The Postal Service closed about 600 post offices in 2011, and it is poised to make mass closures in the spring when the moratorium ends on May 15.  That will also mean mass appeals at the Postal Regulatory Commission (PRC), and last Thursday the Commissioners were talking all about it.

Chairman Ruth Goldway began the Commission’s monthly meeting with a few remarks intended to clarify the status of post office appeals with respect to the moratorium and the two closing lists — the list of 3,652 included in the Retail Access Optimization Initiative (RAOI) and the list of 727 non-RAOI offices that were already being studied for closure when the RAOI began in July.

During her remarks, Chairman Goldway made a few important revelations about what’s coming next from the Postal Service.  (The podcast is here, and a complete transcript of her opening statement is here.)

 

The RAOI is not going away

“Those [post offices] that are in the 3,600 will not have a final decision on discontinuance until May 15,” said Goldway, “but they may well have a mass number of decisions on May 15, which then we would have to hear if there are appeals.  I am told that the Postal Service is reviewing those 3,600 and may in fact have a second community meeting for most of those 3,600 and may have a different approach for some of them at the end of May 15.”

That comment contains three noteworthy points:

1. If the Postal Service is going to issue “a mass number of decisions on May 15,” that means it will be proceeding with the RAOI despite the negative review it got in the PRC’s Advisory Opinion.  The Postal Service can do as it pleases with the Opinion, but Goldway stated in her Concurring Opinion that if the Postal Service chooses not to follow the PRC’s recommendations “and rather proceeds with the RAOI as originally submitted to the Commission, it risks, I believe, violating the law I cited earlier and the consequences that could follow.”  It looks like the Postal Service will try to modify the RAOI in a way that will avoid a confrontation with the PRC, but clearly the Postal Service is not going to abandon the RAOI completely.

2. The Postal Service will apparently not be issuing Final Determination notices on RAOI post offices during the moratorium.  This was news because when the Postal Service announced the moratorium, it issued a “pleading” to the PRC that said it would “continue all necessary steps required for the review of Post Offices during the interim period.”  That left the door open for issuing final notices during the moratorium, with a closing date after the moratorium.  If the Postal Service is going to hold off on issuing Final Determinations until May 15, no post office on the RAOI would close its doors before mid-July.  (There’s a 60-day period between the Final Determination notice and closing date.)

3. The Postal Service will hold a second community meeting for most of the 3,600 post offices on the RAOI list.  That’s not required by postal regulations, so holding another round of meetings is apparently a response to the Advisory Opinion, which criticized the Postal Service for not doing enough to ensure “meaningful public participation,” and recommended “more robust processes” for obtaining and evaluating relevant community information.

It will be interesting to see what happens at these meetings, how they are different from the first round, how the community turnout is, and what this “different approach” is all about.  Perhaps the Postal Service will ensure that a District Manager or Post Office Operations Manager is present, as required by the USPS Discontinuance Guide (PO-101), perhaps someone will take notes on the community’s comments, and perhaps they’ll provide accurate information about cost savings, distance to neighboring post offices, and other matters that require local knowledge.  (There’s more on the problems in the closing process here.)

The appeals just keep on coming

When the Postal Service issues a “Final Determination” telling a community its post office will close, interested parties have 30 days to file an appeal with the PRC.  Historically, there haven’t been many appeals, but in 2011, the PRC was swamped with appeals, and 2012 promises to be even busier.

At Thursday’s meeting, Commissioner Nanci Langley indicated that there were still 138 open dockets before the PRC, and General Counsel Stephen Sharfman said that they are receiving “approximately one appeal per day . . . and this has honestly put a tremendous strain on staff resources.”  Back in November, the PRC put out an ad to hire ten attorneys to handle the “influx of appeals,” so they’re probably at work now or getting ready.

Over 200 appeals were filed in 2011, and the Commission issued decisions on 59.  Six decisions were “victories” for the appeal, i.e., the Final Determination to close was remanded back to the Postal Service for further consideration.  The other 53 decisions were affirmed, thus sealing the fate of the post office to close permanently.  Six cases were dismissed because the Postal Service withdrew the Final Determination notice at the last minute, for reasons it has not disclosed.  (A list of the appeals and their status is here, and there’s a map here.)

Just to put those numbers in perspective, here’s a table showing the history of appeals over the past few decades.  (An explanation of where the numbers come from is here.)

Period	1976- 1997	1998- 2007	2009- 2010	1976- 2010 totals	1976- 2010 annual average	2011
Closings	2,614	688	200	3,492	100	576
Appeals	296	25	13	334	10	208
% of closures appealed	11.3%	3.6%	6.8%	9.6%	9.6%	36.1%
Affirms	170	19	1	190	5	53
Remands	58	3	1	62	2	6
% of decisions remanded	22%	12%	14%	21%	21%	9%
Dismissed, etc.	31	3	5	39	1	6

The table shows why this past year was so unusual, and why the PRC is concerned about what’s going to happen in 2012.  In 2011, the number of closings was nearly six times the annual average of the past few decades, and the rate of appeals was nearly four times the average, so the PRC saw twenty times the average number of appeals per year.  If the Postal Service announces a couple of thousand closings on May 15, the PRC could be hit with eight hundred appeals in May and June.  Given that the appeal rate seems to be increasing with heightened awareness of the process, that number could even be higher.

This doesn’t mean, however, that many appeals will be successful.  Last year the PRC issued remand decisions at about half the average rate of the past few decades — about one in ten as contrasted with one in five.  So a thousand appeals would lead to only a hundred remand decisions.

And there’s no reason to think the remand rate will improve.  Sometime soon the Senate will confirm the nomination of Tony Hammond as the fifth Commissioner on the PRC.  That will give the PRC three Republicans and two Democrats.  It may be a coincidence and party politics may have nothing to do with it, but it’s been the Democrats who have been consistently voting in favor of remands, while the Republicans have been content to affirm the Postal Service’s closing decisions.  Unless Hammond turns out to be more inclined to remand than his fellow Republicans, there will be few successful appeals.

While appeals are not likely to be victorious, it’s important for communities to file them anyway.  They send a message to the PRC, the Postal Service, and Congress that the people in the country want their post offices.  The details in the appeal dockets also help guide the PRC in its work as a regulatory agency, and appeals can have effects far beyond the fate of a particular post office.

This year’s appeals, for example, influenced the PRC’s Advisory Opinion on the RAOI.  The Postal Service had claimed that closing 3,650 post offices would save $200 million, but the PRC used the appeals it had reviewed to make its own calculation and found that closing 95% of the RAOI post offices would more likely save only $100 million.

 

The dissents keep on coming too

While there were very few remand decisions in 2011, there were many dissenting opinions from Chairman Goldway and Commissioner Nanci Langley.  Since November, Goldway has dissented on something like 18 decisions, and Langley has joined her on many of them.

It’s getting to be a regular thing now, with Commissioners Robert Taub and Mark Acton voting to affirm the closing decision, while Goldway and Langley dissent.  A remand requires a majority, so those two-to-two votes mean the post office will close.  But the dissents are important anyway, and they are often cited in subsequent decisions.  The causes for the dissents have varied, and they’re worth noting, since they can help guide those making appeals in the future.

The Postal Service’s mode of calculation for cost-savings has come under repeated scrutiny.  The Postal Service typically figures in the full salary for a postmaster as an expense that will be eliminated, but often the post office is staffed by an Officer-in-Charge, who earns far less.  That issue came up in the appeals for Hoxie, Arkansas; Lake Creek, Texas; and Chillicothe, Iowa.  A related issue is that the Postal Service consistently says that there’s “no effect” on employees since they’re transferring to another office, which has the Commission asking how any money would be saved on their salaries.

In some cases, such as Goodwin, Arkansas, the Postal Service failed to consider the cost of paying out the remaining years on the lease, or the cost of replacing the post office with a rural carrier.

The dissents also note errors in the documentation, such as the distance to the nearest post office.  In Chillicothe, Iowa, for example, the Postal Service said a nearby post office was four miles away, but a bridge is out, and the distance is actually about 20 miles.

Failure to give adequate consideration to community concerns has also been cited several times, as in Langley’s dissent on Pilot Grove, Iowa, where she noted that the Postal Service did not offer meaningful responses to community questions about establishing a Community Post Office and reducing hours of operations a an alternative to closing the post office.  She made essentially the same comment in her dissent on Bigelow, Arkansas.  Langley’s point is that the Postal Service is not fulfilling its obligation to give serious consideration to issues raised by customers.  Implicit in her remarks, however, is a sense that reducing the hours of operation, setting up a community post office, negotiating a lower lease cost, and so on, would be legitimate alternatives to closing the post office completely.

Chairman Goldway also took objection to the closing of the post office in Freehold, New Jersey, which was operating out of a trailer in a parking lot, yet somehow bringing in 2010 revenues of $661,000.   The cost for operating this facility was $154,000, so the office was making a profit of more than half a million dollars.  Goldway felt compelled to “express my serious reservations about the Postal Service’s aggressive pursuit of closing retail facilities that has led it to include truly viable facilities. I believe that this policy is indiscriminate, counterproductive and not in the public interest.”

The moratorium on closings is also figuring into dissents.  In each of her recent dissenting opinions, Chairman Goldway has included the following passage: “Moreover, the Postal Service recently announced a moratorium on post office closings.  It is confusing and perhaps unfair to require some citizens whose post offices have received a discontinuance notice as of December 12, 2011 to gather evidence and pursue an appeal to the Commission, while others whose post offices were in the review process, but had not yet received a discontinuance notice by December 12, 2011, have the respite of a 5-month moratorium.”  It looks like she’ll be using that passage quite frequently over the coming weeks.

 

Predictions for 2012

If things keep going as they have been, it’s not hard to predict the future.  The 138 appeals before the PRC will probably yield about 15 remanded decisions, and 123 post offices under appeal will close as soon as the moratorium ends in May.  That’s on top of a number of post offices that did not file appeals that will also close when the moratorium ends — probably around a hundred.

Thousands of communities with post offices on the RAOI list will have a second meeting during late winter and early spring, as the Postal Service tries to get it right the second time around.  Citizens will continue to fight for their post offices by making noise at these meetings and writing their legislators.

In May, a “mass number” of post offices will receive Final Determination notices, and at least a third will appeal, but only a small percentage will win a remand.   The Postal Service will probably release a new list with another 4,000 post offices it wants to close (as we have been told by the Deputy Postmaster General), and it will be well on its way to closing half the country’s post offices, according to plan.

Congress will debate postal legislation and make some effort to protect rural post offices while giving the Postal Service ample latitude to reduce costs by closing post offices and consolidate processing plants.  Whether Congress can finalize legislation before the moratorium ends — or before the election in November — is an open question.

Also during the spring or early summer, the PRC will issue its Advisory Opinion on the plant consolidation plan (the procedural schedule is not out yet).  It will probably find that the cost savings from closing 250 plants will be far less than projected by the Postal Service, but that won’t stop the consolidations from proceeding.  The Postal Service is already shifting work away from the plants it plans to close.

The speed with which the mail is delivered will slow down as plants and post offices close, people will need to drive further to a post office and the lines will be longer, postal workers will be further demoralized, more historic post office buildings will be sold off, the downward spiral will accelerate, and the country’s anger at the Postal Service will increase to the point that people will look forward to privatization or at least further steps in that direction.

Photo credits: Closing meeting in Coaldale, CO;  Stu’s Views cartoon; Gepp, AR, post office; Lake Creek, TX, post office; Pilot Grove, IA, post office; Freehold, NJ post office