April 3, 2013
Francitas is a small town in south Texas. It’s had a post office since 1911, but no longer. The Postal Service isn’t interested in providing Francitas with a post office anymore, nor with much else either.
Since 2011, the town has been hit with two final determinations to close the post office, had the hours reduced to two a day under POStPlan, seen window services stopped by emergency suspension, and then watched the post office close completely, with no replacement services in place. Since Thanksgiving, the people in Francitas have had to drive almost 20 miles round-trip to La Ward to do postal business. Now they have to make that drive just to get their mail.
This is what passes these days for “a maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not self-sustaining.”
Closing, round one
The first time the Postal Service tried to close Francitas was in 2011. Even though the law says a post office can’t be closed solely for operating at a deficit, the proposal to study the office for closure states that the workload had declined to the point that “the maintenance of an independent office at Francitas may not be warranted.”
After holding a community meeting and reviewing written comments that expressed a variety of concerns — loss of community identity, the dependence of senior citizens on the post office, the long driving distance to other post offices — the Postal Service issued a final determination to close Francitas. Like all of the final determination notices issued back in 2011, this one states that the closing “will not adversely affect the community," even though everyone in town said otherwise.
The Postal Service estimated that the closure would save $19,896 annually — the cost of a postmaster salary and benefits (around $30,000), minus the cost (around $10,000) of replacement services for a rural carrier to deliver the mail to homes and a cluster box unit (whichever individuals preferred). There was no savings on the rent because the Postal Service owns the module unit and just pays a modest fee to lease the land.
Carolina Jalufka and Raymond Salinas, two residents of Francitas, appealed the decision to close Francitas to the Postal Regulatory Commission. In December of 2011, the Commission issued an order affirming the final determination. The Commissioners actually split on the ruling, two to two, as they did many times during 2011 and 2012, but according to PRC’s rules, that meant the Postal Service’s decision was affirmed. (The legitimacy of that PRC policy is now being questioned in a lawsuit working it was through DC circuit court.)
In their dissenting opinions on the case, Commissioners Ruth Goldway and Nanci Langley noted that there were inaccuracies in the cost savings analysis because the Postal Service used the salary of a career postmaster even though the office had been managed by a postmaster relief since 2008.
With the final determination affirmed, the post office should have closed almost immediately, but there was a moratorium on post office closings in effect from December 2011 to May 2012, so Francitas got a reprieve.
April 1, 2013
About three weeks from now, postal insiders and innovative outsiders will convene in Washington DC for the PostalVision 2020/3.0 conference to discuss the future of the Postal Service. Called "Positioning America for the New Millennium,” the event will focus on "a constructive approach to re-inventing today’s broken Postal Service model for future generations."
Among the headliners speaking at the event will be David M. Walker, a former Comptroller General, the first President and CEO of the libertarian Peter G. Peterson Foundation, and currently Founder and CEO of the Comeback America Initiative, which promotes fiscal responsibility (by cutting social programs).
Mr. Walker will probably devote much of his talk to discussing the privatization of the Postal Service. That’s because he is the chair of a five-member panel that the National Academy of Public Administration (NAPA) asked to review a recent proposal on privatization.
The proposal is called “Restructuring the U.S. Postal Service: The Case for a Hybrid Public-Private Partnership.” It describes a postal system in which the private sector would take care of the “upstream” — the retail and mail processing work — while the public sector would remain responsible for the “downstream” — delivering the mail through its network of “trusted letter carriers," the “feet on the street,” as the proposal puts it.
NAPA has a long-standing interest in postal matters, and its President and CEO is Dan Blair, a former member of the Postal Regulatory Commission, so it’s not surprising that NAPA would focus on the Postal Service right now. With funding support from Pitney Bowes, NAPA assembled a panel to subject the proposal to what it describes as a “rigorous evaluation.”
Despite the apparent conflict of interest involved with taking money from a key player in the mail industry, a company that would profit significantly from privatization (as discussed in this earlier post), the NAPA report is officially titled “An Independent Review of a Thought-Leader Concept to Reform the U.S. Postal Service.”
When the panel was first announced, the NAPA website provided brief biographies for the participants, and in the bio for one member of the study team, the review was referred to as “the Pitney Bowes study.” That bio was subsequently revised and the reference to Pitney Bowes purged. In the discussion that follows, we’ll refer to the original proposal as the Thought-Leader Concept, and we’ll refer to Mr. Walker’s review of the proposal as the NAPA/Pitney Bowes study.
The retail end of the upstream
The NAPA/Pitney Bowes report runs to over 50 pages, but very little of it examines one of the key parts of the Thought-Leader Concept — the privatization of the retail end of the Postal Service’s operations. All told, there are maybe two pages’ worth of discussion on this topic.
The Thought-Leader Concept says that “the new postal system” being envisioned “will reinvent the concept of retail access for consumers.” Under the new system, “there will be an explosion of options for the public to conduct postal business.” You’ll be able to do postal business at retail stores, gas stations, schools, coffee shops, movie theaters, or any other location that is interested and meets USPS requirements.
The proposal also suggests that the Postal Service would continue to operate a small number of retail centers, for locations where no other postal options are available or where it is more beneficial to maintain the USPS offices.
In its review of the proposal, the NAPA/Pitney Bowes study has little more to say about this reinvention of the retail system. It explains that Contract Postal Units (CPUs) and Village Post Offices (VPOs) are postal operations housed in private businesses, and it provides a few numbers (drawn from a recent GAO report) about how many there are right now. There's also reference to the fact that some people have recommended creating a BRAC-like commission to help close facilities (it adds, in bold, “Congressional action would help”).
But that’s about it. There’s no discussion of how much money privatization of the retail network might save, nothing about how postal services might decline and push away revenues, nothing about how small businesses might suffer, and so on. We're just supposed to imagine an "explosion of options" that will make it much easier for people to do postal business.
March 31, 2013
The post office in Freistatt, Missouri, closed today — on two days’ notice to customers. The Postal Service says it was unable to negotiate a lease renewal with the landlord, so it declared an emergency suspension.
As usual in these cases, the landlord says he was more than willing to reduce the rent and make other accommodations, but his efforts, along with those of the Village Board, were to no avail. The Postal Service just wasn’t interested.
The USPS facilities list for Missouri says the rent is $3,900 a year, so the disagreement could not have been over a very large sum of money. But when you’re looking at a $40 billion deficit, every penny counts. And that’s probably how the Freistatt post office ended up closing — over a matter of pennies.
The Freistatt City Clerk told the local news station KY3, "From what I have gathered from talking with the building owner, that lease agreement is not unreasonable. But it looks to me like they're using that as an excuse to close a post office."
The Postal Service wanted to close the post office in Freistatt back in 2011. It was on the list of 3,700 post offices being reviewed for closure under the Retail Access Optimization Initiative (RAOI). When the Postal Service held the obligatory public meeting in August of 2011, Mayor Mike Ortwein said, “"I don't see how they are going to save that much money. They only have two employees and no carriers. The one full-time employee will be moved and the other is part-time."
Thanks to the nationwide protest against post office closings, the RAOI never got implemented. Then a moratorium on closings went into effect from December 2011 to May 2012, so the Freistatt post office remained open. Then it found itself on the POStPlan list, set to have the hours reduced to four a day. Apparently that won’t be happening now.
There’s been a post office in Freistatt since August 14, 1884. The post office has been in this building since 1980. The Postal service has known for years that the lease ended on April 1, 2013. It’s hard to understand how lease negotiations could have ended in a last-minute “emergency” situation that has terminated a town's post office after 129 years of service.
Yet somehow the lease problem became public only a couple of weeks ago. According to the Monett Times, “Contradictory exchanges over the status of the post office surfaced in mid-March.” After the Postal Service let the town know that there was an issue with the lease, the Village Board held a special meeting on March 21.
The landlord said that he had encountered no problems in discussions about the lease, and once he learned from the town that there was a potential issue, he made several counter offers, including a cut in the rental rate.
Rick Belcher, manager for post officer operations for the Mid-America District, told the Village Board that one alternative to having a post office was placing cluster boxes on city property. The Board was concerned about liability issues — the town has a lot of seniors — and it said it would need to talk things over with the community.
On Wednesday, March 27, less than a week later, postal customers were officially notified that the post office was closing in two days. And that’s exactly what happened. On Good Friday afternoon, crews from the United States Postal Service emptied out the Freistatt Post Office and closed it permanently. They even sawed off the flag pole.
There’s no home delivery of mail in Freistatt. Everyone has general delivery and goes to the post office to pick up the mail. Now they’ll have to drive eight miles to Monett. Seniors who don't drive are just out of luck.
The Postal Service says rural delivery is not "economically feasible," so it's looking into installing a cluster box unit somewhere in town. There's no chance that the post office will open at another location.
De facto closings
In the Postal Regulatory Commission’s Annual Compliance Determination review (ACD), published just yesterday, there’s a discussion of emergency suspensions. (The Postal Service also shared a list, here.) The report says that there are currently 211 post offices under suspension, 92 of them as a result of “lease expirations,” i.e., a failure to negotiate a renewal.
Most of these post offices will never reopen. Just 21 of the 146 offices suspended in 2012 have reopened so far, and those were mostly due to temporary issues like bad weather, not leases.
One of the big problems with emergency suspensions is that they become, as the Commission’s report puts it, “de facto closings.” There are 87 post offices under suspension from before October 2011, some of them from as far back as the 1980s and early 1990s. In these cases, the Postal Service has never bothered following up with a formal discontinuance study or reopening the office, as the law requires.
The main focus of the PRC’s compliance report is postal rates and whether or not the Postal Service is in compliance with the law on rate matters. The Commission doesn’t make a point of saying that the Postal Service is out of compliance on the suspension issue.
But you don’t need to read between the lines to see that the Postal Service is failing to follow the law by using the emergency suspension provision to do de facto closures. The problem is that no one is doing anything about it.
(Photo credit: Google street view)
March 26, 2013