January 6, 2011

1. Discussion Document Military – Community Collaboration Areas and Approaches for Efficiency January 6, 2011 This document is Close-Hold and is intended solely for the use and information of the client to whom it is addressed.

2. Presentation Overview • Situation Assessment • Options for Response and Authorities • Past Successes • Next Steps

3. Situation Assessment within the Air Force • The Operating Environment Continues to Shape AF Strategies to Gain Efficiencies • Centralization (e.g., organizational, processes, authorities) • Consolidation (e.g., BRAC, Joint Bases, merging career fields) • Leveraging best practices from private sector, academia, consultants, other Services, agencies, & internal AF change management efforts • Revised Strategic Plans & “Transformational Initiatives” • Search for IT efficiencies • Incorporation of asset management principles into business processes • Expanding Public Private Partnerships The AF Operating Environment is Changing • Defense budgets are shrinking • Weapon systems are aging • Personnel management costs are increasing • Some career fields are being stressed and civilian/military force levels are changing • Congressional oversight is increasing • SECDEF Efficiency Initiatives are taking shape • Continued “risk” in infrastructure (marginal recap & 80% sustainment)

4. Authorities and Tools • FAR - competitive procurements, sole source arrangements • Sec 2667 - Lease Authority “... the Secretary is authorized to accept improvements, maintenance, protection, repair or restoration of the property by the lessee in payment of all or part of the consideration for the lease.” 10USC 2667 (b)(5) • Special Legislation • Sec 816 National Defense Authorization Act for FY95 Demonstration Project on purchase of fire, security, police, public works, and utility services from local government agencies - 8/12/94 • Senate Colloquy - Senator Nunn and Senator Boxer clarify intent of Sec. 816 to waive requirement for A76 Congressional Record - Senate - 9/5/95 • Commander Initiative & Patience • Collaborating Community • Table Top Exercises to identify collaboration areas and mechanisms

5. Situation Assessment within Communities • The Operating Environment is Shaping Community Strategies to Gain Efficiencies • Communities seeking new ways to cost effectively serve their citizens • Communities seeking to expand partnerships with the military to effectively support DoD missions, operations and personnel • Communities open to new partnership models that will meet community and military objectives • Monterey Example – “Effectively support the DoD missions, operations, and personnel in Monterey’s installations by providing quality facilities, housing, infrastructure and base support services, at the lowest cost.” The Local Community Operating Environment is Changing • Community budgets are shrinking • Demand for jobs is increasing • SECDEF Efficiency Initiatives are taking shape that will have downstream impacts on communities • Shared services are becoming the norm among cities/counties • Elimination of duplicative/non-productive overhead is essential to allow funding of key services • Services can be tailored to the unique needs of the customer, if customer is willing to pay the cost increment • We must move from a budget mentality to a cost mentality in all we do • Erosion of capital reinvestment and sustainment capabilities

6. Resulting Situation and Options for Response • Changing operating environment in Air Force and communities creating need for efficiencies to meet similar objectives • Serve soldiers and families, serve citizens • Be cost effective • Accomplish operational mission, keep base open • Needs are creating opportunities for expanded military-community partnerships* • Mission encroachment and land use compatibility • Public safety - force protection, police, fire • Public services - medical/mental health, social • Utility infrastructure - water, sewer, energy • Education and workforce development • Transportation • Environment * Partnerships with communities subject to screening criteria to be applied by Air Force

7. Past Successes – Municipal Services in Monterey, CA NEED • Maintenance of Nature Preserve • Maintenance & Operation of Historic Park • Ball Fields • Turn Key Base Ops Maintenance (e.g., fire, buildings, streets, storm drains, sewer, broadband) • Force Protection • Landfill closure and waste management SOLUTION • Out lease • Out lease • Use other people’s $ and real estate • Out lease/Special Legislation • Cooperative Agreement • Joint Powers Authority

8. Savings via Cost Avoidance • Child Care/Development Center Capital Costs: $508,000 Annual O&M: $ 40,000 • Nature Preserve Capital Costs: $ 15,000 Annual O&M: $ 12,500 • Soldiers Field Capital Costs: $410,000 Annual O&M Costs: $ 25,000 • Presidio Historic Park • Capital Costs: $350,000 • Annual O&M Costs: $ 25,000 Inter-governmental vs. Traditional Support Savings 51% Total Savings using Inter-governmental Support!

9. Next Steps • Explore the possible at proven location – Visit Presidio of Monterey on February 28, 2011, (with City of San Antonio and Joint Base San Antonio) to examine potential of installation collaboration with the community • Attend ADC conference and mission support panels to see other examples, February 14-16, 2011 • Consider means of expanding military-community partnerships to realize efficiencies • Pilots • Expansion of authorities • Awareness training, e.g., hold technical session on Enhancing Mission Effectiveness Through Municipal Partnerships at Air Force ESOH Symposium on March 22, 2011 in Nashville, TN

10. Contact Information • Del Eulberg, Vice President • Office: 210-244-4281 • Email: eulberg_del@bah.com • Dr. Will Rowe, Principal • Mobile: 703-304-5976 • Email: rowe_william_jr@bah.com • Susan Morris, Principal • Mobile: 703-867-7899 • Email: morris_susan@bah.com • Fred Meurer, City Manager, Monterey, CA • Office: 831-646-3760 • Email: MEURER@ci.monterey.ca.us