Military Bases: Status of Prior Base Realignment and Closure Rounds (Chapter Report, 12/11/98, GAO/NSIAD-99-36)
Pursuant to a congressional request, GAO reviewed: (1) the Department of
Defense's (DOD) progress in completing action on military base
realignments and closures (BRAC) recommendations and transferring
unneeded base property to other users; (2) the precision of DOD's
estimates of BRAC costs and savings; (3) environmental cleanup progress
and estimated associated costs; and (4) reported trends in economic
recovery in communities affected by base closures.
GAO noted that: (1) by September 30, 1998, DOD had completed actions on
about 85 percent of the four BRAC commissions' 451 recommendations; (2)
in taking actions on the recommendations, DOD declared about 464,000
acres of base property as excess; (3) as of September 30, 1997, 46
percent of the unneeded BRAC property was to be retained by the federal
government, 33 percent was slated for nonfederal users, and the
disposition of 21 percent had not yet been decided; (4) 8 percent of the
property slated for federal use has been transferred, while 31 percent
of the property slated for nonfederal use has been transferred; (5) DOD
officials noted a number of obstacles that must be overcome before
transfer can occur; (6) by 2001, DOD estimates it will have spent $23
billion on BRAC and saved $37 billion in costs it would have incurred if
BRAC actions had not occurred, for a net savings of $14 billion; (7)
beyond 2001, when the last of the four rounds is complete, DOD expects
to save $5.7 billion annually as a result of BRAC actions; (8) however,
the cost estimates exclude certain types of federally incurred costs,
some of which are funded outside of DOD BRAC budget accounts, while the
savings estimates have not been routinely updated and thus are not
precise; (9) a major cost factor in BRAC actions, as well as a major
obstacle to the disposal of unneeded property, is the need for
environmental cleanup at BRAC bases; (10) both the eventual cost and the
completion date for the BRAC-related environmental program are
uncertain; (11) however, available DOD data indicate that the total
environmental cost will likely exceed $9 billion and that cleanup
activities will extend well beyond 2001; (12) the potential for higher
costs exists, given uncertainties associated with the extent of cleanup
of unexploded ordnance and monitoring of cleanup remedies needed at
selected sites; (13) DOD has made progress since the earlier BRAC years
when it was investigating sites for contamination; and (14) the majority
of communities surrounding closed bases are faring well economically in
relation to the national average, according to the latest data available
at the time of GAO's analysis, and show some improvement since the time
closures were beginning in 1988.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-99-36
TITLE: Military Bases: Status of Prior Base Realignment and
Closure Rounds
DATE: 12/11/98
SUBJECT: Military downsizing
Military bases
Surplus federal property
Economic analysis
Defense cost control
Environmental monitoring
Economic growth
Base closures
Base realignments
Waste disposal
IDENTIFIER: DOD Base Realignment and Closure Account
DOE Comprehensive Environmental Response, Compensation, and
Liability Act Program
DOD Future Years Defense Program
EPA National Priorities List
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Cover
================================================================ COVER
Report to the Honorable
John E. Sununu,
House of Representatives
December 1998
MILITARY BASES - STATUS OF PRIOR
BASE REALIGNMENT AND CLOSURE
ROUNDS
GAO/NSIAD-99-36
Military Base Closures
(709278)
Abbreviations
=============================================================== ABBREV
BRAC - base realignment and closure
CERCLA - Comprehensive Environmental Response, Compensation, and
Liability Act
COBRA - Cost of Base Realignment Actions
DOD - Department of Defense
FYDP - Future Years Defense Program
GAO - General Accounting Office
LMI - Logistics Management Institute
NPL - National Priorities List
UXO - unexploded ordnance
Letter
=============================================================== LETTER
B-278553
December 11, 1998
The Honorable John E. Sununu
House of Representatives
Dear Mr. Sununu:
This report responds to your request that we review important issues
associated with the four rounds of military base realignments and
closures (BRAC) beginning in 1988. Through closure rounds in 1988,
1991, 1993, and 1995, the Department of Defense (DOD) expected to
significantly reduce its domestic infrastructure and provide needed
dollars for high-priority defense programs such as modernization.
This report addresses (1) DOD's progress in completing action on BRAC
recommendations and transferring unneeded base property to other
users, (2) the precision of DOD's estimates of BRAC costs and
savings, (3) environmental cleanup progress and estimated associated
costs, and (4) reported trends in economic recovery in communities
affected by base closures.
We are sending copies of this report to the Chairmen and Ranking
Minority Members, Senate Committee on Appropriations, Subcommittee on
Defense; Senate Committee on Armed Services; House Committee on
Appropriations, Subcommittee on National Security; House Committee on
National Security; the Secretaries of Defense, the Army, the Navy,
and the Air Force; the Directors of the Defense Logistics Agency and
the Defense Information Systems Agency; and the Director, Office of
Management and Budget. We will also make copies available to others
upon request.
This report was prepared under the direction of David R. Warren,
Director, Defense Management Issues, who may be reached on (202)
512-8412 if you or your staff have any questions. Major contributors
to this report are listed in appendix VI.
Sincerely yours,
Henry L. Hinton, Jr.
Assistant Comptroller General
EXECUTIVE SUMMARY
============================================================ Chapter 0
PURPOSE
---------------------------------------------------------- Chapter 0:1
By 2001, four rounds of base realignments and closures (BRAC) will
have reduced the domestic military basing structure by about 20
percent from its 1988 level. The Department of Defense (DOD) has
asked the Congress for further rounds to align basing structure with
force structure and to free up funds for programs such as weapons
modernization. Mr. John E. Sununu, House of Representatives,
requested that GAO provide analyses and information on closures and
realignments as the Congress considers whether to enact new BRAC
legislation. Accordingly, this report addresses (1) DOD's progress
in completing action on BRAC recommendations and transferring
unneeded base property to other users, (2) the precision of DOD's
estimates of BRAC costs and savings, (3) environmental cleanup
progress and estimated associated costs, and (4) reported trends in
economic recovery in communities affected by base closures.
BACKGROUND
---------------------------------------------------------- Chapter 0:2
The Congress authorized four BRAC rounds, beginning in 1988, 1991,
1993, and 1995. Generally, bases were selected for closure or
realignment by an independent commission based on DOD's
recommendations. While DOD has 6 years to complete implementation of
closure or realignment decisions, other related actions, such as the
cleanup of environmental contamination and transfer of unneeded base
property to other users, can extend the process many years beyond the
6-year period. Property DOD no longer needed was to be offered first
to other federal agencies, then to state or local authorities by
various means. Any remaining property could be sold.
DOD is primarily responsible for cleaning up environmental
contamination at military bases. Generally, cleanup remedies must be
in place, meeting both federal and state regulatory requirements,
before base property can be transferred to nonfederal entities. For
each BRAC round, the Congress appropriated funds for environmental
cleanup of unneeded property.
RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3
By September 30, 1998, DOD had completed actions on about 85 percent
of the four BRAC commissions' 451 recommendations.\1 The pace of
completion accelerated after the first round. In taking action on
the recommendations, DOD declared about 464,000 acres of base
property as excess. As of September 30, 1997, 46 percent, or about
213,000 acres, of the unneeded BRAC property was to be retained by
the federal government; 33 percent, or about 154,000 acres, was
slated for nonfederal users such as state and local authorities or
private parties; the disposition of 21 percent, or about 98,000
acres, had not yet been decided. However, most of this property is
still awaiting transfer. Eight percent of the property slated for
federal use has been transferred, while 31 percent of the property
slated for nonfederal use has been transferred. DOD officials noted
a number of obstacles that must be overcome before transfer can
occur. To help ease this situation, DOD is leasing some property,
pending actual transfer of the property.
By 2001, DOD estimates it will have spent $23 billion on BRAC and
saved $37 billion in costs it would have incurred if BRAC actions had
not occurred, for a net savings of $14 billion. Beyond 2001, when
the last of the four rounds is complete, DOD expects to save $5.7
billion annually as a result of BRAC actions. However, the cost
estimates exclude certain types of federally incurred costs, some of
which are funded outside of DOD BRAC budget accounts, while the
savings estimates have not been routinely updated and thus are not
precise. For example, the Air Force's savings figure reflects
initial rough estimates that predate any actual closures. Despite
the imprecision of DOD's savings estimates, GAO believes BRAC savings
will be substantial.
A major cost factor in BRAC actions, as well as a major obstacle to
the disposal of unneeded property, is the need for environmental
cleanup at BRAC bases. Both the eventual cost and the completion
date for the BRAC-related environmental program are uncertain.
However, available DOD data indicate that the total environmental
cost will likely exceed $9 billion and that cleanup activities,
including monitoring, will extend well beyond 2001. The potential
for higher costs exists, given uncertainties associated with the
extent of cleanup of unexploded ordnance and monitoring of cleanup
remedies needed at selected sites. DOD has made progress since the
earlier BRAC years when it was investigating sites for contamination.
Its emphasis now is on implementing cleanup measures.
The majority of communities surrounding closed bases are faring well
economically in relation to the national average, according to the
latest data available at the time of GAO's analysis, and show some
improvement since the time closures were beginning in 1988. Of the
62 communities surrounding major base closures, about two-thirds had
1997 unemployment rates equal to or lower than the national average;
the remaining one-third had rates higher than the national average.
Of the 49 surrounding communities involved in the first three rounds,
31 had equal or higher average per capita income growth rates
compared to the national average for the period 1991-95.
--------------------
\1 The four BRAC commissions generated 499 recommendations. However,
only 451 of these ultimately required action primarily because 48
were changed in some manner by recommendations of a later commission.
PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4
RECOMMENDED ACTIONS ARE ON
TRACK, BUT PROPERTY DISPOSAL
IS PROGRESSING SLOWLY
-------------------------------------------------------- Chapter 0:4.1
The military services have been completing recommended actions within
the 6-year period permitted by law. Further, although first-round
actions required nearly 5-1/2 years to complete on average, DOD
learned from this early experience, and it has accelerated the pace
for subsequent rounds to an average of 3 years. By September 30,
1998, DOD had completed 85 percent of the recommended actions.
However, property disposal involves factors not completely under
DOD's control and has not been easy to manage. Completing actions
and disposing of property quickly not only puts excess property into
alternative use sooner but also increases savings.
At BRAC-affected bases, the military services have identified about
464,000 acres that are excess to their needs. As of September 30,
1997, the federal government, including DOD, was expected to retain
about 46 percent, or about 213,000 acres, of that property. While
most, or about 163,000 acres, of this federally retained property is
being transferred to the Fish and Wildlife Service, DOD is retaining
about 13,000 acres for other uses.\2 State, local authorities, and
private parties are expected to take ownership of 33 percent of the
unneeded property. The recipients of the remaining 21 percent have
not been determined.
The amount of unneeded acreage actually transferred has been
relatively small. Overall, as of September 30, 1997, about 14
percent of the unneeded property had been transferred; about 8
percent of the property destined for federal parties had been
transferred and about 31 percent of the property destined for
nonfederal parties had been transferred. The steps that must be
taken to accomplish transfers include preparing and approving
property reuse plans; negotiating the terms of transfer, including
the transfer method and the price and payment terms, if any; lining
up a community organization with adequate financing to administer and
maintain the transferred property; and in many cases, addressing
environmental concerns.
To help get property into use as quickly as possible, DOD is often
leasing property prior to actual transfer. The services do not
centrally maintain leasing information and could not readily provide
comprehensive data. However, data GAO was able to obtain indicated
that during the second quarter of fiscal year 1998, at least 38,000
acres, or 8 percent of the unneeded BRAC acreage, were operating
under some type of leasing arrangement. According to these data,
about 25 percent of the property awaiting transfer to nonfederal
recipients is under interim leases.
--------------------
\2 Additionally, DOD is retaining over 330,000 acres at both closing
and realigning bases for use by the reserve components--this involves
acreage that was not formally declared excess and not included in the
464,000 acres noted previously.
COSTS AND SAVINGS ESTIMATES
ARE NOT PRECISE
-------------------------------------------------------- Chapter 0:4.2
While the military services have updated their cost estimates
annually, they have not routinely updated their savings estimates
based on their experience with carrying out BRAC actions. To assist
in choosing among potential BRAC actions at the start of each round,
the services initially estimated implementation costs and savings
using a rough methodology for comparative purposes. Once decisions
had been made on which bases to close and realign, DOD planned to
replace these estimates with more site-specific estimates in its
budgets.
Beginning with the 1993 budget, DOD required the services to annually
update these estimates. However, the Air Force is still reporting
its initial rough estimates with some adjustments for inflation. The
Army and the Navy have refined their estimates for budget purposes
and have updated these estimates for some bases, but neither has
performed a comprehensive update for all actions or even those
actions defined as major. Nevertheless, the current estimates are
incorporated annually into DOD's 5-year spending plans as prospective
savings. Service officials stated that keeping track of savings
would be costly and labor intensive and that they have not had
systems in place for doing so.
BRAC savings do not take into account expected environmental costs
beyond 2001 and financial assistance provided by federal agencies to
BRAC-affected communities and individuals. While BRAC implementation
authority expires in 2001, post-BRAC cleanup costs may exceed $2.4
billion. Further, over $1 billion in grants have been provided by
the (1) Economic Development Administration to assist communities
with infrastructure improvements, building demolition, and revolving
fund loans; (2) Federal Aviation Administration to help convert
military airports to civilian use; (3) Department of Labor to help
retrain civilian workers who lose their base jobs; and (4) DOD's
Office of Economic Adjustment to help BRAC-affected communities
develop former base property reuse plans. While inclusion of these
costs in the estimates would reduce overall net savings estimates,
BRAC net annual savings will be substantial once implementation costs
have been offset.
ENVIRONMENTAL CLEANUP IS
PROGRESSING, BUT IS COSTLY
AND TIME-CONSUMING
-------------------------------------------------------- Chapter 0:4.3
DOD is making progress toward cleaning up contamination at BRAC bases
and now reports spending more funds on implementing cleanups than on
studying the problems. A program initiated in 1993 to accelerate the
steps leading to cleanup appears to have improved progress.
Through fiscal year 1997, DOD estimates it has spent $4.1 billion to
bring excess property at BRAC bases up to environmental standards
that must be met before property can be transferred. By the time
BRAC implementation authority expires in 2001, DOD expects to spend
an additional $3.1 billion. Beyond 2001, DOD expects it will need an
additional $2.4 billion to complete cleanup. However, because of the
expiration of BRAC authority at that time, the BRAC cleanup effort
would then be funded through the overall DOD environmental budget.
In response to congressional direction, DOD is preparing legislation
to create a new account to fund the remaining cleanup.
Additionally, the estimate of post-BRAC environmental costs is
uncertain, but likely conservative, because DOD has not projected all
costs for the program's duration. Costs could increase if (1)
cleanup requirements change; (2) DOD is required to extensively clean
up unexploded ordnance such as shells, grenades, and mines that
misfired and still pose a danger; and (3) selected remedies fail to
clean up contaminated sites. Given such uncertainties, it is
difficult to identify a date for completing BRAC-related
environmental activities. However, DOD estimates that monitoring to
ensure the effectiveness of remedies will continue for many years
beyond 2001.
MOST COMMUNITIES WHERE BASES
CLOSED ARE RECOVERING
-------------------------------------------------------- Chapter 0:4.4
The majority of communities surrounding closed bases are faring well
economically in relation to the national average, according to the
latest data available at the time of GAO's review, and show some
improvement since the time closures were beginning. As of 1997, 68
percent had average or lower unemployment, compared with 60 percent
in 1988. During 1991-95, incomes in 63 percent of the communities
were growing faster than the national average, up from 55 percent
during 1988-91. Rural communities seemed to be doing about as well
as cities. Notwithstanding trends, a few communities were
struggling--two had double-digit unemployment rates and five had
declining average incomes.
Officials in the communities GAO visited recalled an initial period
of disruption, followed by recovery. In some cases, the panic
resulting from the announcement of a closure seemed to have a more
severe economic impact than the closure itself. Officials noted,
however, some adverse impacts are not reflected in economic
measurements, such as social losses felt in local schools, churches,
and organizations that benefited from active military personnel and
families.
Local officials also mentioned several factors contributing to
recovery, including the health of the regional economy and successful
redevelopment of base property. However, some expressed impatience
with the slow pace of property disposal. For example, community
officials from the Castle Air Force Base area told GAO they have yet
to take ownership of property from the former base even though it
closed in September 1995.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:5
In commenting on a draft of this report, DOD concurred with GAO's
findings and conclusions (see app. V for DOD's comments). DOD also
provided technical comments, which GAO has incorporated as
appropriate.
INTRODUCTION
============================================================ Chapter 1
Between 1988 and 1995, the Department of Defense (DOD), acting under
special legislative authorities, conducted four rounds of base
realignments and closures (BRAC).\1
According to DOD's calculations, when all BRAC actions from those
rounds are completed, no later than 2001, DOD will have reduced its
domestic military basing structure by about 20 percent. DOD believes
it needs to reduce its domestic basing infrastructure even further to
bring it more into line with reductions in its force structure and
funding levels and free up funds for other programs, including
modernization. Consequently, in 1997 and 1998, the Secretary of
Defense requested the Congress to authorize additional rounds of base
closures.
However, the Congress continues to have many questions about the four
BRAC rounds and has not been willing to authorize additional ones to
date. Some in the Congress, noting the lengthy time frame allowed
for closures and realignments to be completed, have suggested that
additional BRAC rounds should not be authorized until prior
recommendations have been implemented and the effects of those
decisions fully assessed. Some members have also raised questions
about the adequacy of DOD's accounting for the costs and savings
associated with BRAC decisions, including environmental restoration
costs and other costs to the government not borne directly by DOD;
the extent to which environmental restoration associated with BRAC
might continue beyond 2001; and the economic impact on communities
affected by closures and their ability to recover.
--------------------
\1 The initial round was completed under the Defense Authorization
Amendments and Base Closure and Realignment Act of 1988 (P.L.
100-526). The last three rounds were completed under the Defense
Base Closure and Realignment Act of 1990 (P.L. 101-510, title XXIX,
part A, as amended). Under the latter legislation, an independent
BRAC commission reviewed recommendations for closure or realignment
submitted by the Secretary of Defense. The commission either
approved or modified the Secretary's recommendations and ultimately
forwarded its own recommendations to the President who, in each
instance, forwarded the recommendations to the Congress. The
Congress generally had 45 days in which to enact a joint resolution
should it desire to disapprove the recommendations - - in each
instance, the absence of a disapproval action by the Congress
resulted in the recommendations becoming effective.
ASSESSING THE MAGNITUDE OF BASE
CLOSURES AND REALIGNMENTS IS
DIFFICULT
---------------------------------------------------------- Chapter 1:1
DOD has characterized the four rounds of BRAC actions as representing
about 20 percent of its major bases, producing decisions to close 97
out of 495 major domestic installations and many smaller ones and to
realign many other facilities. However, trying to fully assess the
magnitude of closures, tally the precise numbers of bases closed or
realigned, or differentiate between the two is difficult. For
example, individual BRAC commission recommendations may have included
actions affecting multiple bases. Additionally, BRAC commissions in
the later rounds made changes, or what are termed ¹redirects,º to
prior BRAC decisions.\2 In total, the four BRAC rounds produced 499
recommendations affecting about 450 military activities.
In our 1995 report on the BRAC process, we noted that the term base
closure often leaves the impression that a larger facility is being
closed.\3 However, that may not actually be the case. Military
installations are diverse and can include a base, camp, post,
station, yard, center, home port, or leased facility and can vary in
size from a few acres to hundreds of thousands of acres. Further, an
installation may house more than one mission or function. For
example, in 1993 the Navy closed the Norfolk Naval Aviation Depot,
which was located on the Norfolk Navy Base, which included the
Norfolk Navy Station, Supply Center, and Air Station. Our report
noted that full closures may involve relatively small facilities,
rather than the stereotypical large military base. It also noted
that the number of bases recommended for closure or realignment in a
given BRAC round was often difficult to precisely tabulate because
closure decisions did not necessarily completely close facilities.
In the BRAC process, decisions generally were made to either close or
realign facilities. While the 1990 BRAC enabling legislation did not
specifically define what is meant by "close," it did define a
realignment as any action that reduces and relocates functions and
civilian positions.\4 Our 1995 report noted that an individual BRAC
recommendation may actually affect a variety of activities and
functions without fully closing an installation. More specifically,
the nature of closures and realignments was such that both could
result in the closure of portions of facilities, and the distinction
between the two was not always clear. For example, our 1997 report
on BRAC lessons learned contained a listing of base closure decisions
DOD reported as major closures.\5 Excluded from that list was the
BRAC 1995 decision regarding Kelly Air Force Base, Texas, which DOD
characterized as a major base realignment. The actual decision
included shifting a portion of the base's property to the adjacent
Lackland Air Force Base and moving the depot maintenance workload of
the Air Logistics Center located on Kelly to other DOD depots or to
private sector commercial activities as determined by the Defense
Depot Maintenance Council.\6
Some closures, as well as realignments, such as those involving the
Army's Fort Pickett, Virginia, and Fort Hunter Liggett, California,
essentially call for cessation of active military presence on the
installations while retaining nearly all of the property for use by
reserve components.
Finally, efforts to precisely determine the numbers of bases closed
or realigned are complicated by changes that are made to BRAC
decisions in later BRAC rounds. The BRAC process allowed DOD to
propose changes to previous commission recommendations, or redirects,
while it was considering new base closures in rounds conducted in
1991, 1993, and 1995. Redirects often meant redirecting the planned
movement or activity to a base other than the one cited as the
receiving base in a prior BRAC round.
--------------------
\2 Likewise, individual bases may be the subject of more than one
BRAC recommendation as succeeding BRAC rounds occur, especially where
realignments occur.
\3 Military Bases: Analysis of DOD's 1995 Process and
Recommendations for Closure and Realignment (GAO/NSIAD-95-133, Apr.
14, 1995).
\4 For BRAC purposes, the Office of the Secretary of Defense defined
"close" as meaning all missions of the installation would cease or be
relocated. It also used the term "close, except" to mean that the
vast majority of missions on an installation would cease or be
relocated and all but a small portion of the base would be excessed
and the property disposed. The small portion retained would often be
facilities in an enclave for use by a reserve component.
\5 Military Bases: Lessons Learned From Prior Closure Rounds
(GAO/NSIAD-97-151, July 25, 1997).
\6 Kelly Air Force Base is in the process of realignment; the
maintenance depot on the installation is being closed as a
government-owned facility; and the depot maintenance workload is
undergoing public-private competition to determine where the work
will be done in the future.
THE PROCESS FOR TERMINATING
MILITARY INVOLVEMENT AND
DISPOSING OF UNNEEDED PROPERTY
CAN BE COMPLICATED AND
TIME-CONSUMING
---------------------------------------------------------- Chapter 1:2
By law, DOD must initiate closure or realignment actions no later
than
2 years after the President submits the recommended BRAC list to the
Congress and must complete implementation within 6 years. However,
this 6-year period refers only to the time permitted to implement
realignment or closure decisions, such as moving functions from one
base to another or halting military activities on a base as a base
closes. DOD's involvement on an installation can go beyond the 6
years as it completes the process of cleaning up environmental
contamination on the bases and disposing of the unneeded property.
ENVIRONMENTAL CLEANUP CAN
TAKE MANY YEARS TO COMPLETE
-------------------------------------------------------- Chapter 1:2.1
DOD must comply with cleanup standards and processes associated with
laws, regulations, and executive orders in conducting assessments and
cleanup of its base closure property. DOD spends about $5 billion
annually to fulfill its environmental mission, including compliance
and cleanup of contamination from hazardous substances and waste on
active, closing, and formerly used DOD sites. While DOD has an
ongoing environmental program at each of its military bases, the
decision to close a military base and dispose of unneeded property
can require expedited cleanups that may not have otherwise occurred.
The time needed to accomplish required cleanup activities can extend
many years beyond the 6 years allowed under BRAC legislation for
ceasing military operations and closing a base. The status of
cleanup activities can also affect transferring title of the property
from the federal government to others.
The Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA) of 1980 ( 42 U.S.C. 9601 et seq.) provides the
framework for responding to contamination problems. CERCLA
authorizes the federal government to respond to spills and other
releases of hazardous substances. It generally requires that the
government warrant that all remedial action necessary to protect
human health and the environment has been taken before property is
transferred by the United States to nonfederal entities, such as
communities or private parties. While CERCLA had originally
authorized property transfers to nonfederal ownership only after all
remedial action had been taken, the act was amended in 1996 to
expedite transfer of contaminated property.\7 Now such property,
under some circumstances, can be transferred to nonfederal users
before all remedial action has been taken. However, remedial action
must still be taken at some point.
Given the large amount of land being affected by the BRAC process and
the delays that could be encountered due to environmental cleanup,
the Congress included provisions in the National Defense
Authorization Act for Fiscal Year 1994 (P.L. 103-160) that were
intended to stimulate base reuse prior to property transfer. That
legislation authorized the military services to lease property to
facilitate state or local economic reuse without limiting the length
of a lease. Previous leases were subject to certain limitations,
including a term not to exceed 5 years and DOD's right to revoke the
leases at will. Although leasing property allows its reuse before
cleanup has been completed, DOD is still liable for environmental
cleanup costs.
--------------------
\7 Section 334, National Defense Authorization Act for Fiscal Year
1997 (P.L. 104-201).
VARIOUS ALTERNATIVES FOR
DISPOSING OF UNNEEDED REAL
ESTATE
-------------------------------------------------------- Chapter 1:2.2
Once property is no longer needed by a federal agency, the property
is declared excess by the agency and is offered to other federal
agencies to satisfy their requirements. Excess property that is not
selected by federal agencies is declared surplus to the federal
government. At that point, the Federal Property and Administrative
Services Act of 1949 authorizes disposal of the property through a
variety of means, including transfers to states and local governments
for public benefit purposes and negotiated or public sales.
Additionally, a 1993 amendment to the BRAC legislation states that
under certain circumstances, surplus real property can be transferred
to local redevelopment authorities under economic development
conveyances for economic development and job creation purposes. This
section enables communities to obtain property under more flexible
finance and payment terms than previously existed. For example, a
community can request property at less than fair market value if it
can show the discount is needed for economic development.
An important step for communities as they seek to recover from the
adverse effects of base closures is to organize local base reuse
authorities to interact with DOD on base closure, property disposal,
and reuse issues. As shown in figure 1.1, local reuse authorities
generally seek surplus property under one of the public benefit
transfer or economic development authorities because these can be
no-cost or no-initial cost acquisitions. If the property reuse does
not meet the requirements for these conveyances, local reuse
authorities can still pursue a negotiated sale without competing with
other interested parties. Any surplus property that remains is
available for sale to the general public.
Figure 1.1: DOD's Usual
Procedures for Transferring
Property
(See figure in printed
edition.)
Source: Our analysis.
ACCOUNTING PRECISELY FOR COSTS
AND SAVINGS IS DIFFICULT
---------------------------------------------------------- Chapter 1:3
While our previous work has shown that BRAC savings are likely to be
substantial, accounting precisely for the costs and savings of BRAC
actions is a difficult task. DOD does not have systems in place to
track and update savings. Further, some costs associated with BRAC
actions, such as federal assistance to BRAC-affected communities, are
not included in BRAC implementation budgets and are not considered
when calculating overall costs.
We have previously reported that savings from prior BRAC rounds are
expected to be substantial, although DOD has not always documented
them well or updated them on a regular basis so as to provide the
precision needed to support savings claims. Likewise, as stated in
our July 1997 report, significant net savings are likely once
up-front closure costs have been paid, although such costs have been
higher than initially estimated and have caused net savings not to be
realized as quickly as DOD projected.
The first publicly released costs and savings forecasts from BRAC
actions are the numbers typically associated with DOD's list of
proposed closures and realignments that are endorsed by the
commission. DOD's and the commissions' initial BRAC decision- making
did not include the cost of environmental restoration, in keeping
with DOD's long-standing policy of not considering such costs in its
BRAC decision-making, whereas subsequent BRAC implementation budget
estimates do. This policy is based on DOD's obligation to cleanup
contaminated sites on military bases regardless of whether they are
closed. We agree with DOD in not considering these costs in
developing its cost and savings estimates as a basis for base closure
recommendations. At the same time, we agree with DOD's position that
environmental restoration costs are a liability to it regardless of
its base closure decisions, and we have reported that these costs are
substantial. The subsequent inclusion of environmental cleanup costs
in DOD's budget has the practical effect of reducing the short-term
savings from BRAC actions and delaying the beginning of net annual
recurring savings.
We have also reported that another difficulty in precisely
determining BRAC savings is that accounting systems--not just those
in DOD--are designed to record disbursements, not savings. The
services develop savings estimates at the time they are developing
initial BRAC implementation budgets, and these are reported in DOD's
BRAC budget justifications. Because DOD's accounting systems do not
track savings, updating these estimates requires a separate data
tracking system, which DOD does not have. The lack of updates is
problematic because initial savings estimates are based on forecasted
data that can change during actual implementation, thereby increasing
or decreasing the amount of savings. We have recommended that
regardless of whether the Congress authorizes future BRAC rounds, DOD
needs to improve its periodic updating and reporting of savings
projections from prior BRAC decisions. As stated in our July 1997
report, this information has been needed to strengthen DOD's
budgeting process and ensure that correct assumptions were being made
regarding expected reductions in base operating costs, as well as to
provide greater precision to DOD's estimates of BRAC savings.
We have also noted that not all federal costs associated with
implementing base closures are included in DOD's BRAC implementation
budgets. We previously reported that various forms of federal
assistance have been made available to communities, including
planning assistance to help communities determine how they could best
develop the property, training grants to provide the workforce with
new skills, and grants to improve the infrastructure on bases. Our
1996 report stated that over $780 million in direct financial
assistance to areas affected by the 1988, 1991, and 1993 BRAC rounds
was not included in the BRAC budget.
COMMUNITY ECONOMIC IMPACT
CONCERNS ARE OF LOWER VALUE IN
THE BRAC DECISION-MAKING
PROCESS
---------------------------------------------------------- Chapter 1:4
The economic impact on communities affected by BRAC actions has been
a long-standing source of public anxiety. Because of this concern,
DOD included economic impact as one of eight criteria it used for
making BRAC recommendations in the last three BRAC rounds. While
economic impact did not play as large a role in initial BRAC
deliberations as did other criteria and was not a key decision
factor, such as military value, its importance was such that DOD
components were required to calculate the economic impact of each of
their recommendations.
For BRAC 1995, where the cumulative economic impact of prior BRAC
rounds also became a concern, we found little documentation
indicating that DOD components had eliminated potential closure or
realignment candidates from consideration for economic impact
reasons. While defense civilian job loss and other adverse effects
on communities are an inescapable byproduct of base closures, at
least in the short term, we noted in our July 1997 report that some
limited studies indicated that, in a number of BRAC-affected
communities, the local economies appeared to be able to absorb the
economic losses, though some communities were faring better than
others. To some extent, it appears that the various federal programs
and benefits provided to those communities affected by BRAC actions
helped to cushion the impact of base closures. Still unanswered were
questions about overall changes in employment and income levels in
the broad range of communities affected by BRAC actions, particularly
those in less urban areas with less diverse economic bases.
DOD'S 1998 REPORT ON BASE
CLOSURES ADDRESSED VARIOUS BRAC
ISSUES
---------------------------------------------------------- Chapter 1:5
In part, because of lingering questions about the costs and savings
generated by previous BRAC rounds, in 1997 the Congress required the
Secretary of Defense to report on the costs and savings attributable
to prior BRAC rounds and the need, if any, for additional BRAC
rounds, among other issues.\8 DOD issued its report in April 1998 and
concluded that BRAC costs were below or close to its original
estimates and that BRAC actions would save billions of dollars after
up-front costs were paid. DOD emphasized that excess capacity in its
installations warrants two additional BRAC rounds and that upkeep for
unneeded installations wastes resources needed for modernization.
DOD also reported that BRAC rounds enhanced military capabilities
primarily by enabling the services to consolidate activities and
shift funding from infrastructure support to other priorities. In
our review of DOD's report, we agreed that BRAC savings would be
substantial after up-front costs were paid but questioned the
preciseness of the estimates. We also agreed that DOD had excess
capacity at its installations, but questioned DOD's methodology for
assessing its infrastructure capacity.\9
--------------------
\8 Section 2824, National Defense Authorization Act for Fiscal Year
1998 (P.L. 105-85).
\9 The Congress required that we review DOD's report, The Report of
the Department of Defense on Base Realignment and Closure, issued in
April 1998. Our assessment is found in Military Bases: Review of
DOD's 1998 Report on Base Realignment and Closure (GAO/NSIAD-99-17,
Nov. 13, 1998).
OBJECTIVES, SCOPE, AND
METHODOLOGY
---------------------------------------------------------- Chapter 1:6
To assist the Congress should it consider the need for future BRAC
rounds in the future, we reviewed a number of important issues
associated with the prior rounds. At the request of Mr. John E.
Sununu, House of Representatives, we are providing information that
addresses (1) DOD's progress in completing action on BRAC
recommendations and transferring unneeded base property to other
users, (2) the precision of DOD's estimates of BRAC costs and
savings, (3) environmental cleanup progress and estimated associated
costs, and (4) reported trends in economic recovery in communities
affected by base closures.
COMPLETING BRAC
RECOMMENDATIONS AND
TRANSFERRING UNNEEDED
PROPERTY
-------------------------------------------------------- Chapter 1:6.1
To determine whether DOD has taken action on BRAC commissions'
recommendations as required by law, we compiled a comprehensive
listing of recommended actions included in the commissions' reports.
Because DOD reports typically focus on major closures and
realignments and it is not readily apparent what constitutes a major
action because the military services define the term differently, our
listing is as complete as possible. We compared the commissions'
recommended actions to military service and defense agency data to
determine if they were completed within a 6-year period specified by
law. We also performed a comparative analysis of the completed
actions by round and the time to complete them. To assure that we
were using the most reliable data available, we followed up to
reconcile discrepancies. While we examined the timing of the
completed actions based on March 1998 data, we did not attempt to
determine whether the specific actions taken complied with the
commissions' recommendations.
To assess DOD's progress in transferring unneeded base property to
other users, we reviewed property disposition plans as of September
30, 1997, and compared the plans with available data on actual
property transfers. We collected transfer data from the services and
defense agencies and reconciled discrepancies with data from our
prior reviews. We validated selected data by visiting several
closing bases and comparing their property records to those provided
by the services' and defense agencies' BRAC offices. The bases where
we performed work included Lowry Air Force Base, Colorado; Mather Air
Force Base, California; Mare Island Naval Shipyard, California;
Defense Distribution Depot, Ogden, Utah; Tooele Army Depot, Utah;
Cameron Station, Virginia; and Vint Hill Farms Station, Virginia.
Our visits provided us with a mix of service and defense agency BRAC
sites across various closure rounds.
PRECISION OF DOD'S BRAC COST
AND SAVINGS ESTIMATES
-------------------------------------------------------- Chapter 1:6.2
To determine to what extent DOD has routinely updated its cost and
savings estimates for BRAC actions, we relied, in part, on our prior
BRAC reports and reviewed Congressional Budget Office, DOD, DOD
Office of Inspector General, and service audit agency reports. We
also interviewed officials in the DOD Comptroller office and the BRAC
and budget offices of the military services and two defense
agencies--the Defense Logistics Agency and the Defense Information
Systems Agency--to obtain their views concerning DOD policy,
procedures, and practices for updating cost and savings estimates.
To determine how frequently these estimates were updated, we compared
estimates presented in DOD's fiscal year 1993-99 BRAC budget
submissions for the 1991, 1993, and 1995 rounds. We did not evaluate
the 1988 round because DOD and military service officials cited
numerous budget estimation difficulties with BRAC 1988 activities.
While we did not independently determine the reliability of the
budget data we used for our analysis, we did examine data included in
the services' and DOD's budget submissions to ensure that the figures
were consistent. In this regard, we found some inconsistencies and
informed appropriate officials who took corrective actions.
To assess the completeness of DOD's cost and savings estimates for
BRAC-related actions, we reviewed data included in the estimates.
Because two major cost elements--expected environmental costs beyond
2001 and certain federal agency economic assistance provided to
BRAC-affected communities--were not included in the estimates and not
used to calculate savings, we obtained available cost data for these
elements to assess their relative impact on BRAC net savings.
ENVIRONMENTAL CLEANUP
PROGRESS AND ASSOCIATED
ESTIMATED COSTS
-------------------------------------------------------- Chapter 1:6.3
To determine DOD's progress and costs associated with its
environmental work at BRAC bases, we
-- analyzed DOD documentation on environmental program initiatives
and costs;
-- met with officials from the military services, the Defense
Logistics Agency, and the Office of the Deputy Under Secretary
of Defense for Environmental Security to discuss difficulties in
cleaning BRAC bases and overall program status;
-- contacted U.S. Environmental Protection Agency officials to
obtain financial data and their views on DOD's environmental
cleanup efforts;
-- spoke with California, Colorado, and Utah environmental
regulators to obtain their views on the cleanup process; and
-- visited several BRAC bases to discuss environmental issues with
base officials and community personnel.
The bases where we performed work were Lowry Air Force Base; Mather
Air Force Base; Mare Island Naval Shipyard; Fort Ord, California;
Defense Distribution Depot, Ogden, Utah; and Tooele Army Depot.
These bases provided us a mix of service and defense agency BRAC
sites across various BRAC rounds. Some sites afforded us an
opportunity to gain insights into specific environmental issues. For
example, the Fort Ord site has extensive unexploded ordnance (UXO)
contamination, which presents a costly and challenging cleanup task
for DOD.\10
Because DOD has not developed a total environmental cost estimate for
its BRAC bases, we developed such an estimate, using available
program cost data from various DOD financial sources. We had to
reconcile discrepancies in environmental cost data in multiple DOD
documents in order to use the most reliable data for developing that
estimate. Even so, the estimate is subject to variability because of
unknowns and unresolved cleanup issues associated with UXO. To gain
a sense of the potential costs of removing UXO, we discussed the
matter with DOD and Environmental Protection Agency officials.
--------------------
\10 Ordnance that remains unexploded either through malfunction or
design can injure personnel or damage material. Types of UXO include
bombs, missiles, rockets, artillery rounds, ammunition, or mines.
TRENDS IN ECONOMIC RECOVERY
OF BRAC-AFFECTED COMMUNITIES
-------------------------------------------------------- Chapter 1:6.4
To assess the economic recovery of communities affected by base
closures and realignments, we reviewed several studies dealing with
this issue. We also (1) performed an economic assessment of
communities where more than 300 civilian jobs were eliminated in the
four closure rounds and (2) visited the surrounding communities of
six major base closures. In performing our economic assessment, we
used unemployment rates and per capita income as measures for
analyzing changes in the economic condition of affected communities.
We chose to use unemployment rates and per capita income as key
performance measures because (1) DOD used these measures in assessing
the economic condition of local areas in its economic impact analysis
for recommended BRAC locations in the closure rounds and (2) these
measures are commonly used by economists to gauge changes in the
economic health of an area over time. During our site visits, we
collected additional information to (1) enhance our understanding of
the relationship between base closures and local communities and (2)
provide a close-up of how a base closure affects individual
communities.
To establish a baseline for our economic analysis, we obtained
selected economic indicator data from the Logistics Management
Institute (LMI), a Federally Funded Research and Development Center
that maintains a database of key economic data for impact areas
surrounding base closures during the four rounds. Data obtained were
multiyear data (1988 through September 30, 1997) on total employment,
unemployment rate, total income, per capita income, and population
for local economic impact areas that experienced a base closure. The
employment data originated in the Department of Labor's Bureau of
Labor Statistics and the income and population data, which were only
available through 1995, came from the Department of Commerce's Bureau
of Economic Analysis. The economic impact areas, based on 1990
census data, were defined using accepted standard definitions for
metropolitan and nonmetropolitan statistical areas and reflected the
impact areas used in the 1995 BRAC round. The 1995 BRAC areas were
configured to reflect the residences of the majority of military and
civilian employees at an activity. LMI routinely validates data and
reconciles discrepancies as necessary. We also performed a limited
reliability assessment of the data by comparing selected data to
Bureau of Labor Statistics and Bureau of Economic Analysis data
available on those agencies' Internet sites.\11 We did not find any
discrepancies.
In analyzing the economic condition of BRAC-affected communities over
time, we compared unemployment rates and per capita incomes to
national averages for the time period encompassing the four BRAC
rounds to the present to assess if communities were below national
averages. We analyzed the data for bases closed under BRAC that had
government and contractor civilian personnel reductions of 300 or
more. While our assessment does provide an overall picture of how
these selected communities compare to other communities based on
national averages, it does not necessarily isolate the condition or
the changes in that condition that may be attributable to a BRAC
action.
In selecting sites for our visits, we sought to satisfy several
criteria: significant civilian job loss; at least one site from each
military service; geographic diversity; at least one major shipyard
or depot complex; and a mix of urban and rural sites. We focused on
1991 BRAC round sites because DOD and communities had more experience
than those in the 1988 round, and the 1993 and 1995 rounds did not
provide enough time to assess recovery. Our site visits included
Philadelphia Naval Base and Shipyard, Pennsylvania; Naval Air
Station, Chase Field, Texas; Eaker Air Force Base, Arkansas; Castle
Air Force Base, California; Fort Devens, Massachusetts; and Fort
Benjamin Harrison, Indiana. At these sites, we met with various
local officials, including business leaders and government officials,
to gain their perspective on how the closures affected their
communities and how the communities recovered. While information of
this nature reflects unique experiences and thus presents a limited
basis for drawing general conclusions about the impacts and recovery
of all communities undergoing base closures, we were able to
highlight common trends and themes.
In performing site visits, we asked local officials to discuss how
base reuse contributes to economic recovery, and some of those
discussions covered governmental assistance and the property disposal
process. We also collected data on certain federal assistance
provided to BRAC communities (see app. I). Because of data problems
and the subsequent inability to make valid projections or
generalizations, we did not track the after-closure employment status
and job quality of specific individuals who lost their jobs due to
base closures. Personnel data were generally incomplete or not
readily available at closing bases, and local employment officials
had only limited relevant data. We did, however, obtain data on the
estimated number of civilian jobs lost and actual jobs created at
major base closures and realignments for the four rounds (see app.
II).
We performed our review between August 1997 and September 1998 in
accordance with generally accepted government auditing standards. We
obtained DOD comments on a draft of this report. The comments have
been summarized in chapters 2 through 5 and are presented in their
entirety in appendix V.
--------------------
\11 When the Bureau of Labor Statistics and the Bureau of Economic
Analysis report new employment and income estimates, they also adjust
estimates for past years. The local level estimates used in this
report were obtained in January 1998 and may not exactly match
estimates available at a later date.
MOST BRAC RECOMMENDATIONS
COMPLETED, BUT TRANSFER OF
UNNEEDED BASE PROPERTY IS
PROCEEDING SLOWLY
============================================================ Chapter 2
By the end of fiscal year 1998, DOD had completed action on about 85
percent of 451 BRAC commissions' recommendations for the four BRAC
rounds.\1 The four BRAC commissions actually generated 499
recommendations; however, only 451 of these ultimately required
action because 48 were changed in some manner by recommendations of a
later commission. According to DOD documentation, all of the 1988
and 1991 round recommendations have been completed within the
statutory 6-year period. Furthermore, from the first round to the
second, the services accelerated the pace at which they completed
recommendations, from an average of just under 5-1/2 years for the
first round to just over 3 years for the second. DOD's plans to
complete remaining 1993 and 1995 round recommendations indicate that
the pace will be consistent with the 1991 round.
Despite timely completion of BRAC recommended actions, disposal of
unneeded base property is proceeding slowly. About 464,000 acres
were designated as unneeded real property at closing or realigning
locations, but, as of March 1998, only about 31 percent of the
property designated for nonfederal users had actually been
transferred by formal deed, and only 8 percent of the property
designated for federal entities had actually been transferred.\2 DOD
and service officials cited various impediments such as environmental
cleanup that extend property disposal time frames. To help ease this
situation, DOD has been using interim leasing to get usable property
to users quicker until a deed transfer can be issued. Nonetheless,
DOD has much to do before it completes the transfer of its unneeded
property.
--------------------
\1 A BRAC recommendation is considered completed when all activities
relating to an installation's or activity's operational mission have
ceased or been relocated. After completion, a caretaker work force
may remain to bridge the period between operational closure and
actual property disposal.
\2 These figures exclude property vacated by a military service's
active component but set aside for use by reserve components within
that service. Data for these types of property reuse are not readily
available and not maintained centrally within DOD.
MOST RECOMMENDED BRAC ACTIONS
ARE COMPLETE
---------------------------------------------------------- Chapter 2:1
DOD has typically reported to the Congress on its progress in
implementing BRAC actions that the services have defined as major.
According to a DOD official, DOD has completed 77 of 152 major
recommendations. However, what constitutes a major or minor
recommendation is not always apparent because the services define
these terms differently. We analyzed all BRAC commissions'
recommendations directed to the military departments and defense
agencies.\3 Our count of 499 recommendations is based on the BRAC
commissions' reports, which are somewhat arbitrary in the way they
enumerate recommendations. For example, a closure or a realignment
in which several missions are disestablished or relocated may count
as one recommendation or several. The types of recommendations are
shown in figure 2.1.
Figure 2.1: BRAC
Recommendations by Round and
Type
(See figure in printed
edition.)
Source: BRAC commission reports for the four rounds.
Overall, according to DOD data, 383, or about 85 percent, of 451
recommendations were completed as of September 30, 1998, including
all recommendations associated with the 1988 and 1991 rounds; 68
actions remain in process.\4 For the 1993 and 1995 rounds, the
completion rates were 87 and 60 percent, respectively, at that time.
Further, DOD reported completing recommendations within mandated time
frames. The statutory completion dates for the four rounds were
September 30, 1995, July 11, 1997, July 2, 1999, and July 13, 2001,
respectively. Our review showed 1988 and 1991 round recommendations
were completed within the required time frames. DOD's schedule for
the 1993 and 1995 rounds also anticipates completion within mandated
time frames.
According to DOD, the sooner a BRAC recommendation is completed, the
faster savings can begin to materialize and unneeded property can be
transferred to users who can benefit by putting the property to
alternative use. We agree that recurring savings could begin to
accrue earlier and the property disposal process could be underway
earlier to the extent that military operations at a closing base can
be terminated earlier than expected. The average time required to
complete a BRAC recommendation has been shortened in all rounds since
the 1988 round, which took an average of nearly 5-1/2 years to
complete. As a result, the subsequent rounds were over two-thirds
complete after 3 years. Service officials generally attributed the
faster completion rate to lessons learned during the first round.
However, they added that implementation of individual recommendations
could be slowed by unavailability of funds or complexity of actions
required to construct new facilities and move organizations and
units. The cumulative pace of completion for each round and the
average completion pace for all four rounds are shown in figure 2.2.
Figure 2.2: Pace of Completing
Recommendations by Round
(See figure in printed
edition.)
Note: The completion rates for years five and six of the 1993 round
and years three through six of the 1995 round are DOD's estimates.
Source: Our analysis of DOD data.
--------------------
\3 The recommendations included closures, realignments,
disestablishments, relocations, and redirections. In a closure, all
missions carried at a base either cease or relocate (although some
property may be retained for new purposes), while in a realignment, a
base remains open but loses and sometimes gains missions.
Disestablishments and relocations refer to missions; those
disestablished cease operations, while those relocated are moved to
another base. Redirection refers to cases in which a BRAC commission
changes the recommendation of a previous commission.
\4 As noted previously, only 451 of the 499 BRAC commissions'
recommendations ultimately required action primarily because 48 were
changed by a later commission.
RECIPIENTS HAVE BEEN IDENTIFIED
FOR MOST UNNEEDED REAL
PROPERTY, BUT TRANSFERS ARE
PROCEEDING SLOWLY
---------------------------------------------------------- Chapter 2:2
BRAC-affected installations contained about 464,000 acres that the
individual military services and components did not need. Property
disposition has been decided for about 79 percent of this acreage.
Plans indicate that federal entities, including DOD activities, are
the largest recipient of this property. As of September 30, 1997, 46
percent, or about 213,000 acres, of the unneeded BRAC property was to
be retained by the federal government; 33 percent, or about 154,000
acres, was slated for nonfederal users such as state and local
authorities or private parties; and the disposition of 21 percent, or
about 98,000 acres had not yet been determined. However, only about
8 and 31 percent of the property designated for federal and
nonfederal recipients, respectively, had been transferred.
DOD officials cited various factors that affect property disposal.
These factors include the iterative process of preparing
site-specific reuse plans, environmental cleanup, preparing
conveyance documentation, and, in some cases, communities' delays in
assuming responsibility for the property. To get more property to
users faster, DOD has been leasing property for several years,
pending transfer of title.
PLANNED DISPOSITION OF
UNNEEDED PROPERTY
-------------------------------------------------------- Chapter 2:2.1
As shown in figure 2.3, DOD data indicate that a substantial portion
of BRAC acreage will be retained by DOD or transferred to other
federal agencies.
Figure 2.3: Planned
Disposition of Unneeded
Property
(See figure in printed
edition.)
Source: Our analysis of DOD data.
Most of the property to be retained by the federal government is to
go to the Fish and Wildlife Service, Department of the Interior, for
use as wildlife habitats (see fig. 2.4). Other federal agencies,
such as the National Park Service, the Federal Aviation
Administration, and the Department of Veterans Affairs, are also to
receive property. Further, DOD intends to retain property for, among
other things, administrative space for the Defense Finance and
Accounting Service. As previously noted, DOD is actually retaining
more property than this because, in many cases during the BRAC
process, the property of an active military service base was turned
over to a reserve component without being declared excess; such
actions would not be displayed in the figure. In particular,
available DOD data indicate that over 330,000 acres of BRAC property
are being retained for use by the reserve components. About 324,000
acres of this amount are attributable to five Army BRAC 1995 round
bases--Fort Hunter Liggett, California; Fort Chaffee, Arkansas; Fort
Pickett, Virginia, Fort Dix, New Jersey; and Fort McClellan, Alabama.
Figure 2.4: Planned
Disposition of Federally
Retained Property
(See figure in printed
edition.)
Note: In addition to the acreage shown in the figure, DOD is
retaining over 330,000 acres at its closing and realigning bases for
reserve component use. This acreage was not formally classified as
excess; thus, it is not displayed.
Source: Our analysis of DOD data.
In transferring property to nonfederal entities, several conveyance
methods--public benefit transfers, economic development conveyances,
and sales--are used (see fig. 2.5). Through public benefit
transfers, property can usually be obtained at no cost for public
benefit purposes such as airports, parks and recreation, education,
and homeless assistance. Through economic development conveyances,
property can usually be obtained at no-cost or no-initial cost for
economic development and job creation purposes. To use this
authority, however, a nonfederal entity must show that economic
development and job creation cannot be accomplished under established
sales or public benefit transfers.
Finally, property can be sold. Our work at seven BRAC sites showed
the various forms of property conveyance the communities were using
to obtain property. Appendix III provides a summary of the status of
property disposition at these sites.
In the early years of BRAC, DOD was projecting higher revenue from
land sales than it is now experiencing. DOD originally projected
about
$4.7 billion in revenue from such sales for the four closure rounds;
however, according to the fiscal year 1999 budget, total expected
sales are about $122 million for those rounds. The decrease in sales
is attributable primarily to national policy changes and legislation
that emphasize assisting communities that are losing bases.
Figure 2.5: Planned Nonfederal
Transfers
(See figure in printed
edition.)
Source: Our analysis of DOD data.
MOST UNNEEDED PROPERTY
AWAITS FINAL DISPOSITION
-------------------------------------------------------- Chapter 2:2.2
While DOD has plans for transferring most of its unneeded property,
actual transfers are much less than planned. Overall, DOD data
indicate that about 14 percent, or about 64,000 acres, of the 464,000
acres of unneeded property has been transferred to federal or
nonfederal entities. Specifically, about 17,000 acres have been
transferred to federal entities and about 47,000 acres have been
transferred to nonfederal entities. Excluding that property for
which no plans have been established for final disposition, DOD has
reportedly transferred about 8 percent of the property to federal
entities and about 31 percent of the property to nonfederal entities.
Progress in transferring title of BRAC property to users is slowed by
many factors. Planning for reuse can be a lengthy process and many
actions must precede disposition. For example, the Defense Base
Closure and Realignment Act of 1990, as amended, requires the
Secretary of Defense to consult with local authorities about their
plans before transferring former military property. The law also
states that the Secretaries of Defense and of Housing and Urban
Development must review and approve the reuse plan of a local
redevelopment authority before DOD can transfer property to assist
the homeless. In addition, DOD guidelines require that a
redevelopment authority complete a reuse plan before DOD can transfer
property for economic redevelopment and job creation purposes.
Furthermore, the need to address environmental contamination can also
delay final disposition. (See ch. 4 for a discussion of
environmental laws and regulations and other environmental issues.)
Finally, according to DOD officials, some communities are not
prepared to assume responsibility for control of unneeded base
property. Specifically, communities need to, among other things,
establish an organization to administer prospective property,
determine uses, and arrange for financing for providing for property
protection, maintenance, and improvements.
LEASING ALLOWS PROPERTY
REUSE PENDING TRANSFER
-------------------------------------------------------- Chapter 2:2.3
While awaiting property transfers, communities can sometimes begin
using base property through interim leasing. Military service
leasing policies and practices provide opportunities for communities
to lease property before environmental cleanup and final disposal are
complete, then find tenants to sublease it. According to community
representatives, leasing is a useful interim measure to promote reuse
and job creation. It can also help DOD gain an advantage as the
community assumes responsibility and pays for protecting and
maintaining the property.
Interim leasing may not always be viable, however. Prospective
tenants may experience financing difficulties or are sometimes
reluctant to sublease property while DOD retains title. For example,
DOD and community officials told us that tenants may have difficulty
obtaining financing for redevelopment because banks are disinclined
to lend money under these circumstances. Also, since much of the
property under consideration has remaining environmental
contamination, there are liability issues to be addressed, and
tenants are reluctant to lease until these are resolved.
The services do not centrally maintain leasing information and could
not readily provide comprehensive data. However, service data we
were able to obtain indicated that during the second quarter of
fiscal year 1998, nearly 38,000 acres, or 8 percent of the unneeded
BRAC acreage, were operating under some type of lease. According to
these data, about 25 percent of the property planned for nonfederal
recipients and awaiting transfer was under interim leases.
Three of the sites where we performed work on property disposal (see
app. III) were using leases while actions for final disposal
progressed. The conditions we noted regarding leases are summarized
below:
-- At the former Mather Air Force Base, California, about 93
percent of the property requested under an economic development
conveyance is operated under an interim lease. The remaining
property under this conveyance has already been deeded, although
a portion of the property devoted to family housing has been
vacant since the base closed in 1993 and has increasingly
deteriorated as negotiations continued between the Air Force and
the community over property transfer. Agreement was recently
reached for a negotiated sale of the property. Also, the
airport property is under a 55-year lease to Sacramento County,
California, pending a public benefit conveyance.
-- At the former Vint Hill Farms Station, Virginia, the Army has
approved several interim leases and is planning an additional
lease to support development of a golf course.
-- At the former Mare Island Naval Shipyard, California, the Navy
and the local reuse authority have entered into a short-term
lease for about 48 percent of the property requested under an
economic development conveyance. As of July 1998, the local
authority had 58 subleases that covered over 178 acres of land
and buildings.
CONCLUSIONS
---------------------------------------------------------- Chapter 2:3
DOD has reportedly completed most of the commissions' recommendations
and accelerated the pace of completion since the 1988 round. Those
recommendations that remain outstanding are generally attributable to
the 1993 and 1995 rounds, and DOD's plans call for closing them out
within required time frames. However, the actual transfer of
unneeded base property has been slow due to a variety of factors.
Activities and rules governing the disposition process, while
designed to ensure that all requirements of applicable laws and
regulations are met, contribute to the slow rate of progress. This
situation has been somewhat eased by the use of leases. Nonetheless,
DOD has much to do before it completes its task of transferring
remaining BRAC property it no longer needs.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 2:4
DOD stated that its goal in property disposal is to convey property
as quickly as possible to advance both the local communities'
economic recovery and to accelerate DOD savings by eliminating costs
associated with maintaining the property. However, DOD acknowledged
that property transfer is a complex process involving many
challenges, including time needed to clean up BRAC property. In this
regard, DOD stated it supports a variety of initiatives to
accelerate, refine, or simplify the process.
BRAC SAVINGS ESTIMATES ARE NOT
ROUTINELY UPDATED, BUT EVIDENCE
POINTS TO SUBSTANTIAL SAVINGS
============================================================ Chapter 3
Through 2001, DOD estimates it will achieve a net savings\1 of about
$14 billion as a result of BRAC actions. Beyond 2001, DOD expects to
save about $5.7 billion annually.\2
Because DOD is relying on BRAC savings to help free up funds for
future defense programs, such as weapons modernization, and has
adjusted its prospective budgets to reflect savings, it is important
that savings estimates be adjusted to reflect experience. The
services have updated costs annually, but they have not routinely
updated savings. The lack of current data on savings raises doubts
about the precision of net savings estimates, and estimates should be
considered a rough order of magnitude.
In addition, DOD cost estimates exclude two categories of
closure-related costs. First, one-time costs of over $1 billion in
federal financial assistance provided to communities affected by BRAC
actions are excluded. While these costs are incurred by the federal
government, they are not funded through BRAC budget accounts.
Second, DOD has not included estimated costs of at least $2.4 billion
to complete environmental cleanup at BRAC bases for its annual
savings projections beyond 2001. Including these costs would reduce
overall savings and delay the point at which net savings begin, even
though the impact is relatively small. Despite these omissions and
the lack of current savings data, our prior work and the work of
others, such as the DOD Inspector General, indicate that BRAC net
annual savings will be substantial once implementation costs have
been offset.
--------------------
\1 The term savings includes costs avoided, such as planned military
construction projects that are canceled due to BRAC actions, and
reductions in operating costs, such as the reduction of civilian or
military personnel positions that recur for an indefinite time.
\2 DOD reports the expected annual savings at $5.6 billion, but
because recurring savings estimates for the Navy were underreported
by $100 million in the fiscal year 1999 budget request, the savings
estimate should be $5.7 billion.
DOD EXPECTS SUBSTANTIAL SAVINGS
FROM BRAC
---------------------------------------------------------- Chapter 3:1
DOD expects that the four BRAC rounds will cumulatively result in
substantial net savings through 2001 and in additional ongoing
recurring savings after that time. DOD expects one-time costs of
about $23 billion for the period of 1990 through 2001, while
achieving total savings of almost $37 billion, resulting in net
savings of about $14 billion (see fig. 3.1).\3 As shown in the
figure, DOD reports that cumulative BRAC savings are expected to
surpass cumulative BRAC costs for the first time in fiscal year 1998.
If community assistance costs of over $1 billion are considered as a
BRAC cost and included in the costs and savings calculations, the
breakeven point for costs and savings would occur later in fiscal
year 1998.
Figure 3.1: BRAC Costs and
Savings for 1990 Through 2001
(See figure in printed
edition.)
Source: Our analysis of DOD data.
BRAC costs and savings differ by round because of variations in the
number and scope of closures and realignments in each round. The
BRAC 1991 round is the only one where DOD expects to achieve a net
savings during the 6-year implementation period; after the
implementation periods, however, DOD expects substantial recurring
savings for all BRAC rounds. The highest costs occurred in the BRAC
1993 round, but this round also accounted for the highest level of
estimated recurring net annual savings. The lowest costs occurred in
the BRAC 1988 round, but this round is expected to produce the lowest
annual estimated recurring savings. For the 6-year implementation
periods for the rounds, total estimated costs are slightly higher
than total estimated savings; however, following 2001, DOD estimates
annual recurring savings of $5.7 billion (see table 3.1).
Table 3.1
BRAC Estimated Costs and Savings by
Round Through 2001
(Dollars in billions)
Implementation period
estimates\a
--------------------------
Net Total
annual savings Net savings
6-year Saving recurring through through
Round period Costs\ s savings\b 2001\c 2001\d
------------ ---------- ------ ------ ---------- ------------ ------------
BRAC 1988 1990-1995 $2.7 $2.4 $0.8 $6.9 $4.2
BRAC 1991 1992-1997 5.2 6.4 1.5 12.4 7.2
BRAC 1993 1994-1999 7.7 7.5 2.1 11.7 4.0
BRAC 1995 1996-2001 7.3 5.9 1.3 5.9 (1.4)
================================================================================
Total $22.9 $22.2 $5.7 $36.9 $14.0\d
--------------------------------------------------------------------------------
Note: Amounts presented are current-year dollars consistent with
DOD's budget submissions; totals may not add due to rounding.
\a Implementation period estimates are the one-time BRAC costs and
savings for the 6-year period authorized to complete a BRAC action.
The cost estimates are less any revenues from the sale of unneeded
base property.
\b Net annual recurring savings start the year after completion of
the round and are usually based on estimated savings during the last
implementation year for each round.
\c Total savings through 2001 consist of 6-year implementation period
savings plus recurring savings for each year after the end of a round
through 2001. For example, BRAC 1991 total savings of $12.4 billion
through 2001 consist of $6.4 billion in savings during the
implementation period and $6 billion in recurring savings for the
years 1998 through 2001 ($1.5 billion for
4 years).
\d Net savings through 2001 consist of total savings through 2001,
less the costs incurred through 2001.
Source: DOD fiscal year 1999 BRAC budget submission.
--------------------
\3 The Congress recognized that an up-front investment was necessary
to achieve savings and established two Base Closure Accounts to fund
certain implementation or one-time costs. The initial account funds
1988 round actions while the second account funds the 1991, 1993, and
1995 rounds.
DOD'S DEVELOPMENT OF COST
AND SAVINGS ESTIMATES
-------------------------------------------------------- Chapter 3:1.1
Potential costs and savings of a BRAC action were factors the BRAC
commissions considered in recommending which bases to realign and
close. DOD developed initial cost and savings estimates by using its
Cost of Base Realignment Actions (COBRA) model, to compare various
alternative BRAC actions. While COBRA was useful in the
decision-making process, it was not intended to produce data for
developing specific cost and savings estimates for any particular
action that was to be implemented. After BRAC decisions were
finalized, DOD intended to replace the COBRA estimates with more
refined estimates for submission in its annual budgets to the
Congress. Starting in fiscal year 1993, DOD was required to update
these estimates on an annual basis in its budget submissions.
The COBRA model consists of a set of formulas that incorporate
standard factors, such as moving and construction costs, as well as
base-specific data, such as average salaries and overhead cost
computations. It incorporates data pertaining to three major cost
elements--the current cost of operations, the cost of operations
after a BRAC action, and the cost of implementing the action. In our
analyses of the BRAC commissions' recommendations for the four BRAC
rounds, we found and reported on various problems with COBRA.\4
Improvements were made to the model after each BRAC round. In our
review of the 1995 BRAC round, we stated that COBRA estimates are
only a starting point for preparing BRAC implementation budgets and
that COBRA is a comparative tool, rather than a precise indicator of
budget costs and savings. DOD agrees that COBRA provides a
methodology for consistently estimating costs and savings for
alternative closure options but that it is not intended to be used in
its budget submissions.
DOD submits costs and savings estimates for BRAC actions with its
annual budget. COBRA estimates were a starting point for the
military services in preparing initial BRAC implementation budgets.
BRAC legislation, supplemented by DOD Financial Management
Regulations, requires that for fiscal year 1993 and thereafter, DOD
submit annual schedules estimating BRAC cost and savings, as well as
the period during which savings are to be achieved. DOD components
are required to prepare budget justification books for each BRAC
commissions' recommendations with narrative and financial summary
exhibits. Each service is also required to prepare a cost and
savings exhibit for each base closure package, showing one-time
implementation costs, anticipated revenues from land sales, and
expected savings.\5 The projected BRAC costs and savings are reported
in the budget for the 6-year implementation period for each round.
The Congress uses these estimates in appropriating funds annually for
BRAC actions.
Data developed for the budget submissions differ from those in COBRA
for a variety of reasons, including the following:
-- Some factors in COBRA estimates are averages, whereas budget
data are more specific.
-- COBRA costs are expressed in constant-year dollars; budgets are
expressed in inflated dollars.
-- Environmental restoration costs are not included in COBRA
estimates, but these costs are included in BRAC implementation
budgets.
-- COBRA estimates show costs and savings pertinent to a given
installation even if multiple tenants are involved; BRAC
implementation budgets represent only a single component's
costs.
--------------------
\4 Military Bases: An Analysis of the Commission's Realignment and
Closure Recommendations (GAO/NSIAD-90-42, Nov. 29, 1989), Military
Bases: Observations on the Analyses Supporting Proposed Closures and
Realignments (GAO/NSIAD-91-224, May 15, 1991), Military Bases:
Analysis of DOD's Recommendations and Selection Process for Closures
and Realignments (GAO/NSIAD-93-173, Apr. 15, 1993), and Military
Bases: Analysis of DOD's 1995 Process and Recommendations for
Closure and Realignment (GAO/NSIAD-95-133, Apr. 14, 1995).
\5 One-time costs, less any estimated land sale revenues, constitute
the BRAC budget request. Some costs resulting from implementing BRAC
actions are not authorized funding from the Base Closure Account and
are funded by other appropriations. Savings may be one-time or
recurring. One-time savings are cost avoidances or revenue gains
that result from BRAC actions, while recurring savings are reductions
in operating costs at BRAC sites that continue for an indefinite
period.
BRAC SAVINGS ESTIMATES ARE
APPLIED TO FUTURE DOD
BUDGETS
-------------------------------------------------------- Chapter 3:1.2
Accurately gauging BRAC savings is important because DOD is depending
on them to help fund future defense programs, such as weapons
modernization. To the extent that the savings are greater than
estimated, DOD could have more resources for future programs than
needed while the opposite would hold true if the savings are less
than estimated. DOD and service BRAC officials stated that estimated
BRAC savings are applied to future annual budgets formally in the
budget process. Estimated amounts of net savings projected at the
beginning of a BRAC round are subtracted from the expected future
cost of each service's plans in DOD's Future Years Defense Program
(FYDP).\6
These early estimates, according to DOD and service officials, are
generally not updated for more current estimates of savings.
Further, the services have discretion in how they apply the estimated
savings. DOD officials told us, for example, that the Army
distributes savings across a number of different budgetary accounts,
while the Navy applies savings as a lump sum against future budget
authority. We could not confirm that all BRAC savings estimates were
applied to future budgets because they may be combined with savings
from other initiatives or, as in the Army's case, distributed as
small amounts across many accounts.
--------------------
\6 The FYDP is an authoritative record of current and projected force
structure, costs, and personnel levels approved by the Secretary of
Defense. The 1998 FYDP supported the President's fiscal year 1998
budget and included budget estimates for fiscal years 1998-2003.
BRAC COST ESTIMATES ARE REVISED
ANNUALLY, BUT SAVINGS ESTIMATES
ARE UPDATED INFREQUENTLY
---------------------------------------------------------- Chapter 3:2
While DOD and its components have emphasized the importance of
accurate and current cost estimates for their annual BRAC budgets,
the military services have not placed a priority on updating BRAC
savings estimates. DOD has consistently updated BRAC costs in its
annual budget; however, the services seldom update estimates of BRAC
savings and do not change savings estimates to reflect actual
savings. Among the reasons savings estimates are not updated are
that DOD's accounting system, or other accounting systems, is not
designed to track savings and that updating savings has not been a
high priority.
For BRAC 1991, 1993, and 1995 round budget submissions, the military
components reviewed and revised their total cost estimates for base
closures and realignments annually.\7 The components provide guidance
to their major commands and/or installations detailing instructions
for supporting BRAC costs included in budget submissions. Each
service's estimated costs in the budget requests showed annual
changes of varying size. Costs for two defense agencies--the Defense
Logistics Agency and the Defense Information Systems Agency--did not
change in some years, but agency officials told us that the costs
were carefully evaluated during the budget process. We did not
verify the accuracy of the estimates; however, the DOD Inspector
General, in a BRAC 1993 audit of costs and savings, noted that DOD
has a reasonably effective process for updating BRAC cost estimates.
In contrast, savings updates were infrequent. Although our review
showed the Defense Logistics Agency and the Defense Information
Systems Agency updated savings projections annually, the services
have seldom revised savings estimates, despite requirements to do so.
The BRAC 1990 legislation required that, for fiscal year 1993 and
thereafter, DOD submit annual schedules estimating the cost and
savings of each BRAC action. In 1996, DOD provided additional budget
guidance to the military components, requiring that savings estimates
be based on the best projection of the savings that would actually
accrue from approved realignments and closures. DOD Defense Planning
Guidance issued that year stated that, as a matter of general policy,
the military components should track actual BRAC savings and compare
them with projected savings.
The Air Force has not updated its savings estimates, and the Army and
the Navy have rarely done so. For the 1991, 1993, and 1995 BRAC
rounds, each service had 11 opportunities in its annual budget
submissions to update savings estimates for one round or another--for
a total of 33 opportunities. Altogether, they submitted a total of
seven updates. The Navy updated savings in four budget submissions
and the Army updated savings in three submissions.
In addition to not updating its savings estimates, the Air Force did
not refine its initial COBRA estimates for its annual budget
submissions. The Air Force's budget estimates consist of COBRA data,
with adjustments for inflation and recurring cost increases at
gaining installations. Air Force officials stated that its BRAC
office never instructed major commands to update savings estimates.
They stated that at the beginning, the Air Force decided not to
update savings estimates because there was no accounting system to
track savings changes and no resources to create one. These
officials agreed that COBRA estimates are broad estimates that may
differ from actual savings.
In contrast, the Navy refined COBRA estimates for its budget
submission at the start of each round. Thereafter, according to Navy
officials, it was Navy policy to update savings only when major BRAC
changes occurred that could affect overall savings. For example, the
Navy's 1998 budget submission for the 1995 round showed increased
savings over the prior year's submission. Specifically, Navy
officials stated that the decisions to privatize workloads at the
Naval Air Warfare Center at Indianapolis, Indiana, and the Naval
Surface Warfare Center at Louisville, Kentucky, instead of closing
them and transferring some jobs to other locations, resulted in
greater savings estimates at both locations. These centers were the
only 1995 round installations for which the Navy updated the savings
estimates; savings for other locations were neither reviewed nor
revised. However, we believe the revised savings estimates for these
two locations may be overstated because our previous reviews of BRAC
actions involving privatization have questioned the
cost-effectiveness and whether it reduces excess capacity.\8 In
particular, our 1996 report on the Navy's Naval Surface Warfare
Center in Louisville showed that the plan for privatizing workloads
in place will not reduce excess capacity in the remaining depots or
the private sector and may prove more costly than transferring the
work to other depots.\9
Like the Navy, the Army revised COBRA savings estimates to more
precise estimates based on its BRAC implementation plans but, until
recently, had not instructed commands to annually update initial
savings estimates. Acting on Army Audit Agency recommendations, the
Army updated its savings estimates for selected BRAC 1995 actions in
the fiscal year 1999 budget.\10 The Army Audit Agency reviewed costs
incurred and avoided at 10 BRAC 1995 closures and developed revised
savings estimates. In August 1997, the Army BRAC office instructed
major commands to incorporate these revised savings estimates in the
1999 budget request and to update estimates annually in future
budgets. The Army, however, did not review or revise savings
estimates for any installations that were not included in the Army
Audit Agency review.
Officials cited a number of reasons for not routinely updating
savings estimates. BRAC officials told us that the emphasis in
preparing the annual budget has always been to update costs--not
savings. Service officials stated that updating savings estimates
would be very labor intensive and costly and that a fundamental
limitation in updating savings is the lack of an accounting system
that can track savings. Like other accounting systems, DOD's system
is oriented toward tracking cost-related transactions, such as
obligations and expenditures. In addition, as we reported in July
1997, some DOD and service officials stated that the possibility that
the components' appropriations would be reduced by the amount of
savings gives them a disincentive to separately track savings.
--------------------
\7 Because the requirement to update cost and savings estimates was
not effective until fiscal year 1993, we did not evaluate costs and
savings estimates for the 1988 round. To determine the frequency of
cost and savings estimate updates, we reviewed annual budget
submissions for the other BRAC rounds as follows: BRAC 1991, 6 years
(1993-1998); BRAC 1993, 5 years (1995-1999); and BRAC 1995, 3 years
(1997-1999).
\8 Air Force Depot Maintenance: Privatization-in-Place Plans Are
Costly While Excess Capacity Exists (GAO/NSIAD-97-13, Dec. 31,
1996).
\9 Navy Depot Maintenance: Cost and Savings Issues Related to
Privatizing-in-Place at the Louisville, Kentucky, Depot
(GAO/NSIAD-96-202, Sept. 18, 1996).
\10 Base Realignment and Closure 1995 Savings Estimates, U.S. Army
Audit Agency, Audit Report
AA 97-225, July 31, 1997.
NET SAVINGS ESTIMATES EXCLUDE
SOME COSTS
---------------------------------------------------------- Chapter 3:3
BRAC net savings estimates consist of a comparison of BRAC
expenditures with anticipated savings, but they exclude some
BRAC-related costs. First, expected environmental cleanup costs of
at least $2.4 billion after 2001 are not included in annual recurring
savings estimates. (See ch. 4 for a discussion of DOD's
environmental program for BRAC bases). Second, BRAC-related economic
assistance costs, much of which are funded through agencies other
than DOD, are not included in the calculation of one-time
implementation savings. We identified about $1.1 billion that was
provided in assistance for purposes such as base reuse planning,
airport planning, job training, infrastructure improvements, and
community economic development.\11
-- About $334 million was provided by the Department of Commerce's
Economic Development Administration to assist communities with
infrastructure improvements, building demolition, and revolving
fund loans.
-- About $271 million was provided by the Federal Aviation
Administration to assist with converting military airfields to
civilian use.\12
-- About $210 million was provided by the Department of Labor to
help communities retrain workers who have lost their jobs
because of closures.
-- About $231 million was provided by DOD's Office of Economic
Adjustment to help communities plan the reuse of BRAC bases.
-- About $90 million in unemployment compensation was provided for
employees who lost jobs during the four BRAC rounds. According
to DOD, data were not available to provide base-by-base
estimates for this cost.
--------------------
\11 Economic Development Administration costs cover fiscal years 1992
through 1997. Federal Aviation Administration costs cover fiscal
years 1991 through 1997. Department of Labor costs cover from
July 1, 1991, through September 30, 1997. DOD's Office of Economic
Adjustment costs cover fiscal year 1988 through February 17, 1998.
\12 Some consider this more of an investment in the national airport
system than a BRAC cost.
DESPITE ESTIMATION
DIFFICULTIES, BRAC SAVINGS
SHOULD BE SUBSTANTIAL
---------------------------------------------------------- Chapter 3:4
Despite the imprecision associated with DOD's cost and savings
estimates, our analysis continues to show that BRAC actions will
result in substantial long-term savings after the costs of closing
and realigning bases are incurred. For example, we reported in April
1996 that overall base support costs for DOD had been reduced,
although DOD's reporting system could not indicate how much of the
reduction was due to BRAC and how much was due to force structure or
other changes.\13 We found that by fiscal
year 1997, DOD had expected to reduce annual base support costs by
$11.5 billion annually from a fiscal year 1988 baseline, resulting in
a cumulative reduction over the period of about $59 billion.
In addition, an Army Audit Agency audit concluded that BRAC actions
would result in overall savings, although savings estimates were not
precise. In its July 1997 report, the Army Audit Agency concluded
that savings would be substantial after full implementation for the
10 BRAC 1995 sites it had examined but that annual recurring savings
beyond the implementation period were 16 percent less than the major
commands' estimates.
DOD Inspector General audits have also concluded that savings
estimates will be substantial. The Inspector General's report on
bases closed during BRAC 1993 stated that for the implementation
period, savings will overtake costs sooner than expected.\14 DOD's
original budget estimate for the 1993 round indicated costs of $8.3
billion and savings of $7.4 billion for a net cost of $900 million.
The Inspector General's audit showed that the costs were closer to
$6.8 billion and that savings could approach $9.2 billion, which
would result in up to $2.4 billion in net savings. The report
indicated that the greater savings were due to factors such as
obligations for one-time implementation costs (which were never
adjusted to reflect actual disbursements), canceled military
construction projects, and less of an increase in overhead costs than
originally projected at a base receiving work from a closing base.
Additionally, some undefined portion of the savings included
personnel reductions that could not be solely attributed to BRAC.
The Inspector General's audit of selected BRAC 1995 closures showed
variation between budget estimates and implementation experience.\15
The audit of 23 closed bases noted savings during the implementation
period were within 1.4 percent and costs were within 4.3 percent of
budget estimates. However, the audit excluded costs and savings from
two activities--the Naval Air Warfare Center in Indianapolis and the
Naval Surface Warfare Center in Louisville--that were
privatized-in-place. However, our prior reviews have raise
cost-effectiveness questions about privatization-in-place efforts.
As noted previously, our 1996 report on the Navy's Louisville
activity showed that the plan for privatizing workloads may prove
more costly than transferring the work to other depots having
underutilized capacity.
--------------------
\13 Military Bases: Closure and Realignment Savings Are Significant,
but Not Easily Quantified (GAO/NSIAD-96-67, Apr. 8, 1996).
\14 Costs and Savings for 1993 Defense Base Realignments and
Closures, Office of the Inspector General, Department of Defense,
Report No. 98-130, May 6, 1998.
\15 Analysis of the 1995 Defense Bases Realignment and Closure (BRAC)
Costs and Savings, Memorandum for Deputy Under Secretary of Defense
(Industrial Affairs and Installations), Inspector General, Department
of Defense, March 20, 1998.
CONCLUSIONS
---------------------------------------------------------- Chapter 3:5
DOD is depending on BRAC savings to help fund future defense
programs. Although evidence indicates that BRAC savings should be
substantial, savings estimates have not been routinely updated and
certain costs are not considered in developing estimates, thereby
calling into question the degree of precision that is associated with
the expected savings. To the extent that actual BRAC savings differ
from the estimated amounts applied to future budgets, DOD either will
have to seek additional funds for programs it hoped to fund with BRAC
savings in the future or may have more funds available than
anticipated.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 3:6
DOD concurred with our conclusion that BRAC savings will be
substantial once implementation costs have been offset. DOD
acknowledged that savings estimates are important because they help
measure the value of the BRAC process. However, DOD stated that such
estimates are difficult to track and update, and that it does not
maintain a separate system to account precisely for savings.
Nonetheless, DOD stated it is taking measures to improve the accuracy
of its savings estimates. For example, DOD cited that the DOD
Comptroller, in a May 1998 memorandum to the military services, had
reiterated the requirement to update savings estimates in annual
budget submissions as much as practical.
ENVIRONMENTAL CLEANUP IS
PROGRESSING, BUT IT IS COSTLY AND
TIME-CONSUMING
============================================================ Chapter 4
The process of making BRAC property available for transfer and reuse
involves cleaning up environmental contamination resulting from years
of military operations. While DOD had an environmental program at
its military bases prior to BRAC 1988, the onset of realignments and
closures and the desire to cease operations and transfer property as
quickly as possible have heightened the interest in environmental
cleanup. Addressing environmental problems has proven to be both
costly and challenging for DOD. Although DOD has not compiled a
total cost estimate, available DOD data indicate that BRAC
environmental costs are likely to exceed $9 billion, of which at
least $2.4 billion is needed to continue restoration after the BRAC
implementation authority expires in fiscal
year 2001. Cleanup is expected to continue many years beyond that
time and the potential for higher costs exists, given uncertainties
associated with the extent of cleanup of UXO and monitoring of
cleanup remedies needed at selected sites.\1
In the early years of the BRAC program, much of the emphasis was on
site studies and investigations. Now, DOD has reported that, with
much of that investigative work completed, the program's emphasis has
shifted to actual cleanup. To expedite cleanup and help promote the
transfer of BRAC property, DOD established the Fast-Track Cleanup
program in fiscal
year 1993 to remove needless delays in the cleanup process while
protecting human health and the environment. Most of the key
provisions of the program have been met. Further, DOD, the services,
and regulators generally agree that the program has contributed to
environmental program progress. However, while some of the steps
leading to actual cleanups have been accelerated, actual cleanups can
still be lengthy and projections for completing cleanups extend well
into the next century.
--------------------
\1 UXO is unexploded ordnance. It is ordnance that remains
unexploded either through malfunction or design and can injure
personnel or damage material. Types of UXO include bombs, missiles,
rockets, artillery rounds, ammunition, or mines.
BRAC ENVIRONMENTAL PROGRAM IS
COMPLEX AND COSTLY
---------------------------------------------------------- Chapter 4:1
The BRAC environmental program involves restoring contaminated sites
to meet property transfer requirements and ensuring that the property
is in compliance with federal and state regulations. The program
consists of restoration, closure-related compliance, and program
planning and support activities. Restoration activities involve the
cleanup of contamination caused by past disposal practices, which
were accepted at the time but which have proved damaging to the
environment. Compliance activities ensure that closing bases clean
up hazardous waste following specific practices outlined in
environmental laws and regulations.\2 Program planning is generally
associated with examining the environmental consequences of property
transfer and reuse decisions.\3
Program support activities include program management,
administration, travel, training, and other support requirements,
such as funds provided to the federal and state environmental
regulatory agencies and the Agency for Toxic Substances and Disease
Registry.
Of the $23 billion estimated cost for the entire BRAC program through
2001, about $7.2 billion, or 31 percent, is associated with
environmental protection efforts. Also, additional environmental
costs of at least $2.4 billion are expected after that time because
the duration of environmental activities is dependent on the level of
cleanup required for reuse and the selected remedy. In some cases,
the contamination problem can be addressed quickly, but in other
cases, the cleanups may require years to complete. The estimated
costs after 2001 are expected to be incurred over a number of years
and would therefore only slightly reduce DOD's projected annual
recurring savings over the long term.\4 Currently, available data
indicate that environmental program costs at BRAC locations are
expected to exceed $9 billion (see table 4.1); however, this estimate
is conservative because DOD has not projected all costs for the
program's duration. Further, costs could increase if (1) cleanup
standards or intended property reuses are revised, (2) DOD undertakes
significant UXO cleanups, or (3) selected remedies fail to clean up
contaminated sites. Likewise, costs could decrease if (1) cleanups
standards or intended property reuses are revised or (2) new cleanup
technologies are developed and implemented.
Over 40 percent of the $9.6 billion estimate had been obligated
through fiscal year 1997. Over 75 percent of the total environmental
cost is expected to be devoted to restoration actions. As noted in
the table, some cost estimates are not all inclusive because either
DOD had not estimated future costs or the data were commingled with
other environmental data.
Table 4.1
BRAC Estimated Environmental Program
Costs
(Dollars in billions)
Through Fiscal Fiscal
fiscal years years
Cost category year 1997 1998-2001 2002 -69 Total
-------------------------- ---------- ---------- ---------- ======
Restoration\a $3.19 $2.15 $2.10 $7.44
Compliance 0.94 0.58 Unavailabl 1.52\c
e\b
Program planning Unavailabl 0.01 Unavailabl 0.01\c
e\d e\b
Program support Unavailabl 0.35 0.30 0.65\c
e\d
======================================================================
Total $4.13\c $3.09 $2.40\c $9.62\
c
----------------------------------------------------------------------
\a Includes costs for 205 installations with cleanup activities for
contaminated sites.
\b DOD does not estimate these costs after 2001.
\c Totals are incomplete because of unavailability of some estimated
cost data.
\d The services were unable to provide estimates because they were
not required to separate obligation data among different
environmental subaccounts until fiscal year 1996.
Source: Our analysis of DOD data.
A major potential compliance cost that is not included in DOD's
estimate is the cleanup of UXO. However, DOD does not define the
cleanup of UXO as a restoration activity. Thus, UXO cleanup costs
are not included in DOD's estimate for the restoration of BRAC bases.
For example, according to Fort Ord's base environmental coordinator,
DOD's annual restoration report does not include the estimated $150
million cost of UXO cleanup at the fort. The Army indicated that
such costs were not included in DOD's annual cleanup report because
they were considered compliance, not restoration, costs. Regardless,
UXO must be cleaned up or addressed in some manner before property
can be transferred and reused.
--------------------
\2 Compliance activities are those closure-related activities that
must be undertaken to transfer property. They include the cleanup of
friable asbestos, polycholorinated biphenyls, lead-based paint, and
UXO; the removal of underground storage tanks that are (or will be)
no longer in compliance when property is leased or transferred; and
responses to leaks from in-service underground storage tanks.
\3 The National Environmental Policy Act of 1969 requires that
federal agencies assess the impact of major federal actions affecting
environmental quality and consider alternatives to those actions.
\4 An additional perspective on the out-year cost is that some
undefined portion of them would have likely been incurred, regardless
of BRAC actions at these bases.
DOD'S CLEANUP COST ESTIMATES
ARE DECREASING
-------------------------------------------------------- Chapter 4:1.1
While environmental cost estimates have risen over the years and the
potential exists for even greater costs, DOD has decreased its cost
estimate to complete BRAC cleanup at identified sites by about $900
million over the last year. Among the reasons the services have
given for the estimate decrease are factors such as enhanced
estimating capability based on experience, improved site
identification, and use of innovative technology. As DOD noted, some
early estimates were based on worst-case scenarios, which have
generally not occurred. DOD also sometimes assumed that it would be
required by local redevelopment authorities to clean property to the
highest cleanup standard, that of unrestricted use; this assumption
has proved to be untrue in some cases. For example, at the Long
Beach Naval Station, the estimated cost to complete cleanup at the
installation decreased from $152.4 million in fiscal year 1996 to
$85.4 million in fiscal year 1997. While the earlier estimate was
based on dredging all contaminated harbor sediments, Navy officials
said they were able to decrease the estimated cleanup cost by
negotiating a reduced amount of dredging and cleanup with the
community. Further, the adoption of some innovative cleanup
technologies is expected to reduce costs.
Ten years into the cleanup process, the military services have voiced
increased confidence in their environmental cleanup estimates for
sites where contamination exists. This confidence is due, in part,
to what they perceive as their enhanced experience in identifying
contaminated sites and selecting appropriate cleanup methods. The
services report that they have used the experiences of successive
closure rounds and their continued programs at active installations.
Assessing the accuracy of estimates, however, is difficult because
data upon which to base conclusions are limited. Fiscal year 1996
was the first full year in which the services used a new model,
referred to as the cost-to-complete model, to develop their
estimates. Whereas earlier estimates were based on completing
"projects," which could involve multiple sites with differing cleanup
requirements, the new model formulates estimates on a site-by-site
basis. The services stated that these cost-to-complete estimates are
based on current remedies and known contamination; the discovery of
new contamination or the development of new technology could change
them. The cost to complete cleanup could increase if selected
remedies are unsuccessful, and other remedies are required.
KEY FACTORS DRIVE THE HIGH
COST OF CLEANUP
-------------------------------------------------------- Chapter 4:1.2
While overall cleanup cost estimates for BRAC bases are decreasing,
the processes of identifying, designing, and implementing a cleanup
program are nonetheless costly. As we reported in 1996, key factors
contributing to the high cost of cleanup are the (1) number of
contaminated sites and difficulties associated with certain types of
contamination, (2) requirements of federal and state laws and
regulations, (3) lack of cost-effective cleanup technology, and (4)
intended property reuse.\5
--------------------
\5 Military Base Closures: Reducing High Costs of Environmental
Cleanup Requires Difficult Choices (GAO/NSIAD-96-172, Sept. 5,
1996).
CONTAMINATED SITES ARE
NUMEROUS AND COSTLY TO
CLEAN UP
------------------------------------------------------ Chapter 4:1.2.1
Although most bases had some type of environmental cleanup activity
while the bases were active, DOD officials told us that the
requirements for disposing of property usually entail a more
extensive review of potential contamination than is necessary for
ongoing operations. As a result of such a review, more contaminated
sites are often identified. While most BRAC bases have been closed
and most investigative studies have been completed, new sites are
still being identified. For example, DOD reported a total of 4,960
sites requiring cleanup in fiscal year 1997, an increase over the
4,787 sites reported in fiscal year 1996.
As we have reported, the extent of site contamination is often
difficult, time-consuming and costly to investigate and may not be
fully determined until environmental cleanup is underway. For
example, at the Tooele Army Depot, the base environmental coordinator
indicated that by 1990 sufficient sites had been identified to place
the depot on the National Priorities List (NPL), yet nine additional
sites were identified after the property was selected for closure in
1993.\6 With cleanup underway in 1995, another contaminated site was
identified. The coordinator estimates the additional necessary
cleanup cost for the last site alone would be $12 million.
The type of contamination also affects cleanup costs. For example,
cleaning up contaminated ground water, an environmental problem at
many closing bases, is often expensive. Further, given available
technology, cleaning up UXO is costly, labor intensive,
time-consuming, and dangerous. According to a recent Defense Science
Board Task Force report, DOD does not know the full extent of the UXO
problem at its domestic bases, BRAC or otherwise, so it cannot
accurately estimate cleanup costs.\7
However, the Board's report indicates that over 15 million acres on
about 1,500 sites are potentially UXO contaminated. The report notes
that even if only 5 percent of the suspected sites require cleanup,
costs could exceed $15 billion. While BRAC bases represent only a
portion of this acreage, UXO contamination is a potentially costly
and unresolved problem at BRAC bases. Issues still to be determined
are how much acreage will require cleanup and to what degree.
According to DOD, efforts are underway to identify requirements and
provide a comprehensive evaluation of the need for a UXO program, and
the services are identifying UXO requirements in their budgetary
planning. Also, DOD is developing policy delineating the methods it
will use for UXO cleanup. Until that policy is published in mid-1999
and experience is gained using the methods, it will be difficult to
predict reliably what the cleanup will cost.
--------------------
\6 The NPL is the Environmental Protection Agency's list of highest
priorities for further study and cleanup.
\7 Unexploded Ordnance (UXO) Clearance, Active Range UXO Clearance,
and Explosive Ordnance Disposal Programs (April 1998).
ENVIRONMENTAL LAWS AND
REGULATIONS INFLUENCE
COSTS
------------------------------------------------------ Chapter 4:1.2.2
As we reported in September 1996, the requirements of federal and
state environmental laws and regulations have a significant impact on
the cost of environmental cleanup. Under the existing environmental
legal framework, cleanup standards and processes associated with
existing laws, regulations, and executive orders establish procedures
in conducting assessments and cleanup of DOD's base closure property.
(See app. IV for a partial listing of these requirements.) In
addition to federal requirements, states may have their own
requirements. These requirements vary by state and, in some
instances, may be more stringent than the federal requirements. For
example, California has some drinking water standards that are higher
than federal standards and thus contamination could be more costly to
clean up.
NEW TECHNOLOGY CAN
POTENTIALLY REDUCE
CLEANUP COSTS
------------------------------------------------------ Chapter 4:1.2.3
In many cases, technology that is used to clean contaminated property
may reduce the costs of cleanup. However, there is some expected
reluctance on the part of the regulatory community, the services, and
the communities to experiment with unproven technology because of the
risks associated with innovation. While innovative technology offers
the potential for reducing the cost of cleanup, it also entails a
risk that the desired goal will not be achieved. In that case, both
time and money will be lost and another remedy must be implemented.
New technologies that are being tested offer the potential to greatly
decrease the cost of cleaning up groundwater, UXO, and other
contaminants. However, their effectiveness has not yet been
validated. For example, at the former Mare Island Shipyard, the Navy
is testing a new technique that could significantly reduce the cost
of cleaning up contaminated soil. An engineer in the Environmental
Protection Agency noted that this technique could reduce the per-ton
cleanup cost of contaminated soil from $1,000 to $300. Although
initial results have been promising, a Navy official cautioned that
the new technique has been tested on a small area only and that the
results not been validated. Following validation, the technique must
also go through the approval and adoption process before it can be
put into practice.
COMMUNITY REUSE PLANS
INFLUENCE COSTS
------------------------------------------------------ Chapter 4:1.2.4
The cost of cleanup also depends partly on the intended reuse of the
property, as the reuse in part determines cleanup level standards.
For example, if there is interest in developing residential housing
on a former industrial site, a higher level of cleanup will be
required than if the property is slated for industrial reuse similar
to its former use. The residential cleanup standard, which involves
having no restrictions on the future use of the property, can be the
highest and costliest to achieve. A less expensive alternative (at
least in the short run) is to limit the reuse of property and
maintain institutional controls, such as deed restrictions, fences,
and warning signs to inform the public of restricted activities.\8
While the services noted that estimates were initially developed
based on the expectation that property would be cleaned to the
highest standard, this has not always occurred. Both DOD and
environmental regulators indicate that communities have generally
been reasonable in their expectations for cleanup. For example,
recognizing the magnitude of the UXO problem at the Army's Jefferson
Proving Ground, the community has not sought to have the property
cleaned up. Instead, it is considering making the area a wildlife
refuge.
--------------------
\8 Institutional controls are mechanisms such as deed restrictions,
fences, and warning signs, which inform the public that certain
activities may not be conducted on property.
DOD REPORTS CLEANUP PROGRAM IS
MOVING FROM INVESTIGATION TO
IMPLEMENTATION, BUT CHALLENGES
REMAIN
---------------------------------------------------------- Chapter 4:2
Fiscal year 1996 was a turning point for the BRAC environmental
cleanup program with a greater emphasis on cleanups than studies to
determine what cleanups are needed. According to DOD, cleanup
efforts since fiscal year 1996 have shifted from the investigative
arena to the implementation phase. Thus, for the first time since
1988 when the first closure round was announced, DOD reported that 55
percent of BRAC-obligated environmental funds were spent on cleanup
activities and 45 percent on investigations. Prior to that year,
more money was obligated for investigations than for cleanup,
primarily because disposing of unneeded property requires a more
comprehensive review of the property. Not only are these
investigations time-consuming, but they often uncover contaminated
sites not previously identified. While DOD has made progress in
identifying contaminated sites and developing solutions, cleanup
actions at most sites have yet to be completed, and long-term
monitoring may be needed at many sites. As a result, DOD will
continue having financial obligations at BRAC installations for many
years.
DOD REPORTS PROGRESS TOWARD
CLEANUP MILESTONES, BUT WHEN
WORK WILL END IS DIFFICULT
TO PREDICT
-------------------------------------------------------- Chapter 4:2.1
DOD has made progress in identifying contaminated sites and
developing solutions, although cleanup actions at most sites have yet
to be completed. However, it is difficult to estimate when
operations and maintenance and long-term monitoring and associated
costs of the activities will end.
DOD has established milestones for (1) forming BRAC cleanup teams,
(2) completing environmental baseline surveys, and (3) putting
remedies in place or completing responses at its BRAC bases.\9 DOD
data indicate that it has achieved the first two goals. The services
are working toward the third milestone, set in defense planning
guidance, of (1) having remedial systems in place or responses
complete at 75 percent of the bases and 90 percent of the sites by
2001 and (2) having 100 percent of the installations and sites with
remedial systems in place or responses complete by 2005. According
to DOD, as of September 30, 1997, 77 of 205 BRAC installations had
all remedial systems in place or achieved responses complete.\10
Twenty of the 77 bases had achieved response complete for all sites.
In some instances, response complete is the end of any activity at a
site; however, in other cases, long-term operations and maintenance
and monitoring may still be needed depending on the specific site
conditions and the chosen remedy. For example, soil contamination
can be addressed by physically removing the contaminated soil or by
implementing some type of on-site soil treatment system. These
activities have different time and cost requirements associated with
their use. Additionally, the chosen remedy may need to be replaced
or modified over time if it failed to achieve the expected cleanup
standard or if a new method of cleanup was warranted and adopted. To
ensure the effectiveness of a remedy and that cleanup goals are met,
long-term monitoring may be necessary--possibly in perpetuity.
While DOD cannot provide dates when operations and maintenance and
long-term monitoring will be completed, estimated long-term
monitoring costs associated with remedies are included in its
projected costs after 2001. DOD officials indicated that such
estimates assume that site closeout will occur 5 years after the
remedial action is completed. A review of the site remedy is
required by law no less often than each 5 years after the initiation
of remedial action if hazardous substances remain at the site to
ensure that ongoing response actions are still protective of human
health and the environment. However, it is possible that operations
and maintenance and monitoring costs could continue beyond this
period. BRAC-earmarked funding ceases in 2001, however, and although
the services are committed to completing cleanup, the BRAC
environmental program will have to compete for funding with other DOD
needs, such as active base cleanup and mission requirements. To the
extent that funding available for BRAC cleanup is curtailed, the
program's completion could be delayed.
The Air Force expects to spend more than any other service for
environmental efforts after 2001. The Air Force estimates it will
require $1.3 billion for cleanup, operations, and monitoring after
that time. At McClellan Air Force Base, California, a 1995 BRAC
activity, cleanup costs after 2001 are expected to be about $396
million, with cleanup completion, except for continued monitoring,
expected in 2033. Activities associated with completing cleanup
include operation of cleanup systems, sampling and analysis,
long-term monitoring of contaminated ground water, landfill cap
maintenance, institutional control monitoring, regulatory reporting,
and performance reviews. The Air Force estimates that one-third of
its installations will complete long-term monitoring and operations
by 2011, another one-third by 2021, and the remaining one-third,
where there is extensive groundwater contamination, some decades
later. Mather Air Force Base is among the bases that require many
years of monitoring and operations, extending to an estimated
closeout in 2069.
--------------------
\9 The term "remedy in place" indicates that a functioning cleanup
solution is underway, while "response complete" indicates that the
cleanup action is finished; however, monitoring may still be
necessary to ensure that it has been effective.
\10 DOD reports there are actually 207 installations in the BRAC
environmental cleanup program. However, two installations were
unable to provide DOD with data so they were not included in the
analysis.
THE FAST-TRACK CLEANUP PROGRAM
IS IMPROVING PROGRESS AND
SUPPORTING REUSE
---------------------------------------------------------- Chapter 4:3
In September 1993, DOD established the Fast-Track Cleanup program to
overcome obstacles associated with environmental cleanup and to help
make BRAC property available quickly for transfer and reuse. DOD
reports that 110 BRAC bases participate in the program, 32 of which
are also NPL sites. Through this program, DOD expected to support
the President's Five Part Community Reinvestment program, which was
established in July 1993 and made early community redevelopment of
BRAC property a priority.
According to DOD, the services, and regulators, the program has been
successful in improving environmental cleanup progress, particularly
in the processes leading up to the actual cleanup of contamination.
However, actual cleanups can still be lengthy, depending on, among
other factors, site conditions and available technology. In a
January 1996 report, DOD asserted that cleanup schedules had been
accelerated as a result of the program; we did not, however,
independently verify DOD's findings.\11
Further, our analysis showed that most key program provisions had
been met. The key provisions are (1) establishing cleanup teams at
major BRAC bases, (2) making clean parcels quickly available for
transfer and reuse, (3) providing indemnification, and (4)
accelerating the review process associated with requirements of the
National Environmental Policy Act. While DOD has been successful in
meeting the first three provisions, it has not been fully successful
in meeting the fourth.
In addition to the specified program provisions, several mechanisms
were developed to support the program. Two of the mechanisms focus
on identifying and documenting properties that are clean or that are
in the process of cleanup and can thus be transferred or leased to
the community. The third mechanism, which is generally referred to
as early transfer authority, makes it possible to transfer property
prior to it being cleaned up, thus making it available for reuse more
quickly.
--------------------
\11 Fast Track Cleanup Successes and Challenges 1993-1995 (January
1996).
MOST PROGRAM PROVISIONS HAVE
BEEN MET
-------------------------------------------------------- Chapter 4:3.1
DOD has created BRAC cleanup teams at its major bases. The teams,
made up of state and federal regulators and service officials, were
developed with the expectation that they would find ways to expedite
cleanup actions to prepare real property for transfer and reuse. By
working together and fostering communication and coordination, DOD
hoped to avoid the slow, uncoordinated reviews and comments and have
a forum to settle disagreements over cleanup standards and methods.
DOD indicated that the creation of the teams has reduced the time and
costs to complete cleanup actions. For example, DOD reported in
January 1996 that the program eliminated nearly 80 years from the
cleanup process and that more than $100 million was saved due to the
early involvement of stakeholders in that process. Team members we
spoke with during our site visits agree that the collaborative effort
has created a more efficient working environment, allowing them to
make decisions more quickly, resolve disputes, and thus save time and
money. However, many of the cleanup activities are still lengthy.
Thus, while the initial steps of the cleanup process were shortened
(i.e., reaching agreement on both the level of cleanup and the
remedy), actual physical cleanups may extend many years.
DOD has also been successful in making clean parcels of BRAC property
immediately available for transfer and reuse. Under the requirements
of the Community Environmental Response Facilitation Act, DOD is to
seek concurrence from the Environmental Protection Agency on the
identification of uncontaminated parcels within 18 months of the BRAC
round being approved. DOD data indicate that it has fulfilled this
requirement, identifying approximately 100,000 acres of
uncontaminated property for disposal from all four BRAC rounds.
In 1993, the Congress authorized DOD to indemnify future owners for
the cleanup of contamination resulting from past DOD operations.
According to DOD, this allows it to more readily lease or transfer
real property and promote reuse.
DOD, however, has not in all instances met the fourth provision of
speeding the review process associated with the National
Environmental Policy Act. By statute, DOD is required, to the extent
practicable, to complete any environmental impact analysis required
with respect to an installation and any redevelopment plan for an
installation no later than 1 year after the redevelopment plan is
submitted. This requirement significantly shortens the usual time
frame of 2 to 4 years. DOD officials acknowledge, however, that this
requirement has not been met in all instances and are attempting to
determine the cause of the delays. DOD reports that, as of September
1998, 37 of the 101 installations that it tracks had not completed
the required environmental documentation within the specified time
frame; another 30 were in the process of preparing the documentation,
and their compliance is undetermined at this point.
DOD HAS SEVERAL MECHANISMS
TO SUPPORT ITS EFFORTS TO
MAKE PROPERTY AVAILABLE
QUICKLY
-------------------------------------------------------- Chapter 4:3.2
In an effort to achieve the Fast Track's goal of making property
available for reuse as quickly as possible, DOD has developed
additional mechanisms for speeding up the availability of unneeded
base property. In 1994, DOD developed two mechanisms to identify and
document properties that are clean and thus can be transferred or
that are in the process of cleanup and can thus be leased to the
community. These mechanisms are referred to as the Findings of
Suitability to Lease and the Findings of Suitability to Transfer.
According to DOD officials and regulators, the documents serve to (1)
act as a link between the environmental efforts and community reuse
and (2) inform the public about the types of contamination on the
base, actions taken or to be taken to address the problems, and
restrictions associated with the use of that property. This
information is important for both the environmental and real estate
sides of the reuse and transfer process. As of September 30, 1997,
DOD reported that lease or transfer documentation had been prepared
for 25 percent of the acres that were available for transfer. Of
about 438,000 acres at 112 major BRAC installations, 43,000 acres had
completed transfer documentation, and 68,000 acres had completed
lease documentation.
In fiscal year 1997, DOD obtained the early transfer authority to
transfer property before all remedial action has been taken. To
assure new owners of DOD's commitment to cleaning up contamination
after a transfer occurs, deeds contain an assurance stating that
necessary response actions to clean up the property will be taken and
a schedule for completion of the response actions. Also, the deed is
to contain use restrictions and schedules to further uninterrupted
response actions. While this authority allows DOD to make property
available for reuse more quickly, it is too early to determine what
impact this will have on property transfers. As of July 1998, only
acreages at Grissom and Mather Air Force Bases had been transferred
under this authority. Several other reuse authorities, including
those at Griffiss Air Force Base, Naval Air Station, Memphis, and
Tooele Army Depot, are pursuing early transfers. Concerns, however,
are being raised. For example, during a meeting between the Army,
and state and local reuse authority officials over the early transfer
of Tooele Army Depot property, the issue of enforcement of land use
restrictions was raised. State officials wanted to know how
restrictions would be monitored and enforced and by whom because the
Army would no longer retain the property's deed and therefore
enforcement powers. According to DOD and Environmental Protection
Agency officials, these issues are being examined.
CONCLUSIONS
---------------------------------------------------------- Chapter 4:4
As is the case for its active bases, cleaning up environmental
contamination on BRAC bases has proven to be costly and challenging
for DOD. However, it is a task that must be done to meet
environmental laws and facilitate the transfer of unneeded property
to other users. While DOD has made progress from the earlier BRAC
years when much of its efforts were largely devoted to investigative
studies and has established initiatives to expedite cleanup, many
cleanup activities remain. As a result, DOD expects to continue its
environmental efforts beyond 2001, the final year of BRAC
implementation authority. Further, DOD estimates that $2.4 billion
is required after 2001, not including estimated costs for UXO, a
potentially costly issue at this point in time. Until such time that
this issue is fully addressed and questions regarding how long sites
will require monitoring before achieving site closeout, determining
the overall cost of the program is difficult.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 4:5
DOD stated that time and cost associated with the cleanup at BRAC
bases is driven by the regulatory framework. Nonetheless, DOD cited
its Fast-Track Cleanup program as one initiative that has accelerated
the cleanup process through partnerships with state and regulatory
agencies as well as with local communities. DOD believes these
partnerships produce more cost-effective cleanups with consideration
to future reuse and community concerns.
MOST COMMUNITIES ARE RECOVERING
FROM THE ECONOMIC IMPACTS OF BASE
CLOSURES
============================================================ Chapter 5
The expected negative economic impact of base closures on local
communities has long been a concern for the citizens of those
communities, as well as Members of Congress. A base closure can
result in the loss of hundreds or even thousands of jobs in a
community. Nevertheless, most communities where bases were closed
under the four BRAC rounds have fared relatively well over time. A
majority of such communities had 1997 unemployment rates that were
lower than or equal to the national average and had per capita income
growth rates that exceeded the national average during 1991-95. A
few communities, however, continued to experience high unemployment
rates and/or declining per capita incomes.
Our work at six selected base closure sites with varying population,
economic circumstances and geography not only showed that the
surrounding communities were recovering from BRAC but also that the
transition was not necessarily easy. Community officials told us, in
general, that they were recovering from the impacts of base closure
and were optimistic about the future of their communities. Many of
these officials credited the strong national economy and diversifying
economic activity in their regions as key to their economic recovery.
At the same time, they pointed to the considerable difficulties,
frustrations, and losses that communities experience as they adjust
to the loss of military jobs and the redevelopment of base property.
These pains of adjustment included decreasing retail sales at some
establishments, leading to some business closings; declining
residential real estate values in areas predominately populated by
base personnel; and social losses felt in local schools, churches,
and organizations that benefited from military personnel and their
families.
MOST COMMUNITIES' ECONOMIC
INDICATORS COMPARE FAVORABLY TO
NATIONAL AVERAGES
---------------------------------------------------------- Chapter 5:1
Selected economic indicators for BRAC-affected communities compared
favorably to national averages. We used unemployment rates and real
per capita income growth rates as indicators of the economic health
of those communities where base closures occurred during the prior
BRAC rounds.\1 We identified 62 communities involving 88 base
closures in which government and contractor civilian job loss was
estimated to be 300 or more.\2
Unemployment rates for BRAC-affected communities compared favorably
with national averages. About two-thirds of the communities affected
by recent base closures (42 of 62) had a 1997 unemployment rate at or
below the national rate of 5.1 percent.\3 This situation compared
favorably to when the BRAC process was beginning in 1988. At that
time, 37 communities, or 60 percent of the 62 communities, had
unemployment rates at or below the U.S. average (then 5.5 percent).
For all BRAC-affected communities with a higher than average 1997
unemployment rate, only two--the Merced area surrounding the
now-closed Castle Air Force Base and the Salinas area surrounding the
now-closed Fort Ord (both in California)--had double-digit
unemployment rates: 15 percent and 10.3 percent, respectively. A
comparison of the communities' 1997 unemployment rates to the
national rate of 5.1 percent is shown in figure 5.1.
Figure 5.1: 1997 Unemployment
Rates of BRAC-Affected Areas
Compared to National Average
(See figure in printed
edition.)
Note: The 1997 unemployment rates for the United States and the
local impact areas were averaged through September 1997. The U.S.
rate was 5.1 percent averaged through September 1997.
Source: Our analysis of LMI data.
Similarly, a June 1996 report by the Congressional Research Service
found that a majority of the localities affected by BRAC actions had
unemployment rates that were near to or well below the 1995 U.S.
rate of 5.7 percent. It states that most communities affected by any
one of the BRAC rounds "have a relatively low degree of economic
vulnerability to job losses that are estimated to result from these
actions.\4
As with unemployment rates, real per capita income growth rates for
BRAC-affected communities compared favorably with national averages.
From 1991 to 1995, 63 percent, or 31, of the 49 areas (excluding the
1995 round) had an estimated average per capita income growth rate
that was at or above the average of 1.5 percent for the nation.\5 Of
the 18 communities below the national average during this period, 13
had average per capita income growth rates above zero percent, and 5
had declining income (see fig. 5.2).
Figure 5.2: 1991-1995 Average
Annual Per Capita Income Growth
Rates of BRAC-Affected Areas
Compared to National Average
(See figure in printed
edition.)
Note: The U.S. real average annual per capita income growth rate
for 1991-95 was 1.5 percent.
Source: Our analysis of LMI data.
These figures show some improvement since the 1988-91 period, when
the BRAC process was just beginning to take effect and the U.S.
average rate of growth was only 0.2 percent. At that time, 55
percent, or 27, of the 49 communities had estimated average rates of
real growth in per capita income at or above the national average.
Twenty of the 49 communities showed decreases in per capita income
during this period.
Because a less diversified economy might make smaller communities
more vulnerable to the adverse effects of a base closure, we analyzed
their economic performance separately.\6 As shown in figure 5.3, 10
of the 18 small city and rural areas, or 56 percent, had a 1997
unemployment rate above the U.S. average, compared to 32 percent of
BRAC-affected communities overall. On the other hand, 10 of 14
communities (again excluding those involved only in the 1995 round),
or 71 percent, had a per capita income growth rate that was greater
than or equal to the national average between 1991 and 1995, a higher
proportion than that of BRAC-affected communities overall (see fig.
5.4).
Figure 5.3: Unemployment Rates
of Less Populated BRAC-Affected
Areas Compared to the National
Average
(See figure in printed
edition.)
Source: Our analysis of LMI data.
Figure 5.4: Per Capita Income
Growth Rates of Less Populated
BRAC-Affected Areas Compared to
the National Average
(See figure in printed
edition.)
Source: Our analysis of LMI data.
--------------------
\1 Ideally, to assess how the local communities fared after each BRAC
round, we would need economic information on how those communities
would have fared without each BRAC round compared to how they have
fared since the BRAC program began. Because we do not have this
ideal baseline and since we want to have some sense of how the
communities fared, we have used the national averages for
unemployment and real per capita income as a benchmark to compare how
well the communities have fared. This comparison does not isolate
economic effects of a base closure from the effects of other economic
events occurring in a particular region.
\2 One of the limitations of our approach to selecting communities is
that some areas may have also been the receiving location for DOD
realignments and may have gained jobs. For example, St. Mary's
County, Maryland, is included because of the closure of Navy
facilities at St. Inigoes, Maryland in the 1993 BRAC round.
However, in the 1995 round, the area gained DOD jobs at the Patuxent
River facilities due to the relocation of Navy activities from the
Washington, D.C., metropolitan area. Nevertheless, the communities
we selected for our analysis lost a significant number of DOD jobs.
\3 The 1997 unemployment data for counties and metropolitan
statistical areas represent the annual rate as of September 1997.
The U.S. average through September 1997 was 5.1 percent.
\4 Military Base Closures Since 1988: Status and Employment Changes
at the Community and State Level, Congressional Research Service,
June 17, 1996.
\5 The per capita income estimates for counties and metropolitan
statistical areas were available only through 1995 at the time of our
analysis. Therefore, we did not analyze per capita income for local
communities that were affected only by the 1995 BRAC round.
\6 For the purposes of our analysis, smaller cities and rural areas
were those with estimated populations of less than 200,000 from the
62 communities we identified for our overall analysis. These areas
ranged in 1995 population from approximately 24,000 in Iosco County,
Michigan, where Wurtsmith Air Force Base closed, to 192,000 for the
Merced area in California, where Castle Air Force Base closed.
COMMUNITIES RECOVERING, DESPITE
PAINS OF ADJUSTMENT
---------------------------------------------------------- Chapter 5:2
In general, the communities where we performed work reported
suffering initial economic disruption, followed by recovery. Less
tangible, but harder to correct, were social losses resulting from
the departure of base personnel, such as the cultural diversity base
personnel and their families brought to the local communities. As
factors in economic recovery, officials pointed to the strong
national economy, diversifying local economies, government
assistance, and base redevelopment. However, some local officials
were dissatisfied with the pace of redevelopment, citing delays in
the transfer of base property. (See ch. 2 for our discussion on
DOD's progress in transferring base property.)
Through our work at the surrounding communities of six major base
closures, we were able to learn how each community was unique in how
it drew on local and regional strengths to recover from the job
losses associated with base closures.\7 We also identified common
economic impacts and trends across the communities. The local impact
areas for Fort Benjamin Harrison, Fort Devens, and the Philadelphia
Naval Base and Shipyard fell within large metropolitan regions.
These areas had low 1997 unemployment rates and 1991-95 average real
per capita income growth rates near or higher than the national
average and past trends. The rural area around Eaker Air Force Base
had a relatively high 1997 unemployment rate compared to the national
average, though it was significantly lower than the 1988 rate when it
was 13.5 percent, and the average real per capita income growth rate
was considerably higher than the national average.
In contrast, the rural area surrounding Merced and Atwater had a high
unemployment rate and declining real per capita income, though the
rate of decline decreased in 1991-95 compared to 1988-91. Local
officials told us that Merced and surrounding communities have a high
unemployment rate because of the large seasonal employment associated
with the agriculture and canning industries and the large Hmong and
Punjabi populations that have migrated into the area and are still
assimilating into the American culture. The other rural area that
showed some economic decline was Beeville, Texas. Though its 1997
unemployment rate was relatively low compared to the 13.2 percent it
experienced in 1993, the rate in per capita income growth from a
healthy 2.9 percent during 1988-91 declined to a below average of 0.5
percent during 1991-95. Local officials told us that the new prisons
have created many new jobs and boosted the population in the Beeville
area, but the decline in income growth suggests that the level of
total personal income has not kept pace with the population growth.
However, prisoners are counted in the population estimates used to
calculate per capita income and thus partially explain much of the
decline in the rate of growth.
Table 5.1 shows preclosure and recent economic data for each of the
local impact areas representing the communities we visited.
Table 5.1
Unemployment Rates and Per Capita Income
Growth Rates of Selected Communities
Average
rate of
real Unemployme
income nt rate
growth (in (in
percent) percent)
---------- ----------
Average
Closed per
Local military Populatio capita
Communitie impact base/Date n income 1988 1991
s visited area of closure 1995 1995 -91 -95 1991 1997
---------- ---------- ----------- --------- -------- ---- ---- ---- ----
Ayer, Worcester Fort Devens 716,666 $23,712 - 1.2 10.0 4.0
Shirley, County (March 2.5
Harvard, (part of 1996)
Leominster the Boston
, Mass. metropolit
an area)
Indianapol Indianapol Fort 1,475,925 24,664 0.8 2.2 4.5 2.6
is and is Benjamin
Lawrence, metropolit Harrison
Ind. an area (Sept.
1996)
Beeville, Bee County Naval Air 27,665 13,681 2.9 0.5 7.2 6.1
Tex. Station
Chase Field
(Feb. 1993)
Philadelph Philadelph Philadelphi 4,952,955 26,959 0.9 1.5 6.8 4.9
ia, Penn. ia, PA-NJ a Naval
metropolit Base and
an area Shipyard
(Sept.
1996)
Merced and Merced Castle Air 192,754 15,653 - - 14.8 15.0
Atwater, metropolit Force Base 1.7 0.8
Calif. an area (Sept.
1995)
Blythevill Mississipp Eaker Air 50,777 17,027 2.7 3.5 10.0 9.7
e and i County Force Base
Gosnell, (Dec. 1992)
Ark.
--------------------------------------------------------------------------------
Source: LMI.
Our findings are consistent with a 1996 report by the RAND National
Defense Research Institute, which studied the impact of three base
closures on neighboring California communities. It concluded that
"while some of the communities did indeed suffer, the effects were
not catastrophic [and] not nearly as severe as forecasted.\8
--------------------
\7 We selected the sites to ensure that we had a range of
experiences. Because each community is unique, the experiences of
these communities cannot be generalized. More information on how we
selected the site visits is in the scope and methodology section of
chapter 1.
\8 The Effects of Military Base Closures on Local Communities: A
Short-Term Perspective, RAND National Defense Research Institute,
1996. The report used a case study approach to examine the impact on
nearby communities of three base closures in California: George Air
Force Base, Fort Ord, and Castle Air Force Base.
IMPACTS ON COMMUNITIES RANGE
FROM TEMPORARY SETBACKS TO
PAINFUL LOSSES
-------------------------------------------------------- Chapter 5:2.1
Impacts of closure that officials conveyed to us included initial
economic disruption caused by the news of impending closure;
decreasing retail sales at some establishments, leading businesses to
close; declining residential real estate values in areas
predominately populated by base personnel; and social losses felt in
local schools, churches, and organizations that benefited from
active, educated military personnel and families. Examples of how a
base closure affects the surrounding community and its business
establishments, schools, real estate markets, and social network, as
provided by local officials, are shown in figure 5.5. We did not
independently verify the data.
Figure 5.5: Reported Community
Impacts Resulting From Base
Closures
(See figure in printed
edition.)
Local officials from each of the communities we visited described the
initial reaction to the announcement of a base closure as one of
anger, fear, panic, and denial. They said that people in the
affected area feared the worst, in some cases predicting the
dissolution of their town itself. At the very least, the loss of the
base was expected to cause significant economic disruption. The
rumors of a closure generated fear throughout the community, driving
down consumer spending on major items and business expansion. This
initial public reaction resulted in real economic impacts, such as a
drop in real estate values and car sales. Officials from several
communities told us that the announcement of the closure and previous
threats of closure were more damaging to economic activity in the
area than the actual closure. Each of the communities made an effort
to reverse the decision, but eventually resigned itself to the loss
and organized a base reuse authority to represent its interests in
the base's redevelopment. Generally, we were told that the citizens
and businesses overcame the turmoil associated with base closure and
adjusted their lives to a new environment.
For the communities we visited, the closure of a military base led to
a decline in retail sales, affecting some stores more than others and
forcing some to close. Local officials said businesses affected the
most included new and used car dealers, clubs, small personal service
businesses such as barbers and some nearby "mom & pop" stores. On
the other hand, some local officials emphasized that it was often
difficult to determine whether the demise of a business was caused by
a base closure or other economic factors. Two officials from
communities outside of Fort Devens suggested that the recent growth
in large discount stores and chains also hurt small retail businesses
during the same period of the base closure. A local business
official in Blytheville said that some businesses survived the
closure of Eaker Air Force Base and were now doing better than ever,
while others failed because they could not seem to adjust their
business plans to serve a new environment. Some cases were more
clearly attributable to the base closure. For example, officials in
Beeville pointed to the demise of several small businesses, including
a convenience store and a janitorial service that contracted with the
base.
At the same time, we were told by local officials that the economic
impact of the departure of base personnel was not as severe as had
been feared. Some local officials believed that military bases
tended to be closed environments where personnel spent much of their
income on base to take advantage of favorable prices at the
commissary and post exchange. Also, local business officials in
Beeville told us that many of the Navy officers and pilots and their
families may have spent more of their disposable income in the nearby
urban areas of San Antonio and Corpus Christi.
Local officials cited three events following a base closure that they
believe can cause residential real estate values to decline. First,
the demand for housing drops as base employees and their incomes
leave an area. Second, base housing may be placed on the market,
increasing the supply of housing. Third, DOD often purchases the
off-base housing units of transferring base personnel and places
these units back in the market for resale, also increasing supply.\9
The net result of these factors is an increase in supply of housing
units at the same time that a community may be losing people who
would most likely be buying homes. Local officials from Atwater
(Castle Air Force Base area), Gosnell (Eaker Air Force Base area),
and Ayer and Shirley (Fort Devens area) described how rental units
that catered to single service personnel had to lower rents and
perhaps offer weekly rents to stay in business. In two communities,
local officials told us that the result was an influx of a less
stable population, which often led to undesirable conditions, such as
increased crime and disorderly conduct and a drain on public
assistance resources. Several officials from Atwater mentioned that
DOD's program to purchase housing from transferring military and
defense personnel lowered housing values. However, officials from
communities surrounding Eaker Air Force Base and Fort Devens told us
that the market for single-family homes has recovered and in some
cases has exceeded preclosure levels. For example, housing values
have increased in the communities surrounding Eaker Air Force Base.
The communities we visited generally regretted the loss of base
personnel, with whom they had good relationships. The loss was often
described as a cultural loss rather than an economic one. This loss
was less pronounced in the urban areas, but in the rural towns, the
bases had brought in people with diverse backgrounds from various
parts of the country. Officials described how local institutions
benefited from these outsiders' viewpoints and experiences,
particularly in communities where the military people became involved
with the local government, the schools, and the arts. An official
from one of the communities near Fort Devens remarked about the high
quality of people that had entered the community who worked at the
Army Intelligence school. In Beeville, some local officials told us
about the pride they had at being the home of Chase Field, which
trained naval pilots.
Base employees were also affected by an installation's closure.
While many base employees accept transfers to other facilities during
a base closure, those who choose to remain in the local community may
face periods of unemployment. In cases where the military base
provided most of the high-paying, high-skilled jobs for the area, as
was the case at Castle Air Force Base and Naval Air Station Chase
Field, some former base employees who chose to remain in the area
reportedly had difficulty finding a job at a comparable salary.
--------------------
\9 DOD's Homeowners Assistance Program provides assistance to
eligible service members and civilian employee homeowners who have
suffered losses through the depression of the real estate market
resulting from actual or pending base closures. Approximately $500
million has been appropriated through fiscal year 1998 for program
funding associated with BRAC. This funding is included in the
calculation of overall BRAC costs and savings estimates.
STRONG NATIONAL ECONOMY AND
DIVERSIFIED LOCAL ECONOMIES
HELP COMMUNITIES RECOVER
-------------------------------------------------------- Chapter 5:2.2
Several factors play a role in determining the fate of the economies
of closure communities and the recovery of communities (see fig.
5.6). Officials from several of the communities we visited cited the
strong national or regional economy as one explanation of why their
communities were able to avoid economic devastation and find new
areas for economic growth. The national unemployment rate for 1997
was the lowest in a generation. Officials from the communities
surrounding Castle and Eaker Air Force Bases said employers are now
finding their communities attractive because these rural areas have
higher unemployment rates and therefore a large population looking
for jobs. These observations are consistent with a 1993 report in
which the Congressional Budget Office reviewed the impacts of DOD's
downsizing on defense workers, stating that the best solution for
displaced defense workers is a growing economy.\10
Figure 5.6: Factors Affecting
Economic Recovery From Base
Closures
(See figure in printed
edition.)
Source: Our analysis.
Officials from each of the communities expressed the importance of
having other local industries that could soften the impact of job
losses from a base closure. Urban communities, as officials from the
more urban areas confirmed, are better able to absorb the job losses
from a base closure because they have more diversified economies that
provide a wider range of job and business opportunities. In a
January 1998 report, we examined defense-related spending trends in
New Mexico and the relationship between those trends and New Mexico's
economy.\11 We reported that while defense-related spending has been
declining in the state, the state's gross product and total per
capita income have been increasing and that this economic growth may
be due to efforts to diversify the economy away from defense.
Officials also pointed to several other economic forces at work in
their regions at the time of a closure, during the transition period,
and at the current time. For example, officials from the communities
surrounding Fort Devens said that at the time of the closure, the
area was suffering from the downsizing and restructuring of the
computer industry. Today, those same communities are benefiting from
the economic growth in the larger Boston metropolitan area.
Philadelphia has been going through deindustrialization for the past
20 years. Officials from Philadelphia said their city has been also
losing job and population for many years--the closure of the shipyard
was not the first big loss they have experienced. However, at the
time the closure was announced, the shipyard was the largest
manufacturing concern in the region, and one official said that it is
difficult for any city to lose such a large employer even if the loss
does not fundamentally hurt the local economy of a large metropolitan
area like Philadelphia. Figure 5.7 describes the economic and
regional context of the base closure for the communities we visited.
Figure 5.7: Economic and
Regional Context of Selected
Communities
(See figure in printed
edition.)
The rural areas we visited, where agriculture has historically
dominated the economy, have benefited from their efforts to
diversify. In Blytheville, Arkansas, for example, where Eaker Air
Force Base closed, the steel industry found a foothold in the late
1980s before the announcement of the base closure and has been a
growing presence ever since. The Blytheville area is attractive to
the steel companies because of its access to the Mississippi river
and a major interstate as well as an available labor pool. Beeville,
Texas, where Chase Field closed, has a long history of farming and
ranching, but has recently benefited from an expanding state prison
industry. In these cases, the emergence of major employers was
coincidental with the base closure, but officials in both towns
stated the importance of these employers to recovery.
--------------------
\10 Reemploying Defense Workers: Current Experiences and Policy
Alternatives, Congressional Budget Office, August 1993.
\11 Defense Spending and Employment: Information Limitations Impede
Thorough Assessments (GAO/NSIAD-98-57, Jan 14, 1998).
LOCAL OFFICIALS STATED THAT
BASE REUSE AND GOVERNMENT
ASSISTANCE CONTRIBUTE TO
ECONOMIC RECOVERY
-------------------------------------------------------- Chapter 5:2.3
The redevelopment of base property is widely viewed as a key
component of economic recovery for communities experiencing economic
dislocation due to jobs lost from base closures. The closure of a
base makes buildings and land available for a new use that can
generate new economic activity in the local community. DOD's Office
of Economic Adjustment surveys the local reuse authorities
representing base closures from all four rounds on the number of jobs
that have been created from redevelopment of bases. As of March
1998, the Office of Economic Adjustment reported that reuse of base
property from closed bases had generated almost 48,000 new jobs
(compared with approximately 100,000 government civilian and
contractor estimated job losses from BRAC actions). Table 5.2 shows
the number of jobs created from redevelopment of base property at the
six closed bases we visited.
Table 5.2
Job Creation From Base Reuse at Selected
Bases
No. of
Estimated jobs
no. created
of from
Closed civilian base
military base jobs lost reuse Examples of base reuse
-------------- --------- --------- ------------------------------------------
Fort Devens, 2,178 1,470 Gillette has located a major distribution
Mass. facility at the fort, with plans to
expand operations. As of November 1997,
more than 30 leases had been signed, and
7 sales had been completed. The Federal
Bureau of Prisons will use the base
hospital as a medical facility
specializing in cardiology and dialysis.
The recreational facilities, including
the health club and ball fields, are
being used by local youth and community
organizations.
Fort Benjamin \4,240\a 563 The Defense Finance and Accounting Service
Harrison, center has been retained in the largest
Ind. building on the base. The state of
Indiana obtained 1,700 acres through a
public benefit conveyance for a state
park. Other uses of base property include
a medical facility with diagnostic and
radiology laboratoties and a growing
YMCA. Officials also cited plans to reuse
some of the base housing.
Naval Air 956 1,290 The Texas Department of Criminal Justice
Station Chase has located a prison complex on the
Field, Tex. former naval air station. The off-base
housing complex is being reused,
primarily as housing for department
personnel.
Philadelphia 8,119 528 The Philadelphia Industrial Development
Naval Base Corporation has leased space at the
and Shipyard, shipyard to 18 companies. Norway's
Penn. Kvaerner, a shipbuilding company, will be
reusing the shipyard's drydocks, bringing
in several hundred jobs and creating many
more subcontractor jobs. Other firms
include tugboat companies and steelworks.
Castle Air 1,149 1,881 Pacific Telesis refurbished the base
Force Base, commissary for a customer service call
Calif. center, employing hundreds of people.
Other companies on site include a trailer
manufacturing firm and a company that
makes modular classrooms. Educational
activities using base facilities include
the Aviation Challenge and the Challenger
Learning Center.
Eaker Air 777 416 The former base now hosts a Federal
Force Base, Express truck-driving school, a pediatric
Ark. care facility, and a YMCA. The airport is
used by a delivery service during the
holiday surge. The Presbyterian
Development Corporation is creating a
retirement community using some of the
housing on site. The base includes some
farmland which is being leased out, as
well as some archaeological sites.
--------------------------------------------------------------------------------
\a The estimate of civilian jobs lost for Fort Harrison includes the
closure of the Defense Finance and Accounting Service center. In a
process following BRAC 1991, DOD selected building one on Fort
Harrison to continue housing the center, in effect saving many of the
jobs estimated to be lost.
From our meetings with local officials, publicizing redevelopment
goals and efforts for former bases is a key strategy for attracting
industry and helping communities gain confidence in recovery from the
closure. For example, Philadelphia officials recently closed a deal
with Kvaerner Shipbuilding of Norway that will bring several hundred
shipbuilding jobs back to the shipyard. Though this deal will not
replace about 7,000 shipyard lost jobs from the closure, it has
helped to allay fears that the shipyard would stay idle in the long
term. Officials from other communities stressed the importance of
successful base redevelopment to their communities' long-term
economic health.
We did not attempt to assess the extent that government assistance
programs speeded economic recovery of communities experiencing base
closures. However, some officials emphasized that federal assistance
in the form of planning and infrastructure grants helps communities
overcome many barriers to redevelopment, such as the complex property
disposal process and deteriorating or outdated infrastructure.
Specifically, local officials told us that Office of Economic
Adjustment grants helped them plan for redeveloping base property and
Economic Development Administration grants provided funding for
infrastructure improvements to integrate base property into the
community's infrastructure. A recent study requested by the Economic
Development Administration and prepared by a research team led by
Rutgers University evaluated the success of the Economic Development
Administration's defense adjustment grants in helping local
communities diversify away from dependence on former military bases
or defense contractors.\12 The study concluded that the assistance
succeeded in aiding job creation and economic recovery from base
closures and defense downsizing.
In helping base employees adjust to closures, the communities took
advantage of federal, state, and local programs to provide displaced
workers with career transition counseling, job retraining, and
placement services. One major effort to assist displaced workers
occurred in Philadelphia. According to Navy data, about 8,000
civilian jobs were eliminated by the shipyard's closure from 1991 to
1996. Of these 8,000 employees, about 1,400 were laid off, 2,000
accepted separation incentives, and almost 2,000 transferred to other
military installations while hundreds left through retirement,
disability separation, and resignation. The Philadelphia base
created a career transition center that provided one-on-one
counseling to over 4,000 workers, as well as skills assessments,
workshops, on-site retraining, and information on career choices.
The center formed partnerships with the Private Industry Council,
state employment office, and local colleges to ensure that every
opportunity for retraining and assistance was used. The shipyard
developed flexible training plans for the employees with the Navy
reassigning people to new positions that supported their training.
One official expressed frustration that more shipyard workers did not
use the training opportunities and suggested that a barrier to
assisting workforces similar to the one at the Philadelphia shipyard
is the older age of this workforce. Most of the shipyard work force
had been doing shipyard work all their working lives and did not want
to start at the bottom again or learn a new trade despite the fact
that the Philadelphia area has a lot of jobs, such as in
construction, that would be suitable with some retraining.
--------------------
\12 Defense Adjustment Program Performance Evaluation, Rutgers
University et al., November 1997.
PROPERTY TRANSFER PROCESS
CONTINUES TO FRUSTRATE LOCAL
LEADERS
-------------------------------------------------------- Chapter 5:2.4
The most consistent major concern cited by the officials in the six
communities we visited was that the transfer of property to the reuse
authority was slow. (See ch. 2 for a discussion on DOD's progress
in transferring base property.) In the case of Eaker Air Force Base,
some of the property was conveyed to the reuse authority through an
economic development conveyance just this past September. The Bee
Development Authority still does not have title to a large portion of
Chase Field. The local reuse authority for Castle Air Force Base is
in the process of obtaining an economic development conveyance. In
each of these cases, the base had been closed sometime between 1993
and 1996. However, both Fort Benjamin Harrison and Fort Devens reuse
authorities have title to base property, and the Fort Devens
authority has been especially successful in turning over property to
commercial enterprises.
One problem caused by transfer delays is the increased cost of
rehabilitating the facilities, which continue to deteriorate from the
time of closure to the transfer of title.\13 This situation is
occurring in Beeville, Texas, despite the fact that a large portion
of the base was transferred to the state of Texas through a public
benefit conveyance for state prison facilities. Officials from the
Bee Development Authority said they wish to diversify the local
economy by attracting manufacturing to the area; they see the
remaining base property as an asset to attract such development.
However, a large hangar and office facility is deteriorating because
the reuse authority does not have the money to maintain it, nor can
it attract businesses that would supply maintenance funds without
title to the facility. Two Beeville officials suggested the absence
of a DOD base transition coordinator, an on-site official who serves
as an advocate for the community and a local point of contact with
the federal government, may have contributed to the local authority's
problems.
Local officials stated that DOD officials responsible for property
disposal do not seem to understand that delaying property conveyance
is bad for business. Some local officials told us they do not think
that responsible offices have enough real estate expertise. For
example, some officials told us that property appraisals did not
consider the cost of bringing a building up to local health and
safety codes and therefore overvalued the property. Consistent with
DOD statements in chapter 2, local officials acknowledged that some
of the delay is due to property disposal process requirements. In
addition, some local officials said transition delays are due to the
lengthy environmental cleanup process.
DOD officials agreed that the property disposal process can be
frustrating to base reuse and economic recovery efforts but explained
that DOD was using all available policy options to speed the process
and remain within the boundaries of the law. A DOD official also
noted that 1991 base closures may not have benefited as much from
initiatives begun in 1993 to speed the process of transferring
property to communities. These initiatives included the creation of
economic development conveyances and base transition coordinators.
Many officials said that once the transition is completed, they will
be able to attract tenants, and they believed that in the long run,
the community could generate more economic activity and accrue other
quality of life dividends such as parks and recreation facilities
than when the base was active.
--------------------
\13 Military Bases: Update on the Status of Bases Closed in 1988,
1991, and 1993 (GAO/NSIAD-96-149, Aug. 6, 1996).
CONCLUSIONS
---------------------------------------------------------- Chapter 5:3
A majority of base closure communities have been able to absorb the
economic loss without a significant economic decline. A growing
national economy and a diverse regional economy play significant
roles in economic recovery, making it easier for communities to
absorb job losses and generate new business activity. However, some
communities are not economically strong based on economic indicators
and may have incurred deeper and longer economic impacts from base
closures.
Local officials said the impact from base closure was not as bad as
they had feared. Though some communities encountered negative
economic impacts during the transition from the announcement of base
closure to recovery, local officials said they are optimistic about
the long-term outlook for their communities. They told us they now
view a base closure as an opportunity for their community to craft a
new identity for itself and diversify the local economy. To the
extent that redevelopment of the base may play a role in economic
recovery, the speed of the property disposal process remains a local
concern.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 5:4
DOD agreed that most base closure communities have been able to
absorb the economic loss associated with closures and show positive
economic growth at or above national averages. DOD cited this as a
tribute to the initiative and persistence of local and state
redevelopment officials who take advantage of the regional
opportunities that an expanding national economy can offer. DOD
stated it will continue to support the base redevelopment efforts of
local and state officials as they transition to a more diversified
economy.
FEDERAL CASH GRANTS GIVEN TO
FACILITATE BASE REUSE FOR THE FOUR
BASE REALIGNMENT AND CLOSURE
ROUNDS
=========================================================== Appendix I
The loss of a military base can cause economic distress to the
locally affected communities. To support dislocated workers and help
communities plan and implement their economic redevelopment
objectives, the federal government provides assistance through
numerous programs. Among the major sources of assistance are the
Department of Defense's (DOD) Office of Economic Adjustment, the
Federal Aviation Administration, the Department of Commerce's
Economic Development Administration, and the Department of Labor.
Grants are awarded to communities for activities such as reuse
planning and job training, as well as infrastructure improvements and
community economic development. In addition to this federal
assistance, there are other federal, state, and local resources
available to assist with the retraining of workers and the
redevelopment of closed bases.
Total OEA Total FAA Total EDA Total DOL Total all
Base grants\a grants\b grants\c grants\d grants
-------------------- ---------- ---------- ---------- ---------- ==========
Adak Naval Air 0 200,000 120,000 0 $320,000
Facility
Alameda Naval Air $4,048,039 0 $8,734,605 $2,500,000 15,282,644
Station and Naval
Aviation Depot
Annapolis Naval 75,000 0 0 0 75,000
Surface Warfare
Center
Anniston Army Depot 0 0 1,382,500 0 1,382,500
Barbers Point Naval 1,308,855 0 0 0 1,308,855
Air Station
Bayonne Military 695,022 0 1,500,000 0 2,195,022
Ocean Terminal
Blackstone Army 0 72,000 0 0 72,000
Airfield
Bergstrom Air Force 200,000 129,104,12 0 1,228,260 130,532,38
Base 8 8
Camp Bonneville 126,341 0 0 0 126,341
Camp Pedricktown 25,030 0 0 0 25,030
Carswell Air Force 478,855 380,000 0 1,800,000 2,658,855
Base
Castle Air Force 1,491,907 1,615,000 7,537,500 0 10,644,407
Base
Cecil Field Naval 1,399,052 0 2,472,150 0 3,871,202
Air Station
Chanute Air Force 1,154,866 936,500 7,622,250 3,000,000 12,713,616
Base
Charleston Naval 3,991,049 0 14,464,460 17,975,755 36,431,264
Station and Naval
Shipyard
Chase Field Naval 1,105,411 140,000 4,162,500 875,151 6,283,062
Air Station
Columbus Defense 0 0 0 746,186 746,186
Distribution Center
Dallas Naval Air 667,815 0 0 0 667,815
Station
Davisville Naval 133,000 0 0 0 133,000
Construction
Battalion Center
Dayton Defense 1,250,252 0 0 0 1,250,252
Electronics Support
Center
Detroit Arsenal 100,000 0 0 0 100,000
Eaker Air Force Base 2,673,608 0 8,450,100 0 11,123,708
El Toro Marine Corps 1,651,933 5,503,335 0 0 7,155,268
Air Station
England Air Force 2,652,115 1,362,500 6,411,800 500,000 10,926,415
Base
Fitzsimons Army 1,303,780 0 469,240 0 1,773,020
Medical Center
Ft. Benjamin 1,895,329 0 4,045,000 4,592,752 10,533,081
Harrison
Ft. Chaffee 348,434 0 3,188,000 1,250,000 4,786,434
Ft. Devens 3,126,039 0 4,425,000 2,000,000 9,551,039
Ft. Dix 67,000 0 4,408,000 1,150,000 5,625,000
Ft. Greely 442,725 0 0 0 442,725
Ft. Indiantown Gap 0 0 0 1,192,000 1,192,000
Ft. McClellan 1,200,020 0 510,000 0 1,710,020
Ft. Meade 0 126,350 0 126,350
Ft. Monmouth 175,000 0 0 0 175,000
Ft. Ord 3,916,543 155,700 63,514,880 800,000 68,387,123
Ft. Pickett 400,436 0 0 0 400,436
Ft. Polk 135,000 0 2,553,750 500,000 3,188,750
Ft. Ritchie 1,167,717 0 1,000,000 825,000 2,992,717
Ft. Sheridan 534,964 0 0 0 534,964
Ft. Totten 65,965 0 0 0 65,965
Gentile Air Force 0 0 2,500,000 285,317 2,785,317
Base
George Air Force 533,648 2,219,088 6,525,000 1,000,000 10,277,736
Base
Glenview Naval Air 798,943 300,000 2,971,125 598,468 4,668,536
Station
Grand Forks Air 0 0 1,000,000 0 1,000,000
Force Base
Griffiss Air Force 2,665,383 0 6,000,000 2,600,000 11,265,383
Base
Grissom Air Force 1,685,661 0 3,649,500 612,500 5,947,661
Base
Guam Naval Complex 2,568,767 26,046,248 100,000 2,750,000 31,465,015
Hill Air Force Base 0 0 1,500,000 1,954,211 3,454,211
Homestead Air Force 1,739,420 418,630 16,125,000 0 18,283,050
Base
Indiana Army 0 0 3,152,650 750,000 3,902,650
Ammunition Plant
Indianapolis Naval 1,620,775 0 0 0 1,620,775
Air Warfare Center
Jefferson Proving 358,600 0 850,000 875,000 2,083,600
Ground
K. I. Sawyer Air 2,028,026 2,893,543 2,277,600 1,045,000 8,244,169
Force Base
Kelly Air Force Base 4,074,181 0 8,632,400 14,500,000 27,206,581
Key West Naval Air 135,000 0 0 0 135,000
Station
Letterkenny Army 1,663,092 0 2,300,000 3,261,759 7,224,851
Depot
Lexington-Bluegrass 100,000 0 1,007,778 0 1,107,778
Army Depot
Long Beach Naval 5,503,284 0 0 0 5,503,284
Station and Naval
Hospital
Long Beach Naval 0 0 8,030,000 6,120,000 14,150,000
Shipyard
Loring Air Force 2,935,012 17,300,000 4,567,000 2,100,000 26,902,012
Base
Louisville Naval 822,223 0 0 0 822,223
Surface Warfare
Center
Louisville Naval 0 0 1,000,000 0 1,000,000
Ordnance Station
Lowry Air Force Base 2,637,932 0 12,338,500 800,000 15,776,432
MacDill Air Force 137,000 0 2,550,000 0 2,687,000
Base
Malmstron Air Force 0 0 750,000 0 750,000
Base
March Air Force Base 1,684,770 0 75,000 0 1,759,770
Mare Island Naval 3,263,983 0 8,050,000 10,448,000 21,761,983
Shipyard
Mather Air Force 630,500 1,692,688 9,794,451 1,750,000 13,867,639
Base
McClellan Air Force 2,803,511 0 0 11,670,000 14,473,511
Base
Memphis Defense 858,637 0 1,400,000 2,258,637
Distribution Depot
Memphis Naval Air 1,461,983 2,311,330 1,252,000 0 5,025,313
Station
Mobile Naval Air 200,000 0 93,750 0 293,750
Station
Moffett Field Naval 0 0 0 5,010,678 5,010,678
Air Station
Myrtle Beach Air 1,408,264 23,832,303 3,500,000 925,000 29,665,567
Force Base
New London Naval 187,500 0 0 0 187,500
Underwater Warfare
Center
Newark Air Force 800,602 0 0 2,750,000 3,550,602
Base
Norfolk Naval 108,561 0 0 0 108,561
Aviation Depot
Norfolk Naval 0 0 1,000,000 0 1,000,000
Shipyard
Norton Air Force 741,000 10,424,638 9,383,660 2,916,000 23,465,298
Base
Ogden Defense 1,056,805 0 75,000 0 1,131,805
Distribution Depot
Orlando Naval 0 0 735,000 0 735,000
Hospital
Orlando Naval 1,658,536 0 118,875 3,392,374 5,169,785
Training Center
Pease Air Force Base 859,790 20,617,344 8,475,000 0 29,952,134
Pensacola Naval 341,546 0 0 5,300,000 5,641,546
Aviation Depot
Philadelphia Defense 321,306 0 0 4,500,000 4,821,306
Personnel Supply
Center
Philadelphia Naval 105,015,64 0 14,273,850 45,970,000 165,259,49
Station, Naval 0 0
Hospital and Naval
Shipyard
Plattsburgh Air 2,159,844 0 4,843,000 1,296,684 8,299,528
Force Base
Point Molate 149,901 0 0 0 149,901
Port Hueneme Naval 159,900 0 2,306,395 0 2,466,295
Construction
Engineering Lab
Portsmouth Naval 0 0 500,000 0 500,000
Station, ME
Portsmouth Naval 0 0 4,450,000 2,700,000 7,150,000
Station, N.H.
Presidio of San 0 0 0 500,000 500,000
Francisco
Pueblo Army Depot 194,000 0 70,000 0 264,000
Puget Sound Naval 120,000 0 850,000 1,188,000 2,158,000
Station (Sand Point
Red River Army Depot 631,247 0 0 0 631,247
Reese Air Force Base 919,980 0 2,584,250 1,268,622 4,772,852
Richards-Gebaur Air 241,985 3,817,235 0 0 4,059,220
Reserve Station
Rickenbacker Air 111,000 4,456,060 0 684,545 5,251,605
Guard Base
Sacramento Army 436,010 0 75,000 1,750,000 2,261,010
Depot
San Diego Naval 1,783,996 0 389,000 0 2,172,996
Training Center
Savanna Army Depot 525,852 0 0 0 525,852
Seneca Army Depot 1,189,730 0 2,706,250 0 3,895,980
Sierra Army Depot 626,734 0 0 0 626,734
South Weymouth Naval 422,000 0 120,000 925,000 1,467,000
Air Station
St. Louis Aviation 341,587 0 0 5,850,000 6,191,587
Troop Command
Staten Island Naval 527,244 0 0 636,000 1,163,244
Station
Stratford Army 615,553 0 0 0 615,553
Engine Plant
Suffolk Naval 90,000 0 0 0 90,000
RadioTransmission
Facility Driver
Tooele Army Depot 562,260 0 2,575,000 3,244,000 6,381,260
Treasure Island 0 0 735,000 0 735,000
Naval Station
Trenton Naval Air 134,902 0 0 850,000 984,902
Warfare Center
Tustin Marine Corps 1,392,543 200,000 0 0 1,592,543
Air Station
Vint Hill Farms 1,355,564 0 0 0 1,355,564
Station
Warminster Naval Air 1,583,558 0 2,000,000 3,030,000 6,613,558
Warfare Center
Watertown Army 185,000 0 1,762,500 0 1,947,500
Materials
Technology
Laboratory
Williams Air Force 1,869,702 14,253,961 7,057,250 2,000,000 25,180,913
Base
Woodbridge Air 50,000 0 0 0 50,000
Reserve Facililty
Wurtsmith Air Force 1,997,015 139,500 9,717,500 1,250,000 13,104,015
Base
Other\e 15,516,542 0 0 7,008,152 22,524,694
================================================================================
Total $231,310,6 $270,518,0 $334,366,0 $210,400,4 $1,046,595
32 81 19 14 ,146
--------------------------------------------------------------------------------
\a Office of Economic Adjustment; data through Feb. 17, 1998.
\b Federal Aviation Administration; data through Sept. 30, 1997.
\c Economic Development Administration; data through Sept. 30, 1997.
\d Department of Labor; data through Dec. 30, 1997.
\e These funds went to California Community Colleges, East Bay Pilot
Project, California Community Assistance, Oakland Military Complex,
Virginia Defense Project, San Francisco Complex and Hamilton Military
Complex.
CIVILIAN JOBS LOST AND CREATED AT
MAJOR BASE REALIGNMENTS AND
CLOSURES DURING THE FOUR ROUNDS
========================================================== Appendix II
The closure and realignment of military bases creates job losses at
these facilities, but subsequent redevelopment of the former bases'
property affords opportunities for the creation of new jobs. DOD
estimates that, for major closures and realignments for the four
rounds, the number of civilian job losses will exceed 135,000 (as
shown in the following table); this number was derived from estimates
made during the base realignment and closure (BRAC) decision-making
process for each round. As of March 31, 1998, DOD reports that the
number of jobs actually created at these activities exceeded 49,000.
Over time, the number of jobs created will increase as more bases are
closed or realigned and additional redevelopment occurs. As a
result, the recovery rate, which provides a rough indicator of how
base reuse is contributing to the economic recovery of BRAC-affected
communities, will also increase. The data presented in the table do
not include the job losses from base closures that may have occurred
elsewhere in a community, nor do they capture jobs created from other
economic activity in the area.
Estimated
civilian Jobs Recovery
Base jobs lost created (percent)
-------------------------------------------- ---------- ---------- ----------
Alameda Naval Air Station and Naval Aviation 3,228 598 18.53
Depot
Army Materials Technology Lab (Watertown) 540 0 0
Barbers Point Naval Air Station\a 618 0 0
Bayonne Military Ocean Terminal\a 2,015 0 0
Bergstrom Air Force Base 927 53 5.72
Carswell Air Force Base 869 688 79.17
Castle Air Force Base 1,149 1,881 163.71
Cecil Field Naval Air Station\a 995 0 0
Chanute Air Force Base 1,035 1,416 136.81
Charleston Naval Complex 6,272 3,087 49.22
Chase Field Naval Air Station 956 1,290 134.94
Eaker Air Force Base 777 416 53.54
El Toro Marine Corps Air Station 979 0 0
England Air Force Base 682 1,527 223.90
Fitzsimons Army Medical Center\a 1,612 54 3.35
Ft. Benjamin Harrison\ 4,240 563 13.28
Ft. Devens 2,178 1,470 67.49
Ft. Dix 2,186 0 0
Ft. Greely\a 291 0 0
Ft. McClellan\a 2,156 0 0
Ft. Ord 2,835 1,135 40.04
Ft. Pickett 245 61 24.90
Ft. Ritchie\a 1,373 21 1.53
Ft. Sheridan 1,681 20 1.19
Gentile Air Force Station 2,804 1,819 64.87
George Air Force Base 506 673 133.00
Glenview Naval Air Station 389 52 13.37
Griffiss Air Force Base 1,191 1,175 98.66
Grissom Air Force Base 792 402 50.76
Guam Naval Complex 980 705 71.94
Homestead Air Force Base 136 388 285.29
Indianapolis Naval Air Warfare Center 2196 2,010 91.53
Jefferson Proving Ground 387 10 2.58
Kelly Air Force Base\a 10,912 144 1.32
K.I. Sawyer Air Force Base 788 657 83.38
Lexington Army Depot 1,131 379 33.51
Long Beach Naval Complex 4,487 200 4.46
Loring Air Force Base 1,311 588 44.85
Louisville Naval Surface Warfare Station 1,435 501 34.91
Lowry Air Force Base 2,275 1,490 65.49
March Air Force Base 997 443 44.43
Mare Island Naval Shipyard 7,567 1,038 13.72
Mather Air Force Base 1,012 1,807 178.56
McClellan Air Force Base\a 8,828 0 0
Memphis Defense Distribution Depot 1,289 185 14.35
Memphis Naval Air Station 250 39 15.60
Myrtle Beach Air Force Base 784 926 118.11
Newark Air Force Base 1,760 887 50.40
Norton Air Force Base 2,133 2,490 116.74
Oakland Naval Complex\a\b 2,834 0 0
Ogden Defense Distribution Depot 1,105 130 11.76
Orlando Naval Training Center\a 753 1,125 149.40
Pease Air Force Base 400 1,385 346.25
Philadelphia Defense Personnel Supply 1,485 300 20.20
Center\a\b
Philadelphia Naval Complex 8,119 528 6.50
Plattsburgh Air Force Base 352 249 70.74
Presidio of San Francisco 3,150 1,779 56.48
Reese Air Force Base 1,238 104 8.40
Red River Army Depot\a 386 5 1.30
Sacramento Army Depot 3,164 5,000 158.03
San Diego Naval Training Center 402 8 1.99
Savanna Army Depot\a 436 0 0
Seneca Army Depot\a 273 0 0
Sierra Army Depot\a 374 44 11.76
Staten Island Naval Station 1,001 50 5.00
Stratford Army Engineering Plant 1,400 5 0.36
St. Louis Aviation Troop Command 4,263 0 0
Tooele Army Depot 1,942 577 29.71
Treasure Island Naval Station 454 1,703 375.11
Tustin Marine Corps Air Station\a 348 0 0
Vint Hill Farms Station 1,472 30 2.04
Warminster Naval Air Warfare Center 2,311 277 11.99
Williams Air Force Base 728 1,418 194.78
Wurtsmith Air Force Base 690 1,070 155.07
================================================================================
Total 135,259 49,075 36.28
--------------------------------------------------------------------------------
Note: The number of "estimated civilian jobs lost" is a projection
of DOD civilian and contractor personnel losses at the major BRAC
bases for the four rounds, even though such losses may not have
actually occurred as yet, particularly at BRAC bases that have not
yet completed realignment or closure. The number of "jobs created"
included only civilian jobs created at major BRAC locations as of
March 31, 1998.
\a These are remaining base closures and realignments that have not
been completed; the estimated jobs lost for these bases are 34,624
and the jobs created are 1,393.
\b The Oakland Naval Complex includes Oakland Naval Hospital, Oakland
Army Base, and Oakland Fleet Industrial Supply Center. Philadelphia
Defense Personnel Supply Center includes the Philadelphia Clothing
Factory and Philadelphia Defense Personnel Supply Center.
Source: DOD's Office of Economic Adjustment, as of March 31, 1998.
STATUS OF PROPERTY DISPOSITION AT
SELECTED BASES VISITED
========================================================= Appendix III
We performed work at seven BRAC bases to gain a sense of the property
transfer mechanisms--public benefit transfers, economic development
conveyences, or sales--being used to dispose of unneeded property.
The bases selected for visits represent a mix of military service and
BRAC round closures or realignments, as follows:
-- Mather Air Force Base, California--a 1988 round base closing in
1993;
-- Lowry Air Force Base, Colorado--a 1991 round base closing in
1994;
-- Cameron Station, Virginia--a 1988 round base closing in 1995;
-- Defense Distribution Depot Ogden, Utah--a 1995 round base
closing in 1997;
-- Vint Hill Farms Station, Virginia--a 1993 round base closing in
1997;
-- Tooele Army Depot, Utah--a 1993 round base realigning in 1997;
and
-- Mare Island Naval Shipyard, California--a 1993 round base
closing in 1996.
------------------------------------- -- -------------------------------------
Mather Air Force Base
Mather Air Force Base, located on Property Disposition: The Air Force
5,716 acres near Sacramento, and Sacramento County are in
California, enjoyed a long history as negotiations for the sale of 329
a military installation. The base was acres containing 1,271 housing units
first activated in 1918 as an and 176 acres containing a golf
airfield and combat pilot training course. The county is acquiring
school, then placed on inactive another 771 acres through an economic
status from 1922 until 1930 and again development conveyance at a cost of
from 1932 until 1941. The base was about $8 million with no down payment
used for pilot and navigator training and no payment during the first 5
activities during World War II and years. As of June 1998, about 55
continued as a training center after acres of the property requested under
the war. It was selected for closure the economic development conveyance
in the 1988 BRAC round and closed in had been transferred by title and the
September 1993. remaining property was under lease.
Specifically, the Air Force executed
one deed under the early transfer
authority (see ch. 4) and is
processing a second early transfer
deed for the remaining acreage.
Public benefit conveyances included
2,875 acres for an airport, 1,470
acres for local parks, 34 acres for
homeless services and a housing
center; and 43 acres for schools and
churches. The balance is used by
federal and state agencies, including
31 acres for a California National
Guard unit.
Lowry Air Force Base
Lowry is located on 1,866 acres in a Property Disposition: The Lowry
suburban area between Denver and Redevelopment Authority, representing
Aurora. The base was originally the cities of Denver and Aurora, is
established in 1937 as an Army Air the lead agency for redeveloping the
Corps technical school. It was former military base. It is pursuing
selected for closure in the 1991 about 755 acres through an economic
round and closed in September 1994. development conveyance and about 580
acres through a negotiated sale. As
of June 1998, about 310 acres had
been deeded. The sale price was
$32.5 million, with a 15-year
repayment schedule. Parcels totaling
about 115 acres are being retained by
the Air Force. Several public benefit
transfers are planned for educational
(220 acres), recreational (175
acres), and homeless (25 acres) use.
The homeless service providers agreed
to accept 10 percent of existing base
housing and a federal grant (plus
local matching funds) to purchase
about 200 units in a five-county
area.
Cameron Station
Cameron Station, located in Property Disposition: Plans were to
Alexandria, Virginia, provided make 165 excess acres available to
logistical and administrative support the community for redevelopment.
to the local military district. It Accordingly, 64 acres were granted to
was selected for closure in the 1988 the city of Alexandria through a
BRAC round and closed in 1995. public benefit transfer, and a
competitive bid sale of 101 acres to
a developer provided the Army with
$33.3 million in revenue.
Defense Distribution Depot Ogden
Defense Depot Ogden was established Property Disposition: Army plans
in Ogden, Utah, in 1941 and was used indicate that the local reuse
to store, maintain, and ship a authority has requested about 1,020
variety of materials for DOD and acres through an economic development
other agencies. The site encompasses conveyance. The remaining property
about 1,128 acres and is located 35 will be divided between a military
miles north of Salt Lake City. The enclave and a public benefit
depot was selected for closure in the conveyance for a nature center.
1995 BRAC round and closed in Although no property had been
September 1997. transferred as of June 1998, an
interim master lease was in place.
Vint Hill Farms Station
Vint Hill Farms Station is located in Property Disposition: An application
northern Virginia, about 40 miles for an economic development
from Washington, D.C. It includes 721 conveyance was submitted to the Army
acres of land, of which 148 acres are in April 1997. Negotiations are
developed. The Army purchased the complete and as of July 1998, the
land in 1942 and used it as a signal Army was awaiting final agreement by
school, signal training center, and the local reuse authority. Payment
refitting station. After World War terms are $925,000 for the real
II, the installation engaged in property and some personal property.
communication intelligence Payments are to be made in equal
activities. It was selected for amounts beginning in year 8 and
closure in the 1993 BRAC round and concluding in year 15, at an interest
closed in September 1997. rate of 7.625 percent commencing upon
transfer of the property, expected
sometime during spring 1999. Although
no property has been formally
transferred, the Army has approved
several interim leases to the reuse
authority. Following final approval
of the economic development
conveyance, the Army intends to
execute a lease in furtherance of
conveyance for land to support
development of a golf course.
Tooele Army Depot
Tooele Army Depot is a 25,172-acre Property Disposition: The local reuse
installation located 35 miles west of authority requested approximately
Salt Lake City. Originally 1,700 acres via a rural no-cost
established and constructed as an economic development conveyance. The
ordnance depot in 1942, it began first portion of the excess property,
operating as a storage, supply, and about 42 acres, which includes a
repair depot in 1947. By 1993 there 400,000-square foot state-of-art
were three main missions at the consolidated maintenance facility,
depot: ammunition operations, was transferred in June 1996 to the
ammunition equipment design and local reuse authority, which later
development, and the overhaul of sold it to Penske Corporation.
military locomotives and rail- Subsequent to the economic
mounted generators. Although the base development conveyance application,
is remaining open, a 1993 BRAC the local reuse authority and the
recommendation to close and transfer Army began discussions of expediting
the ammunition operations and the property transfer using the
overhaul missions has led to actions section 334 early transfer authority.
to dispose of 1,707 acres, completed Nine leases were executed in 1996 at
in September 1997. the local reuse authority's request
to facilitate initial reuse of the
property. Additionally, a lease in
furtherance of conveyance for 1,447
acres was completed in September
1997.
Mare Island Naval Shipyard
Mare Island occupies a 4,895-acre Property Disposition: The city
peninsula at the northeastern edge of applied for an economic development
San Francisco Bay and includes conveyance of 1,412 acres, which
approximately 1,400 acres adjacent to covers most, but not all, of the land
the city of Vallejo. From the mid- excessed in January 1996. It is
1800s until its closure, it operated expected to be approved in February
as a naval shipyard, conducting 1999. While the Navy continues to
numerous industrial activities. It hold title to the property, it has
was selected for closure in the 1993 agreed to an interim lease that
BRAC round and closed in March 1996. allows the city to sublease
facilities. The ultimate plan for the
property (mostly wetlands) covers 8
years and includes a $26-million loan
from the Navy for infrastructure
improvements. Under the agreement,
about 3629 acres will revert to
California and DOD will retain about
35 acres. About 170 acres will be
divided among three federal agencies:
the Fish and Wildlife Service, the
Forest Service, and the Coast Guard.
Approximately 50 percent of Mare
Island is subject to the Tidelands
Trust. Most of this land will revert
to the state. However, some of this
land is to be conveyed to the local
reuse authority and the Tidelands
Trust would restrict development and
conflicts with some elements of the
reuse plan. The city and the State
Lands Commission are working to
resolve these issues.
--------------------------------------------------------------------------------
SELECTED ENVIRONMENTAL LAWS AND
REGULATIONS PERTINENT TO CLEANUP
AT BRAC BASES
========================================================== Appendix IV
Property disposals resulting from BRAC rounds are governed by various
laws and regulations relating to the disposal of unneeded government
property, environmental cleanup, and the protection of natural and
cultural resources. DOD must comply with these laws and regulations
shown below in order to put BRAC property back into reuse by either
federal or nonfederal users.
Title Summary
--------------------------------------- ---------------------------------------
Primary sources of authority
--------------------------------------------------------------------------------
Base Closure and Realignment Act of Requires DOD to comply with a variety
1988 (P.L. 100-526, 102 of laws--including the Comprehensive
Stat. 2627) and the Defense Base Environmental Response, Compensation,
Closure and Realignment Act of 1990 and Liability Act (CERCLA) and the
(P.L. 101-510, 104 Stat. 1808), 10 National Environmental Policy Act--to
U.S.C. 2687 Note effect federal real property disposal
at most BRAC installations.
CERCLA, section 120, 42 U.S.C. 9620 Defines the roles for the Environmental
Protection Agency, state agencies, and
DOD components. Section 120 compliance
is required for all federal facilities,
including BRAC bases. Generally
requires for that all remedial action
necessary to protect human health and
the environment has been taken prior to
property transfer. Also requires the
federal government to assume financial
responsibility for any additional
cleanup of DOD-caused pollution
discovered in the future.
National Oil and Hazardous Substances Sets criteria for an installation's
Pollution Contingency Plan, 40 C.F.R. inclusion on the National Priorities
part 300 List (NPL). Establishes procedures for
conducting response actions.
Executive Order 12580 Authorizes DOD components to conduct
site investigations and cleanups.
Superfund Amendments and Used as the basis for the Defense
Reauthorization Act, section 211, Environmental Restoration Program.
10 U.S.C. 2701 Authorizes removal of unexploded
ordnance and unsafe buildings and
debris on BRAC bases.
National Environmental Policy Act, 42 Defines the process for examining
U.S.C 4331 potential impacts to the environment
that may result from disposition of
BRAC installation property. Requires
that reuse alternatives are identified
and characterized and that the
environmental impacts associated with
each are disclosed.
State laws and other statutes CERCLA section 120(a)(4) states that
"State laws concerning removal and
remedial actions, including State laws
regarding enforcement, shall apply to
removal and remedial action at
facilities owned or operated by a
department, agency, or instrumentality
of the United States when such
facilities are not included in the
National Priorities List."
Other relevant federal environmental laws
--------------------------------------------------------------------------------
Resource Conservation and Recovery Act, Establishes the framework for managing
42 U.S.C. 6901 et seq. solid and hazardous wastes. Applies to
both NPL and non-NPL installations.
Toxic Substances Control Act, 15 U.S.C. Regulates specific chemical substances,
2601, et seq. including polychlorinated biphenyls and
asbestos.
Federal Water Pollution Control Act Regulates discharges of pollutants into
("Clean Water Act"), 33 U.S.C. 1251, et waters. Requires the establishment of
seq. criteria and standards to protect water
quality. Requires federal permits for
dredge and fill operations.
Safe Drinking Water Act, 42 U.S.C. Establishes regulations to protect
300f, et seq. human health from contaminants in
drinking water.
Clean Air Act 42, U.S.C. 7418 Regulates releases of pollutants into
the air.
Federal Insecticide, Fungicide, and Establishes a registration program for
Rodenticide Act, 7 U.S.C. 135, et seq. pesticides. Governs disposal of
pesticides.
Other selected federal laws affecting land use
--------------------------------------------------------------------------------
American Indian Religious Freedom Act, Protects and preserves access to
42 U.S.C. 1996 religious sites of Native Americans.
Archaeological and Historic Protects historic or archaeological
Preservation Act, 16 U.S.C. 469 resources threatened by federal dams or
construction projects.
Bald and Golden Eagle Protection Act, Governs activities and facilities that
16 U.S.C. 668 may threaten protected birds.
Coastal Zone Management Act, 16 U.S.C. Requires federal agencies to observe
1451-1464 state Coastal Zone Management Plans for
activities near shorelines.
Endangered Species Act, 16 U.S.C. 1531- Protects threatened and endangered
1544 species and their habitats.
Fish and Wildlife Coordination Act, 16 Requires federal agencies to consider
U.S.C. 663 the effect of their land and water use
activities on fish and wildlife.
National Historic Preservation Act, 16 Establishes a program for the
U.S.C. 470 preservation of designated historic
properties throughout the nation.
Water Resources Development Acts, 33 Establishes a national goal of no net
U.S.C. 2283 and 2317 loss of wetlands. Provides for
mitigation of negative effects of water
resource projects on fish and wildlife.
Wild and Scenic Rivers Act, 16 U.S.C. Preserves and protects the free-
1271 flowing condition of designated rivers.
--------------------------------------------------------------------------------
(See figure in printed edition.)Appendix V
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
========================================================== Appendix IV
(See figure in printed edition.)
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix VI
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C.
Barry W. Holman, Associate Director
James R. Reifsnyder, Evaluator-in-Charge
Kay Kuhlman, Senior Evaluator
Richard R. Irving, Evaluator
SAN FRANCISCO FIELD OFFICE
Julie M. Hirshen, Senior Evaluator
Randolph D. Jones, Senior Evaluator
Alexandra Y. Martin-Arseneau, Senior Evaluator
Jonathan M. Silverman, Communications Analyst
Karen D. Wright, Evaluator
RELATED GAO PRODUCTS
Military Bases: Review of DOD's 1998 Report on Base Realignment and
Closure (GAO/NSIAD-99-17, Nov. 13, 1998).
Military Base Closures: Issues Related to Fiscal Year 1999 Budget
Request (GAO/NSIAD-98-169, July 30, 1998).
Defense Infrastructure: Challenges Facing DOD in Implementing Reform
Initiatives (GAO/T-NSIAD-98-115, Mar. 18, 1998).
Military Bases: Lessons Learned From Prior Base Closure Rounds
(GAO/NSIAD-97-151, July 25, 1997).
Military Base Closures: Detailed Budget Requests Could Improve
Visibility (GAO/NSIAD-97-170, July 14, 1997).
Navy Depot Maintenance: Cost and Savings Issues Related to
Privatizing-in-Place at the Louisville, Kentucky, Depot
(GAO/NSIAD-96-202, Sept. 18, 1996).
Military Base Closures: Reducing High Costs of Environmental Cleanup
Requires Difficult Choices (GAO/NSIAD-96-172, Sept. 5, 1996).
Military Bases: Potential Reductions to the Fiscal Year 1997 Base
Closure Budget (GAO/NSIAD-96-158, July 15, 1996).
Military Bases: Closure and Realignment Savings Are Significant, but
Not Easily Quantified (GAO/NSIAD-96-67, Apr. 8, 1996).
Military Bases: Analysis of DOD's 1995 Process and Recommendations
for Closure and Realignment (GAO/NSIAD-95-133, Apr. 14, 1995).
Military Bases: Challenges in Identifying and Implementing Closure
Recommendations (GAO/T-NSIAD-95-107, Feb. 23, 1995).
Military Bases: Environmental Impact at Closing Installations
(GAO/NSIAD-95-70, Feb. 23, 1995).
Military Bases: Reuse Plans for Selected Bases Closed in 1988 and
1991 (GAO/NSIAD-95-3, Nov. 1, 1994).
Military Bases: Analysis of DOD's Recommendations and Selecting
Process for Closures and Realignments (GAO/NSIAD-93-173, Apr. 15,
1993).
Military Bases: Varied Processes Used in Proposing Base Closures and
Realignments (GAO/NSIAD-91-133, Mar. 1, 1991).
Military Bases: Process Used by Services for January 1990 Base
Closure and Realignment Proposals (GAO/NSIAD-91-109, Jan. 7, 1991).
Military Bases: An Analysis of the Commission's Realignment and
Closure Recommendations (GAO/NSIAD-90-42, Nov. 29, 1989).
*** End of document. ***
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