with minority banks, 8 percent of 
 the projects and 7 percent of the obligations involved minority 
 banks. However, it should be noted that minority bank participation 
 is somewhat more significant than the above figures indicate. In 
 certain cases, LPW grantees maintained or are maintaining minimum 
 balance checking accounts in minority banks to make disbursements 
 after transferring funds from a non-minority bank handling the 
 letter of credit. The data above do not reflect the numbers of 
 projects or the amounts involved in such transactions. 
 
 In the extremely large LPW II program, complex because of its 
 purpose, timing, and other requirements, the 10 percent MBE require- 
 ment became the single most controversial provision. There were 27 
 legal challenges to the constitutionality of the MBE requirement. 
 These challenges culminated in the July 2, 1980 decision of the 
 United States Supreme Court in the case of Fullilove versus 
 Klutznick . In a 6-3 decision, the Court upheld the constitu- 
 tionality of the LPW II MBE provision. 
 
 5 . Impact of the MBE Requirement on Firms and Grantees 
 
 The Abt Associates interviews cited above revealed that for both 
 rounds of the program, the age of the firm was lower for minor ityowned 
 firms (9.7 years at the time of the survey in September of 1979) than 
 for their majority-owned counterparts (25.4 years). However, there 
 was little difference in the age of the minority firms between LPW I 
 (12 years) and LPW II (9.5 years). The newest minority firms were 
 suppliers (average age 9.3 years) followed by subcontractors (9.5 
 years) and general contractors (11.5 years). Non-minority firms ex- 
 hibited an age pattern more typical of the construction industry, with 
 the oldest firms concentrated in the supply industries (30.8 years), 
 followed by general contractors (22.6 years) and subcontractors (20.9 
 years) . 
 
 At the time of the survey in September 1979, 91.6 percent of the 
 MBEs identified were still in business. Success rates were higher for 
 MBE general contractors (98.3 percent) than for MBE subcontractors 
 (91.5 percent) or suppliers (88.7 percent). This pattern of higher 
 success rates for those firms more directly involved with the LPW 
 grant is contrary to the pattern of success rates exhibited by 
 majority-owned firms (general contractors — 97.9 percent, sub- 
 contractors — 98.2 percent, and suppliers -- 99.2 percent). 
 
 70 
 
Approximately 2,900 (40 percent) of the 7,243 minority-owned firms 
 participating in LPW had been established between 1976 and 1979, as 
 compared to approximately 1,400 of their majority-owned counterparts. 
 Predictably, 94 percent of the 2,900 were established under LPW II 
 with its 10 percent MBE requirement. Of these relatively new MBEs , 
 93 percent were still in business at the time of the survey in 
 September of 1979; the comparable group of majority-owned new firms 
 exhibited a similar success rate of 94 percent. MBEs were more likely 
 to attribute the establishment of their firm at that time to the 
 availability of LPW funding (36 percent) than were majority-owned 
 firms (23 percent), particularly under LPW II. Table 17 presents for 
 minority and majority firms the patterns of formation, relation to 
 LPW, and failure among general contractors, subcontractors, and 
 suppliers. Among MBEs, subcontracting firms were formed in the 
 largest numbers, had the lowest probability of formation in direct 
 response to LPW funding, and had the lowest failure rates; this 
 pattern was generally representative of majority-owned new fii.ms as 
 well. New minority supply firms, on the other hand, were much more 
 likely to have been formed in response to the LPW II program than were 
 their majority counterparts. Fifty percent of all new minority 
 suppliers reported having organized as a result of LPW II, as compared 
 with only five percent of new majority suppliers. 
 
 In general, minority-owned firms reported that their LPW ex- 
 perience had been successful and profitable. Further, 20 of the 
 grantees reported that they had either maintained or introduced a 
 local MBE participation requirement for public construction work; 
 several of these new requirements were directly traced to the 
 grantee's LPW experience. 
 
 F. DETAILED INDIVIDUAL LPW REPORTS 
 
 As stated previously, this chapter summarized the major findings 
 from the various evaluations of the LPW Program conducted under the 
 auspices of the Department of Commerce. Additional material from 
 these evaluations is presented in the comprehensive individual reports 
 published separately. Evaluations conducted by or for the Department 
 of Commerce are listed in Appendix C of this report, with LPW 
 evaluations conducted by other entities listed in Appendix D. 
 
 71 
 
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 <4-l S-l S-l 
 
 y-i u s-i s-i 
 
 
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 CU CU H 
 
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 <U fd H 4-» 0) 
 
 
 C £ H) C -h 
 
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 co c fd c -h 
 
 
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 Ch 
 
 cn 
 
 CO 
 
 c 
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 A 
 
 
 
 2 
 * 
 
 72 
 
Appendix A 
 LPW Employment Build-Up Patterns 
 
i-S 
 
 t J 
 
 •H 
 ,* 
 
 CO 
 
 >i 
 
 I 
 ■T5 
 
 0" 
 
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 O 
 
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 A- 2 
 
 o 
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Appendix B 
 Maps of LPW Project Counts and Funding Levels 
 
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 LOCAL PUBLIC WORKS, ROUNDS I AND II 
 PROJECT COUNT 
 
 SYMBOLS REPRESENT PROJECT COUNTS CODED INTO FIVE CLASSES: 
 
 SYMBOL 
 PROJECT COUNT 
 
 ••• 
 
 ■•• 
 ••• 
 
 000 
 000 
 000 
 
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 ♦ ♦♦ 
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 15 
 
 10 
 
 5 
 
 2 
 
 \ND 
 
 TO 
 
 TO 
 
 TO 
 
 OVER 
 
 14 
 
 PROJECT COUNTS FOR ALASKA, HAWAII, PUERTO RICO, AND OTHER TRUST 
 TERRITORIES WERE 133, 70, 447, AND 43 RESPECTIVELY. 
 
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 ►40004400000 
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 LOCAL PUBLIC WORKS, ROUNDS I AND II 
 
 PROJECT COUNT 
 
00 
 
 ooorooc 
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 00( 
 
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 30 Lp 
 3 0— U 
 
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 300000 
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 ♦ ♦ 
 
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 ► 4*4 
 
 00. 
 
 4 4 4 40000 
 44440000 
 
 
 4 4 444 4 
 
 OOOOOC 
 
 300000* 
 
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 00 000 
 0000 000 
 
 00000044 444 
 00 0000.... 44444 
 OOOOOO... 044444444 
 
 000. .0000 
 0400400000 
 
 4000000 ...ooooo 
 
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 4 44 444 
 
 4 44 
 
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 4 44 
 
 ► 4 444 
 
 4 44 
 
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 4 4 4 
 
 4 4 44 
 
 4 4 4 
 
 > 4 44 4 
 
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 > 444 4 
 
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 4 4 4 
 
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 4 4 
 
 44 44 
 
 444H 
 
 4 4 44 
 
 4 4 
 
 444 4 
 
 
 ► 444 4 
 
 
 4 4 4 
 
 4444 4 44 
 
 4 4 
 
 1 • 
 
 ► ♦ 
 
 oooono 
 
 44 4 
 
 ► 4 
 
 ► 4 4 
 
 oooooo 
 
 44 44 
 
 • 4 
 
 ► 444 
 
 oooooo 
 
 44 4. 
 
 , 4 
 
 ►4440 
 
 oooooo 
 
 44 4, 
 
 . 4 
 
 ►4440000 
 
 onoono 
 
 00*4 44 4 4 
 
 ► 4 
 
 »4 440000000 
 
 o r.r. oo 
 
 000000444 
 
 ► 4 
 
 4 ooooooooon 
 
 
 000000044 
 
 ► 4 
 
 0000000000 
 
 
 oo 
 
 4 
 
 0000000000 
 
 
 00 
 
 4 
 
 OOOOOOOO 
 
 
 oo 
 
 4 
 
 ► ooooono 
 
 
 
 4 
 
 »♦ ooooooo 
 
 
 44444 
 
 ♦ 
 
 ► 444 
 
 
 44 444 
 
 4 
 
 V4 4 4 
 
 
 4 4 44 
 
 4 
 
 ► 4 4 4 
 
 
 4400004 
 
 4 
 
 4 4 4 
 
 
 4 4 444 
 
 4 
 
 4 4 4 
 
 
 4 44 
 
 
 
 
 ooo 
 
 
 0000 
 
 
 00* 
 
 
 ooooo 
 
 
 4 4 44 
 
 
 ooooo 
 
 
 4 4 4 4 4 
 
 
 ooooo 
 
 
 44444 44444 
 
 ooooo 
 
 
 444 44 4 4 4 4 44 4 400000 
 
 
 4 4 
 
 444 4 40000 
 
 
 OGCO 
 
 OOOOO 
 
 ''OOCO 
 
 oooooo 
 oooooo 
 oooooo 
 
 ooooooooo 
 ooooooooo 
 
 0000 
 
 ooooo 
 
 0000 
 000 
 
 ro 
 
 4 4 4 
 
 • ••••••IHI 
 
 ••••illl 
 
 • •Hill 
 
 ••■ 
 
 00 
 
 oooo 
 
 ooooo oooo 
 
 oooooo oooo 
 
 OOOOOOOO oooo 
 
 0000000000000 
 
 oooooonoooooo 
 oooooeoeoooo 
 
 000000000000 
 000000000000 
 
 oooooeoeoooo 
 ooooooeeeeoo 
 
 900000006860 
 •000000000000 
 
 •eeoeooeeooeo 
 ■oooooeoooooo 
 eoeoooooooooo 
 
 §•00000000000 
 
 •oeeoeooooooo 
 
 eeeeeooooooo 
 
 ooooooooooo 
 
 ooooeooooo 
 
 ooeoeooooo 
 
 oooooo 
 ocoooo 
 oooooo 
 eee o 
 ooo 
 
 000 
 
 oeo 
 
 ooo 
 
 oeo 
 
 eee 
 
 eoeo 
 
 eeoo 
 
 ooooo 
 
 oeeo 
 
 eee 
 
 oeo 
 
 ees 
 
 oo 
 
 ooo 
 
 oooo 
 
 00 
 
 000 
 000 
 000 
 
 oooo 
 oooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 ooooooo 
 oooooo 
 oooooo 
 oooooo 
 ooooooo 
 ooooooo 
 -ooooooo 
 ooooo 
 
 
 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 
 OOOOO 
 
 ooooo 
 
 00444 
 00444 
 00044 
 00044 
 
 00004 
 00 
 
 4 4 
 
 ♦ ♦4 
 
 4 44 4 
 
 oooo 
 oooo 
 oooo 
 oooo 
 oooo 
 oooo 
 oooo 
 oooo 
 oooo 
 oooo 
 oooo 
 oooo 
 oooo 
 
 4000 
 4000 
 
 444 4 
 
 444 4 
 
 4 44 4 
 444 
 
 4 4 44 
 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 ooooo 
 
 000 
 
 004 
 
 0004 
 
 0004 
 
 ooooooo 
 
 OOOOOOOO 
 OOOOOOOO 
 OOOOOOOO 
 OOOOOOOO 
 OOOOOO. 
 
 oooo 
 
 000044 
 44 4 44 4 
 
 ooooo 
 oooooo 
 400000 
 
 444400000 
 4444 400000000 
 4444 400000000 
 4444400000000 
 444000 
 
 00 
 
 444 
 
 
 
 LOCAL PUBLIC WORKS, ROUND I — OBLIGATIONS 
 
 SYMBOLS REPRESENT OBLIGATIONS CODED INTO FIVE CLASSES: 
 
 SYMBOL 
 
 OBLIGATIONS 
 
 (Millions $) 
 
 OBLIGATIONS FOR ALASKA, HAWAII, PUERTO RICO, AND OTHER TRUST 
 TERRITORIES WERE $10.2 MILLION, $9.9 MILLION, $116.1 MILLION, AND $10.2 
 MILLION RESPECTIVELY. 
 
 • ■■ 
 ••• 
 ••• 
 
 000 
 00 
 000 
 
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 000 
 000 
 
 4 4 4 
 4 44 
 4 44 
 
 ::: 
 
 25 
 
 5.0 
 
 1.0 
 
 .25 
 
 .24 
 
 VND 
 
 TO 
 
 TO 
 
 TO 
 
 AND 
 
 VER 
 
 24.9 
 
 4.9 
 
 .9 
 
 LESS 
 
 4444 OOOO 
 44 444 4 
 4400*** ♦ 
 44000004 4 
 
 • 4440004 • 
 
 • 4 440004 4 
 
 • 444004 444 
 •***.. .0004 44 
 4 444. . .000 
 OOOOOOO 
 
 OOOOOOO 
 
 ooooooo 
 
 oocooo 
 
 ooooo 
 
 oooo 
 
 40004. 
 
 4 4 4444 
 
 4 4444 
 
 440oooa 
 
 000000444 
 
 ooooooo* 
 oooooo 
 
 00 
 
 444 | 
 
 30. I 
 
K 
 
 o — 
 
 OS 
 
 
 00000 
 
 0000 s 
 
 
 oo n 
 
 ooooooo o- 
 
 — 1_ 
 
 00 
 
 0000000000 
 
 JZD 
 
 0000 
 
 oooooeoooo 
 
 J 
 
 0000 
 
 0000000000 
 
 
 000 
 
 oooooonnn 
 
 
 0000 
 
 ooooeto 
 
 
 o oono 
 
 ooooea ♦ 
 
 
 o oo 
 
 ♦*«oono»* *♦ 
 
 
 00 
 
 ♦»*onno*» ♦ - 
 
 
 
 
 noon*** 
 
 
 
 ♦ * . , ♦ ♦ ♦♦+ 
 
 4 * 
 
 
 * ♦ . * ♦♦ ♦ ♦ ♦ ♦ 
 
 * ♦ 
 
 
 ♦ ♦ . »nn» ♦ ♦ ♦ ♦ 
 
 
 
 no n ♦ ♦ ♦ ♦ 
 
 
 
 ooo *oo 
 
 
 "• 
 
 0000 000. 
 
 nnn* one 
 
 444 
 444 
 
 ♦ ♦ ♦ 
 
 ♦ ♦ 
 
 4 44 
 
 ♦ 
 
 ♦ * 
 
 4 4 4 
 
 Q 
 
 ♦♦::: Sjlj- 
 
 30»nn« 
 3nnno« 
 
 ♦*»000 
 
 o»«nc 
 
 0000 
 
 0. 
 
 00 
 
 000 
 
 oro 
 oooo oooo < 
 ♦ ♦ n * * * * * ooo* 
 
 .« ♦♦.♦COO* 
 
 oooo* ooc 
 roeoo ooc 
 oooti 
 
 I? 
 
 ooo# 
 
 .00.. 
 ,.0000 000 
 
 ♦ no oooo 
 
 oooonn 
 
 
 ooooooooo 
 
 
 0000000000 
 
 
 30000000000 
 
 J 
 
 ooooo 
 
 f 
 
 ooooo 
 
 J 
 
 ooooo 
 
 s 
 
 ooooo 
 
 f 
 
 ooooo 
 
 
 oooooooo 
 
 1 
 
 ooooooo 
 
 
 oooo oooo 
 
 1 ooo ♦♦♦♦♦♦ ♦ ♦. " 
 
 ooooo ooooo 
 
 J 000 ♦ ♦ ♦♦♦♦... 
 
 ooo oooo 
 
 r ooo ooo ♦♦♦♦♦... 
 
 ♦♦ 00 OOOOO****... ♦ 
 
 *r\_r° 
 
 .». OO****** 0*** 
 
 
 • » 00 o****** oooo 
 
 ._J 
 
 • ♦ 00 OOOOOO*** ♦ ♦OO 
 
 
 00 OOOOOO ♦♦♦♦ 
 
 
 oo as . oo oo oooooo ♦♦ 
 
 
 O00«»900 ..00 00 000 «... 000 00»» 
 
 
 000»«» ♦ ..00 00 oooo**.. oooooo 
 
 
 soeoo ♦*.. •*•• oooo* . ooooeee 
 
 
 •OOOO 000 <<•* «*«* 0000 . .0006010 
 
 
 ♦♦♦.... 000000*000 ♦♦♦♦♦ooo ....ooooooo 
 
 
 eo***« . oooooooooeoo**** oooooooo 
 
 
 oooo • oooooo oooooo 
 
 
 oooooo *«0000000 
 
 
 0000*****00 00000 00000** 
 
 
 00 0000000*00000 OOOOOOO 
 
 
 00 000000000000*** 00000 
 
 
 OOOO 000 **♦ 00000000000 
 
 
 ♦♦ 000 ..«• ooooooooo 
 
 
 ooaoo oooo ooo.oooooo 
 
 
 noonooooooo ooo ooooooo 
 
 
 nno oo oooo.o 
 
 
 oooooo. 
 
 
 ..ooooo**** o*«*«o **000. 
 
 
 ♦ ♦...ooo. o ♦ oo**«e _ ooo 
 
 
 ♦ ♦♦ ..o. . oo_ oo L. o 
 
 
 «*♦ OOj 00 
 
 
 »♦.* OOOC 000 
 
 
 *♦»* 00 1 1 000 
 
 
 .♦ 000 
 
 
 4 
 
 4 4 4 
 
 4 
 
 + 
 
 4 
 
 4 
 
 00 
 
 
 44 44 
 
 
 • 4 4 4 
 
 4 
 
 + 
 
 4 
 
 4 
 
 
 4 
 
 
 
 oon . . 4 
 
 
 * 
 
 
 
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 4 
 
 4 
 
 • . 4 
 
 oooo .44 
 
 
 4 
 
 
 
 
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 4 4 4 4 4 4 4 
 
 4 4 4 4 
 
 00000004 ♦ 
 
 
 
 
 
 
 
 4 4 4*40 
 
 ■* 4 
 
 0000000004 4 
 
 000 44 
 
 
 
 
 
 0444 
 00044 
 
 4 4 4 4 
 
 444 4 
 
 
 + 4 + 
 
 4 4 ♦ 
 
 
 
 
 
 0444 
 
 4 4 4 
 
 00 44 4 
 
 
 4 ♦ 4 4 
 
 .00. 
 000. 
 
 
 
 
 
 4 4 4 
 
 00 
 
 JJ 
 
 00.44044 
 
 . .000000 
 4* ©00 
 
 :..o.:3 
 
 000 
 
 onnne 
 ooooo 
 onn*«*o 
 nooonon«**o 
 nooonono**uo 
 l oonono 
 
 W*00 
 
 000 
 
 oooo 
 oooo 
 oooo 
 ooeo 
 
 • It! 
 
 • •• 
 »•• 
 ■ ■J 
 
 LOCAL PUBLIC WORKS, ROUND I 
 
 OBLIGATIONS 
 
I ooooooo. 
 
 "O ooooo., 
 
 ^ooooooo. 
 
 oooooo.. 
 
 ♦ooooo.. . 
 
 ♦♦0... 
 ►44444 . 
 
 . *♦ ♦ 
 > ♦♦ ♦ 
 • ♦♦ ♦ 
 
 . . * ***44 4 . . « 
 
 ,♦♦♦♦♦♦♦♦4* , 
 ,44 4 4 44 
 
 44 ♦ ♦ 
 44 4 4 
 
 44 44 4 
 
 44444444 
 .44.4444 
 ....♦444 
 
 444444 
 
 r 
 
 000000000000. 
 00.000000000. 
 
 oonnoo. . 
 
 J 000. 
 
 V 
 
 ► 4 444 i 
 
 ► 4 444 4 
 > 4 444 4 
 * 4 444 < 
 
 ► 44441 
 
 ► 4 44 4 i 
 
 ► 4 444 4 
 
 ► 4 444 
 
 ,4 44 
 
 ,4 44 
 , 4 44 
 
 >40ono 
 
 ►40000000 
 
 oooooooooo 
 ooooooonoo 
 oooooooooo 
 
 00000000 
 
 ooooooo 
 ooooooo 
 
 
 
 * ♦ ■••••••••••••••*< 
 
 44444444 . 
 
 
 
 
 
 
 '♦• •••*•.•••••••••+' 
 
 
 
 
 
 
 *♦ •••••••••••••••*' 
 
 
 
 
 
 
 ♦ + .••••••••••••••+- 
 
 
 
 
 4444 
 
 
 * ♦ ....•••••. .....* 
 
 ♦♦♦♦ ••■• •••• 
 
 . 
 
 
 44 4 44 
 
 ► 4 4 
 
 ♦ ■> ••••••••••• 
 
 
 
 
 44 4 44 < 
 
 >4 
 
 ►444 ........... 
 
 
 
 
 4 44 4 44 
 
 '• 
 
 44 .*••••..... 
 44 •••••.•••• 
 >♦* ••••••••• 
 
 — 
 
 
 
 4 
 
 
 ►44444444444 • •••••••••< 
 
 ............. 
 
 
 
 ••••♦♦ 
 
 ♦ • • • • ' 
 
 44444444444 • •••••••••■ 
 
 .......... ..... 
 
 . . . . 
 
 
 
 4 i 
 
 4 444444444 ......... 
 
 • • • ■ • • 
 
 ■ • • • 
 
 
 • . ♦ 
 
 
 4444444444 •••••••••• 
 
 
 
 
 • • . 
 
 . i 
 
 444444444 ••••••••• 
 
 
 
 
 
 44444 
 
 ►4444 ••••••• 
 
 
 
 
 44 
 
 4 444 4 44 
 
 .44 4 4 ••••• 
 
 
 
 
 44 44 ■ 
 
 >♦♦..♦.. 
 
 • ♦♦ 
 
 
 
 
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 ► 44 . . 
 
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 4 4 4444 
 
 • . • • . 
 
 . . 
 
 
 
 
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 ..0. ... 
 
 • • • 
 
 
 
 
 44Q00 
 
 .000* 
 
 
 
 
 
 0400 
 
 >000** 
 
 • • • 
 
 
 
 ••••••< 
 
 0444 
 
 ►oo**** 
 
 . . .44 4444 
 
 
 
 
 «•*••. 
 
 U** 
 
 ►4 4 444 
 
 ....♦ 44444 
 
 . 
 
 
 
 • • . • • 
 
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 4 44 . 
 
 
 4 44 444444 
 
 
 .4 44 
 
 4 4 444 4' 
 
 4 
 
 
 
 444 444444 
 
 
 .4 44 
 
 44444 44 
 
 4 4 
 
 
 .•••••••♦♦♦♦♦♦♦♦ OOOOOOOOOO 
 
 444 4 4 4444 
 
 
 . 4 44 
 
 44 444 44 
 
 4 
 
 
 c . ••••§§«♦♦♦♦♦♦♦♦♦ oooooooooo 
 
 4444 4 4 4 44 4 
 
 
 .4 44 
 
 4 4 44444 
 
 
 
 o§§§§§§§§***********§00000 
 
 4 44444 444 444 
 
 
 .4 44 
 
 44 4 444 4 
 
 
 4 44444. 
 
 .§§§§§§§§♦♦♦♦♦♦♦♦♦♦ +000 000 
 
 44 44444 44444 4 
 
 
 .4 44 
 
 
 
 444444 
 
 ooooooooooooooo 
 
 44444 44 444444 
 
 
 .4 4 4 
 
 
 
 44444 
 
 000000000000000 
 
 .4 444 44 444444 
 
 
 
 
 
 4444 
 
 ooooooooooooooo 
 
 .. .4444 444444 
 
 
 
 
 
 444 < 
 
 4 ooooooooooooooo 
 
 • • ... 44 444444 
 
 • • ••••• .44444 
 
 •••••••••* ♦♦♦ 
 
 •■ • • • • • •.♦♦♦♦ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 .... •§•§•000000000000 ooooo 
 
 
 
 
 • •■••••§0000000000000000 
 
 •>••••••••••• 
 
 
 
 
 
 
 §§§0000000000000000 
 
 44 444 44 444... 
 
 
 
 
 
 
 §§§•00000000000000 
 
 44 44444 444 . . . 
 
 
 
 
 
 
 §000000000000000 
 
 44 44 444 44444. 
 
 
 
 
 
 
 00000000***+** 
 
 44 44444 4 4 . 
 
 
 
 
 
 
 ooooooo* ♦♦♦ +** 
 
 444444 
 
 
 
 
 
 
 oooooo******** 
 
 44 4444 
 
 
 
 
 
 ooooo* ****** 
 
 44 4444 
 
 «0000000000000 
 
 ooooooooooooooo 
 
 \jOO OOOOO 00000000 
 0000000000000 
 
 ooooo.... 
 
 
 
 ■ LOCAL PUBLIC WORKS, ROUND I — PROJECT COUNT ■ 
 
 SYMBOLS REPRESENT PROJECT COUNTS CODED INTO FIVE CLASSES: 
 
 ••• 
 •■• 
 
 oee 
 
 ooo 
 ooe 
 
 oon 
 ooo 
 ooo 
 
 4 4 4 
 
 444 
 4 44 
 
 15 
 
 10 
 
 5 
 
 2 
 
 AND 
 
 TO 
 
 TO 
 
 TO 
 
 OVER 
 
 14 
 
 9 
 
 4 
 
 SYMBOL 
 PROJECT COUNT 
 
 PROJECT COUNTS FOR ALASKA, HAWAII, PUERTO RICO, AND OTHER TRUST 
 TERRITORIES WERE 17,14,174 AND 7 RESPECTIVELY. 
 
oo- 
 
 P00. 
 
 • •§. 
 
 • ••0 
 .••00 
 
 -0 
 .000" 
 
 _r 
 
 .00 
 . .00 
 
 • 
 
 . 4 4 + ♦ ♦ 
 
 . . ..♦♦00... 
 
 
 • 
 
 . ...0. 
 
 • • ■ •* + * • 
 
 
 
 ♦♦••.. 
 
 • • • • 
 
 
 
 
 00 
 
 • • ♦♦♦♦•• 
 
 
 00*» 
 
 . . 
 
 
 
 
 
 
 ••♦♦•••• 
 
 
 
 
 
 • ♦ ♦ . 
 
 "II" \ .'.,.. .. 
 
 
 • ♦ ♦ • • 
 
 
 
 000 
 
 000 
 
 ♦ ♦ 00. 
 
 »**ooo 
 
 ♦♦0000 
 ♦♦0000 
 ♦♦000* 
 ♦♦000++ 
 ♦♦♦000 00+ ♦ ♦♦ 
 ♦♦ +000 ..♦♦♦♦ 
 ♦ 0^00 ♦♦♦♦♦•• 
 0»00000_J ♦ 
 ♦ OMO 
 00*00000000 
 
 .♦no*oooo 
 
 ♦ ♦ ♦♦ . 
 
 ♦ ♦♦00 
 ♦♦ ♦ • 
 
 ()♦♦*• 
 *0** . 
 
 ...J ♦♦ ♦ 
 
 00. c ♦♦♦ 
 00 || 000 
 M 000 
 
 ... y 
 
 i ♦ oono 
 I . . ♦♦♦♦o 
 
 I ♦♦....0 
 
 nnoo^^. . .0 
 
 0000+^++. .00 
 _)()*****.. I 
 
 000 
 0000 
 
 oono 
 o»tn 
 •■•■ 
 
 0000 
 
 eoo 
 
 000 
 
 .ooJ 
 
 LOCAL PUBLIC WORKS, ROUND I 
 PROJECT COUNT 
 
00 
 
 000000000 
 
 00000000+* 
 
 ♦♦♦♦♦+♦♦0 
 
 «000***»0 
 
 0000***0 
 
 0000**. . 
 
 0000... 
 
 ♦♦*.... 
 
 ♦.. .000 
 000«*00 
 00P«**0 
 ««♦ «0 
 ♦ ♦♦ g 
 ♦♦♦0000 
 
 ♦oooooo 
 
 0. . . .00 
 
 00++000 
 
 00++000 
 
 000++000 
 
 eeeeeeoe 
 oe«eoeee 
 .....ooo 
 oo*****o 
 ooo****** 
 
 000* * * * * ♦ 
 
 oo****** 
 
 .000000 
 0000000 
 .000000 
 .000000 
 . .00000 
 . .00000 
 ..00000 
 
 osseoooo 
 eeeooooo 
 ooeooooo 
 
 eeeooooo 
 oeeeooooo 
 
 006000000 
 
 eeeooooo 
 
 ooooooo 
 
 ooooo 
 
 ooooo 
 
 ooooo 
 
 000000 
 000000 
 
 oesss 
 ses 
 
 ee 
 
 oo 
 
 o 
 
 + + ♦ ♦ .oooo 
 n****oooo 
 o ooooooooo 
 o oonnoooon 
 o ooo*o*«oo 
 oooooo* ♦ ♦♦♦♦ 
 ooooon****** 
 oooooo* ♦ ♦♦ ♦♦ 
 ooo* ♦♦♦♦♦♦♦♦ 
 
 •ooooo 
 
 ooooon 
 
 ooonoonoo 
 
 oo**oonoo 
 
 oonoooooo 
 
 oooooooo 
 
 ooooooo 
 
 ooooooo 
 
 ooooooo 
 
 «**coooo 
 
 *00000 
 
 .♦•♦ooooo 
 ♦♦♦♦ooooo 
 
 ♦ ♦ +00000 
 ♦ 
 000 
 00 000 
 
 ooooooo 
 
 oooooo 
 
 ooooo 
 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 oooo 
 
 ♦ ♦00 
 
 ♦ ♦♦0 
 
 ♦ ♦ ♦ ♦ 
 
 ♦ ♦ee 
 o+ + oo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
 ooo + o 
 
 000 
 000 
 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 oooooo 
 ooooo 
 
 nOOO++ 
 nOOO++ 
 
 esse" 
 
 eooeo. 
 
 000+++ 
 00+ ♦♦♦ 
 
 no*+++ 
 
 OOOO- 
 OOOO 
 oooo 
 
 oooooo 
 oooooo 
 oooooo 
 
 00-> 
 
 000 
 
 o ooo 
 ooooo 
 ooooo 
 
 
 000.. . . 
 * ♦ 4 ♦ 4 4 
 ♦ 44 4 4 4 
 
 ♦ ♦444 
 
 ♦ 444 4444 
 
 + 
 
 .00 
 
 ♦ ♦♦ 
 
 ♦ ♦ooo 
 
 ♦ ♦ooo 
 
 ♦ ♦000 
 ..000 
 ..000 
 
 . .oon 
 
 . .000 
 
 ..oo. 
 
 00 
 
 00 
 
 000 
 00 
 00 
 
 ♦ ♦0 
 
 ' ♦ ♦ ♦ ♦♦ i 
 
 000 
 000 
 000 
 000 
 
 oooo 
 
 000 
 
 
 oooooo 
 
 oooooo 
 
 ooooon 
 
 000000+++++ 
 000000+++++ 
 000000+++++ 
 000000+++++ 
 
 ooooo** ♦♦♦ 
 
 00. 
 
 ♦♦♦00. 
 
 .♦♦000 
 .♦♦000 
 
 ooo 
 oon 
 ♦ ♦♦ 
 3 ♦♦♦ 
 00 + + + 
 500000 
 1000++ 
 3000++ 
 
 iooo+* 
 ioon»« 
 
 1000«+ 
 10+*** 
 
 00**** 
 000*0* 
 
 oooeee 
 
 oosoeeeoo. 
 eeeeee 
 eeeoeo 
 .oeeee 
 ..oooo 
 
 .. .000 
 
 ...eee 
 
 0000000000 
 
 oooooooooo 
 
 ooooooncoo 
 
 oooooooo 
 
 oooooooo 
 
 oooooooo 
 
 nn 
 nnonn 
 nooooo 
 oooooooo 
 oooooooo 
 oooooooo 
 
 oooooooooo 
 ooooooooonoo 
 oooooonooono 
 oooooo 
 ooooon 
 
 eeee. 
 eoee. 
 
 ooooo 
 eeee. 
 eeee* 
 
 oooe« 
 
 0000 + 
 
 noooo 
 
 0000 + 
 
 00 + + + 
 ooo + + 
 ooo + + 
 ♦ ♦ ♦ ♦ ♦ 
 
 ♦♦♦♦♦( 
 ♦♦♦♦♦< 
 
 ♦ ♦*♦ 
 
 ♦ ♦♦ 
 
 . ♦ ♦ ♦ . i 
 .♦♦ ♦ ♦ < 
 ,♦♦ ♦♦ i 
 
 ♦ ♦ ♦ ♦♦ 
 
 ♦ ♦♦ ♦♦ 
 
 ♦♦♦♦♦♦+♦ 
 ♦♦♦♦♦♦♦♦ 
 ♦♦♦♦♦♦♦♦ 
 
 ♦«♦+♦+ 
 
 eeeeeeee 
 
 eeeeeeee 
 
 oeeeeeee 
 
 eeeeeeee 
 
 seeeeese 
 
 eo***M* 
 
 ee****** 
 
 oeo***** 
 
 so****** 
 
 ••ee 
 
 eee 
 
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 eeee 
 eeeo 
 eeee 
 eeee 
 eeo 
 oeeeeeeeeoee 
 eeeeeeeeseee 
 eeeeeseeeeee 
 oeeoooeeeoee 
 eeeeeeeeeeee 
 eeeeeeeeeeee 
 eseeeeoeeeeo 
 eeeeeeeeeeoe 
 oooeoooooooo 
 seoooooeeoee 
 eeeeeeeeeeee 
 eeeeeeeeeeee 
 ••■••■••eeee 
 •••••••eeee 
 
 ■•••••eeee 
 
 •••••eeeee 
 
 .ooooo 
 eeeeeeooooo 
 oooooeooooo 
 eeeeeeooooo 
 eeeoeoooooo 
 eeeoooooooo 
 eeeooooooon 
 eeeoooooooo 
 eeeoooooooo 
 eeeoooooooo 
 eeeoooooooo 
 eeeoooooooo 
 eeeoooooooo 
 oeeeooooooo 
 ooeeooooooo 
 ooooonooo 
 eeeoooooo 
 eeeoooooo 
 eoooooooo»» 
 eeeoooooo** 
 oeeeooooo** 
 oonoooooo** 
 oooooooo* 
 
 ooonee 
 oee 
 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
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 noooo 
 ooooo 
 
 OOOOO 
 OOOOO 
 
 ooooo 
 ooooo 
 ooooo 
 ooooo 
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 •■••• 
 
 ••••0 
 • •••0 
 
 •***e 
 
 eeeee 
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 .on 
 ooo 
 oooooooo 
 oooooooo 
 oooooooo 
 ooooooee 
 oooooooo 
 noooooeo 
 ooooooee 
 ooooooee 
 ooooooee 
 ooooooee 
 ooooooee 
 ooooooee 
 ooooooee 
 ooooooee 
 oooooooo 
 ooooo 
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 . .0000+««* 
 
 . .onnoo»«« 
 ♦♦ooooo 
 ♦oooooo .. 
 oonoooo. . . 
 
 0000000+++ 
 0000000+++ 
 0000000+++ 
 
 eeooooneee 
 
 oeoonoooeo 
 
 oooooooooo 
 
 eeooooneee 
 
 eeoooooeee 
 
 oooooooooo 
 
 eeooooneoe 
 
 eeeooooeeo 
 
 eeoooooeee 
 
 oeoooooeee 
 
 oooooooooo 
 
 eeoooooooo 
 
 eeeoooo 
 
 ooooooo 
 
 ooooonn 
 
 ooooooo 
 
 ooooo . 
 
 oo 
 
 ■ ♦ ♦ ♦ 
 
 >noo 
 >ooo 
 >ooo 
 >ooo 
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 7000 
 1000 
 
 ooc. . 
 oooo. 
 oooo. 
 oooo. 
 
 0000000000+++ 
 
 onooc*oo*oooo**» 
 
 0GO0«* *«OG0000* 
 
 0000+.. ♦♦♦ooooo 
 
 ♦ooooooooo. 
 
 .oooooooooo 
 
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 ...... .OOOOOOOO** 
 
 OOOOOOOO** 
 
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 LOCAL PUBLIC WORKS, ROUND II — PROJECT COUNT 
 
 SYMBOLS REPRESENT OBLIGATIONS CODED INTO FIVE CLASSES: 
 
 SYMBOL 
 OBLIGATIONS 
 
 ••• 
 
 000 
 
 ooo 
 
 ♦ ♦ ♦ 
 
 • ■■ 
 
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 (MILLION $) AND 
 OVER 
 
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 TO 
 24.9 
 
 10 
 TO 
 4.9 
 
 .25 
 TO 
 
 .9 
 
 .24 
 AND 
 
 LESS 
 
 OBLIGATIONS FOR ALASKA, HAWAII, PUERTO RICO, AND OTHER TRUST 
 TERRITORIES WERE $45.6 MILLION, $30.2 MILLION, $168.1 MILLION, AND 
 $19.9 MILLION RESPECTIVELY. 
 
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 OBLIGATIONS 
 
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 LOCAL PUBLIC WORKS, ROUNDS I AND II — OBLIGATIONS 
 
 SYMBOLS REPRESENT OBLIGATIONS CODED INTO FIVE CLASSES: 
 
 SYMBOL 
 
 OBLIGATIONS 
 
 (MILLION $) 
 
 OBLIGATIONS FOR ALASKA, HAWAII, PUERTO RICO AND OTHER TRUST 
 TERRITORIES WERE $55.8 MILLION, $40.1 MILLION, $284.2 MILLION, AND $30.1 
 MILLION RESPECTIVELY. 
 
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 OBLIGATIONS 
 
001 
 
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 LOCAL PUBLIC WORKS, ROUND II — PROJECT COUNT 
 
 SYMBOLS REPRRESENT PROJECT COUNTS CODED INTO FIVE CLASSES: 
 
 SYMBOL 
 PROJECT COUNT 
 
 PROJECT COUNTS FOR ALASKA, HAWAII, PUERTO RICO AND OTHER TRUST 
 TERRITORIES WERE 116, 56, 273, AND 36 RESPECTIVELY. 
 
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 AVERAGE UNEMPLOYMENT RATE 
 "JULY 1976 THROUGH SEPTEMBER 1976 
 
 SYMBOLS REPRESENT UNEMPLOYMENT RATE CODED INTO FIVE CLASSES: 
 
 SYMBOL 
 UNEMPLOYMENT 
 
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 4 
 
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 9.9% 
 
 6.9% 
 
 4% 
 
 UNEMPLOYMENT RATES FOR ALASKA, HAWAII AND PUERTO RICO WERE 
 6.7%, 10.0%, AND 19.9% RESPECTIVELY. 
 
 U.S. AVERAGE WAS 7.8% 
 
 DATA FOR CONNECTICUT AND RHODE ISLAND WERE NOT AVAILABLE 
 
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 JULY 1976 THROUGH SEPTEMBER 1976 
 
00 
 
 00000 
 
 0000 
 
 000 
 
 000 
 
 00 
 
 00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 00 
 
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 AVERAGE UNEMPLOYMENT RATE 
 MARCH 1976 THROUGH FEBRUARY 1977 
 
 SYMBOL 
 
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 12.9% 
 
 9.9% 
 
 6.9% 
 
 4% 
 
 UNEMPLOYMENT 
 
 UNEMPLOYMENT RATES FOR ALASKA, HAWAII AND PUERTO RICO WERE 
 8.4%, 9.5% AND 19.3% RESPECTIVELY. 
 
 U.S. AVERAGE WAS 7.6% 
 
 DATA FOR CONNECTICUT AND RHODE ISLAND WERE NOT AVAILABLE 
 
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 MARCH 1976 THROUGH FEBRUARY 1977 
 
Appendix C 
 
 LPW Evaluation Studies Conducted By or For the 
 
 Department of Commerce 
 
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 4-1 
 
 CO ^ 
 
 > 
 
 u 
 
 9k 
 
 3 
 
 •H 
 
 CO 
 
 I— 1 
 
 CO 
 
 > 
 
 u 
 
 CO 
 
 I 
 
 O 
 
 T3 
 
 CJ 
 
 CO 
 
 M-l J3 
 
 •H O 
 
 3 
 
 4-1 
 
 •H 
 
 3 
 
 o 
 
 > 
 
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 CO 
 
 4-1 
 
 U 
 
 4-> 
 
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 ►J 
 
 CO 
 
 
 CO i-4 
 
 
 CO 
 
 60 
 
 CO 
 
 
 
 Q 
 
 3 M-l 
 
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 a 
 
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 3 
 
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 o 
 
 
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 13 
 
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 3 
 
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Appendix D 
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 3 
 
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 D-2 
 
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 PENN STATE UNIVERSITY LIBRARIES