Military Base Closures
Progress in Completing Actions from Prior Realignments and Closures Gao ID: GAO-02-433 April 5, 2002Through military base realignment and closures rounds in 1988, 1991, 1993, and 1995, the Pentagon significantly reduced its domestic infrastructure and freed up needed dollars for high-priority programs. By the end of last round in fiscal year 2001, the Department of Defense (DOD) had closed or realigned hundreds of bases, generated savings, and transferred unneeded property to other users. The communities surrounding the former bases continue to recover economically from the closures. Congress recently authorized another round of base realignments and closures beginning in 2005. DOD has saved $16.7 billion through fiscal year 2001, and expects to save $6.6 billion in annually in future years. Although DOD plans to transfer nearly all of the 518,500 acres of unneeded base property to federal and nonfederal users, it has completed only some of the transfers. Environmental cleanup is the primary impediment to conveying the remaining property titles. The military services are using early transfer authority and leasing to make property available for reuse sooner. Although successful redevelopment of base property plays a key role in the economic recovery of neighboring communities, broader regional economic growth also is important to the process. Two economic indicators--the unemployment rate and average annual real capita income growth rate--show that most communities are doing well compared with average U.S. rates, despite delays in the transfer or reuse of former base property. But questions remain about some communities' ability to sustain their economic recovery over time, particularly in light of the recent downturn in the national economy.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-02-433, Military Base Closures: Progress in Completing Actions from Prior Realignments and Closures
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Report to the Honorable Vic Snyder,
House of Representatives:
United States General Accounting Office:
GAO:
April 2002:
MILITARY BASE CLOSURES:
Progress in Completing Actions from Prior Realignments and Closures:
Military Base Closures:
GAO-02-433:
Contents:
Letter:
Results in Brief:
Background:
BRAC Net Savings Are Substantial but Imprecise:
Transfer of Unneeded BRAC Property Is Only Partially Completed:
Most Communities Are Continuing to Recover from the Economic Impact of
BRAC:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: Revisions to BRAC Cost and Savings Estimates:
Appendix III: DOD‘s Use of Economic Development Conveyances:
Appendix IV: Civilian Jobs Lost and Created at Major BRAC
Locations during the Prior Four BRAC Rounds:
Appendix V: Average Unemployment Rates of BRAC-Affected Areas Compared
with the U.S. Average Rate:
Appendix VI: Average Annual Real per Capita Income Growth
Rates of BRAC-Affected Areas Compared with the
U.S. Average Rate:
Appendix VII: Case Examples of Community Impacts and Recovery from
BRAC:
Appendix VIII: Key Reports Related to Base Closure Implementation
Issues:
Appendix IX: Comments from the Department of Defense:
Appendix X: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: DOD‘s Cost and Savings Estimates through Fiscal Year 2001 for
the Four BRAC Rounds:
Table 2: Actual Transfers of Unneeded BRAC Property, as of September
30, 2001:
Table 3: Leased BRAC Acreage, as of September 30, 2001:
Table 4: Use and Status of Early Transfer Authority at BRAC Bases
through Fiscal Year 2001:
Table 5: Cumulative Cost and Savings Estimates through Fiscal Year 2001
for the Prior Four BRAC Rounds as Reflected in DOD‘s Budget Requests
and Documentation for Fiscal Years 1999 and 2002:
Table 6: DOD‘s Use of Economic Development Conveyances:
Table 7: Civilian Jobs Lost and Created at Major Base Realignments and
Closures during the Prior Four BRAC Rounds, as of October 31, 2001:
Table 8: Community Impacts Resulting from the Closure of Chase Naval
Air Station, Texas, as Reported in 1998 and 2001:
Table 9: Community Impacts Resulting from the Closure of Castle Air
Force Base, California, as Reported in 1998 and 2001:
Table 10: Reported Community Impacts Resulting from Base Closures for
Communities Not Visited in 1998:
Figures:
Figure 1: DOD‘s Usual Procedures for Transferring Property:
Figure 2: Cumulative BRAC Cost and Savings Estimates through Fiscal
Year 2001:
Figure 3: Planned Disposition of Unneeded Property:
Figure 4: Planned Transfers to Federal Agencies:
Figure 5: Planned Transfers to Nonfederal Entities:
Figure 6: DOD‘s Estimated Environmental Cleanup Cost at Base Closure
Sites After Fiscal Year 2001, as of September 30, 2001:
Figure 7: Factors Affecting Economic Recovery from Base Closures:
Figure 8: Average Unemployment Rates of 62 BRAC-Affected Communities
Compared with Average U.S. Rate for January-September 2001:
Figure 9: Calendar Years 1996-99 Average Annual per Capita Income
Growth Rates of BRAC-Affected Areas Compared with U.S. Average:
Figure 10: Comparison of Unemployment Rates of 24 BRAC-Affected
Locations West of the Mississippi River:
Figure 11: Comparison of Unemployment Rates of 38 BRAC-Affected
Locations East of the Mississippi River:
Figure 12: Comparison of Average Annual Real per Capita Income Growth
Rates of 24 BRAC-Affected Locations West of the Mississippi River:
Figure 13: Comparison of Average Annual Real per Capita Income Growth
Rates of 38 BRAC-Affected Locations East of the Mississippi River:
Abbreviations:
BRAC: base realignment and closure
CBO: Congressional Budget Office
DOD: Department of Defense:
United States General Accounting Office:
Washington, DC 20548:
April 5, 2002:
The Honorable Vic Snyder
House of Representatives:
Dear Mr. Snyder:
Through base realignment and closure rounds in 1988, 1991, 1993, and
1995, the Department of Defense expected to significantly reduce its
domestic infrastructure and provide needed dollars for high-priority
programs such as modernization. With the conclusion of the 6-year
implementation period of the last round in fiscal year 2001, the
department has closed or realigned hundreds of bases, has generated
savings from these actions, and is in the process of transferring
unneeded base property to other users. At the same time, the
communities surrounding the former defense bases continue the lengthy
process of recovery from the economic impact of the closure process.
Our last comprehensive report on the implementation of base closure
decisions was issued in December 1998.[Footnote 1] In that report, we
concluded that the closure process was generating substantial savings
(although the savings estimates were imprecise), most former base
property had not yet been transferred to other users, and most
communities surrounding closed bases were faring well economically in
relation to key national economic indicators. In a July 2001 report and
August 2001 testimony, we updated our closure implementation data and
reaffirmed the primary results of our prior work.[Footnote 2]
While the Congress recently authorized another round of defense base
realignments and closures beginning in 2005, many in the Congress
continue to have questions about the implementation of the prior
rounds. Some in Congress have raised concerns about the adequacy of the
department‘s accounting for the costs and savings associated with
closure decisions and the economic impact on communities affected by
the closures and their ability to recover. Others have expressed the
view that all prior round actions should be completed before the
introduction of any new rounds.
As requested, this report further updates the status of the four prior
rounds of defense base realignments and closures at the conclusion of
the 6-year implementation period associated with the 1995 round. It
addresses (1) the magnitude of the net savings accruing from the prior
four closure rounds and the impact of remaining closure-related costs
on future savings, (2) the department‘s progress in transferring
unneeded base property to other users, and (3) the economic recovery of
communities affected by base closures.
In performing our work, we used our December 1998 status report on
prior realignments and closures as a baseline for assessing the
department‘s progress in completing prior round actions. First, we
examined the department‘s recently reported net savings estimates and
the rationale for estimate revisions over time. Second, we compared
data on actual unneeded property transfers with earlier data and sought
out the reasons for transfer delays. Finally, we reviewed key economic
indicators (e.g., unemployment rates and real per capita income growth)
for communities affected by the closure process and visited select
communities to assess the overall recovery process. Further details on
the scope and methodology for our work are described in appendix I.
Results in Brief:
The Department of Defense has generated substantial net savings from
the prior four closure rounds and expects those savings to grow on an
annual basis. Our analyses have consistently affirmed that the net
savings for the four closure rounds are substantial and can best be
depicted as cost avoidances in specific operational areas. On the basis
of our analysis of defense budget documentation for fiscal year 2002,
the Department has accrued an estimated $16.7 billion in savings
through fiscal year 2001, an increase over prior estimates. The
department also expects to gain an estimated $6.6 billion in annual
recurring savings thereafter--up $1 billion over estimates made in
fiscal year 1999. The increase is attributed to adjustments in the
inflation rate, changes in the planned implementation of base
realignment and closure actions at specific locations, and the
department‘s underreporting of estimated savings. At the same time, our
reviews have found that the department‘s savings estimates are
imprecise and should be viewed as rough approximations of the likely
savings. Our analysis indicates that the imprecision stems primarily
from the military services‘ failure to periodically update overall
savings estimates, despite departmental guidance to do so. Because
closure or realignment implementation actions may vary from the
original plans, it is important for the services to review and update
these estimates periodically to increase their accuracy. Also, the
estimates do not include a cumulative $1.5 billion cost incurred by the
federal government to assist communities affected by the closure
process or $3.5 billion in environmental costs expected beyond fiscal
year 2001. The inclusion of these costs would have only a limited
impact on cumulative long-term savings. Furthermore, although estimated
environmental costs have fluctuated over time and remain subject to
change, the total expected costs of about $10.5 billion are still
within the range of the projected costs estimated in 1996.[Footnote 3]
Although the department has plans in place to transfer nearly all of
the 518,500 acres of unneeded base property to federal and nonfederal
users, it has only partially completed the property transfers. As of
September 30, 2001, it had transferred about 42 percent of the total
518,500 acres--an increase from the 14-percent transfer rate reported
in 1998. The primary impediment to transferring the remaining property
involves environmental cleanup, which could take many more years to
complete as a condition for conveying property titles. The military
services are using several mechanisms, such as the early transfer
authority[Footnote 4] and leasing, to make property available sooner to
communities and others for reuse. While the early transfer authority
can be beneficial to all parties, it has not yet been widely used. It
appears that its use is an evolving process. Service officials told us
that they expect greater use of this authority as users become more
familiar with its potential advantages.
While some communities surrounding closed bases are faring better than
others, most are continuing to recover from the initial economic impact
of base closures. The economic impact on and recovery of specific
communities within the region of a closed base can vary because of such
factors as their proximity to the base and the business diversity
within the community. While the short-term impact can be very
traumatic, several factors, such as the strength of the national and
regional economies, play a role in determining the long-term impact of
the closure process. While the successful redevelopment of base
property can also play a role in the process, broader regional economic
growth may also be key to economic recovery. Two economic indicators--
the unemployment rate and average annual real per capita income growth
rate--show that the majority of communities are doing well compared
with average U.S. rates, despite delays in the transfer or reuse of
former base property. As of September 30, 2001, of the 62 communities
surrounding major base closures, 44 (71 percent) had average
unemployment rates lower than the U.S. rate, as reported by the
Department of Labor‘s Bureau of Labor Statistics. In addition, the
average unemployment rate decreased for 41 of the 62 communities (66
percent) since 1998. In terms of average annual real (adjusted for
inflation) per capita income growth rates, 33 (53 percent) of the
affected communities had rates equal to or higher than U.S. rates for
1996 through 1999, and another 7 (11 percent) were close to the
average. Of the rest, the rates of only three (5 percent) were
significantly lower than the U.S. rate and none had negative rates. In
addition, the per capita income growth rates increased for 42 of the 49
communities (86 percent) since we last reported them in 1998. Our
visits to communities surrounding six major base closures showed that
they were recovering, although not without difficulty and challenges.
Overall, while our analysis showed that the general economic trend for
most communities was favorable, questions remain about some
communities‘ ability to sustain their economic recovery over time,
particularly in light of the recent downturn in the national economy.
This report contains recommendations for executive action designed to
(1) improve the Defense Department‘s accuracy in reporting estimated
savings generated from the next congressionally authorized round of
base closure and realignment rounds beginning in 2005 and (2)
accelerate property transfers and/or save the department money through
the expanded use of the early transfer authority. In commenting on a
draft of this report, the department concurred with our
recommendations.
Background:
To enable the Department of Defense (DOD) to close unneeded bases and
realign others, the Congress enacted base realignment and closure
(BRAC) legislation that instituted base closure rounds in 1988, 1991,
1993, and 1995.[Footnote 5] A special commission established for the
1988 round made recommendations to the Committees on Armed Services of
the Senate and House of Representatives. For the 1991, 1993, and 1995
rounds, special BRAC Commissions were set up to recommend specific base
realignments and closures to the president, who in turn sent the
commissions‘ recommendations and his approval to the Congress. The four
commissions generated 499 recommendations--97 major closures and
hundreds of smaller base realignments, closures, and other
actions.[Footnote 6] Of the 499 recommendations, 451 required action;
the other 48 were modified in some way by a later commission. DOD was
required to complete its realignment and closure actions for the 1988
round by September 30, 1995, and for the 1991, 1993, and 1995 rounds
within 6 years from the date the president forwarded the recommended
actions to the Congress. Property disposal and environmental cleanup
actions, however, were allowed to continue beyond the 6-year period.
DOD reported that, as of September 30, 2001, it had taken all necessary
actions to implement the recommendations of the BRAC Commissions for
the four rounds.[Footnote 7] As a result of these actions, DOD
estimates that it has reduced its domestic infrastructure by about 20
percent and saved billions of dollars in the process. DOD calculates
its net savings by deducting the costs necessary to implement BRAC
actions from the savings accrued by realigning or closing bases. These
accrued savings include savings that occur during the budget year that
a BRAC decision is implemented as well as the estimated cost avoidances
during future years--costs that DOD would have incurred if BRAC actions
had not taken place. Some of the savings are one-time (e.g., canceled
military construction projects), but most represent an avoidance of
recurring spending (e.g., personnel reductions). Eliminating or
reducing recurring base support costs at closing and realigned bases is
a major component of BRAC savings. Savings are realized through a
number of actions, such as terminating physical security, fire
protection, utilities, property maintenance, accounting, payroll, and a
variety of other services that have associated costs linked
specifically to base operations. Over time, the value of the recurring
savings has become the largest and most important portion of BRAC‘s
overall savings. DOD reports these savings estimates to the Congress as
part of its annual budget requests. The avoidance of other one-time,
but not-yet-programmed, costs also may be significant over time, but
they are not easily captured or reported.
Once DOD no longer needs BRAC property, it is considered excess and is
offered to other federal agencies. As shown in figure 1, any property
that remains is then considered surplus and is disposed of through a
variety of means--initially by transfers to states and local
governments for public benefit purposes and, thereafter, for economic
development purposes (commonly referred to as ’economic development
conveyances“) and negotiated or public sales. Under public benefit
transfers, local redevelopment agencies can acquire property for such
purposes as schools, parks, and airports for little or no cost. In
1993, BRAC legislation was amended to provide local redevelopment
authorities with BRAC property at or below fair market value or without
cost to promote economic recovery in areas affected by closures. DOD
was required to transfer property for economic development to
communities in rural areas at no cost. Later, these provisions were
replaced with others that allowed no-cost property transfers to local
redevelopment authorities for job generation or lease back to the
federal government.[Footnote 8] Consequently, local redevelopment
authorities have usually sought to obtain property at no cost and,
failing that, pursue it through negotiated sales.
Figure 1: DOD‘s Usual Procedures for Transferring Property:
[See PDF for image]
[End of figure]
The economic impact on communities near base realignments and closures
has been a long-standing source of public anxiety. Because of this
concern, DOD included ’economic impact“ as one of eight criteria that
it used for making BRAC recommendations in the last three rounds.
Although it did not play as large a role in initial BRAC deliberations
as did other criteria and was not a key decision factor, ’economic
impact“ was of such sufficient importance that DOD components were
required to estimate the impact of their recommendations.
We have reported on base closure implementation issues on several
occasions. Although many of our reports have been limited in scope,
focusing on concerns raised by individual members of Congress on
closure-related actions at a specific location, our first comprehensive
report addressing DOD-wide closure issues (e.g., the magnitude and
precision of cost and savings estimates, the progress of environmental
cleanup and property transfer, and the latter‘s impact on communities
and their recovery) was issued in December 1998.[Footnote 9] In that
report, we concluded that the closure process was generating
substantial savings, although the savings estimates were imprecise;
most former base property was still awaiting transfer to other users;
and most communities surrounding closed bases were faring well
economically in relation to national economic indicators. Subsequent
reports issued in July and August 2001 updated closure-related
implementation data and reaffirmed the primary results of our prior
work.[Footnote 10] In our July 2001 report, for example, we noted that
DOD‘s net BRAC savings estimates, while imprecise, had not only
remained substantial but also were higher than projected earlier. In
August 2001, we reported that most BRAC-affected communities were
continuing to recover from the impact of base closures and were doing
well economically in terms of key U.S. economic indicators.
Furthermore, we noted that while progress was being made, over one-half
of unneeded former base property had not yet been transferred.
BRAC Net Savings Are Substantial but Imprecise:
Through fiscal year 2001, financial data show that DOD generated an
estimated $16.7 billion in net BRAC savings from the four rounds, an
increase of $2.5 billion from its fiscal year 1999 estimate, and
expects additional annual recurring savings of $6.6 billion beginning
in fiscal year 2002, an increase of $1 billion.[Footnote 11] Although
they have fluctuated over time, as projected costs and savings arising
from the BRAC actions have changed, the net savings estimates have
remained substantial. In addition to our analyses, studies by other
federal agencies, such as the Congressional Budget Office (CBO), the
DOD Inspector General, and the Army Audit Agency, have shown that BRAC
savings are real and substantial. However, because they are based on
cost and savings projections that are not precise, net savings should
be viewed as a rough approximation of the likely savings. The estimates
are imprecise because the military services have not regularly updated
their savings projections. Furthermore, DOD has not incorporated into
its estimates all costs, including reported cumulative federal
government expenditures of about $1.5 billion incurred by agencies to
assist communities affected by the BRAC process. On the other hand,
estimated net savings could be viewed as greater than reported by DOD
if one considers, for example, that many environmental-related costs
attributed to the closures would have likely occurred, but probably at
a slower pace, even if the bases had remained open. Also, closures
avoid future, but not yet programmed, recapitalization costs on
unneeded facilities.
BRAC Net Savings Estimates through Fiscal Year 2001 Have Increased $2.5
Billion:
DOD‘s fiscal year 2002 budget request and supporting data show that
BRAC net savings estimates have increased in recent years. DOD data
show savings estimates of about $16.7 billion through fiscal year 2001-
-an increase of about $2.5 billion from that reported in the fiscal
year 1999 budget request. As figure 2 shows, DOD‘s data indicate that,
in 1998, the cumulative net savings estimates surpassed the costs
incurred to implement BRAC actions, and the net savings have grown from
that point.
Figure 2: Cumulative BRAC Cost and Savings Estimates through Fiscal
Year 2001:
[See PDF for image]
[End of figure]
Source: Our analysis of DOD‘s data.
In preparing net savings estimates, DOD deducts the costs of
implementing BRAC actions for the four closure rounds (e.g., personnel
and equipment relocation and environmental cleanup) from the estimated
savings (e.g., cost avoidances such as base operational costs that
would have occurred without BRAC action) to project net
savings.[Footnote 12] Table 1 summarizes the cost and savings estimates
through fiscal year 2001 for the four BRAC rounds as presented in the
budget-related documentation for fiscal years 1999 and 2002.
Table 1: DOD‘s Cost and Savings Estimates through Fiscal Year 2001 for
the Four BRAC Rounds:
Dollars in millions.
Costs through fiscal year 2001; Fiscal year 1999
budget request and supporting documentation: $22,881;
Fiscal year 2002 budget request and supporting documentation:
$21,972; Total change: $(909).
Savings through fiscal year 2001; Fiscal year 1999
budget request and supporting documentation: 37,066;
Fiscal year 2002 budget request and supporting documentation:
38,679; Total change: 1,613.
Net savings through
fiscal year 2001; Fiscal year 1999 budget request
and supporting documentation: 14,185; Fiscal year
2002 budget request and supporting documentation: 16,707; Total change:
2,522.
Note: Figures are adjusted for inflation.
Source: Our analysis of DOD‘s budget requests for fiscal years 1999 and
2002 and supporting documentation.
[End of table]
As table 1 illustrates, our comparative analysis of BRAC budget
submissions and supporting data for fiscal years 1999 and 2002 shows
that the estimated net savings increase of $2.5 billion through 2001
was due to a combination of decreased costs ($909 million) and
increased savings ($1,613 million) estimates.
A significant portion of the estimated cost reduction resulted from
delays in planned environmental cleanup through 2001, leading to a
decrease of $379 million in reported environmental costs during that
time period. However, expected environmental costs beyond 2001 are now
$3.5 billion rather than the $2.4 billion estimate reported in fiscal
year 1999. At the same time, our analysis shows that overall
environmental costs remain within the range of prior program estimates
that we reported on in 1996.[Footnote 13] A significant portion of the
increased savings estimate is attributable to (1) an underreporting of
$925 million in savings accrued from the 1991 closure round and (2) the
inclusion of a $381 million savings estimate for two Air Force bases--
McClellan Air Force Base, California, and Kelly Air Force Base, Texas-
-which was not included in the fiscal year 1999 submission. Additional
details regarding the increase in projected net savings through fiscal
year 2001 and the rationale for revisions are included in appendix II.
Estimated Annual Recurring Savings Have Increased $1 Billion:
In addition to the revisions made to cost and savings estimates through
fiscal year 2001, DOD revised its annual recurring savings estimate for
fiscal years 2002 and beyond. DOD‘s data now show that DOD will accrue
an expected $6.6 billion in annual recurring savings for the four BRAC
rounds--an increase of approximately $1 billion from its fiscal year
1999 estimate. This increase is attributed to adjustments in the
inflation rate, changes in the implementation of BRAC actions at
specific locations, and underreported savings by the Navy, as explained
below:
* About $470 million of the $1 billion increase in expected annual
recurring savings is primarily a result of changes in the reporting
base year (from fiscal year 1999 to fiscal year 2002), which resulted
in 3 additional years of inflation.
* About $366 million of the increase is due to overall estimated
savings updates for specific BRAC actions made by the military services
since fiscal year 1999. The Army updated its savings estimates for 24
BRAC actions on the basis of revisions submitted by Army major commands
and in response to a 1997 Army Audit Agency report that recommended
specific adjustments for audited BRAC actions.[Footnote 14] The Navy
revised its savings estimate for the Navy Medical Research Institute,
Bethesda, Maryland, because of changes to planned implementation
actions at the facility. Finally, the Air Force‘s reported savings
estimates rose as a result of updates for BRAC actions at McClellan Air
Force Base, California, and Kelly Air Force Base, Texas, in its fiscal
year 2000 and 2001 requests.
* Another $208 million of the increase is the result of underreported
estimated savings in the Navy‘s 1991 BRAC round. Because the Navy
received an appropriation for the 1991 BRAC round in fiscal year 1998,
1 year after the last year of implementation, it reported some, but not
all, of the recurring savings in that additional year. Consequently,
about $208 million ($183 million plus an adjustment for inflation) was
not included in DOD‘s reported annual recurring savings.
Other Government Studies Also Show Substantial BRAC Savings:
In addition to our analyses, studies by other federal agencies, such as
CBO, the DOD Inspector General, and the Army Audit Agency, have shown
that BRAC savings are real and substantial and are related to cost
reductions in key operational areas as a result of BRAC actions. The
following are examples:
* In a July 1998 report, CBO reported substantial BRAC savings, even
though it found some imprecision in DOD‘s costs and savings
estimates.[Footnote 15] CBO stated its belief that DOD‘s estimate of
$5.6 billion in annual recurring savings at that time was reasonable,
given that the Budget Office‘s estimate was about $5 billion annually.
* In a May 1998 report on more than 70 closed or realigned bases during
the 1993 BRAC round, the DOD Inspector General found that BRAC savings
could potentially reach $9.2 billion.[Footnote 16]
* In a July 1997 report on BRAC costs and savings, the Army Audit
Agency concluded that savings after full implementation would be
substantial for ten 1995 BRAC round sites that it had
examined.[Footnote 17]
Precision of Cost and Savings Estimates Is Limited:
While the net savings from BRAC activities are clearly substantial,
savings and cost estimates used by DOD to calculate the net savings at
its BRAC-affected bases are imprecise. Despite DOD guidance directing
the military services to periodically update their savings estimates,
the services have not done this. Furthermore, DOD has not included all
costs associated with BRAC closures in its estimates. For example, the
estimated costs exclude some federal government costs related to BRAC
implementation and expected environmental costs beyond 2001. The
omission of these costs has the effect of overstating net savings
estimates. On the other hand, net savings could be viewed as
understated if one considers the broader implications of BRAC on the
DOD budget. For example, while the costs incurred for the environmental
cleanup of BRAC bases is recorded as a BRAC cost, DOD asserts that many
of these costs would have been incurred anyway had the closing bases
remained open. In this regard, it could be argued that the net costs
incurred by DOD are overstated and that net savings would thus be
increased.
BRAC Savings Estimates Are Not Updated Periodically:
The results of our prior and current work show that the military
services have not updated their savings estimates periodically, thereby
contributing to imprecision in overall BRAC estimated net savings
figures. Because closure or realignment actions may vary from the
original plans, it is important for the services to review and update
these estimates periodically to increase their accuracy. Moreover, DOD
guidance to the services emphasizes the importance of frequent updates
and directs them to update estimates in their annual budget
submissions.
Since our last review in 1998 of the services‘ efforts to update their
estimates, the Army has increased the frequency and scope of its
updates. As discussed previously, it updated savings estimates for 24
BRAC actions in its fiscal year 2000 budget request and an additional 6
in its fiscal year 2001 budget request. The Navy, on the other hand,
has revised the savings estimate for only one of its BRAC actions since
1998. Consistent with our previous reporting in 1998, Army and Navy
officials told us they revise estimates only when there are substantive
changes to BRAC decisions that warrant such revisions. While the Air
Force does not routinely revise its savings estimates from the initial
estimates established by the various BRAC commissions in rendering
their decisions, it did, however, update its estimates for McClellan
Air Force Base, California, and Kelly Air Force Base, Texas, in its
fiscal year 2000 and 2001 budget requests.[Footnote 18]
Service officials have cited a number of reasons for not routinely
updating savings estimates from BRAC closures and realignment. They
acknowledged that updating savings has not been a high priority and
that, instead, the emphasis in preparing the annual budget lies in
estimating costs--not savings. They told us that updating savings
estimates is a labor-intensive process and could be costly because no
systematic approach exists for the process. A fundamental limitation in
DOD‘s ability to identify and track savings from BRAC closures and
realignments is DOD‘s accounting systems, which like other accounting
systems, are not oriented toward identifying and tracking
savings.[Footnote 19] The services develop savings estimates when they
create their initial BRAC implementation budgets and report them in
DOD‘s BRAC budget justifications. Because the accounting systems do not
track savings, however, updating these estimates would require a
separate tracking method or system.
In those instances in which the services did update savings estimates,
the process for updating estimates varied among them, and they were
unable to provide us with adequate documentation to permit us to
independently validate the basis for the revised estimates. Army
officials told us that their major commands provided estimate revisions
during their funding request briefings with the Army Budget Office.
Similarly, Navy commands submitted revised estimates to the Naval
Engineering Facilities Command when a significant change was warranted.
The Air Force, on the other hand, did not require its commands to
submit updated estimates--instead, it formed a special team to arrive
at savings estimates for the McClellan Air Force Base and Kelly Air
Force Base submissions.
BRAC Costs Are Not Comprehensive:
BRAC costs are not comprehensive because they do not include certain
costs related to BRAC activities that are incurred either by DOD or by
other governmental agencies. However, while their inclusion would
reduce BRAC overall net savings, their impact would be marginal.
First, DOD‘s calculation of one-time estimated net savings do not
include BRAC-related economic assistance costs, most of which are
incurred by federal agencies other than DOD. As of September 30, 2001,
federal agencies had reported expenditures of about $1.5 billion (an
increase from the $1.1 billion in our 1998 report) to assist BRAC-
affected communities and individuals for such purposes as base reuse
planning, airport planning, job training, infrastructure improvements,
and community economic development.
* About $568 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 $405 million was provided by the Federal Aviation
Administration to assist with converting former military airfields to
civilian use.
* About $218 million was provided by the Department of Labor to help
communities retrain workers who have lost their jobs because of
closures.
* About $270 million was provided by DOD‘s Office of Economic
Adjustment to help communities plan and implement the reuse of BRAC
bases.
Second, DOD‘s calculation of estimated annual net recurring savings
beyond 2001 does not include expected environmental costs of about $3.5
billion. Because these costs would be spread over many years, however,
they would provide only a marginal reduction in the annual recurring
savings estimates.
Savings May Be Greater Than Estimated:
DOD‘s difficulty in providing precise estimates is further complicated
by the fact that certain actions it undertakes in the BRAC process
could produce other savings that are not captured in its net savings
estimates. For example, the inclusion of BRAC environmental cleanup
costs in calculating net savings has the effect of overstating costs
(and understating net savings for DOD) if one considers that DOD has
reported previously that it would have incurred many of these costs
even if the BRAC bases had remained active facilities.[Footnote 20] DOD
acknowledges, however, that environmental costs under the BRAC process
may have been accelerated in the short term, and may have been more
costly because of more stringent regulatory requirements. However, the
marginal difference is not easily quantified. A similar case can be
made for military construction activities. DOD has expended significant
funds (an estimated $6.6 billion through fiscal year 2001) on military
construction at receiving bases under the BRAC process. Although they
are difficult to quantify, over time DOD would have likely incurred
these and other costs under its facilities capital improvement
initiatives if the closing bases would have remained open.
Transfer of Unneeded BRAC Property Is Only Partially Completed:
As a result of the BRAC process, DOD designated about 518,500 acres of
property at BRAC-affected installations as unneeded.[Footnote 21]
Forty-six percent of the acreage has been scheduled to go to federal
entities, and most of the remainder will go to nonfederal entities; the
disposition of less than 1 percent of the property has not yet been
decided. However, as of September 30, 2001, less than half of the
unneeded property--42 percent--had been transferred to these entities,
and according to plans, it will take many years for DOD to transfer all
of its unneeded property.[Footnote 22] Nearly half of the 236,400 acres
designated for federal use has been transferred while about one-third
of the 279,900 acres intended for nonfederal use, such as local
authorities or private entities, has been conveyed; and the disposition
of less than 1 percent (2,200 acres) has not yet been decided. While
delays in property transfer are due to many factors, the primary one in
most instances has been related to environmental cleanup. In the
interim, DOD is using several techniques, such as leasing, to get
property into the hands of users more quickly for further reuse while
awaiting the transfer of property titles.
Designation of Unneeded BRAC Property Is Nearly Finished:
DOD has made considerable progress in completing the designation of
unneeded BRAC property for federal or nonfederal use. As of September
30, 2001, DOD had about 2,200 acres, or less than 1 percent of the
total unneeded BRAC property, left to designate. This was a reduction
from the 98,000 acres (21 percent of the total unneeded property) that
we reported in 1998.
According to DOD documentation, about 46 percent, or 236,400 acres, of
the total unneeded BRAC property is slated to go to federal entities,
including other services within DOD. (See fig. 3.) About 54 percent, or
279,900 acres, is designated to go to nonfederal entities.
Figure 3: Planned Disposition of Unneeded Property:
[See PDF for image]
[End of figure]
Source: Our analysis of DOD‘s data.
As shown in figure 4, most of the property (81 percent, or 191,700
acres) remaining within the federal government is to be transferred to
the Department of the Interior‘s U.S. Fish and Wildlife Service and
Interior‘s Bureau of Land Management. About 16 percent (37,300 acres)
will go to other federal recipients, including the Bureau of Indian
Affairs, and the Bureau of Prisons. DOD is also retaining some of the
property (7,500 acres) for use by other services and DOD
agencies.[Footnote 23]
Figure 4: Planned Transfers to Federal Agencies:
[See PDF for image]
[End of figure]
Source: Our analysis of DOD‘s data.
DOD can dispose of BRAC property to nonfederal entities through public
benefit transfers (for such purposes as airports, education, parks and
recreation, and homeless assistance), economic development
conveyances, and market (advertized) or negotiated sales. Depending on
the transfer method used, DOD may or may not receive consideration for
the property. For example, property transferred for a public benefit
can typically be at no cost or a discounted cost. With the enactment of
the National Defense Authorization Act for Fiscal Year 2000, all BRAC-
affected communities became eligible to receive property at no cost for
economic development. However, with the enactment of the National
Defense Authorization Act for Fiscal Year 2002, DOD is to seek fair
market value for property transferred from bases recommended for
closure or realignment in the BRAC 2005 round. The act also authorizes
property transfers without consideration if circumstances warrant.
As of September 30, 2001, economic development conveyances were the
most common method used to transfer property to nonfederal entities.
(See fig. 5.) They accounted for about 114,900 acres (41 percent) of
the acres slated for nonfederal use. Public benefit transfers accounted
for 73,100 acres (26 percent), and market/negotiated sales accounted
for 9,700 acres (3 percent).
Figure 5: Planned Transfers to Nonfederal Entities:
[See PDF for image]
[End of figure]
Note: Numbers may not add because of rounding. Other conveyances
include reversions to state or local government entities and
legislation mandating specific unneeded property disposition.
Source: Our analysis of DOD‘s data.
Transfer of Unneeded BRAC Property Is Less Than Half Completed:
Although DOD has plans to transfer nearly all of its unneeded BRAC
property, as of September 30, 2001, it had actually transferred less
than half of the 518,500 acres designated for federal or nonfederal
reuse. As shown in table 2, about 42 percent, or 219,600 acres, of the
planned property transfers have been completed.[Footnote 24]
Table 2: Actual Transfers of Unneeded BRAC Property, as of September
30, 2001:
Planned; Acres to
federal entities: 236,400; Acres to
nonfederal entities: 279,900; Undetermined: 2,200; Total: 518,500.
Transferred; Acres to
federal entities: 114,300; Acres to
nonfederal entities: 105,300; Undetermined: [Empty]; Total: 219,600.
Percent of planned; Acres to
federal entities: 48; Acres to
nonfederal entities: 38; Undetermined: [Empty]; Total: 42.
Not transferred; Acres to
federal entities: 122,100; Acres to
nonfederal entities: 174,600; Undetermined: 2,200; Total: 298,900.
Source: Our analysis of DOD‘s data.
[End of table]
While the amount transferred is a significant improvement over the 14-
percent transfer figure that we reported in our December 1998 report,
DOD still has 298,900 acres of unneeded property left to transfer. Of
this amount, nearly 60 percent, or 174,600 acres, is slated to go to
nonfederal entities. Most of the untransferred property comes from the
last closure round in 1995, although about 33 percent, or 98,700 acres,
stems from the earlier BRAC rounds.
The military services expect to complete the transfer of most of the
remaining unneeded acreage by 2007. The Air Force‘s property transfer
schedule showed that transfers to federal entities and most nonfederal
entities would be completed by 2005 and 2006, respectively. However,
one parcel at McClellan Air Force Base, California, is not slated for
transfer until 2016 because of significant unanticipated environmental
cleanup issues. The Navy‘s property transfer schedule indicated that
transfers to federal entities and nonfederal entities would be finished
by 2007. The Army‘s property transfer schedule showed that many
property transfers would be completed by 2006; however, transfers
beyond 2007 were anticipated at Fort McClellan, Alabama; Fort Meade,
Maryland; Fort Wingate, New Mexico; and the Sierra Army Depot,
California. Furthermore, the Army has not established expected transfer
dates for property on a few bases where unexploded ordnance is a
cleanup issue. These properties include Camp Bonneville, Washington;
Fort McClellan, Alabama; Fort Ord, California; and the Savanna Army
Depot, Illinois.
Most Property Transfer Delays Are Due to Environmental Cleanup Issues:
Our analysis of former bases with untransferred acreage and our
discussions with military service officials show that, while there are
several reasons for delays in transferring property to other users,
including other federal entities, environmental cleanup-related issues
are predominant. Environmental cleanup has been a long-standing concern
in the BRAC program--one that has been not only costly and challenging
for DOD but also frustrating for intended users of the property. While
DOD has already spent an estimated $7 billion through fiscal year 2001
on BRAC environmental-related actions, DOD expects to spend an
additional $3.5 billion beyond 2001 to complete its cleanup work.
Environmental Cleanup Is Impeding Property Transfer:
In analyzing impediments to property transfers, we looked at all 51
BRAC bases with 500 or more acres of property that as of September 30,
2001, had yet to be transferred to another military service, a federal
agency, or a nonfederal entity. These bases had a total of 291,447
untransferred acres, representing almost 98 percent of the
untransferred BRAC acreage. Service officials cited environmental
cleanup concerns--an issue at 40 of the 51 bases--as the primary reason
for property transfer delays. Because base property is normally
subdivided into various parcels for transfer and reuse purposes, a base
may have several reasons for property delays. At 27 of the 51 bases,
environmental cleanup was ongoing on some parcels while 9 bases were
awaiting regulatory approval for transfer on other parcels. Officials
at 10 bases cited difficulties in either establishing the extent of
cleanup required for transfer or deciding on the ultimate reuse of the
property. On a more limited scale, at six Army bases, delays stemmed
from the difficult challenge, in terms of both time and money, of
cleaning up unexploded ordnance. Service officials also cited that
reaching agreement with other federal agencies in the transfer of
property has been a difficult and tedious process.
Environmental Cleanup Costs Continue beyond 2001:
As of September 30, 2001, DOD had spent an estimated $7 billion on
actions related to BRAC environmental cleanup, and it estimates it will
spend about $3.5 billion beyond 2001 to complete the cleanups. As shown
in figure 6, the Air Force is expected to bear the largest burden of
future costs.
Figure 6: DOD‘s Estimated Environmental Cleanup Cost at Base Closure
Sites After Fiscal Year 2001, as of September 30, 2001:
[See PDF for image]
[End of figure]
Dollars in millions:
Source: Our analysis of DOD‘s data.
DOD‘s current cost estimate of $3.5 billion to complete the cleanup
after 2001 is $1.1 billion higher than reported in fiscal year 1999.
Service officials attribute the growth to several factors, including
delays in planned environmental cleanup schedules, increased costs as
requirements have become more refined, and more stringent cleanup
standards at bases where reuse plans have changed. While post-2001
costs are expected to rise, the total estimated BRAC environmental
cleanup cost, which is now set at about $10.5 billion, has remained
relatively stable over time. In 1996, for example, the total
environmental costs were projected at about $11.3 billion and about
$9.6 billion in 1998.
The out-year estimates, however, are still subject to change because
the extent of the remaining cleanup required at some bases is
uncertain. In particular, the cost of cleaning up unexploded ordnance
at several former bases has been and continues to be difficult to
estimate.[Footnote 25] For example, at former Fort Ord, California, the
estimated $306 million needed to complete unexploded ordnance cleanup
is likely to change because the location and concentration of all
unexploded ordnance is still being investigated. A similar situation
exists at Camp Bonneville, Washington, where, according to Army
officials, the current $73 million cost estimate is likely too high,
depending on the extent of cleanup agreed upon by environmental
regulators and the Army. Aside from unexploded ordnance, the discovery
of other hazardous materials can dramatically change cleanup cost
estimates. For example, at McClellan Air Force Base, California, the
more than $600 million estimate is likely to rise because recent
cleanup actions have uncovered about 100 buried and forgotten drums of
materials, some of which contained plutonium waste. According to Air
Force officials, it is too early to tell how many more drums will be
unearthed and what cleanup actions will be required in those areas
where they are found. However, one estimate states that another 1,000
barrels may be buried. Under the Air Force‘s worst-case scenario, the
remaining environmental cleanup cost estimate at the base would
increase to about $1.5 billion.
Considering the magnitude of the expected out-year environmental costs,
the Congress has recently expressed concern over the cost accuracy and
amount of funding devoted to DOD‘s BRAC environmental cleanup efforts.
The Military Construction Appropriations Act of 2002, contained a
general provision that directed DOD to accurately reflect the cost of
environmental cleanup activities in its future BRAC budget submissions.
According to the conference report, this was based on the fact that
Navy and Air Force budget requests for fiscal year 2002 were far below
the level needed to meet urgent obligations. As a result of what it
termed inadequate programming and budgeting decisions by these two
services, the Congress found it necessary to provide both services with
additional funding (about $80.5 million for the Navy and $20 million
for the Air Force) in fiscal year 2002 to complete mandated cleanups.
Furthermore, the conferees directed the Navy and Air Force to allocate
all unobligated balances from previous BRAC appropriations to address
additional cleanup funding shortfalls.
DOD Is Using Several Methods to Expedite Property Reuse or Transfer:
Recognizing delays in the transfer process, DOD has resorted to several
methods to make unneeded property more readily available to future
users for reuse purposes. They include leasing; the so-called ’early
transfer authority“ which facilitates the deeding of property under a
transfer authority; and no-cost economic development conveyances. These
methods have created benefits for both DOD as well as affected users.
By getting property into the hands of users sooner, DOD is able to
reduce its expenses (e.g., caretaker costs). At the same time, users
have the opportunity to put the property to quicker productive reuse
(e.g., creating jobs and stimulating economic growth).
Long-Term and Interim Leasing Can Expedite Property Reuse:
The military services are using long-term and interim leasing to get
property into the hands of communities while awaiting final transfer.
Long-term leases are issued when deeds cannot be obtained immediately-
-usually because of environmental cleanup issues. These leases,
commonly referred to as ’leases in furtherance of conveyance,“ are
usually provided to the expected ultimate transferee after the service
has issued a final disposal decision for the BRAC property, and they
can extend for many years. The Air Force, for example, has entered into
55-year leases at several of its former bases. Interim leases are
short-term leases that make no commitment to the lessee for future use
or transfer, and they are usually used in cases where the service has
not yet made a final disposal decision.
Leasing can provide advantages for both the services and lessees. It
may allow the military services to reduce their operation and
maintenance costs for BRAC property before final transfer by allowing
the lessee to assume more of these responsibilities. It also allows the
services to keep base utilities and infrastructure operational, thereby
saving them and the lessee the expense of having to restart these
services. Community officials stated that lease terms of 25 years or
greater are advantageous because financial institutions are more
willing to lend funds to lessees to finance their reuse and
redevelopment efforts. Leasing also allows lessees to redevelop closed
bases without assuming the risks of property ownership. As shown in
table 3, the Air Force has leased more property (in terms of acreage)
than the Army or the Navy.
Table 3: Leased BRAC Acreage, as of September 30, 2001:
Service: Army; Interim leases: 923; Long-term leases: 5,982; Total:
6,905.
Service: Navy; Interim leases: 7,727; Long-term leases: 2,883; Total:
10,610.
Service: Air Force; Interim leases: 1,899; Long-term leases: 29,877;
Total: 31,776.
Service: Total; Interim leases: 10,549; Long-term leases: 38,742;
Total: 49,291.
Source: Our analysis of DOD‘s data.
[End of table]
Two of the BRAC-affected sites we visited had leases in place while
awaiting property transfer. At the former Loring Air Force Base, Maine,
the Air Force in April 1997 negotiated a 55-year lease with the local
reuse authority for 3,600 acres on the base. Reuse authority officials
told us that the lease has allowed them to take on several expected
long-term tenants and generate revenue for further redevelopment and
reuse. At the same time, the lease also helped the Air Force reduce its
base operation and maintenance costs. In April 2001, 2,800 of the 3,600
acres were transferred to the reuse authority, and the Air Force is
retaining the remaining acreage as environmental cleanup proceeds. At
the former Charleston Naval Shipyard, South Carolina, the Navy leased
several properties to the local reuse authority while cleaning up the
land to meet environmental standards. The reuse authority initially
offered tenants short-term, 5-year interim leases, but these were
modified to 30-year terms when it was assured that these tenants would
become the eventual property owners.
Early Transfer Authority Can Accelerate Property Transfer and Reuse:
Recognizing that environmental cleanup has often delayed the transfer
of BRAC property, the Congress in 1996 enacted the so-called ’early
transfer authority“ provision,[Footnote 26] which allowed property to
be transferred before all necessary cleanup actions had been completed.
For DOD to exercise this authority, however, certain conditions must
exist, including the following:
* The property must be suitable for transfer for the intended use.
* The agency must submit the terms of the transfer for a 30-day public
written comment period.
* The transfer of the property must not substantially delay any cleanup
actions.
* The deed must contain necessary restrictions on the use of the
property to protect human health and the environment, ensure no
disruption of remedial actions, and provide that all cleanup actions
will be taken as approved by the appropriate regulatory agency.
* The agreements must have the concurrence of the governor of the state
where the property is located.
In terms of cost, DOD retains the responsibility for funding the
environmental cleanup, regardless of whether it is performed by DOD or
the user.
A primary advantage of using the early transfer authority is that it
makes property available to the future user as soon as possible, thus
allowing environmental cleanup and redevelopment activities to proceed
concurrently. This can save time and cost and provide users with
greater control over both activities. Furthermore, it provides
communities with the means to quickly put property into productive use,
create jobs, and generate tax revenue. The Navy estimates that use of
the early transfer authority has shortened the time required to
transfer property by at least 4 months and, in one case, up to 54
months. According to an Air Force official, early transfers helped to
transfer property sooner than conventional methods, and in one case
saved the property recipient over $100,000 in loan interest costs.
While early transfer authority can benefit all parties, it has not yet
been exercised widely within the BRAC process. According to service
officials, several factors have worked against its application, such as
community adversity to taking risks, the absence of ready-to-implement
reuse plans, the lack of support from state and local regulators,
changes in intended property reuse, and distrust of DOD. Furthermore,
exercising the authority may require DOD to commit more funds, in the
short term, than what is available to meet environmental cleanup
requirements. It appears that early transfer authority‘s use is an
evolving process; service officials told us that they expect greater
application as users and other parties become more familiar with its
potential advantages. Table 4 provides a list of locations where early
transfer authority has been exercised through fiscal year 2001,
including those locations where a deeded transfer has been completed.
Table 4: Use and Status of Early Transfer Authority at BRAC Bases
through Fiscal Year 2001:
Installation: Naval Shipyard,Mare Island, Calif.; Acres: 3,568; Status
of transfer[A]: Pending.
Installation: Naval Air Station, Memphis, Tenn.; Acres: 1,862; Status
of transfer[A]: Complete.
Installation: Naval Air Station, Agana, Guam; Acres: 1,799; Status of
transfer[A]: Complete.
Installation: Tooele Army Depot, Utah; Acres: 1,621; Status of
transfer[A]: Complete.
Installation: Guam Naval Activities/Public Works Center, Guam; Acres:
1,507; Status of transfer[A]: Complete.
Installation: Naval Air Station, South Weymouth, Mass.; Acres: 1,452;
Status of transfer[A]: Pending.
Installation: Fleet Industrial Supply Center, Oakland, Calif.; Acres:
529; Status of transfer[A]: Complete.
Installation: Grissom Air Force Base, Ind.; Acres: 201; Status of
transfer[A]: Complete.
Installation: Griffiss Air Force Base, N.Y.; Acres: 179; Status of
transfer[A]: Complete.
Installation: Mather Air Force Base, Calif.; Acres: 163; Status of
transfer[A]: Complete.
Installation: Wurtsmith Air Force Base, Mich.; Acres: 149; Status of
transfer[A]: Complete.
Installation: Fleet Industrial Supply Center Annex, Alameda, Calif.;
Acres: 147; Status of transfer[A]: Complete.
Installation: Naval Air Station, Louisville, Ky.; Acres: 142; Status of
transfer[A]: Pending.
Installation: Griffiss Air Force Base, N.Y.; Acres: 132; Status of
transfer[A]: Pending.
Installation: Naval Training Center, San Diego, Calif.; Acres: 51;
Status of transfer[A]: Complete.
Installation: Lowry Air Force Base, Colo.; Acres: 27; Status of
transfer[A]: Future.
Installation: Fitzsimons Army Medical Center, Colo.; Acres: 17; Status
of transfer[A]: Pending.
Installation: Lowry Air Force Base, Colo.; Acres: 17; Status of
transfer[A]: Complete.
[A] ’Complete“ refers to property that has been transferred to the new
user; ’Pending“ refers to property that is in the process of being
transferred; and ’Future“ refers to property that is planned for early
transfer authority.
Source: Our analysis of DOD‘s data.
[End of table]
Economic Development Conveyances Can Accelerate Property Transfer and
Reuse:
DOD also uses economic development conveyances, which are designed to
create jobs and promote economic activity, to transfer unneeded BRAC
property to users. In 1993, BRAC legislation was amended to provide
local redevelopment authorities with BRAC property at or below fair
market value or without cost to promote the economic recovery of areas
affected by closures. DOD was required to transfer property for
economic development to communities in rural areas at no cost.
Subsequently, the National Defense Authorization Act for Fiscal Year
2000 included a provision that required all economic development
conveyances to be no-cost. It also permitted existing economic
development conveyances to be modified to no-cost agreements if certain
conditions were met. According to the conference report accompanying
the act, the purpose of the provision was to support permanent job
creation. Service and community officials told us that the effect of
the provision has been to eliminate delays resulting from prolonged
negotiation over the fair market value of BRAC property and to
accelerate economic development and job creation. More recently, the
National Defense Authorization Act for Fiscal Year 2002 stipulates that
DOD ’shall seek to obtain“ fair market value for property transferred
from bases recommended for closure or realignment in the BRAC 2005
round. It also authorizes property transfers without consideration if
circumstances warrant. DOD has not yet developed policy guidance for
implementing these provisions.
As of September 30, 2001, DOD had 61 economic development conveyances
in place. Of these, 28 were implemented as no-cost agreements following
enactment of the National Defense Authorization Act for Fiscal Year
2000, and 9 previously negotiated conveyances were modified to no-cost
conveyances as allowed in the act. Appendix III provides a listing by
location of the 61 economic development conveyances in effect.
Although DOD has not quantified the overall impact of no-cost economic
development conveyances in terms of facilitating faster transfers and
improving economic activity, the reuse authorities and DOD officials we
interviewed agreed that their use generally has benefited both parties.
Negotiations between DOD and reuse authorities over fair market
property values, which were often highly contentious, have essentially
been eliminated, thereby accelerating the transfer process in many
cases. According to officials from several communities we visited,
funds raised to pay DOD for BRAC properties could now be used to invest
in reuse and redevelopment efforts. And, as DOD officials pointed out,
DOD has been able, in some cases, to reduce its maintenance costs at
BRAC bases because of faster transfers.
Most Communities Are Continuing to Recover from the Economic Impact of
BRAC:
While some communities surrounding closed bases are faring better than
others, our analyses of key economic indicators and visits to select
communities show that most are continuing to recover over time from the
initial economic impact of base closures. Overcoming the negative
economic impact of base closures or realignments on local communities,
including the loss of perhaps thousands of jobs, has long been a
concern for their citizens, as well as members of Congress. Despite the
difficulties of transition, local community officials attributed their
recovery to a number of factors, including a strong national economy,
diversified local economies, and the redevelopment of former base
property, all of which play key roles in unemployment rates and income
levels. According to recent economic data, a majority had unemployment
rates for the 9-month period ending September 30, 2001, that were lower
than the national average and had annual per capita income growth rates
that exceeded the national average during 1996 through 1999.
Furthermore, a majority of the communities had lower unemployment and
higher per capita growth rates than when we last reported these figures
in December 1998. Our work at six selected base closure sites showed
that the surrounding communities were recovering from BRAC, although
the transition had not necessarily been easy.[Footnote 27] Many
community officials credited the strong economy at the time and
diversified economic activity in their region as key to their economic
recovery.
Several Factors Play Key Roles in Community Recovery from BRAC:
Various officials in surrounding communities affected by BRAC cited the
strong national and local economies as key reasons why their
communities were able to avoid economic devastation and find new areas
of economic growth after a closure or realignment of a nearby military
base. Officials also pointed to government assistance and base
development, among other factors. (See fig. 7.) Although optimistic
about the continued economic recovery of their communities, some local
officials were concerned that the recent downturn in the national
economy could hinder continued economic recovery.
Figure 7: Factors Affecting Economic Recovery from Base Closures:
[See PDF for image]
[End of figure]
Officials from BRAC communities have stressed the importance of having
a strong national economy and local industries that could soften the
impact of job losses from base closures. Since the 1991 recession, and
until the recent slowdown, the economic performance of the United
States has been robust. Officials from rural communities surrounding
Fort McClellan, Alabama, for example, told us that the strong national
economy during the 1990s helped to mask the worst effects of the base
closing, but as the economy has slowed in recent months, the area is
beginning to feel the full effects of the Fort McClellan closure.
Officials also point to diversification of the local and regional
economy as key factors in easing economic recovery. For example,
officials from urban communities surrounding the former Charleston
Naval Shipyard Complex, South Carolina, believe they are better able to
absorb the job losses from the base closure because their diversified
economies 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. [Footnote 28] We reported that, although defense-related
spending had declined in the state, the state‘s gross product and total
per capita income had increased and that this economic growth might be
due to efforts to diversify the economy to counter the loss of defense
jobs.
Officials also pointed to other economic forces at work in their region
during the closure period that affected recovery efforts. For example,
according to officials from communities surrounding Loring Air Force
Base, Maine, a potato blight in the early 1990s adversely affected the
potato-related industry--a significant revenue producer for the county
and the state--and, in turn, slowed down the regional economy. Another
event that adversely affected the regional economy was the enactment in
the early 1990s of a Canadian law that allowed the Province of New
Brunswick to apply a provincial sales tax on goods entering Canada from
Maine. These fees forced many Canadian shoppers to remain at home
rather than cross the border into Maine to shop, thereby ending most
Canadian commerce in Aroostook County, where the former Loring Air
Force Base was located.
An area‘s natural and labor resources also can help economic recovery.
The rural areas we visited, where agriculture has historically
dominated the economy, have benefited from their efforts to diversify.
For example, Beeville, Texas (Chase Naval Air Station), and Merced
County, California (Castle Air Force Base), where farming or ranching
have long prevailed, have been recently aided by an expanding prison
industry. In Blytheville, Arkansas, where Eaker Air Force Base closed,
the growing steel industry, which was attracted to the area in late
1980s, in part because of its access to the Mississippi River, has
benefited the community. While the extent of economic recovery varies
in each of these communities, economic diversity has provided a broader
basis for long-term growth.
Leadership and teamwork among participants at the federal, state, and
local levels are essential to reaching agreement on key issues, such as
property transfer, base reuse, and environmental cleanup, all of which
can promote economic recovery. The lack of agreement can prolong the
cleanup and transfer of property. In Charleston, South Carolina, reuse
authority officials told us that state officials have been very
supportive of their redevelopment efforts, both in terms of financial
assistance and other efforts.
Publicizing base redevelopment efforts and goals within the community
and outside the community is a key strategy for attracting industry and
helping communities gain confidence in recovering from the closure. For
example, Charleston Naval Complex Redevelopment Authority‘s recent
marketing efforts helped it to enter into an agreement with a British
firm specializing in the packaging and shipping of machine and
engineering products to move its world headquarters to the former base.
Charleston officials also said that the positive efforts of the
surrounding community governments to work together to recover from the
shipyard closure helped the community to regain confidence quickly.
To help communities successfully transform closed bases into
opportunities, federal agencies have provided areas affected by closed
or realigned bases with about $1.5 billion since 1988 in direct
financial assistance. This assistance has come in several forms,
including planning grants to help develop the property, training grants
to provide new skills for the workforce, and grants for base
infrastructure improvements. A 1997 study requested by the Department
of Commerce‘s Economic Development Administration and prepared by a
Rutgers University research team concluded that federal financial
assistance succeeded in aiding job creation and economic recovery from
base closures and defense downsizing.[Footnote 29]
The redevelopment of base property is widely viewed as an important
component of economic recovery for BRAC-affected communities. While not
the only determinant of economic recovery for surrounding communities,
it can, nevertheless, be an important catalyst for recovery efforts.
Base closures make buildings and land available for new uses, which can
generate new economic activity and new jobs. DOD data show that, as of
October 2001, over 79,000 jobs, or about 62 percent of the nearly
130,000 jobs lost at major base closures from the prior rounds, had
been replaced--an increase from the 36 percent recovery rate reported
in 1998. (See app. IV for further details on jobs lost and created at
major BRAC bases.) Closed bases can have various impacts on the
recovery process. For example, DOD data show that when the Charleston
Naval Shipyard Complex closed in 1996, more than 6,000 civilian
positions were lost. Charleston redevelopment officials told us that
since 1996 they have attracted some 80 tenants and more than 4,200 new
jobs to the former base. Further, for the 1996-2000 period, overall
employment in the Charleston metro area has risen by about 20 percent,
or over 45,000 jobs. However, a closed base can also hinder economic
recovery. At Fort Ord, California, for example, officials stated that
the poor condition of the base‘s infrastructure has slowed the economic
redevelopment of the base. They estimate that area communities will
have to spend $500 million to demolish unusable buildings and replace
the base infrastructure to support tenants.
Most BRAC-Affected Communities‘ Economic Indicators Compare Favorably
with National Averages:
Selected economic indicators for BRAC-affected communities in the
United States compared favorably with national averages. We used
unemployment rates and real per capita income growth rates as broad
indicators of the economic health of those communities where base
closures occurred.[Footnote 30] We identified 62 communities involving
88 base closures in which government and contractor civilian job loss
was estimated to be 300 or more.[Footnote 31]
Unemployment Rates Compare Favorably with National Average:
Our analysis of annual unemployment rates for the 9-month period ending
September 30, 2001, indicates that the rates for most of the 62 BRAC-
affected communities compare favorably with the national average. (See
fig. 8.) During this period, 44 (71 percent) of the 62 communities
affected by base closures had unemployment rates below the average 9-
month national rate of 4.58 percent. For all BRAC-affected communities
with a higher-than-average calendar year 2001 unemployment rates
through September 2001, only three--Merced County, California (Castle
Air Force Base); Mississippi County, Arkansas (Eaker Air Force Base);
and Iosco County, Michigan (Wurtsmith Air Force Base)--had double-digit
rates of 13.7 percent, 13 percent, and 10.2 percent, respectively.
Appendix V provides additional detail on the average unemployment rates
for the 62 communities.
Figure 8: Average Unemployment Rates of 62 BRAC-Affected Communities
Compared with Average U.S. Rate for January-September 2001:
[See PDF for image]
[End of figure]
Note: Each of these 62 communities, from all four BRAC rounds, lost an
estimated 300 or more government and contractor civilian jobs.
Source: Our analysis of the Department of Labor‘s data.
The unemployment situation for most of the 62 communities affected by
BRAC closures has improved since we last reported on them in 1998. We
found that 41 of the 62 communities (66 percent) had lower unemployment
rates for the first 9 months of 2001 than they had for the same 9-month
period in calendar year 1997. About 26 percent (16 communities) had
higher unemployment rates, and for the remaining communities (5
communities, or about 8 percent), the rates were the same.
Growth Rates of Average Annual Real per Capita Income Compare Favorably
with National Average:
As with unemployment rates, annual real per capita income growth rates
for BRAC-affected communities compared favorably with national
averages. From 1996 through 1999, 53 percent, or 33, of the 62 areas
had an estimated average real per capita income growth rate that was at
or above the average of 3.03 percent for the nation.[Footnote 32] Seven
communities (11 percent) had average annual per capita growth rates
that were in close proximity to the national average, while the
remaining 22 communities (35 percent) were below the national average
growth rate. (See fig. 9.) Appendix VI provides additional detail on
the average annual real per capita income growth rates for the 62
communities.
Figure 9: Calendar Years 1996-99 Average Annual per Capita Income
Growth Rates of BRAC-Affected Areas Compared with U.S. Average:
[See PDF for image]
[End of figure]
Note: Each of these 62 communities, from all four BRAC rounds, lost an
estimated 300 or more government and contractor civilian jobs.
Source: Our analysis of the Department of Labor‘s data.
Most of the communities affected by BRAC closures had higher per capita
income growth rates than they were when we last reported on them in
1998. In 1998, we reported on the growth rates from 1991 through 1995
of average annual real per capita income for 49 communities affected by
the 1988, 1991, and 1993 BRAC rounds.[Footnote 33] Our 2001 analysis of
the growth rates for these same communities shows that for 42 of the 49
communities (86 percent), the rate increased; for 6 communities (12
percent), it decreased; and for 1 community (2 percent), it remained
the same.
In general, the six communities we visited had experienced an initial
economic disruption, followed by recovery after base closure. During
revisits to communities surrounding two closed bases that we had
studied in 1998, we found that these communities were recovering but
were still having some problems. Less tangible, but harder to correct,
were the social losses--such as the cultural diversity of military
personnel and their families--that resulted from the departure of base
personnel. Through our visits to all six communities, we learned about
each community‘s unique process of drawing on local and regional
strengths to adjust to job losses associated with base closures.
Additional details about the sites we visited during this review are
found in appendix VII.
Conclusions:
With the closure and realignment actions from the prior closure rounds
now complete, questions remain about the extent of savings generated by
the BRAC process. Although we believe that net savings from the four
closure rounds are substantial, we recognize that they are based on
cost and savings estimates that are imprecise and that the military
services have not updated these projections on a regular basis. The
periodic updating of cost and savings estimates is not only a good
financial management practice but also one that strengthens DOD‘s
budgeting process by helping to ensure that correct assumptions are
made about expected reductions in base operating costs. We recognize
that accounting systems are more oriented to tracking expenditures than
savings and that practical limitations may exist in fully accounting
for all changes in savings estimates over time. At the same time, it is
important for the services to have some means for periodically,
systematically, and consistently updating their savings estimates where
closure and realignment actions vary over time from original plans.
Without a sound process in place to improve the accuracy of the
estimates, the process becomes subject to criticism and the subsequent
erosion of credibility.
While DOD continues the lengthy process of transferring unneeded
property from former military bases to other users and as communities
continue recovering, DOD still has more than half of its unneeded
property left to transfer. As property remains in its inventory, DOD
continues to incur property-maintenance-related costs, and future users
are not afforded the full opportunity to redevelop and reuse former
base properties. By using early transfer authority, the department has
the potential not only to accelerate the transfer process and benefit
future users, but also to save money in many cases. Yet, the authority
has not been widely used since it became available in 1996.
Recommendations for Executive Action:
As part of the new base realignment and closure round scheduled for
2005, we recommend that the under secretary of defense for acquisition,
technology, and logistics, in consultation with the under secretary of
defense (comptroller and chief financial officer), develop (1) a
Defense-wide systematic approach for the periodic updating of initial
closure savings estimates and (2) an oversight mechanism to ensure that
the military services and components update such estimates in
accordance with the prescribed approach.
We also recommend that the secretary of defense encourage the
secretaries of the military services to work with communities impacted
by the base closure process to expand the use of the early transfer
authority in those cases where the department can accelerate the
transfer of unneeded former base property and/or save money.
Agency Comments:
In commenting on a draft of this report, the deputy under secretary of
defense (installations & environment) concurred with the
recommendations. His comments are included in this report as appendix
IX.
We are sending copies of this report to the appropriate congressional
committees; 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 it available at www.gao.gov and to others
upon request.
Please contact me on (202) 512-8412 if you or your staff have any
questions concerning this report. Key reports related to base closure
implementation issues are listed in appendix VIII. Additional contacts
and staff acknowledgments are provided in appendix X.
Sincerely yours,
Barry W. Holman, Director
Defense Capabilities and Management
[Signed by Barry W. Holman
[End of section]
Appendix I: Scope and Methodology:
To determine the magnitude of the savings from the four base
realignment and closure (BRAC) rounds, we reviewed the Department of
Defense‘s (DOD) annual BRAC budget submissions for the four closure
rounds and interviewed BRAC and financial officials from the military
services and the Office of the Secretary of Defense. To ascertain the
extent to which cost and savings estimates have changed over time, we
compared the data contained in DOD‘s fiscal year 2002 BRAC budget
submission and related documentation with similar data in DOD‘s fiscal
year 1999 submission, which was the latest budget document available
when we produced our last comprehensive report on BRAC issues in
December 1998. Through this comparison, we identified where major
changes had occurred in the various costs and savings categories within
the BRAC account and sought a rationale for the changes.
To gain a sense of the accuracy of the cost and savings estimates, we
relied primarily on our prior BRAC reports and reviewed Congressional
Budget Office, DOD, DOD‘s Office of Inspector General, and the service
agencies‘ audit reports. We also reviewed the annual military service
budget submissions for fiscal years 2000 through 2002 to determine how
frequently changes were made to the cost and savings estimates. Where
revisions were made, we sought out the rationale the services used in
making the revisions. We examined available documentation in an effort
to independently verify the adequacy of the basis for the revisions.
Where documentation was unavailable, we interviewed service officials
to obtain their justifications for the changes. In assessing the
completeness of the cost and savings data, we reviewed the component
elements considered by DOD in formulating overall BRAC costs and
savings estimates. Because DOD did not include in its estimates federal
expenditures to provide economic assistance for communities and
individuals affected by BRAC, we collected these data from the
Department of Labor; Federal Aviation Administration; Economic
Development Administration, Department of Commerce; and DOD‘s Office of
Economic Adjustment. We further reviewed the cost estimates for
environmental cleanup activities beyond fiscal year 2001 because they
have the effect of reducing the expected annual recurring savings for
the four rounds.
To determine the progress made by DOD in transferring unneeded base
property to other users, we reviewed BRAC property disposition plans
and actual property transfers as of September 30, 2001, and compared
them with similar data presented in our December 1998 report. To assure
that we were using the most reliable data available, we validated, on a
limited basis, the data contained in various databases and reconciled
discrepancies when they arose. We also categorized the property
disposition data into the various transfer methods (e.g., economic
development conveyances) used for property transfers to gain a sense of
the predominant method being used. With regard to the untransferred
acreage, we sought to determine the primary impediments to property
transfer by examining 51 former bases with a combined untransferred
acreage of about 291,447 acres as of September 30, 2001, or about 98
percent of the total untransferred BRAC property. We also collected
data and obtained the military services‘ views on the use of the so-
called ’early transfer authority“ in which property can be transferred
under certain conditions before an environmental cleanup remedy is in
place. Furthermore, we collected data on the use of no-cost economic
development conveyances to transfer property and stimulate its reuse.
Finally, because leasing is used as an interim measure to make property
available to users while awaiting property transfer, we also collected
data related to leased property.
To assess the economic recovery of communities affected by the BRAC
process, we first performed a broad-based economic assessment of
communities where more than 300 civilian jobs were eliminated during
the prior closure rounds.[Footnote 34] In performing our assessment, we
used unemployment and real per capita income growth rates as measures
to analyze changes in the economic condition of communities over time
and in relation to national averages. We chose to use unemployment and
real per capita income as key performance indicators because (1) DOD
used these measures in its community economic impact analysis during
the BRAC location selection process and (2) these measures are commonly
used by economists in assessing the economic health of an area over
time. While our assessment does provide an overall picture of how these
communities compare with the national averages, it does not necessarily
isolate the condition, or the changes in that condition, that may be
attributed to a BRAC action. In this regard, we also visited the
surrounding communities affected by six major closures to (1) enhance
our understanding of the relationship between base closures and local
communities and (2) provide a close-up picture of how base closure
affected these communities. Those visits included the former military
bases at Castle Air Force Base, California; Fort Ord, California;
Charleston Naval Shipyard, South Carolina; Chase Naval Air Station,
Texas; Fort McClellan Army Base, Alabama; and Loring Air Force Base,
Maine. These visits gave us a mix of Army, Navy, and Air Force sites
across various BRAC rounds; two of the areas we visited--Castle Air
Force Base and Chase Naval Air Station--were areas that we visited
during our 1998 review. These repeat visits were designed to gain a
sense of the progress being made, since our last visits, by the
communities surrounding these former bases.
We performed our review from March 2001 through February 2002 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Revisions to BRAC Cost and Savings Estimates:
As shown in table 5, DOD has increased its net savings estimate through
2001 for the prior four BRAC rounds from about $14.2 billion in fiscal
year 1999 to about $16.7 billion in fiscal year 2002--a $2.5 billion
increase. The increase in net savings is due to a combination of lower-
than-expected BRAC implementation costs through the 2001 time frame and
an increase in the estimated savings accruing during that same time
period. Net savings estimates are calculated by deducting expected
costs from expected savings generated from the BRAC process.
Table 5: Cumulative Cost and Savings Estimates through Fiscal Year 2001
for the Prior Four BRAC Rounds as Reflected in DOD‘s Budget Requests
and Documentation for Fiscal Years 1999 and 2002:
Dollars in millions.
Costs through fiscal year 2001; Fiscal year 1999
budget request and
supporting documentation: [Empty]; Fiscal year 2002
budget request and
supporting documentation: [Empty]; Total change: [Empty].
Military construction; Fiscal year 1999
budget request and
supporting documentation: $6,566; Fiscal year 2002
budget request and
supporting documentation: $6,638; Total change: $72.
Family housing; Fiscal year 1999
budget request and
supporting documentation: 93; Fiscal year 2002
budget request and
supporting documentation: 92; Total change: (1).
Environmental; Fiscal year 1999
budget request and
supporting documentation: 7,337; Fiscal year 2002
budget request and
supporting documentation: 6,958; Total change: (379).
Operations and maintenance; Fiscal year 1999
budget request and
supporting documentation: 7,984; Fiscal year 2002
budget request and
supporting documentation: 7,603; Total change: (381).
Military personnel-permanent change of station; Fiscal year 1999
budget request and
supporting documentation: 175; Fiscal year 2002
budget request and
supporting documentation: 139; Total change: (35).
Estimated land revenues; Fiscal year 1999
budget request and
supporting documentation: (121); Fiscal year 2002
budget request and
supporting documentation: (336); Total change: (215).
Other; Fiscal year 1999
budget request and
supporting documentation: 847; Fiscal year 2002
budget request and
supporting documentation: 877; Total change: 30.
Subtotal costs (through fiscal year 2001); Fiscal year 1999
budget request and
supporting documentation: $22,881; Fiscal year 2002
budget request and
supporting documentation: $21,972; Total change: (909).
Savings through implementation period; Fiscal year 1999
budget request and
supporting documentation: [Empty]; Fiscal year 2002
budget request and
supporting documentation: [Empty]; Total change: [Empty].
Military construction; Fiscal year 1999
budget request and
supporting documentation: $965; Fiscal year 2002
budget request and
supporting documentation: $965; Total change: $0.
Family housing--construction; Fiscal year 1999
budget request and
supporting documentation: 177; Fiscal year 2002
budget request and
supporting documentation: 177; Total change: 0.
Family housing--operations; Fiscal year 1999
budget request and
supporting documentation: 658; Fiscal year 2002
budget request and
supporting documentation: 652; Total change: (6).
Operations and maintenance; Fiscal year 1999
budget request and
supporting documentation: 10,583; Fiscal year 2002
budget request and
supporting documentation: 11,142; Total change: 559.
Military personnel; Fiscal year 1999
budget request and
supporting documentation: 5,229; Fiscal year 2002
budget request and
supporting documentation: 5,229; Total change: 0.
Other; Fiscal year 1999
budget request and
supporting documentation: 4,601; Fiscal year 2002
budget request and
supporting documentation: 4,591; Total change: (10).
Subtotal savings (through implementation period); Fiscal year 1999
budget request and
supporting documentation: $22,213; Fiscal year 2002
budget request and
supporting documentation: $22,756; Total change: $543.
Post-implementation savings (through fiscal year 2001)[A]; Fiscal year
1999
budget request and
supporting documentation: $14,853; Fiscal year 2002
budget request and
supporting documentation: $15,924; Total change: $1,071.
Subtotal savings (through fiscal year 2001); Fiscal year 1999
budget request and
supporting documentation: $37,066; Fiscal year 2002
budget request and
supporting documentation: $38,679; Total change: $1,613.
Net cumulative savings (through fiscal year 2001)[B]; Fiscal year 1999
budget request and
supporting documentation: $14,185; Fiscal year 2002
budget request and
supporting documentation: $16,707; Total change: $2,522.
Note: Totals may not add because of rounding.
[A] These savings begin the year after the implementation period for
each BRAC round, are cumulative estimates through fiscal year 2001, and
are usually based on estimated recurring savings during the last
implementation year for each round.
[B] Net cumulative savings consist of total savings less total costs
through fiscal year 2001.
Source: Our analysis of DOD‘s budget-related documentation for fiscal
years 1999 and 2002.
[End of table]
Estimated Costs through Fiscal Year 2001 Have Decreased:
DOD cost estimates through fiscal year 2001 for implementing the four
BRAC rounds have decreased by about $909 million--from about $22.9
billion to $22 billion--from fiscal year 1999 to fiscal year 2002. Our
analysis of the data shows that most of the reported decrease is
attributed to lower reported operation and maintenance costs (about
$381 million) and environmental costs--about $379 million--through
fiscal year 2001. About 50 percent, or $189 million, of the reported
reduction in costs within the operation and maintenance account is
attributable to the Air Force, and most of that reduction resulted from
reported decreased expenses at McClellan Air Force Base, California,
and Kelly Air Force Base, Texas. Most, or $297 million, of the
environmental cost reduction is attributable to the Navy. According to
Navy officials, some of this amount is due to delaying some planned
environmental cleanup actions to after 2001. It does not imply that
overall environmental costs have decreased, since DOD has increased its
post-2001 environmental cost estimate to about $3.5 billion--an
increase of about $1.1 billion over the $2.4 billion reported in fiscal
year 1999.
In addition, estimated revenues generated from land sales, property
leases, and other reimbursements have increased significantly from $121
million to $336 million from fiscal year 1999 to fiscal year 2002,
thereby raising the offset to BRAC program cost estimates. According to
the Air Force, its increased revenues resulted from the reporting of
nearly $95 million in reimbursements received for fiscal year 1997 from
the city of Chicago, Illinois, for the cost of moving an Air National
Guard unit from O‘Hare International Airport to Scott Air Force Base,
Illinois, and from increased proceeds from BRAC land sales and property
leases. The Army and the Navy reported about $50 million and $25
million, respectively, in additional BRAC-related revenue from
reimbursements, land sales, and leases since the fiscal year 1999
budget request.
Estimated Savings through Fiscal Year 2001 Have Increased:
DOD‘s estimate for savings that accrued through fiscal year 2001 for
the four BRAC rounds have increased by about $1.6 billion to $38.7
billion from 1999 to 2002. Our analysis shows that $925 million (nearly
60 percent) of the increase resulted from DOD‘s miscalculations in
recording its savings estimate for the 1991 BRAC round. The $925
million underreporting of savings was a result of two errors. First,
the Navy inadvertently omitted some estimated savings (about $183
million) for fiscal year 1998 from one of its 1991 BRAC round
subaccounts. Because these savings were recurring, in nature, and were
also omitted in subsequent years through fiscal year 2001, the error
was compounded, resulting in an underreporting of $760 million. Second,
estimated recurring savings for all military services were improperly
adjusted for inflation for fiscal years 1998 through 2001, resulting in
an additional $165 million reporting error. When combined, these errors
constitute the $925 million underreported savings error through fiscal
year 2001.
In addition, another $381 million (about 24 percent) of the increase
was attributable to increased savings estimates in the Air Force BRAC
operation and maintenance subaccount at two of its bases--McClellan Air
Force Base and Kelly Air Force Base. Prior to fiscal year 2000, Air
Force officials told us they had not submitted savings estimates for
these two bases in its budget documentation because of uncertainties in
the workload status of the depots at these locations. Air Force
officials told us that they had subsequently prepared this estimate
after the fiscal year 1999 budget submission. We were unable to
independently validate the basis for these estimates because the Air
Force could not provide us with adequate supporting documentation.
[End of section]
Appendix III: DOD‘s Use of Economic Development Conveyances:
As of September 30, 2001, DOD had 61 economic development conveyances
in place. (See table 6.) Prior to April 21, 1999, DOD obtained
consideration from most communities surrounding a BRAC base for
property transfers for economic development purposes. As a result, only
9 of the 33 such transfers issued prior to April 21, 1999, were
initially no-cost and they were obtained by communities in rural areas.
The remainder was provided under negotiated terms. Subsequently, the
National Defense Authorization Act of Fiscal Year 2000 contained a
provision that allowed for no-cost conveyances for all BRAC communities
after April 21,1999, and for the modification of previous conveyances
to no-cost under certain circumstances. As a result, 28 additional
conveyances have been provided at no cost and an additional 9,
previously approved prior to April 21, 1999,were later modified to no-
cost in accordance with the terms of the act.
Table 6: DOD‘s Use of Economic Development Conveyances:
Period: Before April 21, 1999; Location: [Empty]; Terms of payment:
[Empty]; Acres: [Empty].
Location: Period: Seneca Army Depot, N.Y.; Terms of payment: Period:
Negotiated price; Acres: Period: 9,081.
Location: Period: George Air Force Base, Calif.; Terms of payment:
Period: Negotiated price; Acres: Period: 1,860.
Location: Period: Orlando Naval Training Center, Fla.; Terms of
payment: Period: Negotiated price; Acres: Period: 1,576.
Location: Period: Mare Island Naval Shipyard, Calif.; Terms of payment:
Period: Negotiated price; Acres: Period: 1,412.
Location: Period: Glenview Naval Air Station, Ill.; Terms of payment:
Period: Negotiated price; Acres: Period: 1,029.
Location: Period: Vint Hill Farms, Va.; Terms of payment: Period:
Negotiated price; Acres: Period: 678.
Location: Period: Fort Benjamin Harrison, Ind.; Terms of payment:
Period: Negotiated price; Acres: Period: 604.
Location: Period: Lexington-Bluegrass Army Depot, Ky.; Terms of
payment: Period: Negotiated price; Acres: Period: 570.
Location: Period: Sacramento Army Depot, Calif.; Terms of payment:
Period: Negotiated price; Acres: Period: 380.
Location: Period: Gentile Air Force Station, Ohio; Terms of payment:
Period: Negotiated price; Acres: Period: 164.
Location: Period: Detroit Arsenal, Mich.; Terms of payment: Period:
Negotiated price; Acres: Period: 153.
Location: Period: Newark Air Force Base, Ohio; Terms of payment:
Period: Negotiated price; Acres: Period: 57.
Location: Period: Long Beach Naval Hospital, Calif.; Terms of payment:
Period: Negotiated price; Acres: Period: 31.
Location: Period: Army Material Technology Laboratory, Mass.; Terms of
payment: Period: Negotiated price; Acres: Period: 30.
Location: Period: Long Beach Naval Shipyard, Calif.; Terms of payment:
Period: Negotiated price; Acres: Period: 30.
Location: Period: Fort Devens, Mass.; Terms of payment: Period:
Negotiated price[A]; Acres: Period: 3,623.
Location: Period: McClellan Air Force Base, Calif.; Terms of payment:
Period: Negotiated price[A]; Acres: Period: 3,072.
Location: Period: Kelly Air Force Base, Tex.; Terms of payment: Period:
Negotiated price[A]; Acres: Period: 2,085.
Location: Period: Philadelphia Naval Shipyard/Station, Pa.; Terms of
payment: Period: Negotiated price[A]; Acres: Period: 1,181.
Location: Period: Lowry Air Force Base, Colo.; Terms of payment:
Period: Negotiated price[A]; Acres: Period: 821.
Location: Period: Mather Air Force Base, Calif.; Terms of payment:
Period: Negotiated price[A]; Acres: Period: 774.
Location: Period: Norton Air Force Base, Colo.; Terms of payment:
Period: Negotiated price[A]; Acres: Period: 575.
Location: Period: Myrtle Beach Air Force Base, S.C.; Terms of payment:
Period: Negotiated price[A]; Acres: Period: 429.
Location: Period: Carswell Air Force Base, Tex.; Terms of payment:
Period: Negotiated price[A]; Acres: Period: 382.
Location: Period: Loring Air Force Base, Maine; Terms of payment:
Period: Rural no-cost; Acres: Period: 3,861.
Location: Period: Tooele Army Depot, Utah; Terms of payment: Period:
Rural no-cost; Acres: Period: 1,662.
Location: Period: Eaker Air Force Base, Ark.; Terms of payment: Period:
Rural no-cost; Acres: Period: 1,447.
Location: Period: Letterkenny Army Depot, Pa.; Terms of payment:
Period: Rural no-cost; Acres: Period: 1,400.
Location: Period: KI Sawyer Air Force Base II, Mich.; Terms of payment:
Period: Rural no-cost; Acres: Period: 1,065.
Location: Period: Grissom Air Force Base, Ind.; Terms of payment:
Period: Rural no-cost; Acres: Period: 828.
Location: Period: Wurtsmith Air Force Base, Mich.; Terms of payment:
Period: Rural no-cost; Acres: Period: 508.
Location: Period: KI Sawyer Air Force Base I, Mich.; Terms of payment:
Period: Rural no-cost; Acres: Period: 146.
Location: PeriodAfter April 21, 1999: Presque Isle (Part of Loring),
Maine; Terms of payment: PeriodAfter April 21, 1999: Rural no-cost;
Acres: PeriodAfter April 21, 1999: 36.
Period: After April 21, 1999; Location: [Empty]; Terms of payment:
[Empty]; Acres: [Empty].
Location: Period: Fort McClellan, Ala.; Terms of payment: Period: No-
cost; Acres: Period: 9,378.
Location: Period: Cecil Field Naval Air Station, Fla.; Terms of
payment: Period: No-cost; Acres: Period: 8,295.
Location: Period: Fort Ord, Calif.; Terms of payment: Period: No-cost;
Acres: Period: 7,589.
Location: Period: Fort Chaffee, Ark.; Terms of payment: Period: No-
cost; Acres: Period: 5,261.
Location: Period: Reese Air Force Base, Tex.; Terms of payment: Period:
No-cost; Acres: Period: 2,946.
Location: Period: March Air Force Base, Calif.; Terms of payment:
Period: No-cost; Acres: Period: 2,849.
Location: Period: Guam Naval Activities/Public Works Center, Guam;
Terms of payment: Period: No-cost; Acres: Period: 2,725.
Location: Period: Fort Pickett, Va.; Terms of payment: Period: No-cost;
Acres: Period: 1,675.
Location: Period: Griffiss Air Force Base, N.Y.; Terms of payment:
Period: No-cost; Acres: Period: 1,649.
Location: Period: Chase Field Naval Air Station, Tex.; Terms of
payment: Period: No-cost; Acres: Period: 1,570.
Location: Period: Alameda Naval Air Station, Calif.; Terms of payment:
Period: No-cost; Acres: Period: 1,406.
Location: Period: Charleston Naval Base, S.C.; Terms of payment:
Period: No-cost; Acres: Period: 1,368.
Location: Period: Memphis Naval Air Station, Tenn.; Terms of payment:
Period: No-cost; Acres: Period: 1,312.
Location: Period: Ogden Defense Distribution Depot, Utah; Terms of
payment: Period: No-cost; Acres: Period: 1,003.
Location: Period: Plattsburgh Air Force Base, N.Y.; Terms of payment:
Period: No-cost; Acres: Period: 929.
Location: Period: Red River Army Depot, Tex.; Terms of payment: Period:
No-cost; Acres: Period: 765.
Location: Period: Bayonne Military Ocean Terminal, N.J.; Terms of
payment: Period: No-cost; Acres: Period: 652.
Location: Period: Fitzsimons Army Medical Center, Colo.; Terms of
payment: Period: No-cost; Acres: Period: 344.
Location: Period: Warminster Naval Air Warfare Center, Pa.; Terms of
payment: Period: No-cost; Acres: Period: 297.
Location: Period: San Diego Naval Training Center, Calif.; Terms of
payment: Period: No-cost; Acres: Period: 281.
Location: Period: Agana Naval Air Station, Guam; Terms of payment:
Period: No-cost; Acres: Period: 248.
Location: Period: Indianapolis Naval Air Warfare Center, Ind.; Terms of
payment: Period: No-cost; Acres: Period: 163.
Location: Period: Louisville, Naval Ordnance Station, Ky.; Terms of
payment: Period: No-cost; Acres: Period: 142.
Location: Period: Philadelphia Defense Personnel Support Center, Pa.;
Terms of payment: Period: No-cost; Acres: Period: 86.
Location: Period: Annapolis Naval Surface Warfare Center, Md.; Terms of
payment: Period: No-cost; Acres: Period: 44.
Location: Period: New York (Brooklyn) Naval Air Station, N.Y.; Terms of
payment: Period: No-cost; Acres: Period: 28.
Location: Period: New London Naval Underwater Systems Center, Conn.;
Terms of payment: Period: No-cost; Acres: Period: 15.
Location: PeriodLocation: Fort Holabird, Md.; Terms of payment:
PeriodTerms of payment: No-cost; Acres: PeriodAcres: 14.
[A] These nine economic development conveyances were modified to a no-
cost basis as authorized in the provisions of the National Defense
Authorization Act for Fiscal Year 2000.
Source: Our analysis of DOD‘s data.
[End of table]
[End of section]
Appendix IV: Civilian Jobs Lost and Created at Major BRAC Locations
during the Prior Four BRAC Rounds:
The closure or realignment of military bases creates job losses at
these facilities, but subsequent redevelopment of the former bases‘
property provides opportunities for creating new jobs. In 1998, we
reported that only 36 percent (49,000) of the more than 135,000 jobs
lost because of BRAC actions had been replaced. The number of jobs lost
was derived from estimates made during the BRAC decision-making process
for each round. As of October 31, 2001, DOD reported that 129,649 jobs
were lost at major BRAC locations, of which about 62 percent (79,740
jobs), had been replaced at these sites.[Footnote 35] The figures do
not include jobs lost or created in the areas surrounding the
realigning or closing bases. Over time, the number of jobs created will
increase as 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 rise. The data presented in table 7 do not include the job
losses that may have occurred elsewhere in a community, nor do they
capture jobs created from other economic activity in the area.
Table 7: Civilian Jobs Lost and Created at Major Base Realignments and
Closures during the Prior Four BRAC Rounds, as of October 31, 2001:
Major base: Alameda Naval Air Station and Naval Aviation Depot, Calif.;
Estimated jobs lost: 3,228; Estimated jobs created: 2,076; Recovery
(percent): 64.31.
Major base: Army Materials Technology Lab (Watertown), Mass.; Estimated
jobs lost: 540; Estimated jobs created: 1,061; Recovery (percent):
196.48.
Major base: Barbers Point Naval Air Station, Hawaii; Estimated jobs
lost: 618; Estimated jobs created: 28; Recovery (percent): 4.53.
Major base: Bayonne Military Ocean Terminal, N.J.; Estimated jobs lost:
2,015; Estimated jobs created: 252; Recovery (percent): 12.51.
Major base: Bergstrom Air Force Base, Tex.; Estimated jobs lost: 927;
Estimated jobs created: 1,984; Recovery (percent): 214.02.
Major base: Carswell Air Force Base, Tex.; Estimated jobs lost: 869;
Estimated jobs created: 541; Recovery (percent): 62.26.
Major base: Castle Air Force Base, Calif.; Estimated jobs lost: 1,149;
Estimated jobs created: 2,447; Recovery (percent): 212.97.
Major base: Cecil Field Naval Air Station, Fla.; Estimated jobs lost:
995; Estimated jobs created: 596; Recovery (percent): 59.90.
Major base: Chanute Air Force Base, Ill.; Estimated jobs lost: 1,035;
Estimated jobs created: 1,723; Recovery (percent): 166.47.
Major base: Charleston Naval Complex, S.C.; Estimated jobs lost: 6,272;
Estimated jobs created: 3,339; Recovery (percent): 53.24.
Major base: Chase Field Naval Air Station, Tex.; Estimated jobs lost:
956; Estimated jobs created: 1,153; Recovery (percent): 120.61.
Major base: Eaker Air Force Base, Ark.; Estimated jobs lost: 777;
Estimated jobs created: 991; Recovery (percent): 127.54.
Major base: El Toro Marine Corps Air Station, Calif.; Estimated jobs
lost: 979; Estimated jobs created: 252; Recovery (percent): 25.74.
Major base: England Air Force Base, La.; Estimated jobs lost: 682;
Estimated jobs created: 1,834; Recovery (percent): 268.91.
Major base: Fitzsimons Army Medical Center, Colo.; Estimated jobs lost:
1,612; Estimated jobs created: 2,169; Recovery (percent): 134.55.
Major base: Ft. Benjamin Harrison, Ind.; Estimated jobs lost: 1,050;
Estimated jobs created: 815; Recovery (percent): 77.62.
Major base: Ft. Devens, Mass.; Estimated jobs lost: 2,178; Estimated
jobs created: 2,288; Recovery (percent): 105.05.
Major base: Ft. McClellan, Ala.; Estimated jobs lost: 2,156; Estimated
jobs created: 559; Recovery (percent): 25.93.
Major base: Ft. Ord, Calif.; Estimated jobs lost: 2,835; Estimated jobs
created: 1,135; Recovery (percent): 40.04.
Major base: Ft. Pickett, Va.; Estimated jobs lost: 245; Estimated jobs
created: 182; Recovery (percent): 74.29.
Major base: Ft. Ritchie, Md.; Estimated jobs lost: 1,373; Estimated
jobs created: 108; Recovery (percent): 7.87.
Major base: Ft. Sheridan, Ill.; Estimated jobs lost: 1,681; Estimated
jobs created: 0; Recovery (percent): 0.00.
Major base: Gentile Air Force Station, Ohio; Estimated jobs lost:
2,804; Estimated jobs created: 1,828; Recovery (percent): 65.19.
Major base: George Air Force Base, Calif.; Estimated jobs lost: 506;
Estimated jobs created: 1,085; Recovery (percent): 214.43.
Major base: Glenview Naval Air Station, Ill.; Estimated jobs lost: 389;
Estimated jobs created: 3; Recovery (percent): 0.77.
Major base: Griffiss Air Force Base, N.Y.; Estimated jobs lost: 1,341;
Estimated jobs created: 1,874; Recovery (percent): 139.75.
Major base: Grissom Air Force Base, Ind.; Estimated jobs lost: 792;
Estimated jobs created: 735; Recovery (percent): 92.80.
Major base: Guam Naval Complex, Guam; Estimated jobs lost: 2,193;
Estimated jobs created: 549; Recovery (percent): 25.03.
Major base: Homestead Air Force Base, Fla.; Estimated jobs lost: 136;
Estimated jobs created: 622; Recovery (percent): 457.35.
Major base: Hunters Point Annex Naval Shipyard, Calif.; Estimated jobs
lost: 93; Estimated jobs created: 425; Recovery (percent): 456.99.
Major base: Indianapolis Naval Air Warfare Center, Ind.; Estimated jobs
lost: 2,196; Estimated jobs created: 1,574; Recovery (percent): 71.68.
Major base: Jefferson Proving Ground, Ind.; Estimated jobs lost: 387;
Estimated jobs created: 122; Recovery (percent): 31.52.
Major base: Kelly Air Force Base, Tex.; Estimated jobs lost: 10,912;
Estimated jobs created: 4,444; Recovery (percent): 40.73.
Major base: K.I. Sawyer Air Force Base, Mich.; Estimated jobs lost:
788; Estimated jobs created: 1,045; Recovery (percent): 132.61.
Major base: Letterkenny Army Depot, Pa.; Estimated jobs lost: 2,512;
Estimated jobs created: 578; Recovery (percent): 23.01.
Major base: Lexington Army Depot, Ky.; Estimated jobs lost: 1,131;
Estimated jobs created: 838; Recovery (percent): 74.09.
Major base: Long Beach Naval Complex, Calif.; Estimated jobs lost:
4,487; Estimated jobs created: 200; Recovery (percent): 4.46.
Major base: Loring Air Force Base, Maine; Estimated jobs lost: 1,311;
Estimated jobs created: 1,010; Recovery (percent): 77.04.
Major base: Louisville Naval Surface Warfare Station, Ky.; Estimated
jobs lost: 1,435; Estimated jobs created: 1,018; Recovery (percent):
70.94.
Major base: Lowry Air Force Base, Colo.; Estimated jobs lost: 2,275;
Estimated jobs created: 1,357; Recovery (percent): 59.95.
Major base: March Air Force Base, Calif.; Estimated jobs lost: 997;
Estimated jobs created: 572; Recovery (percent): 57.37.
Major base: Mare Island Naval Shipyard, Calif.; Estimated jobs lost:
7,567; Estimated jobs created: 1,548; Recovery (percent): 20.46.
Major base: Mather Air Force Base, Calif.; Estimated jobs lost: 1,012;
Estimated jobs created: 3,514; Recovery (percent): 347.23.
Major base: McClellan Air Force Base, Calif.; Estimated jobs lost:
8,828; Estimated jobs created: 6,124; Recovery (percent): 69.37.
Major base: Memphis Defense Distribution Depot, Tenn.; Estimated jobs
lost: 1,289; Estimated jobs created: 573; Recovery (percent): 44.45.
Major base: Memphis Naval Air Station, Tenn.; Estimated jobs lost: 250;
Estimated jobs created: 112; Recovery (percent): 44.80.
Major base: Myrtle Beach Air Force Base, S.C.; Estimated jobs lost:
784; Estimated jobs created: 917; Recovery (percent): 116.96.
Major base: Newark Air Force Base, Ohio; Estimated jobs lost: 1,760;
Estimated jobs created: 1,050; Recovery (percent): 59.66.
Major base: Norton Air Force Base, Calif.; Estimated jobs lost: 2,133;
Estimated jobs created: 1,853; Recovery (percent): 86.87.
Major base: Oakland Naval Complex, Calif.; Estimated jobs lost: 2,834;
Estimated jobs created: 838; Recovery (percent): 29.57.
Major base: Ogden Defense Distribution Depot, Utah; Estimated jobs
lost: 1,105; Estimated jobs created: 611; Recovery (percent): 55.29.
Major base: Orlando Naval Training Center, Fla.; Estimated jobs lost:
1,105; Estimated jobs created: 1,131; Recovery (percent): 102.35.
Major base: Pease Air Force Base, N.H.; Estimated jobs lost: 400;
Estimated jobs created: 4,367; Recovery (percent): 1,091.75.
Major base: Philadelphia Defense Personnel Supply Center, Pa.;
Estimated jobs lost: 1,485; Estimated jobs created: 300; Recovery
(percent): 20.20.
Major base: Philadelphia Naval Complex, Pa.; Estimated jobs lost:
8,119; Estimated jobs created: 2,268; Recovery (percent): 27.93.
Major base: Plattsburgh Air Force Base, N.Y.; Estimated jobs lost: 352;
Estimated jobs created: 881; Recovery (percent): 250.28.
Major base: Presidio of San Francisco, Calif.; Estimated jobs lost:
3,150; Estimated jobs created: 1,980; Recovery (percent): 62.86.
Major base: Reese Air Force Base, Tex.; Estimated jobs lost: 1,238;
Estimated jobs created: 138; Recovery (percent): 11.15.
Major base: Red River Army Depot, Tex.; Estimated jobs lost: 386;
Estimated jobs created: 186; Recovery (percent): 48.19.
Major base: Sacramento Army Depot, Calif.; Estimated jobs lost: 3,164;
Estimated jobs created: 101; Recovery (percent): 3.19.
Major base: San Diego Naval Training Center, Calif.; Estimated jobs
lost: 402; Estimated jobs created: 48; Recovery (percent): 11.94.
Major base: Savanna Army Depot, Ill.; Estimated jobs lost: 436;
Estimated jobs created: 62; Recovery (percent): 14.22.
Major base: Seneca Army Depot, N.Y.; Estimated jobs lost: 273;
Estimated jobs created: 944; Recovery (percent): 345.79.
Major base: Sierra Army Depot, Calif.; Estimated jobs lost: 374;
Estimated jobs created: 262; Recovery (percent): 70.05.
Major base: Staten Island Naval Station, N.Y.; Estimated jobs lost:
1,001; Estimated jobs created: 0; Recovery (percent): 0.00.
Major base: Stratford Army Engineering Plant, Conn.; Estimated jobs
lost: 1,400; Estimated jobs created: 111; Recovery (percent): 7.93.
Major base: Tooele Army Depot, Utah; Estimated jobs lost: 1,942;
Estimated jobs created: 819; Recovery (percent): 42.17.
Major base: Treasure Island Naval Station, Calif.; Estimated jobs lost:
454; Estimated jobs created: 59; Recovery (percent): 13.00.
Major base: Tustin Marine Corps Air Station, Calif.; Estimated jobs
lost: 348; Estimated jobs created: 2; Recovery (percent): 0.57.
Major base: Vint Hill Farms Station, Va.; Estimated jobs lost: 1,472;
Estimated jobs created: 344; Recovery (percent): 23.37.
Major base: Warminster Naval Air Warfare Center, Pa.; Estimated jobs
lost: 2,311; Estimated jobs created: 398; Recovery (percent): 17.22.
Major base: Williams Air Force Base, Ariz.; Estimated jobs lost: 728;
Estimated jobs created: 2,200; Recovery (percent): 302.20.
Major base: Wurtsmith Air Force Base, Mich.; Estimated jobs lost: 690;
Estimated jobs created: 587; Recovery (percent): 85.07.
Major base: Total; Estimated jobs lost: 129,649; Estimated jobs
created: 79,740; Recovery (percent): 61.50.
Source: Our analysis of DOD‘s Office of Economic Adjustment data as of
October 31, 2001.
[End of table]
[End of section]
Appendix V: Average Unemployment Rates of BRAC-Affected Areas Compared
with the U.S. Average Rate:
As figure 10 shows, 16 (67 percent) of the 24 BRAC-affected localities
situated west of the Mississippi River had unemployment rates less than
the U.S. average rate of 4.58 percent during January through September
2001. The other eight locations had unemployment rates greater than the
U.S. rate.
Figure 10: Comparison of Unemployment Rates of 24 BRAC-Affected
Locations West of the Mississippi River:
[See PDF for image]
[End of figure]
Source: Our analysis of the Department of Labor …s data.
As figure 11 shows, 28 (76 percent) of the 38 BRAC-affected localities
situated east of the Mississippi River had unemployment rates that were
less than the U.S. rate of 4.58 percent during January through
September 2001. The other 10 locations had unemployment rates that were
greater than the U.S. rate.
Figure 11: Comparison of Unemployment Rates of 38 BRAC-Affected
Locations East of the Mississippi River:
[See PDF for image]
[End of figure]
Source: Our analysis of the Department of Labor …s data.
[End of section]
Appendix VI: Average Annual Real per Capita Income Growth Rates of
BRAC-
Affected Areas Compared with the U.S. Average Rate:
As figure 12 shows, 12 (50 percent) of the 24 BRAC-affected localities
situated west of the Mississippi River had average annual real per
capita income growth rates that were greater than the U.S. average
growth rate of 3.03 percent during 1996 through 1999. The other 12
locations had rates that were below the U.S. average rate.
Figure 12: Comparison of Average Annual Real per Capita Income Growth
Rates of 24 BRAC-Affected Locations West of the Mississippi River:
[See PDF for image]
[End of figure]
Source: Our analysis of the Department of Commerce‘s data.
As figure 13 shows, 21 (55 percent) of the 38 BRAC-affected localities
situated east of the Mississippi River had average annual real per
capita income growth rates that were equal to or greater than the U.S.
average growth rate during 1996 through 1999. The other 17 locations
had rates that were below the U.S. average rate.
Figure 13: Comparison of Average Annual Real per Capita Income Growth
Rates of 38 BRAC-Affected Locations East of the Mississippi River:
[See PDF for image]
[End of figure]
Source: Our analysis of the Department of Commerce‘s data.
[End of section]
Appendix VII: Case Examples of Community Impacts and Recovery from
BRAC:
During our review, we visited communities near the former military
bases at Chase Naval Air Station, Texas; Castle Air Force Base,
California; Fort Ord, California; Loring Air Force Base, Maine;
Charleston Naval Shipyard, South Carolina; and Fort McClellan Army
Base, Alabama. Our visits to communities surrounding the Chase Naval
Air Station and Castle Air Force Base were designed to see what
progress they had made since our last visits to them in 1998; the
remaining visits during this review were with our initial contacts. In
general, local officials told us that their communities were recovering
from the impacts of base closure and they were optimistic about the
future. At the same time, they pointed to the considerable
difficulties, frustrations, and losses that their communities
experienced as they adjusted to the loss of military jobs, the
redevelopment of base property, and the recent declining national
economy. The economic impact on and recovery of specific communities
within a region encompassing a closed base can vary--widely in some
cases--because of such factors as proximity to the base and the
business diversity within the community. For example, officials in
Seaside, California (which abuts the former Ft. Ord) told us that the
base closure caused significant economic problems for the community
(e.g., closing of local businesses) and that these problems continue to
hinder recovery. In the neighboring city of Monterey, however,
officials told us that the impact was less severe because the city had
a more diverse local economy and was less dependent on the base.
Community Impacts Resulting from the Closure of Chase Naval Air
Station, Texas:
In 1998, we visited the communities surrounding the former Chase Field
Naval Air Station, Bee County, Texas, and found that they were
recovering economically from the base closure. We revisited Bee County
and found that these communities continued their recovery but were
still having some problems. Table 8 shows how the closure of Chase
Field Naval Air Station in February 1993 affected the surrounding
communities and activities, as indicated by local officials during our
visits in 1998 and 2001.
Table 8: Community Impacts Resulting from the Closure of Chase Naval
Air Station, Texas, as Reported in 1998 and 2001:
Overview: Bee County, Texas, and the surrounding counties are
generally rural; agriculture and ranching are local industries. The
largest sectors in Bee County are now state and local government,
trade, and services.: As we reported in 1998; Overview: What we found
in 2001.
Overview: Bee County, Texas, and the surrounding counties are
generally rural; agriculture and ranching are local industries. The
largest sectors in Bee County are now state and local government,
trade, and services: January-September 1997 unemployment rate of 6.1
percent; Average real per capita income growth (1991-95) of 0.5
percent; Sales of expensive items, such as automobiles, dropped;
; Automobile dealerships had to reduce staff and some businesses
closed, including high-end clothing stores, a discount department
store, an automobile dealership, a local janitorial service, a tortilla
factory, and about four convenience stores; Real estate values in
the residential market declined, and housing in the $75,000+ range was
stagnant; Many military families that had brought a range of life
experiences to the community moved; Skilled workers commuted long
distances to other bases or were retired, unemployed, or underemployed
or no longer resided in the area.; Overview: January-September 2001
unemployment rate of 5 percent; Average real per capita income
growth (1996-99) of 2.59 percent; Sales of expensive items, such
as new automobiles, remained low while used automobile sales
increased; New motel, theatre, and water treatment plant built,
while one of two large grocery stores closed. New hospital wing added
to accommodate a significant increase in hospital patients treated.
County sales tax revenues increased slightly; Real estate values
in the residential market increased; new home building growth for homes
was in the $100,000+ range; Evening enrollment at community college
was 75 percent lower without the military presence; Skilled workers
continued to commute long distances to other bases.
Source: Discussions with DOD, state, local, and business officials and
our analysis of the Department of Commerce‘s data.
[End of table]
According to local officials, the most important factor contributing to
economic recovery from the base closing was the decision of the Texas
Department of Criminal Justice to locate a prison complex on the former
air base. The medium-security prison, completed in 1994, occupies less
than one-third of the former base and employs about 1,200 people.
Without this prison and another prison complex built earlier and
adjacent to the former base, local officials believe Beeville would not
have survived as a community. According to a DOD Office of Economic
Adjustment October 2001 report, 1,153 new jobs, or 120 fewer than
reported in 1998, were created at the former naval air station. At the
time of our visit in June 2001, the former air station had only one
tenant, who maintains the facility instead of paying rent under a
negotiated 10-year lease agreement with the reuse authority.
Community Impacts Resulting from the Closure of Castle Air Force Base,
California:
We visited the communities surrounding the former Castle Air Force
Base, Merced County, California, in 1998 and found that they were
recovering economically from the base closure. We revisited Merced
County in 2001 and again found that these communities continued their
recovery, although they still were experiencing some problems. Table 9
shows how the closure of Castle Air Force Base in September 1995
affected the surrounding communities and activities, as local officials
reported during our visits in 1998 and 2001.
Table 9: Community Impacts Resulting from the Closure of Castle Air
Force Base, California, as Reported in 1998 and 2001:
Overview: Merced County, California, is a rural area largely
dedicated to agriculture and related industries. Much of its labor
force‘s seasonally employed in farming and canning. Even during seasons
of ’full employment,“ the unemployment rate remains high, around 14
percent; during the off-season, the rate can rise from 19 to 22
percent. The area is home to a large immigrant population.[A]: As we
reported in 1998; Overview: What we found in 2001.
Overview: Merced County, California, is a rural area largely
dedicated to agriculture and related industries. Much of its labor
force‘s seasonally employed in farming and canning. Even during seasons
of ’full employment,“ the unemployment rate remains high, around 14
percent; during the off-season, the rate can rise from 19 to 22
percent. The area is home to a large immigrant population.[A]: January-
September 1997 unemployment rate of 15 percent; Average real per
capita income growth (1991-95) of negative 0.8 percent; Real estate
values in Atwater dropped 25 to 30 percent, partly because the federal
government purchased houses of departing military personnel and placed
them on the market. New housing construction stopped; Atwater
schools lost enrollment, as well as tax base. The Atwater elementary
school district had to reduce budget and staff, canceling some
programs; Local businesses had to reduce staff; some closed, and
some changed ownership. Several small businesses shut down, including
restaurants, insurance vendors, and dry cleaners; The community lost
the military families, who contributed to local organizations, such as
churches and hospitals.; Overview: January-September 2001 unemployment
rate of 13.7 percent; Average real per capita income growth (1996-
99) of 2.32 percent; Housing starts have increased significantly
over the last 2 years partly due to the Bay Area families‘ taking
advantage of affordable residential housing, and to real estate
speculation from an announced new university campus expected to open in
2004. Average home prices increased from $114,000 to $140,000;
Atwater population increased 9.6 percent from 1996 to 2000. Merced
county population increased by 4.5 percent over the same period;
Many closed businesses, such as restaurants and other services, have
not been replaced. There are vacant buildings throughout Atwater;
Former skilled Castle workers continue to commute more than 4 hours a
day, round trip, to the Bay Area, while others no longer reside in the
area.
[A] Many Hmong immigrants from Laos, recruited and trained by the
United States to conduct rescue missions and guerilla activity during
the Vietnam war, migrated to the United States after the war to escape
persecution. India‘s Punjabi began immigrating to California after
World War II and settled largely in rural areas.
Source: Discussions with DOD, state, local, and business officials and
our analysis of the Department of Commerce‘s data.
[End of table]
According to local officials, the closure of Castle Air Force Base had
an immediate adverse effect on the unemployment rate, housing costs,
and per capita income. However, within several years these negative
aspects were overcome. Although the strong national economy helped in
this recovery, Merced County‘s continuing growth is primarily a result
of three factors. First, a new federal prison now occupies a portion of
the former air base and employs 200 individuals. Second, real estate
sales have begun to increase because a new University of California
campus is expected to open in the fall of 2004 and eventually serve
25,000 students. Finally, many Bay Area residents are purchasing more
affordable homes in Merced County and commuting a longer distance to
their jobs.
On October 31, 2001, DOD‘s Office of Economic Adjustment reported an
increase of 566 new jobs (from 1,881 to 2,447) as a result of the
redevelopment of Castle Air Force Base from 1998 to 2001. At the time
of our visit in July 2001, Cingular Wireless was the largest tenant on
the former air base and employed 1,200 people at its call center. In
addition, the 42 other tenants employed about 310 individuals. However,
later that month, Cingular announced that it was cutting 400 jobs at
its Castle site because the number of calls and the size of the
workforce had outgrown the center‘s space.
Other Communities Recovering from Varied Impacts:
Our visits to communities surrounding four other major base closures
showed that recovery was occurring, although not without difficulty.
The impacts of the closures that officials conveyed to us are shown in
table 10 and included initial economic disruption caused by the news of
impending closure; loss of population; decreasing business revenue
leading some businesses to shutdown; a drop in real estate markets and
a rise in rental property vacancies; declining school enrollments; and
social losses felt in the communities from the departure of active,
educated military personnel and families. For example, two school
districts (Limestone and Presque Isle) surrounding the former Loring
Air Force Base, Maine, lost 300 to 400 students and 150 to 200
students, respectively, after the base closed. In the city of Weaver, a
bedroom community hit hard by the closing of Fort McClellan, Alabama,
the population dropped by 200 people to about 2,700 after the base
closed in 1999. But there were some positive effects as well at the
communities we visited. (See table 10.) For example, local grocers in
communities surrounding the former Loring Air Force base benefited from
new business from military retirees, who now shop in their stores
because the base commissary closed. Furthermore, the early prediction
of a 20 to 25-percent loss in economic activity in this same area never
materialized, helped partially by the establishment of a Defense
Finance and Accounting Service facility, which now employs over 300
people on the former base.
Table 10: Reported Community Impacts Resulting from Base Closures for
Communities Not Visited in 1998:
Limestone, Caribou, Presque Isle, Caswell, Fort Fairfield, and Van
Buren, Maine; Overview; The former Loring Air Force Base, which
closed in 1994, is located in the town of Limestone in Aroostook
County, Maine. Aroostook County is a rural county located in the
northeast corner of Maine bordering Canada and covers 6,672 square
miles. The area is largely dedicated to lumber and paper production and
the cultivation of such crops as potatoes, broccoli, and peas.
Unemployment rates for Aroostook County dropped from 8.5 percent for
January-September 1997 to 3.9 percent in the same 9-month period in
2001. Average real per capita income growth rose from 1 percent in
1991-95 to 2.9 percent in 1996-99.
Impact of closure on community; Limestone school district lost 300 to
400 students, resulting in a loss of federal and state funding. Presque
Isle schools lost 150 to 200 students.; Many military retirees left the
area because the base hospital closed.; Retail businesses such as car
dealerships closed. Other businesses, such as construction and general
supply companies, were hard hit.; Ethnic and social diversity
contributed by military personnel and their families disappeared.; Real
estate markets dropped 20 to 30 percent during the first 3 years after
the closing announcement.; Loss of economic activity was not as severe
as initially expected.; Establishment of Defense Finance and Accounting
Service facility on former base provided additional jobs.
Charleston and North Charleston, South Carolina; Overview; The
Charleston Naval Shipyard, which closed in 1996, is located in the city
of North Charleston, South Carolina. Comprising 3 counties, Berkeley,
Charleston, and Dorchester, the Charleston metropolitan region covers
3,163 square miles and has a population of 549,000. Major employers
include the Medical University of South Carolina, the Charleston Air
Force Base, and the U.S. Navy. The largest business sectors are
services, retail and wholesale trade, and government. Unemployment
rates for the metropolitan area dropped from 4.5 percent for January-
September 1997 to 3.2 percent for the same 9-month period in 2001.
Average real per capita income growth rose from 1.9 percent for 1991-95
to 3.4 percent for 1996-99.
Impact of closure on community; Economic impact on the area was not
nearly as severe as expected. While an economic recovery plan expected
recovery in 5 years, it took only 2.; Car sales dropped initially.;
Rental property vacancies rose.; Revenues from military personnel were
lost. For example, the city of Charleston saw a drop in sales taxes
after the base closed, but it has since recovered.; The closure was an
impetus for the formation of a regional alliance of affected
communities--the alliance raised over $8 million from the public and
private sector for business recruiting purposes.; Establishment of Navy
space warfare facility on the former base brought in highly paid and
highly skilled jobs.; New high tech businesses are moving to the
region.
Anniston, Weaver, and Jacksonville, Alabama; Overview; Fort
McClellan, which closed in 1999, was located in the city of Anniston in
Calhoun County, Alabama. Calhoun County covers 609 square miles and has
a population of 112,000. The top employers include the Anniston Army
Depot and a regional medical center. The largest business sectors
include retail trade and service industries. Unemployment rates for
Anniston remained the same--5.2 percent--for January-September 1997 and
for the same 9-month period in 2001. Average real per capita income
growth declined from 2.1 percent for 1991-95 to 1.3 percent for 1996-
99.
Impact of closure on community; Population declined. For example,
Weaver‘s population dropped by 200 people to about 2,700 after the base
closed in 1999.; Sales tax revenues were lost.; Students left,
resulting in a reduction of $8,000 to $10,000 in state school funding.;
Calhoun County lost population from 1999 to 2000, the only county in
the state to do so.; Rental property vacancies increased significantly
after closure.; An off-base shopping area lost many small businesses
and has not been replaced.; Barbershops and clothing stores closed in
Anniston.; Military personnel and dependents, who brought diversity and
were involved in the community, left.; Some military retirees moved out
of the area because of loss of services; but many retirees remained in
the area, thereby increasing local community business activity that was
formerly done on the base when it was active.
Monterey, Del Rey Oaks, Seaside, and Marina, California; Overview;
Fort Ord, which closed in 1994, covers approximately 44 square miles,
and lies within Monterey County, California, in the cities of Del Rey
Oaks, Seaside, and Marina. Major employers include Dole Fresh Vegetable
Company, the County of Monterey/Salinas, the Department of Defense, and
Tanimura & Ante, Inc., a company that prepares crops for market.
Monterey County‘s economy consists of four primary sectors: tourism,
agriculture, environmental technologies, and education. Unemployment
rates for Salinas, a community near the former base, dropped from 10.3
percent for January-September 1997 to 9.2 percent for the same 9-month
period in 2001. Average real per capita income growth dropped from 3.4
percent for 1991-95 to 1.6 percent for 1996-99.
Impact of Closure on Community; 35,000 military personnel and
civilians left the area when the base closed.; Secondary business in
nearby communities, such as dry cleaners and grocery markets, reported
declines in sales.; The loss of military families living off base
created housing and apartment surpluses, which took time to recover.;
Employment growth slowed for1990-95, but recovery followed thereafter.;
From 1990 to 1999, retail sales in the city of Marina grew by 23
percent. In contrast, the county retail sales grew by 50 percent and
state retail sales by 41 percent.; Acquisition of the former base‘s
golf course by the city of Seaside has brought in much needed revenue.;
Acquisition of the former base‘s airport for the city of Marina has
been a success.; Two former base housing areas for the city of Monterey
have been redeveloped and are fully utilized.; Seven educational
institutions have or will soon have facilities on the former base;
California State University (Monterey Bay) has completed $60 million in
renovations and has a student population of 2,400; enrollment is
expected to rise to 12,500 over the next 15 years.; Defense Finance and
Accounting Service facility was established by renovating the former
base hospital.
Source: Discussions with DOD, state, local, and business officials and
our analysis of the Department of Commerce‘s data.
[End of table]
[End of section]
Appendix VIII: Key Reports Related to Base Closure Implementation
Issues:
U.S. General Accounting Office. Military Base Closures: Overview of
Economic Recovery, Property Transfer, and Environmental Cleanup. GAO-
01-1054T. Washington, D.C.: August 28, 2001.
U.S. General Accounting Office. Military Base Closures: DOD‘s Updated
Net Savings Estimate Remains Substantial. GAO-01-971. Washington, D.C.:
July 31, 2001.
U.S. General Accounting Office. Environmental Liabilities: DOD Training
Range Cleanup Cost Estimates Are Likely Understated. GAO-01-479.
Washington, D.C.: April 11, 2001.
U.S. General Accounting Office. Military Base Closures: Unexpended
Funds Raise Questions About Fiscal Year 2001 Funding Needs. GAO/NSIAD-
00-170. Washington, D.C.: July 7, 2000.
U.S. General Accounting Office. Military Base Closures: Potential to
Offset Fiscal Year 2000 Budget Request. GAO/NSIAD-99-149. Washington,
D.C.: July 23, 1999.
U.S. General Accounting Office. Military Bases: Status of Prior Base
Realignment and Closure Rounds. GAO/NSIAD-99-36. Washington, D.C.:
December 11, 1998.
U.S. General Accounting Office. Military Bases: Review of DOD‘s 1998
Report on Base Realignment and Closure. GAO/NSIAD-99-17. Washington,
D.C.: November 13, 1998.
Congressional Budget Office. Review of the Report of the Department of
Defense on Base Realignment and Closure. Washington, D.C.: July 1,
1998.
Department of Defense, Office of the Inspector General. Audit Report:
Cost and Savings for 1993 Defense Base Realignments and Closures.
Report No. 98-130. Washington, D.C.: May 6, 1998.
Department of Defense. The Report of the Department of Defense on Base
Realignment and Closure. Washington, D.C.: April 1998.
U.S. General Accounting Office. Defense Infrastructure: Challenges
Facing DOD in Implementing Reform Initiatives. GAO/T-NSIAD-98-115.
Washington, D.C.:
March 18, 1998.
U.S. Army Audit Agency. Base Realignment and Closure 1995 Savings
Estimates. Audit Report AA97-225. Washington, D.C.: July 31, 1997.
U.S. General Accounting Office. Military Bases: Lessons Learned from
Prior Base Closure Rounds. GAO/NSIAD-97-151. Washington, D.C.: July 25,
1997.
Congressional Budget Office. Closing Military Bases: An Interim
Assessment. Washington, D.C.: December 1996.
U.S. General Accounting Office. Military Base Closures: Reducing High
Costs of Environmental Cleanup Requires Difficult Choices. GAO/NSIAD-
96-172. Washington, D.C.: September 5, 1996.
U.S. General Accounting Office. Military Bases: Closure and Realignment
Savings Are Significant, but Not Easily Quantified. GAO/NSIAD-96-67.
Washington, D.C.: April 8, 1996.
[End of section]
Appendix IX: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
3000 DEFENSE PENTAGON WASHINGTON, DC 20301-3000:
MAR 26 2002:
Mr. Barry Holman, Director:
Defense Capabilities and Management U.S. General Accounting Office
Washington, D.C. 20548:
Dear Mr. Holman:
Attached is the Department of Defense response to the GAO draft report,
MILITARY BASE CLOSURES: Progress in Completing Actions from Prior
Realignments and Closures, dated February 26, 2002 (GAO Code 350059).
The Department concurs with GAO‘s recommendations. The report found
most communities continue to recover from the Department‘s base closure
and realignment actions. Most communities have been able to absorb the
economic loss and show positive economic growth at or above national
averages in recognition of the initiative and persistence of the
Military Departments and local redevelopment officials. We will
continue to work with local and state officials as their redevelopment
efforts seek a more diversified economy.
The Department appreciates the opportunity to review and comment on the
draft report.
Sincerely,
for Raymond. DuBois, Jr. Deputy Under Secretary of Defense
(Installations and Environment):
Attachment: As stated:
GAO DRAFT REPORT DATED FEBRUARY 26, 2002 (GAO CODE 350059):
’MILITARY BASE CLOSURES: PROGRESS IN COMPLETING ACTIONS FROM PRIOR
REALIGNMENTS NAD CLOSURES ’:
DEPARTMENT OF DEFENSE COMMENTS TO THE GAO RECOMMENDATION:
RECOMMENDATION 1: The GAO recommended that, as part of the new base
realignment and closure round scheduled for 2005, the Under Secretary
of Defense (Acquisition, Technology and Logistics), in consultation
with the Under Secretary of Defense (Comptroller), develop a Defense-
wide systematic approach for the periodic updating of initial closure
savings estimates.
DOD RESPONSE: We concur with the GAO recommendation that the Under
Secretary of Defense (Acquisition, Technology and Logistics), in
consultation with the Under Secretary of Defense (Comptroller, develop
a Defense-wide systematic approach for the periodic updating of initial
closure savings estimates for the new base realignment and closure
round scheduled for 2005.
RECOMMENDATION 2: The GAO also recommended that the Under Secretary of
Defense (Acquisition, Technology and Logistics), in consultation with
the Under Secretary of Defense (Comptroller), develop an oversight
mechanism to ensure that the military services and components update
such estimates in accordance with the prescribed approach.
DOD RESPONSE: We concur with the GAO recommendation that the Under
Secretary of Defense (Acquisition, Technology and Logistics), in
consultation with the Under Secretary of Defense (Comptroller), develop
an oversight mechanism to ensure that the military services and
components update such estimates in accordance with the prescribed
approach for the new base realignment and closure round scheduled for
2005.
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
encourage the Secretaries of the Military Services to work with
communities impacted by the base closure process to expand the use of
the early transfer authority in those cases where the Department can
accelerate the transfer of unneeded former base property and/or save
money.
DOD RESPONSE: We concur with the GAO recommendation that the Secretary
of Defense encourage the Secretaries of the Military Services to work
with communities impacted by the base closure process to expand the use
of the early transfer authority in those cases where the Department can
accelerate the transfer of unneeded former base property and/or save
money.
[End of section]
Appendix X: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Barry W. Holman (202) 512-8412:
Mark A. Little (202) 512-4673:
Acknowledgements:
In addition, Nancy Benco, Jane Hunt, David Keefer, Don Kennedy, Michael
Kennedy, Tom Mahalek, Charles Perdue, Bob Poetta, James Reifsnyder,
Thaddeus Rytel, and Arnett Sanders contributed to this report.
FOOTNOTES
[1] See U.S. General Accounting Office, Military Bases: Status of Prior
Base Realignment and Closure Rounds, GAO/NSIAD-99-36 (Washington, D.C.:
Dec. 11, 1998).
[2] See U.S. General Accounting Office, Military Base Closures: DOD‘s
Updated Net Savings Estimate Remains Substantial, GAO-01-971
(Washington D.C.: July 31, 2001) and Military Base Closures: Overview
of Economic Recovery, Property Transfer, and Environmental Cleanup,
GAO-01-1054T (Washington D.C.: Aug. 28, 2001).
[3] See U.S. General Accounting Office, Military Base Closures:
Reducing High Costs of Environmental Cleanup Requires Difficult
Choices, GAO/NSIAD-96-172 (Washington D.C.: Sept. 5, 1996).
[4] The Congress enacted a so-called ’early transfer authority“
provision in September 1996 legislation to allow property to be
transferred before all necessary cleanup actions have been taken.
However, certain conditions must exist for the department to exercise
this authority. For example, the property must be suitable for transfer
for the intended use, transfer of the property must not delay any
cleanup actions, and the governor of the state where the property is
located must approve the transfer. The advantage of an early transfer
is that the property is made available under an economic development or
other disposal authority to the future user as soon as possible to
allow for concurrent environmental cleanup and redevelopment
activities.
[5] The 1988 round was completed under the Defense Authorization
Amendments and Base Closure and Realignment Act (P.L. 100-526, as
amended). The last three rounds were completed under the Defense Base
Closure and Realignment Act of 1990 (P.L. 101-510, as amended).
[6] The number of recommendations may vary depending on how they are
categorized. In this report, the recommendations include closures,
realignments, disestablishments, relocations, and redirections. In a
closure, all missions carried out at a base either cease or relocate,
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. ’Redirections“ refer to cases in which a
BRAC Commission changes the recommendation of a previous commission.
[7] The 1995 BRAC round recommendation to close family housing units on
Fort Buchanan, Puerto Rico, was not implemented because the DOD
Appropriations Act for Fiscal Year 1999 (P.L. 105-262) authorized the
secretary of defense to retain all or a portion of the units in support
of the U.S. Army South‘s relocation from Panama to Fort Buchanan.
[8] With the enactment of the National Defense Authorization Act for
Fiscal Year 2002 (P.L. 107-107, sec. 3006 {a}), DOD ’shall seek to
obtain“ fair market value for property transfers at installations
recommended for closure or realignment after January 1, 2005. The
section also provides for property transfers without consideration, if
circumstances warrant. DOD has not yet developed policy guidance for
implementing this section.
[9] See GAO/NSIAD-99-36.
[10] See GAO-01-971 and GAO-01-1054T.
[11] In terms of constant fiscal year 2001 dollars, the $16.7 billion
net savings estimate and the $6.6 billion annual recurring savings
estimate are $16.7 billion and $6.4 billion, respectively.
[12] While cost estimates are routinely updated and tracked in
financial accounting systems, they are based on obligations and not
actual outlays, thereby adding a degree of imprecision to the actual
costs and the basis for savings projections.
[13] See GAO/NSIAD-96-172.
[14] These 24 BRAC actions include the Army Aviation Troop Command,
Baltimore Publication Center, Bayonne Military Ocean Terminal, Detroit
Arsenal, Fitzsimons Army Medical Center, Fort Buchanan, Fort Chaffee,
Fort Dix, Fort Greely, Fort Holabird, Fort Hunter-Liggett, Fort Lee,
Fort Pickett, Fort Ritchie, Fort Totten, Minor Fort Dix, Minor Army
Forces Command, Minor Fort Lewis, Oakland Army Base, Red River Army
Depot, Savanna Army Depot, Seneca Army Depot, Sierra Army Depot,
Stratford Army Engine Plant, and Tri Service Project Reliance.
[15] See Congressional Budget Office, Review of the Report of the
Department of Defense on Base Realignment and Closure (Washington D.C.:
July 1, 1998).
[16] See Department of Defense, Office of the Inspector General, Audit
Report: Cost and Savings for 1993 Defense Realignments and Closures,
Report No. 98-130 (Washington D.C.: May 6, 1998).
[17] See U.S. Army Audit Agency, Base Realignment and Closure:1995
Savings Estimates, Audit Report AA97-225 (Washington D.C.: July 31,
1997).
[18] The Air Force reported no savings for McClellan Air Force Base and
Kelly Air Force Base prior to fiscal year 2000 because of uncertainties
regarding the performance of the bases‘ depot workloads.
[19] See GAO/NSIAD-97-11.
[20] See Department of Defense, The Report of the Department of Defense
on Base Realignment and Closure (Washington, D.C.: Apr. 1998).
[21] The unneeded acreage does not include property at the Pueblo
Chemical Depot, Colorado, and the Umatilla Chemical Depot, Oregon,
because it will not be available for further disposition until the
chemical demilitarization mission at these bases is completed.
[22] In this report, ’transferred property“ refers to property that has
been deeded to another user; it does not include leased property.
[23] In addition, DOD is retaining an additional 343,000 acres at
closing and realigning bases for reserve component use. Most of this
acreage is property at several Army bases, including Fort Hunter
Liggett, California; Fort Chaffee, Arkansas; Fort Pickett, Virginia;
Fort Dix, New Jersey; and Fort McClellan, Alabama.
[24] As discussed later, an additional 49,291 acres are in use by
others through interim or long-term leases pending other actions that
would permit title transfer.
[25] Two former Army bases--Fort Ord, California, and Camp Bonneville,
Washington--are expected to require most of the funding needed to
complete unexploded ordnance cleanup.
[26] National Defense Authorization Act for Fiscal Year 1997 (P.L. 104-
201, sec. 334).
[27] During our review, we visited communities near the former military
bases of Chase Naval Air Station, Texas; Castle Air Force Base,
California; Fort Ord, California; Loring Air Force Base, Maine;
Charleston Naval Shipyard, South Carolina; and Fort McClellan Army
Base, Alabama. We had previously visited two of these areas--Chase
Naval Air Station and Castle Air Force Base--in completing our 1998
report.
[28] See U.S. General Accounting Office, Defense Spending and
Employment: Information Limitations Impede thorough Assessments, GAO/
NSIAD-98-57 (Washington D.C.: Jan. 14, 1998).
[29] See Rutgers University et al., Defense Adjustment Program
Performance Evaluation (New Brunswick, N.J.: Nov. 1997).
[30] 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 with how they have
fared since the BRAC program began. Because we did not have these
baseline data, we compared the national averages for unemployment and
real per capita income as a benchmark to assess how well the
communities have fared. This comparison does not isolate the economic
effects of a base closure from the factors of other economic events
occurring in a particular region.
[31] One of the limitations of our approach to selecting communities is
that some areas may have been the receiving location for DOD
realignments and may have gained jobs. For example, we included St.
Mary‘s County, Maryland, because of the closure of Navy facilities at
St. Inigoes, Maryland, in the 1993 BRAC round. However, in the 1995
round, the area gained jobs at the Patuxent River Navy facilities
because of the relocation of Navy activities from the Washington, D.C.,
metropolitan area. Despite these gains, the communities we selected for
our analysis lost a significant number of DOD jobs.
[32] Average annual real per capita income rates for 2000 were not
available for analysis during our review.
[33] The per capita income estimates used at the time were available
only through 1995. Therefore, we did not analyze per capita income for
13 communities that were affected only by the 1995 BRAC round.
[34] The impact areas for the communities were defined by using
accepted standard definitions for metropolitan and nonmetropolitan
statistical areas and reflected the impact areas used in the 1995 BRAC
round.
[35] The number of reported civilian positions lost decreased by 5,610
(from 135,259 to 129,649) from 1998 to 2001 because of adjustments in
the Griffiss Air Force figures and the omission of Fort Dix, the
Aviation Troop Command, and Fort Greely from the 2001 report.
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