Fiasco in Freistatt: How the Post Office Became a Cluster Box

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Back of Freistatt CBU-540x469-1

BY MARK JAMISON

The Postal Service didn’t think the folks in Freistatt, Missouri, should have a post office, so they closed it.

The Postal Service didn’t think the folks in Freistatt, Missouri, should get rural carrier delivery like their neighbors, so they tricked the town into accepting cluster boxes.

Now the Postal Service doesn’t think the folks in Freistatt, Missouri, ought to have the opportunity to tell their story to the Postal Regulatory Commission, so they filed a motion asking the PRC to dismiss the appeal because it was submitted a week late.

As reported on STPO back in March 2013, the Postal Service closed the Freistatt office on two-days’ notice by emergency suspension — and on Good Friday no less. But that was not the end of the story.  It was only the beginning.

 

The first push to close Freistatt: The 2011 RAOI

Freistatt is an incorporated town of 160 people in the southwest corner of Missouri. The town is situated along Highway H, a main road that serves trucks traveling between Missouri and Arkansas, and it has a fairly thriving business sector.  There is a major insurance agency in the town, an active non-profit that mails Braille bibles for the blind, a large John Deere outlet, and a housing complex for seniors and the disabled.  Although the town’s population decreased between the 2000 and 2010 census, the general area of Lawrence County grew by about 34% during that time.

In 2011 the Freistatt post office was one of 3,700 offices marked for closing under the Retail Access Optimization Initiative (RAOI), and a discontinuance study was initiated in August of that year.  Like most discontinuance studies, this was a pro forma exercise that was less a study to determine if the office should close than a means to legitimize the Postal Service’s decision to close it.  The plan back then was to replace the post office with rural delivery.  

The discontinuance study was flawed by the usual anomalies and misinformation that has become an all-too-common feature of this process.  For example, even though the office had both a postmaster and a postmaster relief (PMR), in the cost-savings analysis, all of the offices hours were rated at the higher labor rate of the postmaster, thus giving the impression of greater savings than actually would have been accrued.

The initial letters sent to Freistatt’s customers had more than a few things wrong as well.  For example, the mileage to the other post offices was incorrect, and an office that was more than seventy miles away was included as an “alternate” facility. That initial letter, which is not in the administrative record provided by the Postal Service, also apparently had some assertions about the town and the post office that were wrong, including the notion that the town was unincorporated and that the postmaster did not help the elderly.  

 

The meeting and survey

This was not a case of the Postal Service wanting to close an office in a dying area with an uninterested populace.  Eighty-nine people received their mail at Freistatt, and it appears that at the public meeting held on August 25, 2011, they all showed up.  

The Postal Service also distributed questionnaires to the folks in Freistatt.  According to the administrative record, eighty-eight were returned.  The tally that accompanies the surveys indicates that forty-two were unfavorable and forty-six expressed no opinion.  The Postal Service has an unusual way of doing the tally.  Apparently, unless a respondent actually writes that they didn’t like what was happening, their survey was tallied as having “no opinion” — even though the questions in the survey were all checked with negative responses. 

However, lest the Postal Service have any doubt about what the folks in Freistatt felt, there were fifty-eight additional response comments and all of them were negative. This is a town that cared about and supported its post office. The town commission had even spent $10,000 to create a crosswalk and handicapped access especially for the post office after an elderly resident spent the last eight months of his life lobbying for the improvement

According to the law that governs post office closings, the Postal Service is required to “consider the effect on community.”  One could argue that the Postal Service did just that.  Rick Belcher, the Manager of Post Office Operations for the area, responded with a letter to each and every one of those who wrote comments. The administrative record is 651 pages long, and about 600 pages is taken up by the surveys, comments, and Belcher’s letters of response.  Belcher appeared so concerned that in some cases he sent three and even four letters to the same person in response to their concerns.

Of course, on closer inspection, it’s evident that what happened was that the Postal Service went through the surveys and comments identifying general areas of concern and then gave boilerplate responses.  It doesn’t look like anyone spent much time on the exercise.  Some of the “responses” don’t make any sense, some actually contradicted the expressed concern, and there are a whole lot of non-sequiturs.

 

Responding to customer concerns, sort of

It’s sad to read through these surveys and see the feelings people expressed for their community and their post office and to watch how the Postal Service responded.  At best, a postal official looked through the comments in a cursory manner, then checked off a appropriate boilerplate response.  (The Administrative Record is here; the surveys, comments and responses begin at page 57; the Community Meeting Analysis responding to customers' concerns is here.) 

It’s doubtful, given the volume of comments, that the folks from the PRC who are supposed to care about and represent the public’s interest would have the time to go through the comments individually. And even if they did, how can that be translated into a sense of the devastation that is being inflicted on American communities by the loss of the local post office?

For example, an elderly woman expressed concern that if the post office closed, she would need to meet the rural carrier in order to do a money order transaction.  She received a reply letter saying this:

In response to your letter: You were concerned about obtaining services from the carrier. Most retail services provided at the post office are available from the carrier and do not require meeting the carrier at the mailbox.  Stamps by Mail and Money Order Application forms are available for customer convenience.  Listed below are some services available from the carrier and how to obtain them.

Several paragraphs follow, including one titled “Purchasing Money Orders,” which begins with the sentence: “Customers may purchase money orders by meeting the carrier at the mailbox. . . .”  The whole point of the woman’s comment was that she would not be able to meet the rural carrier, and in response she is told she can meet the carrier at the mailbox.  That’s what the Postal Service calls “listening to customers.”

Nearly everyone in Freistatt expressed concerns about the impact the loss of the post office would have on the society and culture of the community.  It was clear that the post office in Freistatt, like in many small towns across America, was a central gathering place, a hem holding the garment of community together.  One fellow offered a warning that many might understand: “Small town America is why this country is so great.  If you destroy small town America, just watch what happens.”

In response to the genuine concerns about the future of their town, the residents of Freistatt got this generic platitude from the Postal Service:

You expressed a concern about the loss of a gathering place and an information center.  Residents may continue to meet informally or socialize and share information at other businesses, churches, and residences in town.

In other words, in response to a community’s heartfelt concern and expression of need the Postal Service offered a canned bit of trite pablum.

 

From RAOI to POStPlan

The important thing, at least for the bureaucracies that manage and oversee these proceedings, is that the Postal Service dotted the i’s and crossed the t’s.  It posted notices, held the meeting, solicited comments, and performed all the administrative tasks that were required — not always well or accurately but enough so the step could be marked off on a checklist — in order to close the Freistatt post office.  

Never mind that the citizens were told that this was “only a proposal” or that their comments and concerns would be “taken into consideration” or that “no final decision has been made.”  The fact was that a decision had already been made and nothing was going to change that.

In December of 2011, the discontinuance study was completed and shipped off to L’Enfant Plaza for final disposition.

And then nothing happened for more than a year.  In the interim the RAOI fell apart and got replaced by POStPlan.  The Freistatt office is listed in POStPlan as being scheduled for a reduction to four hours a day.  For a while, it looked like the folks in Freistatt had gotten a reprieve.  During the discontinuance study, some of them had said that they would be willing to accept reduced hours of operation instead of closure, and it seemed as though they had gotten what they wanted.

POStPlan implementation began last year at offices with a postmaster vacancy.  In Freistatt, the postmaster decided not to accept the buyout or early retirement offers, and she also chose not to apply for any of the available vacancies.  Under the terms of POStPlan, she can stay in her position until September of 2014, at which time she will be subject to a RIFF (laid off).   This means that the folks in Freistatt not only got to keep their post office; they got the added bonus of continuing with their regular hours and their familiar and beloved postmaster until 2014.

 

From POStPlan to Emergency Suspension

All was quiet on the Freistatt postal front until March 27, of this year, when customers were suddenly notified that the office was being closed by emergency suspension as a result of failed lease negotiations.  

The notice came as a surprise to the landlord, too. He had recently signed and returned not one but two leases to the Postal Service. The first lease called for a modest increase in rent from the $3,900 per year that the landlord had been currently receiving.  It was for five years with renewal options.  Curiously, the lease called for reductions in payments after the first two years.  It also contained a 180-day opt-out clause that could be exercised by the Postal Service after two years.  Then things got a little complicated.

The best timeline available for the lease negotiation story comes from a document prepared for the PRC by the town clerk, Deborah Schoen.  (There is also this article from the Monett Times which describes the lease negotiations and subsequent events.)  Here's the chronology:

· On December 18, 2012, lease negotiations begin, with several offers being exchanged; the lease was due to expire on March 31, 2013.

· On March 18, 2013, the USPS drafts an agreement listing terms acceptable to the USPS.  The document is sent to the owner for consideration and signature.

· March 18-19, 2013— the landlord signs, dates, and returned the lease via e-mail. He also mails three signed and dated original copies via regular U.S. mail to the USPS.

· March 22, 2013 – the owner receives a second and revised lease agreement.  The owner says that he was confused by the second agreement, but because the expiration date on the current lease was approaching, he completes the second, revised lease and returns it in the same way as the first.

· March 28, 2013 – the owner contacts the USPS regarding the status of the leases and is informed that the residents have already been issued a notice of Emergency Suspension with the effective date being March 29, 2013.

Even though the landlord had signed not one but two leases, and even though he had acceded to terms that were dictated by the Postal Service, Freistatt was placed under emergency suspension due to “failed lease negotiations.”

 

From Rural Delivery to Cluster Boxes

With their post office suddenly closed, customers were told that they would have to pick up their mail at the Monett post office, a round trip of 16 to 18 miles.  In our March report on Freistatt, STPO reported that the town didn’t have rural delivery.  It turns out there is a rural route that serves the area nearby.  During the period of the discontinuance study, the Postal Service had made every intimation that the residents and customers of Freistatt would be served by rural curbside delivery, even responding to questions about the security of curbside boxes by saying they could be locked.

However, Rick Belcher, Manager of Post Office Operations in the Mid-America District, had other plans. He appeared before the Freistatt village board and said that the only delivery alternative would be through cluster box units, not rural delivery.  Mrs. Schoen says that Mr. Belcher told her that if the town did not agree to site the cluster boxes on city property he would have them installed on corners.  In her comments filed with the PRC, Mrs. Schoen says that Mr. Belcher indicated that until the matter was settled, Freistatt residents would continue to have to retrieve their mail from Monett.

At their April 11 meeting, the village board agreed to allow installation of the cluster box unit on town property.  The CBU was installed approximately two months later, on or about June 13, 2013.

 

From Emergency Suspension to Discontinuance

While arrangements were being made for the cluster box unit, the Postal Service was proceeding with the discontinuance study it had begun back in 2011.  It culminated with a Final Determination to close the Freistatt post office permanently. Nothing in the study was updated or changed, the Postal Service made no attempt to re-evaluate the conditions in Freistatt to see if they had deteriorated or improved. Basically they used an eighteen-month-old document as the basis for their decision.

The regulations require that the Final Determination notice be posted at the post office.  It contains a passage indicating that individuals have the right to appeal to the PRC within 30 days.  Since the Freistatt post office had been closed since March, the Postal Service posted notices at the Stotts City post office (on June 14) and the Monett post office (on June 15), indicating that the deadline for appeals was 30 days away, approximately July 15.  The notices referenced the community meeting that had been held nearly two years earlier, back on August 25, 2011, when representatives from the Postal Service were available at Freistatt Community Building to answer questions and provide information to the 89 customers attending the meeting.

In addition to posting notices at these two other post offices, the Postal Service decided to post the Final Determination notice in Freistatt as well.  It chose to post the notice — all 15 pages of it — on the back of the cluster box unit.  So on June 17, a notice dated three days earlier was taped to the backside of the CBU.  You can imagine how many people saw it there.

 

An appeal to the PRC and a Motion to Dismiss

On July 22, 2013, Town Clerk Deborah Schoen filed an appeal with the PRC regarding the Freistatt closure.  Commission rules require appeals be filed within the thirty days of the day the Final Determination was posted.  It is common for the Commission to grant extensions in filing deadlines.  Along with her appeal, Mrs. Schoen filed a request for an extension.

The Postal Service subsequently filed a Motion to Dismiss the Freistatt appeal because it was “not timely.”  The Postal Service argues that the appeal arrived late, which it argued should be sufficient reason to deny Freistatt its day before the Commission. The Postal Service claims the clock began ticking on June 14, 2013, the day the notice was posted at the Stotts City post office.  According to that time frame, the appeal was filed seven days late.  If one starts the clock on the date the notice was posted in Freistatt, the appeal was just four days late.

The PRC, it should be noted, regularly grants extensions to deadlines, often without requiring any specific reason, and the Postal Service requests more extensions than anyone else.  According to the PRC website, since 1996, a Motion for Late Acceptance has been filed 876 times.  The Postal Service has filed 652 of them (almost one a week).

 

Responding to the Motion to Dismiss

It also should be pointed out that the chairman of the village board wrote to both Senator Roy Blount and Ruth Goldway, chairman of the PRC, on April 18, 2013, asking for assistance in appealing the emergency suspension. The basic facts of the case were presented in those letters, including what can be only characterized as the shenanigans surrounding the lease negotiations. There is no indication the PRC responded to the town at that point, but the letters serve clearly to indicate a desire and intent to appeal.

After the Postal Service made its motion for dismissal, both the Public Representative in the case and Mrs. Schoen filed comments in response.  Those comments were filed on the afternoon of Friday, August 9, 2013.  Both sets of comments are well worth reading for anyone interested in closure appeals.  Mrs. Schoen is not an attorney nor is she familiar with Commission procedures, but she nevertheless does a thorough and workmanlike job in presenting the facts of the case.

In her answer to the Postal Service’s motion to dismiss, Mrs. Schoen explained that a family emergency required her attention and that she was unable to meet the deadline as a result.  There is also the fact that no one in Freistatt could have reasonably been expected to see the Final Determination taped to the back of a cluster box unit.  

The Public Representative’s comments are equally solid.  The PR argues that Commission has the authority to extend a deadline (and she cites plenty of precedents to prove it), and she explains how customers weren’t adequately notified about the appeals deadline (e.g., the final determination posted on the back of the CBU). 

The PR also points out that the Postal Service routinely asks for extensions, and she makes this comment: “It is somewhat disingenuous for the Postal Service – a multi-billion dollar organization fully represented by attorneys who routinely request extensions on its behalf – to advocate for the strict application of a time limit for filing by an individual petitioner unrepresented by counsel and in the grip of circumstances beyond her control.”

In response to the arguments made by the Public Repesentative and the petitioner, the Postal Service today filed a Surreply reiterating its arguments why the case should be dismissed and responding to some of the arguments made by the Public Representative.  The Postal Service really doesn't want this case to be heard.

 

Issues raised by the Freistatt case

This is an appeal that the PRC should accept and review thoroughly.  It presents several major issues relating to post office suspensions and closures in a clear and distinct light.  Among the issues raised by the appeal are the following:

1. Where post offices are not self-sustaining: The original discontinuance study appears to have been initiated based on purely economic reasons, which appears to be a violation of Title 39, Section 101(b), which states: “The Postal Service shall provide a maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not self-sustaining.  No small post office shall be closed solely for operating at a deficit, it being the specific intent of the Congress that effective postal services be insured to residents of both urban and rural communities.” 

When the PRC reviewed the RAOI for its advisory opinion, it acknowledged that the screening criteria used to select post offices for discontinuance study did tend to select offices that run at a deficit, but it concluded this was not a violation of 101(b) simply because there were other criteria.  In the case of Freistatt, there doesn’t seem to have been any other reason to close besides the economics.  In fact, the original letter to the residents of Freistatt states that the discontinuance study was being initiated because of decreasing revenues and/or volumes. Both volumes and revenue had declined all across the Postal Service so by that logic any or every office was subject to study for closure.

2. Regular and effective service: There is also the issue of exactly what “regular and effective service” means. The Postal Service argues through assertion throughout the administrative filing that whatever service it deems to provide should be classified as regular and effective. This is done through its boilerplate rejoinders to the concerns of the affected customers and residents. Assertion is not reality, despite the Postal Service’s frequent claim to the contrary.

3. Suspensions over lease issues: The sham lease negotiations are a serious and ongoing concern.  This particular case is a clear example of how the Postal Service negotiates or fails to negotiate. The issue has come up many times before.  There’s an open docket investigating emergency suspensions (PI 2010-1), and the issue is discussed in the Annual Compliance Report for 2012 (pp. 65).

The Freistatt case offers what might be characterized as a “smoking gun” illustrating how lease negotiations can be used as a means of provoking suspensions. Hopefully the Commission will use all its resources, including subpoena power, to get to the bottom of the lease negotiations in this case.

4. POStPlan: The case also raises question about the administration of POStPlan. Offices where the postmaster chose to remain in place were to be exempted from reduced hours for two years. Is there a pattern that shows the Postal Service is using means such as lease suspensions to suspend or reduce hours earlier in post offices with sitting postmasters?

5. Modes of delivery: Both the House and Senate have come up with postal reform legislation that includes changes in mode of delivery — more curbside boxes and more cluster box units.  There are now regular reports in the media relating to the Postal Service using bullying tactics to force customers to switch modes of delivery.  The POM is clear that, at least for the time being, changes in modes of delivery should be voluntary.  

In Friestatt, it wasn’t a matter of changing from door-side delivery to curbside or from curb to cluster box.  In Friestatt, the post office itself was replaced with cluster boxes.    The Postal Service had initially said that when the post office closed residents would get rural delivery to curbside boxes, a mode that is present in the community. Then the Postal Service changed its mind and said Freistatt would get cluster boxes, not rural delivery, and the representative of the Postal Service essentially held the residents hostage, threatening to force them to continue driving a long way to retrieve mail unless they acquiesced to CBU installation.

If CBUs are to be the delivery mode of the future, then this is a good case to examine the costs.  By all rights the Postal Service should have offered a change of service “N” type case on the subject, given that there’s clearly a plan in place. In lieu of that, the Freistatt case serves as an example.  Nowhere in the documents related to the case are the costs of CBU service discussed. The Postal Service installed six cluster box units with pedestals and a protective awning. With 102 boxes, six mail slots and eight parcel lockers, this may be enough to serve the community, but what is the cost?  Units of this nature retail for about $1,230, so six of them would cost around $7,400. With the awning and installation costs, the total cost could exceed $15,000, plus ongoing maintenance costs. Does the Postal Service propose to develop this sort of infrastructure and maintain and service it without any analysis of long term costs and potential savings?

Nothing in the discontinuance study addresses these costs.  The fact is that no additional effort was put into updating the 2011 study.  Additionally, it is unclear if the residents of the area will receive normal rural delivery services. Normally, rural carriers are required to bring items requiring signature or parcels not fitting in the box to the house (as long as the house is within a half mile of the box). The residents of Freistatt have been led to believe that this would not be the case in their situation.  Why?

6. Document issues: Finally, the handling of documents in this case deserves attention.  The Public Representative and Mrs. Schoen submitted their responses to the Postal Service’s Motion to Dismiss on Friday, August 9, and they were soon posted on the PRC website.  They were removed a few hours later because of “privacy concerns” since they contained information about the details in the lease.  Unfortunately, the PRC did not notify Mrs. Schoen before removing her statement; fortunately, the Public Representative contacted her and explained how she needed to modify her statement.  Both documents, in amended form, were back on the PRC website on the following Monday.

The document story raises some important questions: Is there a policy about notifying individuals before their documents are removed from the PRC website?  What would have happened if the Public Representative had not notified Mrs. Schoen?  Could her statement have been permanently removed?  What if it took some time before Mrs. Schoen discovered the statement had been removed?  If her refilling were late, would the Postal Service have filed a motion asking the Commission to reject it? 

 

Small town, big issues

Like nearly everyone who files an appeal on a post office closing with the PRC, Mrs. Schoen is a novice at these sorts of proceedings.  Given everything that happened with the way her statement was removed from the PRC website (as well as other facts about what happened, too detailed to get into here), one might question whether the office of the Public Representatives is helping her as much as it might.

Fortunately, Friestatt's town clerk is smart and determined, and she has a whole town depending on her.  She wrote an excellent reply opposing the Postal Service’s Motion to Dismiss, and last week, she submitted an equally persuasive brief why the decision to close the Freistatt post office should be remanded.  The Public Representative assigned to the case has been doing a great job as well, and she filed a very thorough brief supporting Mrs. Schoen’s request for an extension to submit her appeal.

At this point, the parties are waiting to see what the Commission will do about the late submission of the appeal and the Postal Service’s Motion to Dismiss. Freistatt may be a small town, but the case raises some big issues about POStPlan implementation, emergency suspensions, lease negotiations, modes of delivery, and the Commission’s rules of practice.  The Commission should reject the Motion to Dismiss and give the case a thorough hearing.


[Mr. Jamison is a retired postmaster and a regular contributor to Save the Post Office; his articles are archived here.  He can be reached at  Mij455@gmail.com.]

Photo credits: Final Determination posted on back of Freistatt CBU (D. Schoen); former Freistatt post office (Google Street Views); cluster box unit from front (D. Schoen).

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