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LOCAL ECONOMY, ENVIRONMENT, AND INTERGOVERNMENTAL COOPERATION: WHAT CAN BE

LEARNED FROM FORT ORD?

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT EFFICIENCY,

FINANCIAL MANAGEMENT AND

INTERGOVERNMENTAL RELATIONS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

AUGUST 28, 2001

Serial No. 107–76

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

BOB BARR, Georgia

DAN MILLER, Florida

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

DAVE WELDON, Florida

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

C.L. ‘‘BUTCH’’ OTTER, Idaho

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

JANICE D. SCHAKOWSKY, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

——— ———

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JAMES C. WILSON, Chief Counsel

ROBERT A. BRIGGS, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON GOVERNMENT EFFICIENCY, FINANCIAL MANAGEMENT AND

INTERGOVERNMENTAL RELATIONS

STEPHEN HORN, California, Chairman

RON LEWIS, Kentucky

DAN MILLER, Florida

DOUG OSE, California

ADAM H. PUTNAM, Florida

JANICE D. SCHAKOWSKY, Illinois

MAJOR R. OWENS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

J. RUSSELL GEORGE, Staff Director and Chief Counsel

DARIN CHIDSEY, Professional Staff Member

MARK JOHNSON, Clerk

DAVID MCMILLEN, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on August 28, 2001 ........................................................................... 1

Statement of:

Albert, Dan, mayor, city of Monterey; James E. Perrine, mayor, city

of Marina; Jerry G. Smith, mayor, city of Seaside; Michael Houlemard,

executive officer, Fort Ord Reuse Authority; and Jeffrey Simon, past

president, National Association of Installation Developers ....................... 14

Farr, Hon. Sam, a Representative in Congress from the State of California .................................................................................................................. 5

Holman, Barry W., Director, Defense Infrastructure Issues, U.S. General

Accounting Office; Patrick O’Brien, Acting Director, Office of Economic

Adjustment, Department of Defense; Raymond J. Fatz, Deputy Assistant Secretary of the Army; Keith A. Takata, Director, Superfund Division, Environmental Protection Agency; Steve Thompson, Acting Manager, California and Nevada office, U.S. Fish and Wildlife Service;

and Edwin Lowry, director, Department of Toxic Substance Control,

California Environmental Protection Agency ............................................. 64

Letters, statements, etc., submitted for the record by:

Albert, Dan, mayor, city of Monterey, prepared statement of ...................... 18

Farr, Hon. Sam, a Representative in Congress from the State of California, prepared statement of ........................................................................... 10

Fatz, Raymond J., Deputy Assistant Secretary of the Army, prepared

statement of ................................................................................................... 122

Holman, Barry W., Director, Defense Infrastructure Issues, U.S. General

Accounting Office:

Information concerning environmental cleanup costs ............................ 97

Prepared statement of ............................................................................... 67

Horn, Hon. Stephen, a Representative in Congress from the State of

California, prepared statement of ................................................................ 3

Houlemard, Michael, executive officer, Fort Ord Reuse Authority, prepared statement of ........................................................................................ 38

Lowry, Edwin, director, Department of Toxic Substance Control, California Environmental Protection Agency, prepared statement of ................. 150

O’Brien, Patrick, Acting Director, Office of Economic Adjustment, Department of Defense, prepared statement of ..................................................... 103

Perrine, James E., mayor, city of Marina, prepared statement of ............... 23

Simon, Jeffrey, past president, National Association of Installation Developers, prepared statement of ....................................................................... 51

Smith, Jerry G., mayor, city of Seaside, prepared statement of ................... 30

Takata, Keith A., Director, Superfund Division, Environmental Protection

Agency, prepared statement of .................................................................... 134

Thompson, Steve, Acting Manager, California and Nevada office, U.S.

Fish and Wildlife Service, prepared statement of ...................................... 143

(1)

LOCAL ECONOMY, ENVIRONMENT, AND

INTERGOVERNMENTAL COOPERATION:

WHAT CAN BE LEARNED FROM FORT ORD?

TUESDAY, AUGUST 28, 2001

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON GOVERNMENT EFFICIENCY, FINANCIAL

MANAGEMENT AND INTERGOVERNMENTAL RELATIONS,

COMMITTEE ON GOVERNMENT REFORM,

Monterey, CA.

The subcommittee met, pursuant to notice, at 10 a.m., in the

Monterey City Council Chamber, Monterey, CA, Hon. Stephen

Horn (chairman of the subcommittee) presiding.

Present: Representative Horn.

Also present: Representative Farr.

Staff present: J. Russell George, staff director and chief counsel;

Mark Johnson, clerk; Darin Chidsey, professional staff member;

and David McMillen, minority professional staff member.

Mr. HORN. The Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations will come to

order.

Among its oversight responsibilities, this subcommittee is

charged with overseeing how efficiently and effectively Federal,

State, and local government agencies work together. We have come

to Monterey to learn how these agencies are handling the many

challenges posed by the 1994 closure of Fort Ord.

Since 1988, the Federal Government has closed 97 of 495 military facilities across the Nation through the base realignment and

closure process. Although these closures were deemed necessary, it

is the local community that bears the economic burden of these decisions.

Fort Ord, which encompasses more than 27,000 acres, was an active Army post from 1917 of the First World War to 1994. It served

as a training facility for infantry, as well as other branches of the

Army, both active and Reserve in the 1930’s, and then full capacity

in the Second World War.

Although the facility was officially closed 6 years ago, several important issues in the reuse process are still unresolved. The 1994

closure of this installation cost the community an estimated 2,835

civilian jobs, in addition to secondary job losses attributed to the

area’s lost revenue.

In 1995, the California State University system began its classes

on Fort Ord land, and that has resulted in the California State

University at Monterey Bay. Although this has brought some 1,100

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new jobs to the area, the local economies of adjacent cities, such

as Seaside, Marina, and Del Rey Oaks have not enjoyed the same

economic growth as those of other areas in Monterey and Monterey

County.

The subcommittee also wants to examine the Federal Government’s effort to cleanup the environmental hazards associated with

Fort Ord’s closure, primarily the removal of unexploded ordnance.

Although most of the cleanup efforts involve used artillery shells,

live ammunition still remains from the facility’s former firing

range.

The Army had proposed using controlled burns to explode the

live ammunition and clear the surrounding flora, which made extraction of the artillery shells both easier and safer. However, local

environmental concerns over the smoke created by the fires resulted in a lawsuit and a preliminary court ruling that temporarily

halted the burns.

Although the court ultimately ruled that the controlled burns

could take place, the U.S. Fish and Wildlife Service is currently

conducting a new study to determine the most environmentally

suitable method to accomplish the cleanup effort.

The subcommittee wants to know the status of this study and

what efforts are being made to implement its recommendations.

The community is understandably concerned over the delays involved in the base reuse process, and indeed, until these issues are

resolved, redevelopment plans will continue to be on hold.

They’re needed, however, to restore the local economy. This is

neither efficient nor effective governing.

Today the Subcommittee on Government Efficiency, Financial

Management and Intergovernmental Relations will hear testimony

from leaders of the communities and various government agencies.

The subcommittee wants to learn about the successes, as well as

the failures that have occurred during the Fort Ord base closure

and what actions the Federal Government can take to expedite the

process.

We would also like to learn the degree of the decisions possible

by many State, regional, county, and city agencies.

We welcome our witnesses. We have a wonderful group of public

officials at all levels, and we look forward to your testimony.

[The prepared statement of Hon. Stephen Horn follows:]

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4

5

Mr. HORN. And we will start, as a courtesy, with your able Representative Sam Farr, who has been in on this situation for years,

and when I had problems in my city due to the closure of the most

effective and efficient shipyard in the United States—they closed it

because it was too efficient—and Sam I talked, and he had some

very good suggestions.

We are delighted to have Representative Farr here today as an

opening presenter, and then I will ask him as the Ranking Democrat to come and sit to my left, as a matter of fact. [Laughter.]

I just thought about that, Sam, and we are delighted to have you

here because you have done so much to be helpful in bringing the

community and agencies together.

So, Sam, give us the overview, and then the rest of the individuals will have 5 or 10 minutes or so, and I will get into that later.

STATEMENT OF HON. SAM FARR, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF CALIFORNIA

Mr. FARR. Well, thank you very much, Mr. Chairman.

I really appreciate you coming back to the region where you were

raised, over in San Benito County, our next door neighbor in Hollister. You will find that almost every one of the panelists has some

connection with Hollister. Even our Mayor coached teams that

played against the Hay Balers to our other mayor, Jim Perrine—— Mr. HORN. Yes, we remember it well. Usually we were mauled.

[Laughter.]

Mr. FARR. Jim Perrine, who works for the city of Hollister.

So we are all very fond of your home and again, welcome to Monterey where California’s government began.

I would like to submit my written testimony for the record and

just kind of speak off the cuff, if you do not mind.

Mr. HORN. Without objection, it will be in the record as will all

statements. The minute the person is recognized their statement is

automatically put into the record.

Mr. FARR. Thank you.

I think that if you look at Fort Ord, as the press keeps asking

me, ‘‘How do you sum it up?’’ The Fort Ord experience, and probably for many military bases, could be summed up in two ways. We

did some things right, and we did some things wrong.

Basically, we did the wrong thing, and I will get into more specifics, but the process is now too chaotic. There are just too many

cooks in the kitchen. There are just too numerous agencies at the

Federal level, at the State level, and some at the local level, all

having independent legal jurisdictions and different budgets and

different timeframes. To get them all on the same vision at the

same time is practically impossible.

It takes too long. This base closed about 9 years ago. We should

be finished and be out of there. We are not.

Last, one of the reasons we are not out of there is that we just

have not put enough money into the cleanup process. That process

is one that is low-ranking in the military’s mission of things they

have to do, but it is a strict liability responsibility. The difficulty

is that they are only responsible, strictly liable in a sense, for what

is underground, not for anything that they have built above

ground.

6

And so the local community is left with the responsibility for

cleanup of a base above ground with no revenue to do it. Essentially this was Federal land. There is no private ownership. There

are no property taxes. There are no sales taxes. There is no revenue coming in to help pay for the cleanup of above-ground hazards.

And if you are going to have to do cleanup by speculating what

can we reuse the land for, you drive up the prices of reuse for the

private sector, for the community sector, and this area of California

is where you really need affordable housing. We have to factor in

the cleanup of about $70 million just to get rid of buildings out

there that are contaminated.

That $70 million then has to be folded into the price of which

they sell housing. So I think one thing we need to do right away

this year is we have got to help bases like Fort Ord with some

money for above-land disposal of facilities.

Now, let me just go into a couple of things. One of the right

things we did is that we used the best of Federal and State government to say there are missions out there that we need to accomplish jointly. We created a new 4 year university, one that you can

be proud of as being former president of 1 of the 21 campuses.

The front page of the paper has today the success of the student

enrollment, of the freshmen enrollment in this school that is up to

about 3,000 students now and growing very rapidly as the word

gets out that this is a good school to go to. It has small classes,

good instruction, high-tech, nice dormitory buildings, and so on. So

that was done right.

The UC, University of California, also has a research park at

Fort Ord. That was done right too, to combine both Cal. State and

UC in one location, colocating them so that the best of both can be

utilized for this State and Nation.

The new BLM, Bureau of Land Management park, is also well

done. The Dunes out at Fort Ord will be dedicated to the public

through a State park system. Again, well done.

Developing new schools, developing new childcare centers, developing the privatization of military housing, selling the golf courses

which have been upgraded and are very, very popular, the commercial airport and more, those are the things that were done right.

Now, what was done wrong was in the process of the conversion.

It is too much of a top-down process for the most part and really

ignores local needs. If you think about it, all development in America is local, and the building permits and the planning process is

local.

I think we have got to get away from the military thinking of

top-down to realizing that even though they develop the real estate

with top-down, they cannot dispose of the real estate without going

bottom-up. We have to redesign the system that puts more emphasis into that.

The cleanup process is a major problem. It creates conflict rather

than resolution. The difference is in how you cleanup each of the

contaminates. You have one set of laws and rules for unexploded

ordnances and totally different for groundwater pollution, for landfill sites, and so on.

As I said, the lack of funding for local reuse is a big problem. I

think that what happened with Fort Ord—and this is what we

7

have got to dispel if we are ever going to have another BRAC

around—is that local communities are fearful of the Federal Government coming in, the big Army, the big Navy, the big Air Force

because they bring in a lot of big Federal agencies. These agencies

really have not instilled confidence in the reuse, particularly when

it goes to cleanup.

This was not just an Army problem. It was also EPA’s problem,

sort of misguided turf building. EPA essentially blocked an orderly

cleanup process under the RCRA laws because it was using Fort

Ord to build a case for EPA jurisdiction over base activities, including base closure.

The EPA fought and joined a lawsuit to force the Army to cleanup Fort Ord to Super Fund specifications, which prolonged the

process, driving up the cost.

But out of this chaos come really good leaders, people that got

in and rolled up their sleeves and realized that leadership is about

getting results.

I mean, I think when Ray Clark, who at the time was the principal Deputy Assistant Secretary of Installations, came on, he took

the unique nature of the problems at Fort Ord and decided that

there were ways to handle it separately.

Out of that sort of desperation, what to do about Fort Ord, came

the idea of a SMART team, SMART standing for Strategic Management Analysis Requirements and Technology.

This group basically worked on finding consensus among a myriad of agencies overseeing Fort Ord one issue at a time, and for

that one person in the audience here today who really deserves

credit, is Dick Wright. He heads up the SMART team, and has

done a tremendous job of being able to sensitize the local needs, the

State needs, and the Federal needs, and bringing in everybody to

a one-stop consensus building process.

Keith Takata at the U.S. EPA plunged into the SMART team

and with only one goal in mind, to make the conversion work. I

think when you have people who are dedicated and have this idea

that, look, we are all here for the same reason, to get this base

cleaned-up and get it converted as fast as possible, the attitudes

change tremendously.

I would also like to praise Pat O’Brien at OEA. Pat and I met

when I was running for Congress and the base was being closed.

He has really stuck through all of these years in our mission to

build a new community out there.

I think these are the kind of people—and there are others—who

really get base conversion. They understand you just cannot throw

your hands up in the air in frustration and walk away from the

problem. They know that lawsuits and threats do not build new

communities. Only hard work and perseverance do.

Making it work is what I have been trying to do every single day

I have been in Congress. There is just one real estate problem after

another, day after day. As you said, the fort started in 1917.

Things were built then, and things were built all along the way.

Some of the things meet modern standards, but most of it does

not. Buildings were not built to code. We found out, as the California delegation, that the military is the biggest user of energy in

California, and when you move to conservation efforts, which you

8

and I are doing in our own homes, you cannot transfer that to the

men and women in uniform because they do not have any meters

on their houses.

The way the military has built these houses not to be like other

communities has got to change. I think we have got to get the military out of the land disposal process. Their job is to train our men

and women in uniform, not to serve as real estate brokers.

I think we need to make it easier for locals to receive the land.

These no cost EDCs are really a valuable tool. There is the carrot

with the no cost EDC, but it does not come with any cleanup

money, and we need to add cleanup money to the EDC.

I think we need to provide seed money for local reuse authorities

to use in rebuilding infrastructure so that economic development

can take place. Everybody looks at Fort Ord and says, ‘‘You are

getting an awful lot of real estate free,’’ but when you come down

to it—this was just so classic for me to be out there—to look at this

housing that was built in the 1980’s, this is modern housing. But

that housing was built under military specifications.

And so going through it with the local fire chief, he said, ‘‘You

know, these windows do not meet California fire standards.’’ I said, ‘‘Well, they are modern windows. Why can’t you leave

them in there?’’ He said, ‘‘Because then we cannot get fire insurance on these

buildings.’’ Then you go to the local water guys, and they say, ‘‘You know,

this is the wrong size pipe to bring the water in, and it does not

meet code standards, and there is no meter on the house for watering. There is no meter on the house for gas and electricity, and the

piping coming in has to be changed.’’ And then you have, of course, none of the housing was built for

ADA standards. So you get into all of these issues, and people

think, well, you know, at the outside, they think this is a Washington thing. We are going to give all of this real estate.

But they do not realize that this real estate comes with an incredible number of liabilities that are not difficult to fix, but that

requires money. In a closed base there is no pot of money at the

local level. They do not have that much discretionary funding.

So we have got to figure out how we can get funding to get the

infrastructure approved, and once it does, you build it and they will

come. I hope we could continue a policy at the Federal level from

a public standpoint that the first people in these houses that have

been lived in by men and women in uniform, essentially a middle

class payroll, that those houses ought to be preserved for like kinds

of people in the civilian sector, people who can pay $500 to $800

a month rent. We should not allow this just to be turned over to

developers who would take that same housing and rent it out to

high-income earners so that the local communities have a bigger

tax base.

That is the fear of what is happening out there. I sympathize

with the local community because they say we need this higher income in order to pay for the cleanup. So if we can play a better

role in the cleanup, they can bring their housing prices down.

I think that if we streamline the process, we clean it up faster,

we are smarter about it, one size does not fit all, then we can, inVerDate 11-MAY-2000 08:26 Jul 23, 2002 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\80374.TXT HGOVREF1 PsN: HGOVREF1
9

deed, turn over these military bases to nothing but success to the

local community.

But Fort Ord is not the model for how it should be done, nor is

it the model for how it should not be done. It is a little bit of both,

and we need the Fort Ord models and the Long Beach models in

order for Congress to learn how to do its job better.

I thank you for coming back to the area of your origins, and I

appreciate your coming to the city of Monterey, and I look forward

to joining you on the dais and hearing from my colleagues.

[The prepared statement of Mr. Farr follows:]

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Mr. HORN. We thank you very much, Sam, and without objection,

Mr. Farr will be a member of this panel, able to ask questions of

the various witnesses.

Now, let me bring panel two, which is the Honorable Dan Albert,

the mayor of the city of Monterey, and, Mr. Mayor, we appreciate

having this wonderful historic room in which we could have this

hearing, and your people who have been the city manager and all

the staff have just been very helpful with us, and we thank you for

that.

We also have the Honorable James E. Perrine, mayor, city of Marina, and the Honorable Jack Barlich, mayor, city of Del Rey Oaks,

and the Honorable Jerry G. Smith is mayor of the city of Seaside.

Michael Houlemard is the executive officer of the Fort Ord Reuse

Authority.

Jeffrey Simon is the past president of the National Association

of Installment Developers.

Now, let’s see how many we have here. Mr. Barlich could not

make it. Anybody else?

OK. Let’s see. We have got Mr. Simon, and Mr. Houlemard, and

Mr. Smith, and Mr. Perrine, and Mr. Dan Albert.

Now, let me tell you the ground rules here. We have your statements. I have read every one of them, and we appreciate that.

What we would like you to do is just look us in the eye and summarize it. We are going to install the 5-minute portion, and we

want to get a dialog between you, and the next panel, panel three,

the experts from the Federal side. We would like to have you at

the same operation that they are going to talk about, and we will

get some dialog there.

And since we are an investigating committee, gentlemen, if you

will stand and will raise your right hands.

[Witnesses sworn.]

Mr. HORN. Thank you.

And the clerk will note five witnesses have taken the oath.

And we will now start with the mayor of Monterey, Mr. Albert.

STATEMENTS OF DAN ALBERT, MAYOR, CITY OF MONTEREY;

JAMES E. PERRINE, MAYOR, CITY OF MARINA; JERRY G.

SMITH, MAYOR, CITY OF SEASIDE; MICHAEL HOULEMARD,

EXECUTIVE OFFICER, FORT ORD REUSE AUTHORITY; AND

JEFFREY SIMON, PAST PRESIDENT, NATIONAL ASSOCIATION

OF INSTALLATION DEVELOPERS

Mr. ALBERT. Yes, Mr. Chairman. I would like to welcome you to

the city of Monterey and to remind everyone that is here and also

to let you know that this is really where California government

began, just right next door, and that we are very proud that the

constitution of California was developed right here and signed right

here. We became part of the United States.

So we are proud of that, and we are proud of that history, and

also to let you know that we are very, very proud to call ourselves

the language capital of the world. We have tremendous language

assets that are here. Approximately 15 percent of all of the languages that are taught and interpreted in the world are done right

here on the Monterey Peninsula with the Defense Language Institute, the Monterey Institute.

15

So I just briefly say that because it is important to us, and I will

get on with what I have to say, but that is important to us because

of the installations that are still here that play a dominant role in

the U.S. Government and our defense.

Mr. HORN. I might just want to add that in the back stairs leading to the House of Representatives, there is a wonderful painting

by the German painter Berstadt, and the Congress gave him

$10,000 on that particular painting. And it is the landing of the explorers at Monterey, CA.

And most people do not even know that because they do not go

up the back stairs, but we all look at it when we are going to get

a vote, and Monterey and dually represented.

Mr. ALBERT. We are going to have to move that to the front part

of the building. [Laughter.]

Mr. HORN. Well, you would displace George Washington. So we

are not going to do that. [Laughter.]

Mr. ALBERT. Well, you have asked us not to read this, but I think

what I would like to do is I would like to read, and then maybe

as we move along make some comments.

I have been actively involved with the base closure deliberations

in 1988, 1991, 1993, and 1995. And later on Michael Houlemard

will give you the specifics of the Fort Ord closure and our recovery

efforts there.

What I would like to do is address the more general subjects that

I think should be kept in mind by the Congress and by the Defense

Department as we move toward what appears to be the next round

of base closures.

The environmental cleanup of the property is critically important. I have a growing sense that the Military Department may

look at a dollar spent on cleanup support, the base reuse plan, as

a dollar not spent on its core missions. If there is an unwillingness

on the part of the military departments to budget for and Congress

to appropriate the sufficient funds to adequately cleanup the defense sites, we should postpone another round of base closures

until we are able to do it the right way.

Basically, we are talking about another round of base closures,

and the sense that we have here is that they are pretty good at

closing down the base, but where we really have the big problem

is once that base is closed, it then becomes the communities that

are mostly affected. Then we have the problem then of what do we

do with those bases.

It seems to me what Congress should be doing, first, instead of

talking about closing bases what you should be doing is let’s move

on with the bases that are closed. Let’s get those fixed. Let’s get

that right, and then you could start talking about more base closures.

What I would say as your process and as you are going through

the process and saying we want to close more bases, along with

that there should be some kind of legislation; there should be something out there that says not only are we going to close them, but

this is what is going to happen after. This is how we are going to

help the local community.

I think that is important. You can imagine the city of Monterey

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ing now. We have got a base that has been closed. We have got two

other bases, two great schools here. I do not even want to think

about them closing because they add so much not only to this community, but to the Nation and what they bring to the Nation.

But if you can think what a community like we are going

through now, when they are talking about other base closures, we

still have one in the situation that Fort Ord is in. It does not raise

the comfort level of a community at all.

The environmental cleanup of the property is critically important. Here in Monterey, for example, we are still dealing with the

cleanup of a closed World War II, Korean War Navy activity, our

local airport. Currently the groundwater under the residential and

neighborhood is contaminated with TCE.

The discovery of this contamination was far too late in coming,

but worse now that it is known. The cleanup is being driven not

by the technical cleanup process, but by the dollars available in our

community from the formerly used defense site program.

This is causing tremendous pain in our community and is an unacceptable way to do the public business. Please insure that the resources necessary to cleanup previously closed bases are available

prior to closing more bases. I mean that just seems like it should

be an essential part of a base closure, is how are we going to deal

with the cleanup process after. I mean, that should go right along

with the idea that we are going to clean a base, and then what is

going to happen with it.

Future reuse planning must be centered on the community’s priorities, not on the Federal Government’s. Federal agency or agencies they sponsor should not be allowed to cherry pick high value

properties unless the proposed uses are consistent with the community’s reuse plan.

All the work done by the military departments’ environmental

work, cooperative agreements, and so on, must be done in coordination and consultation with the community. There should be no secrets from the community. There should not be environmental impact statements done by the military departments that are separate from the community’s environmental work.

The services should not be allowed to develop their own view of

what is appropriate. Reuse should be studied in the department

EIS as happened at Fort Ord. NEPA should be waived for the purpose of the BRAC’s property disposal action.

The State requires an EIS/EIR for the reuse plan as strong as

at NEPA. This one act will save millions of dollars that are spent

by services, and basically what we are saying is, is there an overlap. I mean, I am always asking my constituents to be aware of the

warning on the red light, and now I am getting the red light.

Mr. HORN. No, go ahead.

Mr. ALBERT. But it is OK. It is all right, and there is a lot here,

but I will try to summarize that by saying that there should not

be that overlap. We do not need that, and that is when the communities become confused, and it becomes not a positive thing, but it

becomes a negative thing.

So it seems like the overlap just does not work, and every open

base should be allowed to form partnerships and collaboratives

with its adjunct communities as we have done here in Monterey.

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Through special demonstration legislation, we now provide almost all public works and some recreation services in the procedure

at Monterey and Ord military community on reversible contract

basis. The Army Audit Agency reported that the Joint Power Agency of Monterey and Seaside saved the Army 41 percent of its second year of operation. This $2.5 million saving allowed the Army

to start addressing their backlog of deferred maintenance at the

Presidio.

A side benefit of this program is that the community is now very

familiar with the maintenance requirement of the installation infrastructure. Compare this to the situation at Fort Ord where

buildings and utility systems continue to deteriorate and go

unmaintained 7 years after closure.

If the community is involved in the operation and maintenance

of the installation before a closure decision is made, the DOD saves

money and, more importantly, the community is in a position to

more rapidly recover from the closure if it were to happen. If you’re

allowed to do that, and we have had assistance from our Congressman for that special legislation; we think that is important.

Excess capacity seems to be the base closure driver. All of DOD’s

excess capacity should not be disposed of. We are not smart enough

to know what we will need the day after tomorrow, much less 10

years from now. The capacity once disposed of will almost never be

obtainable again. Therefore, we must be much more aggressive in

exercising the enhanced authorities of Section 267 of Title 10 allowing the lease of excess capacity to local communities, private industry, universities, and so on in such a way that the capacity complements current missions, and it is preserved for future DOD missions.

To give you an example, the Defense Language Institute, there

is a section that was forested, and basically leased to the city. The

Federal Government still owns it, but its been leased to us. We

maintain it. We take care of it.

We also have a lease on the lower portion of the Presidio, but it

is still owned by the Federal Government in case there was a kind

of emergency where they might need it. But that reduces the cost

because we are able to take care and maintain it.

Well, I know that I have run over my time, and I have got a lot

more to say here, but anyway——

Mr. HORN. Well, we will be glad to not just have your statement,

but if you are driving around Monterey and you have got a new

idea, please send it to us. We will put it in the record, and that

includes all of the witnesses here.

Mr. ALBERT. OK.

Mr. HORN. We are going to have to really keep moving.

Mr. ALBERT. I understand that.

Mr. HORN. Or we are not going to get anything——

Mr. ALBERT. No, I understand that perfectly. Thank you, Mr.

Chairman.

[The prepared statement of Mr. Albert follows:]

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Mr. HORN. Thank you.

We now have the mayor of Marina, the Honorable James E.

Perrine.

Mr. PERRINE. Good morning, Chairman Horn and Congressman

Farr. I am Jim Perrine, mayor of the city of Marina and chair of

the Fort Ord Reuse Authority.

I have worked with the Fort Ord closure and reuse process since

the day of the closure announcement in 1991. During this period

I have served either as a marina council member, mayor pro tem,

or the mayor.

I believe that thus far the local reuse process has served certain

areas and constituencies well and others closely, little, or not at all.

In my impression, those well served have been the habitat and endangered species, the homeless programs, and specialty consultants. In general, safety from unexploded ordnance and explosives

has been a priority, and the Army has effectively dealt with it.

There has been a focus on the remediation of groundwater contamination as well. I also believe that we have made strides to

move rental housing into the marketplace. We have, indeed, developed some jobs; far fewer in this term than most people originally

envisioned.

In addition, the community economic base has been modified

from one supporting a military installation to one supporting educational and research facilities.

The areas where we have not had successes at this point are

equally numerous. They include developing new homeowner occupied housing, which is needed to support a significant emerging regional employment base.

Also, we have developed little retail base for taxes and commercial diversity in our communities. As an example of that, between

1990 when Fort Ord was running full speed and 1999, Marina’s retail sales have grown only 23 percent. By way of contrast, the county of Monterey has achieved a 50 percent increase, and the State

of California has attained 41 percent growth in retail sales.

In general, the private marketplace has not yet taken over on the

former Fort Ord. With limited exceptions what has been accomplished has been supported by Federal, State, and local tax moneys

or loans obtained by nonprofit housing providers.

What do we need then to achieve the investment of private dollars on the former Fort Ord? Time does not permit me to comment

on all that is necessary, but I do suggest the following six elements

that must be incorporated or reinforced.

Most importantly, we need to transfer the property, and during

any interim period, the military must fully and actively secure and

maintain the property.

Second, we need specific assistance and remedies within Federal

law. Regulatory agencies both at the Federal and State level must

be mandated to facilitate reuse in manners that are effectively safe

yet efficient.

Third, a partnership with the local community at the infancy of

base closure is vital to eventual reuse. Quite simply, some DOD

personnel see only a mission of base closure. Others, particularly

the local communities, have to shoulder the reuse.

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Fourth, processes must be expedited in Federal law, and specific

coordination with State officials must be mandated. When implementing reuse, the Federal Government should define uniform

standards.

Fifth, a more coordinated and grounded reuse assistance organization must evolve and should have leverage to make the process

work.

And the final element, financial and training assistance is needed to insure that local resources can be effectively provided. OEA,

EDA, and others need more funding appropriated for reuse assistance.

We then need effective regulations to facilitate the distribution of

the funds to the local jurisdictions. I do believe, given the size of

the elephant, reuse of the former Fort Ord is succeeding. I do not

believe, however, that the public concurs. They don’t agree because

the common sense of the matter is that there should be a direct

and easy way to transfer the military facilities to civilian use.

We have also found the costs are considerable. In Marina, the

1,600 barracks we received will cost an estimated $70 million to remove. This is a mind-boggling number for the Federal Government.

Can you imagine how that translates to my city of 25,000 souls?

These barracks were constructed in the 1940’s as temporary

structures to win World War II. Sixty years later they remain, and

they serve only as visible blight and a pressing liability to the local

communities that will inherit them.

I ask you to work with the reuse agencies and local governments

to change the process so that it effectively engages the market

economy in its early years. This can be done, but it will require discarding the present model and creating a new system.

I offer for consideration my six elements and support my colleague’s suggestion for a new system. I believe the perspective

needs to change to empower local communities for future utilization of historically Federal facilities and how the military mission’s

of relocation or change will be required to achieve that.

I thank you for the opportunity to testify and would be pleased

to answer your questions or further elaborate on my comments.

[The prepared statement of Mr. Perrine follows:]

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Mr. HORN. Thank you very much, Mayor.

Our next presentor is the Honorable Jerry G. Smith, mayor of

the city of Seaside.

Mr. SMITH. Good morning, Mr. Chairman and Congressman

Farr, members of the committee.

It is a pleasure to have the opportunity to address you today to

discuss the city of Seaside’s perspective on this important topic.

I am Mayor Jerry Smith, city of Seaside. I have been a lifelong

resident of the Monterey Peninsula and very familiar with the long

history of Fort Ord and its effects on our community, both before

and after its closure.

I would also note that I was once stationed at former Fort Ord.

So my perspective includes the fond memories of my experience in

the Service serving my country.

The city of Seaside certainly agrees with many of the points you

will have already heard today from other speakers. My purpose in

speaking with you is to emphasize a few key issues.

We have experienced a drastic impact in the city of Seaside’s efforts to recover from the closure of Fort Ord. In summary, those

issues are: Delaying access to buildings and properties slated for

transfer to the city of Seaside; conflict with Federal and State

agencies concerning methods and standards for removal of

unexploded ordnance and explosives; the over-reservation of water

and waste water resources by the U.S. Army for Federal purposes;

the costs imposed upon our community for long-term risk management associated with transfer of the properties.

Speaking first to the issues of gaining access to the buildings and

the properties on the former Fort Ord—let me say that the presence of so many of the empty buildings at a time when local housing problems have reached a critical or crisis proportion is a source

of great consternation in our local community.

For over 8 years in vacant, boarded-up structures with the

former Hayes Housing, clearly visible from Highway 1, have offered

torment. These are all illustrations of the problems created by the

Army’s denial of access to this property.

As the city of Seaside has sought to obtain property from the

Federal Government, the buildings, streets, infrastructure have deteriorated before everyone’s eyes. Had we been able to gain access

to these buildings promptly after the closure of the base, we may

have been able to create affordable housing, which would now be

available to our community and to the residents of the Monterey

Peninsula.

The bureaucratic processes which have endured by just buying

100 acres of land now extends over 5 years, and we have not yet

received the signatures on a document that the city of Seaside’s

council approved last April.

The impact of these delays not only creates a condition of worsening deterioration, but also makes the overall development process that much more uncertain. In an atmosphere of uncertainty, we

have found that the development community is more cautious,

more less likely to make commitments to the city, further inhibiting the reuse of the base.

Another problem that we face are conflicts among the Federal

and State agencies having jurisdiction over the Fort Ord properties.

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As you know, the reuse of Fort Ord includes conservation of substantial land for the protection of endangered species. In fact, over

60 percent of the former installation is set aside for the perpetuity

of this purpose.

A significant portion of the land lies adjacent to the city of Seaside’s boundaries, including areas designated for future housing.

One of the requirements for underlining the conservation

documentations for the Fort Ord installation—multiple species,

habitat, and natural management plan—requires the conservation

agencies to utilize controlled, prescribed burns as a method of managing this unique habitat.

The very reasonable provision is required by the U.S. Fish and

Wildlife Service for the management of maritime chaparral further

prescribes fire as required as the safe means of removing vegetation that impedes the clearance of dangerous unexploded ordnance

projectiles left on this land.

However, other agencies following Federal laws protecting air

quality object to the U.S. Army Bureau of Land Management’s

method of prescribing fire burns.

On a personal note, I want to emphasize that I do not disagree

with the need for burning. As a young man growing up in this area

adjacent to Fort Ord, I can still vividly remember an incident

where two young men were injured when they trespassed onto this

land adjacent to the city of Seaside.

This land lies within a quarter mile of most of the residents of

the city of Seaside. These two classmates of mine climbed over a

fence, the barricade between the residents and the military unexplored land, and ventured in there. I was 11 years old. The two individuals were 12 and 14. One is dead, and the other one lost his

legs as a result of the unexploded ordnance that exists on this

property.

The presence of unexploded ordnance so close to the residents’

area presents a continuous, unattractive nuisance to the young people of our communities. This should be addressed by the Federal

Government in a most expedient manner.

One of the most significant challenges we face for economic recovery here on the peninsula is the lack of sufficient water and

waste water capacity, to support new development. For most communities on the peninsula, new development does not occur without the removal of some of the land use simply due to the fact that

there are no new water resources. Not so in the former Fort Ord,

there is a substantial, 6,600 acre-feet of water potentially available

for development. Unfortunately, in closing the base, the Army has

decided to retain a large amount of the water, 1,729 acre-feet for

its future use.

As a result, all of the jurisdictions who will receive land from

former Fort Ord will receive far less water than needed to fully

achieve effective build-out of the land.

In the city of Seaside’s case, this means that the ability to build

new housing, to create new jobs will be limited. The initial reservation of water by the Army was originally designed to insure that

adequate water was available for remediation of hazardous materials, including: asbestos and lead paint on Fort Ord.

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With the assumption that this is a responsibility of FORA, the

Army should have a level of confidence to evaluate their need for

water and relocation of the portion of the retained water resources

to local jurisdictions.

Finally, I want to mention the tremendous, long-term risks

which remain with the ordnance and explosives on former Fort Ord

to the city of Seaside and the jurisdictions. Although the Federal

Government is responsible for cleaning-up the unexploded ordnance because of regulations prepared by Federal and State environmental agencies, the local agencies will still be required to implement a variety of programs to insure that future users of the

properties are aware of the risks of remaining exploded ordnances

and explosives.

There is no Federal funding of any of these programs, leaving the

obligation for the cost of implementation to these local jurisdictions. These programs include educational efforts, long-term monitoring and notification to subsequent property owners, and specific

special steps to be taken during the construction activities.

In some cases records of conveyances providing notification of

these risks will be required on the property. The implementation

of these programs represents unfunded mandates.

In closing, Mr. Chairman, I would like to express my appreciation to the committee for its interest in our community and the tremendous challenges we face as a city and in the county achieving

the reuse of Fort Ord. I hope that the result of this and other hearings you will conduct, we can find ways to remove the obstacles I’ve

discussed.

Thank you very much.

[The prepared statement of Mr. Smith follows:]

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Mr. HORN. Well, thank you, Mayor Smith.

We now have Michael Houlemard, the executive officer of Fort

Ord Reuse Authority.

Mr. HOULEMARD. Chairman Horn, Congressman Farr, thank you

for this opportunity to provide testimony today regarding our experiences at the Fort Ord Reuse Authority with respect to how local,

State and Federal agencies have worked together to implement

reuse, and I say work together because sometimes we do not work

together, but that was the idea of this session today.

As you may know, the former Fort Ord was designated a model

base reuse project some time ago, and as Congressman Farr noted

earlier today, it has become a unique example of what can both go

right and what can go wrong in military base reuse.

In our written testimony, we talked about the many layers and

the deep morass of bureaucracy and the amalgam of regulatory

controls that have resulted in inefficiency, extra cost to our taxpayers and significant redevelopment delays for the local communities.

Diverse working class communities still struggling with the

heavy demands to recover from the Federal Government’s closure

and inadequate funding and other support, we must emphasize

today as the other speakers have cleaning up these former military

bases or now contaminated ghost towns are a critical part of being

able to recover from the substantial economic devastation the communities have suffered.

While Fort Ord is just one of the many examples of this scenario,

the scale of the circumstances here at the former Fort Ord are substantially larger than most. At the former Fort Ord, as you’ve

heard, we have thousands of acres of ordnance and explosives that

have yet to be discovered. The U.S. Army, as the responsible entity

for remediating this contaminant, which continues to be a significant safety issue for our local community, has struggled mightily

to work through the morass of bureaucracy that allows them to be

able to finish this work.

In our view, the removal of ordnance and explosives surfaces significant safety issues for us all. In particular, the first concern includes how to remove the OE itself in a safe way because of what

Mayor Smith has talked about in terms of its danger to the adjacent community, but also how to remove the vegetation and to do

that in a safe way for the workers that are involved on the former

Fort Ord, that very dangerous activity of identifying and removing

these projectiles.

But also the safety questions of what happens when you use certain forms of vegetative clearance for the surrounding community.

As the father of a child that has asthma, we have concerns about

what happens with smoke. While we’re not objecting to the smoke,

we want to make sure that when the burning is done it’s done in

a safe way.

This isn’t a question about our wiping the slate clean and saying,

‘‘Just do anything willy-nilly,’’ but we must use things that safely

protect our workers, safely remove ordnance and explosives, and

protect the health of the residents that are nearby.

The consequences of failing to do this call into play an array of

Federal, State, and local efforts seeking to interpret a myriad of

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Federal laws that purport to resolve the issue, but, in fact, windup

inhibiting the resolution.

The ambiguities and conflicts that these laws have surfaced put

the reuse of portions of former Fort Ord into a State of gridlock,

while the existing ordnance and explosives still remain on the land

and is a danger to the youth. The situation cries for a solution. I

think Mayor Smith has proposed one. I think we could propose

many to you, and we’d like to work with the committee in identifying ways we think can help to resolve this outside of the courts,

as Congressman Farr has reminded us repeatedly.

Also with respect to OE removal, Fort Ord is in a unique circumstance in that the Department of Justice has agreed to perform

or to process the removal of OE as though it were a CERCLA contaminant, which has added nearly 5 years to the transfer dates of

many of the properties on the former Fort Ord.

While we were not consulted during the decisionmaking process

the Department of Justice entered into, the impact on us and one

of our communities has been substantial and just short of devastating. In fact, to a certain degree, the impact that a closure of this

type has on any community with OE, ordnance and explosives, removal as a part of it is very similar to what we have found across

the Nation that the country does when there are natural disasters.

The economic devastation, the loss of jobs, the physical ghost

towns that are left to communities are economic natural disasters

that should be addressed in a similar way as the way we bring in

all of our resources to help communities recover from natural disasters, if there is another round of closure.

Conservation of habitat for protection of endangered species is a

critical and important piece of what we have at the former Fort

Ord. All of the communities recognize the importance of having a

conservation area and to protect the natural beauty that we have

in this area as part of an amenity of the reuse of the former Fort

Ord.

As a consequence, the communities have all agreed to set aside

more than 60 percent of the 28,000 acres of the base for habitat

and to provide substantial funds from the development of the property for managing and maintaining these significant parcels.

However, despite every effort we have made over nearly 5 years

of efforts, we have not been able to get an agreement or an approval from the U.S. Fish and Wildlife Service of our habitat conservation plan, of our agreement to set this land aside for the conservation of endangered species.

The end result is still a significant cost to us, delays to our reuse

projects, difficulties with the U.S. Army in proceeding with certain

cleanup activities, and the prevention of key transfers of property.

Another item of great importance to us are the conflicts between

State and Federal standards for lead/asbestos cleanup. You have

heard about the 1,600 contaminated buildings, and as Mayor

Perrine noted, the cost of removing these 1,600 buildings now exceeds $70 million if we are to comply with our State and local requirements.

However, because of the Federal law, we are left with asbestos

and lead by the U.S. Army with no visible method of being able to

finance this necessary removal.

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In addition to the 1,600 buildings that are at the former Fort

Ord, what we understand from the State of California, there are

about 100,000 of similar kinds of buildings in the State of California, and nearly half a million in this country; many occupied by

soldiers today.

All of this should be addressed as a national priority for cleanup

as well as the appropriate funding to find an appropriate mechanism and proven methodologies for disposing of these contaminants.

Today you may not have direct yes or no responses from those

that will follow us. Typically regulators have regulatory answers to

questions. That is their job. In fact, one of the regulating agency

executives revealed to me last week about his frustration at not

being able to provide front-end, cooperative, advance kind of assistance because the structure of the regulation says that they respond

to actions rather than be an advocate at the front-end.

So that is sort of a frame of mind that we deal with with regulators. We accept that because their police function is one that we

recognize, but would wish that you could think of a regulatory resolution for.

While there are literally dozens of examples of these kinds of

interagency conflicts, I am not going to use the limited time you

have, or we have today, to give the anecdotal issues, but I would

point to our written testimony which details five or six different

areas where we have issues.

But rather I would like to propose some solutions. I believe there

is an inherent problem in the structure of the way this country

handles military base reuse that is part of many of these individual

and anecdotal problems.

The core problem is that we face a multi-faceted, multi-regulatory, multi-agency implementation of a varied array of Federal

laws about reuse in both disparate and directly and distinctly different interpretative policy exchanges. That is the standard we operate under every day.

Rather, we would propose that there needs to be more of a single

use, single focus, directive approach. Instead of the multiple interpretations of intent of reuse, we could maybe be better served by

addressing reuse in the same way it addresses major disasters as

I mentioned earlier.

In fact, when a military installation, I believe, closes, I believe

it has the impact of a natural disaster as I mentioned and, therefore, a national emergency. We have FEMA when we have a natural disaster. Why can’t we have an agency that is professionally

structured to address these kinds of issues?

We have other professional Federal agencies tasked with certain

responsibilities in the case of base reuse. We have multiple agencies within a larger agency that is not tasked with reuse, as Congressman Farr noted, but tasked with defending our country. While

building upon the successful partnerships we developed with other

Federal agencies and even some of the regulators, I think this

might be an overall or global solution that might bring about a successful transition.

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I thank you, Mr. Chairman and Congressman Farr, and I want

to congratulate the great professionalism of your staff in conducting this hearing.

[The prepared statement of Mr. Houlemard follows:]

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Mr. HORN. Well, we thank you, and you have made some very

useful recommendations, and we will put them to use hopefully.

And we now go to Mr. Simon. Jeffrey Simon is the past president

of the National Association of Installation Developers.

You might want to explain the purpose of that group.

Mr. SIMON. We will do that.

Mr. HORN. Thank you.

Mr. SIMON. Good morning, Mr. Chairman and Congressman

Farr. My name is Jeffrey Simon. I have come from Boston, and as

the chairman said, I am the immediate past president of the National Association of Installation Developers [NAID].

James Meadows, who is my successor as president, could not be

here today and asked me to represent our organization. Jim is the

CEO of Presidio Trust up in San Francisco.

NAID is the only national organization made up of more than

350 members who are communities, authorities, private real estate

development companies, and other professionals who are exclusively involved in the reuse of closed military properties and facilities, and like here in Monterey, with active installations.

NAID is an organization that just last year celebrated its 25th

anniversary.

While I know the primary intent here today is Fort Ord, let me

try to provide the national perspective of our members. I, personally, am extremely aware of how critical the topics from this hearing are today, having been involved in the redevelopment of closed

military properties since the mid-1970’s in Massachusetts, then as

head of a State agency created to deal exclusively with military redevelopment.

I contrast that with my more recent experience as director of the

redevelopment of Fort Devens located about 40 miles west of Boston, which was a 1991 BRAC closure.

In recent years, I have been working with my own private development company, Simon Properties on a number of projects involving closed and active installations and thus have seen both the

public side and the challenges faced by a private developer trying

to redevelop closed military bases.

Let me give you some idea of what you find when you try to redevelop these properties. You find buildings that don’t meet local

codes. You find road patterns meant to discover efficiency through

transportation. You find utility systems that are outdated, meet no

codes, and typically need tremendous investment to be useful.

You find land uses that defy any rational site planning contest.

You would have tremendous quantities of lead paint and asbestos,

none of which is covered by the environmental responsibilities of

the services, and as you have heard today, that great underwriting

challenge, unexploded ordnance.

And, last, you find environmental issues which sometimes have

been cleaned-up and sometimes subjected to what are referred to

as, ‘‘institutional controls,’’ which means build a fence around it or

put a deed restriction on it, and we will pretend that we do not

have to deal with it.

But in spite of all that, there are tremendous opportunities. You

need look no further than right here at Fort Ord at CSU, Monterey

Bay, and the housing activity that has taken place. But you can go

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to Arizona and look at Williams, go to Denver and look at Lowry,

Chicago and look at Fort Sheridan, up in Maine at Loring Air

Force Base, or in a small project that I am working on in Annapolis

across from the Naval Academy, to see public officials, such as

those here today, working with private developers to try to work

their way through this myriad of complexities that Michael has described to breathe new life in these communities where soldiers,

sailors, and airmen once lived.

I have three points to make today. First, the central focus of redevelopment efforts should remain the community based redevelopment plan. This reuse plan, usually produced through the hard

work of many volunteer citizens and supported by a broad range

of consultants, becomes the guiding document to efforts at the Federal level, such as the preferred option under the Federal and State

environmental review processes.

Any attempts to dilute that will be counterproductive for the reasons that Congressman Farr talked about in terms of local regulation of land use.

Second, the no cost economic development authority must remain. This tool, together with the environmental indemnity offered

a former military property, have broken the logjam of deed transfers that existed until the late 1990’s. These are the two most important tools that must be conserved in the conveyancing process.

Third and last, probably the largest frustration among local redevelopment authorities trying to redevelop these sites is when one

military branch takes a hard line against the policy or legal interpretation which we know has been allowed by another military

branch.

The members of NAID feel that the incredibly frustrating situation of differing legal interpretations and policies all derived from

the same law or regulations must end.

We support competition among the services. We would hope,

however, that this competition would become one to see which

model works the best to aid redevelopment, and that the starting

point would be a set of authorities that all departments agree are

legal.

I want to echo just one point made by Congressman Farr. The

services make it awfully hard for themselves. They reinvent the

wheel each time each a new division of each service tries to deal

with a closure and try to get their people educated on how real estate development really works.

Property development at this scale is not new in this country.

There’s a well established system, locally based, that we need to

collectively fit into and which should be adopted as military practice. We need to focus on deed transfers expeditiously.

In closing, the Department of Defense has expressed its desire to

see a new round of closures beginning in 2003. While the final decision is uncertain and rests with Congress, I commend you for giving us the opportunity to express our feelings and hope you consider these quality recommendations in any further action.

Thank you very much. I appreciate the opportunity to be here.

[The prepared statement of Mr. Simon follows:]

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Mr. HORN. Thank you. That is very helpful.

Now, that is the last formal presentation, but will some of you

be here when the government officials come next? Because we

would like to have a dialog, and we would like an interaction here

between the good ideas you have prepared, and then let’s see in

terms of the Federal Government and perhaps the State government side how can we improve matters. That is basically what we

are here to do.

Mr. Simon, please list the three most successful base closures,

meaning those with the least disruption to the local community in

the long-run, and the three worst closures.

Mr. SIMON. Well, you know, Mr. Chairman, I was elected by my

members, and while it is certainly not the same as you, it would

be a little bit like saying give me the three most successful constituents and give me the three least successful constituents.

[Laughter.]

So I am always a little bit loath to do that quite so definitively.

But if you look around the country, there are some bases, Fort

Sheridan being one, Lowry being another in Denver, which have

many people, thousands of people living on them today, working on

them today. If you look to the north of here, Sacramento, McClellan

Air Force Base in the last 18 months has really leaped forward in

terms of reemploying thousands of people in what was essentially,

as Michael said, a ghost town when it was taken over.

Conversely, you have heard about the problems at Fort Ord, and

I have to tell you since I was running Fort Devens at the same

time that the Fort Ord experience was happening, I spent a lot of

time with the Fort Ord people, and it just seems like every conceivable roadblock—I see the Congressman laughing—that could have

been thrown up has been thrown up at Fort Ord.

Michael is a very good friend of mine, and we talk all the time

about the frustrations of trying to do that, I on the East Coast in

Boston and he here in California.

And I think though if you look around at properties which have

transferred and which are under development, you will see that

where the committee of the service is there to make a deed transfer

quickly you really get the quickest development. So I would really

encourage that.

Mr. HORN. How many State, local, and Federal agencies are involved in the reuse of Fort Ord? Could you give us an idea, Mr.

Houlemard?

Mr. HOULEMARD. I had a feeling one member of your staff might

be interested in the answer to that question. In our written testimony, we noted that there were some 36 agencies that had some

involvement one way or another on the part of the former Fort Ord.

That came from some testimony that I did a couple of years ago,

and I asked one of our key staff members, Mr. Steven Endsley, to

quickly draw up a list of those that we work with on a weekly

basis, and I have the list for you, Congressman.

There are 53 agencies, in fact, that we work with on a weekly

basis, some more than a dozen different Federal agencies that have

some rule of law having to do with the former Fort Ord, and about

the same amount of State agencies.

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But, in effect, there are 53 agencies that have some call or some

influence or some rule of law related.

Mr. HORN. Without objection, that exhibit will be put in the

record at this point.

Mr. HOULEMARD. Certainly.

Mr. HORN. And before I yield to Representative Farr, I would

like to know, Mr. Simon, as you look at the Fort Ord situation and

what you have heard this morning, how are they on, say, the

curve? Are they in D plus, C plus, B plus, A, whatever and based

on what you see in the rest of the country?

Mr. SIMON. To be quite honest——

Mr. HORN. You are under oath. So we hope you are.

Mr. SIMON. It has already been established. I have nothing further.

Mr. HORN. Usually when a witness comes he says, ‘‘It is a real

pleasure to be here,’’ and I remind him that he is under oath. So

go ahead.

Mr. SIMON. I think that it is incredible to me, quite frankly, that

a property with that much potential in this market, in this State,

coming through the best real estate market that we have ever

known in this country, is not booming, quite frankly.

I worry for my friends at Fort Ord that if the market gets worse,

the problems will get worse because the end that we are all working for is private investment and private development.

So I would have to say that Fort Ord really is a frustrating situation that is behind the curve.

Mr. HORN. OK. Colleague, Mr. Farr.

Mr. FARR. Thank you.

Mr. HORN. Five minutes to question.

Mr. FARR. Mr. Chairman, I just have one question.

Mr. Simon mentioned that one of the bases that he thought was

a model was Sacramento.

Mr. HORN. McClellan.

Mr. FARR. McClellan.

Mr. SIMON. The Air Force base. I would just like to shy away

from the word ‘‘model.’’

Mr. FARR. OK. My curiosity is that I think we have to compare

apples with apples, and if you are going to do like bases, you have

to do it in California because local laws, and State laws particularly, and we have a lot of State agencies that are second guessing

the process at the Federal level.

Here is a base that was closed in California under Federal law.

Is the difference then between the way the Air Force handled it

versus the way the Army handles it at Fort Ord?

Mr. SIMON. There is somewhat of a difference. The Air Force set

up one agency, the Air Force Base Disposal Agency, which handles

all of the dispositions for the Air Force. The Army and the Navy

dispose of property either through the local division of the Army

Corps or the local division of NAVFAC, Naval Facilities Command.

Mr. FARR. So in your testimony you stated that there ought to

be a one-stop office in DOD to handle all of these, that you should

not have the differences between the services. Even though the

laws are the same, the process is different.

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Mr. SIMON. That is absolutely correct. I have had firsthand the

situation of knowing situations where the Army and the Air Force

have allowed a certain situation and the Navy saying this is absolutely not possible.

Mr. FARR. Yes. Well, I concur with that.

You mentioned also in your testimony that you thought that you

ought to create the presumption that communities will serve as cooperating agencies and all base environmental analysis under existing CEQA guidelines. This would be similar to the joint Federal,

State, local dialog conducted at Fort Devens and at Long Beach.

You suggest the requirements for LRAs to act as legal entities

in the State would be eliminated as a result. Could you explain

that?

Mr. SIMON. Sure.

Mr. FARR. I do not know the difference between the Federal attitude of a cooperating agency versus a legal entity of the State.

Mr. SIMON. There are certain people who have a right to be at

the table in the environmental review process at the Federal level.

There is a process for allowing additional members to be at the

table besides the regulators, and those additional people are called

cooperating agencies. They have some interest in the property.

When I was running Fort Devens, we were successful for the

first time in the United States in being able to get that seat at the

table by being formally designated as a cooperating agency, meaning we got the environmental information right at the beginning

and could help. Quite frankly, it was a help to the Army because

people always imagine the worst.

And so when we could state, ‘‘No, we have seen the data, and you

do not have to worry about this particular groundwater plume migrating over into your town because we have seen the data and we

believe the data,’’ but by the same token, when there were parts

of the data that we thought were insufficient, we had an opportunity right at the beginning to say, ‘‘This is not right. This is not

complete.’’

We think that the presumption should be that every LRA is a cooperating agency. I discussed this at length with former Deputy Assistant Secretary Sherry Goodman. Is that the right title? Under

Secretary, who was responsible for this in the last administration,

and she agreed, but it was never implemented. I am not exactly

sure why.

But in terms of the California experience, I would only tell you

that when I look as a private developer at submitting a proposal

on Treasure Island, for example, I called up the LRA director,

Steve Proud, and I said, ‘‘Steve, I have got to tell you between all

the things that you cannot do on the property and all the things

that you have to do on the property, I cannot just figure out anything that economically works. So we are not submitting a proposal.’’

And that was a very frustrating experience for a property that

throughout the BRAC process has been considered a jewel of the

redevelopment opportunities.

Mr. FARR. Thank you. That is very helpful.

Mr. HORN. Just to the mayors generally, you suggested the Federal Government could do more to support the local economy immeVerDate 11-MAY-2000 08:26 Jul 23, 2002 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6633 C:\DOCS\80374.TXT HGOVREF1 PsN: HGOVREF1
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diately after a base closes. Specifically what would you recommend

succinctly? What is the most important thing you would like to see

done?

This is a 30 second answer, I might add. This is Mayor Albert.

Mr. ALBERT. I think there has to be a system that is worked out

that creates an urgency. There has to be an urgency that is created

by the Federal bureaucracy at the local level, something that is

going to move it.

I do not know what that tool is, but it cannot be something with

a date uncertain. There has to be some constraints. We have got

to help those people get the job done, and whatever that takes,

whatever tools you have, that should be used so we can move forward with it.

Mr. HORN. No, I think there are a number of ways that I would

like to see a little revolutionary thinking. If they have not done it

by a certain date, something happens, and they are out of the

game, and that is what we ought to be thinking about.

Mr. ALBERT. Yes.

Mr. HORN. And if they want to play games, bureaucratic games,

fine. Take away some of their budget.

Mayor Perrine, what about it?

Mr. PERRINE. Mr. Chairman, I think that fundamentally at the

very beginning that it would be beneficial to have financial assistance and training knowledge transfer assistance for the local agencies, the local reuse authorities.

You take jurisdictions that have no experience or knowledge on

this process and thrust this tremendous liability upon them, and

we all have to take resources away from other basic services, basic

community services, in order to get up to speed, to learn what this

is all about, get people trained, and to commit the effort to this activity.

And as I say, it dilutes other basic local community services, and

so we need assistance with that.

Mr. HORN. Mayor Smith, any thoughts on this?

Mr. SMITH. Mr. Chairman, I think that the decision to close

bases is just so narrow in its perspective that there should be more

consideration given to the reuse component, more consideration

given to allowing communities access to those properties within a

military installation that historically have not had the presence of

unexploded ordnance.

More consideration should be given and more resources should be

directed to protecting local communities from the hazards of a military institution. These things seem to be an afterthought as opposed to a forethought.

So to sum it up, I would say the resources of reuse should be a

more vivid part of the thought of closure.

Mr. FARR. Mr. Chairman.

Mr. HORN. Mr. Farr.

Mr. FARR. Mayor Smith, I mean, what you are really saying is

that it ought to be daily use, ought to be best management practices so that they do not become a problem in reuse.

Mr. SMITH. That is correct.

Mr. FARR. That is, if you are doing good environmental management now, you would not contaminate the land. Obviously we are

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going to have unexploded ordnances, but if you kept better records

and you cleaned-up periodically, you would not have this huge liability at the end.

Mr. SMITH. That is correct.

Mr. HORN. Mayor Smith, when you recalled those accidents

based in your youth, how often has that happened where some

child has gotten over the fences? What do you know on that and

what does Fort Ord know on it?

Mr. SMITH. You know, Mr. Chairman, that incident was so vivid

in my mind because it was a part of my childhood. There have been

other incidents on the former Fort Ord. That is not saying that the

Army did not take steps to outreach to the community in terms of

making the community aware of the unexploded ordnance hazard.

There have been many incidents in regard to that. I think that

we are getting back to what Congressman Farr just stated, is that

if we would work more on the daily usage of management and documenting these unexploded ordnances, we would have less

incidences of this nature affecting the lives of the citizens of our

communities.

Mr. PERRINE. Mr. Chairman, if I could add to that response, I

think the most recent incident that I am aware of that I can recall,

documented incident, was only 3 or 4 years ago where children,

school age children, entered the restricted area, obtained training

devices, and took them with them back to the community and to

an elementary school, and were discovered there throwing them

against the walls of an elementary school within Mayor Smith’s

community.

Fortunately, none of them were harmed either in obtaining those

devices, and they only obtained training devices which were lying

on the ground immediately adjacent to the live devices, unexploded

devices, and through some miracle they picked up safer ones than

the ones that could have exploded and ended their lives immediately.

Mr. FARR. Mr. Chairman, the issue here is that Mr. Smith as a

child witnessed two children who were seriously injured. That

event was brought into my life because my father was retained as

their lawyer. A bill had to pass through Congress to up the limit

that you could sue the Federal Government. The limit was capped

at $10,000 at the time, and that is all that they could have sued

for for this injury. Just the medical bills way back then cost more

than that.

What Jim Perrine is talking about is that same thing that is

happening today. The difference between the issue then and today

is that it doesn’t need to happen today, we know how to cleanup

this space. We know how to handle unexploded ordnances.

We are fighting over process. It is all on paper and whether you

ought to do an environmental impact statement or whether you

ought to do other process is outside of that it is not about debating

the actual cleaningup of the base. It is debating about whether you

should burn the plants off so that you can get to the ground.

Our community and these regulatory agencies out there are not

collaborating. They are not getting the process of just doing the

deed of getting the base cleaned-up, which is caught up in the morass of questioning the process, not the method of cleaning-up.

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Mr. ALBERT. Mr. Chairman, if I could just add something just to

highlight something, I remember we were going through the BRAC

process, and we were testifying in San Francisco, and one of the

Commissioners on that, and we were talking about Fort Ord at the

time, and he would just say, ‘‘you know, that beautiful piece of

property overlooking that bay, I mean there should be a land value.

I mean it should just’’—and I think that is the thinking. We will

close it down and that will happen.

And I guess what I keep emphasizing is it is fine. It is not fine,

but you are going to close bases, but alongside of that, there has

got to be that process that helps communities do something with

that land that is there. There is more to it than just, well, it looks

good.

Mr. HORN. Well, I agree with you on that.

We are going to have to adjourn now with this particular panel,

but I certainly hope that you will be around so that we can get a

dialog between the Federal and State officials. If you will take the

first row behind you, and then you can come to the table.

So if panel three will come forward.

Panel three, there are six witnesses, and we will give the oath

because this is an investigating subcommittee.

We have read your documents. We are going to give license to

the GAO because of the overall picture they have provided in a

very fine brief, but I do not want the documents read. I want you

to boil it down to what is important.

You have heard the mayors, and you might want to think to

yourself because I am going to ask them to come back and say,

well, what about the State and Federal Government, and so forth.

When we call on you, your record is automatically in the hearing

that the two court reporters are making, and you do not have to

ask us. It is there.

So if you will stand and raise your right hands.

[Witnesses sworn.]

Mr. HORN. The clerk will note that the six witnesses accepted the

oath.

We will start with Mr. Holman, the Director of the Defense Infrastructure Issues, U.S. General Accounting Office.

For a little explaining here, the U.S. General Accounting Office

is part of the legislative branch starting way back in the 1920’s,

and they are headed by the Comptroller General of the United

States, Mr. Walker, and we use them usually after a 6-month study

or a year’s study. We use them as the lead witness on an issue

such as this.

And Barry Holman, the Director of that Defense Infrastructure

Issues, has seen all of the problems across the country.

So Mr. Holman, proceed.

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STATEMENTS OF BARRY W. HOLMAN, DIRECTOR, DEFENSE INFRASTRUCTURE ISSUES, U.S. GENERAL ACCOUNTING OFFICE; PATRICK O’BRIEN, ACTING DIRECTOR, OFFICE OF

ECONOMIC ADJUSTMENT, DEPARTMENT OF DEFENSE; RAYMOND J. FATZ, DEPUTY ASSISTANT SECRETARY OF THE

ARMY; KEITH A. TAKATA, DIRECTOR, SUPERFUND DIVISION,

ENVIRONMENTAL PROTECTION AGENCY; STEVE THOMPSON,

ACTING MANAGER, CALIFORNIA AND NEVADA OFFICE, U.S.

FISH AND WILDLIFE SERVICE; AND EDWIN LOWRY, DIRECTOR, DEPARTMENT OF TOXIC SUBSTANCE CONTROL, CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY

Mr. HOLMAN. Thank you, sir.

Mr. Chairman, Mr. Farr, I am glad to be here today to give you

an overview of the four rounds of base closure processes that have

taken place.

Mr. HORN. We need to move the mic.

Mr. HOLMAN. Again, what I want to do is just give you an overview of the process, the transfers that have taken place during the

past four rounds of BRAC.

Mr. HORN. Is the mic on? Do you see the green lights?

Mr. HOLMAN. Yes, sir, it is on.

Mr. HORN. OK. Move up.

Mr. HOLMAN. OK. What I would like to do is just highlight three

areas for you, one being the economic recovery of communities affected by BRAC, DOD’s progress in implementing the recommendations of the closure commissions in transferring property, and accomplishing environmental cleanup, a subject that we have already

heard about as being very important.

Let me just quickly highlight the results of what we want to talk

about. Again, first, the short-term impact of BRAC. BRAC can be

very troubling to communities and can be very traumatic. However,

we have seen as we tracked this issue over time that with some

exceptions, most communities are recovering from the economic impacts of base realignments and closure. Our analysis tended to take

a very broad view, looking at metropolitan statistical areas.

It is good to have a hearing such as this in Monterey where you

can see so many different communities and see that there can be

some unevenness in terms of how communities do fare.

We have seen that BRAC actions are essentially completed. Unfortunately, however, title to less than half of the property has actually been transferred to the Federal sector and other users.

Environmental cleanup is progressing, but as we have seen and

heard, it will require many years to be fully complete.

One of the things that we have done over the years as we have

looked at DOD’s progress with base closures, is to look at what are

the factors that help communities recover from a BRAC. I will not

go into all of them, but I would like to highlight just a few of them

for you today.

Base reuse and government assistance in planning and executing

base reuse are very important to BRAC communities. Along with

that are leadership, teamwork among participants at the Federal,

State, and local level—they are essential to reaching agreement on

key issues, such as property transfer, base reuse, and environmental cleanup.

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Having said that, I also want to emphasize the very strong, positive impact that we have witnessed in recent years of a strong national economy and what that has done to help ameliorate the impact of the base closing process.

Again looking to the impact on communities, back in 1988, we

did a review and report where we looked at a couple of key economic indicators to get a sense of what was happening with communities that were affected by BRAC. We looked at 62 communities—metropolitan statistical areas—where job losses had totaled

300 or more involving civilian or contractor employees.

We have updated that data for purposes of this hearing today,

and we found as we did in 1988 that although some communities

are faring better than others, the economic data suggests that the

majority of communities are faring well and show improvements

since the BRAC process began.

I say that is the case even though, as we have seen here today

with the case of Fort Ord, much remains to be done to fully utilize

former BRAC sites for their potential for economic development

purposes.

Of the two indicators we looked at, one was unemployment rates.

What we have seen is that based on average unemployment rates

for fiscal year 2000, we found that 43 or 68 percent of the 62 communities we looked at had unemployment rates at or below the

U.S. average of 4 percent. The percentages are comparable to what

we found in the past, although this time the unemployment rate

is even lower.

If we look at the community surrounding Fort Ord, we’ve seen

that the unemployment rate has been a little bit higher than many

of the communities, but even so, it decreased from 1997, when it

was 10.3 percent, now to 9.7, although I hasten to add that while

I’ve looked at some statistics in the past couple of months, it looks

like the unemployment rate in this area has gone down even more.

We’ve tried to look to see to what extent there has been a downturn in the economy, whether the unemployment rates are tending

to go up. So far we haven’t seen this. So there appears to be a lag

factor at play there, and we will keep our fingers crossed that it

stays that way for some time.

The other indicator that we had looked at was the growth in per

capita income. As we looked at the per capita income increases for

the period 1996 through 1999, we found that 33 of the communities

or 53 percent had average annual per capita income growth rates

that were at or above the U.S. average.

An additional seven communities, or 11 percent, had average per

capita income growth rates that were in close proximity to the U.S.

average.

And, again, as we have heard here today, if you look at communities around Fort Ord, you can see there can be variances within

individual communities of a large area.

Let me turn quickly to the BRAC actions and DOD’s progress

there. Again, DOD reports that of the BRAC recommendations that

it had to implement, they have essentially completed those in

terms of taking down flagpoles, transferring units to other locations, and so forth.

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They have made decisions on what to do with most of the

518,000 acres of property not needed by the military. Of that property, about 230,000 acres are to be retained by the Federal Government, most by the Department of Interior and Justice. Title to

about 46 percent of that property has been transferred.

Another 286,000 acres are being transferred to non-Federal

users. There, however, title to only about 37 percent of the property

has been transferred. If you put the two together, about 41 percent

of the property has been transferred.

An additional amount has been leased, but again, as we look at

the area around Fort Ord, we see that an issue like environmental

cleanup remains a factor that can greatly stymie efforts to get title

transfer of that property.

Now, having said that, environmental cleanup is progressing,

perhaps certainly not as fast as many would like to see, particularly with efforts that have been made in recent years to provide

special transfer authority—that is early transfer authority, for instance.

Environmental baselines have been completed for many installations. Many installations have cleanup activities underway

orremedies in place. Many more cleanup activities remain, but

DOD projects that most of it will be done over the next few years,

but a lot of it will require long-term monitoring.

The issue that is very vivid here in the Fort Ord area is the

unexploded ordnance, and questions remain as to just how much

of that will be cleaned-up, how much time it will take, and what

the standards for cleanup will be over time.

Let me put this in a bit of perspective as I close in terms of the

cost for the environmental cleanup in relationship to the overall

BRAC closure activities. Of the $22 billion estimated for implementing the BRAC program through fiscal year 2001, about $7 billion, or 32 percent, is associated with base closure environmental

activities.

Further, DOD estimates that $3.4 billion will be required after

fiscal year 2001. Now, we see some fluctuations over time in what

the environmental costs are going to be. Sometimes we have seen

them go up. We have seen them go down, but I think we still have

some uncertainty as to what the total out-year environmental cost

will be.

Mr. Chairman, I think I will stop at this point. I will be glad to

entertain any questions you or Mr. Farr might have.

[The prepared statement of Mr. Holman follows:]

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Mr. HORN. Leave that particular presentation up. I want to ask

you. Congress appropriates the cleanup money.

Mr. HOLMAN. Yes, sir.

Mr. HORN. And it goes to the Department of Defense. Now, what

do we know about what happens after we spend hundreds of millions to try and get this done, and then there is an overall Department of Defense function, and that is my concern.

They are so slow in providing this money out to the services.

Could we get a chart out of GAO to put in this hearing record at

this point? Well, let’s look at it this way. How much did the Office

of Management and Budget that reports to the President on the

budgets and look at the Clinton administration and the Bush administration, and when that money goes to the department of Defense, I would like to know how fast are they in using that money.

And here is the Air Force: 52 percent, and yet Defense Logistics

Agency is 1 percent. Army, 23 percent; Navy, 24 percent. And that

is what is worrying me. People are just asitting on money balancing the books is the end we now require.

So if you could get that kind of a chart, without objection that

will be in the hearing record at this point.

Mr. HOLMAN. I will see what I can do in that regard, Mr. Chairman.

One issue you may be aware of, in the past few years we have

done some budget analysis of DOD’s the BRAC budget requests,

and I guess one of the issues we have raised in the past few years

is just the sizable amounts of unliquidated obligations and unobligated balances that are there to be used, and for whatever reason,

you know, there was a slowness in cleaning-up those accounts or

using those funds. I think it goes to the issue you are raising.

But I will see what I can do in terms of giving you a chart.

[The information referred to follows:]

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Mr. HORN. Great. I appreciate it.

So we now move to our next presenter, Patrick O’Brien, Acting

Director, Office of Economic Adjustment, Department of Defense.

Mr. O’BRIEN. Mr. Chairman, before I begin, I would like to recognize Congressman Farr’s contributions to the local recovery support

here at Fort Ord. The community often under his leadership has

repeatedly reached beyond the envelope of the status quo to realize

its reuse objectives.

The department’s overall reuse program has been responsive to

local needs, resulting in the creation of nearly 76,000 new jobs, or

nearly 60 percent of the total civilian jobs lost through last fall.

This reflects progress at over 75 major closure locations.

Numerous reuse efforts continue to be cited across the Nation as

examples of successful economic recovery, including some here at

Fort Ord. Our Secretary commends the many successful efforts to

date, including those at Fort Ord, and commits to assist in the resolution of outstanding impediments to successful civilian reuse.

Let me begin by providing an overview of the defense economic

adjustment program and OEA. OEA was created by the Secretary

of Defense in 1961 to help alleviate serious local impacts resulting

from defense program changes, including base closures. OEA assistance consists of technical and financial resources. These resources are managed and delivered through an OEA project manager directly with local leaders, the involved DOD components, and

local, State, and Federal agency representatives to help communities help themselves.

Facilitating the redevelopment of former installations also requires the coordination of numerous Federal assistance programs.

These range from technical guidance and grant-in-aid to discounted

property transfers for authorized public purposes.

OEA project managers work as functional ombudsmen who know

the types of assistance programs available and can facilitate interaction between local officials and representatives of these various

programs.

As the leading Federal agency partners, the Economic Development Administration with $549 million, Federal Aviation Administration with $386 million, Department of Labor with $210 million

have collectively provided over $1 billion in adjustment assistance.

Interagency coordination has also facilitated the Military Departments transfer property at 92 former bases, with some multiple

conveyances for public purposes.

Beginning in the mid-1970’s, several Presidential actions sought

to enhance the Defense Economic Adjustment Program, including

the creation of a Federal interagency organization called the President’s Economic Adjustment Committee.

These efforts were all focused on supporting the Secretary of Defense’s actions to assist impacted communities. As chairman of the

committee, our Secretary is strongly committed to assuring that

the interagency partnership works to support community transition

needs.

Thus, OEA will work to reinvigorate the President’s Economic

Adjustment Committee to focus its efforts on prioritizing requirements and resolving regulatory and property disposal conflicts.

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It should be noted that since its inception, the overall Defense

Economic Adjustment Program has assisted more than 350 communities, over 110 of these arising from the recent four base closure

rounds.

Beyond these sources of assistance, the Department has also

sought to make base closure and disposal supportive of communitybased reuse. Initially efforts to convert former facilities to productive civilian use, such as airports, science research parks, industrial manufacturing, schools, hospitals, and recreational areas were

routinely frustrated by laws and regulations, some over 50 years

old, which were inadequate for the contemporary real estate market.

Property screening was not responsive to local planning and consensus. Environmental analysis and cleanup requirements were

often not consistent with community plans. And early access to

property to generate lease revenue, vital to help pay for redevelopment, was almost nonexistent.

Communities could also only acquire property for business development through purchase at fair market value, consuming essential local resources needed to pay for redevelopment.

In the mid-1990’s, Congress made significant changes to our closure and disposal authorities, specifically empowering local communities to plan and implement a strengthened community based

reuse program. These changes allowed communities to learn earlier

in the process what property would become available, which in turn

afforded them the opportunity to start reuse planning activities

sooner. They could simultaneously address the interests of community, nonprofit, public, private and homeless assistant provider organizations when developing their reuse plan.

Most importantly, they could also acquire the property from the

military services at no cost for purposes of job creation and redevelopment through an economic development conveyance or EDC.

Prior to this change, the Department sought to convey property

for purposes of job creation for consideration at or below the property’s estimated fair market value. The EDC, as we call it, has enabled the Department to complete 57 separate transfers of real

property, accounting for over 92,000 acres of land and facilities that

are projected to support the creation of 350,000 new jobs.

The reuse effort at Fort Ord, similar to most other locations, is

incremental, building upon opportunities as they occur. To date,

over 10,000 of the 27,000 available acres have been transferred.

Considerable Federal assistance has been provided to assist with

planning and reuse, including $4.2 million from the Office of Economic Adjustment for local planning and organization needs, $29.1

million for project planning and infrastructure work from the Economic Development Administration; $64.5 million transferred from

DOD to the Economic Development Administration to carry out

provisions of past Defense Appropriation Acts; nearly $5.2 million

to assist approved homeless providers, establish onsite programs

from the Department of Housing and Urban Development; and

$800,000 in worker adjustment assistance from the Department of

Labor.

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The communities represented at this hearing have taken the opportunity base closure presented and made the most of what they

had to work with to date. Let’s look at that once.

They have crafted a feasible reuse construct in spite of the fact

that over 60 percent of the former facility, because of its slope and

the habitats contained therein, must be preserved and not made

available for any revenue generating purpose.

Furthermore, much of the reuse activity on base today is institutional, meaning they are generally public entities without any obligation to compensate the communities that provide police and fire

protection and other public services. As a result, the 5,000-plus

acres the community will receive through an approved, no-cost

EDC, which is really the primary piece that is outstanding here,

is necessary so that local jurisdictions will be compensated for their

public costs through developer fees and property tax payments. In

essence, it makes the local community whole.

The challenges presented by the witnesses include some that test

the boundaries of federalism and demand fundamental changes in

Federal-State partnerships focused on support to local economic recovery.

Clearly, we need to seek consistent support from the Federal

partners in this effort through the common goal of local economic

recovery. Within the State of California, we have seen the Department of Trade and Commerce work on behalf of community adjustment and the California Environmental Protection Agency and its

departments carry out their regulatory mandates on the process.

The local air and water boards represent another layer beyond

the Federal Government, adding to the complexity of the local efforts. Just as we will work to encourage the President’s Economic

Adjustment Committee to focus its activities on prioritizing requirements and resolving the regulatory and property disposal impediments to reuse, we call upon the State of California to consider

the same with its agencies and local boards.

In closing, Mr. Chairman, I thank you for the opportunity to

come before you to describe what we at the Department of Defense

believe to be an important program, one that benefits both the department and communities we serve. The Department’s primary

mission is the defense of our Nation and way of life, and we recognize the responsibility to help communities adjust to significant impacts that may result from changes in our programs.

I would be pleased to answer any questions you may have.

[The prepared statement of Mr. O’Brien follows:]

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Mr. HORN. Thank you. We will be asking questions once everybody testifies.

The third presenter is Raymond J. Fatz, the Deputy Assistant

Secretary of the Army.

Thank you for coming.

Mr. FATZ. Mr. Chairman, Mr. Farr, thank you for the opportunity to appear before the subcommittee today.

For the last 5 years, I have developed Army environmental policy

and guidance and overseen implementation of environmental programs at Army installations. Since 1988, the Army has closed or

realigned 139 installations. We have realized a one time savings of

over $3 billion and will realize additional savings of almost $1 billion annually.

BRAC allows the Army to divest itself of unnecessary infrastructure so the Army can focus more on fighting and winning the Nation’s wars and allows local communities to redevelop much of this

surplus property for their benefit. BRAC makes sense. It is good for

the Army, and it is good for the Nation.

The Army has made considerable progress in cleaning-up Fort

Ord and making it available for redevelopment. Of the 28,000 acres

at Fort Ord, the Army has transferred over 10,500 acres since it

closed in 1994 to five educational institutions, the Fort Ord Reuse

Authority, the Bureau of Land Management, and other guarantees.

We have investigated or removed ordnance and explosives affecting over 3,000 acres. We have remediated other environmental contamination at many other locations. We have maintained habitat

to protect endangered species, and we have conserved land and

natural resources.

Our progress has been in the face of many challenges. We will

find some of these when any base closes and some are unique to

Fort Ord because of its location, the presence of listed or endangered species, including the largest concentration of maritime chaparral on the West Coast, its listing on the Superfund’s national priority list, and the presence of ordnance and explosives on thousands of acres.

Closing bases is not cheap, and it takes time. We have spent over

$267 million at Fort Ord in the last 7 years. The cleanup of

groundwater and ordnance and explosives will cost $326 million

more. The $30 million budget for this year is almost $11 million

more than originally programmed.

Complex Federal and State environmental laws and regulations

and their extensive opportunities for consultation and regulatory

oversight complicate our cleanup, especially when applied to a

place like Fort Ord where ordnance and explosives are the most

difficult and costly cleanup requirement.

While detection technologies have improved, they are imperfect,

and finding ordnance and explosives are costly and dangerous. The

thick chaparral habitat of Fort Ord which supports endangered and

threatened species hides buried ordnance. While burning it makes

the ordnance accessible and promotes habitat management and

conservation, recent legal action has frustrated our ability to conduct prescribed burns.

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tigation and feasibility study under CERCLA that will take several

years to complete.

In another suit, a 1999 decision of the Ninth Circuit Court of Appeals exposed us to an increased risk of further litigation by finding wider jurisdiction to attack Federal facility remedial cleanups.

Delays caused by litigation frustrate both the Army and the members of the local community and the regulatory community.

In the face of all these challenges, progress requires imagination,

collaboration and innovation. All three are combined in strategy

management analysis requirements and technology teams. We created the SMART team in 1999 after the EPA in California’s DTSC

agreed with me that we needed a tool that would get beyond the

day-to-day problems and find solutions. The SMART team’s success

is due in large measure to the personal investment of Congressman

Farr, Mr. Lowry from DTSC, and Mr. Takata from EPA.

The SMART team is exactly the kind of intergovernmental cooperation BRAC demands.

The Army’s No. 1 priority at Fort Ord is to clean it up to a level

that protects health, safety, and the environment. And do it so that

we support the community’s reuse goals and objectives. Our considerable progress has been the product of the goodwill and cooperation among the Army, conscientious regulatory agencies involved

and formed in committed communities, the Fort Ord Reuse Authority, and support of public servants like Congressman Farr.

The Army continuously seeks ways to streamline the process to

support reuse priorities and to leverage resources, technologies,

and innovation whenever we can find it. The Army will work with

the regulatory community to resolve the important issue of vegetation clearance.

We are continuing our ordnance and explosive remedial investigation and feasibility study, but we will continue to transfer property in the meantime. We will transfer 86 more acres this summer

to the city of Marina for further development and another 2,200

acres this fall to various recipients.

I am optimistic about the future and will work hard to realize

the hopes we all share about the former Fort Ord. I appreciate the

opportunity to testify and provide the Army’s view, and I look forward to your questions.

Thank you.

[The prepared statement of Mr. Fatz follows:]

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Mr. HORN. Thank you.

Next is Keith A. Takata, the Director of the Superfund Division

of the Environmental Protection Agency.

Mr. Takata.

Mr. TAKATA. Good morning, Chairman Horn and Congressman

Farr.

I will not say it is a pleasure to be here because I am under oath,

but I do thank you for the opportunity to talk about how the base

closure is going.

I do not intend to repeat my written testimony here, but I would

like to spend a few minutes talking about what has worked and

what has not worked. But let me start by going back a little bit

in time here.

You mentioned that in the four rounds of base closures we have

had, about 100 bases closed nationwide. Twenty-six of them, about

a quarter of them, were in California.

Of those closing bases 39 are on the Superfund national priorities list, 12 of them in California, including Fort Ord here in Monterey. So as you can see, California took kind of a disproportionate

share of the impact of base closure.

And I think from the beginning all of us that worked on this,

DOD, EPA, the States, all of the local governments have had two

really overriding concerns. One of them is just the sheer size and

scope of both the health and environmental problems of the closing

bases. Each one of these bases are like little cities really.

At Fort Ord, for example, we had over 40 sites, a large landfill,

groundwater problems, lots of soil contamination problems. Plus we

have 9,000 acres of unexploded ordnance.

But obviously the other large concern was the economic impact

on the local community. At the time of the first closures in California, it was estimated that California could lose thousands of jobs

and lose billions of dollars annually. So all of us knew what was

at stake if cleanup and reuse got bogged-down by the process. So

we really tried a different approach here, which was more team oriented and less adversarial.

DOD tried to work closely with the local governments on their

reuse plan, and at the same time DOD, EPA, and the State got together in these base closure teams to try to expedite cleanup.

How did things work? Well, as you have already heard, we have

had both successes and challenges. I think the bottom line for me

is things work the best when decisions on cleanup and decisions on

reuse are closely coordinated and all the parties are involved up

front.

I think the best example at Fort Ord is the cleanup of the more

traditional hazardous waste problems: the landfill, the groundwater problems, the non-unexploded ordnance problems. We have

had a lot of experience at sites like this. We know how to clean

them up. We are able to fit the reuse to the cleanup, and this has

led to the successful transfer of thousands of acres as people have

already mentioned, especially the California State University.

On the other hand, I think the most difficult issue at Fort Ord

is what people have already talked about, which is the cleanup and

reuse of unexploded ordnance. The basic problem here is that the

reuse plan got way ahead of the cleanup plan, and while the Army

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has transferred 7,000 acres to the Bureau of Land Management,

the parcels that were slated to local government for their reuse

were held up until we could figure out how to detect and cleanup

UXO, which is something that we really have not done very much

of in this country before Fort Ord.

The creation of the Army’s SMART team and Congressman

Farr’s personal involvement has really helped us get back on track,

and FORA and the local governments have been extremely patient

and very constructive in the process. And I think this is what

makes Fort Ord different from McClellan.

McClellan was not only an Air Force base. There is one difference there, but I think the big difference is that McClellan did

not have a UXO problem. It had more traditional hazardous waste

problems.

Our biggest challenge nationwide, I think, is that if we want to

safely reuse property that contains UXO, the cost of cleanup, as everybody mentioned, is going to be really high. The DOD budget already exceeds EPA’s budget for Superfund, just as an example, and

it does not even count all of the cost of cleaning up UXO.

I think the GAO report said that the UXO problems could cost anywhere from $14 billion to $100 billion. Just in contrast, the

DOD’s present budget for UXO at formerly used defense sites is only $40 million a year. So you can see it would take many years

to cleanup all of the sites at that cost.

In closing, let me just touch on three things that some of the earlier panels talked about. One is I think it is really important that

we factor the cost of reuse and cleanup into the original decision

to close the base in the first place. I do not think that was really

done as well as it could have in the first rounds.

For example, had we known how much it would have cost to do

all of the UXO cleanups, that might have made us look differently

at closing some of the bases that had UXO on them.

Second, I think it is really important to factor cleanup considerations into reuse and vice versa. So it is very possible for us to do

a better cleanup in some soil areas to enable the local governments

to do whatever they want in terms of reuse, housing, residential,

etc.

On the other hand, sometimes something is so contaminated that

it does not make sense to use for a particular use. For example, no

one would ever recommend that we would build houses on a landfill.

And then last, I think it is really important to adequately fund

both the cleanup, which is what some of the local folks already

talked about, but also all of the reuse activities, including some of

the costs that aren’t covered by any of our programs, asbestos, lead

based paint, etc.

So thank you for the opportunity to testify, and I would be happy

to take questions when the panel is finished.

[The prepared statement of Mr. Takata follows:]

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Mr. HORN. Thank you very much.

Next is Steve Thompson, the Acting Manager for California and

Nevada, the U.S. Fish and Wildlife Service.

Mr. THOMPSON. Thank you, Mr. Chairman and Mr. Farr.

The Fish and Wildlife Service has been involved in Fort Ord

since about 1991, and I am going to focus on a couple of things on

burning and the habitat management plan, and we will save the

rest of the testimony for the official record.

In 1994, the Fish and Wildlife Service and the Army agreed upon

a habitat management plan.

Mr. HORN. Could you talk right into the mic?

Mr. THOMPSON. The habitat management plan provides conservation for federally protected species while allowing the cleanup

of unexploded ordnance at Fort Ord. The foundation of that conservation plan was for the use of prescribed fire.

Burning of the vegetation was identified in the habitat management plan as the most efficient and the safest method for clearing

certain sites of ordnance.

In addition, burning is the most ecologically sound practice for

conserving federally protected species on these sites and other species that are in decline in this area. Recurring fires are an important part to maintaining a healthy ecosystem in the maritime chaparral.

The recent lawsuits brought by the State of California Air Resources Board and the resultant court orders have resulted in

delays in implementing the habitat management plan and the

burning.

Conveyance of these remaining properties was based on the

strategy of cleanup using burning as our major management tool.

If we are asked to revisit the burning as a preferred tool for cleanup and for habitat management, we would have to reevaluate

which lands are needed for conservation of federally listed species.

The configuration and the amount of land to offset the loss of endangered species by development was based on a healthy chaparral

maritime ecosystem. We have three major concerns, and I’ll try to

summarize those quickly for you.

If the Army or the BLM are unable to burn, then we would have

to rely on mechanical methods. The Monterey area maritime chaparral community might degrade and decline, impacting listed species and also other declining species that have a high probability

of highly listed in the future.

The primary management tool in the habitat management plan

was burning. If we have to emphasize mechanical, we would most

likely have to reinitiate consultation under Section 7 of the ESA.

The switch from burning to mechanical may also impact the

habitat conservation plan, which is based on the burning part of

the habitat management plan. The habitat management plan is

based on the foundation of burning.

The Army and the Fish and Wildlife Service, the State agencies

and local communities have been working together for a number of

years to realize a transfer from Fort Ord. All of the parties have

invested significant amounts of resources and time and effort, and

we share in that desire to move forward with the cleanup, the

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agement plan, and the goals of the habitat management plan could

then be achieved.

We are committed to working through these issues to ensure the

lands are transferred in a timely way so that we meet the needs

of the community, the Army, and the affected species.

Thank you.

[The prepared statement of Mr. Thompson follows:]

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Mr. HORN. Thank you.

And our last presenter is Edwin Lowry, director, Department of

Toxic Substance Control, California Environmental Protection

Agency.

Glad to have you, Mr. Lowry.

Mr. LOWRY. Thank you.

Good morning, Mr. Chairman and Congressman Farr and other

members of the panel and the community.

I can say under oath it is a pleasure to be here. It is 104 degrees

in Sacramento today and considerably nicer here. [Laughter.]

I wanted to touch on a few of the items which are in my testimony rather than reading the testimony. First of all, the Department of Toxic Substances Control is a department within the California Environmental Protection Agency. We are the lead agency

for environmental remediation and environmental compliance in

the State of California for military base closures. We cooperate

with other agencies within that agency, including the Water Resources Board, which has a significant role as well.

We have toxicologists, public participation specialists, geologists,

environmental scientists, and others who work very hard on these

problems and have a good, cooperative relationship with the Federal and local folks who are also working on the problem.

I wanted to emphasize or reiterate Mr. Takata’s point—and a

point which was made by others—which is that the estimates for

funding in environmental cleanups and the estimates of the cost of

base closures are made before many of the problems which are discovered.

I note that McClellan Air Force Base has been mentioned today. There is a $44 million additional cost there, which was the result

of digging-up a landfill which has drums which have been there for

50 years.

We simply do not know at the beginning of the process what it

is going to cost, and if we can find a way to either estimate that

better at the beginning or to build in mechanisms to adjust when

we learn about these additional costs, we will do much, much better.

Second, the way in which funding is now done for BRAC cleanups and for FUDs and so forth is there is no fenced-off line-item

within the Department of Defense budget, which is, ‘‘this money is

for environmental cleanup and remediation and nothing else.’’

So what can happen is that these funds can be reprogrammed for

other uses as the fiscal year goes on, and indeed, one of the problems and perhaps mysteries of the Federal budgeting process is it

goes on year to year, and the numbers which we think we will have

3 or 4 years down the line we do not have those funds.

If you look at the proposed budget for the next fiscal year, you

will see, depending on how you do your calculations, between 5 and

10 percent cut on some of the Defense Department cleanup moneys

for closing bases, and that will not be helpful.

We also have a significantly greater cut planned for UXO cleanup and technology investigation within the Department of Defense.

We need to fund these programs adequately so we can do the job

which is necessary to cleanup the bases so that they are good and

safe for civilian use and transfer.

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I wanted to also emphasize a couple of things which have not

been brought up here but might be useful to you, Mr. Chairman,

in the overall context of base cleanups. We have participated in

several early transfers of military bases where title is transferred,

but the cleanup is not yet complete. I am sure you voted on that

legislation about 5 or 6 years ago to allow that process to happen.

This has been a successful model in the State of California for

transferring facilities. What it does is it gets the military out of the

business of cleaning-up the property, and it is my opinion that

their best job is defending us, and they have real challenges in the

cleanup process.

The early transfer process allows them to continue their main

mission and to transfer the authority and, frankly, the problems to

those who are experts at the cleanup and conversion of the facility.

There are some innovative public-private scenarios which are underway in the State of California. Mare Island is a principal example of that, where a private developer, as outlined in my testimony,

is taking over virtually all of the responsibility for the cleanup.

They are also paid by the Navy to do that, but they negotiated a

price, purchased insurance, and now have both the responsibility,

the authority, and the incentive to get that job done.

In summary, what I would like to say about this entire process

is when I was appointed by the Governor in 1999, I did not know

a whole lot about environmental remediation of closing bases, but

also, I think at that time we had a fairly adversarial relationship

with the Federal Government and with the Army.

When we came to the table, I think the question was: Who are

you and why are you here?

And in the past 2 years, I think we have done a terrific job of

working together to resolve these problems, and Mr. Fatz, I think,

hit the nail on the head. The SMART team process has really

furthered that mechanism and that spirit and goal of cooperation

between us.

Thank you.

[The prepared statement of Mr. Lowry follows:]

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Mr. HORN. Well, thank you, and I want to thank the California

Environmental Protection Agency. I sit on the subcommittee of

transportation, and in the mid-1990’s they told us about a plan

they had where they worked with business and let business work

on some of the paperwork where you had warehouses filled with reports that the press could not look at.

I said to the Assistant Director of EPA at that time, ‘‘Do you

think you can do that for the national group?’’

Well, here we are, mid-1990’s. They have not done a thing, and

maybe, Mr. Takata, you can tell me they have made some progress,

but they had not then, and California was way ahead of what the

national agency was doing.

What do you think, Mr. Takata? Have they been able to get these

reports on Superfund and everything else and work with business?

Mr. TAKATA. Well, I think that we have really tried hard to make

Superfund work. When Superfund was first passed by Congress,

there were a lot of problems with maybe studying things too much,

a lot of lawsuits.

We have gone through several rounds of trying to reform the

statute administratively now, and I think you can begin to see the

progress of Superfund nationwide and in California.

We have a measure which we call construction completion, but

it is basically a point where everything is done at a site, and I do

not have the figures right in front of me now, but after a very slow

start, both nationwide and in California, we have over half of the

sites in that construction completion phase. So, I think we are

making progress.

Mr. HORN. I know mostly on the Superfunds, the word was,

‘‘Well, we have put more money in lawyers’ pockets than in cleaning-up the Superfund.’’

How are we now on that?

Mr. TAKATA. Well, we have made a number of reforms along

that, with that problem as well because it is such a powerful law,

to begin with, and it should have been a powerful law, I think.

These sites were around for years and years. Many of them started as a result of World War II, but some of them, you know, from

the earlier century, some of these mining sites, for example. And

all of the existing environmental laws, both State and Federal,

were not adequate to clean them up. So Congress passed a very

strong statute that allowed EPA to use enforcement authorities to

clean these sites up and to fund the cleanup if we had to, if the

parties would not agree to cleanup.

That has worked very well in getting those sites cleaned-up. The

trouble is and the point that you make is that same strong legal

authority has led to lots of lawsuits between parties, between parties and insurance companies, between citizens groups and EPA,

citizens groups and industry. So it has led to lots of legal problems.

What we have tried to do is focus on the cleanup and focus on

making parties pay for what they caused. I think one of the problems in the past is we would tend to try to get a party to pay for

more than they caused, which made them feel unfair about the

process and made them feel like—you know, they felt litigious.

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Now, by focusing on getting parties to cleanup what they cause,

I think that has really cut down on the lawsuits and cut down on

some of the money going to legal fees.

Mr. HORN. Well, I am glad to hear that.

Mr. O’Brien, in your testimony you mentioned the creation of a

Presidential committee in 1961. Is that—go ahead.

Mr. O’BRIEN. Mr. Chairman, while the Office of Economic Adjustment was created in 1961, the President’s Economic Adjustment

Committee was actually created in the mid-1970’s after recognizing

that responding to community impacts has to go beyond the Department of Defense.

I think overall we are one of the only non-war fighting components within the Department of Defense, and we are focused on assisting communities, but our expertise is limited. So we need to call

to the table these other Federal resources.

That committee was reestablished in January 1992 by Executive

Order 12788 by then President Bush. It established and reemphasized the need for the coordination of this assistance, and basically

directed the Office of Economic Adjustment to be managing that

program and providing staff support to it.

Shortly thereafter, with the reorganization of the Department in

1993, the committee basically did not function, and it is now our

intention to reinvigorate it and attempt to address some of these

issues to the extent we can do so federally.

Mr. HORN. Does your Office of Economic Adjustment do the staffing for the Secretary of Defense on these issues?

Mr. O’BRIEN. On economic adjustment, yes, sir, and we have

gradually become advisors on the implementation of reuse policy

for the Secretary. We have also from time to time gone out to craft

and organize the implementing regulations for the new communitybased provisions which I referred to in my statement.

Mr. HORN. Are you the ones that then assign the budgets to the

various services based on the Secretary signing off on it?

Mr. O’BRIEN. No, Mr. Chairman, we are not. The budgeting process actually originates each service, and perhaps my colleague, Mr.

Fatz, can describe, for instance, the budgeting process within the

Department of the Army.

Each service is responsible for crafting their respective obligations in the form of a budget, and it is then vetted-up their chain

to our Comptroller.

Mr. HORN. But the money does come from Congress. It goes to

the Department of Defense. Now, does that go to your office, and

how does it get down to the services?

Mr. O’BRIEN. Yes. I can only speak to our separate appropriation.

We are a field activity under the Secretary, and we are focused

solely on the reuse. The funding for cleanup, in addition to the

other activities that support the closure and disposal of properties,

is a separate process, and again, perhaps Mr. Fatz can address

that.

Mr. HORN. Mr. Fatz, what about it? Where do you find the

money? Where is the money?

Mr. FATZ. It comes from you, sir. [Laughter.]

It comes from Congress.

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Mr. HORN. And we send it over there across the Potomac. Now,

who do you get it from over there?

Mr. FATZ. Yes, we get it from the OSD Comptroller.

Mr. HORN. Yes.

Mr. FATZ. And we build our budget from the bottom up. We put

in our requirements for what we need. There is no fence line in our

budget like Mr. Lowry stated. Sometimes the BRAC cleanup line

like any other line item is identified, but it can be used for other

higher priorities, like a quick deployment to Europe.

Mr. HORN. OK. Well, Mr. Holman is going to look at all of this,

and we will have this in the record at this point.

The gentleman from California, Mr. Farr.

Mr. FARR. Thank you very much, Mr. Chairman, and I appreciate this panel.

Essentially what you heard in the first panel were the local folks

who said that the process is too slow, the process is too many agencies, and the process is too top down, and this panel is that enemy

that creates all of that.

The frustration that I have is that I do not know whether we are

really in dialog here or just kind of, as so many of these hearings

often become, it is just everybody sort of telling their own story

without allowing us to glue it all together.

Mr. Holman pointed out, and I read your report, one of the

things you do not do is look at what other people said. GAO ought

to take a look at the total cost of cleanup of the base and all the

other factors weighing into the COBRA model and then have DOD

say if you are going to really look at base closure, you have got to

look at everything, not just the savings you are going to have from

payroll and base maintenance and base operations from closing a

base because that is all they are looking at.

They claim the savings that Mr. Fatz talked about, that they

have saved all of this money from base closure. What they do not

talk about is the fact that somewhere else somebody had to pickup some of these costs, and the military did not do it.

I really think that we need to do that. I was very interested in

your report where you talked about the impact on the local labor

force and used Merced, CA as one of the communities where there

was a negative impact caused by the base closure.

But you pointed out that was offset because of other economic

factors in California. The biggest was the building of a prison.

There were a lot of Federal and State expenses in that. I mean,

that was money, taxpayer dollars, and the opening of a new university or at least the commitment to open up a new University of

California.

The third factor you mentioned was the fact that there was so

much overcrowding of the Bay Area, which is a lack of affordable

housing, a lack of government attention to the problem.

So in all three cases, the factors that helped Merced were essentially controlled by government, and so, we sort of say, ‘‘well, we

have saved money because it was not our account,’’ but indeed, the

taxpayers pay for it.

So I think we need to get a more realistic cost balance of our

base closure.

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I think that the first panel could also indicate—I mean, Mr.

O’Brien is in a position where he is the good guy because he comes

with the checks and passes them through. I will have a question

for that at the end.

But, Mr. Fatz talked about the fact that we spent $267 million

on Fort Ord so far, and the idea in Washington is that we have

been there, done that. Fort Ord is a success for all of the reasons

that we outlined earlier.

But I think the most shocking thing you said today is it is going

to cost even more than that between now and at the end, another

$326 million more to cleanup the fort.

Where are we going to get that money? This process has been too

slow. It is too slow already, and I do not see any money in site for

making it faster.

Mr. Takata came in with this idea that, we know that Fort Ord

is more expensive than McClellan because of the cleanup, and we

know how to cleanup the land, but still EPA participated in that

lawsuit that slowed the process down, and that again goes back to

the local government’s complaint about it is too slow.

Mr. Thompson said something shocking. That is that if we do not

burn, then we are going to have to go back and redo the whole

thing about what is the habitat management plan. We start all

over, begin at square one.

Let me ask you this. If we start at square one, would your department, with the knowledge you now know about habitats, be

able to downsize the management plan because you would not have

as much habitat to manage? I mean, the critical mass is there and

do you have to have it all?

Because you have a lot of people in this room who will tell you

that they are not going to allow this to burn. They are going to file

lawsuits. They are going to do everything they can to stop burning,

and you just said if we do not burn, it all stops.

This is one of these problems where the right hand does not

know what the left hand is doing.

Mr. Lowry, I mean, are you ready to allow it to burn? Is that OK

with you? You are the Office of Toxics, and people are claiming

that the smoke is toxic.

I got from your testimony that the fastest way—I do not think

this is what you meant to say—but in many ways it was like if we

did not close bases, we would not know all of this stuff was here,

and we would not be involved. If we just did not ask, we do not

tell, your office does not get involved because it is still Federal

ownership, Federal land, and the States do not have a role on military bases.

So if we just did not close anymore bases in California, we would

not have to worry about cleanup.

See, I am sitting here. I just see that the first panel say that

what we heard from the second panel is the reason that we are just

where we are, kind of stuck. How can we do this faster, smarter?

We need to change Federal law, and we need to commit more

money.

But I just kind of addressed the whole panel there, and I would

like to feel that there is some response. Maybe my one question,

the only one I did not say something about, Mr. O’Brien. You go

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around watching all of these bases close in the United States, not

just here in California. Have you noticed any difference between

those bases that are closed in States which have less State law?

I mean, are there unsuccessful or successful transfers because of

State law? I mean, does State law hurt or help in the transfers?

And are there States that have been less involved and, therefore,

the transfer went a lot faster?

Mr. O’BRIEN. In the States that we work with, Congressman,

which number just about all of them, we have an active State regulatory function in a handful, including Massachusetts, Florida, and

California. They are regulatory in the sense that they might have

something like an environmental impact review process, which is

either replicative of the Service’s EIS, environmental impact statement analysis and/or a very detailed Environmental Protection

Agency-type function.

And on that latter one, perhaps Maine and a couple other States

would come to mind as well.

I can sincerely state that we have not seen the type of what appears to be intractable issues that we have found here. I cannot explain the reason for that. Perhaps it is UXO. Perhaps it is a preponderance of not just Federal regulations, but also State regulations and local boards.

You stopped short of asking about local functions. I do not believe we have the type of local layers elsewhere that we do here

in California. We would have to do a more detailed look, though,

to say what causes these issues to occur.

But clearly, and I think the record speaks for itself, that across

these different sites, we have a very active State review process in

California, and we do not see things flowing perhaps as quickly as

they could from the process.

Mr. FARR. Does anybody else want to comment?

I wonder can I get Mr. Thompson and Mr. Lowry? Mr. Thompson

indicated that if we do not burn according to a habitat management plan, you’re going to have to go back and revisit the whole

habitat management plan. I do not expect us to go there, but if we

did—can you downsize it?

Mr. THOMPSON. Well, first of all, I would like to express that we

are also very frustrated with the process here and that we have

been working with the community since 1994. We thought we had

a good habitat management plan, which is the basis of our process

to grant the incidental take permit so that we could allow permits

for the take of endangered species.

So if we do have to switch to mechanical, that does force us to

reevaluate the process. I do not think it completely stops things, as

you characterize it, but we do have to go back, try to figure out a

new——

Mr. FARR. Going back stops.

Mr. THOMPSON. Yes.

Mr. FARR. You have got to stop before you go back, you know.

You cannot just shove it in reverse.

Mr. THOMPSON. That is correct. And we would have to find a new

process, a new way to reinvigorate the habitat so that we would

take care of the endangered species that are there, and that also

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includes a whole host of other species that are on the verge of being

listed as endangered.

This was, according to everybody’s best effort, the best way to

conserve this natural habitat out there and protect endangered species and allow for incidental take.

Now, it would be pre-decisional for me to tell you that we could

give the permit in so many days, but in similar projects like this

one or this closure, you know, we could be within 45 to 60 days of

the public process that we need to have in place and permits

issued.

So I think we are very close, and we, too, are frustrated.

Mr. FARR. Will Mr. Lowry with the Office of Toxics allow that to

take place?

Mr. LOWRY. The lawsuit which we have discussed earlier was

filed by the Air Quality Management District, which is a local

board, and I think the members of that district are actually, the

members of the board——

Mr. HORN. Speak a little closer, please.

Mr. LOWRY [continuing]. Are members of local government, elected officials. So we would not have a role in that. What we have

been looking at are issues related to if you do the burns is the

smoke created any more toxic or dangerous because you are adding

explosives which would be blowing up weapons and so forth.

I am not sure we are completely done with that, but I do not believe it is a significant additional risk. So the issue is more a local

air district problem with smoke than it is a toxics issue.

You also asked, perhaps a bit facetiously, but I think realistically, well, if we do not close the bases, the California Environmental Protection Agency is not here and we will not have these

problems.

And I guess the answer to that is we do have authority over active military installations, but one of the rules which we operate

is that the military is required under laws which Congress passed

to leave the property or clean it up to a reasonably intended use.

And as long as they are using ranges to test weapons and so

forth, that is the intended use, and you will expect unexploded ordnance to be there.

Once you try to convert it to some other use, then there is a role

for us to play.

Mr. FARR. Have you been playing that role on an active military

base?

Mr. LOWRY. With respect to?

Mr. FARR. Any changed use so that it triggers that the State

come in on an active military base?

Mr. LOWRY. Not on a changed use. We do regulate the treatment,

storage, disposal, and generation of hazardous waste, for example,

and we do inspections and file enforcement actions against the

military and work with them on compliance issues throughout the

State.

Mr. TAKATA. Congressman, may I clarify something?

Mr. FARR. I did not mean to pick on you. You have been a hero

in moving the process along.

Mr. TAKATA. Thank you. Thank you very much.

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And I do not mind being picked on, but I want to clarify something. First of all, I do not want to leave anybody with the impression that EPA actually opposes burning per se. In fact, we were not

a participant in either one of the lawsuits. It was the local Air

Board and the local community group here.

But here is the thing. In order to do the cleanup, you have got

to clear the vegetation. In order to get the vegetation out, you either have to burn it or clear it by some other means.

Now, burning is cheaper. So the Army would rather do it that

way, and the Fish and Wildlife Service supports it because it helps

with the habitat management.

But the fact of the matter is it is very controversial among some

community members, and the Air Board has taken up that issue

and filed the lawsuit, and that issue is the safety of burning vegetation, but also vegetation that has UXO on it. I think it is a legitimate issue.

Mr. FARR. But sitting behind you, you heard from Mayor Smith,

who had two friends who actually you might say did manual cleanup. They picked it up, and it blew them apart. I mean, there is a

risk to the people on the land, too, not just the endangered species.

Mr. TAKATA. Absolutely, and so it is our job, I think, as government agencies working on this to try to work through all of these

problems, and here is what we are trying to do.

You know, we have been working with the Army to come up with

this strategy. First of all, they are presently looking at all of the

alternatives to vegetation clearance, including burning, and this is

going to be helpful because maybe not everything needs to be

burned, and also it will be helpful in explaining the decision to the

residents and community in the Monterey Bay area.

As Mr. Lowry stated, we are trying to look at what are the

health impacts of burning. Do you add anything more from burning

UXO to vegetation?

And then last, if the Army does end up choosing burning, we all

want to make sure that we have a really good burn plan in place.

Now, I think we are on course for that now. We got set back by

the lawsuit, but we are now back on track. We have a couple of

symposiums coming up, one this month and I think one several

months later, and the Army hopes to make a decision on whether

or not to burn or use other methods of clearance some time next

year.

The thing I want to stress though is in the meantime, the vegetation can be cleared mechanically. None of the parcels that were

slated for reuse by the local governments have been held up because of this issue. We have been able to work through each one.

Now, the one that is possibly held up, but we still are right in

the middle of that discussion is Parker Flats, but all of the other

ones were moved forward without burning.

Mr. FARR. Last, Mr. Fatz, are we going to commit the Army’s resources to this cleanup, this $326 million? Can we get a commitment that as this is needed, it will be there? Are you not going to

leave us hanging dry?

Mr. FATZ. That is $326 million over approximately 15 years, and

we will put in that request.

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You know, sir, in Congress the ordnance issue has gotten a lot

more attention. We have a number of Members of Congress trying

to get special legislation to create line items just for ordnance removal because it is so costly, and it is dangerous out there.

But we expect to have in Fort Ord’s case the remedial investigation and feasibility study done on the burning and have an interim

arrive by next summer.

Mr. FARR. But you are not changing the way you cleanup

unexploded ordnance. A lot of this whole debate has been not what

you do once you get in the land. It is how to get on the land.

Mr. FATZ. Yes, sir. Here it is the chaparral that hides the ordnance. And the burning is less costly, but it is much safer to the

operators that have to go out with manual or mechanical devices

to take down the chaparral, and it is still a hazard.

Mr. FARR. Well, I think that is what is missing in the debate.

This is a debate about the impact of the smoke, not a debate about

the impact on human risks and cleanup.

I appreciate the panel, and I appreciate the Chairman.

Mr. Horn, I have to really tell you that you and I have been

friends for a long time, but you are the first Member of Congress

to come here, and sitting on a committee with this kind of jurisdiction, to have the responsibility to do the oversight, and I really appreciate your bringing the committee and your staff out here.

Mr. HORN. Well, thank you. We appreciate it.

I would like to hear from the mayors before we wind it up. If

there were questions that were not asked by either Mr. Farr, myself or each other, we have got a little chair down there at the end

of the table, and you can borrow Mr. Holman’s mic if anybody

wants to just raise it.

We are not going to have any great extension on it. We just want

to know if you have listened to this, and maybe while the ideas are

hot, why, we would like to get it on the record, and then the staff

of both the minority, professional here, and the majority will probably be sending all of you questions that we could not get to. And

you are under oath in answering those questions.

So we certainly appreciate your taking the time today.

Mr. PERRINE. Mr. Chairman, Jim Perrine again.

I do have a question for this panel. We did hear about the potential reinitiation of the Economic Adjustment Committee, and as I

understand that organization, that committee would be more or

less a topdown coordinating agency for the Federal process.

I am concerned that we need a bottoms-up coordination as well.

We need some representation of the local interest and some opportunity for remedies to be provided to the local jurisdictions whenever we have conflicts.

And I am interested in knowing if the panel members could foresee some type of an ombudsman type of program that could be initiated at the Federal level to facilitate the assistance for the local

agencies.

Mr. HORN. That is a very good suggestion, and I think one way

to solve this kind of thing would be an assistant to the President

or whatever that coordinated all of these things that are going on.

Any other comments?

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Mr. SMITH. Mr. Chairman, the question I have for the city of

Seaside is that it was implied that there would be a reprioritizing

of the cleanup effort on the former Fort Ord, and you have heard

my testimony in regard to the horrible incident that affected two

lives, and yet we are talking about one of the areas that has the

unexploded ordnances immediately adjacent to the residential area

of the city of Seaside.

I think that we are reacting to local agency, the Air Board, U.S.

Fish and Wildlife, and possibly the threat of U.S. Fish and Wildlife

talking about reopening up the environmental or the natural habitat plan. I guess what I am asking is that this burn plan should

take into consideration that the lawsuit is really brought about

through a mishap of a control burn that got out of hand as opposed

to the many years that burning on the former Fort Ord took place

without an incident.

So I would like to see the agencies, BRAC, U.S. Fish and Wildlife, U.S. EPA, come up with a plan, a burn plan, that would still

not threaten the lives of the citizens that live east of Fort Ord, and

that is basically one of the major concerns.

This threatening to set us back years by opening up the management or the habitat plan is a little terrifying, to be perfectly honest

with you.

Mr. HORN. Well, we thank you very much, Mayor. You and your

colleagues have been very helpful just as we have had the help

from the governmental groups.

This is the first in a series of hearings the subcommittee will

hold on the efficacy of the process for closing military installations.

The problems described today are certainly emblematic of concerns

in communities that have been the subject of realignment of military facilities.

It is our hope that the lessons we learn today and we will learn

as we review other closures will help us avoid the mistakes that

were obviously questioned by the mayors and others.

And I want to thank each of the witnesses. You have all been

very helpful, and again, the record will remain open for the next

2 weeks. If people in the audience and others have something,

please send it to Mr. George, the chief counsel and staff director

of this subcommittee.

And J. Russell George is right behind me there, and to my right

is is Darin Chidsey, the professional staff member that worked on

this, and our clerk, Mark Johnson is over here, and we thank him,

and Dave McMillen, who came out here for the minority, the professional staff member.

And then we really thank the people that helped us with the

Monterey Council Chamber contacts, and that is Elaine Ramos and

Fred Cohn.

And then our court reporters are Nancy Palmer and Susan Palmer, and we thank you for taking down this transcript.

The City Manager’s office and many people have helped in this

wonderful, historic building.

And with that we are adjourned to the next hearing.

[Whereupon, at 12:40 p.m., the subcommittee was adjourned,

subject to the call of the chair.]

[Additional information submitted for the hearing record follows:]

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