March 7, 2014
Next Wednesday is the deadline for submitting bids to purchase the historic Bronx General Post Office. The Postal Service is apparently proceeding with its plan to sell the building even though Congress has recommended a moratorium on the disposal of historic post offices.
Thanks to the efforts of Representatives Barbara Lee of California and José Serrano of the Bronx, Congress included two provisions concerning the sale of historic properties in the Appropriations Bill passed earlier this year.
The first said that the Postal Service “should refrain” from selling historic buildings until the Office of Inspector General (OIG) completes its audit investigation on the disposal and preservation of historic post offices (p. 75).
The second directed the Advisory Council on Historic Preservation (ACHP) “to report on the action plan for ensuring USPS compliance with Section 106 responsibilities during the divestment of historically significant properties”(p. 89)
According to the USPS-CBRE Properties for Sale website, the Postal Service has set March 12, 2014, as the deadline to submit “best and final offers” for the purchase of the Bronx GPO. (The initial deadline was January 15, but for reasons unknown the deadline was extended.)
The call for best offers requests that interested parties submit offers that respond to two possible scenarios — an outright purchase of the property and a purchase that includes a long-term USPS lease for a portion of the building so that it can continue retail operations in the building. Prospective buyers are also asked to describe their development plans for the property under both scenarios.
If the Postal Service elects option one, it will relocate retail services to another place in the neighborhood. If the closing date on the sale occurs prior to the date that the Postal Service is ready to relocate, it reserves the right to lease back the entire building for up to a year for a rent of $1.
If the Postal Service chooses option two, it will retain 8,597 square feet on the first floor and 2,947 SF in the basement and continue to offer retail services for years to come. According to the purchase agreement and the long-term lease, the Postal Service would rent this 11,500 square feet for ten years with two five-year renewal options. The rent for the first five years would be $346,320 a year.
The documents include the floor plan for the first floor and basement showing what portion would be leased to the Postal Service. Not surprisingly, the Postal Service would lease back most of the main lobby of the building, where the customer service windows, post office boxes, and historic murals by Ben Shahn are located.
The southeast portion of the lobby area is not included in the leaseback space, however. This is the area to the right as one enters from the front of the building, over by the passport office. There are several murals in this part of the lobby, so the Postal Service is apparently not considering an option in which it would retain all the spaces where murals are located.
The lobby of the post office and the murals have been declared a landmark by the New York Landmarks Conservancy, which has agreed to accept a preservation covenant from the Postal Service that would cover the landmark rooms and murals.
The murals cannot be sold, so the Postal Service will lend them to the new owner. As it has done in previous cases like this, the Postal Service will set up a loan agreement in which the new owner “borrows” the murals “for the purpose of exhibiting the murals for a term of 25 years.”
That wording is not exactly accurate, however. The “purpose” of the loan agreement is not so that the new owner can exhibit the murals. Rather, it’s a way for the Postal Service to sell the building while retaining ownership of the murals. In fact, according to the agreement, the “borrower” is required to provide "public access" to the murals just for one day a month.
The borrower must also insure the murals for $3,625,000. It’s not clear where this number comes from. The Postal Service has not released a list of its murals and other art works, and it’s not known if it has done appraisals on them. Have the Shahn murals have been appraised at this value? Who knows?
The Postal Service has had an environmental consulting firm do a study of the Bronx property, but it is fairly cursory, even though the building is on the National Register of Historic Places. The Postal Service is claiming a Categorical Exclusion (CATEX) with no “extraordinary circumstances” that might have “a significant environmental effect.”
Normally claiming a CATEX with no extraordinary circumstances means that no further environmental studies will be conducted, but on the Environmental Checklist another box is checked that says, “The Facilities environmental specialist will determine the need for further environmental studies.” So it’s not clear from all this whether or not the Postal Service will proceed to do a more thorough Environmental Assessment.
This is an important issue because the Postal Service claimed a CATEX when it made preparations to sell the historic post office in Stamford, Connecticut. The National Post Office Collaborate and the Center for Art and Mindfulness challenged the sale, and the court found that the Postal Service was not justified in claiming a CATEX and an Environmental Assessment would be necessary. The Postal Service subsequently revised the CATEX provision in its regulations to limit the possibility of this happening again.
Perhaps in the case of the Bronx GPO, the Postal Service will wait to determine if a more thorough Environmental Assessment is necessary once it sees what the potential buyers have planned for the property. One possibility is a marketplace, perhaps along the lines of the Chelsea Market. If the Postal Service were to maintain a post office in the building and the murals were all readily accessible to the public on a daily, not monthly basis, that might not be the worst fate for the building. But selling off postal property is still a form of privatization, and the Postal Service should wait until the OIG and the ACHP have completed their work before proceeding with the sale.
March 5, 2014
Today the Postal Service published the Final Rule on the Load Leveling plan in the Federal Register. As the Rule states, "The Postal Service is revising the service standards for Standard Mail that is eligible for Destination Sectional Center Facility (DSCF) rates. These changes will allow a more balanced distribution of DSCF Standard Mail across delivery days." The effective date is April 10, 2014.
Apparently the Postal Service is not going to wait to hear what the Postal Regulatory Commission has to say about Load Leveling in its Advisory Opinion, which is due out around March 27.
It’s been clear for a while now that the Postal Service was going to implement the plan regardless of what the PRC or anyone else had to say about it. We made that point in a previous post, and last week, the PRC’s Public Representative discussed the matter in her Reply Brief.
As the PR notes, in comments filed with the Commission, Quad/Graphics stated that during a January 10, 2014 webinar with mailers, the Postmaster General said that he planned to go ahead with the Load Leveling Plan regardless of the Commission’s opinion. Many of the mailers have said that they felt “railroaded” and “manipulated” by the Postal Service and that they believed the Postal Service decided to move forward with these changes “with limited regard to the views of its customers.”
The Public Representative reviews these comments from the mailers and then goes on to state the following:
The Postal Service’s predetermination that the Load Leveling Plan will be implemented regardless of mailer views and the Commission’s opinion does not represent “best practices of honest, efficient, and economical management.” While the Commission’s opinion is an advisory one and non-binding in nature, the whole purpose of the 39 U.S.C. § 3661 proceeding is for the Commission to provide its expert advice to the Postal Service. To predetermine that the advice is irrelevant to the Postal Service’s decision, particularly in light of the fact it is required by statute, does not reflect best management practices. Best practices should include consideration of both customer concerns and available advice, even if the final determination differs from the weight of the feedback received.
The Public Representative provides a detailed analysis showing that in two of the three operations tests the Load Leveling plan failed to level mail volumes and that carrier street time productivity actually decreased. The PR also argues that “the Postal Service has not provided evidence of the burden that the Load Leveling plan is intended to reduce and misstates the extent of carriers out past 1700 problem.” She also notes that the Postal Service did not do any cost-savings analysis or any market research on how much volume and revenue might be lost as a result of slowing down Standard Mail.
The Postal Service has provided a detailed Reply Brief of its own, responding to the arguments presented by the Public Representative and the mailers.
But the back-and-forth arguments before the PRC don’t seem to be of much consequence. As indicated by the Final Rule published today in the Federal Register, the Postal Service is going ahead with the plan. The fact that there’s an Advisory Opinion under way is relegated to a mere footnote in the Final Rule.
(Photo credit: SCF in Kearny, New Jersey)
March 2, 2014
A recent report by the USPS Office of Inspector General on offering financial services at the post office won immediate support from Senator Elizabeth Warren, and postal banking was thrust into the limelight. A big front-page story in Huffington Post entitled “Breaking the Banks” by Elizabeth Swanson offers polling data (and a poll of its own) that shows 44% of Americans favor letting the Postal Service getting into the banking business. After the president’s State of the Union message, David Dayen, writing in the New Republic, suggested that President Obama use his executive powers to order the Postal Service to consider postal banking. Dayan has another piece in Salon about how postal banking could even "save the economy."
While some news sites have been touting the idea as a way of saving the Postal Service, others have dismissed the idea as government overreach. The division of opinion falls along fairly predictable ideological lines, with the Left largely in favor and the Right mostly opposed, although as recently as last August Reihan Salam of the conservative National Review was touting the idea of postal savings accounts.
As many of the news articles and op-ed pieces point out, postal banking is not a new or very original idea. The old Post Office Department offered savings accounts up until the early 1960’s. Japan’s largest savings bank operates out of the post office, and many other foreign postal systems offer some form of financial services or banking.
In several pieces here on Save the Post Office, I’ve suggested that the postal network would provide an excellent platform for limited banking services, like small savings accounts, check cashing, electronic bill presentment, and payment systems. These services could bring the unbanked and the underbanked, as well as those with marginal or no access to the Internet, into the 21st-century economy. In many ways those kinds of services are a natural fit with a postal network oriented to public service.
Done properly, offering basic financial services through the postal network would be attractive and beneficial, not just to those at the bottom of the economic spectrum but also to many in the middle class as well. An initiative like this could be a wise way to preserve and expand our existing postal assets while preserving hundreds of thousands of good postal jobs.
Considering that I myself have been a proponent of postal banking, I hate to throw a wet blanket on the idea. The proposal has gained tremendous traction and gotten many people excited, but there are just too many reasons to be skeptical. Given the current structure of the Postal Service, the mindset of its leadership, and the attitudes and expectations of politicians in both Congress and the Administration, a move towards postal banking would not only be unlikely to save the Postal Service and the postal network, but it could also turn out to be as abusive and harmful as the current landscape of payday lenders and predatory banks. The last thing we need right now is for the Postal Service to try to balance its books by extracting billions of dollars in fees from some of the most financially vulnerable folks in society. That’s not the way to save the post office.
February 23, 2014
Earlier this week, there were reports that letter carriers in Washington, D.C. were told by management to end their routes before completing their deliveries in order to keep down overtime costs. Apparently this caused massive pileups of undelivered mail and delivery delays. The Postal Service has denied the claim, saying carriers were told to return at 6 p.m. for safety reasons because of a snowstorm.
There may be another explanation for why carriers have been told to return by 6. The Capital area is one of the places where the Postal Service has been testing Load Leveling, the plan to slow down delivery of some Standard Mail in order to spread the volume out more evenly during the week and get carriers back in the office sooner. It’s possible that the Postal Service told carriers to return before 6 in order to show that the Load Leveling plan will work as advertised.
The problem with this theory is that the dates don’t quite work out. According to a spreadsheet filed with the Postal Regulatory Commission this past week, the Load Leveling test was conducted out of the Curseen-Morris processing plant in Washington, D.C., during January 4 - 17 and January 24 - 31, while the order to return to the office by 6 p.m. apparently took place during the week of February 10.
In any case, if letter carriers in D.C. are now being told to return by 6 and delivery is being delayed, it wouldn’t be a surprise. That’s essentially the goal of Load Leveling, and even though the Postal Service has said the plan would not be implemented until the end of March, it has been clear for a long time that it was going to happen, regardless of what anyone had to say about it.
Moving ahead regardless
When the Postal Service submitted its Request for an Advisory Opinion on the Load Leveling proposal on December 27, its tone implied that the plan would be implemented no matter what the PRC said: “The earliest that the Postal Service intends to make the changes discussed in this Request is March 27, 2014 — 90 days after the date of this filing.”
The 90 days cited here is a reference to the Commission’s regulations (39 CFR § 3001.72), which require the Postal Service to file the request for an advisory opinion “not less than 90 days in advance of the date on which the Postal Service proposes to make effective the change in the nature of postal service involved.” But the tone of the Postal Service’s statement points to other matters.
In the past, the PRC has taken longer than 90 days, sometimes much longer, to complete advisory opinions, and this has become an issue not only with the Postal Service, but Senator Tom Carper and the Commissioners themselves. The Commission is therefore now in the process of trying to revise its rules in order to expedite the process. The revision has lagged, though, because of disagreements among the stakeholders, many of whom are concerned that an expedited process will deny them of due process.
With this statement in the Load Leveling Request about the 90 days, the Postal Service put the Commission on notice that it might implement the plan at the end of March, even if the advisory opinion isn’t done yet. The Postal Service also makes it sound as if it’s not going to spend weeks digesting what the Commission has to say — it could implement the plan on the same day the advisory opinion is issued.
If one gets the impression that the Postal Service doesn’t much care what the advisory opinion says, it’s more than an impression. According to comments filed this week with the PRC by Quad/Graphics, the Postmaster General told mailers during a webinar on January 10, 2014, that “regardless of the Advisory Opinion of the Postal Regulatory Commission (PRC), he intended to implement the change no earlier than late March.”
As a result of the PMG’s statement, says Quad/Graphics, “many in the mailing community felt that comments [to the PRC] would be a waste of time since the USPS was set on moving ahead with the changes regardless.”
In fact, it seems that Load Leveling may have been a done deal even before the Postal Service filed its Request with the PRC in December. Many of the mailers are now saying that they felt that way even when the Postal Service began talking about the plan in the spring of 2013.
Railroading the mailers
The Postal Service began discussions on load leveling with the Mailers Technical Advisory Committee (MTAC) sometime in early 2013, and in May it set up a subcommittee called Work Group 157 to focus on the plan. Over the next few months, Work Group 157 met several times — the slideshow presentations are here — but apparently it was not a very inclusive process. Many mailers are saying the Postal Service was not really interested in their opinions.