Week in Review: AMPs, 10-K, PRC, CBRE, VPO, GAO & OWS


It was another busy week in Postal World — post offices keep closing, plant consolidation plans keep rolling on, the GAO keeps coming up with studies, and the PRC struggles to keep up with the appeals and Advisory Opinion.  Here are just some of the highlights:

Hearing in Harlem: The New York Metro Area APWU announced that on Tuesday, Nov. 22, there will be a hearing to discuss the closing of the Lincolnton post office in New York’s Harlem.  The meeting is at 6 p.m., but community members, postal workers, and union leaders will be assembling for an informational picket outside the station beginning at 5:30 p.m.The post office is located at 2268 Fifth Avenue at 138th Street.  (More info here.) [CORRECTION: The Lincolnton Station is not being studied for closure: the meeting was at Lincolnton, but it was about the nearby College Station, which is on the RAOI list.)]

AMP’d & Excessed: The Postal Service continues with its AMP consolidation studies.  In La Crosse WI, employees are being AMP’d and looking at a commute of over 150 miles to St. Paul MN.  Some employees were apparently excessed to La Crosse, and now they’re returning to their own plant.  The Williamsport PA plant had its public meeting on consolidation on Nov. 17.  A postal worker writes in to Save the Post Office asking, How will Harrisburg handle all the mail as well as that of other plants that may be closed?  It’s definitely going to mean delays — “not to mention all the families who depend on their jobs to pay their mortgages and raise their families and who cannot pack up & relocate.”  There’s a petition to save the Williamsport plant here, and more info here.)

It’s hard to understand why the Postal Service insists on playing musical chairs with processing plants.   Consolidation kills jobs, breaks up families, causes crazy commutes, and hurts communities.  It’s not even clear they save money.  This in-depth study concludes that “simply consolidating plants is not likely to be an effective strategy for restructuring the USPS network with the object of increasing aggregate productivity.  Most plant consolidations will actually decrease the volume that can be processed by the same equipment and labor force in the consolidated plants.”  For more on AMP studies, the Postal Service provides information about its “streamlining” plans here, and the APWU keeps its updates here.

No “undertaking” in Venice: Efforts to save the historic New Deal post office in Venice CA continue, but the Postal Service is sticking by its decision.  USPS VP David Williams informed citizens of Venice that, “while sympathetic” to their concerns, he would “not set aside the Postal Service’s prior decision.”  The National Historic Preservation Act requires federal agencies to consider the effects of their undertakings on historic properties, but the Postal Service does not consider closing the post office “an undertaking” that will change the character or use of the property.  Williams say an “undertaking” would occur only when the Postal Service adopts a plan to reuse the building or transfer it to private ownership.  An attorney has taken on the case on a pro bono basis, so perhaps the PRC will hear the case (an appeal has been filed) or maybe it will end up in court. Williams says no way, and his letter to Venice ends as follows: “This is the final decision of the Postal Service with respect to this matter, and there is no right to further administrative or judicial review of this decision.”  (More on the Venice fight here.)

Post Offices “in contract”: A couple of weeks ago, the Postal Service and its partner CBRE put up a new website advertising properties for sale.  On day one, there were 90 buildings listed, but today there are 48.  Perhaps the other 42 were removed because they were sold, but it might be because the Postal Service was in such a rush to get the site up it didn’t even have a photo for all the post offices it wants to sell.  (At least now the “About USPS” page doesn’t say “Under Construction” anymore.)  Several historic post offices have apparently found a buyer.  The site lists as “in contract” the post offices in Fairfield CT; the 31 Street in Washington DC; Gulfpost MS; and 358 West Harrison Street in Chicago, IL.  It’s really a crime that the Postal Service so undervalues the country’s architectural riches and is selling off these historic buildings on the cheap.

How much is the Postal Service worth?  Speaking of undervaluing postal assets, the Postal Service doesn’t seem to think any of its post office properties are worth much.  This week the Postal Service issued its annual financial report (Form 10-K) for fiscal year 2011 (ending Oct. 1).  Not surprisingly, the headlines focused on the $5 billion deficit, but there’s another number in the report worth a look — the value of USPS assets (buildings, land, equipment, and intellectual property).  The Postal Service owns over 8,000 facilities, and the 10-K says they’re worth $24 billion — the amount it cost to build or purchase them — minus depreciation. The 10-K adds $3 billion for land and $20 billion for equipment, but then subtracts $29 billion for “depreciation and amortization.”  A note explains that the historic buildings have been depreciated over 75 years, using the straight-line method.  In other words, the buildings are worth nothing in the Postal Service’s calculations, and there are no records on fair market valuations or tax assessments.

But the value of many postal buildings has appreciated considerably, and, as a recent USPS OIG report noted, their fair market value far exceeds purchase price.  For example, the National Postal Museum cost $47 million and it now has an assessed tax value of $304 million.  The post office in Fairfield cost $1 million, but it is “in contract” now for $4.4 million.  So why is the Postal Service saying its properties have depreciated to almost nothing, when they’re worth several times what they cost?  Why undervalue assets like that, unless, perhaps, the folks running the show are thinking ahead to when it’s time to put a price tag on the whole postal system, and they want their friends to be able to buy it cheap?  How much is the Postal Service worth, anyway?  You won’t find an answer to that in the 10-K.

They’re not taking it in Malden: The post office in Malden WA is being studied for closure, and citizens aren’t happy with the “facts” presented by the Postal Service.  A website discussion lists many of the complaints, and we’ve heard others too:  The proposal to close says there are a number of alternative sites within a short distance, but the nearest is seven miles; it says the building is 56 years old, but it’s over a hundred; it lists as “advantages” that box holders won’t have to pay fees, but their boxes are free right now; many farmers who use the post office did not receive notices of the proposal to close, the announcement about a meeting, or the questionnaire; the meeting was scheduled at an inconvenient time; seniors and those with disabilities cannot wait in the cold and snow to do postal business with the carrier.  Plus, Washington is a “vote by mail” state, so the Malden post office serves as a de-facto polling location for the surrounding area, and closing the post office amounts to voter suppression.  The community has written its elected officials, and it's not going to lose the post office without a fight.

Rug pulled out in DuBois: Four years ago, when the Postal Service tried to close the post office in DuBois NE, the town raised more than $25,000 to buy the post office building so that it could offer the USPS a cheaper lease.  That lease runs through January 2017, and the town thought the post office was safe till then.  But now the DuBois post office is being studied for closure under the RAOI.  The nearest post office is about a ten-mile drive (twenty round trip), so closing the DuBois post office would be a great inconvenience and a big loss to the town.  A town board member said that the five-year lease made everyone in town feel like the post office was there to stay, "and everything was set up for that.  And now we feel like we're getting the rug pulled out from under us." 

Only a pawn in their game: The Postal Regulatory Commission (PRC) remanded two closing decisions (Innis LA and Monroe AR) back to the Postal Service for further consideration, a sign perhaps that the commissioners are taking a tougher line with the Postal Service.  Plus, another post office was spared when the Postal Service withdrew the Final Determination to close the post office in Pomfret Center CT.  The Postal Service doesn’t say why, so the cause for the reversal will remain a mystery.  Senator Lieberman from Connecticut is the chair of the senate committee that oversees the Postal Service, so maybe he had something to do with the Pomfret decision. 

Along those lines, in July the Postal Service withdrew the Final Determination to close the La Mesa post office in San Diego, shortly after an appeal was filed by the president of the San Diego Area Local of the APWU.  In August, the Postal Service reversed its decision to close the post office in East Camden AR, perhaps because numerous Department of Defense contractors (like Lockheed Martin, General Dynamics, and Raytheon) are served in a nearby industrial park, or perhaps because Senator John Boozman got involved (in a conference call with USPS personnel).  Let’s hope politicians, the Postal Service, and others in power are not using post offices as pawns in their game. 

In the PRC mailbag: The Postal Regulatory Commission released its log of inquiries over the past quarter and for the fiscal year.  Big surprise — the PRC has received a ton of correspondence about post office closures.  The PRC’s Public Inquiry Log for the last quarter (July 1 to Sept. 30) shows a total of 3,050 items, and 2,500 of them concern post office closings (2,132 of them related to the RAOI).  For the fiscal year, over half of the 5,600 inquires were about the closings.

Bulletin boards banned: As if the Postal Service didn't have enough to worry about, now they're cracking down on bulletin boards.  You could read the writing on the wall in late September when, in cross-examination before the PRC,  Postal Service lawyers asked Lorhrville, Iowa's Mayor Donny Hobbes about the kind of things being posted on the board in his town's post office.  The question came up because the mayor had mentioned how the post office was a place where local news was exchanged, like on the bulletin board.  Now USPS supervisors in Capitol Heights MD have told postmasters in their district that bulletin boards with community announcements are banned in post offices.  The board can only have "official postal and other governmental notices and announcements."  But the USPS seems unclear about the rule.  A spokesperson in Baltimore said community announcements were fine so long as the bulletin board was in the outer lobby near the P.O. boxes, but the spokesperson in the Washington district said there are no exceptions.  While the USPS works things out, the post office in Tracys Landing MD is going its own way.  As the local news put it, "There wasn't exactly an uproar in Tracys Landing, more like a quiet rebellion.  In a great American tradition, people decided a rule was stupid and ignored it."

Another VPO: While the Postal Service works on ruining its reputation with silly bans on bulletin boards, it's still trying to look good by opening up cute "Village Post Offices."   The fifth VPO opened last week, and it's in a really lovely hardware store in Glenn, Michigan, named Gerstner Hardware and Vintage Specialties.  The store has been around since 1918, it’s located in a beautiful historic building, and it actually housed the post office sixty years ago, so it was the perfect spot for a VPO.  The town is lucky the owners of the hardware store were willing to take on the job since they won’t make any profit from stamp sales, and they needed to do some remodeling and add a handicap ramp.  A local contractor and architect have even been pitching in to help with the work.  Sounds like a great community.

The wrinkle in the story is that the Glenn post office closed under an “emergency suspension” because of a “loss of a lease on the property,” even though the post office had been in the building for “half a century.”  In August, when the Postal Service informed residents of the suspension, the letter said, “the recommended change is tentative and will not lead to a formal proposal unless we conclude that it will provide a maximum degree of regular and effective service."
 Now that a VPO is in place, one wonders if the Postal Service will ever go through the formal discontinuance process. 

Herr strikes again: Phillip Herr has written 15 or 20 GAO reports over the past three years, many of them about closing post offices.  Herr is so prolific on the subject that his footnotes usually reference his own studies since there’s no one else to cite.  Herr’s latest, “Action Needed to Maximize Cost-Saving Potential of Alternatives to Post Offices,” is about how the alternatives to a post office — kiosks, stamps on line, contract postal units, village post offices, postal counters in chain stores, etc. — are less expensive to operate than post offices and should thus be the future of postal retail. 

The report also discusses the problems with these alternatives, and it’s worth reading for that alone.  As Herr notes, some alternative outlets charge more for postage than you’d pay at a post office.  Contract postal units, which seem like the perfect alternative, are on the decline because they can be terminated, with or without notice, by either the operator or the Postal Service, and they get a lot of “resistance from postal labor” (which sees them as a way around union work) and higher costs (than, say, stamps-on-consignment at a chain store).  Herr seems frustrated by the slow pace of post office closings and the inability of USPS officials “to provide any details about actual cost savings resulting from their efforts to expand retail alternatives.” 

Man of the hour: While Phil Herr is busy trying to close post offices, there's a young man working hard to keep them open.  Evan Kalish is a 25-year-old photo-journalist who's been taking weekend breaks from grad school to travel around the country photographing post offices as fast as he can.  His photos call attention to the beauty of every post office, whether it's a grand old historic building or a modest vernacular structure, and they radiate his love for post offices.  Last week Evan was featured in the Washington Post print edition and an excellent article in Time.  Today he’s off for an interview with NPR, and the BBC is interested as well.  Check out his latest post on Going Postal about island post offices off the coast of Maine. 

Keeping Wall Street Occupied: It’s easy to blame L’Enfant Plaza for the problems facing the Postal Service, but the big Wall Street corporations can take some credit, too.  They lobby Congress for legislation that’s good for their profits even if it’s bad for the Postal Service, and they are the main beneficiaries of the $12 billion the Postal Service outsourced last year, much of it at the expense of postal workers, who are now looking at layoffs because there's supposedly not enough work for them.  This video has some thoughts about how to send these corporations a message and do some good for the Postal Service at the same time.

(Photo credits: Lincolnton NY post office [Evan Kalish]; Williamsport PA rally; Venice CA post office; Gulfport MS post office vintage postcard; Fairfield CT post office; Malden WA post office [Nick Bachman]; DuBois NE post office (to the right of the bank); bulletin board in Tracys Landing MD; VPO in Glenn MI; Pomfret Center CT post office; Retail Alternatives; Squirrel Island community post office.)