Navy in Europe searches for new ways to cut costs
There is a chill in the air inside buildings at Navy bases around Europe as officials lower thermostats as part of an effort to save money and prepare for expected budget cuts.
Navywide cuts aimed at setting aside more funds to help modernize the fleet, coupled with a weakening dollar, have bases looking for ways to reduce costs and do things more efficiently, said Lt. Cmdr. Carla McCarthy, spokeswoman for Navy Region Europe.
Some changes went into effect last summer, such as movie theaters charging for tickets. More recent measures include an increase in child-care rates, closure of auto hobby and wood hobby shops in Spain, and a hiring freeze in Sicily.
Smaller base budgets worldwide are the result of the Navy’s shifting dollars to what commanders call “recapitalization.” The cuts are aimed at freeing up money so the Navy can overhaul its bases, ships and warfighting gear.
In addition to the cuts, the euro rate change has affected how much money bases have in their budget, for example, for the cost of labor for local nationals.
“If the euro-to-dollar rate declines, we don’t necessarily have the same buying power,” McCarthy said.
McCarthy said it’s difficult to provide dollar figures or percentages to compare this fiscal year’s funding for bases to last year’s, because the numbers change daily. She also noted that comparing the fiscal years does not portray an accurate picture of available funds because additional money was pumped into the budget last year as a result of Operation Iraqi Freedom.
Navy officials were also unable to predict how much, in percentage or dollars, they must cut from operating budgets this fiscal year.
While cost-saving measures vary base to base, some are Navywide.
This month, rates for full-time child care — which are based on income levels — increased 1.5 percent for the top three categories. For example, for category 4, the lowest category of those seeing an increase, the difference is $5 a month, from $329 to $334 per month child per child. It’s the first rate increase in three years.
Budget cutbacks also prompted the Chief of Naval Installations to direct facilities to reduce spending on utilities. In January, several bases began enforcing thermostat mandates that require temperatures to be maintained at no higher than 68 degrees during the winter and no lower than 75 during the summer.
“It’s not just pinching pennies, it’s making sure we’re spending our dollars in the best way possible,” McCarthy said.
At the base level, commanders have taken a variety of actions to save money.
Naval Air Station Sigonella, Sicily, implemented a hiring freeze for government service and local national employees in December “mainly to help us control money because we don’t know how big of a hit we’re going to take this year,” said base spokesman Lt. Steve Curry.
“In the interim, that was one way we can watch where our money goes.”
Curry said the base is anticipating a $4 million reduction in this fiscal year’s operating budget, from $51 million last year to $47 million this year. Base departments are taking a 20 percent reduction in operating funds to offset the budget crunch, he said.
“We looked at a lot of non-employee type things we could do, like not turning on the heat in nonessential buildings until January, things like that to help us save money just in case we find more shortfalls throughout the year,” Curry said.
Naval Support Activity Naples, Italy, is expecting a 7 percent budget cut for the current fiscal year. To save money, the library hours were reduced and officials are replacing travel assignments with less costly video and phone conferences, said Lt. Cmdr. Lisa Braun, base spokeswoman.
In Rota, Spain, the naval station will cut the summer-hire program and limit the bus schedule.
Capt. John Orem, commander of U.S. forces at the base, said he made some cuts and “realignment” in services.
“We knew that it was going to be tight and that’s why we’re sort of pre-emptive,” he said in December. “We had a little more precision in the MWR world. We knew MWR was going to be a problem. That’s why we did what we did….”
Rota’s auto hobby and wood hobby shops were closed this weekend. Lt. Corey Barker, the base’s public affairs officer, said the labor and supplies used at the shops came from the local Spanish economy and were made more expensive by the weakening dollar.
“They’re the two least-used services on base,” he said. “It was decided to cut those two services and use the money elsewhere.”
Rota base officials said the closings will save $110,000 per year.
McCarthy said while base commanders are making small changes to save money, the Navy is looking at ways of doing business more efficiently.
One involves the role of a program manager. In the past, naval bases worked as independent organizations that developed their own requirements and spent the budget allotted within their base. A program manager provided oversight, policy and advice.
Now, the manager’s role is broadening to include making proposals to base commanders from a larger, regional standpoint.
— Reporters Scott Schonauer and Charlie Coon contributed to this report.