Buyer opts out of purchase of historic Berkeley Post Office

December 4, 2014

The US Attorneys' office has notified the City of Berkeley that the prospective buyer of the Berkeley main post office has exercised an option to cancel the sale, which was set to close on December 22.

News that the development firm of Hudson McDonald was the buyer of the post office was reported by Berkeleyside in early November, after weeks of silence from both sides in the deal.  Citing “good business practices," the Postal Service has been reluctant to keep elected officials and other interested parties informed about the deal. 

The sale is being challenged in lawsuits filed by the City of Berkeley and the National Trust for Historic Preservation (as discussed in this previous post). 

On November 5, U.S. District Judge William Alsup issued a temporary restraining order against the Postal Service, halting the sale until a hearing on December 11 (as reported by Berkeley Daily Planet).  The motion for the preliminary injunction was filed by attorney Antonio Rossmann on behalf of the City of Berkeley.

The fact that the sale has been canceled will probably not stop the lawsuit, however, since there’s still a dispute about whether or not the Postal Service has followed proper procedures regarding historical preservation laws and the disposal of federal property.  It’s also possible the Postal Service will find another buyer to replace Hudson McDonald.

There’s no word yet about why the sale was canceled or if the injunction and the lawsuit had anything to do with it. 

UPDATE: According to a report in Berkeleyside on Dec. 4.: "Chris Hudson, principal at Hudson MacDonald, said his company had been unable to reach agreement with the Post Office by the time when the contract reached its expiry date. Hudson said they asked the Post Office for an extension, but the Post Office declined, saying they had 'things to figure out.' Asked if he was disappointed, Hudson said he was hopeful they might be able to get back at the negotiating table. 'Maybe it’s not over,' he said."

A report in Inside Bay Area News has additional information: "Local developer Hudson-McDonald is not buying the historic downtown post office.  The deadline to enter into a formal contract for its purchase was Thursday.  'We were unable to extend the contract,' Chris Hudson said in a brief phone interview, explaining that more information about the building was needed before his company could enter into a purchase agreement.  'We just ran out of time,' Hudson said."

(Photo credit: Dec. 4 protest. Harvey Smith, Berkeleyside)

POStPlan Implementation: Just 1,600 post offices to go, but far from done

December 2, 2014

The Postal Service has implemented POStPlan at about 11,400 post offices so far.  That leaves approximately 1,630 offices where the window hours have yet to be reduced and the original postmaster is probably still on the job.  You can see a list of these remaining offices here.  (Note that while this list was made using USPS lists, it is not official and contains some errors.)

Many if not most of the postmasters working at these remaining offices will be subject to a Reduction in Force (RIF) on January 9th.  We've heard that about half of them are eligible for retirement.  Many have been hoping that something would happen to prevent the RIF  — like the Postal Service initiating a phased retirement program — but at this point it looks inevitable.

For many postmasters, it will be a very sad day in January when they are forced to leave the Postal Service after years, perhaps decades, of loyal service.  Saying goodbye to the communities they have been serving won't be easy.

There are also thousands of Postmaster Reliefs who have working in POStPlan post offices, and they too may be out of luck and a job as a result of the recent APWU arbitration victory.

As for what will happen to each particular post office and its employees, that’s difficult to say.  Implementing the arbitration decision — with all the agreements about the pecking order and everything else — will probably make the first two years of POStPlan implementation look relatively simple.

This statement on the NAPUS website reviews the situation.  There’s a good Q-and-A on the many issues involved with the changes here, and another fact sheet here.  As these documents show, there are a lot of questions to address.  Things will probably get even more complicated by the fact that management responsibilities and access to information are being transferred from the postmasters' associations to the APWU.

Just to illustrate the kind of problems that will need to be managed, consider lunch breaks. At many POStPlan offices, the Postal Service has set up shifts with a long break in between.  For example, a Level 4 office might be open 9 to 11 a.m. and 3 to 5 p.m.  (Or as the Postal Service puts it, the office is "open 9 to 5" and "closed for lunch," 11 to 3.)

Sometimes these odd hours were set up to respond to community preferences.  Sometimes they’re the result of the Postal Service’s operational needs.  The problem now is that the long gap between shifts conflicts with the APWU contract, which limits lunch breaks to one hour for NTFT (Non-Traditional Full-Time) workers.  

According to the arbitration decision, Level 4 offices will be staffed by PSE's (Postal Support Employees), and Level 6 offices will be staffed by NTFT employees.  Several hundred of the Level 6 offices have lunch breaks longer than one hour.  (A list is here.) The union and the Postal Service will thus need to work out that issue on top of the many other personnel matters they’re dealing with.

Another question that ought to be explored is how much money POStPlan is going to end up saving.  When POStPlan was introduced back in 2012, it was supposed to save $500 million a year because full-time postmasters earning good salaries would be replaced by part-time workers earning about $11 an hour. 

For various reasons that savings estimate was suspect from the beginning, as discussed in this post, but it definitely needs to be revised now that many offices will soon to be staffed by union workers earning much more than $11/hour. 

At this point, one has to wonder if POStPlan was really worth the cost savings.  Thousands of communities have had their postal services diminished — the post office is only open part of the day, and the staffing has become inconsistent and often inexperienced.  Thousands of postmasters have had their careers ended and their lives upended.  The Postal Service may be saving some money, but is the country really any better off?

You can see a list of the 11,400 offices that have already had their hours reduced under POStPlan here.  It was put together using USPS implementation reports, which you can find here.  (Note that about 130 offices appear twice for various reasons, such as a change in the hours after initial implementation.)  The list of 1,630 offices yet to be implemented was made by comparing this list with the original POStPlan list of 13,000.  For more lists and articles on POStPlan, see this resource page.

(Photo credit: Sign on post office door in Craftsbury Commons, VT)

How's the exigent rate increase doing?

November 28, 2014

Earlier this week, the Postal Service released its preliminary financial report for fiscal year 2014.  Now may be a good time to evaluate the impacts of the exigent rate increase that went into effect on January 26, 2014.

Back in September 2013, when the Postal Service presented testimony to the Postal Regulatory Commission about the proposed increase, one of the main questions was how the increase would impact mail volumes and revenues.  The Postal Service knew that raising rates would drive away some business, but it figured that the higher rates would yield more revenue in the end.

The mailers and others argued that volumes would drop so much that even with higher rates, total revenues would decline.  For example, Rafe Morrissey, the vice president of postal affairs at the Greeting Card Association, called the PRC's decision to grant a temporary increase “disappointing."  Morrissey then said this:

“Raising rates above inflation is not a solution, but rather a pathway that will exacerbate the Postal Service’s current financial crisis by driving away much needed mail volume to other competitors."

Along the same lines, Senator Susan Collins, one of the lawmakers behind the 2006 postal legislation governing the price cap rules, had this to say upon hearing the PRC's decision:

“My concern is that a rate increase of this magnitude will worsen the Postal Service’s crisis by further driving down mail volume, eroding the Postal Service’s steadily declining customer base, and leading to a further decline in revenues.”

At this point in time, the Postal Service seems to have been right about its view of price elasticities.  In fact, the falloff in volumes turns out to be less than the Postal Service anticipated.

The following table compares two data sets.  The “Projected” columns (A-E) contain data provided by Stephen J. Nickerson, USPS Finance Manager, one of the Postal Service’s witnesses for the exigent increase before the PRC.  They're Attachments 15 and 16 at the end of his testimony.  The percentages were calculated using Nickerson's numbers.  

The “Actual” columns (F-H) come from the Postal Service’s financial report for FY 2014, which you can find on the PRC website.  (If the table isn't appearing, try refreshing your browser.  You can see the table on Google Docs here.)

National Trust joins Berkeley in suit against Postal Service

November 25, 2014

The National Trust for Historic Preservation has joined the City of Berkeley in a lawsuit against the Postal Service over the sale of the Berkeley Main Post Office.  The suit complains that the Postal Service has failed to comply with federal historic preservation laws prior to entering into a contract for sale of the building. 

The National Trust’s complaint is here.  The press release from the National Trust reads as follows:

“Over the past several months, the City of Berkeley and the National Trust for Historic Preservation have been engaged in good-faith negotiations with the United States Postal Service, seeking a long-term preservation covenant for the Berkeley Main Post Office building to fulfill the agency’s obligations under federal preservation law. In October, however, the Postal Service abruptly ended the negotiations, closing off what had been a productive process and leaving the building’s potential sale shrouded in secrecy.

“We would have preferred to resolve this matter through continued negotiations, but the Postal Service’s unwillingness to communicate its plans for the building left us no choice but to join the City of Berkeley’s lawsuit.

 “The National Trust is concerned not only with this particular historic building, but more broadly with historic post office buildings in communities throughout the nation that are being disposed of by the Postal Service without adequate measures to ensure their long-term preservation. Despite repeated requests from elected officials, preservation groups, and local citizens, the Postal Service has not come forth with a clear and consistent process for protecting these important community assets. We hope that this litigation will cause the Postal Service to rethink its entire approach to transferring ownership of its stock of historic post office buildings.”

The City of Berkeley filed its case against the Postal Service on November 4. The following day U.S. District Court Judge William Alsup issued a temporary restraining order, preventing the Postal Service from taking action to sell the historic building to a third party pending the government's response.  A hearing is scheduled for December 11. 

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On Privatization

Good Reading on Postal Privatization

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

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Organizing to Save Rural Post Offices


A Community Organizing Toolkit

Revised November 2012

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