Analysis of closings

Getting closing lists out of the Postal Service is like, well, pulling teeth.  Over the past several months, hundreds of post offices have closed, gone into emergency suspension, or received a Final Determination notice indicating they’ll close in 60 days.  But try to find a list of all of these post offices on the USPS website.  One gets the impression that the Postal Service would prefer that the public not have access to this data. 

It’s not as if the information is really secret.  Every community that sees its post office close or that gets a Final Determination knows about it, and there’s usually at least one local news article when a post office closes.  But in a very real sense, most closures take place below radar, and it’s difficult to see what’s happening at a national level.  In the UK, where they’ve closed over 7,000 post offices, something similar has gone on.  They call it “the secret closure programme.”

To make things more transparent, Save the Post Office has been tracking the closings, but it’s been difficult.  The Postal Service turned down a request made under the Freedom of Information Act for materials about the closings.  (Actually, it didn’t turn down the request outright – it just said that the information would cost $650, plus photocopying.)  Compiling data from a variety of sources like news reports is time consuming and prone to error.  The USPS website itself has incorrect information, and important pages are not updated often enough.

Yesterday, we had some good news in the list department.  In response to a request from the Chairman of the Postal Regulatory Commission (PRC), the Postal Service submitted several lists containing information about post office closings and suspensions.  Chairman Ruth Goldway made the information request (see #28) a couple of weeks ago as part of the information gathering required for the PRC’s annual compliance report.

The lists can be accessed in an Excel document (with five sheets) on the PRC website here, and there’s a description of the lists he re.  The lists are readily available on the Save the Post Office website as well (links below).  (Note that the new lists have several errors and anomalies, some of which have already been identified by Going Postal.)

Goldway has requested seven lists.  Five were submitted yesterday, and two more are forthcoming.  Below are links to each list, along with a few comments (not provided by the Postal Service):

a. Post Offices Closed After 1/1/2011: This list contains 430 post offices that closed during 2011. 

That’s considerably more than the 280 USPS VP Dean Granholm indicated had closed as of October 13, and somewhat shy of the 500 that Postmaster General Donahoe said had closed as of mid-November.  It’s also many more than Save the Post Office was able to identify as of just a few weeks ago, when we published a list of 320. 

b. Post Offices Under Suspension as of 1/1/2012: This list contains 227 post offices — some suspended as recently as June 2011, and others as far back as 1986 — which were still suspended as of the first of the year.  

The list does not indicate the reason for the suspension, but it certainly illustrates how suspensions can go on forever, which amounts to a de facto discontinuance, without due process.  Most of these post offices were suspended during 2008 to 2010.  In March of 2011, the Postal Service gave the PRC a much longer list of about 330 post offices that remained under suspension.  Many of those have apparently re-opened or closed permanently after a formal discontinuance process.  Chairman Goldway mentioned at a meeting of the PRC in January that about 200 suspended offices had closed or were being studied for closure.

c. Post offices Suspended after 1/1/2011: This list contains 211 post offices that were suspended during 2011, as well as two that were suspended in early 2012. 

Like list (b), it does not indicate the reason for suspension, nor does it say what the current status of these post offices are.  A search of news articles about these suspensions suggests that many, if not most, were due to weather-related problems, like Hurricane Irene, the flooding in the Midwest, tornados, and so on, and most of them eventually re-opened.  In some cases, however, the Postal Service chose not to find a new location, and essentially used the natural catastrophe as an opportunity to suspend and subsequently close the post office.  The post office in Reading, Kansas, for example, was destroyed by a tornado in May, and three months later, the town learned the Postal Service was studying the post office for permanent closure.

Word comes from Arkansas today that a dozen post offices, as well as a couple of others we'd heard about previously, have been removed from the list of those in the state being studied for closure under the Retail Access Optimization Initiative.  That's brings to nearly a hundred the number of post offices removed from the RAOI (most of them in Alaska).  

There were 179 Arkansas post offices on the RAOI list, so over 90% remain in jeopardy.  Plus, there are 29 Arkansas post offices on the "non-RAOI" list of 727 offices under closure study (released the day after the RAOI).  Of those, at least 16 have closed or received final determination notices.  

Information continues to trickle in about closings and final determination notices, but it remains difficult to produce complete lists.  As October comes to an end, several more non-RAOI post offices have closed, but no post office on the RAOI list has received a final determination notice yet.  That could change over the coming weeks, since many closure studies got started in early August and they should be completing the 60-day comment period soon.  Final decisions may take only a few days more.

In the meantime, appeals keep coming in at the Postal Regulatory Commission.  They're up to about 150 for the year — about 65 through August, plus 43 in September and 42 in October.  With nearly 600 closings (including final determinations) so far this year, that's a rate of about 25%, which would mean hundreds of appeals over the coming months.  The PRC has posted a "Help Wanted" notice for ten attorneys to help process the "influx" of appeals.

If you have information about a closing or a post office being removed from consideration, please let us know.

ARKANSAS POST OFFICES OFF THE RAOI LIST AS OF OCT. 31, 2011

ARKANSAS POST OFFICES AS OF OCT. 31, 2011

[black = closed; brown = final determination posted; green = no longer under closure study]

(Photo credit: Witts Springs post office)

It takes a lot of imagination to destroy an institution as big and durable as the U. S. Postal Service, but the executives in L'Enfant Plaza keep coming up with bold new ideas for doing just that.

Today the Postal Service published its “Final Rule” on “amending its regulations to improve the administration of the Post Office closing and consolidation process.”  The new rules change the definition of ‘‘consolidation’’ and the policy on staffing post offices.  The result will be that thousands of small rural post offices — those offices where one person holds down the fort — will be run by an officer-in-charge on temporary assignment or a non-career PM-replacement with less expertise and training than a postmaster.  The goal, as usual, is cost-savings, and the result, as usual, will be to diminish the quality of service offered by the Postal Service and to send it deeper into its downward spiral.

In July, the Postal Service amended 39 CFR 241 "to improve the administration of the Post Office closing and consolidation process."  These changes permitted a closure study to be initiated at headquarters (“top down”) instead of in the field, streamlined the discontinuance process so that a post office can be closed in less than five months instead of about nine, and granted stations and branches the same closing procedure used for main post offices (the same rules about notifying the patrons, holding public meetings, and providing the right to appeal a closure).

When it made these changes, the Postal Service deferred a decision on two key passages .  These involved the meaning of “consolidation” and the question of whether or not a post office needs to be managed by a postmaster.  Today’s Final Rule addresses those two issues.

Redefining "consolidation"

In the past, the term “consolidation” applied to changing the status of a post office from a main post office to a station or branch, as well as to changing the status of a USPS-operated facility into a “contract postal unit” (CPU).  The Final Rule issued today changes the definition of “consolidation” so that, starting December 1, 2011, the term will apply only to converting a USPS-operated retail facility into a contracted unit.

That means the Postal Service can, at will, simply decide that a main, independent post office is now a secondary branch or station.  To the general public, for whom “a post office is a post office is a post office,” whether it’s a main post office or a station or a branch, the change may not seem significant, but it will have many implications that will be felt by postal employees and the public.

The National League of Postmasters and National Association of Postmasters of the U.S. (NAPUS) have argued that the new procedures “erase” the concept of “consolidation” from 39 USC § 404(d) by regulation, when such a change should require Congressional action.  The Postal Service claims it has the right to make the change on its own.  A second objection is that the redefinition would make it easier to close a post office that has lost its “main post office” status, but the Postal Service says that since, as of July, the closing process is the same for all facilities — post offices, stations, and branches — that concern is not relevant.  A third issue may be that the new policy makes it easier to turn a USPS-operated facility into a contract postal unit, but that’s not quite clear yet and it’s not addressed in the Final Rule.

It any case, it is not likely that the postmasters associations and communities who watch their post office turned into a station or branch are going to see it as a non-issue.  It’s the Postal Service, after all, that has spent the last several years arguing with the Postal Regulatory Commission (PRC) that stations and branches are secondary, subsidiary types of facility, not entitled to the statutory protections of a main post office.  Now the Postal Service wants to say it’s no big deal if it turns a post office into a station or branch because there’s essentially no difference. 

Closing procedures are not the only issue.  There are rules governing post offices, for example, that don’t apply to a station or a branch, like hours of operation.  And there’s also the issue of community identity – having a main post office in your town is different from being a branch of some other town’s post office.

The new regulations are also somewhat ambiguous about what’s involved with “consolidating” a post office into a contracted postal facility staffed by non-USPS personnel.  The regulations seem to suggest that there’s a natural progression from main post office to branch or station to contractor-operator facility, as if the services they provide and the training required for managing them were basically the same.  By blurring the difference between a post office and a branch, the Postal Service may also be blurring the distinction between a facility owned and operated by the Postal Service and a contracted facility owned and operated by non-USPS personnel.  The same kind of elision is at work when the Postal Service says a community can replace its post office with a “village post office,” which is not a post office at all. 

Staffing a Post Office

The second change in the regulations involves the staffing of post offices.  The postmasters associations believe that the law requires a main post office to be staffed by a postmaster.  They argue that the Postmaster Equity Act (2003) precludes changing 39 CFR 241.1 in a way that would permit a post office to be be managed by someone other than a postmasster. 

The details of the objections posed by the League and NAPUS are explained in the document they prepared back in the spring, when the Postal Service first proposed the change:  “In law, a post office is managed by a postmaster, plain and simple. The proposed regulations conflict with that law. The Senate Committee Report that accompanied the Postmaster Equity Act (Report 108-112) underscores the legal requirement that a post office is managed by a postmaster: ‘Postmasters are the manager-in-charge of the nation’s individual post offices.’  In addition, the report states that postmasters ‘are accountable for postal operations and services, including retail operations and community relations.’ The regulation does not and cannot confer these responsibilities on ‘another type of postal employee.’”

Yesterday the Postal Service announced that twenty-one post offices in Alabama would be closing in November and December, and today there’s word that some in Arkansas are closing as well, so it looks like the Postal Service is working its way through the alphabet.   Next week we’ll probably hear about closings in Arizona, California, and Colorado. 

It’s only been a couple of weeks since Save the Post Office published a table summarizing the closings and final determinations for 2011.  It may seem too soon for an update, but a lot has happened in the past few days, so here's an updated table:

The table reflects several recent developments:

First, earlier this week Postal Service Vice President Dean Granholm told Bloomberg Businessweek — in an excellent article by Angela Greiling Keane — that the Postal Service has already closed 280 post offices this year and another 300 have received final determination notices.  That was a total surprise — about 200 more than Save the Post Office had estimated.  Although we’ve not been able to identify all of these post offices, we’ve updated the table to reflect Granholm’s revelation.  

Then yesterday, the Postal Service released the list of post offices in Alabama that have received final determination notices and will be closing in November and December.  That too was a surprise because it represents a closure rate much higher than anticipated. 

Nearly all of the twenty-one Alabama post offices on yesterday’s list come from the “non-RAOI” list of 727 post offices slated for closure study that the Postal Service released on July 27, 2011, the day after the Retail Access Optimization Initiative (RAOI) was announced.  There are 30 Alabama post offices on this non-RAOI list.  At that rate, about two-thirds of the non-RAOI post offices may close.  We’ve therefore increased the number of these post offices that will close or receive final determination notices by the end of the year from 283 to 441.

ALABAMA POST OFFICE CLOSINGS

(Black flags: closed.  Brown: final determinations issued. List view here.)

The vast majority of post offices being reviewed for closure are leased properties, and most of them will have months or years left on the lease when they close.  The Postal Service could run into some serious buy-out costs over the coming year, perhaps close to $100 million.

About 250 post offices have closed so far this year, and another 70 or so have received final determination notices, meaning they’ll be closing before the end of the year.  About half of the post offices closing in 2011 had several months, even years, remaining on the lease. There are 166 post offices, closed or closing in 2011, that have at least two months left on the lease, and the total cost for lease buy-outs on these post offices is approximately $10 million.  (Below is the beginning of the list: the complete table is here.)

In addition to those that have already closed, there are 3,600 post offices currently being studied for closure under the Retail Access Optimization Initiative (RAOI).  Of these, there are over 2,100 that could require lease buy-outs.  Assuming March 1, 2012, as the closing date, the total amount owed on leases would be about $77 million.

There are another 727 post offices being studied for closure that appear on a list that came out the day after the RAOI in July.  Some of these “non-RAOI” post offices have already closed, but most are still under study.  About 350 post offices would owe some rent if they closed by March 1, 2012 — over $8 million in total.

That brings the grand total of potential buy-out costs for post offices that could close over the coming months and those that have already closed or received final determinations to about $95 million.

That number is just an estimate, of course, since it’s impossible to know how many post offices will close and exactly when.  But there’s another factor that we don’t know about — how many of those post offices have leases with “early termination” clauses? 

In order to avoid buy-out costs, the Postal Service has apparently been pressuring lessors to include an “early-out” clause in new leases so that the it can terminate the lease with three or four months’ notice, with no obligation to pay off the months or years remaining on the lease.  The mere fact that the Postal Service is doing this is yet further evidence, as if we needed it, that the Postal Service has plans to close many more post offices in the future. 

Lessors don’t like the clause because it makes it difficult to plan ahead, and it can complicate matters with mortgage lenders, who also like to know that the tenant will be sticking around until the end of the lease.  But if a lessor objects to including the early-out, the Postal Service can say there’s “a problem with the lease,” declare an “emergency suspension,” and close the post office on the spot.  Lease problems are one of the most common reasons for suspending a post office, and the practice has been the subject of an on-going investigation by the Postal Regulatory Commission (PRC). 

The issue of lease buy-out costs has also come up in at least one appeals case before the PRC.  A few months ago, the community of Akron, Ohio, appealed the decision to close its post office.   There were two years left on the lease when it closed, and that cost the Postal Service nearly $200,000.  PRC Chairman Ruth Goldway cited the buy-out costs in a dissenting opinion that challenged her colleagues’ ruling to affirm the Postal Service’s decision to close the post office.  Apparently perplexed why the Postal Service was buying out the lease when it would have been less expensive to keep the post office open until the lease ran its course, Goldway wrote that “in my view, the final determination does not offer a rational explanation of why the Postal Service would make a determination to close this facility despite the closing’s negative impact on the Postal Service’s finances.”

Expecting the Postal Service to provide a rational explanation for its decisions may be asking too much.  Nothing the Postal Service does makes any sense.

Consider that in Palm Beach, Florida, the Postal Service recently sold off a beautiful New Deal post office that it owned outright and moved the post office to an expensive strip mall, where the rent is rumored to be $10,000 a month. 

The pace of post office closings and appeals is picking up, and it’s only going to get worse over the coming months.  If Congress doesn’t do something soon, by the end of the year we’re going to see post offices closing at a rate of several per day.  

An updated list of the post offices that have closed, been suspended, or received a final determination (closure "pending") is here, and a map view is here.   The following chart summarizes what's happened over the past nine months and offers some projections about what we're likely to see over the rest of the year.

POST OFFICES CLOSED, SUSPENDED, CLOSURE PENDING: OCT. 1, 2011 

ABOUT THE NUMBERS:

The data for the first nine months of the year are approximations because the Postal Service has not been providing closing lists or updates.  The numbers are based lists we've compiled using news accounts, the PRC website, and other sources.  The projections for October through December are based on several factors, as described below.  (See Correction at the end.)

NOT ON A LIST: Many post offices were initiated for closure study back in 2009 and 2010, and during the first eight months of 2011, many of them finally closed.  There are probably a few more that may still close, but most of those currently being studied for closure appear on one of the following two lists.  Hence projections for the rest of the year in this category are minimal.  

NON-RAOI LIST: On July 27, 2011, the Postal Service released a list of 727 post offices that had been initiated for closure study and that had progressed to the public hearing stage before the RAOI list was released.  These include main posts offices that were on the "old system," under which it took nine months to close a facility, and many were stations and branches, which the Postal Service could close in far less time.  Many of these facilities were initiated for study in late 2010 or early 2011, so they are now entering the final stage of the process.  In September, many received Final Determination notices, and the rate should increase over the coming months, but we have kept the projections conservative, about 75 a month.  

RAOI LIST:  On July 26, 2011, the Postal Service released a list of 3,652 post offices being studied for closure under the Retail Access Optimization Initiative (RAOI).  Some 82 have been removed from the list, but most of them are well along in the process, and they are on the "new system," which requires less than five months for the closure process.  The process began for some of them in late July and early August, so the first of these should begin receiving Final Determination notices in mid-October, and some will close by the end of the year.  The projections are based on news accounts, which indicate that public hearings are taking place at a frenetic pace.  Postal operations managers (POOMs) are sometimes doing three in one day.

PENDING: This category refers to post offices that have received a Final Determination notice, which means they'll probably close in 60 days unless they are successful with an appeal.  The totals for the "pending" category on the far right estimate how many will still be pending at year's end, not the total that received Final Determination notices.  (In other words, if a post office closes before the end of the year, it is not included in the total "pending" number, which is why some of the totals look askew.)

SUSPENSIONS: The Postal Service can close a post office on very short notice as an "emergency suspension" — the building is unsafe, there's a staffing problem, or there's an issue with the lease.  For example, in Jewell, Georgia, the post office was closed without notice because there was no one to run it, and in Kneeland, California, there was a problem with the lease that the property owner blamed on the Postal Service — communications, he said, were "lax, making it difficult to renegotiate the lease.”  These suspensions are not supposed to be permanent closings, but they usually turn into that.  Also, a post office being studied for closure can be suspended as well, as is the case with a couple of those on the chart.

The Postal Service is in the process of closing some 3,650 post offices as part of its Retail Access Optimization Initiative (RAOI).  The first of them will close by the end of the year, and it will take a few more months to work through the list.  But the Postal Service is already looking ahead, and word now comes that 4,000 more post offices will soon be on the chopping block.

It came out a couple of weeks ago in an interview Deputy Postmaster General Ron Stroman did with MyPrintResource.com.   (Thanks to Dead Tree Edition for catching this.)  Stroman was discussing the RAOI, and then he said this:  “After we finish that review, we will probably pick up another 4,000 that we will review.”  (Stroman’s remark comes at 2:00 into the video.)

We've known for a while that the Postal Service wants to close 16,000 post offices over the next six or seven years, but this is the first we've heard of a new list coming after the RAOI. Stroman didn’t mention in the interview that the Postal Service is also working on yet another list of 727 post offices that had been initiated for closure before the RAOI list came out.  Plus, about 230 post offices have already closed over the past year.  So we’re looking at nearly 8,500 post office closings over the next couple of years — well on a pace to reach 16,000 closings by 2017.

The Postal Regulatory Commission (PRC) has asked the Postal Service about its future plans, presumably concerned that in focusing only on the RAOI list, now under consideration for an Advisory Opinion, the PRC is just seeing a piece of the overall plan.  James Boldt, the man running the RAOI, told the PRC in testimony on Sept. 8, 2011, that “future plans will be developed after the Postal Service has absorbed the lessons from the RAOI,” but he did not elaborate. 

Pressed further by Commissioners, Boldt was assisted by USPS attorney Michael Tidwell, who jumped into the conversation to explain: “The Postal Service's view from the start has been very clear.  We have developed an initiative that involves 3,650 facilities that is being examined in this docket.  If, and when, the Postal Service determines that it wants to cast the net at another 3,650 facilities, it recognizes: (1) it has to move forward to the Board of Governors to seek authority to do so; and (2) if a conclusion is made that that initiative itself might involve a nationwide service change, the Postal Service recognizes it has obligations under Section 3661,” and it will ask for another Advisory Opinion from the PRC.  (Testimony Transcript, p. 356-7).

The bottom line: The Postal Service is only just beginning to close post offices.  There will be one list after another, and the post office closings will go on and on and on.  The Postal Service is "segmenting" its overall plan into smaller pieces in order to make the impacts seem less significant and to avoid provoking an even bigger public outcry than we're witnessing.