DCCIMENT ESUME 02042 - A1252232] ( / Proposed Closure of Kincheloe ir force Base, Michigan. LCD-77-321; B-168700. April 29, 1977. 15 pp. Report to Rep. Philip E. Ruppe; y Robert P. Keller, Deputy Comptroller General. Issue Area: Facilities and Material Management (700). Contact: Logistics ard Communications Div. Budget Function: National Defense: Defense-related Activities (054). Organizaticn Concerned: Department of the Air Force; Department of the Air orce: Kincheloe AFE, I. Congressional Relevance: Pep. Philip E. Ruppe. The proposed closure of Kincheloe Air orce Base is part of a continuing effort by the Air orce to reduce support and overhead costs and to reallocate additional resources for force modernization and increased combat capability. Findings/Conclusions: Numerous errors were found in the Air Force's estimate of costs and savings if Kincheloe were closed. The current proposed cloture could result in aual recurring savings of about $2e millicn; one-time costs of about $27.9 million; and one-time cost avoidances of about $9 million. The closure would further depress the economy in the eastern part of Michigan's Upper Peninsula, and undoubtedly would result in increased Federal expenditures to assist affected communities and individuals. The total estimated one-time costs include estimates for impact aid to school districts and for unemployment compensation and food stamps for affected Kinocheloe employees. Closure of tbe base would also drastically affect the local eccncmy by causing an increased housing vacancy rate, depressing real estate values, and causing a substantial business loss in the area. Federal response to the closing might also include establishing a local development organization, developing a regional plan to attract private investment, training unemployed persons to fill existing or new jobs, converting Department of Defense facilities for civilian use, and providing loans to build and equip plants for nes industry. (Author/SC) .,-ttac ;- I:3- _....e ? -- ..... '... -.9 cubs X:t- $ i f -- X r ~ e REPORT OF THE 6 COMPTROLLER GENERAL ltcos., OF THE UNITED STATES Proposed Closure Of Kincheloe Air Force Base, Michigan Department of Defense The proposed closure could result in --annual recurring savings of about $28 million, --one-time costs of about $27.9 million, and -- one-time cost avoidances of about $9 million. The closure would further depress the econ- omy in the eastern part of Michigan's Upper Peninsula and trigger an increased amount of Federal aid to affected communities and indi- viduals. Although the extent and amount of such aid cannot currently be accurately deter- mined, in several instances there was sutfi- cient data to make cost estimates. LCD-77321 APRIL 29, 1977 COMPTROLLR GOINERAL. OF THE UNITIC ITATE WAMINTHINTOTN D.C. B-168700 The Honorable Philip E. Ruppe House of Representatives Dear Mr. Ruppe: On June 17, 1976, you asked us to report on several matters concernlng the proposed closure of Kincheloe Air Force Base, Michigan. As you requested, this report -- evaluates the Air Force estimate of savings and costs resulting from closing Kincheloe, -- assesses the accuracy of the Air Force estimate of the economic impact if Kincheloe closes, and -- contains cost estimates, which were reasonably sup- ported, for Federal agencies other than the Department of Defense. As you requested, we did not present this report to the Department of Defense for their review and comments. We did, however, discuss our findings with Air Force representatives. Sincerely yours, DEPUTY Comptrol!r General of the Ui,.ted States COMPTROLLER GENERALeS RPORT PROPOSED CLOSURE OF TO THE HONORABLE PHILIP E. RUPPE, KINCHELOE AIR FORCE HOUSE OF REPRESENTATIVES BASE, MICHIGAN Department of Defense DIGEST On March 11, 1.976, the Secretary of the Air Force announced the start of a detailed study to analyze the potential effects of closing Kincheloe Air Force Base, ichigan, by October 1977. The proposed closure is part of a continuing effort by the Air Force to reduce support and overhead colts and to rtallocatf: aaai- tional resources for force modernization and increased combat capability. (See p 1.) GAO found numerous errors in the Ar Force's estimate of costs and savings should Kincheloe be closed. Nevertheless, the current proposed closure could result in --annual ecurring savings of about $28 million, -- one-time costs of about y_7.9 million, and -- one-time cost avoidances of about $9 million. (See ch. 2.) Tie closure would further depress the economy in the eastern part of Michigan's Upper Penin- sula and undoubtedly result in increased Fed- eral expenditures to assist affected communi- ties and individuals. Although te extent and amount of such aid cannot currently be accurately determined, in several instances there was sufficient data to make cost esti- mates. 3IA&L5b Up removal, thnrport odwM be dowdepon. i LCD-77-321 The total estimated one-time costs of about $27.9 million include estimates for impact aid to school districts ($2,629,000) and for unemployment compensation ($2,584,000) and food stamps ($186,000) for affected Kincheloe employees. These represent a portion of the costs of Federal programs that might assist affected communities and individ- uals. (See pp. 12-15.) This report was not presented to the Depart- ment'of Defense for their review' and comments. ii Con ten t Page DIGEST i CHAPTER 1 INTRODUCTION 1 History of Kincheloe Air Force Base 2 Scope of review 2 2 SAVINGS AND COSTS REIATED TO THE PROPOSED CLOSURE 4 Estimated annual recurring savings 4 Estimated one-time costs 7 Estimated one-time cost avoidances 10 3 ECONOMIC IMPACT OF THE PROPOSED CLOSURE 12 Studies of economic impact 12 Federally funded assistance 13 ABBREVIATIONS DOD Department of Defense GAO General Accounting Office CHAPTER 1 INTRODUCTION On March 11, 1976, the Secretary of the Air Force announced plans to study numerous proposed base realinements. The proposed actions to be studied are part of the Department of the Air Force's continuing effort to reduce overhead and support costs and to reallocate additional resources for force modernization and increased combat capability. According to the Secretary, tese actions would save about $150 million per year. The announcement included Kincheloe Air Force Base, Nichigan, as a candidate for closure, effective September 30, 1977. Kincheloe was selected because of a review of basing capacity within the Strategic Air Command. The review dis- closed that recent force reductions had resulted in excess capacity and that bases where the Command constitutes the sole mission offer the best potential to reduce costs. After assessing single-mission bases, the Air Force selected Kincheloe as a candidate for closure, and two other single- mission bases--Wurtsmith Air Force Base, Michigan, and Blythe- ville Air Force Base, krkansas--as alternatives if Kincheloe is not closed. The Air Force's selection process included comparing costs and savings associated with the bases under cornsidera- tion, as Shown in the following table. Category Kincheloe Wurtsmith Blytheville -- (00, 000 omitted)- Annual recurring savings $22 $22 $20 One-time costs 11 11 5 Construction cost avoidances 9 13 7 In addition, the Air Force e rained the environmental and economic impact the base cl is would have on surrounding a communities. It found a mJi l environmental impact but substantial adverse economic impact at all three bases. The rationale for selecting the candidate and alternative bases is in the following Air Force documents, released in draft form for comments from interested parties in September 1976: -- Resources Evaluation Base Realignment Proposal. -- Operational Evaluation Base Realignment Proposal. -- Environmental Impact Statement. Closing Kincheloe would result in the following force re- alinements of its aircraft: the 16 -52s would be transferred to Ellsworth Air Force Base, South akota, and K. I. Sawyer Air Force Base, Michigan; and the 16 KC-135s would be assigned to Air Force Reserve units. HISTORY OF KINCHELOE AIR FORCE BASE Kincheloe, about 25 miles south of Sault Sainte Marie, Michigan, and the Canadian border, was built in 1941 as part of the general defense pattern of northern Michigan. Known then as Kinross Auxiliary Air Field, it was a refueling base for Alaska-bound aircraft throughout World War II. Following postwar inactivation, the base was reactivated in 1952 and began operating within the air defense network in 1953. In November 1961 it took on an additional mission: the Strategic Air Command's 4239th StLategic Winq, with its B-52 Stratofc:tress bombers and KC-135 Stratotankers, was as- signed there. In February 1963 this wing was redesignated the 449th Bombardment Wing, with the mission of long-range bombing and effective air refueling. In 1968 the air defense mission moved to Griffiss Air Force Base, New York. Kincheloe consists of about 6,200 acres, 987 buildings, and a 12,000-foot runway. Its authorized personnel strength in March 1976 was 3,186: 381 officers, 2,333 enlisted per- sonnel, and 472 civilians. For fiscal year 1976 the P.litarv and civilian payrolls were about $31 million and $7 million, respectively, and local procurement was about $10 million. Department of Defense (DOD) investment in real estate, eq'v-)- ment, supplies, and aircraft is esti.mated at $508 millior SCOPE OF REVIEW We reviewed Air Force estimates of the costs &Jdsavings in clo.ing Xincheloe, but did not evaluate its estiutes on closing Wt,;:tsmith and Blytheville. We also examined two 2 economic implct reportss one prepared at the direction of the Air Force and the other prepared at the direction of the Klncheloe Area Economic Committee. We made our review primarily at the Kincheloe base in Michigan; the Strategic Air Command Headquarters, Offutt Air Force Base, Nebraska; and at Air Force Headquarters, Washing- ton, D.C. We discussed with Ait Force officials the costs alnd savings and the economic impact resulting from closing I incheloe.