It’s Cheaper to Keep Base, Navy Argues : Military: In numbers war with closure panel, officers say recouping cost of shutting Point Mugu would take 63 years.

Brushing against the cold steel wielded by Pentagon budget cutters, Point Mugu has developed a persuasive defense: It would cost more in this lifetime to close the Navy base than to leave it open.

The Navy calculates that it would take 63 years for the Pentagon to recoup the costs of mothballing most of Point Mugu in southern Ventura County and moving its missile-testing operations to the China Lake Navy base in the Mojave Desert.

The Navy prefers to limit its base closures to places where it can get a return on its investment within 10 years, so it can funnel the savings into training sailors or otherwise modernizing its forces.

The Navy’s numbers fortify its defense of Point Mugu, which was targeted for closure earlier this month by a federal commission set up to cut the military’s overhead costs.

“It looks like an open-and-shut case right now,” said Adm. Dana B. McKinney, commanding officer of Point Mugu and its sister base at China Lake. “But I don’t think it’s over yet.”

The Navy’s calculations must first pass muster with auditors at the Defense Base Closure and Realignment Commission who are sifting through the data submitted last week, looking for inflated figures or faulty assumptions.

The commission also could decide to close part of the base, leaving some facilities intact as a way to trim moving costs, McKinney said.

As now proposed, Point Mugu would keep its radar and other facilities that operate the missile-testing range stretching across 36,000 square miles of Pacific Ocean. Just about everything else would move to China Lake or be closed, including the base’s runway and aircraft hangars.

Under that scenario, the Navy projects the costs and savings this way:

* It would cost $805 million to relocate nearly 3,000 people and thousands of tons of computers, electronic gear and other equipment. These costs include constructing new buildings at China Lake.

* Merging programs at the two bases would save an average of $28 million a year by eliminating about 340 jobs and reducing rent and utilities. At the same time, there would be some added costs, such as extra fuel needed to fly aircraft from China Lake 160 miles to the test range off the beaches of Point Mugu.

* Factoring in inflation, it would take 63 years for the yearly savings to recoup the initial $805-million investment. The law requires any newly ordered closures to be completed by 2001, so the break-even date is set at 2064.

In a letter sent last week to the commission, Assistant Navy Secretary Charles P. Nemfakos said the $805-million figure is a conservative estimate, and moving costs could be much higher. But Nemfakos wanted numbers that would hold up to scrutiny.

The calculations have also been reviewed by the Navy Audit Service.

“Part of the drill that we went through in the past week and a half was Navy auditors punching holes in what we initially offered,” McKinney said. “We went back and forth numerous times, discussing how realistic the numbers were. It was a pretty good scrub.”

Nemfakos pointed out that the Navy’s conclusions are remarkably different from those in a June, 1994, report written by the Defense Department’s inspector general.

The inspector general report projected the Navy would save $1.7 billion within 20 years if it merged overlapping programs between the two bases. The savings from eliminating 2,000 jobs would be so great, the report concluded, that it would recoup the $518 million in relocation costs within six years.

In contrast, the Navy projects that such a merger would result in a net loss of $436 million at the 20-year mark. According to the Navy’s analysis, it would be another 43 years before the savings catches up with the initial $805 million in moving costs.

As for the $2.1-billion discrepancy, Nemfakos said that the inspector general’s information is outdated and does not reflect the management streamlining that already has occurred between the sister bases.

Point Mugu and China Lake have cut about 2,000 jobs since 1991, he said, by intertwining their operations under one command as the Naval Air Warfare Center, Weapons Division.

Any further consolidation would disrupt these complementary programs, Nemfakos wrote, “and cost taxpayers almost half a billion dollars.”

Nemfakos, the Navy’s point man on base closures, challenged the inspector general’s report because it inspired the base-closing commission to add Point Mugu to the Pentagon’s list of recommended closures.

“The $1.7 billion in savings was something that caught the attention of the commissioners,” said Rebecca G. Cox, one of eight commissioners who will decide the fate of Point Mugu. “The report was clearly an impetus for us looking at the base.”

Cox and fellow commissioner Benjamin F. Montoya, a retired admiral, will visit Point Mugu today to get a firsthand look at its weapons-testing operations.

They will be accompanied by a growing entourage of congressional and naval officials, including Adm. Ronald J. Zlatoper, commander in chief of the Pacific Fleet, and Adm. John A. Lockard, head of all naval aircraft.

The admirals are convening at Point Mugu to demonstrate the Navy’s support for the base it ranks as second in military value among the service’s 64 technical centers. China Lake is No. 1.

Unlike the Long Beach Naval Shipyard and five other installations on the hit list, Point Mugu is the only one the Navy has never seriously considered for closure.

The Navy wants the Long Beach shipyard closed. The service also had planned to recommend closing the Naval Warfare Assessment Division in Corona and three bases in the Bay Area, but yanked their names off the closure list at the last minute to minimize job losses in recession-weary California. These four bases were added to the hit list on May 10, when the commissioners decided to target Point Mugu.

Since then, the Navy has grown aggressively protective of Point Mugu, one of three bases nationwide it has made a priority in its defensive campaign. The others are a Naval Air Station in Atlanta and the Portsmouth Naval Shipyard in Maine.

Last week, Adm. J. M. Boorda, the Navy’s top-ranking officer, issued a letter that characterized Point Mugu as “not only a critical asset for the Department of the Navy, but as a national asset as well.”