June 30, 2012
POStPlan, the Postal Service’s plan to reduce hours at 13,000 post offices, was not invented out of thin air. The Postal Service has been reducing hours at post offices for many years. But try getting any information from the Postal Service about the scope or effects of those reductions.
In 2004, the GAO issued a report about efforts to optimize the retail network, and it discusses reducing hours at post offices. After noting that the Postal Service closed 440 post offices in 2003, the GAO says, “According to USPS, it has also adjusted hours at existing post offices from time to time to reflect customer demand.”
The GAO asked for details, but the Postal Service “could not provide information on the number of post offices where changes in hours occurred in fiscal year 2003.”
What we've got here is a failure to communicate
The GAO report goes on to explain how the Postal Service adjusts hours based on the number of transactions and customer visits. The GAO then states, “USPS reported that its efforts to increase efficiencies in its retail area have resulted in a decrease of almost 5 million workhours from fiscal years 2002 to 2003.”
Given that this number appears at the end of a paragraph about reducing hours at post offices, one might get the impression that the 5 million workhours were eliminated thanks to these reductions. But that’s probably not the case. If the reduction in hours of operation averaged 4 hours a day per post office, 5 million hours would involve 4,800 post offices.
It’s not likely that the Postal Service reduced hours at nearly five thousand post offices in one year. The 5 million workhours must include many other ways to reduce retail hours, like opening fewer windows in post offices where there are several and eliminating window clerk jobs.
The GAO report thus offers no relevant information about cutting hours of operation at post offices. It contains no details about how many post offices had their hours reduced, how many hours the average reduction was, or how the reductions impacted revenues, customers, and communities. The Postal Service “could not” provide this information — or it would not.
Given the Postal Service’s inability or unwillingness to share information about its practice of reducing hours, it should come as no surprise that the 2004 GAO report is entitled “USPS Needs to Clearly Communicate How Postal Services May Be Affected by Its Retail Optimization Plans.”
The Hail Mary is an incomplete: The PRC denies the APWU motion to stop the change in service standards
June 29, 2012
The Postal Regulatory Commission has denied the APWU’s motion for an emergency order directing the Postal Service not to implement its proposed changes in service standards on July 2. Next week, then, overnight delivery will end for Inter-SCF mail (that's mail that needs to travel from between processing facilities). The PRC press release is here, and the order is here.
The decision does not come as a surprise. As discussed in this blog post a few days ago, it was unlikely that the PRC would require the Postal Service to wait until the Advisory Opinion is completed, sometime around Labor Day. Today’s order does, however, contain a clear statement that the Commission believes the public interest is not well served by the Postal Service’s decision to proceed with implementation while the Advisory Opinion process is still ongoing.
Today’s order reviews the arguments made by the APWU and the Postal Service, and adds a few paragraphs of Commission Analysis. There were several issues on the table.
1. Likelihood of Success on the Merits: The APWU needed to demonstrate that it would ultimately prevail in its original Complaint about premature implementation of the plan. The Commission decided, however, that “APWU fails to provide any persuasive argument that 39 U.S.C. 3661 precludes the Postal Service from implementing any nationwide change in the nature of postal services until after the Commission issues its advisory opinion.”
That’s a reference to section 3661 of Title 39, the passage in the Postal Reorganization Act that establishes the advisory opinion process. The Act says, ‘When the Postal Service determines that there should be a change in the nature of postal services which will generally affect service on a nationwide or substantially nationwide basis, it shall submit a proposal, within a reasonable time prior to the effective date of such proposal, to the Postal Regulatory Commission requesting an advisory opinion on the change.”
The passage does not clearly state that the Postal Service must wait for the Opinion itself, and the PRC decided that the APWU had failed to demonstrate that its interpretation of the passage was conclusive.
June 29, 2012
Some preliminary numbers are circulating on how the Special Incentive Offers are going. About 45,000 mail handlers were offered $15,000 to retire, and as of June 22, the original deadline, 2,800 had decided to accept (2,500 optional and 260 VER). The response is somewhat less than projections based on previous offers.
It’s a different story for postmasters, however, and their response has apparently taken the Postal Service by surprise. Based on past history, around 2,000 postmasters would have been expected to take the offer of $20,000. But as of June 22, over 3,600 postmasters had decided to retire (2,500 optional and 1,100 VER). With the deadline extended to July 2, the total may reach something like 4,500.
A few weeks ago, when the Postal Service saw these kinds of numbers coming in, it announced that due to the “overwhelming response” to the incentive offer, so it would be necessary to postpone the retirement date for some postmasters from July 31 to August 31 or September 30. Staggering the retirement dates will give the Postal Service a little more time to adjust, but it’s not going to be easy staffing all these post offices.
Most of the retiring postmasters run post offices that will have their hours cut under POStPlan. Those offices will need temporary full-time replacements for a couple of months, and then they’ll need new part-time workers when the hours are cut, starting in the fall. It’s not just these that will require new staffing, however. Many postmasters who are retiring work at regular full-time offices not part of POStPlan. When they leave and a position opens up, a POStPlan postmaster will want the job, so that postmaster’s post office will need new workers too.
The Postal Service is going to get a quick look at what it’s like to staff 13,000 post offices with part-time employees. It’s possible that as many as 7,000 post offices will need to be staffed over the coming months. Personnel at other offices will need to be shifted around, new workers will need to be hired and trained, and postmasters at Administrative Post Offices (APO) will need to learn how to manage part-time workers at a Remotely Managed Post Office (RMPO). It could be a real headache. One thing is for sure: the quality of service at thousands of post offices is going to decline very rapidly.
June 25, 2012
Sometime this week, the Postal Regulatory Commission will issue a ruling on the APWU’s Motion for an Emergency Order, which seeks to prevent the Postal Service from implementing a change in service standards for First Class mail on July 1.
If the PRC does not issue an order to stop the Postal Service, overnight delivery will come to an end for Inter-SCF First-Class Mail and periodicals. That’s mail that originates or destinates outside of the geographic area served by a sectional center facility (SCF). It’s basically regional mail, in between local and long distance, and it represents about 20 percent of First Class mail. The other 80% of overnight delivery is Intra-SCF mail — the “turnaround” mail that originates and destinates within the same geographic area served by an SCF — it's basically local mail that "stays in the building" — and it will be preserved until 2014, then that will be the end of overnight delivery for First Class mail.
The APWU says the Postal Service should wait until the PRC issues its Advisory Opinion before implementing the changes, sometime around Labor Day. The Postal Service says it won’t wait, and it’s filed an Opposition brief to the union’s request, arguing that the PRC doesn’t have the authority to issue an injunction, and even if it did, there’s no justification for it.
The APWU argues that the 1970 Postal Reorganization Act (PRA) — the legislation that created the Postal Service, the PRC and Advisory Opinions — says the Postal Service must request an Advisory Opinion when it’s planning a change in service with nationwide impacts. The Postal Service replies that the Act says only that it must request an Opinion; the Act doesn’t say that the Postal Service must wait until the Opinion is issued.
The APWU says that if the Postal Service implements the changes before the Opinion is out, it would render the legal requirement for an Opinion “nugatory” (of no value). The Postal Service responds that if it were expected to wait for an Opinion, the regulations would not specify that the request for an Advisory Opinion must be submitted “not less than 90 days in advance of the date on which the Postal Service proposes to make effective the change” (39 CFR § 3001.72).
The APWU argues that if the service changes have already been implemented when the Opinion comes out and the Commission makes a recommendation against the changes, the Postal Service will say that it would impose too great a cost on itself and its customers to undo the changes. The Postal Service replies that if it proves desirable to reverse the changes, mailers and the Postal Service can adjust. In the meantime, says the Postal Service, a delay would lead to additional expenses and require it to revise its consolidation plans yet again. (All the documents concerning the APWU Complaint and motion for an emergency order are in docket C2012-2.)
No stopping summer consolidations
As good as the arguments may be for an emergency order, it’s not likely the Commission will rule in favor of the AWPU’s request. Such an order would say, in effect, that the Postal Service must wait until the Opinion is issued. As the Postal Service notes in its Opposition brief (p. 14), PRC Chairman Ruth Goldway has already expressed her view that the Postal Service needn’t wait for an Advisory Opinion to be issued before it implements the change in service standards.
The APWU knows this, and it has known for a long time that the change in service standards would most likely be implemented before the Opinion was issued. In March, USPS VP David Williams told the Commission that the Final Rule on the changes would be published in the Federal Register in mid-April and the Postal Service would immediately begin the process of helping customers to adjust to the new system. Everyone knew that the Opinion would not be out until months later.
June 22, 2012
The Postal Service has notified postmasters considering retirement that they’re welcome to apply for a job as a Postmaster Relief (PMR). It’s “an opportunity to continue to serve postal customers” — and an opportunity to earn $11.76 an hour.
Who could pass up an opportunity like that? Who wouldn’t want to give up a good-paying full-time job, transition into retirement a few years before you’re ready, and then take your old job back for half the day and at a third your hourly wage?
The Postal Service must be counting on quite a few takers. Perhaps there will be a lot of postmasters who figure that between their pension, the $20,000 VER offer, and a few hours a week as a PMR, they’ll be able to get by. Maybe some of them will simply to want to “continue serving their community.”
In any case, the letter to postmasters from the Postal Service is rather vague about some of the details, and there are a couple that warrant a closer look.
The letter says, “Under the rules that allow the Postal Service to reemploy annuitants without a reduction in their retirement annuity, the Postal Service must first post the PMR position. If, as we expect in most cases, no qualified applicant applies for the position, we will then select a retired postmaster to fill the vacancy.” The letter goes on to say, “Your ability to work in this position without reduction to your annuity is subject to specific conditions and a limited duration.”
In order to get some sense of what’s behind those comments, it’s necessary to go back to the statute and regulations that govern reemployment of government retirees.
Decoding the rules
Title 5 of U.S. Code, sections 8344(i) and 8468(f), contain the laws concerning federal retirees, annuities, and re-employment. Generally speaking, retirees don’t go back to work for the government, and when they do, their annuities are usually reduced. But as section 8344(i) describes, there are exceptions.
The Director of the Office of Personnel Management (OPM) can issue waivers “on a case-by-case basis for employees in positions for which there is exceptional difficulty in recruiting or retaining a qualified employee.”
The OPM can also delegate authority to the head of an agency to make such exceptions “for an employee serving on a temporary basis, but only if, and for so long as, the authority is necessary due to an emergency involving a direct threat to life or property or other unusual circumstances.”
These sections of Title 5 are implemented by the Code of Federal Regulations, which provides more details. The part entitled “Reemployment of Military and Civilian Retirees to Meet Exceptional Employment Needs” (5 CFR 553) says that there are four categories of case-by-case waivers: (1) An emergency hiring need; (2) a severe recruiting difficulty; (3) a need to retain a particular individual uniquely qualified for a specific project; and (4) requests based on other unusual circumstances not rising to the level of an emergency.
The CFR presents various rules about how each of these criteria should be applied, and this Q & A fact sheet from the OPM explains many of the details. The fact sheet outlines the circumstances under which an annuitant can be reemployed under the criterion of “severe recruiting difficulty.”
According to the OPM, “The individual for whom an agency is seeking a waiver based on a severe recruiting difficulty must be the only qualified candidate described in the agency’s recruiting efforts. For these purposes, a minimally qualified candidate is a qualified candidate.”
The fact sheet goes on to say, “Agencies MUST submit documentation for requests based on a severe recruiting difficulty,” and this documentation should include, among other things, a description of the length, breadth, and results of the agency’s recruiting efforts, including details about the number of applicants and an explanation as to why none of the candidates was selected.
June 20, 2012
ENDORSE THE HUNGER STRIKE HERE
On June 25th, a band of protestors will travel to Washington DC to stage a four-day hunger strike calling attention to the Postal Service’s plans to reduce service and cut jobs. That’s just days before the Postal Service implements the change in service standards that will end overnight delivery for about 20 percent of First Class mail, a prelude to further service reductions next year and in 2014.
“Save the Post Office” joins over 400 community groups, clergy, citizens, and postal workers endorsing the strike. You can see the endorsement list here, and you can add your name here. (By the way, the form asks for your phone number and street address, but those details won't appear in the endorsement list.)
The main theme of the Hunger Strike is that cuts to service will succeed only in driving business away from the Postal Service and sending it into a death spiral. Slowing down the mail, closing plants, closing post offices and reducing window hours, and putting tens of thousands of postal employees out of work is not the way to solve the Postal Service’s financial problem.
That problem can be addressed with a simple act of Congress: Repeal the 2006 Congressional mandate that requires the Postal Service to pay $5.6 billion a year into its Retiree Health Benefit Fund (RHBF) — to cover health benefits decades in advance. That mandate is the main cause of the postal deficit, and it’s completely unnecessary.
As the USPS Office of Inspector General has observed in a letter to Senator Bernie Sanders, “Prefunding retiree health care is rare in the public and private sectors. We have been unable to locate any organization, either public or private, that has anything similar to the Postal Service’s required level of prefunding heath care benefits.”
If it’s so rare, why did Congress create such a fund in the first place? Back in 2002, the Office of Personnel Management (OPM) determined that the Postal Service was on course to overfund the CSRS pension fund by over $70 billion. The Government Accountability Office said the overfunding could top $100 billion. But reducing the Postal Service’s payments into the pension fund would have added to the federal deficit by $4.5 billion a year. One of the main reasons Congress decided to have the Postal Service prefund retiree health care was to keep those billions flowing into the Treasury.
If Congress had been concerned simply with having enough money to pay for retiree health care, it could have decided on a 40-year payment schedule, as the OPM recommended. But the health care payments would have been too small to balance out the $4.5 billion reduction in payments to the pension fund. So Congress came up with a ten-year payment schedule — hence the $5.6 billion the Postal Service is now required to pay into the RHBF.
An endless stream of news reports repeats the message coming from Congress and postal headquarters: The Postal Service has lost $25 billion over the past five years, and If nothing is done, the Postal Service will go broke. And it's all because of the Internet.
But as the Postal Regulatory Commission stated in its most recent Annual Compliance Determination, “The primary reason for the losses is the overly optimistic RHBF prefunding requirement. If there had been no prefunding requirement, the cumulative 5-year loss would have been reduced to $4.4 billion.”
So over 80 percent of the $25 billion deficit was caused by the prefunding mandate. As for the remaining $4.4 billion, about a third of that loss occurred in 2009 and 2010 and can be attributed directly to the recession. The big loss in 2011 was due partly to the continued weakness in the economy, but it has another cause — and it's not the Internet. Postal management deserves a good deal of the blame for recent revenue losses. Whether by accident or design, it has helped to undermine the relevancy and viability of the Postal Service by constantly invoking insolvency and “Greece,” by announcing one cost-cutting plan after another, by reducing service and by promising to reduce it more.
In the end, however, Congress must take responsibility for the crisis. “Not the Internet, not private competition, not the recession — Congress is responsible for the postal debt,” explains Jamie Partridge, a retired letter carrier traveling from Portland, Oregon, for the Hunger Strike. “Corporate interests, working through their friends in Congress, want to undermine the USPS, bust the unions, then privatize it.”
“We will not stand by as our beloved Postal Service is destroyed,” says Tom Dodge, a postal worker from Baltimore who will be joining the Hunger Strike. “We will shame Congress and denounce the Postmaster General. We will engage in dramatic actions on Capitol Hill and at the USPS Headquarters to turn up the heat on decision makers.”
For more about the Hunger Strike, visit the website of Communities and Postal Workers United, a national grassroots network that’s working to share information and expertise in order to preserve customer service and fight the privatization of the Postal Service.
Busy week at the PRC: The union complains, the Postal Service shares numbers, and the senator sends a letter
June 17, 2012
It was a busy week at the Postal Regulatory Commission. On Wednesday and Thursday, the Commission heard cross-examination from witnesses challenging the Postal Service’s Network Rationalization plan to close over 200 processing plants. The APWU has also filed a complaint about the plan as well as a motion for an emergency order seeking to prevent the Postal Service from implementing the service standard changes at the end of June.
On Friday, several interesting documents concerning POStPlan — the plan to cut hours at 13,000 post offices — showed up in the PRC’s daily listings. There’s a spreadsheet showing the cost savings on the plan, a response to an inquiry about the revenue losses the plan might cause, and a request for non-public status on another library reference containing the revenue numbers for all the POStPlan post offices.
The PRC also received a letter from Senator Carper on Friday, urging the Postal Service to speed up its Advisory Opinions.
We’ll get to the latest developments on Network Rationalization in the next post. For now, here’s the latest on POStPlan, plus a comment on Senator Carper’s letter.
Cost savings on POStPlan: No great expectations
The Postal Service has provided the PRC with a spreadsheet showing how POStPlan could save $500 million. There’s not much to the analysis, and it looks a lot like the guestimates we made a couple of weeks ago.
The Postal Service says that the goal of POStPlan is not to save $500 million or to achieve any particular cost savings. In a reply to an information request from the Commission, the Postal Service simply says, “Postal management's goal in pursuing the POStPlan is to improve efficiency and meet customer needs by matching retail hours and services to community postal needs and use patterns” (POIR 1-10).
According to the Postal Service, then, it will be better able to “meet customer needs” if it closes their post office a few hours a day. That’s pretty much along the same lines as its view that closing 3,700 post offices would be a form of “retail access optimization.” The new plan is not about saving money, says the Postal Service. Its purpose is simply to “match” retail hours to postal needs. “The goal,” says the Postal Service, “is not contingent on a specific cost savings estimate or expectation.”
While a specific cost savings estimate may not be the goal, the Postal Service is justifying the plan by saying it will save $500 million, and the spreadsheet shows how. The total cost for labor for the 17,727 impacted post offices is currently $1.26 billion. Under POStPlan, the labor costs would be $0.75 billion. The total savings is around $517 million.
You can see the original USPS spreadsheet on Google docs, here. For some reason, it includes not only the 17,727 post offices that are part of the plan, but another 4,100 Level 18’s that aren't. Just to make things a little clearer, here’s the spreadsheet with those Level 18s removed, and some numbers on hours of operation and hourly wages added:
As you can see, the cost savings analysis compares the total labor costs for full-time postmasters to the lower costs for using part-time replacements. The difference between them is the savings. There’s nothing in the analysis about other costs that POStPlan might incur, like training thousands of part-time workers or sending someone from an Administrative Post Office to a Remotely Managed Post Office to open or close the lobby, having a carrier go the post office to distribute the mail for PO boxes in the morning (the office may open only in the afternoon), and all the other expenses in managing part-time post offices from afar.
What revenue losses?
As part of its inquiry into cost savings, the PRC also asked the Postal Service to “explain any efforts the Postal Service has made to estimate the expected impact on revenue from reducing window service hours under the POStPlan. Include electronic worksheets showing how this estimate was calculated.”
The Postal Service could provide no such worksheets. It says it wouldn’t know how to do such calculations. In reply to this request, the Postal Service says the following. It’s worth quoting in full.
June 14, 2012
Last week the National Trust for Historic Preservation named the Historic Post Office Building to its annual list of the 11 Most Endangered Historic Places.
The historic post office faces an “uncertain future,” observes the National Trust in its press release. The Postal Service has been closing post offices at an unprecedented pace, announcing one downsizing plan after another, and selling off its properties. At least forty historic post offices have been sold or put on the market in the past year.
Among the Trust's main concerns is the way the Postal Service has been handling the sell-off. "The lack of a transparent and uniform national process from the Postal Service — one that follows federal preservation laws when considering disposal of these buildings — is needlessly placing the future of many historic post office buildings in doubt," says the Trust. Stephanie Meeks, president of the National Trust, says she hopes to work with the Postal Service to develop a process for adapting and reusing the historic buildings.
Asked about the announcement from the National Trust, USPS spokesperson Sue Brennan told the Associated Press — in an article that appeared in over a hundred news outlets — that of the 31,500 post offices nationwide, only 55 are officially listed on the National Register of Historic Places.
That didn’t sound right, so I contacted Ms. Brennan. She explained that the number 55 probably referred to how many National Register post offices were among the 3,700 post offices being studied for closure last year, and she graciously provided a very thorough USPS list that inventories all the Postal Service’s historic post offices.
As it turns out, about 440 currently operating post offices are on the National Register, and as many as 1,800 others are eligible for the Register. Here are a list and a map of the 440, complete with photos and links to more information, like the National Register nomination documents. More tables and maps are listed at the end of this post.
The Postal Service’s Real Estate
The Postal Service is obviously having cash flow problems, and it clearly likes to poor mouth when it suits its purposes. But its deficit problem is primarily and unnecessarily caused by the 2006 Postal Accountability and Enhancement Act (PAEA), which requires the Postal Service to pay $5.6 billion annually into a fund for the health care of future retirees. The payments aren't just for retirees. They were mandated by Congress so it could avoid refunding overpayments to the postal pension fund, which would have added to the federal deficit.
The Postal Service isn't really going broke. It's actually incredibly wealthy. If you ignore the health care prepayments, it is basically breaking even, in spite of the weak economy and diversion to the Internet. (For FY2012 year-to-date, the loss is $275 million, about 0.7% of revenues.) The Postal Service generates $65 billion in annual revenues, and it is sitting on a mountain of assets — 8,600 properties, 214,000 vehicles, $326 billion in retirement funds, and much else, like intellectual property and an experienced, knowledgeable workforce. No one knows how much the Postal Service is worth.
The Postal Service has not released any numbers about the value of its real estate holdings, and it may not even know the total itself. According to an OIG report issued last year, the Postal Service does not maintain fair market or assessed tax value records for its properties. It does, however, keep track of purchase prices, and in its 2011 fiscal summary, the Postal Service reported holding over $24 billion (in purchase price) for property such as buildings and land. The OIG figured that the assets were worth at least twice that due to appreciation, but on its books, the Postal Service goes the other way and depreciates them by half.
A significant portion of the Postal Service’s $25 to $50 billion in real estate resides in just a few buildings, like large processing plants, which can be worth $50 or $100 million a piece, sometimes more. According to the OIG’s report, L’Enfant Plaza is probably worth $115 million.
On today’s market, a typical post office can go for anywhere between a half million dollars to several million, as you can see on the USPS Properties for Sale website. This site, by the way, is the product of a partnership between the Postal Service and CB Richard Ellis, the world’s largest commercial real estate firm, which is now handling sales and leases.
Figuring a rough average of a million dollars per post office, the 2,200 historic properties could be worth something like $2 billion.
Even if the Postal Service were to sell every one of these treasures, it wouldn’t add up to one annual payment to the retiree health care fund, which could be eliminated by a simple act of Congress. That means Congress must ultimately bear responsibility for the dismantling of the country's rich legacy of historic post offices.
June 7, 2012
BY MARK JAMISON
The United States Postal Service has abandoned the American people. At the direction of its Board of Governors and through the efforts of its primary officer, the Postmaster General, it has abandoned its mission of service and its basic responsibilities to the citizens of this country.
In place of an uplifting vision of binding the nation together, the leaders of the Postal Service have embraced a cynical view that denies the traditional American commitment to community and to building a solid national foundation in favor of a purely individualistic pursuit of selfish greed.
The leaders of the Postal Service have been aided and abetted in their actions by a Congress that is no longer able to act in a bipartisan way to serve the interests of the people of the United States. Hell, the vast majority of the members of Congress are no longer able to define the interests of the people of the United States. Instead, Congress splits, parses, and divides the common interest and ends up serving the deepest pockets and the most influential and wealthiest among us.
Also helping in the demise of a treasured national institution has been the Administration in Washington, a group that was elected on the promise of hope and change but instead has governed on the basis of business as usual. Its appointments relating to postal matters are either based on cynical political calculation or simply reflect complete surrender to a vision of America that severs us from generations of progress on equality and community.
Blame can also be laid at the feet of the various employee organizations. With few exceptions, the unions and management associations have increasingly accepted a corporatized postal system that redefined service into little more than a huckster’s sales pitch. They have countenanced an ever more incestuous relationship with a small segment of the marketing industry. Instead of finding a common purpose and a community of interest, these organizations have fought with each other for meaningless shreds of advantage and thereby enabled senior management to divide and conquer, leaving employees and the public worse off.
June 6, 2012
THE NATIONAL TRUST FOR HISTORIC PRESERVATION has named the Historic Post Office Building to its annual list of the 11 most endangered places. The Trust has a story, a slideshow, a feature on the post office in Geneva, Illinois, and a press release (which has the most details). The Chicago Tribune also has a story, and the Associated Press has another.
The National Trust has put the historic post office on its endangered list because the Postal Service, as part of its big push to downsize its retail network, has been selling off post office buildings, many of them valuable national treasures.
"This isn't about taking on the post office," explains Stephanie Meeks, president of the National Trust for Historic Preservation. "Of course we don't quibble with the post office having to do what they have to do to manage their business, but we do want to make sure there's a thoughtful process in place for managing the historic resources."
The Trust notes that the “lack of a transparent and uniform national process from the Postal Service — one that follows federal preservation laws when considering disposal of these buildings — is needlessly placing the future of many historic post office buildings in doubt." The Trust hopes to work with the Postal Service "to develop a consistent, sensitive, and transparent process that follows established federal preservation law for protecting historic post office buildings targeted for disposition."
One of the communities especially pleased by the news from the National Trust is La Jolla, California, which was singled out for special attention by the Trust, along with Gulfport, Mississippi, Fernandina Beach, Florida, and Geneva, Illinois. The folks in La Jolla have been fighting hard to save their historic New Deal post office, under threat of sale for many months now. They’ve put up a Facebook page and website, and it looks like they’ve gotten the attention of Senator Feinstein. There may even be a call for legislation to protect historic post offices. A flurry of articles came out today about the La Jolla post office: U-T San Diego, La Jolla Patch, La Jolla Light, and SD News.
Legacy for Sale
Three-fourths of the country’s 32,000 post offices are housed in leased spaces, but the Postal Service owns about owns 8,989 post-office properties, including post office buildings, vacant land for post-office development or modular post offices. According to David Partenheimer, a postal service spokesman, some 28% of those properties — about 2,500 — are either on the National Register of Historic Places or eligible to be listed due to their historical significance. A search of the National Register shows 869 post offices currently listed, most no longer active. A preliminary review suggests there are over 300 currently active post offices on the National Register. You can see images of many of the post offices on the National Register on wikipedia.
(In an AP story about the National Trust's announcement, USPS spokesperson Sue Brennan said there are 55 post offices on the National Register. We're checking on that.)
Over a thousand post offices were built during the New Deal. They are particularly significant because of their famous murals. According to Dallan Wordekemper, Postal Service historian, about 800 of the New Deal post offices contain priceless sculptures and murals, often prized more than the buildings themselves. Although often mistakenly identified as WPA murals, they were produced under the Treasury Department's Section of Painting and Sculpture, later called the Section of Fine Arts.
Over the past year, the Postal Service has embarked on a plan to dispose of its vast real estate holdings, and many of these New Deal post offices have already been sold. Last July, the Postal Service entered into a contract with the largest commercial real estate company in the world, CB Richard Ellis, to manage lease negotiations and sales. In November, CBRE and the USPS started a website displaying some of properties for sale. There are about 80 listed right now, a good number of them historic properties.
As of last September, the Postal Service had already sold $140 million in post offices and other property during fiscal year 2011, according to USPS spokesperson Sue Brennan. As the Wall Street Journal reported, “Postal officials say it's unclear how many of these historically significant post offices will be sold, but many communities are already starting to see the for-sale signs go up.”
Over the past year, at least 43 historic post offices have been sold or put on the market:
June 5, 2012
Yesterday the Postal Regulatory Commission put out a press release announcing that it has established the docket (N2012-2) for its Advisory Opinion on POStPlan, the Postal Service’s plan to cut hours at 13,000 post offices.
The Chairman of the PRC, Ruth Goldway, encourages postal customers “to become familiar with the new proposal and to let the Commission know of their interests and needs.” POStPlan isn’t going to be challenged by the postmasters associations, NAPUS and the League of Postmasters, so it’s especially important for the public to make its views known to the Commission.
You can send your comments to the Postal Regulatory Commission, 901 New York Avenue NW, Suite 200, Washington, DC, 20268-0001. Mention the docket number, N2012-2. You can also submit comments online using the customer service form, here. If you want to suggest questions that might be put to the Postal Service about the plan, you could probably also contact the Public Representative assigned to the case, Emmett Rand Costich, at email@example.com.
The process will be chaired not by Chairman Goldway, but by Vice Chairman Nanci Langley. No explanation on that, but perhaps Chairman Goldway has her hands full with the Advisory Opinion on Network Rationalization, which will be running concurrently, as well as the many other open dockets. Judging by the many dissenting opinions Langley wrote for appeals cases in which she challenged the Postal Service's decision to close the post office, it looks like the chair responsibilities are in good hands with Commissioner Langley.
The procedural schedule, short but sweet
The PRC has also published its procedural schedule for the Advisory Opinion on POStPlan. Compared to the schedule for previous Advisory Opinions, this one is brief, and one wonders why.
The Postal Service’s Request for an Advisory Opinion was submitted on May 25, and the schedule will be completed by July 27, unless there’s rebuttal testimony. That’s nine weeks. The Opinion itself will probably be issued in August.
For the Opinion on the Retail Access Optimization Initiative (RAOI), the plan to close 3,700 post offices, the Request was filed on July 27, 2011, and the schedule ran until November 10 — a total of 15 weeks.
The official explanation for the short schedule on POStPlan, as conveyed through PRC spokesperson Ann Fisher, is that the POStPlan Advisory Opinion builds upon the PRC’s previous work on the retail network. It has already studied the 2009 Stations and Branches Optimization and Consolidation (SBOC) initiative as well as the 2011 RAOI. The procedural schedule was also informed by a preliminary review of the Request for an Advisory Opinion, which was relatively brief and not accompanied by much else — just a few library references and the testimony of one witness, Jeffrey C. Day, who's apparently in charge of the plan.
In other words, the short schedule is due partly to the fact that this is the PRC's third Opinion on the retail network, so a lot of the groundwork has already been done. In some respects, one could even view POStPlan as the Postal Service’s response to the Commission’s Opinion on the RAOI. Not that the Postal Service necessarily sees it that way — it doesn't even mention the RAOI in its Request for an Advisory Opinion or in witness Day's testimony.
It’s worth noting, by the way, that the Postal Service never issued a formal reply to the PRC about its Opinion on the RAOI, which it did do on the Five-Day Delivery case. It never challenged any of the Commission’s findings, never publicly acknowledged the Opinion at all.
June 4, 2012
The Postal Service does not give out much information about the revenues post offices bring in, but it has provided enough data to enable one to make estimates. So we've done a little figuring and made a table with estimated revenues for FY 2011 for all 17,700 post offices on the POStPlan list.
You can view a spreadsheet here (good for an overview) or a Fusion table here (good for a map view, charts, and other analytic tools). You can go straight to a map here. The easiest way to find the revenue estimate for a particular post office is probably to use the Fusion table: Click on Options > Filter, and select Office Name or Zip > Starts with, and type in the name of the office (in ALL CAPS) or the zip code (3 digit, 5, or whatever).
Keep in mind that these revenue numbers are strictly estimates, based on a methodology described below. They're mostly useful for getting the big picture; the number for any given post office could be significantly off.
The Postal Service prefers not to provide revenue data for its post offices. About the only time one learns anything about how much revenue a particular post office takes in is when the Postal Service decides to close it. A Final Determination always contains a cost-savings analysis that includes a few details about the revenues, including the total revenues for the past three years — usually cited to show they're declining. (The Postal Service never mentions that the recession may have had something to do with the decline.)
Last year, when the Postal Regulatory Commission (PRC) was doing its Advisory Opinion on the Retail Access Optimization Initiative (RAOI) — the plan to close 3,700 post offices — the Commission requested a spreadsheet showing walk-in revenue data for all USPS retail facilities. The Postal Service submitted the material as a “non-public” library reference, meaning that only selected participants in the Advisory Opinion process could see it.
The Postal Service explained that it regards revenue figures to be "commercially-sensitive and proprietary information that should not be released into the public domain.” In its request for non-public status, the Postal Service told the PRC that it would not be “good business practice” to release this information, and making it public could cause the Postal Service to suffer "commercial harm.”
A couple of weeks ago, as part of its PRC testimony on POStPlan, the Postal Service submitted a large spreadsheet entitled "Summary" that contains data about the operations of each post office on the POStPlan list. It has calculations for retail workload, administrative workload, and so on, for all 17,700 post offices impacted by POStPlan. (You can download the spreadsheet from the PRC website here. An abridged version with just the financial data is on Google Docs, here.)
The Postal Service also provided a second spreadsheet for Average Annual Retail Revenue for POStPlan offices for FY2011. This one just has a few numbers. It’s grouped by EAS level, and it breaks out total walk-in revenue averages for each level by categories — stamp sales, meter revenue, p.o. box fees, etc.
By combining the information in the two spreadsheets, one can come up with a rough estimate for the revenues at each post office. Here's how:
June 2, 2012
When the Postal Service gave the Postal Regulatory Commission its request for an Advisory Opinion on POStPlan — the plan to reduce hours at 13,000 post offices — it provided no cost-savings analysis. In his testimony, USPS witness Jeffrey Day says only that "the Postal Service anticipates that the POStPlan will provide significant labor cost savings due to lower salary and benefit costs and a reduction in overall retail window hours."
While putting a number on the savings can cause problems with the PRC, publicly the Postal Service has been more forthcoming, and there's a press release on the USPS website saying that the plan would save a half billion dollars annually. The press release provides no details, but using all the data that's out there, one can imagine how the Postal Service might be figuring things.
The following table provides estimates about how much the POStPlan post offices cost to operate (for labor) before and after implementation. The numbers on impacted post offices and postmaster salaries come from a POStPlan presentation available on the League of Postmasters’ website; some of them also appear in Day's testimony. The rest of the table represents calculations based on those numbers. Additional assumptions are described below. The calculations do not include Saturday, since the Postal Service has said nothing about changing Saturday hours as part of POStPlan.
The total cost of labor for the 17,725 post offices impacted by POStPlan is currently about $1.1 billion. That figure is derived by estimating what the total cost of labor would be if a postmaster staffed every office — $1.33 billion — and then subtracting $200 million to correct for the fact that about 4,000 post offices are currently staffed not by a postmaster but by a Postmaster Relief (PMR), who earns about a third as much.
June 1, 2012
Last week the Postal Service submitted to the Postal Regulatory Commission its Request for an Advisory Opinion on POStPlan — the plan to reduce the hours at 13,000 small post offices. These downgraded offices will be called Remotely Managed Post Offices (RMPOs), meaning that the full-time postmaster responsible for administering the office will be located at another post office.
Along with the Request, the Postal Service submitted a Library Reference that contains a spreadsheet with the financial data used to calculate each office's proposed status. The spreadsheet also has other information, like whether the post office was previously studied for discontinuance. It includes all the post offices set for reduced hours, as well as 4,600 post offices that will be upgraded to Level 18 as part of POStPlan.
POStPlan Lists & Maps
When the POStPlan list was released earlier this month, we created a Google Fusion Table, which makes it possible to map the post offices and analyze the data in various ways.
Now that the Postal Service has released a list that includes both the upgraded and the downgraded offices, we've created a new Fusion table that includes the entire POStPlan list.
While we were at it, we also included every USPS facility (post offices, processing plants, parking lots, etc.). That information comes from the USPS website, which has facility reports for each state. The original facility reports are here (leased) and here (owned). Note that the reports have not been updated recently, but they remain the best publicly available source.
The new Fusion Table is here. For a map view, click on the “Visualize” tab.