July 2011


Washington MO 1922 post office, back on the closing list

July 31, 2011

 

Handle with Care: Saving Washington, Missouri’s Old Main Post Office

Written by Erica Stewart

A nearly two-year campaign to save a downtown post office might seem a bit bewildering to a city dweller. I can set out in almost any direction from my home in northeast Washington, DC and find a padded mailer for sale (behind bullet-proof glass unfortunately, in some cases) in five minutes flat. But the effort waged in Washington, Missouri to keep its Old Main Post Office open and operating was about more than just having a convenient place to buy postage stamps. It illustrates the importance of downtown’s historic assets to Washington’s economic development while preventing the loss of a key piece of the community’s fabric.

When the United States Postal Service (USPS) decided to close the station to offset financial loses, that was a direct affront to the downtown revitalization efforts of the Downtown Washington, Inc. (DWI) Main Street organization and its sister organization, the Historic Washington Foundation. Washington, a town of approximately13,200, is about an hour’s drive from downtown St. Louis.

For more than twenty years, DWI has worked to promote an attractive and financially stable downtown while preserving historic resources. The Historic Washington Foundation (HWF) promotes sensitive adaptive use of blighted or underutilized real estate while preserving the history of the community. A vacant historic landmark and a reduction of essential services within the downtown district was simply not part of their vision for Washington’s future.

Coming Soon!

Coming Soon!

So, the two nonprofit organizations took matters into their own hands. HWF made a bid to purchase the historic building with the goals of restoring it to its 1923 appearance, creating new retail space, and keeping the postal operations intact. Eighteen long and unpredictable months later, the purchase of the post office was approved and the property was transferred to HWF in late May, 2010. Work is now underway and is expected to take between 18 months to two years to complete.

The rehabilitation is expected to cost between $400,000 and $500,000 and is being financed by HWF, including grants, tax credits and a $10,000 grant from the Johanna Favrot Fund for Historic Preservation by the National Trust for Historic Preservation.

Downtown Washington, Inc. has already moved into temporary office space in the property but once the lobby renovation is complete, the center of the building will serve as their permanent office. DWI will be joined by new and existing businesses at the project’s conclusion as well. DWI will manage the postal operations through a contractual arrangement with USPS. In the meantime, the Post Office is open for business and Washington leaders are ecstatic.

“We couldn’t be more excited,” said Bridgette Epple, executive director of DWI. “This really is a dream come true. We were literally jumping up and down when we heard the news.”

As a successful adaptive use project, the Old Main Post Office project will act as a catalyst for economic growth and impact the quality of life for the entire community. The project “will bring new jobs, contribute to the local economy and the support the city’s tax base,” says Richard Hopp, president of HWF. “The additional revenue to the city will help produce good roads, police protection, even more mundane things like park benches and plantings. That is what the population will see and feel and enjoy.”

Lauri Michel, Vice President of Community Revitalization at the National Trust for Historic Preservation recently visited Washington and the post office project and was struck by the “can do” spirit of dedicated individuals cultivating downtown living in Washington. She credits the wealth of relationships between the Main Street organization, business owners, lenders, City Hall and residents with creating a vision for Washington that revolves around a strong, vital downtown district and making it happen—one postage stamp at a time.

Erica Stewart is the outreach coordinator for the National Trust for Historic Preservation’s community revitalization department.

Reprinted from the National Trust for Historic Preservation.

What the Postal Service Doesn't Want You to See: An Interactive Map of the Closing List

July 30, 2011

What the Postal Service doesn't want you to see: An Interactive Map of the Closing List

Welcome to Ye Olde Village Poste Office

July 30, 2011

On July 26, 1775, the U.S. postal system was established by the Second Continental Congress, with Benjamin Franklin as its first postmaster general.  In its profound wisdom, the Postal Service chose July 26 to release a list of 3,653 post offices that will it be studying for closure over the coming months.  The list even includes the B Free Franklin post office, a museum dedicated to Ben Franklin and the creation of the post office. 

The next day the Postal Service released a second list, this one with 727 post offices, stations and branches already heading for discontinuance.  (A list of 727 post offices released on 7/27.  They know how to pick their dates.)  That’s 4,380 post offices, and it doesn’t include at least 150 that have been closed over the past several months, and probably a few hundred that have fallen in the cracks.

If you want to get a sense of what all those closures look like, check out the interactive map of the closing list presented on Tuesday.  You’ll see the whole country blue with markers indicating the post offices slated for closing.  The map says it all.

We’re witnessing the largest effort to close post offices in the country’s history.   For the past 40 years—since the Postal Service was created out of the old Department of the Post Office—they’ve closed post offices at the rate of about a hundred a year.  Over the coming year, they want to close 30 or 40 times that many, and over the next six years, 16,000—half the country’s post offices. 

There have been over three thousand news reports about the release of the closing list this week, and nearly every one says the same thing — basically the USPS press release about how much money the Postal Service is losing and how everyone is using email, and nothing about what's really behind the mass closures, nothing about the huge corporations that have been making billions off the Postal Service for years, nothing about how "rightsizing" the postal system is part of a plan to privatize it. 

Most of the articles also repeat the Postal Service’s line that just because a post office is on the list doesn’t mean it will ultimately close.  Some articles make it sound like the Postal Service isn't really serious about closing all those post offices—it's just "mulling" it over.  This is just wishful thinking designed to put everyone back to sleep.  

(By the way, speaking of how the news media are covering the story, don’t miss the Washington Post editorial endorsing the Ross-Issa Postal Reform Act.  Who wrote this thing, Fred Smith or the Cato Institute?)

Nowhere in the reporting on what’s going on will you read what should be obvious.  The Postal Service is not going to stop with the lists this week.  It is closing down our post offices, period.  It will continue to develop its “alternative retail network” of kiosks, contract postal units, and internet business so that in six years, there will be no need for post offices at all, and they can proceed to close the rest, perhaps leaving the cream, a couple of thousand of the big money-makers, probably to be sold off to a private corporation.

The best part is the way the Postal Service puts an Orwellian spin on the whole sorry business.  Downsizing postal workers out of their jobs is called "rightsizing," and now they call the push to close 3,653 post offices a “Retail Access Optimization Initiative."  On the website where the Postal Service lists the post offices being studied for closure, they call it the “Expanded Access Study List.”  Only the Postal Service could close thousands of post offices and call it “expanded access.”  And killing post offices—oh, that’s called “consolidating,” “discontinuing,” and “optimizing.”   

Ben rolls over in his grave: B Free Franklin post office, on the chopping block

July 26, 2011

Is nothing remotely sacred to the people in L'Efant Plaza?  Myfoxphilly.com is reporting that the B Free Franklin post office, one of the icons of American postal history, is on today's closure list:

"The post office is at Franklin Square in Philadelphia's Independence Mall area and is adjacent to the U.S. Postal Service Museum. It is on the location of Ben Franklin's house and it is the only post office that doesn't fly a U.S. flag — because the area pre-dates the Revolution.

"And in a double insult, Franklin's push to get the Post Office established as an entity was enacted on July 26, 1775, and the current museum and neighboring post office were unveiled on July 26, 1975.

"So on July 26, 2011, the facility got word it will likely be shutdown unless a company takes over running the small post office."

(Photo credit: B Free Franklin p.o.; sign)

Closings in the Heartland: Breaking down the Iowa closure list

July 26, 2011

Iowa has about 960 post offices, and there are 180 on the closing list.  That’s almost 20% of Iowa’s post offices, and almost twice the national average of about 11% (3,600 out of 32,000).  And that's on top of the 80 or so already marked for closing.  Iowa Backroads is doing a fantastic job keeping track of all the closings and news articles, along with a great gallery of photos.  Someone in every state should be doing the same.

The country’s post offices are approximately 85% main post offices, 15% stations, but in Iowa, nearly every post office is a main post office.  There are very few stations and branches because of the rural nature of the state. 

About one-fourth of the country’s post offices are owned, and three-fourths are leased.  Of the 180 on Iowa’s closing list, about 20 are owned and 160 are leased, so a larger number than the national average are leased spaces, and none of the owned properties dates back before 1988.  Not that there aren't some old post offices in Iowa, including New Deal p.o.'s, as well as some beautiful examples of vernacular styles.

Looking at the 160 post offices leasing space in Iowa, about 100 of them  have leases that extend beyond a year from now, so that means the Postal Service could be walking away from a lot of leases and paying for the privilege. 

We’re looking at something like 25 leases with a year to go after July 2012, 20 with two years to go, 30 with three years to go, and 25 with even more.  The average annual rent for Iowa post offices is about $4,800.  So we’re talking about roughly $1.2 million that the Postal Service would need to pay to lessors if by next July it has closed all 100 post offices with leases that run beyond July 2012. 

Iowa has been having a tough time dealing with the prospect of losing 80 post offices.  Adding another 180 to the list has to feel devastating.  

Data source: Most of the data cited above comes from the USPS website, leased facilities here, owned here.

(Photo credit: Iowa Backroads: Crystal Lake post office (1960), Sharpsburg post office, both already on closure lists)

Taking a chunk out of the Apple: Breaking down the closing list for New York State

July 26, 2011

While it’s going to take a while to process all the data on what the Postal Service closure plan represents, it might be useful to focus on one state just to get a preliminary idea of what’s happening.  Let’s start with New York State.

New York has about 2,100 post offices, and there are 110 on the closing list, so approximately 5% of NY's post offices are on the closing list.  That’s considerably less than the national average of about 11% (3,600 out of 32,000).  That means many states are going to find themselves with a closure rate even greater than 11%.

The country’s post offices are approximately 85% main post offices, 15% stations.  Of those on the closing list in NYS, 65% are main post offices, and 45% are stations, so New York has an unusually large number of stations closing, mostly because there are several stations in Brooklyn and the Bronx on the list.

About one-fourth of the country’s post offices are owned, and three-fourths are leased.  Of the 110 on the New York closing list, 15 are owned and 95 are leased, so a larger number than might be expected are leased spaces.

Of the country’s 8,000 or so post office buildings owned by the Postal Service, about 2,000 are pre-1933 and 2,000 are 1933-1943.  Only one on the New York list is a pre-1933, and five are New Deal post offices.  That’s considerably less than the overall averages, so it looks like many of New York’s historic buildings are being spared for the moment. 

Of course, there are many historic post office buildings that may go on the market independently of the closure list.  The Postal Service often sells the building and then finds another location for the post office, so while the building is gone, the post office hasn’t officially closed.  It just moved, like the post office in Greenwich, Connecticut, which moved from a beautiful historic New Deal building to a pet supply store.  

Looking at the 95 post offices leasing space in New York, about one third have leases that end in about a year or less, so closing them over the course of the next twelve months will not cost the Postal Service anything in rent obligations.  But the other two-thirds have leases that extend beyond a year from now (some as long as 2015 and even 2020).  That means walking away from a lot of leases and paying the rent on a lot of abandoned spaces. 

We’re looking at something like 10 leases with a year to go after July 2012, 20 with two years to go, 20 with three years to go, and 10 with even more.  The average annual rent for New York post offices is about $30,000.  So we’re talking about roughly $4.5 million that the Postal Service would need to pay to lessors if by next July it has closed all 60 post offices with leases that run beyond July 2012. 

Using that $4.5 million and extrapolating from New York’s 110 post offices to the 3,600 on the list, and we’re talking about $150 million.  Of course, not all 3,600 will close, and the rental averages are going to be much lower outside of New York.  So knock off a third of that, and we’re still talking about a cool $100 million, just to pay off the leases for post offices that will have already closed. 

Or maybe the Postal Service will take its time and just close those post offices when the lease runs out.  Maybe.  In Fort Smith, Arkansas, the Postal Service closed a station with two years left on the lease—annual rent, $53,401.  There were other costs incurred by this closing, and in her comments on the appeals case, PRC Chairman Goldway noted that the Postal Service incurred a one-time cost of $273,000.  That, by the way, would have paid the rent on the little post office in Etna, New York (where the rent is $5000 a year) until the year 2065.  But the Etna post office may have already closed.

Coming next, profiling the closing list for Iowa.

Data source: Most of the data cited above comes from the USPS website, leased facilities here, owned here.

Photo credits: Historic NY state post offices on the closing list: North Tonawanda post office (1914); Bay Shore, Long Island post office (1935);  Devoe Avenue post office, Bronx (1936)

CORRECTION: The North Tonawanda post office is not on the closing list.

Breaking News: The Closure List Is Out

July 26, 2011

Here's the list.

The Postal Service has released the list of over 3,600 post offices that will be studied for closure over the coming months.  It's organized state by state, and the USPS website provides only the office name, city, and ZIP code.   There's no information about whether the location is an independent post office, station or branch; whether or not there's a postmaster running the post office; whether the space is owned or leased.  Hopefully more details like that will be forthcoming.

More to come. . . . 

The PMG’s “New Concept” Unveiled: Not so new, but what a concept

July 25, 2011

The major media outlets are finally reporting, as we’ve known for several days now, that over 3,600 post offices are being targeted for closure in the Postal Service's new plan, but here’s the real news.  The Postal Service is also unveiling its “replacement strategy” for communities that lose their post office, and it turns out to be a “plan to have third-party retailers provide services in places that lose a post office.”

Postal Service spokeswoman Sue Brennan explains: “If you're a community and there is a local convenience store, for example, we might be reaching out to these organizations to see if they would be interested in providing limited postal service for the community that might be affected."

Such arrangements will likely be put in place place in "communities that have existing businesses, mom and pop shops -- some type of local business that could also provide postal services," Brennan told CNNMoney.

Postmaster General Donahoe referred to the strategy as a new "village post office concept." "We're finding a lot of interest with small businesses who say, 'I'll gladly sell stamps and provide package services,' " he said. Of the 3,653 post offices on the list being released Tuesday, 2,500 potentially qualify for the "village" concept, he estimated. In other cases, the agency could move postal services to a neighboring town.

So this is the “new concept” that the PMG referred to last week?  A $70-billion-a-year operation, and this all they’ve come up with?  A few days ago I joked that the “new concept” was going to be contracting out postal services to Starbucks.  That was supposed to be funny.  The only thing I got wrong, it seems, was the name of the business.  It’s not Starbucks, it’s your local 7-11 and Charlies' gift shop.

While the Postal Service may want to make this idea sound homey with its talk about "mom-and-pop stores" and the "village post office," there’s nothing new about contracting out postal services.  It’s called a “contract postal unit” or CPU, and as of 2010, there were some 2,931 CPUs in the country, as well as 763 “community post offices" or CPOs.

According to the 2009 Postal Employees Guide to Contract Postal Units, a CPU is “a supplier-owned or supplier-leased site operated by the supplier under contract to the Postal Service to provide postal services to the public at postal prices.”  A CPO is closely related—that's a contract postal unit in which a small rural community, rather than a local business, assumes the responsibilities of providing postal services.

The USPS publication “Foundation for the Future” (2010-2011) states further that “most CPUs offer the same basic services available at Post Offices.  CPUs are staffed by the host retailer, typically in supermarkets, card and gift shops, colleges, and similar locations.”

The Postal Service has also made arrangements with private retailers, typically a packaging service, to sell stamps and some postal services.  These retailers charge customers a service fee in addition to the postage and shipping costs.  These are not CPUs because they receive no fee from the Postal Service.  

From what Ms. Brennan is quoted as saying, the "replacement strategy" sounds more like a CPU than this other sort of arrangement.  In any case, the PMG may come up with a new type of CPU, but for now there are two:

Optimizing Bethesda: Another New Deal post office, sold and soon to close

July 25, 2011

Head west out of USPS headquarters in L’Enfant Plaza and take Wisconsin Avenue north, and in less than 30 minutes, if the traffic isn’t too bad, you’ll find yourself in one of the richest and most highly educated communities in the country, Bethesda, Maryland. 

In the middle of town at 7400 Wisconsin Avenue you’ll discover one of the more beautiful of the country’s post offices.  You can’t miss it because it’s right next to a large Madonna of the Trail statue, erected by the National Old Trails Association and the Daughters of the American Revolution to honor pioneer women.  Future president Harry S. Truman, then president of the Trails Association, presided over the dedication of the monument on April 19, 1929. 

The Wisconsin Avenue post office was built by the New Deal in 1938.  It is included in the Montgomery County Master Plan for Historic Preservation, and it contains a mural by Robert Gates, who would later become the head of the Art Department at American University.  The mural shows farm women feeding their animals on one side, selling produce at the market on the other, which may be an allusion to the Farm Women’s Cooperative Market that began across the street in 1932.

Eleanor Roosevelt took a special interest in this post office, and on Dec. 12, 1938, in the middle of a day packed with personal engagements and public appearances, she visited the Procurement Division of the Treasury Department to look at the mural sketches Gates was working on.  The sketch was “charming,” wrote Eleanor in her diary, and then she added, “I think these post offices are making the country more and more conscious of decorative, artistic values.” 

The Postal Service sold the Wisconsin Avenue post office in March for about $4 million, and the new owner has been renting space back to the Postal Service, so the post office is still open.  But now the Postal Service is planning to consolidate the Wisconsin Ave post office and the Arlington Road post office, and to re-locate both to a central office.

Dennis Perry is a real estate specialist who works in the USPS eastern facilities service office in Greensboro, North Carolina.  Asked why the Postal service was considering closing the Wisconsin Avenue post office, Perry replied, “To drive the highest and best use, to optimize our operations.”

I guess you’d have to ask the folks over in L’Enfant Plaza how it came to pass that the post office is not being used to its full capacity.  They probably moved most of the postal workers to other locations some time ago, leaving only a small retail operation, just as they’ve done at downtown post offices across the country. 

There’s a meeting to discuss the consolidation plan on July 27.  If you can’t be there but would like to let Mr. Perry know what you think about “optimizing” this historic post office, you can give him a call at 336-665-2863 or drop him an email at dperry2@usps.gov.   I’m sure he’d be happy to explain why history doesn’t mean squat to the Postal Service.

(Photo credits: Wisconsin Ave. post officepost office and Madonna of the Trailmural)

It's the end of the post office, and the national media didn't get the press release

July 24, 2011

More than 150 post offices close in a matter of months, over a thousand post offices are under study for closure, the Postal Service announces that it is going to consider 3,600 post offices for discontinuance over the next year, and the Postal Regulatory Commission is about to begin a review of the USPS plan for an Advisory Opinion—an Opinion that may determine the fate of the brick-and-mortar post office as a national institution—and all this barely makes it into the national news.  Didn't our major news outlets get the press release?

 

Not fit to print?

What’s up with the New York Times?  It has barely touched the story of how post offices are closing all across the country.  Every day for the past several months there have been a half dozen stories in local newspapers and online sources about a closing announcement, a public hearing with USPS representatives, or a post office’s last day.  There are hundreds and hundreds of post offices being closed, and nothing about it in the nation’s paper of record?

This week the Times took a pass on the major closing events of the past few days.  It did publish a very good article (which I recommend) by Sean Collins Walsh (July 21, 2011) about the various bills in Congress that would address the USPS fiscal problems, but the article says nothing about the PRC Advisory Opinion or next week's closing list, and it says almost nothing about post office closings at all except for a passing comment.  It mentions that one of the bills in Congress would “grant the Postal Service much of what it wants, including the ability to tap into surpluses in its retiree benefits funds, which would maintain solvency in the short term. It could also allow the Postal Service to ship wine and beer, close more unprofitable post offices and eliminate Saturday deliveries.” 

That makes it sound as if the issue of shipping wine and beer were on a par with closing thousands of post offices.  And why identify these post offices with the phase “the more unprofitable.”  Thanks to the way the Postal Service keeps its books, something like 80% or 90% of post offices are “unprofitable,” and sometimes the “more unprofitable” ones are those most crucial to the life of a community—like small rural post offices.  The Times makes it sound as if the Postal Service just wants to do a little pruning of its worse money-losers.  But 3,600 post offices is hardly a trim, especially if it's your post office.  As a man named Sonny Pate, who lives in the small town of Irwinville, Georgia, told his local news reporter a couple of weeks ago, "If you take the post office from Irwinville, it's kind of like taking a limb from the body.”  Well, at least Sonny may be able to get his beer delivered by the Postal Service.

 

The incredible shrinking closure list

The Washington Post has an article by Lisa Rein and Joe Davidson (July 21, 2011) makes some important points about what’s been going on the past week, but it doesn't convey the gravity of the situation.  It notes that that the Postal Service has produced a new version of its closing regulations (the earlier version came out in March) that will make it “easier to shutter post offices,” and it notes that this version  preserved a key but controversial element "allowing the Postal Service to target facilities that suffer from ‘insufficient customer demand’ or where customers have other options for buying stamps and postal services.” 

Those two details are crucial, and they will make all the difference when it comes to the PRC Advisory Opinion.  The Postal Service’s main defense against the accusation that closing thousands of post offices violates its universal service obligation under Title 39 is likely to be that there are “other options” out there, like kiosks, stamps by mail, and contracted outlets in supermarkets.  And the whole point of the universal service obligation is to protect post offices where there aren’t a lot of customers.

The problem with the Post article is the way it minimizes the significance of what’s going on.  It says, “Since March, [Postmaster General Patrick] Donahoe has floated a couple of numbers on how many facilities he wants to close within the next year. The initial figure was around 2,000, but it then fell to 1,000.”  That makes it sound as if the PMG were just "floating" numbers with no real plan, and it sounds like the threat is diminishing rather than increasing.  Why not mention the fact that Donahoe said in June that he thinks they’ll be closing 16,000 post offices over the next six years? 

The Post Office Gets Its Day in Court

July 22, 2011

The post office as a national institution will soon have its day in court, and the verdict could be a matter of life or death. 

Yesterday, the Postal Service announced that it will request an Advisory Opinion from the Postal Regulatory Commission about its plan to study 3,600 post offices for closure.  On July 26, the Postal Service will release the list of postal facilities under consideration for discontinuance—about 2,800 post offices and 800 stations.  The day after, the Postal Service will present its plan to the PRC, which will embark on a review period that will last several months. 

The PRC process is similar in many ways to a courtroom proceeding, and there will be lawyers, arguments, counter-arguments, expert testimony, cross examinations, rebuttal testimony, witnesses, and, if necessary, subpoenas.  Maybe there will be some courtroom drama as well.

At the end of the process, the PRC will issue its Advisory Opinion.  That Opinion could determine the future of the brick-and-mortar post office.

 

What a difference a week makes

The Postal Service is required by law to seek such a PRC Advisory Opinion before it embarks on a program that could have a significant impact on its service to the nation.  Although it has been clear for some time that it had begun a program to close thousands of post offices, the Postal Service has been claiming for months that it had no such plan. 

It was just last Thursday (July 14) that the Postal Service released its revision of the Rule describing changes to the closure process (published in the Federal Register on Friday).  The Rule, like the earlier version released in March, states explicitly that the Postal Service had not developed “a program to study the discontinuance of large numbers of retail facilities that [has] the potential to effect a nationwide or substantially nationwide change in service.”  In fact, the Postal Service wrote that “unless and until such a program is developed and presented to the [Postal Regulatory] Commission,” concerns about its impacts “are speculative and premature.” (Rule here; see section N)  

Now we know that these concerns were not so “speculative and premature” after all.

Earlier that same day, at an open session of the PRC, Chairman Ruth Goldway indicated that she had received what she hoped was a “comprehensive list” of post offices being studied for closure, and she said the PRC would make the list available “so that the public will better understand what the Postal Service is now engaged in in terms of post office closings and then very shortly what their future concepts are for adjusting the retail network.”  That made it seem like something had to happen soon.  And it did.

On Tuesday came word from Goldway that “Postal Service has indicated that it intends soon to file a request for an Advisory Opinion on a nationwide plan to review post office facilities for closure.” 

On Wednesday, the Postal Service confirmed that it would be releasing a list of post offices to be studied for closing and that it would be initiating the process for an Advisory Opinion.  At the same time that it releases the list and its closure plan, the Postal Service will be unveiling “a new concept” for replacing post offices.  

While all that was going, the PRC also decided on two appeals, and in both cases, Chairman Goldway dissented from the majority’s rulings on behalf of the Postal Service.  On Tuesday the PRC denied a request to suspend the closing of the Lafayette Postal Facility in Freehold, New Jersey, while an appeal was being considered, but Goldway said the post office should stay open while the appeal went forward.  The next day, the majority upheld the Postal Service’s decision to close a postal station in Fort Smith, Arkansas.  Again, the chairman dissented, this time because of “material flaws” in the Postal Service’s case.

Yesterday, Thursday, the national media joined the conversation with articles in the Washington Post and New York Times about legislation making its way (or not) through Congress and about the closure plan to be announced by the Postal Service. 

It’s been quite a week.  And did I mention, it's hot out there.

Week in Review

July 22, 2011

There's a lot of postal news out there right now, and it's going to get even crazier next week when the Postal Service releases a list of some 3,500 post offices that will be (or are being) studied for closure.  Expect thousands of articles, in every local newspaper and online news source that covers a town with a post office on the list, as well as many articles in the national news—finally.  Here are a few articles from the last couple of days that are worth a look to get a sense of where things stand:

"Postal Service to consider closing thousands of new post offices," by Lisa Rein and Joe Davidson. Washington Post. July 21, 2011

"Many Seek to Revamp Post Office," by Sean Collins Walsh. New York Times, July 21, 2011

"USPS to mount nationwide review of post office network." (Based on an interview with the PRC's Ruth Goldway) Post & Parcel, July 20, 2011.

"Review Of Fort Smith Postal Closing Rejected," By Rusty Garrett. Times Record, July 21, 2011 (for another version of the PRC decision, see my blog post)

And just another note: In a blog post last week on "Leveraging the Post Office"—about a proposal to use post offices as collateral for a loan to the Postal Service—I mentioned that the Postal Service had hired a real estate company to help "downsize" its real estate portfolio.  Postal News Blog has more, here

(Image source: Postal Service: Give Up, a new album by Ben Gibbard and Jimmy Tamborello )

PRC Chairman Goldway dissents two times in two days

July 21, 2011

In what may be an indication of growing concern over closing post offices, the Chairman of the Postal Regulatory Commission, Ruth Goldway, issued two dissenting opinions in as many days this week.  The first expressed her reluctance to allow a post office in New Jersey to be closed while the decision to close was under appeal, and the second focused on “material flaws” in the Postal Service’s decision-making process in closing a post office in Arkansas. 

With the PRC about to begin a review of the Postal Service's plan to close thousands of post offices, these two cases may provide some insight into how the Postal Service will defend its plan and what the PRC's Advisory Opinion may say.  

One issue in these rulings involves a long-standing debate over the status of "stations" when it comes to Title 39 section 404(d), which describes the process for closing a post office.  It's a lengthy process—about nine months—and it permits an appeal to the PRC.  The Postal Service maintains that this section of the law does not apply to stations and branches, while the PRC says it does.  That issue may soon become moot because the Postal Service has apparently agreed to use uniform procedures for stations, branches, and post offices in the new procedures published last week in the Federal Register.  In any case, the issue did come up in both of these decisions, even though it does not appear to have been at stake in the rulings.

 

The Lafayette post office in Freehold, New Jersey

On Tuesday (July 19), the PRC denied a request on behalf of the Lafayette Postal Facility in Freehold, New Jersey, to “suspend” (i.e., postpone) closing the post office while the closure decision is under appeal.   This post office is located in downtown Freehold Borough in a trailer in a parking lot a few blocks from the old post office, abandoned by the USPS years ago.  (The PRC decision is here, and you can read my “boss” blog post about the Freehold post office from a few weeks ago, here.)

The Postal Service argued that it had gone through a more thorough review process than it needed to for a station, and it stated that there are alternative access to retail postal services for affected customers—postponing the closure may even disrupt those alternatives.  The PRC concurred and rejected the request to keep the post office open while the appeal was being considered.

Goldway’s dissent stated that while on prior occasions, she had “reluctantly” concurred in denying applications for suspensions, in this case she was taking a different view.  She pointed to the Postal Service’s recently adopted new rules, which employ uniform procedures for closing stations, branches, and main post offices.  “The public and the Postal Service will be better served if affected offices are not closed until completion of the ongoing review process,” wrote Goldway.  “Particularly in light of the new rules, the Commission will accelerate its efforts to review post office appeals expeditiously. Given the procedural requirements of section 404(d), maintaining operations at a retail facility pending disposition of an appeal will not materially increase Postal Service costs and, in the long run, will avoid unnecessary expenses and public confusion about the process.”

Now that the petition to suspend closure has been denied, the Freehold post office will close on Friday next week (July 29). 

 

Rogers Avenue Station, Fort Smith, Arkansas

On Wednesday (July 20), the PRC turned down an appeal that might have saved the Rogers Avenue Station in Fort Smith.  The PRC's ruling denied a request to return the case to the Postal Service for further evaluation, thus sealing the fate of the post office.  Rogers Avenue Station is one of several post offices in Fort Smith, Arkansas.  It’s located in Park Plaza strip mall, facing Creekmore Park.  The Postal Service has been renting the space since 1998, for an annual rent of $53,401, and there are two more years left on the lease.  The post office was closed on March 26, 2011.  (The PRC decision is here.)

In closing the Rogers Avenue post office, the Postal Service argued that “even if the requirements of section 404(d) were applied in the context of the discontinuance of the Rogers Avenue Station, it had satisfied the salient statutory provisions.”  It had considered all the relevant criteria, including the effect on postal services, the community, and employees, and the economic savings gained from closing the post office for the Postal Service.

PMG finds plan to close thousands of post offices in bottom of desk drawer

July 21, 2011

Postmaster General Patrick Donahoe made a startling discovery over the weekend—a USPS plan to close 16,000 post offices over the next few years.  Just last Friday, in the Rule announcing changes to its procedures for closing post offices (published in the Federal Register), the Postal Service had indicated it had no plan in place to close a significant number of post offices nationwide and concerns about the impacts of such a plan, if it existed, were "speculative and premature.”

The statement provoked mocking derision ("The plan is we have no plan") on the part of the national media (i.e., this blog), so the PMG called an emergency meeting of his senior staff late Friday afternoon.  “They weren’t happy about that,” the PMG told Save the Post Office in an exclusive interview earlier today.  “They were all headed out to their beach houses for the weekend and in no mood for another meeting.”

The PMG berated his staff for not having a plan in place if they were going to be closing all these post offices.  “It just didn’t look good,” said the PMG.  “It made it seem like we didn’t know what we were doing.  But then someone at the meeting pointed out that we did in fact have such a plan, and that I had been given a copy months ago.  I just didn’t remember.”

The PMG spent the weekend looking all over his office and home for the plan, and eventually found it on the bottom of a desk drawer, under a pile of unopened mail. 

“I was shocked by what I read,” said the PGM.  “It turns out the USPS has a plan to close 16,000 post offices over the next six years.  I thought I was kidding when I said that at a meeting of the American Catalog Mailers a few weeks ago.  It’s no joke.”

Breaking News: USPS will file for Advisory Opinion on nationwide post office closures

July 19, 2011

On the Postal Regulatory Commission website:

Chairman's Message:

Dear Postal Consumers:

The Postal Service has indicated that it intends soon to file a request for an Advisory Opinion on a nationwide plan to review post office facilities for closure. 

The Commission will welcome comments from the public and will take prompt action on the request for an Advisory Opinion.  Once we receive the Postal Service’s formal request for our Opinion, we will post instructions in this column on how to submit comments  either formally for the record or informally for our public comment file. 

Ruth Y. Goldway
Chairman

A Penny for Your Post Office

July 19, 2011

How much would it cost the Postal Service to cancel its plans to close half the country’s post offices over the next six years? 

In 2008 the Postal Service engaged a study team led by Dr. Michael Bradley, Professor of Economics at George Washington University, and IBM Global Business Services.  The purpose of the study was to measure the cost of maintaining the Postal Service’s “universal service obligation."  (The entire USPS report, including this study, is here.)

The study team analyzed the cost of six-day delivery, the cost of “uniform pricing,” and the cost of the retail network of post offices.  More specifically, it focused on how much money the Postal Service could save if it were to close retail operations at over 18,000 of the Postal Service’s smallest post offices, i.e., those that bring in the least revenue.  The study looked at savings in salaries for postmasters and window clerks, facility costs (rent or maintenance and depreciation), and various miscellaneous costs.

Its conclusion?  “If the 18,574 smallest Post Offices were closed, the cost savings are estimated to be $1.4 billion per year.”

Keep that number in mind for a second while we look at this Gallup poll asking people about ways to help the Postal Service solve its financial problems:

The vast majority could live with closing the post office on Saturday, even doing away with Saturday delivery, while people are evenly split on government funding, and most would prefer not to see stamp prices go up.  But the question that got the strongest response was “How about closing your local post office?”  And a definitive 86% said no.

The Postal Service processed 171 billion pieces of mail in 2010. 

That means if the Postal Service were to raise its rates an average of one cent per piece, it would generate $1.7 billion—much more than the $1.4 billion that would be saved by closing all those post offices.  That might mean a little more than one cent for a parcel or express mail, a little less for a letter and bulk mail.  But think about—an average of one cent per mailing to save over 18,000 post offices.  How many of the 60% who don’t want to see postage go up would feel differently if they knew the increase went into a "save the post office" fund? 

Would you pay a penny per piece to keep your post office open?

Help Wanted: Math Teacher for the Postal Service

July 17, 2011

The decision to reorganize the Postal Service’s network and close thousands of post offices—16,000 of them over the next six years, according to the Postmaster General—is based on dozens of “retail optimization” studies done over the past few years.  There’s no shortage of numbers demonstrating why it’s good business for the Postal Service to do retail out of supermarkets, Office Depots, and kiosks instead of old-fashioned post offices.

The math deployed by the Postal Service and its consultants can be quite impressive.  In one study called "The Postal Service Retail Facility Location and Size Problem" (pdf here) by Anthony M. Yezer, Professor of Economics at George Washington University, there's a whole slew of numbers and equations, like this one:

That's a lot of brain power to justify closing a small rural post office.  But the logic is cruel, the math is fuzzy, and the numbers don’t add up. 

Just consider the way the Postal Service calculates how much money a particular post office is making or losing.  Most postal revenue comes from commercial mail, and all this revenue is credited to the place where it enters the system, usually a large urban facility.  The post office that bears the cost burden of delivering this mail gets none of the revenue.  That’s why nearly every post office looks like it’s losing money—nine out of ten, according to what the Postal Service recently told the Postal Regulatory Commission.  The only ones that are profitable are those that get income from the big mailers.

Consider, too, how much it costs to operate a post office and to rent or own the space.  The ten thousand smallest post offices represent less than one percent of the USPS budget of nearly $70 billion a year.  And closing 16,000 of the most "under-performing" post offices—half the post offices in the country—would save less than two percent of the USPS budget.

But it gets worse.  What the Postal Service saves by closing post offices comes at the expense of the people it’s supposed to be serving.  Take the case of Etna, New York.

Etna is located in Tompkins County, in the “dark forest” of the southern Finger Lakes region, a great vacation spot and home to Cornell University and Ithaca College.  Many of the towns and villages in the area have names like Ithaca, Homer, Hector, and Ulysses because the surveyor’s clerk had a fondness for Greek and Roman history, and there was a classical ferver going around, as evidenced by early nineteenth-century architecture—all part of the desire to associate post-War of Independence America with ancient Greek democracy.

Named after Mount Etna in Sicily, the town got its first post office on January 16, 1823.  The first postmaster was Henry B. Weaver, and over the next 182 years, a succession of fifteen postmasters would serve the people of Etna.  A year ago, postmaster Barbara J. Van Dusen resigned.  She may be the last of the Etna postmasters.  The Postal Service never replaced her, and for the past year, the post office has been run by an officer-in-charge.  Now the Postal Service is using the absence of a postmaster as a reason for closing the post office.

Etna, New York

In May the Postal Service held a meeting at Houtz Hall, the community center where the Postal Service rents space for the post office, to hear comments from the town’s citizens about the impending closure.  The Postal Service scheduled the meeting for 10 a.m. on a Thursday morning, when most people are at work.  As the Cortland Standard reported, about twenty people attended, and it doesn’t sound like they were very happy.  They didn’t like the idea of mailboxes—the snow plows knock them down—or cluster boxes either—they freeze up—and neither has the security of a post office.  And they didn’t like the idea of driving three miles to the next-nearest post office in Freeville.  And they didn’t like losing a place that’s been there for their whole lives, a place many can walk to, a place where they chat with neighbors, a place that helps give identity to the town.

One Moment in Time: A Golf Story for Sunday Morning

July 16, 2011

Pinehurst, North Carolina, is a small town located in the south central part of the state in an area called the Sandhills.  It was established in 1895 when James Walker Tufts, a resident of Boston who had build a fortune with the American Soda Fountain Company, purchased land to create a health resort.  He wanted a “first rate” plan, so he hired the best—Frederick Law Olmsted, designer of Central Park in New York City and the Biltmore Estate in Asheville.  (More history here.)

Pinehurst remained a private resort until 1920, and the place is “sacred ground” for golf enthusiasts.  It has hosted the US Open three times, and it is three-time winner of Travel & Leisure Golf Magazine’s Best Golf Resort in America award.  In 1996, the Village of Pinehurst and its resort were given National Landmark status for their significant role in U.S. golf history. 

In 1999, Payne Stewart, on a comeback late in his career, sunk a 15-foot putt on the 18th green of the famous #2 and won the U.S. Open, just months before he died in a plane crash at the age of 42.  People still talk about the putt, and there's a sculpture by Zenos Frudakis of Stewart doing a fist pump after the ball dropped in the hole.  It's called "One Moment in Time."

There’s a New Deal post office in downtown Pinehurst, built in 1935.  It will close on Aug. 19, and its operations will be consolidated at the Blake Boulevard location, reports The Pilot this week.

Village Manager Andy Wilkison said in May that the village would do what it could to keep the postal facility open, perhaps by purchasing the building and leasing part to the USPS and part to another business, but it doesn’t look like that will be happening.  Wilkison said that two businesses have expressed interest in the building.  Rumors are the asking price is $695,000.

“Going to the downtown post office is a ritual, a tradition for so many,” said Mayor Ginsey Fallon, “and it’s not going to be the same if they have to go someplace else to get their mail.”

(Photo credits: Pinehurst p.o.; Pinehurst No. 2, painted by William Mangum; Payne Stewart sculpture)

UPDATE: August 20, 2011: The post office did close on Aug. 19, and the community has filed an Appeal with the PRC. Here's the news item on the closing.

Leveraging the post office

July 15, 2011

Here's an idea for how to deal with the Postal Service’s financial problem: leverage USPS real estate assets.  In other words, put up our post office buildings and land as collateral for a loan from the Treasury Department.  It's all laid out in a July 12, 2011 report from the USPS Office of Inspector General (OIG) entitled "Leveraging Assets to Address Financial Obligations."

Previous OIG reports have established that the Postal Service has made $142 billion worth of overpayments to its retirement programs.  The Postal Service has been asking Congress to correct these overpayments so it can maintain solvency, but with legislation tied up in Congress (where there are all kinds of agendas at work), the Postal Service needs another solution, and soon.

So the OIG has a quick fix.  The Postal Service owns a ton of property—over 8,000 postal facilities, worth who knows how many billions of dollars.  No one actually does know, since the Postal Service does not maintain fair market or assessed tax value records for its properties.  However, the Postal Service does keep track of purchase prices, and it reported nearly $27 billion (in purchase price) for property such as buildings and land in its fiscal year 2010 annual financial report.  Given that some of these buildings were purchased decades ago, the property value is considerably higher now.  So the OIG says, “if the Postal Service were to leverage its real property assets at the fair market value, that amount would likely cover the remaining $55 billion of unfunded liability in its retiree benefit funds.”

This would get the Postal Service through its current problem, and then when Congress fixes the overpayment situation and the Postal Service books are balanced again, the Postal Service would “un-leverage” its properties and things would return to normal.  If, on the other hand, Congress does not change the law and the Postal Service becomes insolvent—“a very unlikely event,” says the OIG—the Postal Service would turn over the titles to its properties to the Treasury Department, which  “could liquidate the leveraged real property and return the [retirement] programs to an operational level.”  In other words, a mass sell-off of Postal Service properties.  Such a scenario, as unlikely as it may be, “would protect taxpayers,” says the OIG, and presumably avoid the necessity for some kind of bailout.

In order to illustrate its point about fair market value versus purchase price, the OIG notes that the National Postal Museum (photo at the top) had a purchase price of $47 million and an assessed tax value of $304 million. (Not that the OIG was suggesting the Postal Service sell the museum—this was just for illustration purposes.) 

Why is it so wrong to close a post office?

July 15, 2011

If you want to know why it's so wrong to close a post office, you could read 500 hundred news stories about how sad and angry citizens across the country are becoming as they learn their post office is closing.  Or you could read a study about "The Social Value of the Post Office," which explains in detail how a post office contributes to the economic vitality and social life of a community.  Or you could just watch this news video about Irwinville, Georgia, a small town that just wants to keep its post office.  (Photo credit: WALB news)

The plan is we have no plan: Postal Service claims it has no program to close a large number of post offices nationwide

July 14, 2011

Yesterday the Postal Service released its Final Rule on procedural changes for closing post offices.  It contains many interesting points, but none more eye-opening than the Postal Service’s claim that it has no program to study the closing of a significant number of post offices nationwide.  Yes, you read that right.  The Postal Service is saying that it has not developed “a program to study the discontinuance of large numbers of retail facilities that [has] the potential to effect a nationwide or substantially nationwide change in service.”  In fact, the Postal Service says that “unless and until such a program is developed and presented to the [Postal Regulatory] Commission,” concerns about its impacts “are speculative and premature.” (Rule here; see section N)

At issue here is the fact that if the Postal Service did have a program in place to close thousands of post offices nationwide, it would be required by Title 39 § 3661 to request an Advisory Opinion from the Postal Regulatory Commission to determine if the program "will generally affect service on a nationwide or substantially nationwide basis."  And such an Advisory Opinion might derail the program. 

So forget about the hundreds of news articles that have come out in the last few months telling stories about post offices being studied for closure.  Forget the story about 2,000 post office stations and branches slated for closure that the Washington Post and dozens of others newspapers published a few months ago.  Forget all the government studies about “optimizing the retail network” that have provided the rationalization, scope, and direction for the closings we’ve been witnessing.  The USPS has no program to close thousands of post offices, at least not one that has “the potential to effect a nationwide or substantially nationwide change in service.”

Perhaps this refusal to acknowledge the existence of such a closure program explains an interesting moment in yesterday’s open session of the Postal Regulatory Commission. (You can listen to the session here.)

Changing the rules in the middle of the game: USPS amends closure regulations

July 13, 2011

The Postal Service has just released its “Final rule” to amend 39 CFR Part 241 "to improve the administration of the Post Office closing and consolidation process."  This document is a revision of an earlier one entered into the Federal Register in March.  That version had been widely criticized, and this one responds to the criticisms.  It says the comments were heard and incorporated, and it suggests that many of the changes to the closure procedure will improve the transparency of the process and provide ample opportunity for communities to be heard when their post office is being studied for closure.

The Postal Service will publish this final rule in tomorrow’s Federal Register.  Here are some of the highlights. 

1. No Advisory Opinion for now. Many people have been waiting for the Postal Service to request an Advisory Opinion from the Postal Regulatory Commission that would evaluate whether or not the USPS plan to close thousands of post offices represents a significant “change in service” that undermines the Postal Service’s legal obligation to provide “universal service” to all parts of the country. 

The Postal Service had indicated previously that it would make such a request when the time came.  The Postal Service now says that it’s wrong to “assume” that the intent of the change in procedures “is to usher in seeping closures of small and rural Post Offices.”  The Postal Service denies that it has even developed such a program:

Even if the Postal Service were, in the future, to develop a program to study the discontinuance of large numbers of retail facilities that had the potential to effect a nationwide or substantially nationwide change in service, the Postal Service would intend to seek an advisory opinion from the Commission under 39 U.S.C. 3661(b)-(c). Parties would have a full opportunity to raise their concerns and assess the impact of such a program on service levels and public confidence at that time. Unless and until such a program is developed and presented to the Commission, however, such concerns are speculative and premature. In the meantime, impact on service is necessarily taken into account in each discontinuance study.

Apparently the Postal Service is saying that whatever it looks like, with hundreds of post offices being closed, they don’t have a “program” to close them, so there’s no need for an Advisory Opinion. 

2. Top-down on initiating a closure study. The Postal Service is sticking to its new plan to allow a Headquarters Vice President to initiate a feasibility study on closing a post office.  That means it can come from the top down, whereas before it was a District Manager who made that decision.  This proposed change had been criticized because HQ is further from the community and not in as good a position to make the decision.  This should make it easier for the Postal Service to orchestrate its closure program (or whatever it is).

"This is not just about the mail, this is about our community": Save the Tariffville Post Office

July 13, 2011

“With chants of 'save our post office”'and signs cleverly stating much the same, the gazebo in Tariffville was the site of a rally to do just that," reports today's Simsbury Patch.  "About 50 people turned out on a hot Tuesday night to support each other to continue the efforts to save the local post office, which to this community means much more than mail.”

The post office in Tariffville, Connecticut, was closed on February 4, 2011 for an “emergency suspension.” A heavy snowfall caused concerns about the “structural integrity” of the building and that led to an evacuation.  The building had housed the post office for more than fifty years

As the Simsbury Patch reported at the time, shortly after the suspension, the company that manages the building said the problems had been repaired and the post office should be open for business “tomorrow.”  The other tenants returned after just a couple of days, but the Postal Service had "quickly removed the PO boxes and office equipment instead of returning."

The Tariffville post office never re-opened.  Instead, the Postal Service initiated a discontinuance process to close the post office permanently. A study to determine whether the post should be closed will soon come to a conclusion.  Residents have until July 17 to submit written comments.

Along with the comment form, the Postal Service has made available a document discussing some of the issues.  It says that the Tariffville office has no postmaster and is not accessible to people with handicaps, and the Postal Service would save about $60,000 annually by closing it.  Residents challenged the Postal Service’s claims that the post office was losing money, and they questioned its argument that postal service provided by a rural or contract carrier would alleviate the need to drive to the post office—since now the residents will have to drive several miles to another post office.  (Hartford Courant).

The Postal Service has a history of using “emergency suspensions” like this to close post offices permanently, and the Postal Regulatory Commission has launched an investigation into the practice. As the Wall Street Journal reported in January, the PRC is investigating “whether the postal service has been improperly using reasons such as lease expirations to suspend service and to close many small, rural post offices.”  The PRC has been reviewing more than 400 post offices where service was suspended in recent years to determine whether the suspensions were in fact illegal “de facto closings.”

Deputy Selectman Lisa Heavner did a little research to prepare for Tuesday's rally.  "Way back in the 1700s, when we had our first postmaster, Benjamin Franklin, it wasn't about making money, it was about binding a nation," said Heavner, who urged residents to write to their legislators. "This is not just about the mail, this is about our community."

(Photo credits: Rally “Save Our Post Office”; “Right the wrong”; Tariffvile post office)

(More images at the Hartford Courant and more of everything at Friends of Tariffville Post Office 06081 on Facebook.)

Is there a USPS "crisis" or isn't there? The Postal Service has it both ways

July 13, 2011

If all you watch and read is the mainstream media, you're probably convinced that the U.S. Postal Service is on the brink of bankruptcy, desperately in need of a bailout that taxpayers will have to pay for.  The leaders and managers of the Postal Service have contributed to this view by telling people across the country that the USPS is in such dire financial straits that it has to cut Saturday delivery and close your local post office.

At the same time, the Postal Service leadership says that they've been doing a fine job and the main thing that's making the Postal Service look like it's in trouble is the Congressional requirement that the USPS fund pre-retirement health care for people that haven't been hired yet.  Without this requirement, the Postal Service would be breaking even, perhaps making a little profit.

Postmaster General Donahoe has told both stories.  When he wants to close post offices, reduce service, and cut the workforce, there's a financial crisis.  When he wants to defend the Postal Service from attacks by those yelling "bailout," he says the Postal Service is doing great.

Here, for example, is the Postmaster General's testimony before the Congressional hearings on "Pushing the Envelope: The Looming Crisis at USPS" that Dennis Ross ran a few months ago to stir up a sense of urgency.  Donahoe talks about how the financial "challenges" the Postal Service faces have necessitated reducing the work force and becoming "leaner."  Without changes to the law on funding health care, the USPS "cannot survive as a self-financing entity." Last year's losses, he says, were "staggering."  (Donahoe's testimony  begins 19 minutes into the video, and his remarks about the financial issues about 22 minutes, so just scroll at the bottom.)

And here is Donahoe on CNBC telling Larry Kudlow "we are not going broke."  (Donahoe's remarks on the health of the Postal Service come 30 seconds into the video.)

The bottom line is that manufacturing a "crisis" is a useful tool for getting things done.  There have always been people like Kudlow and Ross—and perhaps the PMG too—who want to see the Postal Service run not as a public service essential to democracy but "like a business," perhaps even turned into a private corporation.  Now they are creating an emergency atmosphere to accomplish goals they had long before the "crisis" emerged.  

So next time you hear about the impending doom facing the Postal Service, well, maybe the situation is not as bad as some would have you believe.  Maybe they just have an agenda.  As I've said before on this blog, if the country could build 1,100 beautiful post offices in the midst of the Great Depression, it can weather its current problems without tearing apart the rich fabric of post offices that "bind the nation together" and without adandoning the Postal Service's commitment to universal service.

How fast can you close a post office?

July 12, 2011

How fast can you close a post office?  Not as fast as the Postal Service would like.  But luckily for the USPS, they have a new computer tool to help them speed up the process.  More on that, but first some background.

Under current law (US Code Title 39) and regulations (Code of Federal Regulations—CFR 39), it takes the Postal Service at least nine months to close a main post office, even less for a station or branch.  (The process is described in this pdf.)

The Postal Service has been lobbying Congress to change the law so that it can speed up this “discontinuance” process, but naturally things are stalled in Congress. 

So on March 31, 2011, the Postal Service proposed several changes to the regulations that would “improve the administration of the Post Office closing and consolidation process.”  The changes would streamline the procedures and cut at least 30 days, perhaps as many as 76, from the discontinuance process.  They would also make a public hearing about the planned closure, now required, up to the discretion of the USPS.  The Postal Service believes that these are just changes to the regulations and not the law, so they can implement them without Congressional approval.

That position has been challenged by the National Association of Postmasters and the League of Postmasters in a May 23 legal complaint filed with the Postal Regulatory Commission (PRC).  The USPS replied to the complaint on June 13 (pdf here), and on July 5, the postmasters replied to the reply (pdf here).  The back-and-forth arguments are before the PRC.  No news yet on when a decision might be reached.

In the meantime, Postal Reporter News Blog reports yesterday that the USPS Office of Inspector General (OIG) has just released an audit report about the results of a new web-based application called the Change Suspension Discontinuance Center (CSDC) program that the Postal Service has been using.  The Washington Post had reported back in March that the Postal service was using a new computer system to facilitate the closing process, and now we have some results.

The OIG found that the CSDC program reduces the current “cycle time” it takes to close a post office from 280 days to 218 days, a savings of 62 days.  If you’re into the numbers, the breakdown is like this: The program shaves the “authorization to study” from 10 days to 3, the “study period” from 150 to 123, the “HQ review and final determination” from 30 to 12, and the period from the posting of a “final determination” to actual closure, from 90 to 80.  (The full study is here.)

Much of the time saving is thanks to the computer program’s ability to gather and integrate data from a variety of sources more quickly than in the past.  What’s noteworthy, however, is that Postal Service Headquarters is now giving itself just 12 days to evaluate all the information it gathered over the previous months and to come to a final decision.  That helps explain how Arkansas Congressman Mike Ross mistakenly received final determination notices on three post offices in his district just a week after the public meeting.

The OIG notes that if the proposed changes to CFR 39 are implemented and combined with the results of this new computer program, the total period for discontinuance will be reduced from about 280 days to 142 days. 

So your post office has been in your town for, say, a hundred and fifty years, and the USPS and the OIG are pleased that by cutting the discontinuance "cycle time" in half, the Postal Service can close your post office in less than five months.  That's progress.

The Postal Service is obviously in a big hurry to close post offices.  But why, and for what?  It can’t be just about the money. The PRC has estimated that “the total net cost of the 10,000 smallest post offices—more than one-third of all post offices in the United States—is less than seven tenths of one percent (0.7%) of the total cost of the United States Postal Service.”  Or consider this 2008 IBM report, which showed that closing 18,574 post offices with the lowest annual revenue would save $1.43 billion, a hefty sum but only 1.8% of the Postal Service budget for 2008 ($78 billion).

There must be more to the story, but don’t expect the Postal Service to tell it.

(Image sources: cartoon, used with permission from Cartoonstock; USPS discontinuance process, from USPS Postal Operations Manual, Section 123.12, p. 12, pdf here)

The times they are a changin: New Deal P.O. in Fairfield, for sale, maybe

July 11, 2011

Settled in 1639, Fairfield, Connecticut is one of the oldest towns in the country, and the people of Fairfield were among the earliest followers of the cause for independence in the Revolutionary War.  In 1779 the British burned the town to the ground in retaliation.  At Fairfield’s center is the Historic District, which contains 75 buildings in a variety of architectural styles, some going back to the Revolutionary War era.

On the edge of the historic district, at 1262 Post Road, is the Fairfield post office, built by the New Deal in 1936.  According to the Fairfield Citizen, the Postal Service is considering selling the post office. "We hope to be able to sell our current location, which we have occupied since 1936,” said USPS spokeswoman Maureen P. Marion, “and make a seamless transition to an alternate site in the same general area that comes in a better size for us.” The post office is almost 16,000 square feet, and they’re looking to downsize to about 2,000.

That announcement came back in December, and there’s been no news since. The post office is not listed for sale on the usual websites like Loopnet.  But with the recent sale of the nearby post offices in Westport and Greenwich, as well as the closing of the Norwich p.o., rumors of an impending sale are spreading.  It seems only a matter of time before a “for sale” sign appears in front of the Fairfield post office.

The  suburbs of Fairfield County, the "Gold Coast of Connecticut,"  provide the setting for several literary and cinema classics that define the “suburbs” in the American imagination. Eric Hodgin's Mr. Blandings Builds His Dreamhouse (1946) is about a couple who move from NYC to a rundown farmhouse in Connecticut, and the 1948 movie with Cary Grant and Mryna Loy is always worth watching.  Sloan Wilson’s 1955 novel The Man in the Gray Flannel Suit, made into a movie starring Gregory Peck as the commuting businessman who learns he needs to spend more time at home, was set in nearby Southport.  John Cheever’s 1964 short story “The Swimmer” takes place in an affluent Connecticut suburb like Fairfield, and the 1966 movie with Burt Lancaster was shot in nearby Westport. Both the 1975 and 2004 versions of The Stepford Wives were filmed in various towns in Connecticut, and the 1975 version had locations in the Greenfield Hill section of Fairfield.  And the best of them all,  Richard Yates' Revolutionary Road, was set in a fictionalized version of “Fairfield County,” and scenes for the movie with Leonardo DiCaprio and Kate Winslet were shot in the real Fairfield.

Like many New Deal post offices, the Fairfield p.o. contains an historic mural.  (There may have been another one on the opposite wall, but according to the staff, it was wallpapered over years ago.)  The extant mural was painted in 1938 by New York artist Alice Flint, who also did murals in Georgia and Louisiana.  It depicts a couple on horseback in a procession symbolizing the passage of time.  It’s entitled "Tempora Mutantur et Nos Mutamur in Illis," a Latin motto which means “Times change, and we change with them.” 

(Photo credit: Fairfield p.o. exterior; Fairfield postcard; Revolutionary Road; mural, jimmywayne on flickr, Image used with permission of the USPS)

(By the way, note the FedEx box in front of the post office.)

UPDATE: July 15, 2011: The Fairfield post office was included for example purposes in a OIG study about the fair market value of postal properties.  Apparently the Fairfield post office was purchased for about $1 million (or perhaps that's how much it cose to build?), and it’s worth $3.5 million today.)

The Face of the Post Office: New Deal P.O. in Eugene, for sale

July 9, 2011

It’s the usual story.  The Postal Service owns a beautiful downtown post office that’s been a thriving hub for decades.  Then it moves most of the postal workers to another facility, a non-descript annex on the edge of town or in another city.  After a few years the Postal Service says, “the building is much bigger than we need,” and it goes up for sale.  When the citizens of the community learn that the post office is on the market, a Postal Service rep tells patrons, ““We want to maintain our retail presence in the area,” so perhaps we’ll be able to lease back some space in the building or in another nearby location.

That’s what happened in Eugene, Oregon, home to a 72-year-old landmark post office built by the New Deal.  For 40 years it was the main processing center, but in 1979 the Postal Service moved most of the workers to a processing center in Springfield, and now the Postal Service has put the building up for sale. (Register-Guard)

Eugene Mayor Kitty Piercy wrote a letter to Eugene Postmaster Paul Bastinelli , saying the “signature post office is essential to the long-term growth and economic vitality of Eugene’s city center" and asking the Postal Service to discuss the fate of the post office with the community.  Ron Anderson, the Portland-based USPS customer relations coordinator, said that’s not how it works.  First the post office finds a buyer, then it notifies the community of the impending closure, and then it listens to what residents have to say.

The downtown post office was listed on the National Register of Historic Places in 1985.  It was designed by Gilbert Underwood, and it contains murals by Carl Morris, a friend of artists Mark Rothko and Robert Motherwell.  The murals depict the local industries of lumbering and agriculture.

If you’re an interested buyer, the post office is listed by Northland Realtors.  The asking price is $2.5 million.  Unless the city of Eugene can find a way to take over the building for public purposes, it will probably turn into a restaurant or offices for a private company.  That would be too bad.  As career postal employee Gary Jarvis told KVAL.com, moving out such a unique building will lower the postal service's standing in the community.  "That's the face of the post office the community has come to know," he said.

(Photo credit: Eugene p.o.; mural; for sale)

How to Privatize the Post Office: Piece by piece, step by step

July 7, 2011

Think it would take an act of Congress to privatize the postal system?  They’ve been privatizing the post office for four decades, piece by piece, step by step.  It’s called “piecemeal privatization,” and it works like this.

Step One: Marketization

Marketization is “the process that enables state-owned enterprises to act like market-oriented firms.”   It’s achieved by reducing government subsidies, deregulation, organizational restructuring, and decentralization, and it often paves the way for complete privatization.

It was the Postal Reorganization Act of 1970 that began the marketization of the postal system.  It transformed the U.S. Post Office Department – a government agency and part of the Cabinet — into the independent U.S. Postal Service – a government-owned corporation that is self-supporting and receives no tax dollars.  The post office thus came to be viewed in terms of a business model.  Like a private corporation, it was expected to adopt the methods and values of the marketplace — cut costs, streamline operations, fight unions, don’t run in the red — rather than operating as a public service “to bind the nation together.”

That’s why you keep hearing politicians and USPS leaders say “the Postal Service is a business,” and it needs to “optimize its infrastructure facilities” and “shed under-utilized assets.”  And that’s why a few weeks ago Dennis Ross’s committee on postal infrastructure brought in a couple of corporate execs to explain how they run their businesses. 

The Reorganizaton Act, it's worth noting, was the product of a presidential commission in 1967-68, chaired by retired AT&T Chairman Frederick R. Kappel, who, in testimony before Congress, said, "If I could, I'd make it a private enterprise and I would create a private corporation to run the postal service and the country would be better off financially.  But I can't get from here to there."  It would be left to others to "get from here to there."

Step Two: Contracting Out

The main strategy for piecemeal privatization is, as postal workers know well, “contracting out.”  Throughout its history, almost all of the work of the government’s Post Office was done “in house.”  That changed in 1988 when President Reagan’s Commission on Privatization submitted its report Privatization: Toward More Effective Government, and outsourcing came into fashion across the spectrum of government agencies.  The commission recommended that the Postal Service more actively pursue contracting out opportunities in all of its functions.  (It also recommended that the private express statutes, which mandate the postal monopoly, be repealed to allow competition in the provision of any postal service.)

Also in 1988, the Postal Service introduced the USPS Procurement Manual, which made it easier for management to outsource without worrying about “full and open competition.” The manual made “adequate competition” sufficient, it introduced “simplified purchasing,” such as replacing sealed bids with “competitive negotiations,” and it downgraded the procurement regulations into “non-binding guidelines.”  That paved the way for the big FedEx deal in 2001, which was criticized for failing to go through a rigorously competitive bidding process.  No matter, there are now thousands of FedEx boxes in front of post offices across the country, and no one seems to mind.

The Postal Service now contracts out $12 billion annually.  FedEx is at the top of the list, with $1.37 billion in 2010, automation supplier Northrop Grumman is next, at $494 million, and UPS is 12th on the list, taking in $95 million of USPS business.  By outsourcing work to private corporations, the Postal Service in effect sells parts of its own business to the highest bidder or the company it chooses to negotiate with.  The Postal Service has contracted out transporting the mail, equipment repair, retail postal stations, cleaning services,  implementation of the bar code system, and many other elements of its operations, in addition to promoting the huge pre-sort business through bulk mail discounts.

Contracting out got to be such a problem that Congress held a hearing about it in 2007 called “Inquiring Minds Want to Know: What is the Postal Service Contracting Out?”  APWU President William Burrus testified at the hearingthat the USPS “has begun to travel resolutely down the road of privatization without authorization from Congress” — or the American people. The subcontracting of postal work, he warned, “is just one aspect of a dangerous trend: the wholesale conversion of a vital public service to one performed privately for profit.”

Step Three: Divestiture

The next stage in piecemeal privatization is “divestiture”—selling off assets.  The 1988 Presidential Commission on Privatization said that “divestiture of federal assets should be pursued” in the interest of ensuring the “highest and best use” of the Postal Service’s assets.  But there are many “Barriers to Network Retail Optimization” (laws, regulations, unions, politicians), and over the past 40 years only 4,000 post offices have closed.

On June 27, 2011, Postmaster General Donahoe said that the Postal Service will close half of its 32,000 post offices over the next six or seven years.  This obviously represents a significant change in the country’s postal system, and any such change is supposed to be reviewed in an Advisory Opinion by the Postal Regulatory Commission.  But the Postal Service is going at it “piece by piece” and arguing that no such significant change is happening.  The League of Postmasters and National Association of Postmasters have filed legal complaints with the PRC, but thus far, to no avail.  The closures continue.

It took the country a couple of centuries to develop a network of brick-and-mortar post offices, and the government built thousands of post offices along the way, post offices that were designed to display the power and prestige of the nation.  In the early 1900s, post offices were designed in the classical style, to call to mind the great democracies of Greece and Rome, and to inspire confidence in the federal government.  During the New Deal, FDR personally took a hand in designing several post offices near his home in Hyde Park, NY, and the country built 1,100 beautiful post offices in the midst of a Depression.  The post office — if it was built before the 1950s —is often one of the grandest buildings in a town or city. 

For the past twenty years, the Postal Service has been preparing the way to dismantle this legacy of brick-and-mortar post offices, as if it were a burden to be disposed of rather than an inheritance it was responsible for protecting.  It started with research papers by right-wing think tanks, government reports by the GAO and other agencies, and detailed USPS space inventories—how much is used for this and that, how much is owned or leased, how much business each facility does —all intended to demonstrate the money that could be saved by consolidating and selling.

Then came the consolidations of post offices and relocations of workers.  The Postal Service has typically moved workers from a large downtown post office to a suburban annex.  That has left a post office, once a hub of community, with a small retail staff and a lot of empty space—space now used to justify calling the building “obsolete” and making a quick sale to the highest bidder. 

The Postal Service has also been going from owning to renting. It now leases three-fourths of the space for its operations.  Leases make it much easier to consolidate processing facilities and to close an “under-performing” post office.  Since a post office can’t be closed for strictly economic reasons, it helps to have a lease “problem” to justify a closure — a practice that has been criticized by the Postal Regulatory Commission.

Post offices themselves, owned or rented, are being replaced by the 70,000 “alternative retail outlets,” like supermarkets, Office Depots, and kiosks, that the Postal Service boasts about with its USPS Everywhere PR program.  These are the places the Postal Service recommends to people when they lose their post office — that is, when the Postal Service doesn’t simply suggest staying at home and using the internet.

That’s where things stand right now.  We’re witnessing the Great Sell-off of Postal Service assets.  Unlike the earlier stages, which were relevant mainly to postal workers, USPS management, and the companies that do business with or compete with the Postal Service, this current transformation is being experienced by the entire country.  People are seeing their post office being targeted for closure, and a few months later, it’s gone.  In some cases, the post office is closed in a day or two—thanks to an “emergency” issue with the lease, a broken leg, or a dispute over a few dollars a day.

Step Four: What Comes Next?

The marketization, contracting out, and divestiture will continue, at ever-increasing speed.  The Postal Service will cut the work force again and again (over a half million career employee positions have been cut since 2000), increase the percentage of part-time and flexible employees, end Saturday delivery (which will be picked up by some private company), expand the network of alternative retail outlets, and close half of the country’s 32,000 post offices.  Then the Postal Service will be a “lean and mean” corporate entity, ready for the final stage of privatization. 

What shape this will take is hard to predict. Perhaps, as suggested by the 1988 Presidential Commission on Privatization, the Postal Service will be turned into an employee-owned company through an employee stock ownership plan (ESOP).  Perhaps it will be broken up into smaller units and sold off, piece by piece.  Perhaps it will be taken over in its entirety by a FedEx, which can then skim the cream and sell off the less profitable parts.  Or perhaps, as they’ve talked about doing in Great Britain, there will be an IPO and the Postal Service will sell itself in shares on the stock market.

Trust the corporate elite to figure all that out.  Regular citizens will probably have as much to say about it as they do when a Postal Service manager comes to town and tells them their post office will be closing.

(Image sources: Chicago main post office (built 1932, auctioned off in 2009); Privatization book cover; Funny Times cover; FedEx box in front of Utica, MI post office; Hyde Park, NY post office; Greenwich CT post office for sale; Office Depot USPS counter; Uncle Sam auction cartoon (from "Privatization: Selling America to the Lowest Bidder" by Al Bilik)

Modesto Update: Going, going

July 5, 2011

The New Deal post office (1933) in Modesto CA is being auctioned off, and you can follow the bidding action on the General Services Administration (GSA) auction site (it's one of the featured properties at the top).  The auction started on June 9, with a minimum opening bid of $100,000.  As of July 5, three bidders were competing, and the high bid was $350,000.  The GSA site doesn't say when the bidding will be closed, so you'd better get yours in soon.  The site has some nice photos of the New Deal murals in the building. 

The Modesto post office story is another case where the Postal Service gradually emptied  the building of all but a small retail operation, and then declared it  was under-utilized, obsolete, and needed to be sold.  Non-profit groups, working through county officials, have expressed interest in buying the building, but the GSA says it will go to the highest bidder.  The GSA can decline the top bid if it doesn't reach the appraised fair market value, which the GSA won't disclose.  Other New Deal post offices have sold for millions—one in Palm Beach FLh went for $3.7, and another in Westport CT, for $3.6 million.

(More on the story here, and a TV news report, here.)

(Photo credit: Modesto po)

Fish Stories: New Deal P.O. in Geneva IL, for sale

July 4, 2011

In 1843 women's rights advocate Margaret Fuller, on a road trip around the country,  stopped for a few days in  Geneva, Illinois, a new settlement on the western fringe of Chicago.  In her book Summer on the Lakes, she wrote that it reminded her of a New England village, and she discovered many New Englanders living there, "generous, intelligent, discreet, and seeking to win from life its true values."  She went to church and listened to a sermon, then spent a couple of days "passing some happy hours in the woods that fringe the stream, where the gentlemen found a rich booty of fish."

They must be proud of the fishing in Geneva.  When the federal government commissioned a mural for the post office in 1941, the painter, Manuel Bromberg, had to work out the subject matter with the people of the town.  The title of the mural is "Fish Fry in the Park."

The mural embellishes the Geneva post office, built by the New Deal in 1938.  Located within the Central Geneva Historic District , which contains 68 historic buildings (including Frank Lloyd Wright’s P. D. Hoyt House), the post office was a busy place for decades. But years ago, as part of a nation-wide strategy to abandon large downtown post offices, the Postal Service moved the mail carriers to an annex behind a MacDonald’s

With only a retail business and a staff of three, the space is now considered “under-utilized,” so the Postal Service has been trying to sell the building.  It put it up for sale in 2009, but there weren’t many interested buyers, except for a local company, Fagans Graphic Design.  Company president Joe Stanton said he gave up on trying to buy the building because dealing with the federal government became a “nightmare.”

The property is currently valued at $1.2 million.  The real estate firm Jones Lang is handling the sale, reports the Geneva Patch.   “We think it’s an interesting property for redevelopment,” said the company’s senior VP Jeff Gittelman.  He imagines the building “as the home of several retailers or a new downtown restaurant.”

Postal worker Jim Cowell said, “It’s built to be a post office. Nothing else should be here.”

The fate of the mural has been of concern to Geneva’s citizens since they learned the building was for sale.  In January the mural was temporarily removed for restoration; it’s supposed to be remounted later this year. 

“This restoration is a benefit to the community,” said USPS rep Robert Hart, in a USPS press release back in January.  “The Postal Service makes every effort to preserve and safeguard the art in our buildings for future generations.”  Unfortunately, when it comes to preserving and safeguarding the post office buildings themselves, the Postal Service has, well, other fish to fry.

(Photo credits: Post office exterior; mural; for sale)  Here's a video about the mural.

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Also: Sarah Ryan's "Understanding Postal Privatization: Corporations, Unions, and the "Public Interest"


 

Privatization in the UK

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Organizing to Save Rural Post Offices


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