Air Traffic Control: Remote Radar for Grand Junction (Letter Report,
11/19/96, GAO/RCED-97-22).

Pursuant to a congressional request, GAO reviewed: (1) whether the
Federal Aviation Administration (FAA) chose the most cost-effective
option for handling radar-based air traffic control activities at the
Grand Junction, Colorado, airport; (2) whether the safety and efficiency
of the air traffic control system would be compromised by remoting radar
data and contracting out tower operations at Grand Junction; and (3)
what can be done to improve the FAA process for determining when and
where to remote radar data.

GAO found that: (1) it agreed with the FAA determination that remoting
the Grand Junction radar signal to a terminal radar approach control
facility in Denver is the most cost-effective option for handling radar
data from the site; (2) the FAA 20-year projected savings attributable
to the remote option should be reduced by about $500,000, from $5.9
million to $5.4 million, since FAA overlooked certain telecommunications
costs and did not utilize more realistic staffing scenarios; (3) GAO
analysis of the available data disclosed no valid concerns about the
safety and efficiency of remoting radar data or contracting out a
tower's operation; (4) the FAA process for deciding when and where to
remote radar signals was generally sound, but relatively ad hoc; and (5)
a formal methodology for making such decisions would have helped FAA to
ensure that all relevant factors were properly considered and
communicate to the affected communities how its decision was made.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-97-22
     TITLE:  Air Traffic Control: Remote Radar for Grand Junction
      DATE:  11/19/96
   SUBJECT:  Air traffic control systems
             Cost control
             Radar equipment
             Privatization
             Transportation safety
             Cost effectiveness analysis
             Human resources utilization
             Air traffic controllers
IDENTIFIER:  Grand Junction (CO)
             FAA Terminal Radar Approach Control System
             Denver (CO)
             FAA Airport Surveillance Radar Program
             ASR-9 Radar
             FAA Contract Tower Program
             Yakima (WA)
             FAA Air Traffic Plans and Requirements Program
             
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Cover
================================================================ COVER


Report to Congressional Requesters

November 1996

AIR TRAFFIC CONTROL - REMOTE RADAR
FOR GRAND JUNCTION

GAO/RCED-97-22

Air Traffic Control

(341474)


Abbreviations
=============================================================== ABBREV

  FAA -
  TRACAB -
  TRACON -
  ASR -
  VFR -

Letter
=============================================================== LETTER


B-270247

November 19, 1996

The Honorable Hank Brown
The Honorable Ben Nighthorse Campbell
United States Senate

The Honorable Scott McInnis
House of Representatives

In 1983, the Federal Aviation Administration (FAA) began a nationwide
program of consolidating air traffic control facilities to gain the
benefits of automation and any attendant cost savings.\1

As part of this program, FAA conducted several studies between 1992
and 1995 to determine the most cost-effective way to handle the
radar-based air traffic control activities for the airport located at
Grand Junction, Colorado.\2 The studies focused on two options:  (1)
a local option that would establish a terminal radar approach control
facility in Grand Junction and (2) a long-distance option, referred
to as "remoting," wherein the radar signal from the radar
installation at Grand Junction would be transmitted and monitored at
a terminal radar approach control facility located approximately 250
miles east in Denver, Colorado.\3

In June 1995, FAA announced its final decision to remote the signal
from the Grand Junction radar installation to a terminal radar
approach control facility at Denver.  According to FAA officials, the
analyses conducted by the agency showed that remoting the radar
signal was more cost-effective than establishing an approach control
in the Grand Junction airport's tower (TRACAB) or in a separate
TRACON facility in Grand Junction.  As a consequence of the decision
to remote the radar signal from Grand Junction, FAA will propose that
the tower at Grand Junction and its remaining air traffic control
functions be contracted out to the private sector. 

You asked us to examine some concerns that representatives of the
city of Grand Junction had raised about FAA's decision.  As agreed
with your office, we developed information to respond to three
specific questions:  (1) Did FAA choose the most cost-effective
option for handling radar-based air traffic control activities at
Grand Junction?  (2) Would the safety and efficiency of the air
traffic control system be compromised by remoting radar data and
contracting out tower operations at Grand Junction?  (3) What can be
done to improve FAA's process for determining when and where to
remote radar data? 


--------------------
\1 In 1993, the House and Senate Appropriations Committees reiterated
their interest in having FAA consolidate more facilities. 

\2 Staff Study, Grand Junction, CO, Radar Approach Control Service
(June 26, 1995); Staff Study, Grand Junction, CO, Radar Approach
Control Service (May 1994); and Staff Study, Grand Junction, CO,
Radar Approach Control Service (1992). 

\3 Remoting, part of consolidating the air traffic control functions
for two or more airports, is routing each airport's radar signal to a
single terminal radar approach control (TRACON) facility.  Air
traffic controllers stationed at the TRACON facility monitor and
communicate with the aircraft that are using airspace in the
geographic area associated with each radar signal. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

We agree with FAA's determination that remoting the Grand Junction
radar signal to a TRACON facility in Denver is the most
cost-effective option for handling radar data from the site. 
However, we believe that FAA's 20-year projected savings attributable
to the remote option should be reduced by about $500,000, from $5.9
million to $5.4 million, because FAA overlooked certain
telecommunications costs and did not utilize more realistic staffing
scenarios.  Our analysis of the available data disclosed no valid
concerns about the safety and efficiency of remoting radar data or
contracting out a tower's operation.  FAA's process for deciding when
and where to remote radar signals was generally sound but relatively
ad hoc.  A formal methodology for making such decisions would have
helped the agency to (1) ensure that all relevant factors were
properly considered and (2) communicate to the affected communities
how its decision was made. 


   BACKGROUND
------------------------------------------------------------ Letter :2

FAA conducted a series of analyses to identify the most
cost-effective way to use the radar data from Grand Junction.\4 On
the basis of the results of a 1992 study, FAA decided that building a
TRACON facility at Grand Junction was less costly than remoting the
radar signal from Grand Junction to Denver.  However, in May 1994 FAA
conducted another cost analysis that factored in the use of a new
technology for remoting radar signals known as video compression.\5
The results of this analysis showed that it would be less costly to
remote the radar signal from Grand Junction to Denver, and in August
1994, FAA announced its choice of the less costly option.\6

FAA's decision to remote the radar signal also means that the tower
at Grand Junction will be operated by a contractor.  FAA's decision
to provide approach guidance to aircraft through the Denver TRACON
dictates that the Grand Junction tower be classified as a level-1
tower that operates using visual flight rules (VFR).\7 In 1993, the
House and Senate Appropriations Committees directed FAA to contract
out all level-1 VFR towers to the private sector. 

In March 1995, Grand Junction community leaders and local air traffic
controllers met with FAA to outline their concerns about FAA's
analyses and conclusions.  The major concerns of the controllers and
the city's representatives were (1) the accuracy and completeness of
the cost comparisons between the two options and (2) the
considerations about safety and efficiency associated with remoting
radar signals and contracting out a tower's operations.  FAA agreed
to conduct a new study that would consider two options--(1) a local
option that would establish either a TRACON or a TRACAB at Grand
Junction or (2) a long-distance option that would remote the radar
signal to Denver--and found once again that remoting the radar signal
to Denver was the most cost-effective option and that it would not
compromise the system's safety and efficiency. 


--------------------
\4 In a related development, the House Appropriations Committee in
fiscal year 1992 directed FAA to install state-of-the-art airport
surveillance radar (ASR-9) equipment to serve the Grand Junction
airport.  FAA commissioned the radar installation on November 9,
1995, and on an interim basis began transmitting radar data to an Air
Route Traffic Control Center located at Denver. 

\5 Video compression allows the transmission of radar display data
via telephone lines. 

\6 FAA expects to move from the interim transmission of Grand
Junction radar data to the Denver Air Route Traffic Control Center to
the Denver TRACON in mid-1997. 

\7 About 460 towers are categorized at levels 1 through 5.  Level-1
towers have the lowest activity and are the least complex.  For
example, the airport in Charlottesville, Virginia, has a level-1
tower that controls about 63,000 operations a year; Chicago's O'Hare
International Airport has a level-5 tower that controls about 840,000
operations a year. 


   FAA CHOSE THE MOST
   COST-EFFECTIVE OPTION BUT
   OVERESTIMATED THE COST
   ADVANTAGE OF REMOTING
------------------------------------------------------------ Letter :3

FAA's 1995 analysis of the costs of establishing a new TRACAB
facility at Grand Junction or remoting the radar data to Denver was
based on a comparison of the costs for facilities and equipment,
telecommunications, staffing, and relocating staff over the 20-year
life cycle of the project.  FAA estimated that the cost of remoting
the signal to the Denver TRACON would be about $9.4 million, while
the cost of establishing a TRACAB in Grand Junction would be about
$12.8 million,\8 a difference of about $3.4 million.\9 FAA also
estimated that an additional $2.5 million would be saved over the
same 20-year period by contracting out the tower at Grand Junction. 
According to FAA's estimates, these two actions would save about $5.9
million. 

To verify whether FAA chose the most cost-effective option for
providing radar approach control to the Grand Junction airport, we
performed an independent cost analysis of FAA's 1995 study.\10 While
we agree that FAA's analysis identified the most cost-effective
option, FAA did not take into account three factors that, in our
opinion, are valid in evaluating the options studied.  When these
factors are considered, FAA's total projected savings attributable to
remoting and contracting out the tower operation at Grand Junction
are reduced by about $500,000, from $5.9 million to $5.4 million. 
The principal findings from our analysis are summarized below.  (See
app.  I for a detailed presentation of our analysis.)

  -- FAA did not include a cost for establishing telephone lines
     between Grand Junction and Denver under the remoting option. 
     The overlooked cost of annual telephone lines was $107,500, or,
     when discounted over the 20-year life cycle of the project,
     $853,000 in 1995 dollars .  We revised FAA's estimated total
     telecommunications cost under the remote option upward by
     $853,000, from $618,000 to $1,470,000. 

  -- FAA overestimated the cost of staffing under each of the options
     studied because the agency used authorized staffing levels--even
     though the positions were often unfilled.  Using staffing levels
     that more closely approximate actual levels in the Northwest
     Mountain Region, we estimate that the annual staffing cost would
     be lower by $147,600 (about $1.82 million over 20 years) for the
     TRACAB option and by $168,900 (about $2.091 million over 20
     years) for the remote option.  The net effect of these changes
     increases the savings attributable to remoting by about $271,000
     over 20 years.  Moreover, when using staffing levels that more
     closely approximate actual levels in the field, we estimate that
     the TRACAB option's staff relocation and training costs would be
     lower and further reduce the savings attributable to the remote
     option by $174,000. 

  -- FAA underestimated the savings associated with contracting out
     the air traffic control functions at Grand Junction.  We
     estimate that contracting out saves about $2.7 million--or about
     $218,000 more than FAA estimates--over 20 years after factoring
     in FAA's previous experience with contractor-operated towers and
     the additional costs of relocating the Grand Junction
     controllers who choose not to work for the contractor. 


--------------------
\8 This amount does not include the cost of the ASR-9 radar, which
FAA views as a fixed cost whether the agency remotes this radar
signal to Denver or establishes a TRACAB at Grand Junction. 

\9 The costs of these two actions are expressed in 1995 present value
dollars.  We used 1995 present value dollars in all of our
calculations. 

\10 Representatives of the city of Grand Junction expressed concern
about several specific cost items in FAA's analysis.  Most of the
concerns focused on FAA's costs for staffing and equipment.  We
examined each of the community's concerns and incorporated changes to
our analysis where appropriate. 


   RADAR REMOTING AND CONTRACT
   TOWERS ARE SAFE AND EFFICIENT
------------------------------------------------------------ Letter :4

The representatives of the city of Grand Junction expressed concern
that by remoting the radar signal to Denver and by contracting out a
tower's operation, FAA jeopardizes the safety and the efficiency of
the air traffic control system at the Grand Junction airport. 
Specifically, the representatives questioned the implications for
safety and efficiency of transmitting radar data over 250 miles and
having Denver controllers provide Grand Junction's radar approach
control.  The city's representatives also questioned the safety and
efficiency implications of contracting out Grand Junction's tower. 

We discussed remoting and considerations about the safety and
efficiency of a contractor-operated tower with officials at FAA
headquarters and at FAA's Northwest Mountain Region, who have
jurisdiction over the Grand Junction and Denver areas.  We also
discussed these issues with officials from major aviation-related
associations.\11

According to the air traffic officials in FAA's Northwest Mountain
Region, the agency has successfully transmitted radar data hundreds
of miles to its enroute centers for the past 30 years without
compromising or affecting the system's safety.\12 Because FAA's
ability to transmit radar data over 250 miles of mountainous terrain
was a concern to the Grand Junction representatives, we reviewed
FAA's information on the reliability and availability of radar data
transmissions.  The information showed that the reliability and
availability of the transmissions averaged 99.98 percent nationally
over the past 5 years and that they were unaffected by mountainous
terrain. 

According to FAA and aviation association officials, a controller's
physical location is not a safety issue, and controllers routinely
control air traffic safely without having visual contact with other
air traffic controllers.  The critical issue is that information be
exchanged in a timely manner, not that two individuals be in visual
proximity.  Moreover, FAA officials told us that when normal modes of
communication are disrupted, the agency adjusts its operating
procedures--such as transferring the control of air space to an
enroute center or using nonradar approaches--to ensure the timely
flow of information. 

The city's representatives believed that remoting caused traffic
delays at the Grand Junction airport because Denver controllers were
not trained to manage the airport's air traffic.  According to FAA
Air Traffic officials in the Northwest Mountain Region, Grand
Junction incurred initial start-up problems similar to those that
other facilities incurred when FAA began to remote radar data.  To
eliminate these problems, FAA provided refresher briefings to the
Denver controllers on managing Grand Junction's air traffic.  Grand
Junction air traffic controllers told us that the Denver controllers
are now efficiently managing this air traffic and delays are no
longer a problem.  According to the aviation association officials,
their members had not raised any concerns about efficiency associated
with FAA's remoting of radar data. 

In connection with private-sector controllers under contract to FAA,
the manager of FAA's contract tower program told us that contract
controllers are as well trained as FAA controllers.  He provided
documentation showing that contract controllers average 18 years of
experience.  The program manager also told us that contract
controllers are certified by FAA and operate under the same
regulations as FAA controllers.  Additionally, officials representing
various aviation associations told us that their members were
provided with safe and efficient services by both FAA-operated and
contractor-operated towers.  As a result, these officials told us
that they had no reason to question the safety and efficiency of
FAA's contract tower program. 


--------------------
\11 The Regional Airlines Association, National Business Aircraft
Association, American Association of Airport Executives, National
Association of State Aviation Officials, Airline Pilots Association,
National Air Transportation Association, and Air Freight Association. 

\12 Enroute centers provide enroute services for a large geographical
area to aircraft between the departure and arrival phases of flight. 


   EXPERIENCE WITH GRAND JUNCTION
   SUGGESTS CONSIDERATIONS FOR
   FAA'S FUTURE CONSOLIDATIONS
------------------------------------------------------------ Letter :5

The concerns raised by representatives of the city of Grand Junction
have also been raised by citizens' groups in other communities where
FAA has proposed to consolidate facilities and contract out a
facility's operation.  That other communities had similar concerns
leads us to believe that FAA can do a better job of communicating the
reasons for its future decisions on consolidating facilities. 

The issues and concerns raised by the city's representatives--the
reliability of cost data and the safety and efficiency of the
airport--were similar to those raised in 1994 by a Yakima,
Washington, citizens' group that also questioned an FAA remoting
decision.\13

In both the Grand Junction and the Yakima projects, FAA took a
relatively ad hoc approach in deciding whether to remote radar data. 
In both cases, our review showed that while FAA chose the most
cost-effective option, it did not include all relevant cost factors
in its savings computation and did little to communicate the
rationale for its decision to the affected communities, thereby
contributing to subsequent misperceptions by community
representatives. 

We did not find any standard FAA guidance for officials to follow or
analytical model for them to use when deciding what costs to include,
how to compute those costs, and what documentation to maintain when
analyzing candidate facilities for consolidation.  In June 1996, FAA
issued a report\14 that identifies the types of information to be
considered in deciding whether to establish or consolidate TRACON
facilities; however, the report does not specify how the various
factors will be computed in the decision-making process.  In the
absence of standard guidance or an analytical model, FAA patterned
its Grand Junction studies after earlier remoting efforts.  Officials
in FAA's Air Traffic Plans and Requirements Program said that the
agency uses this approach because each potential consolidation and
remoting situation is unique.  However, this approach has led to the
agency's omitting certain telecommunications costs and not reflecting
the more realistic scenarios for staffing facilities and has raised
concerns in the affected communities.  These types of process
problems can have the effect of undermining the agency's credibility,
discouraging the community from accepting FAA's decision, and
delaying implementation plans and the realization of projected cost
savings. 


--------------------
\13 Remote Radar for Yakima (GAO/RCED-95-106R). 

\14 Investment Criteria and Operational Requirements for Terminal
Radar Approach Control (TRACON) Facility Projects (June 28, 1996). 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

While FAA chose the most cost-effective way to handle radar data for
Grand Junction and Yakima, in both instances it overlooked relevant
cost factors.  Furthermore, in both cases FAA's decisions were
challenged by the affected communities, thereby contributing to
delays in implementing the decisions.  A more structured
decision-making process, based on formal guidance and an analytical
model, could ensure that FAA considers all relevant factors when
making a remoting decision.  A more structured decision-making
process could also help FAA defend its decisions to communities that
protest the closure of an FAA-staffed facility.  As FAA continues to
remote radar data and consolidate facilities, it is to FAA's
advantage to develop and implement a more structured decision-making
process in conjunction with key stakeholders. 


   RECOMMENDATION
------------------------------------------------------------ Letter :7

We recommend that the Secretary of Transportation direct the
Administrator, Federal Aviation Administration, to develop formal
guidance and an analytical model for making its remoting decisions. 
The guidance should outline what costs to include, how those costs
should be computed, and what documentation is required to support the
analysis.  It should also provide for early and continuous
involvement of the major stakeholders, especially the affected
communities. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

We provided a draft of this report to the Department of
Transportation for review and comment.  We met with officials of the
Department, including FAA's Program Director for Air Traffic Plans
and Requirements Program, who agreed with the draft report's
conclusions and recommendation.  The Program Director said that FAA
does not normally conduct the level of analysis we recommended
because of the wide difference in costs between remoting radar data
and establishing a local terminal radar approach control facility. 
Nevertheless, FAA recognized that improvements can be made in its
decision-making process.  In our view, FAA's June 1996 report that
identifies the types of information to be considered when deciding
whether to establish or consolidate TRACON facilities is a step in
the right direction for improving its decision-making process. 
However, the report does not specify how the various factors will be
computed in the decision-making process. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :9

We interviewed FAA officials in Washington, D.C., and the Northwest
Mountain Region and obtained specific documentation on the cost of
each option and the associated safety information.  To verify the
figures FAA used in its most recent cost analysis, we conducted an
independent cost analysis.  We also met with representatives of the
city of Grand Junction and officials from major aviation associations
to discuss their concerns and obtain their opinions on the potential
operational and safety impacts associated with remoting and
contracting out the Grand Junction tower.  We discussed our findings
with FAA officials, including the Program Director, Air Traffic Plans
and Requirements Program. 

We performed this review from October 1995 through October 1996 in
accordance with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :9.1

We are sending copies of this report to the Secretary of
Transportation; the Administrator, Federal Aviation Administration;
and representatives of the city of Grand Junction.  We will also make
copies available to others on request.  Please call me at (202)
512-4803 if you or your staff have any questions about this report. 
Major contributors to this report are listed in appendix II. 

Gerald L.  Dillingham
Associate Director, Transportation and
 Telecommunications Issues


GAO'S ESTIMATES OF THE COST OF
LOCATING A TRACAB FACILITY AT
GRAND JUNCTION OR REMOTING THE
SIGNAL TO A TRACON FACILITY AT
DENVER
=========================================================== Appendix I

                              TRACAB at Grand       Remote radar to      Cost savings for
FAA cost category                    Junction                Denver         remote option
-----------------------  --------------------  --------------------  --------------------
Facilities and                       $992,329              $425,016              $567,313
 equipment cost
Plant engineering                     $44,200               $34,200               $10,000
Electronic engineering                $24,500               $14,900                $9,600
Construction                         $168,037              $169,226              ($1,189)
Electronic installation              $755,592              $206,690              $548,902
Telecommunications                         NA          $1,470,824\b          ($1,470,824)
 cost\a
=========================================================================================
Salary cost\a                      $9,621,789            $6,310,252            $3,311,537
Manager (GS-13)                      $866,695                    NA              $866,695
 Salary = $866,695/20            (1 position)
 yrs.
Supervisor (GS-12)                 $1,457,690              $728,845              $728,845
 Salary = $728,845/20           (2 positions)          (1 position)
 yrs.
Staff Specialist (GS-                $608,117                    NA              $608,117
 11)                             (1 position)
 Salary = $608,117/20
 yrs.
Controller (GS-11 for            $4,864,936\c            $3,321,156            $1,543,780
 TRACAB option; GS-10           (8 positions)         (6 positions)
 for TRACON option)
 Salary = $553,526/20
 yrs.
Controller (GS-14) for                     NA          $1,044,017\c          ($1,044,017)
 Denver                                                (1 position)
 Salary = $1,044,017/
 20 yrs
Facilities Technician            $1,824,351\c            $1,216,234              $608,117
 (GS-11)                        (3 positions)         (2 positions)
 Salary = $608,117/20
 yrs.
Staff relocation cost                $150,000                    NA              $150,000
 (1 move = $50,000)\d
=========================================================================================
Training\e                            $98,925                    NA               $98,925
Subtotal                          $10,863,043            $8,206,092            $2,656,951
=========================================================================================
Savings from contract                      NA        ($2,700,000)\f                    NA
 tower program\a
=========================================================================================
Total cost over 20                $10,863,043            $5,506,092            $5,356,951
 years
Cost per year for 20                 $543,152              $275,305              $267,847
 years
-----------------------------------------------------------------------------------------
\a The costs for telecommunication, salary, and savings from the
contract tower program were discounted over 20 years. 

\b We revised FAA's telecommunication cost for the remote option
upward by $852,776 to $1,470,824 to account for the costs that FAA
omitted from its 1995 study. 

\c We used staffing levels that more closely approximate actual
staffing levels in the Northwest Mountain Region.  As a result, we
used eight controllers and three technicians under the TRACAB option. 
We also used one Denver controller under the remote option. 

\d We believe $50,000 per move is reasonable because FAA now projects
$56,200 as the average cost per move for its Northwest Mountain
Region. 

\e Because we eliminated one technician under the TRACAB option, we
reduced the cost of training by $23,900.  FAA training academy
officials told us that this is the cost for training one technician. 

\f We found that FAA's contract tower program is now projecting
annual savings of about $255,000 per tower because the average
personnel and benefits costs for FAA-operated level-1 towers have
increased more rapidly than costs for contracted towers.  As a
result, we revised upward FAA's annual savings estimate attributable
to the contract tower program by $50,000 and then adjusted this
figure for inflation over the next 20 years to an estimated $3.1
million savings.  We then revised downward the $3.1 million savings
attributable to the contract tower program by $400,000 to account for
the cost of relocating Grand Junction controllers who choose not to
work for the contractor.  FAA did not include the cost to relocate
controllers to other facilities in its contract tower savings. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II


   RESOURCES, COMMUNITY, AND
   ECONOMIC DEVELOPMENT DIVISION
-------------------------------------------------------- Appendix II:1

Linda S.  Garcia
Dana E.  Greenberg
Robert E.  Levin
Peter G.  Maristch


*** End of document. ***