FMWRC Annual Report 1998

8/9/2019 FMWRC Annual Report 1998

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United States Army Community and Family Support Cente

contentssalute to fiscal year 1997 .............................................................3

section 1. executive summary: fy97 pass in review.............4

section 2. strategies for the future: fy98 and beyond ........18

section 3. a quality workforce: trained and ready ..............21

section 4. financial report: army mwr ..................................22

section 5. program status reports ........................................26

Army Community Service ..................................................................................26Army Family Team Building...............................................................................27Armed Forces Recreation Centers ....................................................................28Army Recreation Machine Program ...................................................................28Arts & Crafts .....................................................................................................29Automotive Skills ..............................................................................................30Better Opportunities for Single Soldiers .............................................................31Bowling .............................................................................................................31Child Development Services ..............................................................................32Entertainment (Music & Theater) .......................................................................33Food and Beverage Operations .........................................................................34 Clubs, Theme Concepts, and Other Food and Beverage ProgramsGuest Houses ...................................................................................................35Golf ...................................................................................................................36Recycling ..........................................................................................................36Leisure Travel ....................................................................................................37Libraries ............................................................................................................38Outdoor Recreation ...........................................................................................39Recreation Centers (Community Activity Centers) .............................................40Sports ...............................................................................................................41World Class Athlete Program ............................................................................42

Youth Services ..................................................................................................43

section 6. audit results ..........................................................44


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1997 MWR Annual Report

notes

All dollar figures used in the text and charts are rounded to the nearest $100 thousand.

Throughout Section 5, Program Status Reports, labor and other operating expense percentages used in theAverage Army Data financial information boxes are a percent of total revenue. Cost of goods sold percent-ages are a percent of sales.

This report is compiled by the Strategic Planning and Policy Directorate, U.S. Army Community and FamilySupport Center. For information or additional copies, contact Mr. Abraham Van Dyne at (703) 681-7427 or Mr.Joseph Trebing at (703) 681-7424.


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United States Army Community and Family Support Cente

For many years, the Army leader-ship has worked to develop busi-ness-based economies and effi-ciencies for Morale, Welfare andRecreation programs. Fiscal year1997 marks the realization of thoseefforts. In terms of fiscal perfor-mance, customer satisfaction, andoperational efficiency, Army MWR issmokin the course!

This achievement is primarily due tosuccess on two critical fronts. First,the oversight provided by the MWRBoard of Directors clearly increasesthe visibility of financial performanceand accountability, and emphasizesquality programs and services ataffordable prices for soldiers andtheir families. Secondly, our installa-tions are executing MWR programsin a superb manner. As a result,nonappropriated operating perfor-mance reached an all-time high in

FY97, with a net income beforedepreciation of $78.8M. This perfor-mance exceeds our FY99 goal twoyears early.

Continued improvement guaranteesthe future viability of MWR. The

Army is putting customer-desiredfacilities on the ground, maintainingan aggressive $49.5M NAF majorconstruction program for FY98.Increased patron use demonstratesthat MWR is offering the program-ming that customers want. New

program standards and benchmarks,modified service delivery systems,and innovative operating methodolo-gies assist Commanders in providing

EVAN R. GADDISBrigadier General, U.S. ArmyCommander, Community and

Family Support Center

salute

fiscal year 1997

to

for customer needs while makingsound business decisions. Collec-tively, these strategies are paying off,and allowed the MWR BOD to reducethe capital reinvestment assessmentfrom three to two percent of revenue.

Increased operations and personneltempo served as additional catalystsfor change, driving program modifica-

tions for both deployed soldiers andthe families they left behind. By theend of FY97, 87 MWR civilian special-ists had voluntarily deployed insupport of Operations Joint En-deavorand Guard. The fitness,sports, recreation, and leisure pro-grams these dedicated professionalsprovided were the only diversionsavailable from the rigors of duty. Athome, an inclusive family supportsystem mobilized to prepare the familyfor deployment and to support themduring separation from their loved

ones.

The Army adopted an MWR vision ofFirst Choice. As we move intoFY98, leaders at every level mustoperationalize that vision with organi-zations that are open to change andcommitted to meeting the needs of

Americas Army. We must rememberthat the Army is notaboutpeopleit ispeople. MWR andreadiness are in-separable.


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Congressional Support

Congress continues to support morale,welfare, and recreation programs as criticalpartners in promoting the readiness of

Americas Army. During an April 1997hearing, Congressman John McHugh,Chairman of the MWR Panel of the NationalSecurity Committee, spoke on the impor-tance of MWR programs: MWR programs

frequently do not receive the notoriety thatthe military resale system sometimesreceives.... However, in many respects,these programs are more important to thewellness and to the readiness of our forces.These programs promote physical fitness,establish communities for service membersand their families, particularly at remoteinstallations in isolated areas, and areperhaps the most tangible evidence that themilitary cares about the quality of life of itspeople. In war time or during deployment,MWR programs are essential to providing

recreation and relief from stress and duringhardships away from home.

In fiscal years 1995 through 1997, Congressprovided appropriated funds beyond theamount requested in the Armys budget tosupport family programs. Of particularinterest to Congress is high-quality, afford-able child care. In FY97, Congress providedadditional funding to construct child develop-

ment centers in Darmstadt, Germany; FortEustis, VA; and Fort Carson, CO. The FY99Presidents budget request includes $10.9Min military construction funding to replace twochild development centers at Wuerzburg,Germany and Mons, Belgium.

As part of the plan to implement the FY98Defense Authorization Act (Public Law 105-85), the Secretary of Defense is developinga proposal on the advisability and feasibilityof permitting Defense nonappropriated fund

instrumentalities to enter into public-privateventures. This report will facilitate understand-ing of the PPV process to Congress.

White Sands Missile Range and Fort Campbellare among six DoD sites completing the firstyear of a two-year Uniform Resource Demon-stration. Under this congressionally directedtest, appropriated and nonappropriated fundsare merged, with all MWR services using NAF

rules. The goal is to lower operating costs,expand opportunities for business operations,and increase the visibility of financial data. Todate, installation leaders and MWR managersare very supportive, especially with the NAFprocurement process and the visibility offinancial data. Resource managers, thoughsupportive, are concerned with potentialbudget reductions and with maintaining properoversight of APF resources. All parties areconcerned with the potential transition of APFpersonnel if the concept is approved for DoD-wide implementation. The Office of the

Assistant Secretary of Defense, ForceManagement Policy, monitors the demonstra-tion.

DoD and Army Leadership

Defense Planning Guidance for the ProgramObjective Memorandum (POM 99) recog-nizes that Quality of Life programs have adirect impact on retention, morale, andreadiness. The guidance urges the Servicesto adequately fund community and familysupport programs and continue progresstoward meeting MWR funding standards.The guidance also encourages the Servicesto increase efforts to outsource and privatize,reduce unneeded facilities, improve barracksstandards, and stop the migration of resourcesat the expense of OPTEMPO.

The Quadrennial Defense Review will play animportant role in defining the DefenseDepartments future missions, strategies, andcomposition. Decisions to reduce active

Army and reserve end-strengths are de-signed to increase force utility and betterintegrate the reserves with the active compo-

nent. The QDR recognized that the quality ofthe force depends on the quality of militarypersonnel; DoDs long-term commitment toadequately fund community and family pro-grams, morale and recreation activities,housing, and transition assistance will besustained.

During FY97, the Army developed prototypeperformance standards and key activities forinstallation base operations support services.Developing service performance standards isthe third, and last, step required to fully

Soldiers of the 3rd U.S. Infantry,

The Old Guard, prepare for a

ceremony in Washington, D.C.

- Photo by SPC James P. Aldridge

executivesummary

fy97

pass inreview

Section 1


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Section 1

implement the Installation Status Report. InJanuary, members of a joint Headquarters,Department of Army and Major Army Com-mand working group defined installationservices and drafted standards for thoseservices. MWR participants created a singlefunction, MWR, with four services: Child andYouth, Army Community Service, Fitness andRecreation, and Business Operations. CFSC,using input from MACOM functional propo-

nents, developed quantity standards for eachMWR service. Feedback from a late FY test ofthese quantitative standards will drive futuredevelopment of the ISR Part 3.

In July, the Assistant Secretary of Defense(Force Management and Personnel) autho-rized the Utilization, Support, and Account-ability Practice for optional use by MACOMsor installations, effective 1 October 1997.Under USA, installations prepare an agree-ment documenting specific governmentfunctions to be provided by the MWR activity

for the government, the amount of APFsrequired to perform those services, and thepayment schedule. This practice applies onlyto APF-authorized services of MWR pro-grams (in accordance with Army regulation),and the Installation Morale, Welfare andRecreation Fund may not be paid more than itcost to actually provide the services. USAmay be tailored to each installations require-ments, and may include the entire MWRprogram and budget, or selected programs orservices. USA returns flexibility to command-ers trying to get the most mileage out of APFresources.

MWR Board of Directors

The Board of Directors continued its strongleadership role in the management andoperation of Army MWR programs. The BODis composed of the four-star commanders ofU.S. Forces Korea, U.S. Army Forces Com-mand, U.S. Army Training and DoctrineCommand, U.S. Army Materiel Command,U.S. Army Europe and Seventh Army, theU.S. Army Pacific commander, and theSergeant Major of the Army. The BOD weighs

MACOM and installation requirements, includ-ing the needs of unique customer bases,against Armywide requirements. In FY97, theBOD:

q Stabilized the Army Morale Welfare andRecreation Fund by refining the NAF FinancialPlan to identify two conditions when the BODwill take action: when indicators reflect apotential cash-to-debt ratio of less than 1:1over a three-month period, or when theoutstanding loan balance of the AMWRF isprojected to exceed 50 percent of aggregatefield NAF instrumentalities cash balances.

qApproved AMWRF receipt of earnings fromthe sale of tobacco in commissaries. Con-currently, the BOD rolled back the capitalreinvestment assessment from three to twopercent beginning in FY98, providing $8.7Ma year for installation capital reinvestment.The BOD adjusted the net income beforedepreciation standard upward to sevenpercent for FY98, and eight percent for FY99and thereafter. At each meeting, the BOD

continues to review options to reach anoptimal cash-to-debt ratio.

q Changed the CommandersMission Box standards, effec-tive in FY97: combined all cluboperations into one aggregatestandard, eliminating theseparate lines for OfficersClubs, NCO/EM Clubs, andcommunity clubs; eliminatedthe food, beverage, andentertainment standard; addeda standard for food operating

results, regardless of programelement; and added a pass/fail(green/red) standard to monitorthe limitation on capital pur-chases and minor constructionexecution.

qRevised the CommandersMission Box, effective FY98:changed the child care NAFsubsidy standard from $200 to $100 perspace in FY98, $50 in FY99, and $0 inFY00; and set the food standard to fivepercent of revenue in FY98, six percent inFY99, and seven percent in FY00, subject to

review thereafter.

qApproved a FY98 NAF major constructionprogram worth $49.5M and project validationassessments for FY99 NAFMC projects.

Financial Overview

All Army MWR Operating Funds

Field operating nonappropriated fund instru-mentalities, the Army Recreation MachineProgram, and the AMWRF comprise ArmyMWR operating funds.

Collectively, FY97 APF and NAF supportexceeded $1.4 billion, a $90M increase overFY96. In FY97 (as in FY96), APF and NAFshares of total support were 33 and 67percent, respectively. Total NAF revenueincreased $58M from FY96, or 6 percent,primarily because of increased support fromthe Army and Air Force Exchange Service(core dividend and tobacco earnings) andincreased revenue from fees and charges.The APF support increased $32M, or 7percent. Military personnel and small

Three-year old Jordan Dent picks

a pumpkin at Fort Lewiss pumpkin

patch.

- Photo by SPC Robin Van Dervee


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MACOMs accounted for the majority of thisincrease. Borrowed military manpower isbecoming more visible, particularly in physi-cal fitness programs. Figure 1-1 illustratestotal support and how APF and NAF dollarswere used. As in the past, personnelconstitutes the major use of funds, at 53percent of the total. After operating costswere paid, $176M was available for capitalrequirements. Examples include majorconstruction, management informationsystems, and CPMC.

DoD Funding Metrics

Department of Defense fiscal standardsrequire that, regardless of category, 100percent of authorized costs are funded withappropriated funds. Metrics for measure-ment of success in achieving these stan-dards include allowances for incidentalprogram-related resale operations (notauthorized APF) and are 85 percent APFfunding for Category A and 65 percent APFfor Category B. These standards were

published in November 1995. For the second

consecutive year, the Army has collec-tively improved its performance (Figure1-2), with 87 percent APF recorded forCAT A and 64 percent APF for categoryB.

Critical Indicators

As of 30 September 1997, the Armyscollective MWR operating cash to

current field liabilities was 1.1:1. Thismatched last years ratio for the sameperiod. The relationship of the outstand-ing AMWRF loan to the Army Bankingand Investment Fund with field NAFIcash was 51 percent as of 30 Septem-ber 1997. The MWR Board of Directorsauthorized this loan as one of thefinancing strategies for improving theMWR physical plant. The cash-to-debtratio and loan balance percentage arethe two major critical indicators the BODuses to maintain the financial health ofthe operating funds. While the Septem-

ber data reflect a sound position, FY98is now viewed as the most critical period, asthe Army aggressively executes plannedcapital expenditures while maintaining solventoperations in an environment of scarce re-sources and changing structure. Detailedfinancial information, including the SummarizedBalance Sheet and Summarized Income andExpense Report for Army MWR OperatingFunds, is presented in section 4 of this report.

Field Operating Funds

Direct Appropriated Fund SupportFor FY97, .S account and family programaccounts were executed at $176.1M and$176.0M, or 103 and 97 percent of allocations,respectively. These amounts were $7.5M morefor the .S account and $1.5M more for familyprogram accounts than the actual execution forFY96. Figure 1-3 reveals that the YouthProgram overexecuted $4M while the ChildDevelopment Services underexecuted by anequal amount. Reporting problems for school-age programs caused this out-of-balanceexecution. In the case of Army Community

Service, installation commanders worldwidechose to execute $5M of authorized funding forother programs with more critical needs;possibly, at least collectively, MWR wasoverexecuted in a similar amount.

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Section 1

Nonappropriated Funds

Fiscal year 1997 was the most financiallysuccessful in recent history for field-operatingNAF activities. The Net Income BeforeDepreciation adjusted for one-time, non-cashBase Realignment and closure costs, such aswrite-offs of buildings and improvements, was$75.8 M (8.9 percent of total revenue), versus$65.1M (7.8 percent of revenue) in FY96. As

shown in Figure 1-4, financial results in eachof the past two years exceeded budget

projections.

Figure 1-4 also shows the progress madeArmywide in generating net income at asufficient level to prevent de-capitalizing theMWR program. De-capitalization occurswhen capital assets are depleted or depreci-ated at a rate greater than that at whichincome is generated. While depreciationincreased from $100M in FY96 to $103M inFY97 because of capital reinvestment, the netincome after depreciation increased from anegative $36.2M in FY96 to a negative$27.8M in FY97. Continued progress of thismagnitude will allow the Army to meet a long-term goal: break-even after depreciation.

Results for FY97 show continued profitabilityand financial progress, which has occurredeach of the past five years (Figure 1-5). TheNIBD has increased steadily from 5 percentof total revenue in FY93 to 8.9 percent inFY97. This profitability is a direct result ofincreased financial oversight and emphasisby the BOD, which established phased

financial standards commencing in FY94.Initial standards required each Category Cprogram to achieve NIBD of at least zero.Other standards required installation MWRfunds to achieve a NIBD of at least zero, witha budget variance no greater than 15 percent;execution of at least 70 percent of budgetedCPMC; limiting the NAF subsidy to childdevelopment centers to no more than $400per child space or the previous years sub-sidy, whichever was less; and reducingoverhead costs by at least 10percent.

These standards presented signifi-cant challenges to MWR fieldmanagers which they met.MACOM financial results are briefedtwice a year to the BODs ExecutiveCommittee. As installations provedable to satisfy initial standards, theBOD tightened them and addedadditional standards as part of a long-range financial improvement plan.

Additional standards included arequirement for NAF operations in

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Field Operating NAFIs - Worldwide NIBD/Net IncomAdjusted for Base ClosureFY 96/97 Budget vs. Actual

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Figure 1-4

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5-1erugiF


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category A programs to break even (netincome before depreciation of at least zero)and for all APF-authorized requirements withincategory A to be 100 percent APF funded.The category B standard required NAF opera-tions to at least break even. The results ofthese standards over the past three years areshown in Figure 1-6.

Category C operations increased profitability

from $39.3M in FY95 to $64.1M in FY97, a 63percent improvement. Category A programsmade steady progress toward achieving atleast a break-even NAF operation in theirprogram, while increasing the percentage ofappropriated fund support. Category Bprograms made a dramatic turn-around, froma $4.7M net loss before depreciation in FY95,to a $5.5M NIBD in FY97.

An additional area of success is the reductionin overhead expenses (not including the CapitalReinvestment Assessment) by $17M fromFY95 to FY97 while total revenue increased

only slightly. Examples of efficiencies includethe further centralization of accounting ser-vices, the establishment of MACOM SingleFunds with the resultant centralization offinancial management and procurement, andthe efficiencies achieved through the Manage-ment Information Systems such as the TimeLabor Management System and the FinancialManagement Budget System.

Non-operating revenue (Figure 1-7) held steadyduring this period of increased programprofitability and decreased overhead costs,allowing a greater portion of income to be usedfor capital and program reinvestment, ratherthan subsidizing program operations.

The BODs financial plan sets increasinglyambitious standards through FY99 (Figure 1-8). The NIBD standard increases from 5percent in FY97 to 8 percent in FY99. Thisstandard is apart from the CRA collected bythe AMWRF for Armywide capital reinvest-ment requirements. Thus, installation andMACOM MWR funds are challenged togenerate income equal to at least 10 percentof revenue (before the CRA) by FY99.

Remarkably, installations and MACOMs havealready achieved and exceeded this standardtwo years ahead of time.

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Section 1

Program Initiatives

Business Programs

Business Programs moved forward with thedevelopment of benchmarks and programstandards developed to improve customerservice and increase profitability, with majoremphasis on enhancing food programs. TheBODs guidance in club and food areas

continues to pay big dividends as installationclub programs recorded one of their mostprofitable years ever, contributing $9.7M toMWR worldwide (Figure 1-9).

Benchmarks for food and beverage programsaid commanders and program managers inmeeting BOD standards. Benchmarks alsohelp bring our programs on par with theprivate sector. National Restaurant Associa-tion statistics and historical operating resultswere used to develop the benchmarks.

Our new theme concepts are proving very

successful and popular with soldiers, theirfamilies, and installation management. Theconcepts include a complete package, fromdcor to menus and uniforms. Nine themeconcept operations opened in FY97, with anadditional ten scheduled for FY98.

The CFSC completed the sale of the Fort Ord(Presidio of Monterey) golf courses, receiving$10.7M to support local NAFI MWR pro-grams. This was the first MWR activity soldat fair market value with proceeds accruing toNAF.

An MWR Catering Workshop conducted inAugust was attended by more than 50catering and club professionals from MWRactivities. The training presented the latest inmenu design, dcor and decoration tech-niques, innovative theme events, and solu-tions to improve catering operations.

Telephone service income was $16.6M inFY97, increasing $2.2M over FY96. A majorfactor in the increase was greater telephoneusage as a result of Operation Joint En-deavor. Although pay telephone income hasdeclined due to the dynamics of a changing

market, this has been offset by additionalincome from increasing usage of cellularphones and barracks telephones. Thesetrends are expected to continue during FY98.

The year was difficult for the commercial travelindustry, and the Army felt the impact whenone of our largest commercial travel providersunilaterally initiated a 65 percent reduction in

commissions paid to installations. Thesignificant reduction in travel commissionsresulted from sharply lowered commissionspaid to travel agents by the airline industry.

Approximately 80 percent of a travel agentsbusiness is derived from airline travel. Nego-tiations are underway to reduce the adverseeffect on installations.

Guest house operations boosted occupancyby participating with the Army CentralReservation Center. Anticipated roomvacancies in guest houses are allocated for

sale to customers calling the ACRC, at1-800-GO-ARMY-1, in search of on-postaccommodations. In 1997, over 94,000guest house room nights Armywide wereallocated to the ACRC for sale.

In 1997, guest house training initiatives wereconsolidated at the Community and FamilySupport Training Center, providing guesthouse employees centrally funded trainingopportunities. Training seminars, alsocentrally funded for employees, were held inconjunction with the International Hotel/Motel and Restaurant Show in New YorkCity. These initiatives were the result ofcoordination between CFSCs Army LodgingDirectorate, which has operational policyresponsibility for guest houses and spon-sors all lodging-related training, and the

CFS Training Center.

$ Millions

Guest House$12.3

Business Programs NIBD Operations

Golf

$13.0

Clubs$9.7

Bowling$6.6

FY97

$41.6M

Figure 1-9


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Family Programs

Family programs continued to capitalizeon efficiencies without forsaking quality oreffectiveness. Significant accomplish-ments for the year included:

qA series of process action teams forgeda plan to restructure and streamline ArmyCommunity Service. The plan recom-

mends: developing a one-stop approachreflecting alignment by functional service,horizontal integration, and a single point

of entry; creating the infrastructure to supportFamily Advocacy Program consolidation; andterminating low-demand services. CFSCcontinued to emphasize pursuit of the UnitService Strategy, and contracted to developoutcome measures for Army CommunityService.

qThe biennial HQDAArmy Family Action PlanPlanning Conference met

in March. MACOMs sent138 delegates, represent-ing all elements of

Americas Army, to reviewand prioritize issuesforwarded from localsymposia. Delegatesassessed 66 issues andrecommended 19 to theVice Chief of Staff, Army,for inclusion in the AFAP.In this 14th year of the

AFAP, the Army familys

most critical QOL issueswere in the area of medi-cal benefits and entitle-ments. Figure 1-10 showsthe top 5 services, asrated by AFAP representa-tives, impacting QOL.

qTo improve the quality ofchild care across the country, PresidentClinton issued an executive memorandum in

April directing that military child care pro-grams share lessons-learned with the civiliansector. The Services established a toll-free

access number to an information clearing-house, enabling civilian agencies to ordertraining and resource materials. The Armysubmitted 55 documents to the clearinghousefor potential distribution. A bureau of militarychild care experts is available for speaking ortraining engagements.

qA review of Army child care programsconcluded that costs are not rising, the NAFsubsidy is down, HQDA guidance andrequirements are not overly restrictive, and

school-age services programs are not ad-versely competing with other child and youthprograms.

qEighty-three percent of Army Child Develop-ment Centers were accredited and ninety-eightpercent were certified in FY97.

qWorld Teen Discovery 97 met in July inColumbiana, AL. Seventy-five Army teensdeveloped leadership skills, acquired team-building and facilitation skills, and learnedstrategies for resolving teen issues back attheir home installations.

q The Army Teen Panel, comprising 11 teens,met in September to foster communicationbetween teens and Army leadership onissues facing youth. Key topics focused onyouth sponsorship, volunteer and communityservice, youth employment, sports programs,peer-to-peer counseling, and CharacterCounts (a character education program forteens).

Recreation Programs

Recreation programs continue to assesspolicies and evaluate program outcomesagainst evolving leisure and recreationalneeds of the future force. Program highlights

during FY97 included:

qAfter successful testing at three installa-tions, the new Recreation Delivery Systemwas approved for Armywide implementation.Program and operation teams allowed staff tofocus on increasing program participation

through integrated customer-driven pro-grams, customer service, and staff efficien-cies. The new delivery system requiresincreases in unit outreach programs, non-facility based programs, and outsourcingopportunities. While the program teamconcentrates on delivering programs, theoperations team operates the facilities andenables staff sharing to fill personnel short-ages and reduce work backlogs. Implemen-tation of this system can yield both installationcost savings and increased revenues, butmost of all, it provides increased programmedevents to meet customer needs and desires.

qThe second annual program training work-shop for recreation professionals was held in

August 1997. Having gotten out of the boxlast year, programmers were challenged tomove that box and be non-facility bound andnon-traditional in programming. Attended by100 recreation professionals, the workshopfocused on determining market needs, plan-ning programs and services to meet thoseneeds, and providing them in the most suitableplace.

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Fishing at Seward Military

Recreation Resort will give you

some tall tales to tell.

- Photo by H. Johnson


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11

Section 1

qLibraries report a successful year serving theinformation and reference/research needs ofsoldiers and their families. The 1996 LeisureNeeds Survey rated libraries themost desiredMWR program. Soldiers now have accessthrough the world wide web to a wide variety ofautomated reference databases for news,business, and health that offer abstract andfull-text retrieval capabilities. In addition tosupporting Operation Joint Guard, paperback

books were centrally provided to isolatedsoldier units stationed around the globe. Theannual Army Library Institute provided criticaltraining to librarians on change, management,and automation.

qThe U.S. Army Soldier Show entertained146,000 people during a six-month tour thatincluded Hawaii, Okinawa, Japan, and Korea.

A total of 105 performances at 57 locationsincluded special shows for the InternationalJamboree of the Boy Scouts of America andUSMA, West Point. A 30 percent increase in

audience over FY96 speaks to the increasingpopularity of this program. The USA Express,a soldier show band, toured Turkey, Bosnia,Hungary, Kuwait, Panama, Korea, Japan, andHawaii during the holiday season.

qThe 1997 U.S. delegation to the eighthNATO World Chess Invitational Tournamentwas again composed exclusively of Armyparticipants. Although the team took sixthplace, they finished only a point and a halffrom a medal.

q Eight members of the World Class AthleteProgram qualified for biathlon and bobsledevents at the Winter Olympics in Nagano,Japan. For the biathlon, the Army athleteswere SPC Ntala Skinner, SPC KristinaSabasteanski, SPC Kara Salmela, SGTDaniel Westover, and 1LT Robert Rosser.For the bobsled, the athletes were SPCGarrett Hines, SPC Darrin Steele, and SPCDan Steele. Two other athletes qualified asalternates, with one named assistant coach inthe biathlon (CPT Chuck Lyda) and anotheras driving coach in the bobsled (1LT BillTavares).

qAll Army sports teams had a successfulyear, winning 8 of 17 contested ArmedForces Championships. An Army marksman,SSG James T. Graves, was named Army Male

Athlete of the Year, and a track and fieldathlete, SPC Niambi Dennis, took ArmyFemale Athlete of the Year honors and sharedthe Armed Forces Female Athlete of the Yeartitle.

SPC Niambi Dennis, 1997 Army

Female Athlete of the Year.

- Photo by Tony Duffy

SSG James T. Graves, 1997 Army

Male Athlete of the Year.

- Photo courtesy of USAMU PublicAffairs


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12


qMWR downrange continues to supportsoldiers deployed to Bosnia for OperationJoint Guard. Weight training, aerobic fitnessequipment, libraries (103,000 paperbackbooks), wide-screen televisions, Army & AirForce Exchange Service first-run movie videoservice, commercial phone access, and

Armed Forces professional entertainmenthelp pass time and provide a touch of home.To date, 89 civilian MWR professionals havevoluntarily deployed with soldiers to enhancequality of life and unit readiness. During

Operation Joint Endeavor, MWR established53 service points, promoting physical fitnessand providing recreational, social, and othersupport services. There are currently 26service points and 24 MWR specialists intheater. Additionally, AAFES provides foodand retail service at base camps.

Hospitality Programs

Aggressive marketing, high occupancy rates,and continued expansion efforts ensured that

Armed Forces Recreation Centers and theArmy Recreation Machine Program had a

very successful year. Operations maintainedan unwavering focus on the key successfactors for hospitality programming: cus-tomer satisfaction, value-oriented services,and quality facilities and equipment. FY97achievements include:

q Occupancy at Shades of Green for FY97closed at 99.3 percent. Room renovationsare complete on 100 rooms, and new in-room

amenities include coffee makers, irons andironing boards, clock radios, and safes. Totalunmet demand for accommodations equates toan additional 86 percent of the availablerooms. The 287-room hotel generated NIBDof $2.2M on total revenue of $13.9M.

q For AFRC-Europe, FY97 was a year ofchallenge as it supported a highly deployedtheater dedicated to peace-keeping missions,

such as Operation Joint Guardin Bosnia.Throughout the year, AFRC-Europe offered aseries of special vacation packages to reunitesoldiers returning from extended deploymentswith their families. The most demandedprogram, the Weekday Getaway, provided agroup package for returning battalions thatincluded transportation from home station,three days lodging and meals, and two days ofalpine activities. These reduced rate pack-ages, combined with reduced patronage due toextended deployments, resulted in a net lossbefore depreciation of $1.2M.

qThe Dragon Hill Lodge was awarded theSilver Award from the Educational Institute ofthe American Hotel and Motel Association.This award recognizes the hotels achieve-ments in measuring customer service, meetingcustomer service performance standards, andproviding certification and independent learningprograms for the hotel staff. This focus oncustomer service yielded an occupancy rate of99 percent and a NIBD of $6.1M.

qTwo years after the addition of the MaileTower, the 817-room Hale Koa Hotel achieved a96 percent occupancy rate and a NIBD of$7.3M.

qDespite troop reductions, flat slot machinerevenues, and increased costs of expandingamusement game operations, overall ArmyRecreation Machine Program revenueincreased by $1.3M from FY96. In FY97,operations produced $122.5M in revenue, ofwhich $101M (after expenses) will be used tofinance major MWR programs throughout the

Army.

Army Marksmanship Unit

The worlds finest team of shooters andgunsmiths had its most dominant shootingyear in the last decade, with 14 Nationalchampions, 4 World Cup medals, the Army

Athlete of the year, the U.S. Olympic Commit-tee Shooter of the Year, and Interservice TeamChampions in both rifle and pistol.

SSG Patrick Porter uses the

Military Occupational Specialty

Library at the John L. Throckmorton

Library, Fort Bragg, NC.

- Photo by Susan Spitalny


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13

Section 1

Support Services Initiatives

Asset Management/Privatization

With the approval of public-private ventureprocedures in FY97, the Army is now stagingdelivery on 19 projects. Partnering with theprivate sector supplements traditional MWRdelivery methods, allowing installations toleverage real estate assets to provide facilities

and services without NAF capital expenditures.In exchange for access to the MWR marketand a long-term land lease, a private-sectorpartner will finance, build, operate, andmaintain a facility or program, and provide anequitable return to the installation MWR fund.PPVs may not be viable everywhere, but canbe tremendous win-win opportunities.

The 19 projects currently planned represent apotential NAF capital investment avoidance of$134M. In perspective, the MWR NAF majorconstruction program is funded at approxi-mately $40M per year. Successful completionof just 25 percent of PPV projects wouldaugment MWR at a level equal to a yearsworth of regular construction. All currentprojects are in the United States (Status ofForces Agreement limitations may applyoverseas).

The PPV process is needs driven, beginningby request of the installation commander. The

Asset Management Office serves as extendedstaff for the garrison commander, providingcross-functional expertise to assist with theprocess. Negotiations are almost complete onthe Armys test project a car wash at FortCarson. Other PPV projects, in various stages

of solicitation or preparation prior to solicita-tion, cover a range of MWR programming:guest houses, golf, family entertainmentcenters, outdoor recreation facilities, carwashes, and movie theaters. Feedback fromprivate industry is favorable for the programand the procurement process.

Commercial Sponsorship andAdvertising

In 1997, commercial sponsorship incomewas reported for the fiscal (vice calendar)year. For the 9-month reporting period,installation and DA programs generated$12.4M in cash, goods, and services, almostmatching totalincome for FY96. Highlightsinclude:

q Findings from the Army Audit Agency onthe commercial sponsorship program(released 5 March 1997) rated the programas cost effective and adequately resourcedat most of the 56 responding installations.Key management controls were issued toassist installations in proper programmanagement.

qAdditional sponsorship for the 1997 DogDays of Summer concert tour ensured asuccessful tour of 12 installations in FY97.The Miller Brewing Company, AT&T, VISA,Brown Foreman, and local media compa-

nies continued their support from FY96 forthe tour, with new FY97 sponsors includingMagic: The Gathering, 7-Up, and Kodak.

q The U.S. Army Soldier Show continued itssuccessful tour with the sponsorship of theVeterans of Foreign Wars and theUSPA&IRA. Operating costs were alsosubsidized by additional advertising sold inthe shows program.

q The BOSS Commissary AwarenessCampaign partnered with 33 installationBOSS programs, the Defense Commissary

Agency, and eight commercial sponsors toprovide over $125,000 in cash and productsamples to support the campaign. Thiscampaign shows single soldiers the benefitsand savings of shopping at local commissar-ies.

Soldiers of the 1997 U.S. Army Soldier Show

entertain the audience with the hot song and dance

number, I Like It Like That.

- Photo by Kevin Kim


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14


Construction

Congress approved the FY98 NAF construc-tion program as submitted. Working withinstallations, MACOMs, the Army Secre-tariat, and the Office of the Secretary ofDefense, the construction directorate ensuredthe submissions accuracy and complete-ness. FY97 highlights are:

q

The FY98 NAF MWR major constructionprogram submitted to Congress totaled$49.5M in projects (AMWRF funding,$38.2M, and installation self-funding,$11.3M).

q Interior and foodservice designs werecompleted for 139 projects in FY97, includ-ing NAF major construction, CPMC renova-tions, and Army theme concepts. Themeconcepts remain popular with threeReggies, four Strike Zones, and fourMulligans in construction. The design staffparticipated in 14 assessment visits to

evaluate installations specific needs anddetermine preliminary construction costs.Completed projects include two Sports USA(Forts Stewart and McCoy), the Stryker GolfClub (Fort Bragg), the Catahoula Grill (FortPolk), a guest house (Walter Reed MedicalCenter), and a major kitchen renovation ofthe Hartel House (Korea).

q During FY97, CFSC delivered 11 majorconstruction projects, valued at $39M, forthe Armys MWR programs. As a jointservice initiative, CFSC signed a memoran-dum of agreement with Navy and Marine

Corps MWR to support their constructionrequirements on a cost-reimbursable basis,using CFSCs design-build process. CFSCexecuted four Navy projects and one MarineCorps project in FY97.

Contracting

The NAF Contracting Directorate continues todevelop First Choicestandards for excel-lence by further streamlining the acquisitionprocess and empowering procurementteams. Accomplishments for the year in-clude:

qAwarded six NAF major construction

contracts, valued at $21.9M, and six archi-tect-engineering task orders, valued at$225,000. These contracts cover suchdiverse projects as a theme restaurant, alodge, a travel camp, an automotive center,club and golf course renovations, and a youthcenter expansion.

qAwarded major contracts in support ofprograms managed centrally for installations(such as NAF Cash Management, WorkersCompensation Claims Adjudication, and the

Army Concert Series). Administered $13M inmajor contracts, calls on blanket purchase

agreements, and credit card and smallpurchases. In addition, approximately 40major contacts for various services, valued atover $12M, are currently being administered.

q Expanded the Lodging Success Programto ten hotels in Atlanta, GA, and San Antonio,TX, providing Army travelers with rates belowthe Joint Travel Regulation per diem. Reserva-tions are made through the Army CentralReservation Center. This program saves the

Army over $10M a year in travel expenses.

qExtended six regional indefinite delivery/

indefinite quantity contracts for projectvalidation assessments for an additional year.

Awarded 24 task orders valued at $585,000against these contracts. Awarded a regionalIDIQ contract for architect-engineer servicesin Europe. Two additional contracts, valuedat $8.7M, were awarded as a test to stream-line the design-build process.

q Executed 46 contracts, valued at $5.2M, insupport of the Armed Forces RecreationCenters, the Army Recreation MachineProgram, and Army Lodging.

Nineka Wright (left), Ingrid Santiago (center), and Matthew Brown

going after a grounder during a T-ball game at Vicenza, Italy.

- Photo by Laura Kreider


15/44

15

Section 1

Human Resources

The Human Resources Directorate continuedto recruit, place, train, and maintain theCareer Field 51 (MWR) workforce.

q The MWR Staffing and Referral Officeassisted commanders in filling key positionsby issuing 326 referral lists (217 NAF and 109

APF). Average processing time was 1.7

days.q Ten trainees were recruited for the NAFManagement Trainee program. Eight gradu-ates of the program were placed in perma-nent positions Armywide.

q The BOD granted concept approval fordeveloping and implementing a CentralizedCareer Management Program.

q The MWR Benefits Office initiated manyimprovements to employee benefits pro-grams. Employees can now use the internetto access 401(k) accounts and run retirement

projections. Medical and dental insurancewere added for NAF retirees. Military retire-ment service credit (up to 5 years) was alsoadded to the benefits program.

q The CFS Training Center trained 1,051students in FY97, with a full curriculum of 38courses. Virtually all annual training growthwas due to expansion of cooperative trainingwith other services. One Training Centerinstructor was also deployed to Bosnia tosupport MWR downrange and to learn,firsthand, the training needs of deployedMWR civilians. Four InstallationCommanders Courses were delivered in1997, training 18 general officers in installa-tion management and MWR.

Information Management

Implementation and fielding of the MWRManagement Information System continuedin FY97. Specific accomplishments included:

q Enhancements and Year 2000 compliancefor the Time Labor Management System.Ninety-six percent of worldwide NAF payrollaccounts performed total electronic transfer

of data to the Defense Finance and Account-ing Service Central NAF Payroll Office at RedRiver Army Depot, TX. TLMS is the labormanagement portion of the NAF workforcemanagement system. The cost of processingpayroll dropped from $2.15 to $.95 a pay-check.

q Continued development of a Windowsversion of the Financial Management andBudget System. With many enhancements

and user-friendly tools, FMBS will provide anannual NAF budget development tool forinstallations.

qFielded the Recreational Tracking Systemto 76 locations worldwide. RecTrac! providesfacility and activity reservation and registra-tion, league and tournament management,and a point-of-sale system for rentals andsnackbars. Over 1,500 users were trained in

FY97.qFielded the Golf Tracking System to 60locations worldwide. GolfTrac! provides golf-course program management and a point-of-sale system for fees and retail operations.Over 500 users were trained in FY97

q Continued sustainment of version 2.4 ofChild Development Services AutomatedManagement System. Development iscontinuing on CDSAMS version 3.0, to bereleased in 1998.

q Completed Armywide fielding of a Win-dows version of the Standard ManagementInformation Reports for Finance system.

q Completed testing of a proposed StandardNAF Automated Contracting System. Thefirst solution failed acceptance testing, andthe second solution will be tested in earlyFY98.

qSelected Fort Sill, OK, and AberdeenProving Ground, MD, as model installationsfor total implementation of the MIS systems.

Marketing

Change 3 to the MWR Strategic Action Planformally recognized marketings contributionin providing demand-driven programs,activities, and services essential to readi-ness and the quality of life of Americas

Army. The transition from Strategic Goal #6,Support Services, to Strategic Goal #2,Programs, recognizes marketings responsi-bility, disassociates it from overhead, andmakes it a participant in the delivery ofprograms, events, and services.

The MWRSAP formalizes a requirement to

provide appropriate market information to allMWR programs and to ensure installationaccess to all marketing disciplines. TheMWRSAP requires each installation todevelop and implement a Strategic BusinessPlan. The MWR Strategic Business Plan-ning Handbook and its accompanyingGuidebook, distributed in 1996, provides in-depth, how to support for this process.


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Major revisions to the MWR Strategic ActionPlan were also developed. Since publication inOctober 1994, most of the plans actions havebeen completed (e.g., financial standards,enhanced NAF employee benefits, a stream-lined construction process, and a globalmanagement information system). Proposedrevisions add objectives based on MalcolmBaldrige and the Presidents Quality Awardprocesses, allowing MWR to explore best

business practices and performance-basedmeasures. Combined, the updated vision,mission, goals, and strategic action planstrengthen planning and refocus MWR onglobal, long-term continuous improvement anda total customer orientation.

The demographics of the Armys soldiers andfamily members are changing. As shown atFigure 1-13, a declining population of soldiersand family members is becoming increasingly -based in the continental United States.

CFSC collected additional data to documentthe impact of MWR programs on readinessand quality of life:

qThe Walter Reed Army Institute of Researchcompleted an assessment of burnout among

Army volunteers and its implications for soldierand family readiness. Results show thatburnout is not a serious problem for most Armyvolunteers. Only 15-20 percent of the 700respondents reported burnout, but due to thelimited number of volunteers, increasing

demands, and a lack of resources and appre-ciation for their efforts, burnout could become aproblem in the future.

qData from the Fall 1996 Sample Survey ofMilitary Personnel reported high soldiersatisfaction with Army family, recreational, andchild and youth programs (Figure 1-14). Thereport also noted that 38 percent of enlistedpersonnel and 15 percent of officers partici-pated in the BOSS program, and 73 percent of

The second Armywide survey of leisureactivity participation and customer-perceivedquality of MWR programs and facilities wascompleted in May, with seventy-two installa-tions participating. Eighteen U.S. ArmyEurope and Seventh Army sites will be

surveyed in 1998. From an Armywidedatabase of the results, CFSC issuedMACOM and installation reports electroni-cally, eliminating printing costs. Based onsurvey data from all market segments, thetop ten most desired MWR programs are atFigure 1-11.

In March, 120 Army marketing personnelwere trained in conjunction with the AmericanLogistics Association Trade Show in Dallas.The training featured performance-oriented,graduate-level marketing instruction. Private-industry managers discussed delivering value

through marketing leadership, leisure needssurvey report interpretation, and methodolo-gies for measuring marketing effectiveness.

Strategic Planning and Policy

In late FY97, broad revisions to the MWRStrategic Vision were forwarded to the BODsExecutive Committee for approval, including anew MWR vision and mission statement(Figure 1-12), intended to make Army MWRprograms the first choice for patrons.

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17/44

17

Section 2

officers and 61 percent of enlisted personnelconsider AFRCs a better value than commer-cial recreation opportunities.

The Army continued to make progress inrecouping NAF resources from real property

disposal at Base Realignment and Closuresites. From property disposal at three BRACinstallations in FY97, NAF will recoup $4.5Mfrom deposits to the U.S. Treasury Reserve

Account. NAF shares of future BRAC pay-ments will total $5.5M. To date, a total of$2.2M in BRAC funds has been received forNAF severance pay and relocation costs.

In late 1997, the BODs Executive Committeechartered an MWR Contingency OperationsSteering Committee, whose charter is toestablish doctrine, policy, and operationalplanning guidance to support MWR in de-

ployed scenarios. Doctrine must be continu-ally monitored. In many cases (e.g., Somalia)civilian assets may not be approved into thecommand, thus units must be self-sufficient forMWR until follow-on support is available.

Additionally, no requirement or definition of kitsexists to support recreation above the unitlevel. At its inaugural meeting in Heidelberg,Germany, the committee developed an actionplan to modernize contingency operations andrevised MWR contingency doctrine and policy(pending publication). The COSC action planreturns responsibility for deployed recreation to

the Unit Commander while the DCA/DPCA hasthe responsibility to train unit personnel prior todeparture.

Public Affairs

The public affairs office promotes Army MWRthrough command information, public commu-nication, and community relations. Significantaccomplishments for FY97 were:

qProduced six issues (33,600 copies) ofFeedback, the Armys MWR commandinformation newsletter. Three issues contained

24 pages and three contained 28pages, with an average cost of$.95 per copy. Eighty-ninepercent of respondents to areader survey considerFeed-backuseful to their jobs, and 85percent find the publication to bea good source for new ideas.

qSubmitted 38 hometown news

forms to the Army/Air ForceHometown News Program,generating 171 hometown newsreleases.

q Established a special MWRfolder on the Army Public Affairsnetwork, PA Link. Armyinstallation and unit publicationeditors can access and download CFSC PAOnews releases, features and photographs,allowing wider use of news releases (44 inFY97).

q

Coordinated with Soldiers Magazine on aspecial two-page feature spread of the U.S.Army Soldier Show in the August 1997 issue.

qContinued our partnership with SoldiersRadio and Television. The CFSC broadcasterproduced more than 90 radio stories and 23television news or feature stories for SRTV.He traveled to Bosnia to document MWRsupport to Operation Joint Endeavor/Guardand used the footage to produce a documen-tary film about MWR Downrange. He alsodeveloped and produced a special MWR radioshow called MWR Break, broadcast to

CONUS installations via Soldiers SatelliteRadio Network.

qPartnered with the Marketing Division todesign and produce 10,000 copies of a 44-page, four-color MWR booklet to educateinternal and external audiences about CFSC

and MWR programs.

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PFC Jason Shuman plays guitar

during down time at Comanche

Base in Tuzla, Bosnia-Herzegovina

- Photo by SPC James R. Sapp


18/44

18


Business Programs

The Internet is fast becoming the worldschoice for communication and information.Internet communications with soldiers,MACOM and installation MWR programmanagers, and activity managers will soonbecome the medium of choice.

The Army MWR website, at http://

www.armymwr.com, hosts a wealth ofinformation, from bowling, golf, and food andbeverage benchmarks, to guides for develop-ing business plans, theme concepts, andFort Excellence. Fort Excellence is arepresentation of excellence in Army busi-ness programs, describing the facility,staffing, maintenance, and operations from acustomer service, operational, and financialperspective. Sample business plans are alsoprovided. Fort Excellence currently com-prises the Eagle Trace Golf Course andPatriot Lanes Bowling Center, with a food andbeverage site planned for FY98. Program

benchmarks are updated every two years andplaced on the web, providing easy access tocommanders and managers.

Plans include a virtual ticket office on theinternet where soldiers can purchase ticketsfor events or air travel, with local MWR fundsreceiving a commission. This will reduce

labor expense and overhead cost, whilealso providing soldiers 24-hour ac-

cess.

We continue to focus on food,beverage, and entertainment pro-

grams that are responsive to the needsof soldiers and families. Tailored to local

market demands, theme concepts are beinginstalled at many CONUS and OCONUSlocations.

A primary objective in FY98 is to improve theinfrastructure of golf courses, especiallyirrigation systems and maintenance facilities.In the FY99 construction program, the BODreserved funding for construction of mainte-nance facilities; however, many courses alsorequire irrigation systems to maintain the

course and generate additional revenue andnet income. Alternative funding strategies forirrigation projects are in development. Golfand bowling Pro Shop operations will beimproved by expanding consolidated buyingopportunities and improving product selectionand display.

The Army Lodging Directorate will proceed withthe purchase and implementation of a commer-cial, off-the-shelf property management systemfor lodging operations. Guest house opera-tions are included in the system test, with theultimate objective to include guest houseoperations in the deployment plan, therebystandardizing property management practicesand reporting capabilities throughout the Army.

Family ProgramsIn April 1998, CFSC will host the initial biennial

Army Family Action Plan Process ActionTeam. The AFAP PAT takes the place of theHQDA AFAP Conference in non-conferenceyears and ensures a forum for grassrootsrepresentatives to review issues from the fieldthat are raised to Department of Army level.The PAT will be composed of eighteen soldiers,family members, and retirees, who will presentrecommended new issues to the Vice Chief ofStaff, Army, during the AFAP General OfficerSteering Committee meeting.

The FY97 Presidential Executive Memorandumon Child Care will result in many initiatives. Inaddition to the newly formed child care informa-tion clearinghouse and speakers bureau, DoDplans include a training video for state childcare administrators, a military child develop-ment web site, and child care programs ofexcellence. The Army will participate in eachinitiative and will also develop a tour protocolguide for military child development programmanagers and serve as executive agent for athree-day Joint Services Child Care Confer-

ence.Child care benchmarks will be developed inFY98 to evaluate availability, affordability, andquality of care. In addition, a new child andyouth services initiative, Promise Passport, willbe launched to encourage volunteering andcommunity service, thereby building on thePresidents Summit for Americas Future.

In FY98, the Army will seek to expand itspartnership with the Boys and Girls Club of

America to further enhance youth programmingat installations. This will allow installations to

participate in regional and local training,contests, and take advantage of technicalassistance and member publications. Thenumber of participating installations shouldincrease from eight to twenty by year end.

Army Community Service will continue to focuson program evaluation and outcome measuresas it completes restructuring efforts in FY98.

Benchmarks for golf,

bowling, and food and

beverage operations

can be found at Fort

Excellence, at

www.armymwr.com

Eagle Trace

Golf Course

strategiesfor thefuture

fy98 andbeyond

Section 2


19/44

19

Section 2

Recreation Programs

The Recreation Delivery System will be fullyimplemented Armywide by FY01. Installationscan choose to implement either by desk-sidereference manuals or by requesting assistanceteams to lead them through the necessarysteps.

The World Class Athlete Program will begin

training for the Xlll Pan American Games,scheduled for August 1999, and the XXVllSummer Olympics, in September 2000.

In FY98, the Automotive Skills Program willbring hands-on technical training to moreindividuals at less cost than ever before via atraveling technical training program. A profes-sional trainer will travel to approximately 25installations to provide two-day workshops onautomotive diagnostics and repair.

Library priorities are to update baselineautomation, improve access to materials, andaugment inter/intra-library data connectivity.Central purchase of reference and other basicmaterials will continue, as will the focus onproviding paperback books to soldiers in thefield. In FY98, DoD expects to publish stan-dards for achieving and maintaining qualitylibraries.

Hospitality Programs

For AFRC-Europe, aggressive marketing effortsare underway to increase patronage. In FY97,aggregate AFRC-Europe occupancy rates were79.8 percent in the five hotels in Garmisch and

Chiemsee (337 guestrooms). Extendeddeployments from the theater were the majorcause of reduced occupancy.

At the Hale Koa Hotel, a $1M renovation ofIlima Tower guestrooms is slated for comple-tion in February of 1998, with a 6-7 year $35Mmajor renovation of the 22-year-old infra-structure to begin by the end of the calendaryear. This project will be funded with revenuesgenerated by the AFRCs.

Design of the planned Dragon Hill Lodgeexpansion was completed in FY97. Theexpansion, to be completed in FY00, will add atwo-level parking garage and 95 additionalguestrooms for a total of 396 guestrooms.

Planning began in FY97 to relocate the ArmyRecreation Machine Program headquartersfrom Frankfurt, Germany to Fort Carson, CO.This relocation of personnel and assets, to becompleted by May 1998, will result in anestimated annual cost savings of $1.2M.

Army Marksmanship Unit

The Army Marksmanship Unit will expandits role in enhancing Army combat readi-ness. As directed by the Armys Chief ofStaff, AMU will review Army basic riflemarksmanship training. AMU will alsoincrease support to the U.S. Army Recruit-ing Command and double the frequency ofclinics and demonstrations to share

shooting lessons learned. As the SydneyOlympics approach in 2000, AMU plansanother dominant shooting year.

Support ServicesInitiatives

Asset Management/Privatization

In response to the growing governmentemphasis to seek alternative means toprovide facilities and services, the CFSC willcontinue to pursue NAF public-private

ventures and also explore how best to partnerPPVs with other privatization opportunities.As part of an ongoing improvement andrefinement process, the Asset Management/Privatization Office will focus on how tostreamline the PPV process to providegreater benefit to MWR and the Army family.Our experiences and expertise will be sharedwith the other Services and other governmententities through formal Memoranda of Agree-ment and informal consultation.

Contracting

Future initiatives include a consolidatedprocurement of amenity kits and fitnessequipment; a consolidated procurement oflibrary books for the Army and the Navy; anda joint Fort Sill, Army Materiel Command,and CFSC test of an integrated, standardizedNAF contracting system for potential

Armywide fielding. Designed to automateprocurements from purchase request throughcontract award and close-out, the system willalso collect trend data needed to projectfuture requirements. A module for Interna-tional Merchants Purchase Authorization

Card credit purchases is included. Plansalso include internet electronic commerce.

The first annual Army NAF Purchase ReviewBoard met in June 1996, and identified 20supply items to include in the Army and Joint-Service Standardized and Consolidated

Acquisition Program. The PRBs charter willbe revised in FY98. Efforts continue toincrease PRB representation from golf andbowling program managers.


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Construction

The Construction Review Board will transitioninto the Capital Investment Review Board, inaccordance with the Strategic Action Plan.The CIRB will continue to review the NAFMCprogram based on a matrix evaluation. A newNAFMC matrix and a minor constructionmatrix will be reviewed by the MWR BODsWorking Group in August 1998 for possible

implementation during the January 1999 CIRB(for the FY00 construction program). Inaddition to the NAFMC and minor construc-tion review, the CIRB will review specialproject requirements and public/privateventure start-up funding.

Human Resources

The future quality of key MWR managersdepends on implementation of a CareerManagement Program for Career Field 51.Phase I (executive level) will be implementedin 1999, with Phases II and III (specialist and

entry level, respectively) implemented by2001.

Development and delivery of training forRecreation Program Managers will be basedon the training needs assessment conductedthis past year.

The Training Center has been studying theapplication of distance/distributed learningtechnology to the Master Training Program.The CFS Management Course has beenavailable by correspondence for two years,and the Basic NAF Contracting Course will

be available by correspondence in May 1998.The goal is to have 25 percent of the TrainingCenters curriculum delivered via distancelearning by 2003.

The Defense Authorization Act for FY95mandated a uniform health benefits programfor DoD NAF employees. The DoD NAFHealth Benefits Plan, to be effective1 January 2000, will consist of: PreferredProvider Organizations, Point of Service, Outof Area Option (traditional indemnity), dentalcoverage, and subsidized retiree medical/dental coverage.

Marketing

In coordination with the Army ManagementInformation Steering Committee, plans areunderway for a data warehouse and on-lineanalytical processing capability for ArmyMWR. When completed in FY00, this willprovide market management information toprogram managers.

Twenty Army level programs have beenidentified that require complete marketingplans. Three plans are scheduled for FY98:

AFRC Europe, the Recreation Delivery System,and theme restaurants.

The role of the MACOM Patron SurveyAdvisory Council has expanded. The Councilwill assist in assuring installation commanderaccess to all disciplines necessary to support

the complete marketing process.The first 80-hour course for Army MarketingManagers will be conducted in FY98 at Texas

A&M University in College Station, TX.

Strategic Planning and Policy

Development and fielding of the InstallationStatus Report Part 3 - Services will continue.Functional proponents at CFSC will reviewfeedback from a field test of quantitativestandards. Installations will then conduct an

Armywide evaluation, and functional propo-nents will draft qualitative standards, or howwell done standards, for services.

In late 1997, CFSC convinced the AssistantChief of Staff for Installation Management toinclude the residual base operations functionalarea assessment issue, Prioritize Quality ofLife Services, in ISR Part 3. The originalrecommendation was to create a rank orderedlist based on contribution to readiness, missionof the installation, and availability of off-postresources. However, that approach infringedon installation prerogatives, failed to acknowl-edge the importance of revenue generating

programs to MWR, and required an installationby installation review. Once program servicestandards are implemented, installations candetermine for themselves if their level ofinvestment provides a satisfactory return.

The MWR Contingency Operations SteeringCommittee will continue to develop doctrine,policy, and operational planning guidance tosupport Army deployments. Joint Chiefs ofStaff planning guidance to warfighting Com-mander-In-Chiefs will include kits for programsabove the unit and will standardize and prepo-sition these kits for expedited deployment.

During post-deployment, the kits will bereturned to the materiel management systemsto be refurbished and placed on-line for thenext deployment. These two steps, and muchmore, have been submitted as changes toField Manual 12-6, Personnel Doctrine. Jointpublication 1-0 (draft) will also include MWR inall Joint Operations Planning.


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21

Section 3

A quality workforce iskey to deliveringeffective programs. Toreach this goal, MWRmust develop, improve,and adapt programsand systems to

improve managementand effectiveness of adiverse workforce.

Career Development Programs

NAF Management Trainee

Each year this centrally funded program placesup to 10 college graduates in MWR positions.In 1997, ten trainees were hired into the traineeprogram: three in club management, two inhospitality, two in marketing, two in outdoorrecreation, and one in golf management.MWR conducted regional training at FortsHood, Bragg, Myer, Lewis, Benning, Carson,and the Shades of Green. In FY97, eightgraduates from the FY95/96 programs com-pleted on-the-job training and moved intopermanent positions.

Continuing Education Units

Popular in the field and at the CFS TrainingCenter, students earn Continuing EducationUnits for completing Training Center coursesand installation, MACOM, and Headquarters

training events that meet standards set by theInternational Association for ContinuingEducation and Training. One CEU is awardedfor each ten contact hours of instruction in asponsored nonacademic setting.

Training with Industry (TWI)

The TWI program remains open to MWRpersonnel as a career enhancement opportu-nity. Prior training with organizations such asthe Atlanta Committee for the Olympic Gamesand Oglebay Park Conference Center exposedparticipants to unique learning environmentsthat benefited the installation and the Army.

Job Swap and DevelopmentalAssignments

Job Swap exchanges usually last for sixmonths, although timeframes and locations arecarefully constructed to meet the needs ofprogram managers and the individuals involved.Developmental assignments are long-termassignments at CFSC headquarters.

Master Training

In FY97, the CFS Training Center conductedresident training for 1,051 students (program-level to installation command). Figure 3-1highlights cumulative training attendancesince 1988. The Center significantly ex-panded cooperative training ventures withother Services. The Applied FinancialPlanning and Forecasting course is popularwith Marine Corps managers, and the MarineCorps Senior Managers Course is now anintegral part of the curriculum.

The American Council on Education, in anannual review of Training Center courses,maintained college credit eligibility forstudents of resident courses. These coursesprepare the workforce for the challenge ofdeliveringFirst Choice, customer-driven MWRprograms to soldiers and their families.

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Section 3

NAF Employee BenefitsIn FY97-98 the Preferred Provider Programcontinues to operate without an increase inpremiums, a result of switching from the fee-for-service plan in 1996. Savings generatedby this managed care program are reflectedin annual premium stability. The PPPservices 95 percent of CONUS participants.This program will end and become the NAFHealth Benefits Plan effective 1 January 2000,in accordance with the Defense Authorization

Act for FY95.


22/44

22


Army MWR corporate finances are thecombined total performance from fieldoperating NAFIs, the ARMP, and the

AMWRF. Section 1 of this report shows howthese elements, taken in the aggregate,performed from FY96 to FY97. In addition,Section 1 reviews field operating results forthe same period. Below are the summarizedbalance sheet (Figure 4-1) and the summa-rized statement of income and expense

(Figure 4-2), which support the analysis in theexecutive summary. The remainder of thissection addresses individual HeadquartersDepartment of the Army funds managed atCFSC.

As of 30 September 1997, the overall financialposition of Army operating funds remainedsound. The Army continues to invest inmodernizing the MWR physical plant,increasing the fixed-asset base by $53.4Mduring the year. Current assets rose by$18.1M with current liabilities increasing only

$7.5M. Other assets show an increase of$15.3M due to the AMWRF picking up a long-term loan receivable that had not yet beenrecorded on an installations books. As of 30September 1997, the outstanding balance ofthe AMWRF loan to the Army Banking andInvestment Fund was $125M reflected in long-term liabilities.

Figure 4-2 illustrates the statement of FY97

APF and NAF operations compared withFY96. The NAF revenue and expenses havebeen reduced by $3.1M in this display topreclude overstatement of resources due tothe Uniform Resource Demonstration. UnderURD, APF and NAF are combined into asingle resource, with MWR services beingprovided using NAF rules and procedures.The APF portion of URD is reflected under theOperations and Maintenance Army accountand other appropriations. Total APF supportincreased $3.1M, primarily in Military Person-nel Army and other appropriations (such as

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1-4erugiF

financialreport

army mwr

Section 4


23/44

23

Section 4

Army Working Capital (formerly DefenseBusiness Operations Fund), InformationSystems Command, and Research, Develop-ment, Testing and Evaluation). NAF revenueincreased $58.4M over FY96, largely becauseof $41.6M in increased AAFES payments toMWR (a $23M increase in AAFES core dividedto AMWRF, $16M in tobacco earnings, and a$2.6M increase in the Army Simplified Divi-dend). Additionally, fees and charges in-

creased $13.6M. NAF expenses declined$4.7M. Of particular interest is the shift ofoverhead labor (-$5.6M) to operating labor(+$3.2M) and an overall decrease in otherexpenses of $3.3M. The NIBD yielded a $63Mincrease over FY96. FY97 was the first year inrecent history that also reflected a positiveNIAD Armywide. However, the field NAFIcomponent of the Army operating funds still didnot generate enough income to maintain levelsof capitalization annually.

Army Morale, Welfare andRecreation Fund

This is the MWR Board of Directors fourthyear of financing strategies to modernize theMWR NAF physical plant. The long-rangeplan redirects field NAFI revenue to the

AMWRF for worldwide application andauthorizes borrowing from the Army Bankingand Investment Fund. FY97 saw the continu-

ation of this extremely aggressive capitaliza-tion plan with over $65M paid out for regularconstruction, $15.2M for managementinformation systems, and $3.8M for EighthU.S. Armys cable television program. Whilethe largest portion of the AMWRFs cashfinances capital requirements, the fund alsoinvests in other Armywide programs, such asmaster training, interns, patron surveys, andmarketing. The next largest allocation is forfield services such as the Army Soldier Show,

Army Sports, arts and crafts contests, and

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24/44

24


BOSS, as well as self-sufficiency exemp-tions. Finally, the fund supports a portion ofthe NAF administrative budget for CFSC.Figure 4-3 shows how the AMWRF dollar wasallocated for FY97.

Army Recreation Machine TrustFund

The ARM Trust Fund, established to adminis-ter the Armys Recreation Machine operatingprofits, continues to be one of the mostconsistent sources for financing MWR capitalrequirements. During FY97, the fund received$76.4M in profit distribution from ARM

operations. The profits were down $2.7Mfrom the FY96 level, largely because ofdeclining customer bases in both Europe andthe Far East. Major uses of cash for FY97

on a cash-flow basis (which included cash onhand at the beginning of the period) were$74.5M in shared distributions, $1.2M forconstruction, and $6.7M for internal ARM

operations capital needs.

Army Banking And InvestmentFund

The Army Banking and Investment Fundmanages a pool of U.S. Government securitieson behalf of its participants and pays interestbased on the earnings of that portfolio. DuringFY97, the ABIF provided cash managementand investment services to 425 Army and DoDentities. Participants earned a compoundedrate of 5.84 percent on their average depositedbalance. During the year, the ABIF distributed$15M as interest income.

Invested cash rose slightly during the year,from $268M on 30 September 1996 to $274Mon 30 September 1997. Current projections

(Figure 4-4) reveal that FY98 will experience adecline to $260M, but FY99 and out will see agradual increase.

Army Central Insurance Fund

Despite suffering some heavy losses in the tortprogram, the ACIF showed a net income of$7.2M. This net income was primarily due tothe annual actuarial study, which reducedreserve requirements for the WorkersCompensation Program. This excess reservewill be returned to NAFIs in the way of areduced rate for FY98. In the same manner,

Unemployment Compensation costs werereduced to $3.3M, also resulting in a ratereduction. The Property Program did notsuffer any major catastrophic losses; moneyand securities and fidelity bonding losseswere lower than previous years. DuringFY97, employee and customer safety wereemphasized. Safety posters and an analysisof paid tort claims were provided to NAFI fundmanagers in an effort to make staff members

more aware of safety concerns.

Army Central Retirement Fund

The ACRF represents the total of employeeand employer contributions and investmentearnings on those contributions (plan assets)for the U.S. Army Nonappropriated FundEmployee Retirement Plan. The fund paysaccrued benefits to participants and theirsurvivors.

Figure 4-4

Army Banking and Investment FundDepositors Balances

31 530 829 627 026 0

27 426 8

35 1

45 6

52 9

63 465 8

0

10 0

20 0

30 0

40 0

50 0

60 0

70 0

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02

$ Millions

(Net ofAMWRF Loan)

Figure 4-3

Uses of an AMWRF Dollar

15 %

7%

78 %

Construction and Program InvestmentField Services and Self-Sufficiency ExemptionsCFSC Administration


25/44

25

Section 4

As of 1 October 1996, the date of the lastavailable plan actuarial valuation, the value ofbenefits that participants have earned to date(actuarial present value of accumulated planbenefits) was $321.7M. This value is theamount required to satisfy all the plansobligations if it were terminated today. Themarket value of assets available on 1 October1996 was $361.9M; therefore the funded ratiowas 113 percent.

A more important measure of the plansfinancial health is its ability to meet theobligations for benefits that will be earned inthe future. An enrolled actuary makes thesecomputations annually. The total actuarialaccrued liability as of 1 October 1996 was$354.6M, compared with $318.5M one yearbefore, with the actuarial value of assets$328.5M. Therefore, the unfunded actuarialaccrued liability was $26.2M on 1 October1996. Amortization of this shortfall will con-tinue over several years and is reflected in the

rate charged employers and NAF employees.Retirement plan assets are in a trust fund thatcan be used only to provide benefits toparticipants as authorized by the plan. Fivetrustees control the trust and are responsiblefor investing assets in authorized investmentssuch as stocks, bonds, real estate, andgovernment instruments. Assets are investedso that, over time, the return on investmentmeets the long-term assumptions on whichthe plan is based. The plan paid NAF retireesand their beneficiaries $18.3M in FY97including a 2.9 percent COLA on 1 April 1997.

On 30 September 1997, the plans assetstotaled $433M. These assets were investedas shown in Figure 4-5. The return oninvestment earned by these assets for theyear ending 30 September 1997 was 22.4percent.

Army Medical/Life Fund

The Army offers health,dental, and life insurancebenefits to its regular NAFemployees. The AMLF

collects premiums fromemployers and employees(and the Army MWR Fundfor the self-insured pre-ferred p

Documents

FMWRC Annual Report 1998