Is there a pattern here? Three more post offices closing over "lease disputes"

August 28, 2013

The Postal Service has a long history of using manufactured problems over lease negotiations to close post offices by emergency suspension, to initiate a discontinuance procedure, and to justify relocations to smaller spaces.  The Postal Service typically tells the media that the landlord terminated the lease or the parties couldn’t come to an agreement.  Just as typically, the landlord reveals that the Postal Service really wasn’t interested in renewing the lease to begin with.

This happens all the time.  Over the past few days, three more cases have been reported in the media — in New Canaan, Connecticut; Aripeka, Florida, and Chattanooga, Tennessee.  The stories are strikingly similar.


“No interest in staying” in New Canaan

Last week the postmaster told the New Canaan Advertiser that the post office would need to find a new location because the lease is expiring on January 31, 2014, and the lease negotiations broke down. 

“We were negotiating and we just came to the end of negotiations and we couldn’t come to a mutual conclusion,” said New Canaan Postmaster Nancy Cornelio.  “We’re keeping our eyes and ears open for a smooth transition to a new place in New Canaan.”

The same line came out of L’Enfant Plaza.  Christine Dugas, a spokesperson at the Postal Service’s headquarters, told the Advertiser that after “extensive negotiations,” postal officials learned on Tuesday that the lease will lapse in January and that officials are reviewing all options, including short- and long-term possibilities, “to ensure continued service to our New Canaan customers.”

The landlord, needless to say, has a different story to tell.  Again, from the Advertiser: “Harry Traub, a partner at Elm Street Partners, told the Advertiser on Monday that in May his firm thought it had negotiated a deal with the U.S. Postal Service for the Post Office to remain in the current space on Pine Street.  Then, the firm received a call one day that the Postal Service reconsidered. The reason, Traub said, is that the Postal Service determined that office no longer needs the 7,000-square feet of space.  Traub said his firm asked the Post Office to submit a plan of how much space it would need, but it never did.”

In an earlier report back in October 2012, the landlord told the Advertiser, “We’d very much like the Post Office to stay in the building, and we think it reflects the wishes of the residents in town."

The landlord said the Postal Service promised to present a proposal to stay, but it has not been forthcoming with one.  He also noted that he had been talking to postal headquarters about the lease for the past two years.  That was last October.  

Ten months have gone by, and it's obvious now that the Postal Service has no interest in staying in New Canaan.  The post office has been in this location since 1958.  That will apparently come to an end in January.


No way! PRC rejects appeal on post office closure for being late — by one day

August 27, 2013

Last Friday afternoon, the Postal Regulatory Commission sent letters to the folks appealing the closure of the Franklin Station post office in Somerset County, New Jersey, telling them the appeals had been filed too late and were consequently being rejected.  The appeals were postmarked one day after the filing deadline.  

The Commission’s decision is disturbing for a number of reasons.

First off, the Franklin post office is a station, and since the Postal Service believes only independent post offices are entitled to an appeal, the Final Determination notice announcing the closure did not inform Franklin customers they could appeal to the PRC.  It’s a wonder they even discovered that an appeal could be filed.  How could the people in Franklin know that the Commission disagrees with the Postal Service about stations and branches and always accepts appeals, regardless of the facility’s classification?

Then there’s the fact that the discontinuance study was conducted in late 2011 and early 2012.  A moratorium on post office closings ran from December 2011 to May 2012, so the Postal Service stopped the discontinuance process before it was completed.  Most people in Franklin probably had no idea that sometime this summer postal officials had resumed the process and signed off on the Final Determination.  There had been no talk about a possible closure since the public meeting was held back in February 2012.

It's even possible that Franklin customers didn't realize the appeal was late.  The Final Determination does not state that one has 30 days to file the appeal — it doesn't even mention the right to an appeal to begin with.  It does state, however, that the Final Determination should be posted until August 13, which is the day the appeals were sent in.

There's a chance that the Commission would have considered a late appeal if it had been accompanied by a request for late acceptance.  The Commission is currently considering such a request on the appeal in Freistatt, Missouri.  If it were necessary to file a request for late acceptance, then someone at the PRC should have immediately advised the petitioners to do so.  That obviously didn't happen.

Chairman Ruth Goldway dissented from the decision to reject the Franklin appeal, for reasons that go unstated in the letter to the petitioners.  The four other commissioners agreed that the appeal should not be heard.  The commissioners didn’t even wait for the Postal Service to file a motion to dismiss the case, they didn’t give the Public Representative an opportunity to weigh in, and they didn’t ask to hear from the petitioners why the appeal wasn’t submitted sooner.  The four commissioners simply decided that one day late was sufficient cause to reject the appeal.

It should be noted, by the way, that parties often ask the Commission to accept late filings.  Since 1997, the Postal Service has filed something like 1,200 Motions for Late Acceptance.  The Commission granted nearly every one.

Christmas for Pat: A heartwarming tale in which everyone gets what they want — and then doesn’t

August 25, 2013


You’ve got to be very careful if you don’t know where you’re going because you might not get there. – Yogi Berra

It’s August and Congress is on its annual five-week summer break.  Despite statements by folks like Senator Tom Carper and Congressman Darrell Issa, we don’t seem to be any closer to postal reform than we’ve been for the last three years.   Back in January, Senator Carper, who likes to use sports analogies, summed up the state of postal reform with a football metaphor: “I think we narrowed our differences….  In terms of negotiations, we’re in the red zone.”

Maybe we should switch sports to baseball.  Rather than the game being almost over, it looks like we’re in for an extended rain delay.  Very extended.


Christmas in August

When Congress returns from its break, it will have a lot to deal with besides postal reform.  First off, it will need to take up the spending bills that fund the government for the next fiscal year, beginning October 1.  That’s likely to degenerate into another protracted battle.  Some of the more radical Republicans, like Senator Ted Cruz, have insisted that threatening to shut down the government would be a perfect opportunity to eliminate the Affordable Care Act.  It’s likely the House and Senate will spend precious time arguing back and forth before they come up with a continuing resolution to keep the government going.

Also looming on the horizon is another battle over the debt ceiling.  Who knows how much time that will waste? There are probably a few surprises on the horizon that will manage to chew up a few more news cycles.  Before you know it, it will be time for Congress to take its traditional Christmas break.

Maybe by Christmas time Pat Donahoe and his friends on the Board of Governors will have brought this postal crisis to a head.  CFO Joe Corbett keeps repeating his dire warnings about the Postal Service running out of cash.  With the threat of an exigent rate increase being bandied about the industry, apoplectic lobbyists will be making sure every contribution counts.   These days nothing is more likely to focus a Congressman’s or Senator’s attention than the promise of a contribution or the ability to proclaim himself or herself a hero for saving the public from another dreaded bailout.

So let’s pretend it’s Christmastime in Postal Land.  Let’s pretend that the PMG has been a good boy all year, and Santa Darrell and St. Nick Carper are ready to bring him all the goodies he wants.  What exactly does Pat want for Christmas?


The PMG’s wish list

Well, a good place to start would be his testimony before Issa’s Committee on Oversight and Government Reform on July 17, 2013. During that testimony the PMG referred to the Postal Service’s Five Year Business Plan and offered these eight points to bring the Postal Service back to profitability:

  1. Create independent USPS Health Care Plan (resolves Retiree Health Benefits prefunding issue)
  2. Refund FERS overpayment and adjust future FERS payments
  3. Curtail delivery frequency (Five-day mail/Six-day packages)
  4. Streamline governance (eliminate duplicative oversight)
  5. Provide authority to expand products and services
  6. Require defined contribution retirement system for future postal employees
  7. Require arbitrators to consider financial condition of Postal Service
  8. Reform Workers’ Compensation

That may seem like quite a list, but much of it coincides with the various plans and wish lists promoted by lobbyists like PostCom and GCA.  In many ways it also coincides with the Pitney Bowes/NAPA plan for partial privatization of the Postal Service.

All of these so-called reforms are aimed at shrinking the Postal Service’s retail network, a continued consolidation of the mail processing and delivery network, and perhaps changes in mode of delivery, moving away from door and curb delivery towards cluster boxes.

Five of the items on the list are directly focused on the postal labor force.  Donahoe has continually insisted that changes in the labor force, like moving to a part-time flexible force with lower wages and benefits, is a necessary step.  One of the most oft repeated facts about the Postal Service is that labor makes up 80% of its costs. This is cited as a negative, and Donahoe and the BOG have consistently argued that postal workers and the wages and benefits they receive are one of the main, if not the main, sources of the current problem.

Donahoe is also asking for a reduction from six-day to five-day delivery. He’s modified his earlier proposal to totally eliminate Saturday delivery, most likely in response to overwhelming evidence that the loss of a delivery day for packages would harm future revenue prospects and denigrate service.

Donahoe also asks for more freedom from his regulator, the Postal Regulatory Commission, along with more freedom for his governing board, the BOG.

The PMG has also asked for additional authority to move into other products and services.  The management of the Postal Service has been laser focused on the mailing industry for the last ten years or more.  Virtually all of the innovations the Postal Service has engaged in have been designed to enhance the effects and prospects of direct mail advertisers. 

Other types of innovation, like those that might help average citizens, are not on the agenda.  Donahoe has dismissed calls for the Postal Service to move into small banking services as a complement to its money order business.  He has argued that developing cooperative arrangements to use the postal network to assist state and local governments or other Federal agencies would not be remunerative.  So “other products and services” would likely mean things like more discounts for mobile barcodes and perhaps the delivery of beer and wine.

Musical chairs in Reading PA leaves historic post office without a place

August 24, 2013

Add another historic post office building to the list of those being sold.  The Postal Service has announced that it plans to close the main post office at 59 North Fifth Street in downtown Reading, Pennsylvania, and put the building on the market. 

The Postal Service says there’s too much space in the building for its needs, and it points to the reduced volume of mail in the electronic age as the explanation.

Actually, the space issues are a little more complicated than that. There are several postal facilities in Reading, and the Postal Service has spent the past couple of years shuffling operations around, including the consolidation of the Gus Yatron mail processing plant.  The Postal Service itself has created the excess space in the main post office, not declining mail volumes.  


Playing musical chairs with post offices

Reading’s main post office was built in 1940 under the New Deal.  (For some reason, on the USPS facilities list, it’s called the Downtown Station, and there’s no facility in Reading identified as the Main Post Office.)  It has 44,894 square feet, and about 23 employees — a few retail workers and several bulk mail handlers.

There’s also a large processing plant in Reading, the Gus Yatron facility on N. 13th Street, which offers retail services as well.  Built in 1986, it has 105,000 square feet.  There used to be over 200 workers at the facility, but in 2011 outgoing mail operations were consolidated with plants in Harrisburg and Lehigh Valley, and this summer incoming mail was consolidated with Harrisburg.  A couple of dozen workers are still at the facility running the retail and bulk mail operations.

In addition to the main post office and the Yatron plant, there’s a carrier annex at 1910 North 5th Street.  Built in 2000, it has 17,115 square feet and about 70 workers.  There are also several stations and branches in the Reading area.

The consolidation of the Gus Yatron facility has opened up a lot of space in the building, and now the Postal Service wants to put it to use.  The plan is to close both the carrier annex and the main post office and move most of their operations to Yatron.  To replace the main post office downtown, the Postal Service will open a small retail office of 3,000 square feet, location yet to be determined.

The extra space in the main post office — the rationale for closing it — is thus not simply a result of declining mail volumes.  It is a situation that resulted from decisions made by the Postal Service to move operations around among its other facilities.

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