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CLEVELAND STREET POST OFFICE
tit IX '1• i. 1,1111111tie, B041,1 of Lilerto,rs • CLEARWATER!:[ A )Ri I t. \.ORG October 9, 2015 Congressman David Jolly 29275 U.S. Highway 19 North Clearwater, FL 33761 Dear Congressman Jolly, boo Cleveland Street Clearwater. FL 33755 1> (727) 461 -00ff i (727) 449 -2889 In recent years, based on United States Postal Service strategy and policy, closures and consolidation of post offices have been a main tool the USPS have utilized to cut costs and overhead. I am writing in regards to the Post Office located in downtown Clearwater at 650 Cleveland Street. The downtown Post Office was built in 1933, and was placed on the National Register of Historical Places in 1981. The potential for adaptive reuse of the infrastructure cannot be understated. The Post Office is located in an essential corridor that lies in the gateway to our downtown district. The Urban Land Institute, in a study released in 2014 identified the historic Post Office as a "unique asset here that can serve as a visual marker" and that the current gateway needs to be enhanced to communicate the downtown branding, and certainly lends itself to historic downtown Clearwater. One of the recommendations published in a report to Congress by the Advisory Council on Historic Preservation in 2014 specifically states "the USPS should consider the Historic Surplus Property Program for select historic properties where protection of the property is paramount and a state or local government is interested in acquiring the property." There are plenty of examples of historic post offices that have been developed for adaptive reuse. The Old Post Office in St. Louis for example was reused to house multiple tenants which has since had a ripple effect throughout the region and has proven to be a catalyst for future growth in the City of St. Louis. The building was constructed with style and details found in the Renaissance period and we are confident that with a proper adaptive reuse strategy it will be a pivotal piece in the mosaic of our own renaissance of downtown Clearwater, and continue the tradition of operating as a core center of the community, as it has done for decades. The Clearwater Regional Chamber of Commerce would like to encourage you to research the property and push to have it included on the United States Postal Service's list of surplus property. Thank you for your time and consideration. Sincerely, 1 I Brian Aungst, Jr. Board Chair Clearwater Regional Chamber of Commerce CLEARWATER REGIONAL CHAMBER OF COMMERCE CLEVELAND STREET POST OFFICE A COMPREHENSIVE STUDY FOR ADAPTIVE REUSE HISTORY OF THE CLEVELAND STREET POST OFFICE The Cleveland Street Post Office opened on October 9, 1933. The Postmaster General was James A. Farley. Charles R. Lee. was the local postmaster at this time. Theodore Skinner was the architect that designed the Cleveland Street Post Office. He built this historical site in a Mediterranean - Revival style. Mediterranean Revival is a design style introduced in the United States in the waning Nineteenth Century. Peaking in popularity during the 1920's and 1930's. The movement drew heavily on the style of palaces and seaside villas and applied them to the rapidly expanding coastal resorts of California and Florida. Structures are typically based with a rectangular floor plan, and feature massive, symmetrical primary facades. Stuccoed walls,red tiled roofs, windows in the shaped of arches or circles, one or two stories, wood or wrought iron balconies with window grilles, and articulated door surrounds are characteristic. Keystones are occasionally employed. The firm that constructed the post office was the Palm Beach construction firm of Walt and Sinclair of Florida. The exterior of the Cleveland Street Post Office was finished in oolitic limestone that was quarried in the Florida Keys. Oolitic is a sedimentary rock formed from ooids, spherical grains composed of concentric layers. The name derives from the Hellenic word onion for egg. The Cleveland Street Post Office was registered in the list of National Register of Historical Places in 1981. HISTORY OF POST OFFICES ON A NATIONAL LEVEL Post offices constitute the most common form of federal government buildings in the nation. Located in large cities, small towns, and rural areas, post offices are an important presence of the federal government in communities. they play an essential role in facilitating communication and promoting economic development, reducing the isolation of rural locales, and disseminating products, information, and ideas across geographical areas. Historically, in times of economic stress the construction of post offices has stimulated local economic recovery and provided work. Many post offices are significant civic monuments that beautify the cities and towns in which they are located. Architecturally, post offices have served as symbols of the federal government's authority, conveyed regional historical themes, and exemplified high art forms. Some post offices were designed in an "official" national style and serve as notable examples of classicism in their respective communities. During other phases in the federal government's public building program, post offices were designed to reflect regional styles and influences. For much of the 19th century and throughout the Depression, artwork, such as ornamental sculptures and murals, was integrated into the architectural design of post offices. While many post offices functioned as community meeting places, they are also an integral part of the governmental presence in the community, providing not only a functional role but a symbolic presence in the community. In some communities, post offices, along with a courthouse, city hall, or other public buildings, collectively form a civic core that generates pedestrian traffic, contributes to the vitality of the downtown area, and provides a sense of community identity and civic pride. Unfortunately, todays Post Office no longer accomplishes these essential community attributes. Post Offices are closing nationwide and communities who have successfully taken ownership are experiencing a resurgence of historical appreciation and economic growth through adaptive reuse. MARKET TRENDS/ CURENT STATUS OF THE POSTAL SERVICE/ EFFECT ON POST OFFICES NATIONWIDE The Internet has forever changed the world we live in and will continue to do so. From business transactions to shopping and mailing, the Internet has had a monumental impact. These transactions can now all be accomplished from the convenience and comfort of wherever you are with the lightning speed and simple touch of your fingertips. The massive infrastructure the Postal Service built, is no longer sustainable or the correct business model for the future. This new world is forcing the Postal Service to reorganize and downsize. Taking into context the current Post Office plans and strategies while considering and assuming the USPS will continue to consolidate, downsize and close post offices, propose that the city of Clearwater initiate a position to have the Cleveland Street Post Office be placed on the Federal surplus properties list so that the city of Clearwater can pursue a transfer of property. I also propose the Clearwater City Council adopt a resolution stating official position. Adaptive Reuse- Cleveland Street Post Office Why this initiative is an outstanding economic opportunity for the City of Clearwater and why we should own it 1. Preservation in perpetuity of a historic treasure on the National Register of historic building 2. The Urban Land Institute calls for preservation of historic character to enhance local economic development when possible 3. Federal strategy and incentives in place to facilitate preservation and adaptive reuse 4. Then, as now, federal dollars were meant to stimulate local economic growth 5. Development community ( restaurant/ retail) is extremely interested 6. Adaptive reuse promotes historical awareness and public access to a much larger audience/ than the current use 7. Citizens would expect a showcase and would get one 8. Unique destination through adaptive reuse ( restaurant/ retail/ office) 9. Allowed- for profit- long term leasing 10. Federal tax credits for buildout, etc., 11. Upgrade failing systems, etc., 12. Maximize footprint- postal service currently utilizes bottom floor only 13. Economic catalyst for downtown Clearwater ( east end anchor potential, just as the Capitol theatre is the west end of Cleveland St. anchor) 14. Located in the CRA- incentives possible to facilitate and assist with the transfer / relocation of a more efficient, mission oriented customer convenient post office 15. Potential revenue generator 16. Extensive new residential units coming on line 17. ULI calls for anchor destinations- designed, dedicated trips to anchor tenant/ tourists and residents 18. 18,000 sq ft.- two rooftop areas/ large basement/ two stories 19. Independent federal agency report- Advisory Council on Historic Preservation- 15 recommendations illustrating the critical need for the preservations of historic post offices/ recommendation #9 recommends the transfer to local municipalities who have the desire and capacity to respect, protect and preserve all the while promoting public access to these national treasures • Table of contents A. The Cleveland Street Post Office B. Current Status and Business Plan for the United States Post Office C. The Advisory Council on Historic Preservation- A Report to Congress D. Adaptive Reuse of Historic Properties- A Economic Stimulus • • • CLEVELAND STREET POST OFFICE A COMPREHENSIVE STUDY FOR ADAPTIVE REUSE HISTORY OF THE CLEVELAND STREET POST OFFICE The Cleveland Street Post Office opened on October 9, 1933. The Postmaster General was James A. Farley. Charles R. Lee. was the local postmaster at this time. Theodore Skinner was the architect that designed the Cleveland Street Post Office. He built this historical site in a Mediterranean - Revival style. Mediterranean Revival is a design style introduced in the United States in the waning Nineteenth Century. Peaking in popularity during the 1920's and 1930's. The movement drew heavily on the style of palaces and seaside villas and applied them to the rapidly expanding coastal resorts of Califomia and Florida. Structures are typically based with a rectangular floor plan, and feature massive, symmetrical primary facades. Stuccoed walls,red tiled roofs, windows in the shaped of arches or circles, one or two stories, wood or wrought iron balconies with window grilles, and articulated door surrounds are characteristic. Keystones are • occasionally employed. The firm that constructed the post office was the Palm Beach construction firm of Walt and Sinclair of Florida. The exterior of the Cleveland Street Post Office was finished in oolitic limestone that was quarried in the Florida Keys. Oolitic is a sedimentary rock formed from ooids, spherical grains composed of concentric layers. The name derives from the Hellenic word onion for egg. The Cleveland Street Post Office was registered in the list of National Register of Historical Places in 1981. HISTORY OF POST OFFICES ON A NATIONAL LEVEL Post offices constitute the most common form of federal government buildings in the nation. Located in large cities, small towns, and rural areas, post offices are an important presence of the federal government in communities. they play an essential role in facilitating communication and promoting economic development, reducing the isolation of rural locales, and disseminating products, information, and ideas across geographical areas. Historically, in times of economic stress the construction of post offices has stimulated local economic recovery and provided work. Many post offices are significant civic monuments that beautify the cities and towns in which they are located. Architecturally, post offices have served as symbols of the federal government's authority, conveyed regional historical themes, and exemplified • high art forms. Some post offices were designed in an "official" national style and serve as notable examples of classicism in their respective communities. During other phases • in the federal government's public building program, post offices were designed to reflect regional styles and influences. For much of the 19th century and throughout the Depression, artwork, such as ornamental sculptures and murals, was integrated into the architectural design of post offices. While many post offices functioned as community meeting places, they are also an integral part of the governmental presence in the community, providing not only a functional role but a symbolic presence in the community. In some communities, post offices, along with a courthouse, city hall, or other public buildings, collectively form a civic core that generates pedestrian traffic, contributes to the vitality of the downtown area, and provides a sense of community identity and civic pride. Unfortunately, todays Post Office no longer accomplishes these essential community attributes. Post Offices are closing nationwide and communities who have successfully taken ownership are experiencing a resurgence of historical appreciation and economic growth through adaptive reuse. • • • THE POSTMASTER GENERAL HIMSELF came down to Clearwater the day they dedicated the new U.S. Post Office on Cleveland Street in 1933. That's James A. Farley, the Postmaster General and political confidant of President Franklin D. Roosevelt, at the microphone. The ceremonies were broadcast over WSUN and WFLA. (C.C.) THE POST OFFICE on Cleveland Street was nearly new in 1935 when this photo was made. The traffic on the main drag was certainly heavy! (P.C.H.C.) • Page 1 of https: // pinellascountyhistory .files.wordpress.com /2014 /02 /unnamed.jpg 9/7/2015 ©NAME HISTORIC SEE INSTRUCTIONS IN HOW TO COMPLETE NATIONAL REGISTER FORMS TYPE ALL ENTRIES -- COMPLETE APPLICABLE SECTIONS • Cleveland Street Post Office AND /OR COMMON LOCATION STREET& NUMBER 650 Cleveland Street CITY. TOWN Clearwater STATE Florida •VICINITY OF _NOT FOR PUBUCATION CONGRESSIONAL DISTRICT 5 CODE 12 CLASSIFICATION CATEGORY _DISTRICT XBUILDING(S) _STRUCTURE __SITE - OBJECT OWNERSHIP X PUBUC ___PRIVATE _BOTH PUBLIC ACQUISITION _IN PROCESS _BEING CONSIDERED STATUS XOCCUPIED - UNOCCUPIED WORK IN PROGRESS ACCESSIBLE -YES: RESTRICTED XYES: UNRESTRICTED - NO OWNER OF PROPERTY NAME COUNTY Pinellas CODE 103 PRESENT USE ._AGRICULTURE -MUSEUM - COMMERCIAL -PARK - EDUCATIONAL _PRIVATE RESIDENCE ENTERTAINMENT - REUGIOUS X GOVERNMENT -SCIENTIFIC _INDUSTRIAL _TRANSPORTATION _MILITARY _OTHER: United State Postal Service, Field Real Estate and Buildings Office STREET & NUMBER 5511 Executive Drive, Suite 133 CITY, TOWN Tampa VICINITY OF LOCATION OF LEGAL DESCRIPTION COURTHOUSE. REGISTRY OF DEEDS, ETC. STREET& NUMBER CITY. TOWN STATE Florida Pinellas County Courthouse Clearwater STATE Florida 6 REPRESENTATION IN EXISTING SURVEYS TITLE • DATE Central Business District Architectural Survey 1976 _FEDERAL _.STATE _COUNTY XLOCAL DEPOSITORY FOR SURVEYRECOROS Volunteers in Preservation, P.O. Box 11.573 CITY. TOWN Clearwater STATE Florida DESCRIPTION CONDITION CHECK ONE CHECK ONE X EXCELLENT - DETERIORATED _UNALTERED ?S.-ORIGINAL SITE S -GOOD _RUINS X ALTERED _MOVED DATE _FAIR - UNEXPOSED DESCRIBE THE PRESENT AND ORIGINAL (IF KNOWN) PHYSICAL APPEARANCE The Cleveland Street Post Office in Clearwater, Florida is an example of Mediterranean Revival architecture. The building is located in downtown Clearwater at the intersection of Cleveland Street and East Avenue. The dimensions are approximately 118' x 131'. The low- pitched red tile roof and the low basement emphasize the building's horizontality. Both the Cleveland Street and East Avenue elevations are faced with buff colored Florida oolitic limestone. This stone is superficially similar in appearance to Italian travertine limestone. The remaining elevations are covered with buff colored brick laid in running bond. The entrance facade is defined by a one -story loggia whose five bays of round - headed arches are separated by simple square piers. The arches have neither archivolts nor imposts. The voussoirs radiating from the heads of the arches are of the same limestone as the wall facing and are keyed into the courses. This arcade is reflected in the five combination windows with arched transoms on the East Avenue elevation and the seven bays of triple arched windows beneath the eaves of the roof on both Cleveland Street and East Avenue. Originally, there were two large arched windows and a lunette on the west elevation, but these have been enclosed. The remainder of the windows are all rectangular with flat arches. Exterior decoration is limited to two bas relief medallions on both Cleveland Street and East Avenue depicting rampant eagles, and to a poly - chrome frieze of faience and terra cotta beneath the eaves of the roof. The only significant alteration to the exterior was the replacement of the stone steps of the main entrance with concrete ones. The interior of the post office appears to have retained many of its original features in the public areas on the first floor. The notable of these is the large L- shaped hall which defines the interior sorting room of the post office. Arched lunettes and door ways reflect the exterior arcading. The majority of these arches have been fitted with decorative metal grills. Each grill is composed of thin twisted bars which radiate from the center line of the arch. The ceiling of the hall is divided into large stepped recesses, the center of each of which contains an original light fixture. These recessed areas are separated by panelled. beams. The light fixtures each consist of a multifaceted globe suspended from a trumpet- shaped metal support. SIGNIFICANCE PERIOD EHISTOHIC -1499 -1500 -1599 -1600 -1699 _1700 -1799 -1800 -1899 X -1900- AREAS OF SIGNIFICANCE -- CHECK AND JUSTIFY BELOW ARCHEOLOGY- PREHISTORIC _COMMUNITY PLANNING _LANDSCAPE ARCHITECTURE _ARCHEOLOGY - HISTORIC _CONSERVATION -LAW _AGRICULTURE XARCHITECTURE _ART - COMMERCE _COMMUNICATIONS _ECONOMICS _EDUCATION _ENGINEERING _EXPLORATIO WSETTLEM ENT _INDUSTRY INVENTION _LITERATU RE - MIUTARY -MUSIC -PHILOSOPHY - POLITICS/GOVERNMENT _RELIGION __SCIENCE - SCULPTURE - SOCIAL/HUMANITARIAN - THEATER _TRANSPORTATION _OTHER (SPECIFY) SPECIFIC DATES + 1932 • STATEMENT OF SIGNIFICANCE • BUILDER /ARCHITECT The Cleveland Street Post Office in Clearwater is significant as a representative example of the smaller postal facilities constructed under various federal public works programs during the period 1929 -1939. The building reflects the "regionalism" in architectural style which predominated in federally sponsored construction projects at the time. During the administration of President Herbert Hoover (1929 - 1933), and the first two administrations of Franklin Delano Roosevelt (1933 - 1941), the federal government Ainded a variety of public works programs aimed at alleviating the stagnation of the U.S. economy which followed the Wall Street Crash in 1929. State and local governments were provided with financial assistance for the construction of libraries, schools, power and sewage disposal plants, and other community service projects which would afford employment in the building industry.' The federal government also took a direct hand by constructing buildings to house the regional offices of its various agencies. Formerly the majority of these agencies had rented offices in privately owned commercial buildings.2 In 1933, the year in which the Cleveland Street Post Office was officially dedicated, the United States Post Office Department announced that it had partici- pated in the construction of 201 new postal facilities throughout the country.3 The Cleveland Street facility was the first building in Clearwater specifically designed to serve as a post office. In general it followed the standards of design and construction required by the Architectural Division of the U.S. Treasury Department which supervised the construction of all federal buildings at the time. In keeping with the policy of the Treasury Department, a local architect, Theodore H. Skinner, was awarded the commission of designing the Clearwater post office. The Treasury did not provide designs and specifications for such projects, nor did its Architectural Division dictate the style of the architecture or the materials and method of construction to be used. These were left entirely to the architect awarded the project.4 Theodore H. Skinner (1873 -1944) spent most of his professional career in Clearwater. When he joined the American Institute of Architects in 1935, he listed his business address as The Architectural Studios, 1128 Granda Avenue, Clearwater, Florida. He resigned from the AIA in February 1939 when he retired from practice.5 (See continuation sheet) 9 • MAJOR BIBLIOGRAPHICAL REFERENCES (See continuation sheet) 10 GEOGRAPHICAL DATA ACREAGE OF NOMINATED PROPERTY TIT 1 QUADRANGLE NAME Clearwater AREAGE OT VERLF1EANGLE SCALE I • 5 fin• UTM REFERENCES A1117I L3I2� �3�2i2 OJ t3,0L9•1l 2 0 AI LEI ZONE EASTING NORTHING ZONE ' EASTING NORTHING cW III,Ir11 DL,IJIiLiiIJ,I L111 H W I_ I i I I 1 I l 1 1 1 1, 1 1 VERBAL BOUNDARY DESCRIPTION UTM NOT VERIFIED.. STATE (See continuation sheet) LIST ALL STATES AND COUNTIES FOR PROPERTIES OVERLAPPING STATE OR COUNTY BOUNDARIES CODE' COUNTY CODE STATE CODE COUNTY CODE %FORM PREPARED BY NAME /TITLE Shiver, W. Carl, Historic Sites Specialist 5Jl5,[80 ORGANIZATION DATE Florida Division of Archives, History and Records Management STREET& NUMBER CITY OR TOWN TELEPHONE (904) 487 -2313 STATE Tallahassee Florida 32301 [ESTATE HISTORIC PRESERVATION OFFICER CERTIFICATION THE EVALUATED SIGNIFICANCE OF THIS PROPERTY WITHIN THE STATE IS: NATIONAL_ STATE LOCAL X As the designated State Historic Preservation Officer for the National Historic Preservation Act of 1966 (Public Law 89 -665). I hereby nominate this property for inclusion in the National Register and certify that it has • evaluated according to the criteria and procedures set forth by the National Park Se STATE HISTORIC PRESERVATION OFFICER SIGNATURE TITLE State Historic Preservation Officer DATE GPO 021 -001 FHR- 8 -300A (11/78) UNITED STATES DEPARTMENT OF THE INTERIOR HERITAGE CONSERVATION AND RECREATION SERVICE 411PATIONAL REGISTER OF HISTORIC PLACES INVENTORY -- NOMINATION FORM CONTINUATION SHEET ITEM NUMBER 8 PAGE 2 A main postal facility for Clearwater was authorized as part of the public building program under the Public Buildings Act of 1926. No funds were appro- priated for the project, however, until 1931 when $150,000 was authorized for the purchase of a building site and construction of the facility.6 By February 19, 1932, Skinner's designs had been approved and a contract for construction of the building awarded to Watt and Sinclair of Florida, Inc., a construction firm located in Palm Beach, Florida.? The architect described his design for the post office in the following manner: "Precedents for the style and details are found in the transitional period between the Romanesque and the Renaissance, of which there are so many examples in the Mediterranean cities . . ., and also in a section of the Rhine country . . . . . systematic use of arcading to decorate the exterior walls . . . gave to these Rhenish churches ches and halls an external beauty hardly equalled in contemporary edifices." The post office was officially opened on October 9, 1933 in a dedication ceremony attended by James A. Farley, Postmaster General of the United States.9 Farley attended many such functions while Postmaster General to promote the policies of the Roosevelt administration.10 1C.W. Short and R. Stanley - Brown. Public Buildings: Architecture under the Public Works Administration 1933 -1939. Washington, D.C.: U.S. Government Printing Office, 1939, p. 1. 2Car1 H. Scheele. A Short History of the Postal Service. Washington, D.C.: Smithsonian Institution Press, 1970, p. 170. 3lbid. 4Short and Brown. Public Buildings, VII. SMargaret Kiehl, letter to Carl Shiver, July 30, 1979. 6National Archives and Records Service, RG 121: Records of the Public Building Service (Selected Records), 1931 -33. 71bid. 8Ibid. (See continuation sheet) HERITAGE CONSERVATION AND RECREATION SERVICE FHR- 8 -300A (11/78) UNITED STATES DEPARTMENT OF THE INTERIOR HERITAGE CONSERVATION AND RECREATION SERVICE IIIATIONAL REGISTER OF HISTORIC PLACES INVENTORY -- NOMINATION FORM CONTINUATION SHEET ITEM NUMBER 8 PAGE 3 9Clearwater Sun, October 9, 1933. 10James A. Farley. Jim Farley's Story: The Roosevelt Years. New York: Whittlesey House, 1948, p. 51. • • 0 FHR- 8 -300A (11/78) UNITED STATES DEPARTMENT OF THE INTERIOR HERITAGE CONSERVATION AND RECREATION SERVICE •ATIONAL REGISTER OF HISTORIC PLACES INVENTORY -- NOMINATION FORM CONTI NUATION SHEET ITEM NUMBER 9 PAGE 1 • • Clearwater Sun. October 9, 1933. Farley, James A. Jim Farley's Story: The Roosevelt Years. New York: Whittlesay House, 1948, p. 51. Kiehl, Margaret. Letter to Carl Shiver. July 30, 1979. National Archives and Records Service. R.G. 121: Records of the Public Buildings Service, Selected Records, 1931 -1933. Scheele, Carl H. A Short History of the Postal Service. Washington, D.C.: Smithsonian Institution Press, 1970. Short, C.W. and Stanley - Brown, R. Public Buildings: Architecture under the Public Works Administration 1933 -1939. Washington, D.C.: U.S. Government Printing Office, 1939. FHR- 8 -300A (11/78) UNITED STATES DEPARTMENT OF THE INTERIOR HERITAGE CONSERVATION AND RECREATION SERVICE •ATIONAL REGISTER TE OF HISTORIC PLACES INVENTORY -- NOMINATION FORM CONTI NUATION SHEET ITEM NUMBER 10 PAGE 1 Begin at the northwest corner of Cleveland Street and East Avenue and run north along the west side of East Avenue to the southwest corner of East Avenue and Laura Street, then turn west and proceed along the south side of Laura Street a distance of approximately 60 meters, then turn at a right angle south and proceed in a straight line to the north side of Cleveland Street, then run east along the north side of Cleveland Street to the point of beginning. • GAO Aecountablity * * Re0 illy jjighlisfJ . hlights of , a report to /tights requesters Why GAO Did This Study Dedines in mail volume have brought the U.S. Postal Service (USPS) to the brink of financial insolvency. Action to ensure its financial viability is urgently needed. Visits to post offices have also declined, and in an effort to cut costs, USPS is considering dosing nearly half of its 32,000 post offices by 2015. In their place, alternatives to post offices, such as the Internet, self -service kiosks, and partnerships with retailers, are increasingly important for providing access to postal services. Retail alternatives also hold potential to help improve financial performance by providing services at a lower cost than post offices. As requested, this report discusses how (1) USPS's efforts to expand access through retail alternatives support its service and Wnucial performance goals, (2) USPS nicates with the public about retail alternatives, and (3) USPS oversees its retail partners. To conduct this work, GAO analyzed USPS documents and data and interviewed USPS officials and stakeholders. GAO also interviewed operators of postal retail partnerships. What GAO Recommends USPS should develop a plan to guide its retail network restructuring that is supported by relevant performance measures and data and includes a method to assess the effectiveness of its public communication strategy. USPS should also implement a risk- based approach to monitoring retail partners. USPS reviewed a draft of this report and stated it is developing a plan to guide its retail network restructuring and agreed to review how it monitors retail partners. or key components. information, contact Phillip Herr at 12-2834 or heap @gao.gov. November 2011 U.S. POSTAL SERVICE Action Needed to Maximize Cost - Saving Potential of Alternatives to Post Offices What GAO Found USPS has expanded access to its services through alternatives to post offices in support of its goals to improve service and financial performance. Retail alternatives offer service in more locations and for longer hours, enhancing convenience for many customers, but certain characteristics of these alternatives could be problematic for others. For example, services obtained from some alternatives cost more because of additional fees, which could deter use by price - sensitive customers. Furthermore, although about $5 billion of its $18 billion in fiscal year 2010 retail revenue came from altematives, USPS officials said it is too early to realize related cost savings. USPS also lacks the performance measures and data needed to show how alternatives have affected its financial performance. A data -driven plan to guide its retail network restructuring could provide a clear path for achieving goals. Without such a plan, USPS may miss opportunities to achieve cost savings and identify which alternatives hold the most promise. USPS Retail Network: Exam Key Purchase stamps Marl Ii:tttr s of Services Offered at Post Offices and Alternatives Retailer Post ell(( e t.sps cant M31, Obtain passport Retailer i USPS has sought to raise customers' awareness by developing media campaigns, enhancing its online tools for locating postal access creating standard symbols for post offices and retail alternatives points, which products and services they offer. However, USPS has not assessed whether its message is reaching its customers, such as by using one of its existing customer surveys, and therefore does not know to what extent customers are aware of and willing to use its various retail alternatives. Although the public increasingly uses postal retail attematives, more widespread adoption will be needed if USPS is to close thousands of post offices as planned in the next few years. USPS has projected that by 2020 alternatives to post offices will account for60 percent of its retail revenue. USPS's oversight of its retail partners, which includes entering into written agreements with them and providing training and guidance, could be improved if USPS modified its approach to monitoring compliance with its procedures. Local USPS officials are supposed to conduct quarterly reviews of retail partners to make sure they are following mailing procedures, but according to retail partners and USPS officials in field and local offices, these reviews do not always occur as often as intended because of resource constraints. A risk -based monitoring approach would allow targeting limited USPS oversight resources to areas of concem and thus address issues that could otherwise discourage customers from adopting retail alternatives, such as inadequate service. United States Government Accountability Office BUSINESS Ci Corporate Intelligence r: ?3 pm _un 17, 2014 U.S. Postal Service: `The Financial Hole We're In Is So Deep' ARTICLE A political battle has broken out between the U.S. Postal Service's union and leadership over the state of its financial condition. Both sides are amping up the rhetoric, but there are few clear answers as to how it will cover its enormous liabilities in the coming years. The Postal Service, which is self-funded and receives no taxpayer subsidies, is a massive agency. About 40% of the entire world's mail volume is handled by its 500,000 employees. With 31,100 retail offices and more than Z)0,000 vehicles, it delivers to about 153 million mailboxes, 6 days a week. it is also tapped out. The agency calculates it has $113 billion in total current and future liabilities — including payments to retirees and workers compensation — exceeding assets by $90 billion. Here's how the liabilities break down and compare to cash on hand, according to a Postal Service white paper. Safari Power Saver Click to Start Flash Plug -in Popular Now • But stripping out some of these liabilities, the Postal Service would have actually been profitable starting in 2012. Operating revenue increased 3.2% to $67.32 billion in 2013, which would have allowed it to make $600 million. So far this year, it would be making about $1 billion. Package revenues are growing at a rate of about 10%, and the Postal Service scored a contract with Amazon to do Sunday delivery, adding to its bottom line. A direct -malt program it started three years ago has brought in about $1 billion in revenues since its launch The service lets small businesses select specific routes for deliveries, Chief Financial Officer Joseph Corbett said in an interview with the WSJ. It is also acing letter tracking and exploring some new business areas, induding crederrtialiing uthentication processes for website users. (Think passports.) 41: ince 2006, it has cut its career employee workforce, pushing costs down by about $15 billion. Those cuts did not involve layoffs, just attrition and voluntary retirement incentives. And it consolidated more than half of its mail processing operations to 320 locations. In total, the Postal Service has cut costs by 7% to about $67 billion since 2006, excluding some liabilities. But revenues fell about the same amount. 1 think we've been quite creative and, in fact, successful," says Mr. Corbett. But "there is essentially a ceihrg." A big drag on the Postal Service is a congressional mandate that requires it to prefund health benefits for future retirees at about $5.5 billion each year. "Legislators should address the factor that is causing 100 percent of the 'losses' — the congressional mandate that the Postal Service, alone among all public agencies and private companies, be required to pre-fund future retiree health benefits," said Fredric Rolando, president of the National Association of Letter Carriers in May. This is where the union and the Postal Service part ways. Whiie it would be a good step, Mr. Corbett says it wouldn't be enough. Even after defaulting on these payments, the agency only has enough liquidity to pay for a Nttie more than two weeks of operating expenses, down from about 52 operating days of liquidity in 2006. That's in part because it tapped out its legal borrowing limit of $15 billion in 2012. Between 2007 and 2013, total mail volume in the U.S. fell 25 %. Because of the higher cost of delivering a package, it takes $3 in package revenue to make up for every dollar lost in First -lass mail revenue, which declined 2696 over the same period, Mr. Corbett says. • if we were making a small profit, the financial hole we're in is so deep, we can't fill in ole every year even when we return to profitability," he says. And the Postal Service has also skimped on needed investments. About 140,000 delivery i p," irk an n ii1 ioit;iit Clc d vehicles are more than 20 years old and need to be replaced. It needs new package - sorting equipment to sort that growing business. Mr. Corbett estimates they should be spending about $10 billion over the next four years, something they just can't afford. Even if Congress removes its pre - funding requirement – or stretches the payments out over 40 years — the Postal Service will still owe that money down the road. Mr. Corbett would like to see legislation that addresses six -day letter delivery, health care and workers' compensation changes, as well as providing the ability to withdraw from its overfunded federal employee retirement account. While the Senate Homeland Security and Governmental Affairs Committee in February, it hasn't yet made it to the floor for a vote. The situation now, as you can see, is fairly precarious. When you have roughly $4 billion of cash, and over $100 billion in liabilities, it doesn't take a genius to figure out we're in a financial crisis," Mr. Corbett adds. Corrections & Amplifications: A direct-mail program the Postal Service launched three years ago has brought in about $1 billion in revenues since its launch. An earlier version of this article said it was bringing in about $1 billion in revenues annually. SPONSOREO LINKS Add a Comment We welcome thoughtful comments from readers Please comply with our Our brags do not require the use of your real name Comments (5 of 28) USPS pensions The good news is USPS pensions are very well funded. FERS is overfunded by $6 billwn at least (FERS oddly didn't make the graph) and CSRS is 91% funded. Combined. the USPS FERS and CSRS pensions have $287 billion of assets covering $300.2 billion of liabilities. Not a bad %. • • m About Leadership A decade of facts and figures ,0 SHARE p w Financials The Postal Service delivers for Am infrastructure Service ce American erica. Even in an increasingly digital world, the Postal Service remains part of the bedrock Judicial Officer the Postal Service is to economy, serving its people and businesses, Gov secure, reliable, affordable delivery of mail and binding ck ae the nation together. and military installations worldwide. oger' The core function of Packages to every address in America, its territories Our History Postal Facts 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Annual Revenue $67.813 $67.3 B $65.2 B $65.7 B $67.1 8 568 B $74.9 B $74.713 $72.7 B $69.9 B Page 1 of 1 Size and Scope Decade of Facts and Figures Total Career Employees* 486,822 489,727 522,144 551,570 583,908 623,128 663,238 884,782 696,138 704,716 This Post Office Is Always Open Total Mail Volume 155.48 158.46 159.98 168.36 170.98 176.76 202.78 212.26 213.18 211.78 History. Foundation, Art. Preservation. People. Community. Social Total First Class Mail Volume 63.613 65,8 8 68.7 B 72.5 B 77.6 B 82.7 B 90,7 B 95.9 B 97.7 B 98.1 B Responsibility Postage Stamps Mail Volume" lass Single Piece 21.5 B 22,6 6 23.2 B 25.8 B 28.9 8 31.6 B Mail i 35.4 8 42.3 8 44.4 8 45.9 B Innovation in the Mail Postal Blue Goes Green Total Shipping /package 4 B Volume"' 3.7 B 3.5 B 3.3 B 3.1 8 3.1 B 3.3 8 Priority: You at Work Innovative Technologies - Systems mail Volume (Advertising) 80.3 B 80.9 B 79.5 B 84.013 81.8 B 81.6 B 98.4 6 103.5 B 102.513 100.9 8 Information Technology Defnery Points 153.9M 152.9M 152.1 M 151.5 M 150.9 M 150.1 M 149.2M 148.0M 146.2 M 144.3M Security. Law Enforcement. Preserving the Trust. Total Postal-Managed 31,662 31,702 31,857 31, 900 32,028 32,552 32,549 32,169 32,583 Forensics. Crime Scenes. Retail Offices Evidence. 32,355 Total Retail Offices Military and Diplomatic Postal 35,641 35,074 35,369 Services 35, 756 36,222 36,496 36,723 36,721 36,826 37,142 One Day by the Numbers Visits Total Retail Customer 948.7 M 989.1 M 986.2 M 1.0213 1.06 6 1.12 8 1.1613 1.1813 1.24 B 1.2313 Fun facts Top 10 Things to Know Total Retail Revenue 51913 $18.3 B 517.5 8 $16.9 B 517.513 517.7 B 518.7 B 518.5 6 517.8 B 517.3 B Postal-Managed Retail 510.7 B 510.8 B 510.613 510.913 512.1 8 $12.7 B 513.713 514 B 513.9 6 513.9 B Office Revenue Alternate Access Revenue 58.38 $7.5 B $6.8 B 5613 $5.4 8 $5.1 8 55 8 $4.4 B $4 8 53.4 8 Alternate Access 43.7% 41% 39.1% 35.5% 30.7% 28.6% 26.8% 24% 22.2% 19.7% Revenue Percentage Online Revenue - usps.00m"*- Online Customers $1 B 5873.3 5787 M 5704 M 5643 M 5581 M 5588 M 5454 M 5343 M 5249 M M 500 M 435.4 M 366.8 M 423.6 M 373.2 M 204.4 M - Total Delivery Routes 244,365 225,152 227,000. 228,160 230,600 232,900 244,800 246,500 244,700 243,000 Total Vehicles 211,284 211,654 212,530 213,881 215,625 218,684 221,047 219,522 216,004 214,146 "As of February 17, 2015 "'includes bearing page stamps - bill payments, personal correspondence, cards and letters, eta includes Priority Mad, Priority Mail Express, First.ClaeS Packages, Package Services, Parcel Return Service and Parcel Select. ****These figures are included in Alternate Access Revenue Download Adobe Acrobat Reader, Copye9 2015 USPS. At Rights Reserved..._ http: / /about. usps.com /who -we- are /postal- facts /decade -of- facts- and- figures.htm _,..._.. 8/26/2016 National News Local News Testimony & Speeches Broadcast Downloads Audio Downloads Events Calendar Photo Gallery Service Alerts Letter to our customers June 30, 2014 Download Dear Valued Customer, The United States Postal Service is planning to resume the rationalization of our network of mail processing facilities which began in 2012. To provide adequate time for planning and preparation, the Postal Service is providing this six -month advance notice of consolidations, for up to 82 facilities, which wit begin early January 2015 and be completed by the fall mailing season. The Postal Service will provide detailed information about its network rationalization planning in the coming weeks. As with prior network rationalization efforts, t he al Service will work closely with customers to mitigate potential issues associated with transportation and logistical requirements. In 2012 and 2013, the Postal Service consolidated 141 mail processing facilities. This rationalization was highly successful, resulted in negligible service impact, generating annualized cost savings of S865 million and required no employee layoffs. The Postal Service expects the completion of this phase of network rationalization will generate an additional 5750 million in annual savings. Why are we taking this step now? Over the past three years, the Postal Service recorded financial losses of $26 billion. The Postal Service receives no tax -payer funds to pay for operating costs and derives all of its revenues from the sale of our products and services, and continues to face significant financial challenges associated with the decline cost as well s Mail ril volume mandates and wage and benefit inflation, increasing operating significant debt pressures. Moreover, the uncertainty regarding legislem to review of postal rates in the courts continues to delay needed pltal acquire package sorting equipment and replace an aging mail delivery fleet. Vile believe strongly that this phase of network rationalization will establish the toN -cost, technology centric delivery platform necessary to serve the mailing and shipping industry for decades to come, lAk bok forward to discussing our specific plans for our network in the coming weeks. The fist of facilities to be consolidated after January of 2015 is available at 3P: fiBC.i}, 1.1sps.cotA Or`:LlSP&C.O SHAPE c..ikf:? t SPS SITE • • • National News Our Future Network dal News Testimony & Speeches Broadcast Downloads Audio Downloads Events Calendar Photo Gallery Service Alerts Phase 2 Network Rationalization Frequently asked questions For Mailers and the Mailing industry What is Network Rationalization? The Postal Service is responsible for maintaining an efficient mail Processing and transportation network, The pace of change affecting the Postal Service has accelerated due to the ubiquity of computer -based communications, both for business and personal use. Stamped letter mad volume has been declining for a decade and will continue to decline. These factors, along with efficiencies brought about by investment in automation, have created various ranges of excess capacity at the local level in our mail processing facilities and transportation network. To ensure that the Postal Service continues to deriver on its universal service commitment, our processing network has to be efficient, affordable, and flexible. To accomplish this, we have to successfully adjust our network locally to match our resources with a declining mail volume. What criteria were used to make the consolidation decision? The decision to consolidate a facility is not made lightly. There is a standardized process by which the Postal Service must follow in order to consolidate a facility. This process is called Area Mail Processing study. Area Mail Processing (AMP) is the consolidation of all originating and/or destinating distribution operations from one of more facilities into other automated processing facilities for the purpose of improving operational efficiency and /or service. There is also a standardized process for the communication of any plan under consideration. Every proposal for consolidation is evaluated, employee, congressional, mailing industry and public input is sought and considered prior to any decision being made. Once a consolidation is approved, two after cost studies are performed to ensure that savings and expect service impact are realized. Why is a particular facility included in the study? There ate two ways in which a particular facility can be included in a study. The bottom up approach is where the process begins with the District Manager or Senior Plant Manager notifies the Area Vice President about the intention to conduct an AMP feasibility study. The AVP then informs Headquarters. The top down approach is used when Headquarters contacts the AVP about initiating a feasibility study. When either one of the approaches is used, communication to stakeholders must occur when there is clear intent to proceed with an AMP feasibility study. The notification of intent to perform the study will include an invitation to the public to submit any comments or concerns to a Postal Service representative. How soon could a mail processing facility be closed? Phase 2 consolidations wit! begin in early January 2015 and are expected to be completed by the tali ma ing season. Thew manyhtdie different types of processing facilities are there? What's the difference among them? 09 types of processing facilities: Processing and Distribution Centers — P &DCs process and dispatch mail from Post offices and collection boxes within a region. Customer Service Facilities — CSFs are Post Offices, stations and branches that contain processing equipment Also known as Customer Service Mail Processing Centers (CSMPCs) Network DistribrAion Centers — NDCs consolidate mail processing, increase operational efficiency, decease costs and maintain service while expanding the surface transportation reach. Annexes —Annexes provide the larger facilities with additional capacity for processing and distribution. Surface Transfer Centers — STCs distribute, dispatch, consolidate and transfer First-Class Mail, Priority Mail and Periodicals within a specialized surface transportation network. Air Mail Centers — AMCs process and distribute inbound and outbound domestically flown mail for a specific geographic location. Remote Encoding Centers — RECs process video images of letter mail to determine a barcode for the envelope. International Service Centers — ISCs process and distribute inbound and outbound international mail What is an Area Mail Processing study? An Area Mail Processing (AMP) study is the consolidation of mail processing operations to improve operational efficiency and/or service. An AMP study may involve the consolidation of originating operations (canceling and sorting locally generated mail at a facility close to where the mail originates), destination operations (sorting and pfeparing mail received from more distant areas for local delivery) or both. The intent is to more efficiency use Postal Service equipment, facilities, staff, work hours and transportation. Additional information can be found at How long do AMP studies take? Study times vary depending on the complexity of each location; however, the average AMP study time takes between three and five months to analyze financial information, collect public feedback, review the information and render a decision. Download SHAPE Can some processing facilities be closed without going rnrvuyri .+iii •+ <• r Yes. The Postal Service can close annexes and partial mail processing operations within facilities without going through the AMP process. Does the Postal Service intend to add additional sites to the Phase 2 list that were not previously announced? At this time, there are no new sites being added to Phase 2. If a processing facility closes, will the related postmark be gone as well? Yes. However, Post Offices have the postmark available for customers who wish to have their mail hand-cancelled. What are the proposed service standard changes for First -Class Mail (FCM)? Is the FCM delivery day range changing? be seen b Yes, Phase 2 will affect the existing service standards for First -Class Mail and Periodicals Mail. The changes may by comparing Tables 1 and 3 with Tables 2 and 4 at the following Federal Register notice link: What will be the new CETs for First -Class Mail (FCM) entered at SCF? Would it be eligible for ovemight service? Properly prepared and containerized intra-SCF Presort FCM volume entered at the SCF plant by the 08:OOAM CET for mixed Intra-SCF and by the 12:OOPM CET for 5- Digit/Scheme containers will receive ovemight service. What are the proposed service standard changes for Priority Mail and Express Mail? The Postal Service is not planning any changes to the Priority Mail/Priority Mail Express service standard business rules as a result of network rationalization. However, there will be changes in the service standards applicable to specific 3 -digit to 3-digit ZIP Code origin - destination pairs based on the reconfiguration of the network, and changes to the labeling lists which implement the current service standard business rules. What are the proposed service standard changes for Periodicals mailings? seen Phase 2 will affect the existing service standards for First -Class Mail and Periodicals Mal. The changes may be comparing Tables 1 and 3 with Tables 2 and 4 at the following Federal Register notice link: What is the CET for destination entered Periodicals to receive overnight service? Properly prepared and containerized destination entered non -FSS Periodical volume entered at the SCF plant CET for direct M CET for mixed Intra -SCF containers, by the 14:OOPM CET for 5- Digit/Somea containers, domination entered FSS digit Carrier Route paltets will receive overnight service. Properly prepared Periodical volume entered at the plant by the 08:00AM CET for mixed intra -SCF containers and by the 11:OOAM CET for 5-, Digit/Scheme containers will receive ovemight service. What are the proposed service standard changes for Standard Mail? The Postal Service is not planning any changes to the Standard Malt service standard business rules as a result of network rationalization. However, there welt be changes in the service standards applicable to specific 3-digit to 3-digit ZIP Code origin - destination pairs based on the reconfiguration of the networc, and changes to the labeling lists which implement the current service standard business rules. What are the proposed service standard changes for Package Services? As is the case with Standard Mail, the Postal Service has no plans for any changes to service standard business rules for Package Services as a result of network rationaltzatron. However, there will be changes in the service standards applicable to specific 3-digit to 3 -digit ZIP Code origin - destination pals based on the reconfiguration of the network, and changes to the labeling lists which implement the current service standard business rules. How soon will the No service changes associated witService he request will be implemented t�emented� service than January, 2015 changes? How much mail will be delivered ovemight once Phase 2 is implemented? to be delivered Current estimates indicate approximatety 25% of the Single Piece First -Class Mail volume is expected to be delivered overnight. Overall 13% of First Class Mail volume is estimated to be delivered ovemight, about 35% expected in 2 days and about 52% delivered in 3 days. The graphic below illustrates an approximate breakdown of First -Class Mail service performance after Phase 2 implementation: Data Source: ODIS &RPW FY15 P02 The Postal Service is consolidating its network. How will this impact mail and package delivery? The consolidation of the processing network will not impact the delivery process. Won't this slow down service? �Aw .arr w reach its destination win increase slightly from an overall average of 1.8 days to an overall average of 2.1 clays. How will military mail be impacted by these changes? Military mail worked domestically will follow the same service standards as domestic mail. • Will there be a price increase? There is no price increase associated with this change. Will additional discounts be offered for overnight service for mail deposited before 8 a.m.? No. How much will this effort cost the Postal Service? Realigning the network will cost a minimal amount. The Postal Service does not plan any expansions due to the current capital constraints of the organization. What are the estimated cost savings resulting from the proposed changes? Phase 2 is projected to save the Postal Service approximately $750 million per year in savings. Will mailers who currently induct their mail at a BMEU that is co4ocated within a USPS Plant on the PHASE II lose their SCF discount? Effective January 2015 to qualify for DSCF pricing mailers win be required to enter mail at the SCF (Federal Register Dec. 18, 2013). BMEU/PVDS Mailers should prepare mail according to the effective labenng Lists, abide by the grace periods built into the Labeling Lists, and enter mail in accordance with Mail Direction Files What were the savings captured by the Postal Service for Phase 1 consolidation for FY12, FY13 and FY14 year to -date? As part of the network rationalization process, there is a Post - Implementation Review (PIR) that is performed for each consolidation to evaluate the specUic implementation These reviews are conducted twice: once at six months after the consolidation and then again after a full year has elapsed. At this time, based upon either the interim or the final review as available, the Postal Service is projected to save approximately $865 million per year. What are the roles of the Labeling Lists and Mail Direction File in conjunction with facility changes? Labeling Lists and the Mad Direction File will be adjusted to reflect the changes in the network. The updates win comply wdh the published schedule. Mailers are encouraged to continue to prepare and enter mad utilizing the updated Label Lists and Mad Direction File as they do today. How will the Postal Service work with customers who use software and need time adopting labeling list changes? All label list changes include a 1 month grace period to facilitate the changes. If not updated by the end of the grace period, the mail would lose the applicable discount. Will USPS provide adequate adjustment time when changes occur? As happened in Phase 1, mailers will be updated regarding pending changes to mail processing at least 30 days in advance via the RIBBS website. Will there be any changes to metered mailing datelre- dating requirements as a result of changes to the mail entry locations? No. What about Business Mail Entry units? The Postal Service has Business Mail Entry Units in a significant portion of our processing facilities nationwide. Virtually all of the plants that will be studied have Business Mad Entry Units. The Postal Service will determine the best method to manage the impact on business mailers. This may include increasing the use of plant loads, creating additional detached mail units, or allowing bulk mad entry at larger Post Offices around the country. BMEUs will remain in place until further notice. How will the AMP studies affect BMEU locations and hours? BMEU hours and locations will not change in the near -term. As we begin to understand changes in mailer behavior, consideration will be given to adjustments in BMEU operations. Will customers continue to be able to enter bulk mail at business mail entry units (BMEUs) currently located in impacted facilities? Where practicable, a BMEU will remain in the impacted facility. In situations where this is not feasible, acceptance units will be located within relatively close geographic proximity to the impacted facility. What about designated sectional center facility (DSCF) entry discounts? Will they still be available for mailings entered at BMEUs that remain in impacted facilities? To accommodate changes in facility functions, the Postal Service has been allowing destination sectional center (DSCF) facility pricing at some former SCFs. Advance notice was provided on December 18, 2013 when the Federal Register published "Changes for Letters, Flats, and Parcels', stating mar enecuve would be required to enter mail at an actual SCF'. BMEU/PVDS Mailers should prepare mail according to effective Labeling Lists, abide by the Grace Periods built into the Labeling Lists, and enter mail in accordance with Mail Direction Files How will Detached Mail Units (DMUs) 1 Plant Load Agreements be impacted? DMUsIPlant Load Agreements will be determined based upon the new network and related impact on postal transportation and logistics. Communication with large volume wen mailers at Date s will help to identify any for any change reuired in their preparation, separation or transportation. Customers will be g' adequate or customer-supplier agreements because of a plant closure or operational relocation. Has a list of impacted DMUs been published? No. Could entry procedures be different if these changes are implemented? The Postal Service expects that facilities will be able to handle the volume they receive, particularly as more standardization, and thus consistency will be made possible with fewer entry points. Will timely cleating of mail still occur when DMU is staffed by a BMEU that is relocated further away? Yes. How will issues at BMEU be addressed such as impact, administrative services, consultation etc.? There is no change request the BMEU k process and pvisor or Manager of Business Mad seeking for the district. an or assistance may request to speak will these changes impact Caller Services and Remittance Mail that was provided by the BMEU? At some locations, the Caper Service and Remittance Mail was picked up through the BMEU operation. This ti not handle t of the normal BMEU operations. If a BMEU is closed or relocated, alternate arran ements will be made locally Service and Remittance Mail pickup as needed. Will there be a period of the day when no mail processing equipment is running? Any idea what the electricity savings could be? The Postal Service expels most equipment to be idle between the hours of 0600 and 0800. In addition, there will be roping periods of time in which equipment will not be running for maintenance purposes. The electricity savings potential is currently being quantified and will be considered during the study process. If facilities are consolidated, how will the Postal Service minimize bottlenecks at those remaining open? tans, volume arrival profiles and critical entry times to ensure adequate dr� Processing p and facilities will p manage maintained operating P space and work floor space is maintained and available to meet mailors� �' system will be adjusted as necessary to support appointment windows in the Facility Access and Shipment Tracking (F T) sy� shifting volumes across the network. Where will all the excess mail processing machinery go? Can the Postal Service sell it? The Postal Service has a responsible dispostion plan for all excess map processing equipment. Part of the plan includes eliminating mail processing equipment that has reached its end-of -fife but is still maintained with the inventory duel f� of capital to make significant investments for replacements. In addition, the utosttal Service spare will maintain sold. P contingency planning purposes. The remainder of the equipment may be Will Flats Sequencing System (FSS) machines be relocated? Yes, a few FSS machines will be relocated. How will the potential closing processing facilities impact transportation? Logistics? It is expected that the Postal Service will be able to better optimize transportation across the board. The transportation network will be realigned to meet the needs of the realigned mail processing network. The logistics network MI be set up to take advantage of the new operational window and will meet new critical entry times based on that new processing window. Will the Postal Service be increasing its use of contract transportation? If so, by how much? The Postal Service will assess each contract to determine whether it aligns with the realigned mail processing network, as well as whether the routing in place supports the new requirements. How much will it cost the Postal Service to make such wide - spread transportation 1 logistics changes? The Postal Service currently has causes in its contracts to It is expected there will be minimal cost to make these changes• allow for service changes, as well as the cancellation of routes. Will these changes result in increased fuel use? No, these changes will decrease the amount of fuel required. It is expected the amount of transportation will be reduce which will lead to lower fuel use. • • NTD RVS About National News Local News Electronic News Kits Testimony & Speeches Broadcast Downloads Audio Downloads Events Calendar Photo Gallery Service Alerts Copyright® 2015 USPS. All Rights Reserved. Village Post Office fact sheet The L.S. Postal Service annou.ncec 11e concept of the ifilage Post Cfice in Ju 20'1 as a way to continue p•ovicirg convenient access to postal products and se•ices ih iro•e •rl commJnities across the nation. The first V Ilage Post Office (VP0) opened :n :d alone. WA. in August 2011. On Dec. le, 20'2, the100th VPO, located in larder. N. began opera. ons. • VPOs afe .orated within existing communifes'n a variety of loea:o,s, including convenience stores, local bus- nesses and libraries, and are operated by the managenert of those locations. • VPOs offer a rarge of popu:a• products and services -- the ores most used by customers — inducirg PO Boxes, .Forever stamps, Pre -paid Priority Mail Flat Rate ervelopes and a mail collecttor box • By being located inside estabtehed bus•nesses and oche- p aces consumers a ready frequert, VPOs offer Postal Service customers time- saving convenience, and :n most cases, longer :hours than regular Post Offices. • VPOs p'ovice operators — h most cases, the local busiress owners — w'th oppommit)es for increased customer foot traffic and reverue, as well as providing additional servces •or ;heir customers and diems. • The Postal Service win cons :der establisiing a Village Post OP. ce :n 'orations w :here there is no Post Oflce or that has one with ;educed operating .lours, and v.' 1ere an afternate access site will benefit the community and the Posta Service. • The V tiage Post Office is an example of how the Postal Sery ice 's changirg to better meet America's marling needs. Village Post OFces are pan of ne Portal Service's "Approved Postal Provider network — retail outlets for postal products and services that ihc:ude Ccn7act Postal Cni•s. Approved Shipper, stamps on consign -rent locations and Community Post Offices, Approved Postal P :wider, are operated by third parties and complement the Postal Service's own rework by o" eying customers expanded retail access to costal products and services at convenient hours and locations .: Download PDF Download Adobe Acrobat Reader, rage 1or1 VPO links VPO home About Village Post Offices Opening a Village Post Office , Locating a Village Post Office VPO news VPO downloads VPO brochure (PDF) VPO fact sheet (PDF) http: / /about. asps, con /news /electronic- press - kits /expandedaccess /vpo- fact- sheet.htm 5/14/2015 1uv v lttage rOSL V111eeS 1NOW Vpett 101 DU2ttlGaa V•d,o We. Aro What We're Doing Newsroom Careers Doing Business with Uc. �UNITED STYES vesit L SERVICE. National News Local News Electronic News Kits Testimony & Speeches Broadcast Downloads Audio Downloads Events Calendar Photo Gallery Service Alerts Search About 100 Village Post Offices Now Open for Business Postal Service Celebrates Milestone in Rural Indiana December 19, 2012 Release No. 12.155 WASHINGTON — In the rural commonly of Jnden. IN, 50 miles outside of Ir.d'.anapo:is, Inc U.S Postal Se lice celebrated the milestone grand opening today of the country's lor.nt Village Past Cffice (VPC) Tnis •ibbol.cutting event at the _ nden Food Plaza marks the 21s1 VPO in Indiana. "The Village Post Office is a :erriric way for b.rsinasses i1 rura America to provice their sustorre's with convenient access to costa :: products and services — becoming :te ultimata convenience store,' said Postmaster Genera Patrick Donahoe. 'We're pleased that VPOs have oecoete a way to extend postal access while supoorlilg local bus'nesses Located wthln communities in a variety of locations — convenience sto"es, gas stations, local or"sinesses, libraries, or other government agencies — VOOs are opea:ed by :ie naragerrem of those locations. The Poster Service announced Inc c0n0e2to'. the VPO in July 2011 as a way to ircraase access to poste products and serv+cee m the more rural commune:es ao'oss the nation VPOs oft- a range of 'ndudirtg PO Boxes, ore Ir stamps, ps, 'e"pasd P�rtority Mail at Rate envelopes and a mail collection box. Located inside esablishec b tsnesses and other paces const.mers a ready Iregt.enl, VPOs offer Postal Service customers timesaving converieftce, and in mos -. cases, Iorger boas than regular Post Offices. The first VPO opened ;n Malone, WA. in At.g.nt 201' Additional intorrration abo..t V:Ilage P051 Offices, Inc udi'rg Inc fist of 100 VPOs, can be 'mold el town ',usus.conVvillaoepustoffrce. The Posta. Service receives r.o tax dollars for ope'a :ng expenses and relies on the sale of postage, products and services to turd 1s operations. #e# Please Note: For broaccast goality video and audio. photo stills and other media resources, visit the LISPS Newsroom at httpllaboutusps.com/newsitseicome.htnt Po' repo'te's interested in speak'ng with a regional Postal Service pub tc relatiors professional or. this Issue, please go to htta/about.usps corrinewslmedia- cattactslusps- local- media- contacts.pd. A self - supporting government enterprise, the U.S. Postal Sery :ce is the only delivery service that - eacles every address in Inc nation — 15' m'tlon resider ces, businesses and Post o'c0ra Boxes. The Postal Service.' receives no tax dollars for operating experses. a'tc relies en the sale of postage, products and services to fund its operations. W.th 32,000 retail locations and the most frequertly visited website in the federal goverment usps.s0me, the Posta, Service las annual revenJe or more Plan 525 bllion and de'ivere nearly 40 percent of the world's mail If :. were a prva:a sector company, the U.S. Postal Service wou :d lank 35th in the 2011 Forune 500. In 20' 1, Ox'ord Strategic Corsultirg ranked the L.S. Posta Service number one in overa 1 service pe'fo manse of the posts in the top 20 wea'thiest nations' n the woild. Siacit Enarprrse and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversi endt)i The Posta Service here been rained Inc Most Trusted Gove -amen: Agency 'or ea sixth Most Trusted 3Jsiness in the nation by the Ponemoa Irstitt.te Fo low the Postal $ease on www twitter.comfUSPS and at www facebook.comrUSPS. Download Adobe Acrobat Reader Download POF POSTAL NEWS Media Contacts Sue Brennan Sue.BrennanlusPs.gov 202 -268 -6363 ON USPS.COM OTHER USPS SITES ON sr OUT.USPS.COM &mints Customer Gateway LEGAL USPS coin Home + Newsroom Service m + Postal Inspectors ' Prvacy Policy + Buy Stamps 3 Sloop > Feints o! Use + Form & Pu Alerts • Print Labels with Postage + Inspector General FOIA • Forms & PuWicanons + Customer Service + Postal Explorer No FEAR Act EEO Data + Careers + Site Index + Oelivenng Solutions to the Last Mile Copyngnt^ 2015 USPS Ali Rights Reserved. http: // about. uses.com /news /national - releases /2012/pr 12 15 5.htm • 5/14/2015 UN! TED ST,T ES POSTAL SERVICE; • EXECUTIVE SUMMARY For over200 years, the Postal Service has fulfilled its mission to deliver trusted, affordable service to the nation. Its business model worked well because mail volume increased steadily as the nation grew. In recent years, however, as customer preferences have rapidly evolved and new technology has changed how Americans communicate and transact business, the model has faltered. Mail volume, instead of increasing, is declining dramatically, even as the cost of delivering mail to an expanding number of addresses continues to grow. As a result, the Postal Service's ongoing ability to finance universal service is at great risk. In the face of these challenges, the Postal Service has responded aggressively, saving over$1 billion every year since 2001, including $6.1 billion savings in 2009 alone. Yet these savings are not sufficient to counter underlying shifts in the business of mail. A loss of more than $7 billion is projected for2010, and with urrent trends expected to worsen over the ecade, the Postal Service will be pushed more deeply into crisis. Without fundamental change, cumulative losses could reach more than $238 billion by 2020. To avoid potential insolvency, the Postal Service has developed an ambitious but achievable plan, taking steps allowed under current law to reduce the projected gap by $123 billion. These savings would be unprecedented, even bythe standards set over the last several years. And even if its plan was to succeed in every action that present legislation allows, the Postal Service would still face unsustainable losses of at least $115 billion by 2020. This remaining gap can be dosed, and the Postal Service can continue to fulfill its mission at no cost to American taxpayers, but only with additional flexibility that would have to come through legislative changes. Theyindude: 1. Retiree Health Benefits Prefunding. Restructure retiree health benefits *payments to "pay -as- you -go," comparable to what is used bythe rest ofgovemment and the private sector. This equates to an average of $5.6 billion in cash flow per year through 2016. Address overpayments to the Postal Service's Civil Service Retirement System pension fund. 2. Delivery Frequency. Adjust delivery days to better reflect current mail volumes and customer usage. Survey data show that the public favors 5 -day delivery over using taxpayer funds and other alternatives. 3. Expand Access. Modernize customer access by providing services where the customers are. Increase and enhance customer access through partnerships, kiosks, and improved online offerings, while reducing costs. 4. Workforce. Establish a more flexible workforce that is better- positioned to respond to changing demand patterns as over 300,000 employees become eligible to retire in the coming decade. 5. Pricing. Ensure that prices of Market Dominant products can be based on the demand for each individual product and its costs, rather than capping prices for every class at the rate of inflation. In addition, pursue a moderate exigent price increase effective in 2011. 6. Expand Products and Services. Permit the Postal Service to evaluate and introduce more new products consistent with its mission, allowing it to better respond to changing customer needs. 7. Oversight. Reinforce these changes with more clearly defined, appropriate, agile oversight roles and more streamlined processes. Without question, the current situation is a crisis for the Postal Service, the mailing industry, and indeed for all postal stakeholders. It is also an historic opportunity — providing a chance to make positive and very practical changes that not only meet the present crisis, but also lay the foundation fora leaner, more market - responsive Postal Service that can thrive well into the future. Contents Executive Summary 1 I. An Unsustainable Business Model 3 II. A Rapidly Worsening Crisis 6 III. Actions Within Management Control..........___. IV. A Viable Postal Service: The Plan to Get There 10 The Path Forward . 15 Appendix 16 INTRODUCTION Since Benjamin Franklin was appointed the first Postmaster General, the agency known today as the United States Postal Service has fulfilled its mission to deliver trusted, affordable service to the American people. From the Pony Express to today's fast - changing digital world, the Postal Service has dramatically improved service and efficiency, ensuring that consumers and businesses get world -class mail services at reasonable prices. The Postal Service is the world's most efficient post. A First -Class stamp costs just 44 cents, while other major posts charge an average of 78 cents. Customer satisfaction and service levels have reached the highest levels ever reported. For five years in a row, the Postal Service has also been voted the "Most Trusted Government Agency" for protecting customer privacy, and rates in the Top 10 of all public and private entities. The Postal Service's business model dates to 1970, when it became an independent agency of the Executive Branch. In contrast to the heavily subsidized department it replaced, the Postal Service was designed to operate like a business, financing its operations from the sale of its products and services. This self - financing model worked well for many years as mail volume grew with the nation. In recent years, however, volume has declined, and it continues to fall as technology rapidly reshapes the market and changes how Americans communicate and conduct business. The recent economic downturn accelerated this trend as businesses cut expenses and reduced their investment in mail. Mail is big business. The Postal Service is at the core of the trillion dollar mailing industry that employs more than 8 million people. For most businesses, there is nothing exceptional in this; they must continually adapt to technology and market changes. Unlike most businesses, however, the Postal Service is attempting to meet its 21st century challenges with a business model suited to the last century — one that does not acknowledge that a fundamental change has taken place. Prudent management required that the Postal Service make substantial adjustments to compensate for the decline in volume and revenue. To the extent that current law allows, it has done just that, saving over $1 billion every year since 2001, including $6.1 billion in 2009 alone. Unfortunately, its ability to make adjustments is limited in the areas where costs are highest — wages and benefits, its network, and the interpretation of the Universal Service Obligation. • t In 2006, Congress passed new legislation that significantly modified the postal business model. It provided limited pricing freedom in Competitive Products but offered Tittle flexibility for the remainder of the business. The law also limited the Postal Service's ability to create new products and seek new sources of revenue. It capped prices at the Consumer Price Index by class for Market Dominant products, which is 88 percent of revenue. And without providing additional flexibility to control its costs, the law added a massive new obligation: to pre -pay future retiree heath benefits on a schedule that consumes 10 percent of revenue every year. These changes in the law were made just as volume had begun to fall and the recession began to take hold. The Postal Service responded with comprehensive actions to transform operations. It increased the use of automation and substantially reduced its workforce, all while improving service. Despite these improvements, the Postal • 0 Service began to suffer significant net losses in 2007 primarily due to a legislatively imposed requirement to prefund future retiree health benefits. This paper explains the current crisis and presents an action plan to meet it. The plan has two parts: the first includes aggressive actions that the Postal Service commits to making within existing law; the second describes additional actions, most requiring changes in law, that are vital to restore financial stability. This plan is the product of more than a year of dialogue between the Postal Service and members of Congress, the Administration, the business community, postal employees, and the general public. To gain a fresh, objective perspective, the Postal Service solicited papers from a number of independent sources, and enlisted three of the world's most experienced and highly regarded management consulting organizations — Accenture, The Boston Consulting Group, and McKinsey & Company. All three were given free rein to talk with employees, customers, and anyone else whose opinions they considered relevant' I. AN UNSUSTAINABLE BUSINESS MODEL Since 2006, the Postal Service has faced the financial strain of steep declines in volume and revenue, combined with increases in network costs, wages and benefits, and new legal requirements. It began to incur large net losses in 2007 (Exhibit 1). Volume and revenue have fallen sharply From 2006 to 2009, volume declined 17 percent, from 213 billion to 177 billion pieces, while prices remained capped at the rate of inflation — triggering a loss of In 2003, the President's Commission on the U.S. Postal Service said, "Now is the time to...modernize the Postal Service to not only preserve its future, but also to ensure its service to all Americans.” This action plan is fairly consistent with the President's Commission's findings. Postal Service operations ere not funded by taxpayers Throughout most of the nags x�1� tts post . system waaadministered by the Paste Department; a cabinet level agency. " B}��e late 1960s „however, years of financial neglect. d' fragmented control had impaired the abiliit} cif tl) depart' tient to respond to changing conditions and increasing` mail volumes. Convinced that fundamental change;was necessary in 147d Congress enacted the Posta Reorganization Act. This sweeping legislation created the Postal Service as an independent establishment of the Executni!e Branch and directed the new or anization to bring 9. , ;�►9 modem..;, business methods and practices to,tho national mall system. For36 years, the Postal Service's usiness model worked very well for customers; al employees; and the nation.. The Postal Service was able to charge affordable prices and use revenues from its products toprovide mail service to all areas of the country; charging customers the same e prices regardless of delivery costs. It received no taxpayer subsidies tofund its operations. The Postal Accountability and Enhancement Act- of 2006 (the Postal Act of ?Obk split postal 1 products into Competitive. 40;14! rket Dominant:` Atthesame time, the Act put the bulk of revenue= generating products uriderastringent price andbave the Postal Service limited abifrty to control its costs or increase roue Theviabilrty of the Postal Service: underthe Postal Act of 2006 relied on the underlying presumption that mail volume would continue to grow it hasn't: 4 Exhibit 1: USPS is experiencing unprecedented losses Postal Service net profittloss •. S Billions 32 .1 1.4 mg -0.2 -1.7 `funding is driving tosses Retiree health benefits pre - 2000 01 02 03 04 05 t Magma oiwYenl Mani racial Year ta�kte 2 Per 2010 integrated Financial Plan panuaiy Note: M "We nter to Find Yaws ending an Sept 30^ souaceusPs $15.8 billion in 2009 revenues? First -Class Mail saw the largest volume decline, about 15 percent. This had a disproportionate effect on the bottom line since First -Class Mail provides the majority of contribution (Exhibit 2). In total, the volume decline outpaced even the most pessimistic forecasts. The volume of high - contribution First -Class Mail has declined sharply, and is expected to continue to fall. .1 7.82 06 07 08 09 2010 8.4 4.50, MI 55 aa+aa RHB pre-funding � $ Bf11ions While the recession accelerated the volume decline, its primary cause is a fundamental and permanent change in mail use by households and businesses. Hardcopy communication of all types continues to shift to digital alternatives. More people are paying bills and transacting business online. Advertisers are switching from print • • Exhibit 2: Changes in volume and contribution of the two largest mail classes Volume Billion pieces First-Class Mali 84 53 2009 Portion of total margin available 71% to cover nixed costs Standard Mali 83 86 2009 2020 21% Exhibit 3: Workforce costs are p Percent increase per n 2010 and 2020 ........... . ............. same f .wm.lrapm to Internet and mobile channels. And while online purchases have increased the volume of packages, this part of the Postal Service's revenue stream is not large enough to offset overall mail volume trends. 1111,,ew costs and capped prices A key driver of the cost of delivering mail is the obligation to deliver to virtually every mailing address, regardless of volume, 6 days per week. Fulfilling this duty requires an extensive network of Post Offices, processing plants, vehicles, and delivery employees. These costs are largely fixed, so they increase with the size of the network, which has grown by an average of 1.4 million new addresses every year. As a result of the growth in fixed costs and increases in other expenses, the total cost per piece of mail rose from 34 to 41 cents since 2006. The Postal Act of 2006 was passed before volume had begun to fall sharply. It had the unintended consequence of constraining the Postal Service's ability to respond to the challenges in a financially responsible manner. The Act introduced two crucial restrictions. ofst, it added a major new cost. It compelled e Postal Service to set aside money over 10 years to cover future retiree health Health lasuranoe Perms i 1.9%) benefits. This prefunding mandate requires that the Postal Service set aside, on average, $5.6 billion per year through 2016.3 This has the effect of increasing total costs in this period by 9 percent a year. Prefunding is unique to the Postal Service within the public sector, and is not required in the private sector. Second, the Act capped price increases at the Consumer Price Index (CPI) for each class of mail where the Postal Service is perceived to dominate a market (e.g., First - Class Mail).4 Looking forward, the losses due to volume declines and retiree health benefits prepayments cannot be made up with increased prices (Exhibit 3). The Postal Service aggressively cut costs while improving service The Postal Service responded to the volume declines by dynamically reducing work hours and improving internal operations. This reduced 2009 costs by $6.1 billion. In 2009, natural attrition and early retirement offers allowed the Postal Service to reduce the workforce by the equivalent of 65,000 full - time employees, or approximately 10 percent (Exhibit 4). This was the largest one -year reduction in postal history. The Postal Service also froze hiring and executive pay. Workforce costs will rise at a rate greater than prices, which are capped at inflation. There is limited remaining opportunity to reduce part -time, temporary, and overtime work hours. Exhibit 4: Work hour reductions Sources of work hours reduction Millions of hours2 S 5 SOURCE: FY 091040; 2008 and X009 National Work hours 2009 • Part urns and temporary Hoar Summary Repat Operations were streamlined consistent with this smaller workforce. The Postal Service consolidated delivery routes, reorganized portions of its processing network, and renegotiated over 500 supplier contracts to obtain more favorable terms. To boost revenue, the Postal Service enhanced programs such as Parcel Select, which provides last -mile delivery for FedEx and UPS, among others. It launched an advertising campaign ( "If it fits, it ships ") for Flat Rate Priority Mail, which is priced on the size of the box, not the weight or zone, making the shipping process more convenient. The Postal Service also introduced innovative new programs such as the "Summer Sale," which boosted volumes and retained customers by offering a 30 percent discount for incremental Standard Mail (advertising mail) volume. Additionally, it invested in expanding customer access through improvements to its website and partnerships with retailers. II. A RAPIDLY WORSENING II CRISIS Even with all these actions, the Postal Service has, in recent years, been unable to stem broader financial losses. In 2007, it began to suffer net losses, which are expected to exceed $7 billion in 2010. The Postal Service is now in the position of having to borrow from the Treasury to meet its obligations to the Treasury. Its future borrowing capacity is limited by law at $15 billion, a level it could reach in early FY 2011. Industry experts confirm that the marketplace trends challenging the Postal Service in recent years are expected to accelerate. The organization will continue to face declining volume, stagnant revenue, large fixed costs, and rising workforce costs. Without additional action to address these trends, the Postal Service would face annual losses as great as $33 billion by 2020 (Exhibit 5). • Volumes projected to steadily contract, and revenues to stagnate The recession is not only reducing volume due to declining business activity. It is also pushing businesses to find less expensive methods of communicating with their customers. In coming years, this will speed up the more fundamental underlying trends that are motivating customers to switch to electronic alternatives. Total volume — which fell 17 percent from a high of 213 billion pieces in 2006, to 177 billion pieces in 2009 — is expected to drop an additional 15 percent by 2020, to a level of 150 billion pieces (Exhibit 6).5 In real terms, revenue will decline significantly over the next decade. In nominal terms, overall Postal Service revenues will be largely stagnant, rising from $68.1 billion in 2009, to just $69.3 billion by 2020. As a result, assuming prices by class remain capped at inflation, revenues per address will have fallen eom a daily average of $1.50 in 2009 to $1.41 2020.6 First -Class Mail. Even as the economy rebounds, First -Class Mail volume will not Extilbit 6: Volume forecasts to Exhibit 5: Pro net loss in 2020 Without any additional action, negative forces result in increasingly large annual deficits, culminating in a $33B annual loss in 2020. Cumulative losses between now and 2020 would exceed $238B. sousceiM return to past levels; it is expected to fall an additional 37 percent by 2020. Invoicing and payments will continue to move online, and businesses will continue to expand their use of electronic channels as a low -cost means to process payments and manage customer relationships. The volume forecasts include high levels of uncertainty, although trends point downward. 1 118 ( 4 15 16 17 18 19 2020 einipilam 20100foltalkevAll NI Saislia 64adigutimmeement actions mil 1,,P,s rl9wkrbudisi beyond Mk .wi t..narn w.wnanlcpraot watt awe Nisod II poet males ammo roma tiory Isibrowskraeski Zapper" UAW %weft. ot mail inrNk r4rb�M► MM4MdCPa�pktrueoirk� +tka�.earMll�anNwwwMtFewewrawr_ , tot Given First -Class Mail trends, retail revenues are expected to fall another 40 percent by 2020. This creates the perfect storm, eroding mail's primary role as an invoice and bill payment medium. The consumer shift online will result in a projected 1.1 billion fewer letters per year over the next decade, while businesses are expected to mail 10 billion fewer bills by 2020. Total bill and invoice mail volume is expected to fall by 44 percent, and the mix of mail is expected to shift away from First -Class Mail to less expensive Standard Mail. Advertising mail. The volume of advertising mail has fallen rapidly in the recession along with most other advertising media. A large share of advertising investment has moved to Internet and mobile channels. One top marketing agency observed companies moving one -third of direct mail acquisition spending online. Consequently, the segment of the Postal Service's business that historically grew steadily with Gross Domestic Product (GDP) is expected to remain flat for the foreseeable future. Packages. This segment is likely to experience some growth, but at a rate of only 3 percent per year. Letter volume declines will far outweigh package growth in both pieces and revenue. Costs will continue rising Today, fulfilling the Universal Service Obligation involves more than 36,000 Post Offices, stations, and branches. Delivering mail 6 days a week involves 220,000 vehicles, $2.6 billion in air transportation, and 600 processing facilities. As volume continues to decline and the number of addresses continues to increase, the cost to deliver each piece of mail will keep rising while revenue per delivery point falls. Each year through 2020, volume is expected to decline by 1.5 percent on average while approximately 1.2 million delivery points are added. Maintaining the Postal Service retail network will be increasingly costly. The average Post Office is far more expensive to operate than other means of serving customers. The average Post Office transaction costs 23 cents per dollar of revenue, while the average transaction at a contract postal unit costs just 13 cents (Exhibit 7). In the past, Post Offices generated almost all postal retail revenue. Today, however, 29 percent is generated through usps.com and other alternative channels. Post Offices recorded Exhibit 7: Channels for accessing postage & mailing packages Average Cost per Dollar of Retail Revenue Average Post Office' $0.23 (Postage & Packages Only) Ccmactpostal unit 50.13 Online Postage (e.g. O 1dFN ship. 50.08 $0.12 PC Post "eBay) Kiosk (automated, self- aeries) 00.12 Stamps by mat phone, Internet $0.08 Retail partners $0.02 -50.©7 1 Avowal). ant W al Pint X731 SOU USN system (Hours at operation) Sara — 5pm, Monday — Friday, Omitted weekend Avg. Tam - apm. Monday— Sunday 2417 24/7 24/7 Avg. 7arn -9pn, Monday— Sunday of retool ma►ue. 410 117 million fewer transactions in 2009 than in 2008, adding to the network's overcapacity. Despite this excess capacity, under current law Post Offices cannot be closed solely for economic reasons.' Yet by 2020, with retail revenues predicted to fall by another 40 percent, even more Post Offices will be pushed into the red. Wages and benefits account for 80 percent of Postal Service costs, and work hours will also become more costly due to rising benefits costs. Total workforce costs are expected to increase from $56.5 billion in 2009 to $77.2 billion in 2020.8 Workers' compensation is projected to rise by 2 to 4 percent, health insurance premiums by 4.7 to 5.2 percent, and retiree health benefits costs by 11.8 percent. Health care in particular will grow at a pace well above inflation - capped price increases. While the Postal Service has collaborated with its unions to structure reasonable compensation options, federal statutes hamper its ability to craft a market- ed benefits package .° Finally, the accelerated schedule requiring prefunding of retiree health benefits over Exhibit 8: USPS will the first 10 years of the 50 -year liability will consume $5.5 billion to $5.8 billion per year through 2016. While these obligations will fall to $2.6 billion to $2.7 billion per year from 2017 to 2020, total funding for retiree health benefits will continue to exceed 10 percent of gross revenues through 2020. 1I1. ACTIONS WITHIN MANAGEMENT CONTROL The Postal Service will work within current law to close part of the budget gap The Postal Service evaluated various possible actions for their feasibility and impact on projected losses. The analysis identified four areas with the greatest potential to generate additional revenue and reduce costs under current law. By 2020, these actions are expected to reduce annual losses by $18 billion. Cumulatively, they will narrow the projected $238 billion financial gap by $123 billion. The four areas include product and service actions, productivity improvements, workforce flexibility improvements, and purchasing savings (Exhibit 8). a series of actions try save Si gii ion by 2020 As a result of collaboration between management and union leadership, the Postal Service has 200,000 fewer career employees compared to 2000, with the reductions achieved through attrition. Product and service actions. The Postal Service plans to expand products and services across targeted mail and package segments to increase profits by $2 billion by 2020. For example, it will work to increase direct mail use among small and medium - sized businesses, and to increase volumes in both First -Class Mail and advertising mail through targeted promotions. It will continue to leverage its last -mile network to deliver packages to all households, forming partnerships with others serving the growing e- commerce industry. It will also continue to grow other retail services, such as passports and Post Office Box rentals. Improving productivity. The Postal Service will continue to cut costs and capture additional productivity savings. Planned actions include further streamlining of plant operations, optimizing delivery routes, providing customer service through the most cost - effective channels, and consolidating administrative functions. Targeted efficiency enhancements will reduce costs by approximately $10 billion in 2020. Workforce flexibility improvements. Continued attrition due to retirements will provide opportunities to establish a more flexible workforce better aligned with changing customer demand. Over the next 10 years, over 300,000 employees — more than half the current workforce — wili be eligible to retire. This will provide an opportunity to make the workforce even more efficient by increasing use of flexible and part -time employees. Eliminating the Retiree Health Benefits prefunding requirement would cover only part of the growing financial gap; other changes would still be necessary. than 78 percent of volume is already handled 0 through workshare programs, including presort, destination entry, and automation - compatible mail preparation. In addition, roughly 55 percent of the past savings in work hours were due to reductions in overtime and the non - career workforce. Further opportunity to significantly reduce hours in these areas is very limited. IV. A VIABLE POSTAL SERVICE: THE PLAN TO GET THERE The Postal Service is committed to providing universal service to the American people, covering all costs and paying all debts with postal revenue. However, even if it achieves the savings in its management plan, the Postal Service would still face an annual loss of $15 billion in 2020 and cumulative losses of $115 between now and then (Exhibit 9). Further, there is considerable risk that the projected losses could be far greater. And while projections indicate that volumes are likely to fall to 150 billion pieces, alternate scenarios suggest that volumes could sink even lower. Purchasing savings. The Postal Service has additional opportunities to trim resource costs in several areas. For example, it will lower transportation costs by using fewer trips at fuller truck-load levels. It will also continue to negotiate favorable contracts and improve vendor and process management. In each of these four areas, accomplishing improvements will be exceedingly challenging. For example, the Postal Service has achieved 91 percent automated letter processing, the highest in the world. More Clearly, aggressive steps are required. That is why the Postal Service is seeking the flexibility to pursue additional opportunities in seven critical areas: 1) retiree health benefits prefunding; 2) delivery frequency; 3) access to services; 4) workforce; 5) pricing; 6) products, and 7) oversight (Exhibit 10). 1. Retiree health benefits prefunding The current retiree health benefits prefunding requirement has a significant impact on postal losses. The Postal Act of 2006 mandated a prefunding schedule of $5.5 billion to $5.8 billion per year through 2016. Congress must approve any future changes to that schedule, as it did in 2009. The Postal Service seeks to restructure funding in a way that upholds its obligation to current and former employees and does n constrain cash flow during periods of volu decline. To do this, the Postal Service seeks • need manage neat actions This crisis provides an historic opportunity to make changes that will allow the Postal Service to succeed as an independent agency of the Executive Branch. Its business model can work if it is recalibrated to 21st century realities. B) Actions %+until management control 1Y dose $18 billion of the 2020 gap but not return the Postal Service to breakeven t to shift to a "pay -as- you -go" system, paying premiums as they are billed. Other federal agencies and most private sector companies 4 such a system. In addition, the Postal Service Inspector General recently determined that the Postal Service overpaid, by nearly $75 billion, its contributions to the Civil Service Retirement Exhibit 10: Postal Service of the future 3) Financial gap in 2020 if no additional efficiency or reveres initiative are raultstaken System Fund (CSRS). The Postal Service will ask Congress to transfer this $75 billion to the Retiree Health Benefits Trust Fund. When it is added to the Fund's existing $35 billion balance, the Postal Service's retiree health benefits will be fully or nearly fully funded. As much as $50 billion can be saved over the next 10 years if the Postal Service does not have to prefund retiree health benefits. From • Pre4unded retiree heeilh benefits • "Pay.asyou. ce retiree health berms in requirement line wtt1 other spalavaant gifts match volume end changing customer needs obese through en enhanced online presence. parberships, and kiosks Flexibnity to capture rai apott to match demand Post xibAltjf to adapt 10 matNuat and tedmdoogydtss inflationieSediaice cepe by dims ded to paelpl pro bodi�as 1MIth responstbilties and processes ralasion 1tbot' 2. Delivery frequency To adapt to changing mail volumes and consumer needs, the Postal Service must have the authority to reassess and adjust the frequency of delivery. A recent Gallup survey showed that two- thirds of Americans would rather have delivery days reduced than have increases in postage or have the government subsidize the Postal Service's losses with taxpayer funds (Exhibit 11)1° The Postal Service would move to a 5 -day per week schedule if given the legislative changes required to adjust delivery frequency, thus eliminating delivery on Saturday, the lowest volume day. This would boost 2010 daily delivery volumes per address to 2008 levels. This would also help close a substantial portion of the net income gap, yielding annual savings (after initial implementation) of approximately $3 billion in 2009 dollars. alone kiosks and additional partnerships with retailers. The Postal Service will expand options available on its website and through its carriers, which provide access to most postal services without customers leaving their home or office. 3. Access As consumer behaviors and needs change, so must the Postal Service. It must better align its retail network and the access it provides, investing in new options that improve service while lowering costs. Access will be expanded by serving customers where they already shop, creating more automated and on- demand services such as stand- Given the need for dramatic cost reductions, the American public is most in favor of eliminating Saturday delivery, rather than taxpayer subsidies or significant price increases. As customers continue to shift to these new services, the Postal Service will minimize costs by reducing redundant retail facilities. Current customer research shows increased demand for new ways to access the postal services. For instance, 79 percent of Americans surveyed were not concerned about closing Post Offices if postal services were moved to other retail locations (Exhibit 12). Many actually preferred to have postal services provided in nearby retail locations rather than Post Offices. Proposals to close facilities often lead to protests, and on a few occasions Congress has blocked changes through legislation. This response is not unique to situations involving the Postal Service. For example, recommendations to close or consolidate military installations have also met with resistance. However, because the Postal Service does not receive appropriated funds to maintain its network, postal customers are ultimately required to absorb the costs of political decisions that keep redundant facilities open. • bit 11: Public opinIC rdling delivery frequency stron* oPPose to 8 day* fo5? reducing t# Share of responder). 10 2 Strongty sten* emcee SOURCE: Gallup Pal Jun 1T - -18, • Exhibit 12: Survey Data: Consumer acceptance of retail service options How would it affect you if the Poet Office closest to your home dosed and its services moved to saran service counter in a nearby rte store? Share of respondents, percent Almost 80 percent of consumers report they would benefit or would easily adapt if Post Office services were moved to a nearby retail store. do not conducted by hicidentoY 4. Workforce The Postal Service must become a leaner organization. The large number of xpected retirements creates an important opportunity to achieve this through what can be an orderly process of attrition, and by establishing more flexible work rules through the collective bargaining process. Annually, approximately 5 percent of employees are eligible and expected to retire. It would not make sense to replace them with full -time employees if demand is moving in a direction better suited to a part-time workforce. Although the Postal Service would prefer to manage this change through collective bargaining, under existing law, arbitration is always a possibility. The financial health of the Postal Service and the affordability of postal products should be key considerations in any arbitration ruling. Therefore, the Postal Service will ask Congress to require arbitrators take into account its financial condition before making any decision. When benchmarked against other large iiiosts, the Postal Service employs the most II -time workers as a percentage of the tal workforce. For example, the United Kingdom employs 22 percent part-time employees and Deutsche Post employs 40 percent part-time employees, while part- time employees represent up to 13 percent of this country's postal workforce. Providing increased workforce flexibility will help maintain service levels while reducing costs. 5. Pricing The Postal Service needs the authority to adjust its pricing to better reflect market dynamics and offset future volume and revenue declines. Current law does not provide this. Instead, prices by class remain tied to CPI, and not to the key drivers of postal inflation. Also, the Postal Service may make only limited price increases under exigent circumstances. Therefore, it will seek legal modifications related to pricing, and pursue a moderate exigent price increase effective in 2011. Single price cap. The first reform would apply the inflation price cap to Market Dominant products as a whole, rather than to each class of mail. This would allow adjustment of individual prices based on market demand and unit costs. Prices for some classes would rise above the rate of inflation while others would rise at a lower rate. This would provide flexibility over time to address products that do not currently cover their costs. Preferred -class pricing. Addressing the pricing of preferred mail — such as non -profit mail, Media Mail, Library Mail, and Periodicals — would ensure that these products get to a point where they cover costs while contributing reasonably to overhead costs. An alternative would be appropriations funding to cover the gap. Exigent price increase. The Postal Act of 2006 allows price increases beyond the Consumer Price Index in extraordinary circumstances. Such increases are permitted if the Postal Regulatory Commission finds "that such adjustment is reasonable and equitable and necessary," and that there are "exceptional or extraordinary circumstances. "" Using existing authority, the Postal Service will pursue a moderate exigent price increase in 2011. Larger increases will need to be pursued if changes are not authorized in connection with other issues, such as Retiree Health Benefits pre- payments and 5 -day delivery. Given the largest volume declines since the Great Depression, the requirement to pre -pay billions of dollars in Although prices are capped by law, survey data show that small businesses would tolerate moderate increases. retirement health benefits, and the forecast for increasing net losses, among other unfavorable realities, the current situation should qualify (Exhibit 13). 6. Products As technology and customer needs change, so will the definition of mail. The Postal Service seeks additional flexibility to innovate its products and better meet changing customer demands, while tapping into new sources of revenue. Currently, every potential new product, including individual customer contracts, require before - the -fact review by both the Governors and the Postal Regulatory Commission. The existing review process can delay the implemention of customer contracts, leading to mailer frustration and providing an adventage for competitors. Amending the current regulatory framework to broaden the definition of postal products and allow for streamlined, after -the -fact product reviews would allow the Postal Service to introduce new products and services in a more timely and customer - friendly way. • • bit 13: Survey Data Small business response tao.price increase, Percent of respondents who woad change mail volume by lass tha S% given modem% price incroas•' Share of respondents, pmt Adverrising General cane Mall type s. S%pdeImbue some conwmee wvey, Decetxc 2008, aonoucne by 7. Oversight Congress modified the Postal Service's oversight model in 2006 at a time when volumes were increasing. The model includes Presidentially- appointed Governors (LISPS) and Commissioners (PRC). Both are required to represent the public interest and have overlapping responsibilities to ensure affordable, quality, universal service to America. Additional oversight includes Congress, portions of the Executive Branch, the Government Accountability Office, the Postal Service Inspector General, and other federal agencies. In many situations, roles and responsibilities overlap and are not sufficiently clear. Oversight primarily involves changes to postal networks, products, prices, costing methods, service, Sarbanes- Oxley Act Compliance, and complaints. The world is rapidly changing, yet the current oversight model constrains the flexibility and speed required to adapt and respond. It is crucial to clarify oversight roles and eponsibilities and to streamline processes. ersight changes are critical mechanisms to make this plan a reality. Since the Postal Act of 2006, the Postal Service has increased transparency and accountability. However, internal changes alone are insufficient. Changes in law are necessary to make oversight processes more responsive to market needs. They should include looking at issues such as time limits on reviews, and moving before - the -fact to after -the -fact reviews. Collectively, these changes would ensure continued protection of customer interests while providing flexibility to manage in the changing postal environment. Only by balancing actions across all these areas will the Postal Service be able to eliminate the deficit projected for 2020 and continue to provide high quality, affordable service. Limited action on just a few areas would exacerbate the Postal Service's financial situation and place an undue burden on postal stakeholders. • THE PATH FORWARD Even with the most informed projections, there is no way to know exactly what the future holds. Therefore, it is imperative that improvements to the Postal Service business model contain sufficient flexibility to allow the Postal Service to respond quickly in a financially responsible way no matter where the market turns. America can continue to enjoy quality, universal postal service at no cost to the taxpayer only if aggressive internal improvements are made in tandem with regulatory and legal changes. The only way to close the Postal Service's income gap while providing the American people with the service they deserve is though a balanced approach that does not overtax any single part of the business or place a disproportionate burden of change on any one group. The Postal Service asks for the flexibility necessary for action along all seven proposals: • Restructuring retiree health benefits payment to a pay -as- you -go system • Adjusting delivery frequency to reflect volumes and customer needs • Modernizing access to make it more effective and efficient • Establishing a more flexible workforce • Aligning pricing with economic realities • Allowing faster introduction of a broader range of products • Ensuring agile and appropriate oversight If this plan becomes a reality, the Postal Service can build on its achievements and secure a strong future to meet the nation's changing needs. Delay increases the challenge and deepens the crisis. Success will require starting to work on solutions now. 16 Appendix Summary of some of the additional concepts that were evaluated but are not currently being pursued Changing First -Class Mail service standards Moving First -Class Mail service standards from 1 -3 days to 2 -5 days would reduce cost and system complexity. Savings would accrue by consolidating facilities and divesting unused plants, virtually eliminating costly air transportation, and redesigning the networkto simplify and standardize mail flows and processes. The option to lengthen the delivery window for First -Class Mail will not be pursued at this time. When presented with this prospective change, mailers expressed concern about the cash flow consequences of a longer delivery window for bills and payments. Only 17 -18 percent of consumers responded that a shift from 1- to 2 -day local mail would be "an inconvenience I would notice for a long time" or a "serious problem or hardship." Nevertheless, mailers said they would likely reduce volumes if the standards changed. There is already a shift from First -Class Mail to Standard Mail due to its improved service. Reducing the First -Class Mail service standard would no longer provide the same level of product differentiation, thereby reducing the value of First -Class Mail. Shifting delivery to the curb or centralized boxes businesses expected to reduce volume by more than 10 percent if delivery points were changed. Higher - volume mailers responded similarly. Shifting delivery points would also be expensive and slow to implement. Additional non -mail revenue generating options Additional revenue opportunities will continue to be considered in the future. Some product ideas were drawn from international posts, which take a broad -based approach to product diversification. Ultimately, five areas stood out — parcel services, logistics, banking, integrated marketing, and document management. Building a sizeable business in any of these areas requires time, resources, new capabilities (often with the support of acquisitions or partnerships), and profound alterations to the postal business model. Accenture research shows that while international posts are still building these businesses and implementing the necessa steps to make them succeed, these lines of business tend to generate below - average profitability compared to industry benchmarks. (Details on usps.com.) Moving delivery from the door to a curb receptacle, or from the curb receptacle to a centralized "cluster box," would reduce costs by allowing for more deliveries per route. This option will not be pursued at this time. Mailers were concerned that shifting delivery to curb or community mailboxes would undermine the convenience and intimacy of mail and lead to customers checking mail less frequently. They said they would reduce volumes as a result. Roughly 15 to 20 percent of small and mid -sized However, the other product areas examined are currently not viable for the Postal Service because of its net losses, high wage and benefits costs, and limited access to cash to support necessary investments. Opportunities to leverage the Post Office networkto enter new markets, such as banking or consumer goods, are similarly limited by high operating costs and the relatively light customer traffic of Post Offices compared to commercial retailers. Becoming a federal government agency supported by appropriations The Postal Service examined other business models, including a switch from today's self- funded Postal Service to a regular federal government agency supported by appropriations. This would be similar to t prior to the Postal Reorganizatio • Act of 1970. Under this model, Congress would determine the level of service provided, including the definition of universal service, pricing, and facility closures. This model eliminates the tension that exists between the Postal Service's status as a governmental agency and its mandate to be self- supporting. This business model also ties political decisions to the funding responsibility for those decisions. For example, if Congress does not want facility closures, it would have to continue to fund those facilities. The main disadvantage is taxpayer burden, especially given the deficits in the current economic environment. Moving towards privatization Another business model option evaluated was privatization. This would be a dramatic asure requiring sweeping changes. he Postal Service would cease to be a govemment agency, and would operate as a private business owned by investors. This new private post would have shareholders and would compete with other private businesses. The postal monopoly would be reduced or eliminated. The Postal Service would be free to enter into any other businesses it saw fit, and it would be allowed to fail. This model allows for greater flexibility in both revenues and costs. The Postal Service would have the ability, without political interference, to right -size its networks, design pricing approaches, adjust delivery frequency, and determine which products to eliminate or add. Those who support privatization point to the economic efficiencies of allowing market supply and demand to determine pricing and services offered, and to the assumption that competition would likely give rise to *nnovation and a more agile customer - esponsive entity. A look at privatization in other countries shows prices far greater than in the United States. A new private post could lose economies of scale inherent with processing and delivering the entire nation's mail. Presumably, other postal providers will quickly move in to serve the higher volume, profitable areas of the country, leaving higher cost rural and inner city urban locations without affordable service. To ensure universal service, subsidies would be required either through tax dollars or universal service fees charged to licensees. Nationwide affordable and uniform pricing would likely be eliminated, since private businesses would charge more to deliver to higher - cost areas. Elimination of the mailbox monopoly may raise concerns about the safety and security of the mailbox. Perhaps most importantly, there is the question of whether the Postal Service could find investors and equity if privatized, given that it has negative equity, operates in a declining industry, and is burdened with significant outstanding liabilities. Therefore, all the changes laid out here would be needed before privatization. Endnotes 1. The Boston Consulting Group projected mail volumes through 2020. Accenture analyzed the range of businesses that foreign posts have entered to see if these could raise profitable revenue to support the USO. McKinsey & Company developed an independent assessment of the Postal Service's current strategies and provided recommendations for future growth and cost savings options, over a ten year period. 2. $15.8 billion loss in revenues reflects aggregate volume decline (from 2006 -2009) against 2009 prices. 3. Includes only the prefunding amount, not the costs of premiums for current retirees. 4. Price caps apply to Market Dominant products, including First -Class Mail, Standard Mail, Periodicals, Bound Printed Matter, Media Mail, Library Mail, and Special Services. In aggregate, they account for 88 percent of revenue and more than 99 percent of volume. 5. Volume projections based, in part, on extensive mailer interviews, consumer surveys and interviews, experience with other posts, and insight into other industries. Analysis developed by The Boston Consulting Group. 6. Daily revenue per delivery point was calculated by dividing revenue by the number of delivery points and annual delivery days. Revenue is not adjusted for inflation. (This endnote is revised from an earlier printing of this paper). 7. 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." [39 U.S.C. 101(b)] 8. Assumes no action is taken to reduce workforce costs by 2020. 9. Regulations prevent the Postal Service from settling workers compensation claims (20 C.F.R. 10.5) and, unlike in most other industries, the Postal Service gets no subsidy to cover the costs for Medicare Part D prescription drugs. By law, the Postal Service may not have "a program of fringe benefits" that on the whole" is less favorable than on July 1, 1971. [39 U.S.C. 1005(f)] 10. Sixty-six percent of consumers were reported to "strongly favor" or "favor" 5 -day delivery over other options, including taxpayer subsidies, higher prices, lay -off of postal employees, and closing Post Offices. 11. P.L 109 -435 (Postal Act of 2006). • • C::11NUITEDSTLITES POSTAL SERVICE® • St Petersburg, FL Area Mail Processing (AMP) Public Meeting November 332011 • L / UNITED STATES P %! OSTAL SERVICE® Two Topics Radical Area Mail Network Processing Realignment Study 2 UNITED STATES I ±I POSTAL ERV CE® Mail Volume Shifting ' g to a Less Profitable Mix 125 100 75 50 25 0 2006 2010 2016 2020 98 78 First -Class Mali 54 39 Volume in Billions of Pieces • • 103 Standard Mail 83 85 86 2006 2010 2016 2020 3 • UNITED STATES POSTAL SERVICE® NETWORK CAPACITY GRoviTH Capacity Expansion 1970 2006 4 J UNITED STATES l POSTAL SERVICE@ NETWORK CAPACITY GROWTH Capacity Expansion 1970 2006 CONSOLIDATION Excess Capacity 2013 5 • • UNITED STATES POSTAL SERVICE® Potential Decrease in Processing Facilities Through 2013 800 a) 600 "U Co LL c 400 .U) a) U 0 p 200 673 623 614 528 487 Less than 200 2007 2008 2009 2010 2011 2012 2013 6 As of 8/31/2011 • as co 0 21, ------a._ 0 < • 11`.-4 9 ---..') • , t ( , • --i r A._ • • + ' ( fir -• ‘4. • • • • - _ • • • * • • • • "1. • 0 • \ It \ v-,„ — ** -/.‘4'' r • ‘ I • ii.,.., • „-...,0.,„.7.... . \ ; II!. r • ''' 0 ' • • 0 • ,1 \41?::*k, lk • ,ir • • 1 / \ c.,• \,..,/, 1 1 si'-i \ `,, , • • • •• it • i ; •I * -, • 1 1,./- *. Ij • • • • • II • -0----r- . • • 1 • • 1 1 ,..,.... / 1 .„--, . --_----L _ I , _ i _ ir ____LL__._1_21141 if 7\?--- ' 41? ',-5--• i ' i \ 1 i I s... I 'C '11 , • ,-/: .1 • • , ..\7_,.., ,,........... i. ik : i \ __,... I-1 ,J-- •- , • , i • j i i I , /` , , i ‘, / ' •r \ • 51 I. ,—...-• '--4 ._..,-.4 ----, i ---4,--,_ 1 ... _„: i , ,- . • i.--.9- -4,-16/ --..5 ' i i• ' s , .., • • • • • 1 • • • • • • • • • • • • • I , / • e-4 • • • SI • / / so • • Jew ,er • • •• • .1 1111■1111■ I UNITED STATES 1 POSTAL SERVICE® Mail Processing Facility Footprint Studyima252 Facilities for Potential Consolidation c) *,-4,... i 't* ,..-----,...„....„,* * * ( --k' * * „ i ,, * c * __ if * i • -,y'' ! - I * * ---- \, ! — * i * * *1--,* * '!-* '-------.4 1 ---, • * -!!! • • ' r!, LV,,- II • /1 ( * • v 1 -...\__ * t----------- — ___LI __* =or ----M-----*/ '4** 4 ----1 i li--- ----,—; ___,*_*__ * *.____.------- . . * ,-,75, —*IL. * * 0 1.7-*;-----,L. -- r * --0. ) "s4 f-------.. 4., ,7ge, lk * 1 illi ."`:*---1:\ I -`-,L,..,4-/- * ---1 • * N---' '--- 7 j 1 J ,-- * 7 ■ , * ok * * * Currently Under Study * Announced Sept. 15th * It•*\\* * k ?I *• *\ , ,,, •)- * • * ' * irv''''' : 1 , * ---7, * * ,,, , , „1,,,c,...,..., • --„. * ( ,-.:)* . -*L_--A --,.. * * • ,t, 4 8 UNITED STATES POSTAL SERVICE® Mail Processing Facility Footprint Potential Network r 1 ' /,;r __. 11 1, '‘ 4 i S l s is • r _°.-;- _ • • J -:1 • '► "` ' I \. 1 • M• � `• �, • • � `ter' • • • ty • • 41 9 • l UNITED STATES l POSTAL SERVICE® 6:00 p.m. Mail Processing Redesign 12:00 a.m. 12:00 p.m. Current Operation Mail Processing Facility 6 :00 a.m. 6:00 p.m. 12:00 a.m. 12:00 p.m. Proposed Operation 6:00 a.m. 10 UNITED STATES (%l POSTAL SERVICE® Driving Efficiency FUTURE NETWORK • Support 2 -3 day Service Standards • Revised Entry Times • Reduced Equipment • Reduced Footprint BENEFITS • Eliminate Excess Capacity • More Efficient Transportation Network • Fully Utilized Workforces • Up to $3 Billion Cost Reduction 11 • J UNITELaS_ f POST/�L SERVICT/VTESE® Our Customers CHANGES • Planning for new mail processing footprint and transport pattern • Transitioning to 2 -3 day service standard OUR APPROACH • Ongoing communication and collaborative solutions L UNI / POSTAL TED SERVIC5T41TES E® Our Employees 559,000 151,000 35,000 • Total Career Employees Total Mail Processing Employees Fewer Mail Processing Positions 13 • % UNITED STATES 1 POSTAL SERVICE® Topic Area Mail Processing Study 14 UNITED STATES IPOSTAL SERVICE® St Petersburg FL to Tampa FL AMP DISTANCE BETWEEN FACILITIES — 20 miles Treasure Island Me Hohres.Bead*. Copyright© and (P) 1988 -2006 Microsoft Corporation and/or its suppliers I ri Certain mapping and direction data ©2005 NAVTEQ. All rights raseer'v d! Y -e All ri hts reserved. Tele Atlas and Tele Atlas North Americaeare'�tra Tema s'©fT le' • • 611„411q-,101 . +-orporation.aLl n Atlas =filen da> 15 • J LSSEE POSTUNIT D AL SETAT R VICS E® St Petersburg FL to Tampa FL AMP BUSINESS CASE* Mail Processing Workhour Savings: $5,331,649 Mail Processing Management Savings: $1,295,066 Maintenance Savings: $1,895,831 Transportation Savings: X228,792 Proposed Annual Savings: $8,751,338 *Preliminary results subject to change UNITED STATES !'OSTAI.. SERVICE® St Petersburg FL to Tampa FL AMP EMPLOYEE IMPACTS` Net craft impacts: Net management impacts: -112 -8 All bargaining employee reassignments will be made in accordance with the respective collective bargaining agreements. *Preliminary results subject to change • 17* J UNITED STATES J POSTAL SERVICE® St Petersburg FL to Tampa FL AMP CUSTOMER & DELIVERY SERVICES • Supports a 2 -3 day service standard for First -Class Mail • Retail and other services • Business mail acceptance • Collection mail • Delivery of mail • Local postmark J UN /TED /. j POSTAL SERVICSTATES E® St Petersburg FL to Tampa FL AMP NEXT STEPS • Complete Area and HQ review • Review Public Comments • Continue Network Optimization studies UNITED STATES POSTAL SERVICE® St Petersburg FL to Tampa FL AMP Mail additional comments to: Manager, Consumer & Industry Contact Suncoast District 2203 N Lois Ave Ste 1163 Tampa, FL 33607- 7163 Must be postmarked by November 18, 2011 �IUNITED STATES POSTAL SERVICED UNITED STATES Miff POSTAL SERVICE. Five -Year Business Plan April 2013 • • April 16, 2Q J UNITED STATES POSTAL SERVICE Business Environment This U.S. Postal Service (USPS) business plan ( "Business Plan ") is designed to communicate to key stakeholders the vital role that the USPS plays in the U.S. economy and important solutions required to return the Postal Service to financial and operational viability and self- sufficiency. Specifically, the document covers • Challenges facing the organization today • Actions USPS is planning to take to address its financial position and outlook • Financial benefits of the identified initiatives and impact on USPS stakeholders • Overview of continuing actions to confront revenue declines through innovation • Legislation required to remove restrictions on our ability to address changes in the business environment • Business Plan risks and sensitivities Despite operational improvements which have generated significant cost savings, the financial position of the organization has become untenable 1 The USPS continues to endure the negative effects of electronic diversion combined with a weak economy and excessive funding obligations While the USPS has appealed to lawmakers for help with the required changes to the business model, very limited action has been forthcoming l • Complex web of stakeholders with competing interests • Congress must balance the interests of all stakeholders and all must contribute to achieve a solution The organization's current financial position requires urgent action to ensure the near -term continuation of communication and delivery via the Postal Service, as well as long -term self - sufficiency 4' 1 April 16, 2013 UNITED STALES POSTAL SERVICE Continuous Efficiency Improvements Have Helped Mitigate Effects of Business Threats ❑ U.S. Postal Service ranked as the most efficient postal service within the world's top 20 largest economies(1) ❑ The core of an $800 billion mailing industry in the U.S. that employs approximately 8 million people ❑ Delivers --40% of world's mail (1) Oxford Strategic Consulting report issued December 15, 2011 696 685 663 623 584 557 '0$ '07 '05 'Of '10 '11 • 528 '12 8 i 1 MhKoXni (o71i /•VRO9`11�1/- 4:-X01 x= nYA14o -7 111111 t11h) dill f ��c`I.vl'1v/� •9 ; ���rt!'�fll \ +a�� ©Xt71. 11 1 IC lid olt�K���X�l •'xy 1,500 1,400 1,300 1,200 1,100 1,000 2005 2007 2008 2009 2010 2011 2012 • 30.0 - 25.0 - V 42 20.0 F— g 15.0 10.0 a 5.0 u_ 0.0 -5.0 1972 Total Factor Productivity 23.8 I I I , I I I I , 1 1 „ I , , , , I I , till,, I,, I, I I, I N 2 1980 1990 2000 2012 2 April 16, 201 • UNITED STATES POSTAL SERVICE USPS Financial Position has Deteriorated in Recent Years 6.;d I \y /(61 'n l<�. i F?k- ? Y tff i(0,1 n aXd) ' 1i. 0) 0111?-; 260.0 260.0 200.0 150.0 100.0 50.0 0.0 212 2007 2008 $0.0 ($2.0) ($4.0) c ($6.0) 0 E ($8.0) ($10.0) ($12.0) ($14.0) ($16.0) ($18.0) ($5.1) 2007 ($2.8) ($3.8) 2009 I 2009 2009 2010 ($8.5) 2010 2011 2012 ($5.1) 2011 ($15.9) 2012 lt iILK ifP(uX+Av4 I)'1i(o)ni ((ft:A' ;)) Dili(0/1n(110117 iitof 80.0 70.0 60.0 g 60.0 v► 40.0 30.0 .0 20.0 10.0 0.0 $75.0 $75.0 2007 2008 ( $68.1 $67.1 _ $65.7 $65.2 2009 2010 2011 2012 $20 $15 $10 In FY2012, the USPS reached its $15 billion statutory debt limit. 7.2 10.2 Total Debt: FY07 - FY12 15.0 13.0 12.0 FY' 10 FY11 FY 12 IDire financial position requires urgent action to ensure continued mail delivery and to restore long -term self sufficiency. i April 16, 2013 3 UNITED STATES POSTAL SERVICE Profit Margins Decreasing Driven by Loss of First -Class Mail $ Billions FY07 - FY12 • First -Class ■ Standard • Shipping & Packages ■ International Periodicals & Other .— Packages: Gain of $0.5B ('07 vs. '12) 4-- First - Class: Loss of $3.0B ('07 vs. '12) a ir_ , . o � o c1 < c flinXzli (GILA•=+' hi (okP e - in(0 ? iroLikJC4kz,) ILfli �kl�F11rorf1H /i ���1to�1�(<< ���%�i��linl (����Y��k� lti�l�d�il�uK� �k�� -`� lekll4���.t ���oXuXI t.,ynXol 11X Sft,i�X � 7l � • April 16, 20. 4 UNITED STATES POSTAL SERVICE Many Factors Contribute to Continuing Financial Problems Volume • Mail volume declining due to electronic diversion • Advertising mail is subject to more substitution options • Mail volume highly sensitive to economic changes • Packages are growing — but much lower profit margins • Scope of products / services limited by law Price • Capped by inflation • Price elasticities are in flux due to growing alternatives • i l l ' '11+ bri K ? A //qti l ( ) Universal Service Obligation • Consistent pricing and service for all 50 states plus territories • Postal network costs driven by: • Delivery points • Retail locations • Sortation facilities • Delivery days & timing Labor Costs • —80% of total costs • COLA increases • Federal benefits are 48% of total labor costs • Limited flexibility April 16, 2013 5 UNITED STATES POSTAL SERVICE Current Financial Situation - Critical uoed annual revenue by rice increases, as permit The greatest= r-evenue-- la:s(--7 8= billion) is -in our-most -prop pro ct,T First-Class.. Mail, which: has ,a 53% profit margin et losses in the .last six fiscal ccounta April 16, 206 6 • UNITED STATES POSTAL SFR VICE USPS is Incurring Unsustainable Losses that will Worsen without Urgent Actions ❑ USPS's financial losses are at unsustainable levels ❑ Declines in revenue are being driven by lower First -Class Mail volumes (down 28% since 2007) ❑ Reduced volumes are, in turn, reducing density and profit margin across the USPS network $5.0 - $0.0 ($5.0) - ($10.0) ($15.0) - ($20.0) - ($25.0) - $3.3 $2.3 ($8.4) ($5.6) ($2.8) ($5.1) ($2.4) r - 1 4 ($4.0) :41 ($7.8) ($3.0) ($5.5) ($8.5) ($5.1) ($5.5) ($10.6) (z) ($4.8) Before the effects of Strategic Initiatives ($5.0) ($5.6) ($11:1) ($10.6) ($15.9) ($7.0) ($5.7) ($12.7) ($9.2) ($11.3) ($5.8) ($17.1) ($16.6) ($16.6) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . 2017 • Net Profit/ (Loss) Before RHB Pre - Funding Impact of RHBPre- Funding ❑ Deferred RHB Note: Bolded figures after 2007 represent Net Profit / (Loss) after RHB Pre- Funding (1) In 2009, $4.0bn of RHB Pre - Funding was deferred and will be re- evaluated in 2017 (2) In September 2011, Congress rescheduled the 2011 required RHB payment of $5.5bn until August 2012. The Postal Service defaulted on the 2012 payment and anticipates that future defaults will occur, absent legislative change to the RHB prefunding obligation. April 16, 2013 7 UNITED ST/]TES POST/IL SERVICE Expenses Exceed Revenue and the Gap is Growing $ in Billions $90 - Historical expenses (peaks and valleys driven by rescheduling of RHB pre- funding) Baseline Expense Outlook before any Initiatives Expense $45 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Debt (1) $4 $7 $10 $12 $13 $15 $18 $25 $31 $37 $48 $61 $77 $93 Debt (2) $4 $7 $10 $12 $13 $15 $33 $45 $57 $70 $82 $95 $111 $127 (1) Assumes no USPS initiatives and no RHB prefunding paid in 2012 — 2017 ($34B). (2) Assumes no USPS initiatives but with RHB prefunding paid 2012 — 2017 ($34B). • • April 16, 201 8 UNITED STATES POST/AL SERVICE Restructuring Objectives E 3i i tki►�i�' `} }i ®'tln tL ?)I l'i ili11{IUK '�1(o) iro e 10)41'Z' ,_ � , II °7 C I� !�F� n1(9,j (0)16)l t° chi 1vii(z -) `�E��lh�.li� (bXx n►t ((1 it (Preserve the ability to provide and finance secure, reliable and affordable universal delivery service Further economic growth and enhance commerce (Implement p comprehensive transformation for a long -term sustainable financial future 1 (Protect U.S. taxpayers (avoid Federal funding and appropriations) 1 Maintain fairness to employees and customers April 16, 2013 9 UNITED STATES POSTAL SERVICE First -Class Mail Declines Will Continue Shipping & Packages Will Grow 0 m 69 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 - V I d,�x= l�tio�hOf >.!Orif ",Y.Jo Total Revenue 2012 2013 2014 2015 $64.9 2016 $64.6 2017 ❑ Flat total revenue over next 5 years, net of volume declines and price changes. ❑ Loss of another $6 billion of First -Class revenue — results in loss of $3 billion of profit margin (at 53 %) in 2017. ❑ Gain of $5 billion of Shipping /Package revenue provides $0.9 billion of profit margin (at 18 %) in 2017. ❑ Decrease in profit margin in 2017 from these two major items results in loss of $2 billion in annual profitability. ❑ Volume /revenue changes in other mail classes have an insignificant effect on total profit margin. • N C 0 d, 0 r'm�.i�(tol��l J dy1j.1 0) 30.0 25.0 20.0 15.0 2012 2013 2014 2015 2016 2017 k: �,� �� 1 /- D oYili( I 20.0 15.0 co 10.0 5.0 2012 2013 2014 2015 2016 2017 010 April 16, 2013 UNITED STATES POSTAL SERVICE' Shipping & Packages Profit Marg1I 113 of First -Class Mail in 2012 30.0 25.0 20.0 15.0 0 10.0 5.0 0.0 $28.9 Revenue 13.6 Attributable Cost First -Class Mail $16.4 10.9 $11.6 9.5 ❑ Contribution, or profit margin, differs by mail class. First -Class letters have a profit margin of 53 %, and generated 64% of gross profit in 2012. ❑ Declines in highly profitable First -Class mail have contributed greatly to weakening financials. ❑ Projected volume and revenue increases for Shipping and Packages V for promise. his product the current contributions/margins of 18% cannot replace the First -Class profits lost at 53 %. ❑ It takes -$3 in Package revenue to make up the profitability of every dollar lost in First -Class Mail revenue. ❑ To cover the $6B decline in First -Class revenue by 2017, Shipping & Package revenue would need to grow by $18B. $2.8 2.0 Standard Mail Shipping & Packages International • Cost • Profit Margin $1.7 $2.7 2.4 2.0 Periodicals Other April 16, 2013 11 / Cost Reductions & Legislative Action Needed TE ST PO= ,A •FRV ,C• for USPS to Regain Financial Self- Sufficiency L oss of Contribution from First -Class Mail is Driving Continuing Trend of Operating Losses Cl Growth in Shipping and Packages is not sufficient to replace First -Class Mail profits ❑ 53% contribution from First -Class Mail revenue cannot be replaced with 18% contribution from Shipping & Packages revenue To remain viable, the Postal Service must continue to cut costs and improve efficiency ❑ Labor costs represent 79% of the Postal Service total cost base ❑ 49% of labor costs are devoted to delivery ❑ 48% of labor costs are devoted to benefits ❑ 18% of total cost base is devoted to Health Care to Legislative action is also required to give Postal Service authority generate new revenue and adapt to changing business conditions ❑ Scope of products and services limited by law retirement and other ❑ Cost of federal benefits programs for health care, benefits ❑ Reform governance model • • April 16, 2013 • 12 UNITED ST/JTES POSTAL SERVICE Benefits Costs Contribute to High Personnel Costs Personnel $59.6 B (79 %) Non - Personnel $16.08 (21%) Baseline* FY2012 Total Costs: $75.6B Of which $13.4B (18%) is Healthcare Wages for Hours Worked $30.88 (52 %) i aid Time Off $5.3B / RHB (9%), re-fundin $5.66 6 `9 %) Benefits $1 7.9B (30 %) Paid Time Off, Benefits & RHB: •FERS Contributions $3.0B 'Thrift Saving Plan 1.0 'Social Security 1,9 'Health Insurance & Medicare 5.2 •RHB Premiums (Current Retirees) 2.6 • RHB Prefunding 5.6 $13.48 •Paid Time Off ' Workers' Comp 'Other Total 5.3 3.7 0.5 $28.8B * Includes only the expense of the FY2012 RHB pre- funding ($5.6B) and not the second RHB pre- funding carried -over from FY2011. April 16, 2013 13 mil UNI TEL, STATES POSTAL SERVICE Cost Structure - By Employee Activity Benefitsl' = 47.78 FY2012 Employee Wages & Direct p Postmasters / Installation Heads $2.6B 5% Building Services $3.1 B 7% Vehicle Services $1.2B 3% SG &A $2.8B 6% Career Employees (Sept 2012): NALC: City Delivery 177K NRLCA: Rural Delivery 67K NPMHU: Mail Processing 42K APWU: Multiple Functions 186K Postmasters & Installation Heads 17K All Other Employees 39K 528K Customer Services $6.0B 12% Rural Delivery $6.2B 13% TOTAL Career Employees (March 2013) 498K (1) Direct Benefits include FERS Contributions, TSP, Social Security, Health and Others. $ in billions • • 49 Percent of Personnel costs directly attributable to Delivery. April 16, 2013 • 14 /-,/ Executing on Identified Initiatives is Core to Addressing USPS's Financial Challenges UNITED STATES POSTAL SERVICE USPS needs to save up to $20 billion annually over the next five years, of which nearly half requires legislative action ❑ Each of the Strategic Initiatives is essential in order to restore the Postal Service to financial viability Healthcare Reduced Network Density from Volume Declines Revenue Management Governance ❑ USPS- sponsored health insurance is significantly more cost effective and yields equivalent or better coverage for the vast majority of annuitants and current employees ❑ The Postal Service projects approximately $8 billion of annual savings from the adoption of a new USPS - administered healthcare program (including elimination of prefunding and transfer of retirees into USPS Plan) • RHB Pre- Funding elimination of — $5.7bn annually plus reduced healthcare costs of —$2bn annually ❑ Network costs are fixed and too high relative to mail volumes and reduced density • USPS needs flexibility as well as cost reduction - CI Better align network size with volumes • Mail processing facilities are being streamlined and consolidated • Reducing the cost to serve In our retail network to align with customer evolving needs and provide expanded access to our products and services ❑ Service levels must be addressed • 6 day package delivery and 5 day mail delivery • Modify overnight service standard for First -Class Mail as part of network optimization • Expand centralization of delivery points ❑ Expand scope of products and services allowable ❑ Enhance Mail experience: Digital connections to websites, social media, purchase points ❑ Targeted price changes: • Re -price for volume • Re -price to eliminate contribution losses on certain products ❑ Package Growth: Take advantage of carrier network ❑ Investments in advertising and infrastructure ❑ Governors must have authority commensurate with responsibility April 16, 2013 15 UNITED ST4TES POST/ 1L SERVICE Summary of Cost Initiatives in the Five -Year Business Plan USPS has worked extensively to develop a targeted cost reduction program for the elimination of $20+ billion of annual cost from the business within the next five years FERS Network Retail Delivery 6 Day Packages 5 Day Mail Workforce and Non - Personnel :11r 1 (If :lofdt��,,i I l r l i i i = l l viz ii,_, Via,- �r /Irt °l=' ❑ Health benefits plan sponsored by the Postal Service 0 Accounting methodology & non- cash adjustments TBD ❑ ❑ —$5.7bn from elimination of RHB Pre - Funding $2bn from Postal Health Plan for retirees and employees ❑ Reduction in FERS obligation and "normal cost° contribution, based on USPS - specific assumptions & demographics 0 $6B refund of overfunding ❑ $0.3bn annually ❑ 0 ❑ O Rationalize service standards Consolidation of mail processing facilities Relocation of equipment Capture of reduced volume workload ❑ 0 $120mm Opex $265mm Capex ❑ 0 $2.4 bn in 2014, growing to $3.4bn in 2017 Includes workload O O O O Reducing cost of service Simplifying product offering to enhance customer experience Optimizing levels of services based on customer demand Capture of reduced volume workload ❑ ❑ $40mm Capex $35mm Opex 0 ❑ $1.2bn In 2014, growing to $1.6bn in 2017 Includes workload 0 ❑ ❑ Delivery Optimization Expand business and residential delivery to centralized boxes Capture of reduced volume workload ❑ $45mm Capex ❑ 0 $1.0bn in 2014, growing to $1.8bn in 2017 Includes workload O ❑ Packages — 6 day delivery Mail — 5 day delivery 0 0 $200mm Capex $100mm Opex ❑ $1.9bn annually, when fully implemented ❑ O ❑ Reduction in total unit labor costs Non - Personnel savings Retirement plan of the future ❑ ❑ Workforce $1.8bn in 2017 Non - Personnel growing to $2.5bn in 2017 • Apnl 16, 2013 uNlrEU STATES POSTAL SERVICE Savings by Strategic Initiatives '11i1,•,; tj, Phi li)I•lc Operational Initiatives Networks Retail Delivery Total Operational Initiatives Workforce & Non- Personnel Legislative Initiatives 5 -Day Mail Del. + Saturday Pkgs Postal Health Plan FERS & Other Total Legislative Initiatives 11C ill401r:3,fit 4 l' 2016 Savings $ 3.1 1.5 1.4 6.0 2.6 1.9 8.6 0.6 11.1 j� o➢�; ai ij ∎!,_H O 25.0 20.0 15.0 10.0 5.0 2013 2014 Networks 15 ■ Retail ■ Delivery Routes & Mode ■ 5 -Day Delivery • Workforce & Non - Personnel RHB pre fund Ing. Postal Health Plan PERS & Other 2016 2017 (1) Includes $6B estimated refund of FERS overfunding. 17 April 16, 2013 UNI TER STATES POSTAII SERVICE Savings - Operational Initiatives $ in Billions dki oin}= iilicik1:ion, ,,,,,Y4,1,1!4„i:(6I Networks (Consolidations in '13 -'14) Retail (Post Plan + Workload) Delive 0 •timization 'x+ \SAY ®rtOl jf(•,11. 1.1 0.9 0.7 2.4 1.2 1.0 2.9 1.5 1.1 3.1 1.5 1.4 3.4 1.6 1.8 12.9 6.7 6.0 �-� Networks Retail Delivery A= Actual • In Summer 2012, adopted two -phase approach to approx. 200 mail processing consolidations. Phase I in Summer 2012 to Spring 2013. Phase 2 in Spring 2014. • In 2012 and 2013, approximately 22,500 employees represented by the APWU and 2,925 Mailhandlers accepted incentives to retire or resign. • In 2013, Plan was revised to accelerate portions of Phase 2 Consolidations to June- Sept '13, without impacting service standard. • PostPlan reduces hours in 13,000 Post Offices (2-4 -6 hrs /day) in 2013 and 2014. Replaces Postmasters in small offices with non - career employees. • 4,275 Postmasters accepted buy -outs in Aug 2012. Remaining savings begin in 2014 when 2 -year saved Postmaster pay expires. • Self- Service Expansion — Deployed 264 self - service kiosks to 132 Post Offices in 5 markets. • Transaction shift to alternate access to create a decrease in Post Office workload • Delivery Unit Optimization plan consolidates 1,500 delivery (non - retail) offices by 2015. • Expand centralized delivery for both business and residential deliveries. • • April 16, 2013 • 18 • POSTAL SERV CE U TE S ES Strategic Initiative: Network Consolidations 1consolidate Exces O 417 processing facility network handle 250 billion phicespm_01 Cit O Current and projected volumes oaf! for network of <250 facilities O 2012 Plan assumed all consolidations & service standard changes in 2012. 0 In Summer 2012, adopted tvvo-phase approach in order to allow Congtetl• sufficient time to pass comprehensive Postal Reform legislation. CI Phase 1 - Summer 2012 - Spring 2013. CI Phase 2 - Spring 2014. _ 0 Accelerating portions of Phase 2 Consolidations to June-Sept '13 without impacting service standard. ....,, 0 $3.4 billion savings achieved in 2017, includirig workload effects. t(0) VI 1 (11111f/ I a.'‘ • • <+•; - ' . • • . • , -1 • • • • • . -4* , • . ••• • . • • .%;:. .-e-• • ••':-.:41 • • 7. . • • •• •• '•4'.■.4. • .;0111'.' • • • .• • r— • • • • • . • , • \ • • • • • „ "1..• .>r• ,....., • •.,„ • • • •. • •• • • • • , LA! ••„_,' • • • • • • • . e ' 4 • • • • . • • • • • 4 • • • • • • • t - • • • • '-. ...; • • ,• ; . • • '• - • t...... 4.. 1, r • • '... • ' . • ''-' •., .• • tS ta, f . 4 lk 11 -:14104n1-: 4,4:(0 `,41,•=irt'A*,94t.r,c -ii.ht;i10) I , ' • • •• • • .• • Apri116, 2013 19 UNITED STATES POSTAL S£RV /CE Strategic Initiatives: Retail Retail Channel Strategies • Transform customer experience in high traffic. Post__ Offices by_in_creasing__ __ the availability of self service • Enhance customer experience through expanded retail-partnerships • Preserve retail service in rur America by modifying window °service hours to match the local customer demand and establishing Village Post Offices with local businesses to provide postal services where customers shop Workload Impact of Reduced Volumes $ 1.0 PostPlan 0.6 Total Retail Savings $ 1.6 Volume decline of 21 billion pieces by 2017 reduces retail workload IP • Increase adoption of self service at high traffic offices from 28% to 65% • Shifting transactions to alternative access • Increase alternate access retail revenue from 40% to 60% • Implement non - career staffing at 13,000 small Post Offices (level 16 and below) • Phase in 2-4 -6 hour operations throughout 2013 and 2014 • April 16, 2013 •20 UNITED STATES POSTAL SERVICE Strategic Initiatives: Delivery Centralized Deliv ❑ Savings of $65 per year for each delivery- converted`from curb to central Savings of $190 per year for each delivery' converted from door to central CI Savings will more than cover the costs associated with centralized delivery boxes: •. Purchase cost: • Installatiot cost •{ Maintenance cost 0 New delivery points -centralized .n∎ Workload Impact of Reduced Volumes Delivery Optimization Total Delivery Savings $ 0.8 1.0 $ 1.8 1:4 d :Workl;oadYReducti�, • Volume'declire of 1 billion pieces by 2017 -. • Delivery Workload-reduction by 2017 of • $0.8 billion Delivery Optimization Savings: • Delivery Unit Optimization (consolidations) approx 1)500 planned by 2015 • Route Optimizations continue April 16, 2013 21 UNITED sri]rEs POST/IL SERWEE Savings - Workforce and Non - Personnel Initiatives $ in Billions 1°Ay Ori ris L k eiri fil- 'il�tb��l {:��fc Wage Restraint + Flexibility (3 unions) Interest Savin•s • odnic 11(0 ...0 �'�df,�'•J�eA 0.7 1.5 1.7 1.8 1.8 0.1 0.1 0.8 2.5 (� 7.5 3.5 �f w (dir ;'Ti Wage Restraint + Flexibility Interest Savings A= Actual • Arbitrations with remaining 3 major unions completed in 2013 (City and Rural Carriers and Mail Handlers). • Arbitrated contracts follow similar pattern to the 2011 APWU contract, with two year pay and COLA freezes (back -dated to end of last contract), followed by modest general pay increases and resumption of COLAs. • Pay increases and COLA for APWU and NRLCA begin in 2013. Pay increases and COLA for NALC and NPMHU begin in 2014. • Savings associated with standards changes included in NRLCA contract are still being evaluated and thus are not included above. • Contracts with NALC and MH include provisions increasing the proportion of non - career employees to approx. 20 %. • Contracts for APWU and NRLCA expire in 2015. Contracts with NALC and NPMHU expire in 2016. • Freezes on non - bargaining pay increases have been in effect since Jan 2011. • Higher interest savings in 2016 and 2017 due to higher projected interest rates and growing debt (up to $82 billion in 2017) in the base case. • 22 April 16, 2013 UNITED STATES POSTAL SERVICE Savings - Legislative Initiatives $ in Billions fl ilil1II f�Ye 5 -Day Mail Delivery + Saturday Pkgs (Jan 2014) Resolve RHB prefunding (Postal Health Plan Beginning 2015) Postal Health Plan - Actives' Premium Reductions Postal Health Plan - RHB: Normal Cost vs Retiree Premiums FERS Surplus Refunded FERS - Reduce Biweekly Contribution Percentage New Career Employee - Defined Contribution Pension Only Workers' Compensation Reform (Equivalent to S. 1789) Non - Postal Products and Services ft:.111"X: 51 t( 1 t 1.3 1.9 5.6 5.7 5.7 0.2 2.1 1.9 5.8 0.4 2.4 6.0 0.2 0.3 0.3 0.3 0.1 0.1 0.1 II if 0.1 4fial,bl, 1.9 0.4 3.1 0:3 0.1 0.1 0.2 !f, 7.0 22.8 1.0 7.6 6.0 1.4 0.2 0.2 0.4 A= Actual Delivery Schedule RHB Prefunding Postal Health Plan (Active Employees) Postal Health Plan (Retirees) FERS Refund & Biweekly Contribution Percentages New Career Employee Workers' Comp Reform Non - Postal Products & Services April 16, 2013 23 • 6 -day package delivery and 5 -day mail delivery begins in Jan 2014. • Reduced workload from 5 -day mail delivery. Noncareer flexibility used for Saturday packages and retirees beginning • Requesting Congress to require Postal Health Plan for both active employees January 2015. • Eliminates need for prefunding in 2013 and beyond. • Requires union agreement under current law. • Requestin9 Congress to require Postal Health Plan, beginning January 2015. (pay -as- you -go) through • Market Postal Health Plan to retirees while continuing to pay FEHBP premiums 2014. • Requesting Congress to require Postal Health Plan for retirees, beginning January 2015. • Postal Health Plan will reduce costs, providing for a fully funded RHB, therefore only paying annual "normal cost" in 2015 and beyond. increases and demographics), versus • Estimated values using Postal- specific assumptions (primarily pay the government -wide assumptions currently used by OPM. • Savings from changing from defined benefit pension to defined contribution plan (TSP) for employees hired beginning in 2015. • Savings don't begin until 2016 because of minimal number of new hires. 2012. • Assumes enactment of reforms from Senate Bill passed in April services on behalf of federal • Includes estimated financial benefit of shipping beer and wine and providing and local government agencies. April 16, 2013 23 4)/ (MITER STATES POSTAL SERVICE Key Legislative Goals To Regain Financial Self- Sufficiency ❑ Require USPS Health Care Plan ❑ Resolves RHB Prefundin g Issue ❑ Refund FERS Overpayment ❑ Adjust Delivery Frequency (6 -Day Packages, 5 -Day Mail) ❑ Streamline Governance Model ❑ Authority to Expand Products and Services ❑ Require Defined Contribution System for Future Postal Employees ❑ Instructions to Arbitrator ❑ Reform Workers' Compensation ❑ Right to Appeal EEOC Class Action Decisions April 16, 2013 26 31 UNITED STATES POSTAL SERVICE 2013 Business Plan Financial Projections ($ in billions) Total Revenue O•eratin• E i•enses Before Initiatives (1) O • eratin • Income Before Initiatives (1) RHB Pre Fundin• I��ia'114floCI0,,101 ti /CL(a ): 1.(1 Operational Initiatives Workforce + Non - Personnel Initiatives (2) Le.islative Initiatives �iiA4 fi. `010k1rnini 'i�itE Restructuring /Separation Costs Xo kC:1Ma� tik �_� �t 2 or,iI /.\ jaolil j $ 64.9 $ 64.8 $ 64.6 $ 64.9 $ 64.6 69.9 71.8 73.8 76.2 81.2 /A0)11('.1 Revised Operating Expenses(1) 2.7 0.7 11.8 5.7 5.7 • 4.6 1.6 7.3 (0.3) (0.5 5.5 1.8 10.3 6.0 2.6 11.1 6.8 4.3 6.1 60.6 64.5 61.9 62.3 64.0 (1) Excludes non -cash adjustments to workers' compensation. (2) Effect of contract negotiations, workforce flexibility, non- personnel initiatives and interest. A= Actual April 16, 2013 27 UM TEO STATES POSTAL SERVICE Strategic Initiative: 6-Day Package Delivery / 5 -Day Mail Delivery Saturday Package Delivery 0 Continue Saturday package delivery, which is a competitive advantage • Supports on -line purchases • Continues 6 -day delivery of commercial packages, such as prescription medicines ❑ Eliminates mail delivery on Saturday, which is generally the lowest volume day • Many businesses are closed Saturdays ❑ Does not affect service to PO Boxes ❑ Post Offices with Saturday hours will remain open ❑ -$2 billion annual savings Irkuio ikE ,4t)1014 0) (1; l 16l( I ;•it',VX \ 1')4 =1\vj li `'Ir'd11.: % Favorable Volume (billions) 3.5 2010 2011 2012 April 16, 201 24 UNITED STATES POSTAL SERVICE USPS Health Plan Generates Significant Savings L1 U11F1f( ?lhfig, (''(� ;i(i�1KQ)Iill ❑ Postal Service does not control its health care benefit program ❑ Current federal programs exceed the private sector comparability standard in terms of cost and coverage ❑ Current programs do not align benefit value with cost or reflect USPS demographics ❑ Retiree Health Benefit obligation of $94B, of which $46B (49 %) was funded (as of Sept 2012) ❑ Three distinct categories of participants — annuitants, current employees and new hires ❑ Tiered program appropriate to the varying coverage needs of participants ❑ Adopt best practices in private sector — pharmacy benefit management, wellness incentives, etc. ❑ Maintain benefit choices with consistent alignment between value and cost ❑ Simplify plan structure and self insure ❑ Establish incentives for Medicare - eligible retirees to fully participate in Medicare benefits ❑ Result: -$8B of annual cost savings through 2016 April 16, 2013 25 UNITED STATES POSTAL SERVICE Strategic Initiatives will Reduce Workload and Staffing Needs FTE / Career Headcount (thousands) The Postal Service anticipates a reduction of -146K Career and Non - Career Full- Time- Equivalent Employees (FTE's) by 2017 528 • 2012 (14) 608 (10) (57) 541 (8) (11) 522 (2) (16) • Strategic Initiative Impact • Workload Impact • FTE 504 (7) (10) 487 • 28 April 16, 2014 UNITED STATES POSTAL SERVICE Financial Projections after Strategic Initiatives Achieved Achieving the Business Plan will produce reasonable profits that:. will_ allow: for debt repayment. This requires full realization of all the Strategic Initiatives. 10 5 • 0 (5) (10) (15) (20) $4.3 $0.3 $2.7 $2.6 UU: Without initiative impacts Average annual net losses (1) of $14B -$15.9 0 2012 2013 2014 2015 2016 2017 (1) Excludes impacts of non -cash adjustments (if any) to workers' compensation liability in 2013 - 2017. 10 5 - 'n911'6)111 Without initiative impacts 2017 Debt of $82B (5) - (10) - (15) -$6.7 -$7.4 -$12.9 -$4.2 • -$1.4 -$0.5 2012 2013 2014 2015 2016 2017 April 16, 2013 29 UNITED SATES POSTAL .SERVICE Revenue Growth Initiatives Will Accompany Cost & Efficiency Improvements p Y ;e Mail Mobile on mail £#fat Vfail with Audio/ $ rs copy-to- o tal Website Social media v Purchase poii Produc 's current technkology and data in ways that help better support the mailing industry and rican public April 16, 2013 30 UNITED SUITES POSTAL SERVICE Revenue & Volume Forecasts 70 60 50 0 40 30 20 10 0 2012 2013 2014 2015 2016 2017 • First -Class Periodicals • International • Standard • Shipping & Packages • Other 180 160 140 120 y C 100 c 80 d 60 40 20 0 2012 2013 2014 2015 2016 2017 • First -Class Periodicals • International • Standard • Shipping & Packages • Other April 16, 2013 31 UNITE° STATES POSTAL SERVICE Analysis of Revenue & Volume Forecasts Standard (Mail • Volumes an revenues projected to remain`relativefy flat through 2017, as the=advertising: market remains highly competitive ake up' revenue, comj % 1 eriodicala olurnes and revenue continue to slowly decline International • Revenues are projected to grow modestly on slightly decreasing volume, consistent with historical and societal trends • • • April 16, 2013 32 UNITED STATES POSTAL SERVICE Sensitivity Analysis / Risks ❑ Legislative reform must be enacted ❑ Require Postal Health Plan for employees and retirees ❑ Without legislative reform, debt would need to climb to $58 billion in 2017 ❑ Risk of less - than - optimal legislation ❑ Economic risk — further economic slowdown or recession could worsen electronic diversion of First -Class Mail and slow growth of Standard Mail and Packages ❑ Further delays in implementing all elements of the Plan have cumulative financial effects 33 April 16, 2013 UNITED STATES POSTAL SERVICE Losses Continue Without Legislation Debt Continues to Grow Revenue & Expense Assumes all Postal Service Initiatives, but does not include any legislation. 85 70 80 75 70 - 65 60 2007 $ Billions S 2008 2009 2010 2011 2012 2013 2014 2015 No Net Debt -111-Revenues -.- Expenses • 2016 2017 April 16, 201 34 UNITED STATES POSTAL SERVICE Forecast Sensitivy to Mail Volume Changes $70.0 $68.0 $66.0 $64.0 $62.0 $60.0 $58.0 $56.0 41\y 1l u K ` ((` > iLLil i 110 ll l I KO)I ii tz )j $67.8 $64.6 $61.4 $58.1 2012 2013 2014 2015 2016 2017 $10.0 $5.0 - $- $10bn variability $(5.0) z (c (01 ro(0 )1 fi fl N lc( `°X 0 -11t i1 \YA f. / If economic conditions or electronic diversion changes so that annual mail volume increases by 5 %, then net income and cash are positively impacted • In comparison, the 2007 — 2009 recession resulted in a reduction of approx. 10% of revenue, which is consistent with the purple line in each graph. • For declines in mail volume due to economic conditions or accelerated electronic diversion, only 1/2 of workload effects are captured. This is due to the aggressive Plan and continued large cost reductions. The result is annual net losses and increasing debt. Volume 5% Higher LISPS Plan $(10.0) $(15.0) $10.0 $- $(10.0) $(20.0) $(30.0) $(40.0) I 2012 2013 2014 2015 2016 2017 $6bn variability lir— $38bn variability 2012 2013 2014 2015 2016 2017 Volume 5% Lower Volume 10% Lower April 16, 2013 35 UNITED STATES POSTi]L SERVICE All Elements of Plan Must be Implemented to Provide for Long -Term Financial Stability 0 The challenges facing USPS are both economic and structural • Decline of high contribution First -Class Mail • Inflexible business model, including high -cost retirement and health benefits programs ❑ The Postal Service's 5 -Year Plan • Continue to generate new revenues, particularly in the Package business where our delivery network and schedule are a competitive advantage • Re- structure the USPS network • Achieve requisite legislative changes • Adopt the USPS healthcare program for employees and retirees • Implement 6 -days- per -week package delivery schedule and 5- days - per -week mail delivery ❑ The Plan enables the USPS and all of its stakeholders to: • Preserve the Postal Service's mission to provide secure, reliable and affordable universal delivery service • Make the Postal Service economically self - sustaining ❑ Successful restoration of Postal Service financial stability requires implementation of ALL aspects of the Plan April 16, 2013 36 — F •aVaa +VV, a avtAA,L1vG L llveilants, ana sate of Historic Post Offices - Preservation Leade... Page 1 of 4 Preservation Leadership Forum Blog • Insights and Information for Preservation Professionals HOME ADVOCACY LEGAL SUSTAINABILITY WHY DO OLD PLACES Section 106, Protective Covenants, and Sale of Historic Post Offices Posted on: February 10th, 2015 by Special Contributor ' 1 Comment By Steve Hutkins In her introduction to the 2012 Forum Journal on Section 106, National Trust president Stephanie Meeks notes that Section 106 requires federal agencies to "stop, look and listen" before jeopardizing historic resources. This valuable tool has saved thousands of historic sites across the country. But it only works as long as all players— preservationists and federal agencies — clearly understand Section 106 and their role in the process. As we approach the 50 -year mark of the enactment of the National Historic Preservation Act and Section sob, the Preservation Leadership Forum has enlisted the help of preservation practitioners to take a close look at how Section 106 has worked over the past five decades. Here Steve Hutkins, professor at New York University and editor of "Save the Post Office" website, talks about recent problems with the disposal of historic post offices and the use of covenants and Section 106 to protect these buildings. About six years ago, the Postal Service embarked on a program to downsize its real estate portfolio, and among the properties earmarked for disposal were many historic post offices. About so historic post offices have been Orsold since 2009, and another 5o have been eviewed, marked, or listed for sale. This disposal program instigated a wave of Section 106 reviews, and by 2012 the federal preservation officer at the Postal Service was dealing with more than 70 Section 106 consultation processes. The colonnade of the downtown Berkeley post office. I Credit: Daniel Parks via Fliekr under Creative Commons Many communities and organizations have contested the disposal program, and four of the sales —in Venice, California; Stamford, Connecticut; Bronx, New York; and Berkeley, California —have been challenged in the courts. The sales have also been the subject of two very critical reports by the LISPS Office of Inspector General and the Advisory Council on Historic Preservation. One of the points of criticisms has been that the Postal Service is not doing a satisfactory job maintaining an inventory of its historic properties and identifying which of them might be nominated to the National Register of Historic Places, as required by Section no of the NHPA. The Postal Service does not even have an accurate list of active post offices on the National Register. In a 2011 report to the Advisory Council, the Postal Service indicated that 523 post offices are listed on the National Register, but a 2014 addendum to the same report said that 61 properties are on the National Register. There are probably at least 500 active post offices on the National Register, and perhaps 2,000 others are eligible. Section 1o6 and Historic Post Offices Section 106 states that transferring a property out of federal ownership without "adequate and legally enforceable restrictions" that will ensure "the long -term preservation of the property's historic significance" constitutes an adverse effect. In order to protect a property after it leaves federal hands, the Postal Service typically establishes a preservation covenant that identifies which features of the building are historic and sets forth what needs to be done to preserve them. • Covenants are recorded as part of the deed, and they hind future owners to protect the historic haracter of the property. DC 2015 ABOUT Preservation Leadership Forum JOIN Become a Preservation Leadership Forum Member LOGIN Already a member? Login to Access Your Full Benefits NOY3 -6 WASNIN6i0N,DC PkST FOR 4R0 A CONFERENCE OF THE NATIONAL TRUST FOR HISTORIC PRESERVATION REGISTER! Search Categories Categories Select Category Archives Archives Select Month v Recent Posts Art and Shadows: A Fresh Perspective at Shadows on the Teche Living with Success Revisited: Summit on Heritage Tourism in our Nation's Most Beloved Historic Cities Earl San Francisco Parking Garages http:// blog. preservationleadershipforum .org/ 2015/ 02/ 10/ protective- envennt,k_>, ;c1m4,_,,,,�* Q/11p1A, VW, • avIA-A.1./. vG wvcllQiLIS ana Jaie of Historic Post Offices - Preservation Leade... Page 2 of 4 In order to ensure that they are enforced, the covenant is a property right that is gifted to an agency or organization willing and able to accept it, such as the state historic preservation office (SHPO), a Certified Local Government (CLG), or a private preservation organization. Since the grantee is typically required to monitor the covenant in perpetuity, it can be difficult to find someone willing to take on what can be a costly burden. The Postal Service has typically viewed the attachment of a preservation covenant as a method to avoid the "adverse effect" that would result from the sale of the property. However, if there are issues with the covenant and adverse effects would remain despite the covenant being executed, the Postal Service can execute a Memorandum of Agreement (MOA). The MOA offers a greater opportunity for consulting parties to determine the appropriate steps for avoiding, minimizing and mitigating adverse effects that result from the sale of the property. A covenant, for instance, can be a condition of an MOA, but the agreement may also contain other stipulations binding on USPS to assure the consequences of its move from a historic building are taken into account. Exterior of the Venice, California, Post Office I Credit: Michael Doi n,sch on Flickr via Creative Commons MOAs are also useful when the Postal Service seeks to sell a post office that contains New Deal -era murals and other art works, which it is prohibited from selling. In these cases the Postal Service can use the consultation process to determine the terms of a loan agreement for art to the new owner of the building. The MOA process can help set forth the owner's responsibilities about preserving the art, providing continued access to the public, limiting access to photographers who might make commercial use of images, and so on. Problems with MOM and Protective Covenants As the Postal Service has increased its disposal program over the past few years. these protective covenants and MOAs have come under scrutiny and become the source of considerable controversy. One issue is how long the covenant or MOA remains in effect. In Santa Monica, California, for example, the Postal Service sold a New Deal -era post office to a film production company. in its report to Congress, Preserving fl istoric Post Offices, the ACHP noted that in December 2013 it had sent a letter to the Postal Service stating that the covenant was insufficient and jeopardized the long -term protection of the property's historic significance because it included a clause that allowed the city, following public notice, to modify or cancel covenant restrictions. Preserving Historic osr Offices: Another recurring issue has been public access to the art within the building. As the New York Times noted in a 2013 article about the disposal controversy, when the Postal Service sold the historic post office in Venice, California, to film producer Joel Silver (to be turned into his studio offices), the USPS negotiated a loan agreement which stipulated that the mural— "Story of Venice," by Edward Bibennan —could be publicly viewed just six times a year and by appointment only. Because the LISPS concluded that no adverse effect was caused by the sale of the building, the terms of the agreement were negotiated without review by consulting parties. The typical boilerplate USPS offers regarding public access to murals is only a little better just one day per month. That's the case with the Loan Agreement for the Bronx General Post Office in New York, home to several outstanding murals by Ben Shahn. The good news is that the new owner plans to turn the building into a food market, so the public should be able to enjoy the murals. The Berkeley, California, Post Office Another recurring issue with the sales has been finding an appropriate agency or government entity to serve as the covenant holder. This problem has been particularly acute in Mapping the Risk of Sea Level Rise Summer 2015 Forum Journal: High Water and High Stakes Links to Preservation American Institute of Architects American Planning Association: Recovery News American Planning Association: Sustaining Places Citylab History(ivWork Next City NRDC Switchboard: Kaid Benfield Rootlines: The Shelter Force Blog Smart Growth America Sustainable Cities Collective The Dirt (American Society of Landscape Architects) The Field (American Society of Landscape Architects) Treehugger Urban Green Council Urban Land Online (Urban Land Institute) The Fine Print While the writers of the Preservation Leadership Forum blog are on staff at the National Trust for Historic Preservation or affiliated organizations, their posts are their own, and do not necessarily reflect the views and opinions of the National Trust for Historic Preservation. http: // blog. preservationleadershipforum .org /2015/02/ 10 /protective- covenants -h i stori a -nnet flA • Section 106, Protective Covenants, and Sale of Historic Post Offices - Preservation Leade... Page 3 of 4 California, where several historic post offices have been put on the market and the SHPO has been reluctant to take on the burden. • As it prepared to sell the historic post office in Berkeley this past October, the Postal Service was unable to find a covenant holder that it found satisfactory. Since the SHPO did not have the resources, the City of Berkeley offered to hold the covenant, but only if the Postal Service would commit to maintaining a post office within the building for 5o years —a condition the Postal Service found unacceptable. The National Trust also offered to take on the covenant, but, as is standard practice, it wanted to be paid a fee to cover the costs of monitoring and enforcing the agreement over a long period of time, which can be formidable. Exterior of the Berkeley Post O ice. l Credit: Wayne Hseih via Flickr and Creative Commons. The Postal Service would not agree to the conditions required by the City or the Trust. Instead, with the sale of the post office "in contract," the Postal Service determined that it would serve as the covenant holder itself. Reid Nelson, director of the ACHP Office of Federal Agency Programs, then wrote a letter to the Postal Service saying that such a covenant would not ensure the long -term preservation of the property because it gave the Postal Service "unfettered authority to approve adverse effects to the property (including demolition)." The ACHP also noted that the Postal Service "had neither demonstrated experience in holding preservation covenants nor an apparent interest in the long- term preservation of the property." The federal preservation officer of the Postal Service, Daniel B. Delahaye, responded with a letter expressing his disagreement with the ACHP's opinion, reaffirming the Postal Service's finding of "no adverse effect," and closing the Section 106 process. The issue is now the basis of one of the counts • in a lawsuit brought by the National Trust and the City of Berkeley against the Postal Service over the Berkeley sale. • It seemed at the time that the Berkeley case might be unique, but the Postal Service recently decided that it would also serve as the covenant holder for the Old Chelsea post office in Manhattan. where the Postal Service wants to sell the air rights over the building to a developer for an apartment building. As with Berkeley, the ACHP informed the Postal Service that such a covenant did not support a finding of no adverse effect. A Programmatic Alternative In order to avoid such problems, the ACHP and the National Trust have asked the Postal Service to work out a programmatic agreement that would cover the key aspects of the disposal program— initiating the .ro6 process, drafting the covenants, securing covenant holders, and reviewing consulting party requests from the public to participate in the preservation process. The National Trust has also offered to serve as the covenant holder for a number of covenants, providing the Postal Service pays a fee for the service. Exterior of the Stamford Post Office on Atlantic Avenue Credit: Dennis Griggs /Tannery Hill Such a program agreement was also the recommendation of the USPS Office of Inspector General in its audit report, as well as URS, Inc., a private consulting firm hired by the Postal Service to do a report on historic post offices. The Postal Service has rejected the idea. In a letter responding to the ACHP Report to Congress. Tom Samra, USPS vice president of facilities, wrote that given the current volume of disposals, the sales "do not warrant a programmatic approach." Samra took issue with nearly all of the criticisms and recommendations in the ACHP report and defended the sales for the way they "revitalize communities and protect the historic properties from deterioration and loss." htfn .//h1 no 111e ery mtinn1Pa�Prcliir'fnnim nrtr /')fll S /Al I1 AIrrntsr,tl..o_.....) "VI n,r.t, l..: ev +....:....,...t 11VVl1�/tt ivy, A iu«y,uvc wvenants, and Sale of Historic Post Offices - Preservation Leade... Page 4 of 4 At this point, it appears that conflicts over the covenants and MOM will continue, and the sale of historic post offices will remain a source of controversy. Editor's Note: For more information about the National Trust for Historic Preservation's involvement with saving historic post office buildings visit www.savingplaces.org. Want more? Read the fill Section 106 series and the series on Section to of National Historic Preservation Act on this page. Steve Hutkins is a literature professor at the Gallatin School of New York University, where he teaches courses on travel writing, the literature of the 1y3os, and "a sense of place." He founded Savethepostoffice.com in April 2011, when he became concerned about post office closings and the sale of New Deal post offices. Legal, National Treasure One Response Yuqi February 16, 2015 Maybe it will be helpful to combine this type of covenant with some incentive programs such as federal /state historic preservation tax credit. Then, maybe buyer/ developer/ lender who gets the tax credit can be required to bear the burden of paying for the cost of guaranteeing the preservation covenant. ADVERTISEMENT Copyright National Trust for Historic Preservation O http: // blog. preservationleadershipforum .org / 2015 /02/10 /protective- covenants- hictnrie-nnct R /1' »n1 c • • Advisory Council Recommends Major Changes to Disposition of Historic Post Offices - ... Page 1 of 3 4110 Preservation Leadership Forum Blog Insights and Information for Preservation Professionals • HOME ADVOCACY LEGAL SUSTAINABILITY WHY DO OLD PLACES DC 2015 ABOUT Advisory Council Recommends Major Changes to Disposition of Historic Post Offices Posted on: April 21st, 2014 by Chris Morris Since listing Historic Post Offices as one of the National Trust's 11 Most Endangered Places in 2012, we have been arguing loudly and consistently that the U.S. Postal Service's (USPS) process for closing and selling its historic buildings is deeply flawed, lacking in public participation, and not in compliance with Section 106 of the National Historic Preservation Act. Many citizens, community activists, and elected officials also have expressed their frustration with the Postal Service and its unwillingness to listen to local concerns or consider any alternatives that would keep these cherished buildings open and accessible to the public. While we have catalogued the problems, provided reams of comments to the Postal Service, and suggested many ways in which we could collaborate on solutions that would protect and preserve historic post offices, those comments have largely fallen on deaf ears at USPS. But the thousands of people across the country worried about the fate of their local post office got a huge boost Last week, when the Advisory Council on Historic Preservation released its report "Preserving Historic Post Offices: A Report to Congress." Preserving Historic Posr Offices: A Report ro Congress Commissioned by Congress as part of the last appropriations bill and written by a subcommittee composed of Advisory Council members and staff, the report evaluates the numerous failings in the Postal Service's disposition of historic post office buildings and makes a series of 15 recommendations for how the process can and should be improved. It includes the following key recommendations: • initiating Section 106 consultation as soon as the Postal Service considers closure or relocation, rather than waiting until a decision to sell has already been made; • working with the National Trust, the Advisory Council and others to develop a model covenant that will adequately protect historic post offices transitioning into new ownership; • providing training for Postal Service employees on Section 1o6 and the special considerations of selling historic post offices; • maintaining ownership of post offices and exploring the potential of leasing them to new users in accordance with Section 111 of the National Historic Preservation Act; and, most importantly, suspending any further sales or relocations until the Postal Service fully implements all the recommendations in the report. While many other groups have publicly criticized the Postal Service over the last few years and demanded change, the Advisory Council report represents a definitive guide that contains clear instructions on how best to conduct the relocation and sale of historic Postal Service properties, "so that future disposals are better informed by sound Preservation Leadership Forum JOIN Become a Preservation Leadership Forum Member LOGIN Already a member? Login to Access Your Full Benefits NOV3 -6 WASHINGTON, DC PkST FORI RD A CONFERENCE OF THE NATIONAL TROST FOR HISTORIC PRESERVATION REGISTER! Search Categories Categories Select Category Archives Archives Select Month v Recent Posts Art and Shadows: A Fresh Perspective at Shadows on the Teche Living with Success Revisited: Summit on Heritage Tourism in our Nation's Most Beloved Historic Cities Early San Francisco Parking Garages lhttn• //lhlna r►rPCPrvatinnlparierchinfnnim nra/7f1141(14/71 /aehn- hictnri[ - nnct- nffinec/ R/17/2015 Advisory Council Recommends Major Changes to Disposition of Historic Post Offices - ... Page 2 of 3 planning and meaningful consultation with communiti es and stakeholders." A similar report from the Postal Services' Office of the Inspector General is expected to be released at the end of April, which we believe will only reinforce the Advisory Council's recommendations and strengthen the call for reform. It is our hope that Congress —which requested the Advisory Council report—will soon take action and demand USPS adopt new and improved procedures that will finally allow the public to play an important role in determining the fate of their local post offices. Learn about other Post Offices: Lr Berkeley, Calif., signs of prott over privatizing the post office are displayed. 1 Credit: Steve Rhodes, Flickr City Unites to Save Berkeley's Post Office Citizens Fight for the Northfield Post Office in Minnesota Putting a Stamp on History at the Bronx General Post Office La Jolla Community Continues Fight for Historic Post Office About Chris Morris Chris Morris is the field director in the Los Angeles Field Office of the National Trust for Historic Preservation. More Posts (2) Advocacy, National Treasure Mapping the Risk of Sea Level Rise Summer 2015 Forum Journal: High Water and High Stakes Links to Preservation American Institute of Architects American Plaiting Association: Recovery News American Planning Association: Sustaining Places CitvIab History k Work Next City NRDC Switchboard: Raid Benfield Rootlines: The Shelter Force Blog Smart Growth America Sustainable Cities Collective The Dirt (American Society of Landscape Architects) The Field (American Society of Landscape Architects) Treebugger Urban Green Council Urban land Online (Urban Land Institute) The Fine Print While the writers of the Preservation Leadership Formn blog are on staff at the National Trust for Historic Preservation or affiliated organizations, their posts are their own, and do not necessarily reflect the views and opinions of the National Trust for Ilistoric Preservation. ADVERTISEMENT Get a $100 cash rewards bonus offer with the only National Trust for Historic Preservation credit card httny// h1no .nrescrvatinnleadershinfnnlm Ara /2014/04/71 /athn- hi ctnrin- nnct- nfficPC/ R/17/7015 Havisory Louncii recommends Major Changes to Disposition of Historic Post Offices - ... Page 3 of 3 Tho Proconmtinn 1 oa,lorchin Von im of tha. Nntinnal'1'ri for Flictnrir Procprvntinn is 1 not-work of nroconintinn Ioa,lore — nrnfoccinnalc ctuiiontc vnlnntonrc 4111 Copyright National Trust for Historic Preservation • http: // blog. preservationleadershipforum .ora /2014/04/21 /ache- historic -host- offices/ R/12/2015 t Preserving Historic Post Offices: A Report to Congress ABOUT THE ACHP The Advisory Council on Historic Preservation (ACHP) is an independent federal agency that promotes the preservation, enhancement, and sustainable use of our nation's diverse historic resources and advises the President and Congress on national historic preservation policy. The ACHP also provides a forum for influencing federal activities, programs, and policies that affect historic properties. In addition, the ACHP has a key role in carrying out the Preserve America program. Milford Wayne Donaldson, FAIA, of Sacramento, California, is chairman of the 23- member ACHP, served by a professional staff in Washington, D.C. For more information about the ACHP, contact: Advisory Council on Historic Preservation 1100 Pennsylvania Avenue, NW, Suite 803 Washington, DC 20004 Phone: 202-606-8503 Fax: 202-606-8647 Web sites: www.achp.gov www.preserveamerica.gov » Front cover: Spanish Colonial Revival, I 930s, Redlands, California, (Wikipedia); "The FurTraders," Elizabeth Lochrie, 1938, St. Anthony, Idaho (National Postal Museum /Smithsonian Institution); Art Deco, 1935, Milton, Pennsylvania (Evan Kalish); Colonial Revival, 1938, Lakewood, New Jersey (The Lakewood Scoop); retail counter, Bronx, New York (USPS) » Back cover: postboxes at Old Post Office and Courthouse, Little Rock, Arkansas (Carol M. Highsmith, Inc./ GSA); cancelled stamp (iStockphoto) » WASHINGTON, D.C. OLD POST OFFICE BUILDING, ACHP HEADQUARTERS ROMANESQUE REVIVAL, 1892 • TABLE OF CONTENTS 1 ACKNOWLEDGEMENTS 2 ACRONYMS AND ABBREVIATIONS 3 CHAIRMAN'S MESSAGE 5 EXECUTIVE SUMMARY 8 INTRODUCTION 13 USPS HISTORIC PROPERTIES 19 USPS HISTORIC PRESERVATION AND DISPOSAL PROGRAMS 26 USPS COMPLIANCE WITH SECTION 106 28 ISSUES IN THE SECTION 106 REVIEW OF DISPOSAL OF HISTORIC POSTAL FACILITIES 39 FINDINGS AND RECOMMENDATIONS FOR USPS PROGRAM IMPROVEMENTS 47 SOURCES ACKNOWLEDGEMENTS The Advisory Council on Historic Preservation wishes to extend its appreciation and thanks to the following individuals and organizations for their time and contributions to this report: USPS REPORT PANEL Milford Wayne Donaldson, FAIA, ACHP Chairman Teresa Isabel Leger de Fernandez, Citizen Member Stephen T. Ayers, Architect of the Capitol Beth L. Savage, General Services Administration Elizabeth Hughes, National Conference of State Historic Preservation Officers ADVISORY COUNCIL ON HISTORIC PRESERVATION John M. Fowler, Executive Director Reid J. Nelson, Director, Office of Federal Agency Programs Caroline D. Hall, Assistant Director, Office of Federal Agency Programs (report author) Najah Duvall - Gabriel, Historic Preservation Specialist Kirsten Kulis, Program Analyst, GSA Liaison Susan Glimcher, Director, Office of Communications, Education, and Outreach Shayla Shrieves, Senior Writer- Editor PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS I I • • ACRONYMS AND ABBREVIATIONS ACHP Advisory Council on Historic Preservation CATEX Categorical Exclusion under the National Environmental Policy Act CEQ White House Council on Environmental Quality CLG Certified Local Government CFR Code of Federal Regulations CRP Community Relations Program eFMS USPS Electronic Facilities Management System EO Executive Order FPO Federal Preservation Officer FR Federal Register FSO Facility Service Office GAO Government Accountability Office GSA General Services Administration HPC Historic Preservation Coordinator MOA Memorandum of Agreement NCSHPO National Conference of State Historic Preservation Officers NEPA National Environmental Policy Act NHPA National Historic Preservation Act of 1966 NPS National Park Service NRHP National Register of Historic Places NRIS National Register Information System NTHP National Trust for Historic Preservation OIG USPS Office of Inspector General PA Programmatic Agreement Section 106 Section 106 of the National Historic Preservation Act of 1966 Section 110 Section 110 of the National Historic Preservation Act of 1966 Section 111 Section 111 of the National Historic Preservation Act of 1966 SHPO State Historic Preservation Officer SOI Secretary of Interior THPO Tribal Historic Preservation Officer USC United States Code USPS United States Postal Service WPA Works Progress Administration PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 2 CHAIRMAN'S MESSAGE The Advisory Council on Historic Preservation (ACHP) is pleased to present this report on compliance by the U.S. Postal Service (USPS) with Section 106 of the National Historic Preservation Act for the closure and disposal of its historic postal facilities. The report responds to the request by Congress in the explanatory statement of the Consolidated Appropriations Act of 2014, Division G. The USPS has disposed of post offices throughout its history. However, the rate of disposals began to increase in 2008 as declining mail volumes along with increased automation and worker productivity led to a determination by the USPS that many facilities are larger than operations require. Given the number of historic properties in the USPS real property inventory, it is inevitable that historic post offices and facilities would be among the properties considered for disposal. Section 106 consultations on a number of high profile disposals across the country have demonstrated that the preservation community and the public have significant concerns about the potential closure of these historic facilities, including the loss of public use of the buildings, the risk posed to the integrity of historic buildings and the artwork they contain, and the potential loss of public access. The limited consideration of the historic values of these iconic buildings along with the lack of transparency in Section 106 consultation further exacerbates these problems. This report makes specific findings and recommendations that would improve USPS compliance with Section 106, while building collaborative relationships with communities and historic preservation stakeholders. These recommendations are the result of thoughtful consideration of information provided to the ACHP by State Historic Preservation Officers, communities, preservation advocates, the public, and the USPS itself. Awareness of and appreciation for the value of these important community resources under federal ownership can foster better management practices that will benefit the USPS, the historic properties, and the communities in which they reside. The ACHP stands ready to work with the USPS and historic preservation partners to implement the recommendations of this report and chart a course for improved Section 106 compliance and better historic preservation outcomes for communities. J1 Milford Wayne D naldson, FAIA Chairman EXECUTIVE SUMMARY Many post offices have operated for decades as the civic core of their communities. These structures, while often functioning as community meeting places, were constructed with public funds and serve as an integral part of the governmental presence in the community, providing not only a functional role but a symbolic federal presence. Since 2008, the rate of post office disposals has increased in response to a determination by the United States Postal Service (USPS) that many facilities are larger than current operations require. Many of these disposals have targeted historic post offices. Consultations on a number of high ' profile disposals across the country under Section 106 of the National Historic Preservation Act (NHPA) have demonstrated that the preservation community and the public at large have significant concerns about the closure of these historic facilities and the potential loss of access to these places of such importance to local communities. In response, Congress directed the Advisory Council on Historic Preservation (ACHP) to "provide, within 90 days of enactment of this Act, a report on how the Council will ensure compliance by the USPS of Section 106 responsibilities for these historic properties." (Explanatory Statement, Consolidated Appropriations Act of 2014, Division G). Development of this report was informed by the ACHP's long history of working with the USPS on Section 106 compliance for a number of LISPS undertakings, including rehabilitation, new construction, the sale of air rights, and demolition. With the increase in disposals, the ACHP continues to consult with the USPS encouraging proactive planning and the use of programmatic approaches to compliance for the disposal of historic postal facilities. In addition, the ACHP visited Oakland, California, to gather information and hear from stakeholders who have been directly involved in Section 106 consultations on a number of USPS disposals in California. The ACHP also solicited written comments from stakeholders and the public on the USPS disposal of historic postal facilities and its compliance with Section 106. This report provides summary information on the USPS's historic properties, disposal procedures, and Section 106 compliance to date. It also discusses the concerns expressed by stakeholders regarding these undertakings and the USPS's conduct of the Section 106 process. Finally, this report makes 15 specific findings and conveys related recommendations for Congress and the USPS. The report presents actions the ACHP will take, within the scope of its authorities, to ensure that the USPS more effectively considers historic preservation values in the process of evaluating postal facilities for closure and disposal, and improves historic preservation outcomes. THE RECOMMENDATIONS ARE AS FOLLOWS: + Congress should clarify that the NHPA and its implementing regulations apply to all programs of the USPS, in order to remove any doubt that the USPS is legally obligated to comply with Sections 106, 110, and 111 of the NHPA. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 5 • + The USPS should suspend any further actions to relocate services out of historic postal facilities and dispose of these historic facilities until such time as it fully implements the recommendations of this report. + The USPS should define the undertaking for Section 106 purposes as both the proposal to cease /relocate postal services and operations and the subsequent proposal to dispose of the historic property. + The USPS should initiate Section 106 consultation at the time relocation or cessation of services at a historic postal facility is considered, rather than waiting until disposal is proposed. + The ACHP will work with the USPS, the National Conference of State Historic Preservation Officers (NCSHPO), the National Trust for Historic Preservation (NTHP), and other stakeholders to develop a model covenant to serve as the basis for all future covenants used for historic post office disposal. + The USPS must correctly apply all of the Criteria of Adverse Effect found in the Section 106 regulations (36 CFR § 800.5) to determine when a finding of no adverse effect or adverse effect is warranted. + The USPS should explore partnerships with Certified Local Governments (CLGs) to facilitate the use of local ordinances as mitigation for adverse effects when the SHPO concurs. + The USPS should evaluate the benefits of utilizing the General Services Administration's (GSA) Office of Real Property Disposal to conduct disposal activities, including Section 106 compliance. + The USPS should consider use of the Historic Surplus Property Program for select historic properties where protection of the property is paramount and a state or local government is interested in acquiring the property. + The ACHP should continue to work with the USPS, NCSHPO, and other stakeholders to identify a program alternative appropriate to the scope and duration of the disposal program and work with the parties to develop such an approach. + The USPS should expand and reorganize its historic preservation program. + The USPS, in cooperation with the ACHP, should work with NCSHPO and other stakeholders to develop guidance and training for USPS employees on the process, procedures, and special considerations of disposal of historic post offices. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 16 + The USPS, in cooperation with the ACHP, should work with NCSHPO and other preservation partners to develop guidance for developers on covenants and historic property stewardship. + The USPS should evaluate the viability of leasing historic properties, or portions thereof, in accordance with Section 111 of NHPA as an alternative to disposal. + The USPS should develop language for inclusion in covenants attached to historic properties or other legally binding mechanisms that makes an effective commitment for the USPS and a binding obligation for the new owner to ensure protection and access to murals and other artwork located within historic post offices. The findings and recommendations in this report offer a range of actions for Congress, the USPS, the ACHP, and its partners. These will make significant improvements to the USPS planning and compliance for its historic preservation and disposal programs. As the LISPS continues its efforts to comply with Section 106, the ACHP is committed to assisting the USPS in moving forward with these recommendations so that future disposals are better informed by sound planning and meaningful consultation with communities and stakeholders. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 17 • • INTRODUCTION Few would deny that the local post office is a key component of the civic heart of communities across the nation. These structures have served for decades as centers of commerce and communication as well as valued community meeting places. They also form an integral part of the government presence in the community, providing both a functional role and a symbolic federal presence. Understandably, the disposal by the U.S. Postal Service of these public assets often raises significant concerns within communities, not just for the loss of postal services but also for the preservation of the historic buildings and the artwork they contain, the continuing vitality of a facility that generates foot - traffic in downtown areas, and a diminished federal government presence as part of the community fabric. The public has expressed concerns to Congress, the Advisory Council on Historic Preservation, State Historic Preservation Officers (SHPOs), and the USPS itself regarding the effects of disposal of historic postal facilities on the buildings themselves as well as surrounding historic districts and the broader local community. Further, the House of Representatives and the Senate have discussed legislation to address concerns with regard to the decision - making process for the disposal of USPS's historic facilities. The proposed disposal of historic postal facilities must first be subject to a historic preservation review, in accordance with Section 106 of the National Historic Preservation Act, 16 U.S.0 § 470f. The ACHP administers the Section 106 process through its implementing regulations, "Protection of Historic Properties" (36 CFR Part 800). The ACHP has been advising the USPS and consulting parties on questions regarding the conduct of the Section 106 process for proposed disposal undertakings for several years. Recognizing this critical role, Congress has tasked the ACHP to prepare this report focusing on how the USPS could improve its Section 106 compliance process for disposal of historic post offices. This report provides background information on the USPS's historic properties, disposal procedures, and Section 106 compliance to date. It also discusses the concerns expressed by stakeholders regarding these undertakings and the USPS's conduct of the Section 106 process. Finally, the report makes specific findings and conveys related recommendations for Congress and the USPS, as well as actions the ACHP will take, to ensure that the USPS more effectively considers historic preservation values in the Section 106 process and thereby improves historic preservation outcomes. BACKGROUND The ACHP is an independent federal agency, established by the NHPA in 1966, that promotes the preservation, enhancement, and sustainable use of the nation's diverse historic resources. The ACHP's 23 statutorily designated members address policy issues, direct program initiatives, and make recommendations regarding historic preservation to the President, the Congress, and heads of other federal agencies. A principal goal of the NHPA is to have federal agencies act as responsible stewards of the nation's historic resources. The ACHP seeks to advance this goal through its oversight of the Section 106 process and through policy recommendations to improve federal agency implementation of the NHPAs mandates. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 18 Consolidated Appropriations Act, 2014 Responding to the significant public concerns about widespread closure of historic post offices, the Congress included language accompanying the ACHP's FY 2014 appropriation: "Although the Council has made significant efforts to work with the United States Postal Service (USPS) for almost two years to develop a consistent, transparent, and consultative process to preserve historic post offices, no comprehensive process has been developed. In light of this, the Committees direct the Council to provide, within 90 days of enactment of this Act, a report on how the Council will ensure compliance by the USPS of Section 106 responsibilities for these historic properties : (Explanatory statement of the Consolidated Appropriations Act of 2014, Division G) National Historic Preservation Act and Section 106 In the NHPA, Congress established a comprehensive program to preserve the historic and cultural foundations of the nation as a living part of community life. Section 106 of the NHPA is a crucial part of that program that requires federal agencies to consider the effects of their actions on historic properties and to engage in a consultative process to resolve negative impacts. All federal agencies are subject to the requirements of Section 106, including independent regulatory agencies. Complying with Section 106 is a federal agency responsibility and while applicants for federal permits or purchasers of federal properties may be asked to carry out some of the tasks for completing a Section 106 review, the federal agency remains legally responsible for all findings and determinations. It should be noted at the outset that there is some uncertainty as to whether the USPS believes its Section 106 compliance is legally required or voluntarily assumed. The USPS has adopted a resolution establishing that "it is the policy of the Postal Service to abide by the general policies and requirements for historic preservation" under Sections 106, 110, and 111 of the NHPA. ( "Policy on Historic Preservation : Resolution of the Board of Governors of the United States Postal Service No. 82 -7 [November 9, 1982]). The USPS is an "independent establishment of the executive branch of the Government of the United States," 39 U.S.C. § 201. While such designation clearly fits the NHPA definition of an "agency" subject to Section 106 (see 16 U.S.C. § 470w(1)), the Postal Reorganization Act (PRA) has exempted the USPS from federal laws "dealing with public or federal contracts, property, works, officers, employees, budgets, or funds : 39 U.S.C. § 410. The ACHP is not aware of any court opinions discussing whether the PRA exempts the USPS from the requirements of Section 106. However, existing court opinions have found that the PRA does not exempt the USPS from complying with the National Environmental Policy Act (NEPA), an environmental review law that is usually coextensive in its coverage with Section 106. See Chelsea Neighborhood Ass'ns v. United States Postal Serv., 516 F.2d 378 (2nd Cir. 1975), and City of Rochester v. United States Postal Serv., 541 F.2d 967 (2nd Cir. 1976). Section 106 requires federal agencies to consider the effects on historic properties of projects they carry out, assist, permit, license, or approve. Federal agencies must also provide the ACHP a reasonable opportunity to comment on such undertakings before the approval of the expenditure of any federal funds on the undertaking or before the issuance of any license, permit or approval. Agencies comply with Section 106 through the process in the PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 19 • implementing regulations, "Protection of Historic Properties" (36 CFR Part 800). The regulations implementing Section 106 can be found on the ACHP's Web site at http : / /www.achp.gov /regs- rev04.pdf. A fundamental goal of the Section 106 process is to ensure that federal agencies consult with interested parties to identify and evaluate historic properties, assess the effects of their undertakings on historic properties, and attempt to negotiate an outcome that will balance project needs and historic preservation values. Section 106 review encourages, but does not mandate, a preservation outcome and recognizes that sometimes there is no way for a project to proceed without affecting historic properties. Based on the information gathered through the Section 106 process, a federal agency may make an informed decision to approve, change, or cancel 'a project. Therefore, the outcome of Section 106 reviews can range from avoidance of historic properties to the acceptance of extensive adverse effects to historic properties. The Section 106 process ensures that a federal agency assumes responsibility for the consequences of its undertakings on historic properties. Although the Section 106 regulations specify timeframes for most steps in the review process, some steps (like consultation on measures to resolve adverse effects) do not have a specified deadline. While the specific time needed to complete the Section 106 review for a particular project is not predetermined, the federal agency customarily allocates sufficient time to complete the review as part of the overall project planning process. Depending on the circumstances and the consultation process, a federal agency may conclude its Section 106 review with a finding of "no historic properties affected" or "no adverse effects to historic properties : If the proposed project may pose adverse effects to historic properties, the agency must consult to attempt to reach an agreement on how to resolve those adverse effects. Under the regulations, consultation means "the process of seeking, discussing, and considering the views of other participants, and, where feasible, seeking agreement with them regarding matters arising in the Section 106 process :' (36 CFR § 800.16(f)) The Secretary of the Interior's (Secretary) "Standards and Guidelines for Federal Agency Preservation Programs pursuant to the National Historic Preservation Act" provides further guidance on consultation. The Section 106 regulations identify consulting parties as SHPOs, Tribal Historic Preservation Officers (THPOs), federally recognized Indian tribes, Native Hawaiian organizations, local governments, applicants for federal assistance or approval, and individuals and organizations with a demonstrated interest in the undertaking. The agency must also seek the views of the public, which are essential to informed federal decision making in the Section 106 process. The federal agency is to carry out its public engagement in a manner that reflects the nature and complexity of the undertaking and its effects on historic properties, the likely interest of the public in the effects on historic properties, confidentiality concerns of private individuals and businesses, and the relationship of the federal involvement to the undertaking. (36 CFR § 800.2(c)) Consulting parties also participate with the federal agency in the preparation of an agreement document, typically a Memorandum of Agreement (MOA) or Programmatic Agreement (PA), which establishes the agreed upon measures to resolve the adverse effects of the undertaking and the roles and responsibilities of the agency and the consulting parties. If the signatories cannot come to an agreement, the head of the agency must request, consider, and respond to the formal comments of the ACHP members. If an agreement is reached, the agency must implement all agreed upon measures set forth in the resulting agreement. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS I 10 EO 13287: "Preserve America" Executive Order 13287: "Preserve America," (EO) addresses the state of the federal government's historic properties and their contribution to local economic development. Issued in 2003, the EO reaffirmed the federal government's responsibility to show leadership in preserving America's heritage by "actively advancing the protection, enhancement, and contemporary use of the historic properties owned by the federal government, and by promoting intergovernmental cooperation and partnerships for the preservation and use of historic properties :' Section 3 of the EO established an accountability system to gauge agency implementation of the mandates of NHPA and the EO. It requires the ACHP to prepare a report to the President every three years on the current state of the federal government's historic properties and their contribution to local economic development. The ACHP's reports incorporate data submitted by real property managing agencies in accordance with Sections 3(a), (b), and (c) of the EO. The USPS submitted its baseline report in accordance with Section 3 of the EO to the ACHP and the Secretary of the Interior in 2004 and submitted progress reports in 2005 and 2008. However, the USPS failed to submit a report in 2011 as required. THE CHALLENGE Although the USPS has disposed of post offices throughout its history, the rate of disposals began to increase in 2008. Declining mail volumes, increased automation of mail sorting, and increased worker productivity led to a determination by the USPS that many facilities are larger than operations require. Given that, the USPS increased efforts to analyze its properties to identify opportunities to optimize its facilities network. This was initially a slow and labor - intensive process, requiring site visits and physical measurements of space. Subsequently, the USPS developed a computer model that analyzes space needs and optimization opportunities. The goals of the USPS, in response to its current financial crisis, are to increase revenue and decrease costs. Property disposals are just one of the tools the USPS employs in pursuit of those goals through optimization of the USPS's facilities network, taking into account each facility's size, location, costs and revenue, and the operations housed there. Given these goals and the USPS inventory of historic properties, it is inevitable that historic post offices and facilities would be among the properties considered for disposal. However, Section 106 consultations on a number of high profile disposals across the country have demonstrated that the preservation community and the public have significant concerns about the potential closure of these iconic facilities, including the loss of public use of the buildings, the risk posed to the historic architecture and art, and the potential loss of public access to these places of importance to local communities. In addition, these concerns include not just the decision to close the facilities, but the manner in which the USPS is conducting its decision - making process, the transparency of that process, and how it conducts the Section 106 consultation process. REPORT METHODOLOGY On behalf of the ACHP membership, a panel of ACHP members oversaw the development of this report and its recommendations. The panel included ACHP Chairman Milford Wayne Donaldson, FAIA; Teresa Isabel Leger de Fernandez (citizen member); Stephen T. Ayers (Architect of the Capitol); Beth L. Savage (representing the Administrator of the General Services Administration) and Elizabeth Hughes (President, NCSHPO). PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS I I I • • • » BERKELEY, CALIFORNIA RENAISSANCE REVIVAL, 1915 Credit:Wikipedia Commons, Noah Salzman Development of this report was informed by the ACHP's long history of working with the USPS on Section 106 compliance for a number of USPS undertakings including rehabilitation, new construction, and demolition of postal facilities. Spurred by the increase in disposals, the ACHP has been consulting with the USPS since 2012 to encourage proactive planning and programmatic approaches to compliance for the disposal of historic postal facilities. However, recognizing that the ACHP has been directly involved in consultation on only a small number of USPS disposal cases, the ACHP visited Oakland, California, to gather information and hear from stakeholders who have been directly involved in Section 106 consultation on a number of USPS disposals in California. The site visit enabled the panel members and staff to hear from USPS officials, the California SHPO, the NTHP, local organizations, and local government officials. The visit offered the ACHP the opportunity to learn about stakeholders' experiences in attempting to reach agreement on appropriate measures to avoid adverse effects to historic facilities and opportunities for improving USPS compliance with the requirements of Section 106 for these actions. It also afforded the panel members the opportunity to view firsthand the facility in Berkeley that is the subject of ongoing disposal efforts by the USPS. In addition, the ACHP solicited written comments from stakeholders and the public on the USPS disposal of historic postal facilities and its compliance with Section 106. Notice of the opportunity to comment to the ACHP was posted on the ACHP Web site; e- mailed to SHPOs, nationwide, state, and local preservation organizations; federally recognized Indian tribes and Native Hawaiian organizations; as well as distributed to attendees of the Oakland meeting. This report has been further informed by an online survey developed by NCSHPO at the request of the ACHP in August 2013. Twenty -one SHPOs responded to this survey, which asked eight questions covering SHPO experiences working with USPS in the Section 106 process for historic post office disposals and the use of covenants in these cases. Further, on March 3, 2014, NCSHPO sponsored a discussion among SHPOs, the USPS, and the ACHP to review the disposal program to date, to discuss challenges and successes, and to confer on a path forward. In development of the report ACHP staff coordinated with congressional staff, the USPS, NCSHPO, the NTHP, the USPS Office of the Inspector General (OIG), and the White House Council on Environmental Quality (CEQ. The ACHP also consulted with Steve Roth, Executive Advisor for Realty Asset Analytics, and former director of Realty Asset and Lease Management for the USPS. USPS HISTORIC PROPERTIES The USPS's inventory of historic properties spans two centuries. The architectural styles of the post offices, the fine art they house, and the function the buildings provide in the community tell the history of the agency and of rural and urban development in 19th and 20th century America. This history is important to understanding not just the architectural significance of these facilities, but also their value and their significance to the communities they have served for decades. HISTORY Post offices constitute the most common form of federal government buildings in the nation. Located in large cities, small towns, and rural areas, post offices are an important presence of the federal government in communities. They play an essential role in facilitating communication and promoting economic development, reducing the isolation of rural locales, and disseminating products, information, and ideas across geographical areas. Historically, in times of economic stress, the construction of post offices has stimulated local economic recovery and proyided work. Many post offices are significant civic monuments that beautify the cities and towns in which they are located. Architecturally, post offices have served as symbols of the federal government's authority, conveyed regional historical themes, and exemplified high art forms. Some post offices were designed in an "official" national style and serve as notable examples of classicism in their respective communities. During other phases in the federal government's public building program, post offices were designed to reflect regional styles and influences. For much of the 19th century and throughout the Depression, artwork, such as ornamental sculptures and murals, was integrated into the architectural design of post offices. While many post offices functioned as community meeting places, they are also an integral part of the governmental presence in the community, providing not only a functional role but a symbolic presence. In some communities, post offices, along with a courthouse, city hall, or other public buildings, collectively form a civic core that generates pedestrian traffic, contributes to the vitality of the downtown area, and provides a sense of community identity and civic pride. For many of America's smaller towns the post office remains the only federal presence in the community. ANNAPOLIS, MARYLAND GEORGIAN REVIVAL, 1901 Credit:Wikipedia Commons • • Historically, governments have maintained control over postal systems, since the effective organization and control of society depend upon the ability to communicate. The United States government also assumed control over mail service, but incorporated democratic principles by constitutionally placing the power to establish post offices and post roads in the hands of Congress (U.S. Constitution, Article 1, Section 8). The establishment of the postal service throughout the country provided an example of democracy at work: citizens petitioned Congress, which established post roads and instructed the Postmaster General to provide postal service along the routes. (National Park Service. National Register Bulletin 13: How to Apply the National Register Criteria to Post Offices. Washington, DC: 1984. Revised 1994.) The buildings constructed for use as post offices have reflected various government and architectural philosophies. From the establishment of the Office of the Supervising Architect of the Treasury in the 1850s until the 1890s, the style of federal buildings tended to follow the favorite style of the incumbent Supervising Architect. During the tenure of James Knox Taylor (1897 -1912) as Supervising Architect of the Treasury, the federal government promoted the concept that government buildings should be monumental and beautiful, and should represent the ideals of democracy and high standards of architectural sophistication in their communities. Taylor preferred styles derived from classical or early American traditions. Believing that federal buildings should be built to last, he also emphasized the use of high quality construction materials. Private architects worked on many of the larger projects, but the Office of the Supervising Architect produced smaller buildings, including many of the post offices that are found in small towns across the nation. The buildings were individually designed; Taylor firmly resisted suggestions that designs be standardized. After 1913, federal construction policy changed in response to concerns over the cost of public buildings projects and controversy over whether all the buildings authorized by Congress were truly needed. The 1913 Public Buildings Act, which authorized the construction of a large number of public buildings, also prohibited the construction of new post office buildings in communities whose postal receipts totaled less than $10,000. In the interest of economy and efficiency, the Department of the Treasury instituted a classification system under which a post office's structural and ornamental qualities were functions of the value of real estate and postal receipts in the city where it was to be located. First class post offices in large cities would still be monumental and elaborate, but for a small town, the standards specified an "ordinary class of building, such as any businessman would consider a reasonable investment." In contrast to the earlier policy of designing post offices individually, the Supervising Architect's Office used the same design and floor plan whenever possible, and rarely employed private architects during this c period, which continued through the 1920s. The emphasis on economy and efficiency continued during the Depression, when the government rapidly expanded its public works program as a means of stimulating economic recovery and providing work for the unemployed, almost one third of whom were in the building trades. The number of public buildings constructed in the 1930s increased dramatically. Approximately three times the number of post offices were built » FRANKLIN, TENNESSEE COLONIAL REVIVAL, 1925 Credit: Heritage Foundation of Franklin and Williamson County PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 14 in this period as had been built in the previous 50 years. The construction of these post offices was funded through a number of different programs and authorizations but remained the responsibility of the Treasury Department until 1939. Nearly a quarter of the post offices built during this period were authorized by the Public Works Administration (PWA), established in 1933 to oversee the planning and construction of federal and non - federal public works projects. The planning required by the 1926 Public Buildings Act and the 1931 Federal Employment Stabilization Act enabled the PWA to begin its program with a minimum of delay by starting with federal projects such as post offices. The Bureau of Labor Statistics maintained statistics on employment, wages, cost of materials, and other data on PWA projects. Although the 406 post offices built under this program composed only a small portion of the approximately 34,000 PWA construction projects completed or in progress in virtually every county in the nation by 1939, they were among the most familiar to the general public. Despite the desire to complete projects rapidly, the PWA also stressed the importance of high quality in order to ensure "public works of an enduring character and lasting benefits," according to its 1939 report. The government once again employed private architects after 1930, but this practice was ended with an order of June 29, 1934, that all remaining federal buildings be designed by the Office of the Supervising Architect. The Treasury Department determined that it was not economical for private architects to handle small architectural projects. It was felt that the expeditious placement of buildings under contract and the putting of men to work in the shortest time possible facilitated employment in the construction field, and outweighed the benefits of procuring designs from a comparatively small number of architectural firms. A limited number of private architects were associated with the Treasury Department's building program on a consulting basis. In March 1939, however, the Treasury Department reversed its policy and decided to select private architects by means of regional competitions. This new policy was barely announced when the public buildings program was removed from the Treasury Department in July of 1939 and merged into the Federal Works Agency (FWA). Although some variations to facades were allowed, standardized interior plans were well established by this time, and outlined in a publication entitled "Instructions to Private Architects Engaged » CHERAW, SOUTH CAROLINA GREEK REVIVAL, 1933 Credit: Arcadia Preservation, LLC /Gardiner Hallick PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 115 • » INDEPENDENCE, IOWA "POSTMAN IN STORM" MURAL, ROBERT TABOR, 1938 Credit: USPS • on Public Building work under the Jurisdictions of the Treasury Department." The most commonly used styles were the Colonial Revival style or a simplified classical style blending modern and classical elements, characterized by symmetrical massing and plain surfaces. Many of the post offices constructed during the 1930s were adorned with murals or other forms of artwork commissioned by the federal government. Of the four government programs supporting graphic arts during the Depression, the Treasury Department's Section of Painting and Sculpture (later the Section of Fine Arts) was the principal sponsor of art for federal buildings, primarily post offices. Funds for artwork were based on 1 percent of the total appropriation for the building's construction. Unlike another major program, the Works Progress Administration's Federal Art Project, the Section's program was one of patronage rather than relief and stressed quality over mass production. Artists were selected through blind competitions, whose standards encouraged realism as the most appropriate style and scenes of everyday American life as suitable subjects. Placement of the commissioned murals and sculptures in public buildings resulted from the desire of leaders in the Administration to make original, quality art accessible to those who otherwise had little or no opportunity to see it. When the public buildings design function was transferred from the Treasury Department to the FWA in 1939, its vision was altered as well. In its 1940 annual report, the FWA described itself as "primarily an organization for building," concerned with providing facilities for persons engaged in military readiness. By 1943, temporary war- related construction was completed, and the Supervising Architect's staff was reduced by nearly one -half. Construction of non - military buildings, especially post offices, was virtually at a standstill. However, the FWA planned for a post -war public building program. The agency studied the character of building materials, designs, and construction methods used during the war years, and gauged the adaptability of the new materials and methods to post -war federal construction. After the war, federal architectural activities were well diffused throughout military and civilian agencies. The FWA —with its public buildings design function —was subsumed into the new General Services Administration with the enactment of the Public Buildings Act of 1949. The Office of the Supervising Architect increasingly relied on private architectural firms to carry out public building designs. The Office continued, however, to provide standard designs and guidelines for post office buildings, although the nature of those buildings changed remarkably after World War II. Post offices became prominent examples of the architectural tenet "form follows function." Postmaster General Arthur Summerfield called for utilitarian post office designs with no architectural adornment. New post offices had clean lines and standardized designs for lobby windows, counters, lock boxes, and letter drops. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 16 �, POST OFFICE /3 u DRIVE -IN 1 » HOUSTON, TEXAS 1951 Credit: USPS Another significant difference between pre- and post -war post offices was site design relative to automobile accessibility. After World War II, post offices were located near major roadways or automobile traffic intersections, rather than along railroads or in town centers. The new pattern emerged as post -war development spread out from central cities. Site plan concerns included adequate parking, tail -gate space, rail sidings, and drive - through service. With private architects or architectural firms designing most post offices after the war, GSA encouraged standardized designs by providing prescriptive drawings and specifications and through an ambitious lease- purchase program. This program provided for private investors to finance and construct public buildings according to federal government requirements. The government would lease the buildings for a specified number of years and then, according to a prearranged purchase contract, become owner of the building. The architectural treatment of the exterior was left to the decision of the building owner and the architect, but interior spaces had to conform to accommodate specific postal functions. In 1954, all exclusively post office projects were removed from GSA and transferred to the U.S. Post Office Department. GSA was left with most of the remaining civilian federal buildings, including those that combined post offices with other federal functions. INVENTORY Section 110 of the NHPA requires each federal agency to establish a program for the identification, evaluation, and nomination of properties in their ownership or control to the National Register of Historic Places (NRHP). Despite this requirement, USPS policy does not support the development of a comprehensive inventory of the historic properties in their stewardship. However, USPS policy states that identification and evaluation of historic properties is carried out during Section 106 consultation processes for individual undertakings. There are no other USPS policies related to the identification and evaluation of historic properties, and the agency has not established goals for these purposes. The USPS reports that it is challenged by its fiscal constraints and its ongoing efforts to modernize its procedures to better carry out its core mission, and is therefore presently unable to devote the necessary budget to carry out a comprehensive historic property identification and evaluation program, or to update the USPS Electronic Facilities Management System (eFMS) on a regular, full -time basis. The eFMS database is the official U.S. Postal Service record for real property inventory, used to manage all property - related projects including acquisition, disposal, and repairs. Despite these challenges, over the years the USPS has produced a number of historic context studies and inventories of its historic properties. Historic contexts are those patterns or trends in history by which a specific occurrence, property, or site is understood and its meaning (and ultimately its significance) within history or prehistory is made clear. Historic context studies develop a "context" within which properties can be evaluated for National Register eligibility. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 17 • The significance of a historic property can be judged and explained only when it is evaluated within its historic context. In 1981, the USPS produced the "History of the U.S. Postal Service, 1775- 1980." Subsequently in 1982, it developed a historic context on post office construction between 1900 and 1940. Most recently in 2012, the USPS contracted for, the preparation of a historic context of USPS buildings dating from the period between 1940 and 1971. The "History and Context Study of Postal Facilities Constructed or Occupied Between 1940 and 1971" was designed to guide future protection and utilization or sale of USPS properties. As part of the most recent historic context study and inventory (completed in 2012), the USPS contracted with URS Group, Inc., who surveyed 98 postal facilities throughout the United States, representing approximately 7 percent of the 1,461 properties in the eFMS property database that were built or occupied between 1940 and 1971. The USPS determined that comprehensive National Register evaluation materials for post office facilities dating from this period were necessary due to the initiation of the "Mail Processing Network Rationalization Initiative," a major step to reduce costs. Development of a nationwide context study would further facilitate the evaluation of the NRHP eligibility of these buildings. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 I8 USPS HISTORIC PRESERVATION AND DISPOSAL PROGRAMS At the request of the ACHP, in order to facilitate preparation of this report, the USPS provided the background information in this section of its historic preservation and disposal program policies and procedures. As discussed above, according to the USPS, its policy, by a resolution of the Board of Governors, (Resolution No. 82 -7, dated November 9, 1982) is to abide by the general policies and requirements for historic preservation applicable to the federal government, including the NHPA and Executive Orders 11593 (Protection and Enhancement of the Cultural Environment), 12072 (Federal Space Management), 13006 (Locating Federal Facilities on Historic Properties in our Nation's Central Cities), and 13287 (Preserve America). The USPS has developed standard requirements with respect to how agency personnel address historic properties as they carry out their specific responsibilities. The U.S. Postal Service Facilities Guide to Real Property Acquisitions and Related Services (Handbook RE -1, https: // about .usps.com /handbooks /rel.pdf) and the Facilities Environmental Guide (Handbook RE -6, www.apwu.org /dept /ind- rel /re6 /re6c3.pdf) are the agency's internal guidebooks that outline USPS policy regarding historic properties. The USPS reports that postal employees responsible for historic properties use these guides as tools for the management of facilities, including historic properties. The guides provide standard RESOLUTION OF THE BOARD OF GOVERNORS OF THE UNITED STATES POSTAL SERVICE Resolution No. 82 -7 Policy on Historic Preservation RESOLVED: The Postal Service in [sic] one of the largest organizational holders of Real Estate in the United States. The Postal Service's activities in the areas of property acquisition, management, and disposal often affect historic properties and historic districts. The Postal Service, as a good neighbor in communities throughout the Nation and as an agency of the Federal government should acquire, manage, and dispose of its real property with due regard to the impact these activities may have on historic properties and historic districts. In light of the foregoing, the Board of Governors of the United States Postal Service affirms that it is the policy of the Postal Service to abide by the general policies and requirements for historic preservation applicable in the Federal government. These are set out in Section 106 of the National Historic Preservation Act of 1966; section 110 and 111 of the National Historic Preservation Act Amendments of 1980; and in Federal regulations issued to carry out these provisions of law. The foregoing Resolution was adopted by the Board of Governors on November 9, 1982. /s/ Louis A. Cox Secretary PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 19 • operating procedures and other information about how USPS employees will carry out their responsibilities to ensure compliance with historic preservation laws and regulations. However, the handbooks are in many ways inconsistent with the Section 106 regulations, as discussed below. In addition, while the RE -1 handbook included an entire chapter dedicated to historic preservation at one time (1996 Edition, Chapter 9), the current version of the handbook has deleted this chapter. The flowchart from Handbook RE -6 (below) is an example of the types of specific cultural resource management guidance that is contained in these documents. SITE EVALUATION • Are any archaeological, historical, or cultural materials located on or near the site? • Is the site listed in the National Register? • Will the actions directly or indirectly affect any archaeological, historical, or cultural sites or materials? • Will construction directly or indirectly affect any archaeological, historical, or cultural sites or materials? YES REQUIREMENTS • Conduct public meetings. • Monitor impacts and mitigation measures during construction. • Follow the NHPA Section 106 process (does not apply to Native American, archaeological sites). • Obtain required permits. COMPLIANCE ACTIONS • Issue public notices. • Develop mitigation plans. • Initiate NHPA Section 106 process. • Develop monitoring procedures for the construction phase. • Obtain excavation permits. USPS Handbook RE -6, Exhibit 3 -4.1, Page 3 -78 NO GO TO NEXT ENVIRONMENTAL TOPIC This flowchart is notable for its lack of clarity and skewed impression with regard to the requirements of the Section 106 process. For instance, in the "site evaluation" box, there is no mention of properties that are eligible for the NRHP. The graphic only includes properties that are listed on the NRHP, but the Section 106 regulations give equal treatment to properties whether listed or eligible for listing (but not formally listed) on the NRHP. Nor does it afford consideration of impacts on NRHP eligible or listed historic districts, whether or not the postal facility itself is a historic building. In addition, the graphic includes no mention of National Historic Landmarks, which are afforded additional protection under Section 110(f) of the NHPA. Further, the second box labeled "requirements" includes "public meetings." Under the Section 106 regulations, this PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 20 is not a requirement. While consultation is a requirement, it may or may not include "public meetings." In addition, it states that following the Section 106 process does not apply to "Native American archaeological sites." This is inaccurate; the Section 106 process is required for all federal undertakings, and consideration of effects must be given to all resources meeting the definition of a "historic property" (any property listed on or eligible for listing on the NRHP). Any archaeological site that meets the definition of historic property must be considered in the Section 106 process. When an undertaking may affect a historic property of religious and cultural significance to an Indian tribe or Native Hawaiian organization, the agency is required by statute to consult with such entities. Finally, the box entitled compliance actions" lists "initiate NHPA Section 106 process" after "issue public notices" and develop mitigation plans." It is unclear if this list of actions is intended to be conducted in the order listed (this is the impression given), but if so, it directs the initiation of Section 106 far too late in the decision - making process. Section 106 requires that agencies consider alternatives that will avoid, minimize, or mitigate adverse effects. If an agency initiates Section 106 after development of "mitigation plans," it implies that an alternative has been chosen without the benefit of consultation in accordance with the Section 106 process and creates the risk that the opportunity for meaningful consideration of alternatives, and comment by the ACHP, may be foreclosed. In such cases, an agency may be unable to complete the Section 106 process as required by law. DISPOSAL PROCEDURES To address an ongoing pattern of operating budget deficits caused by declining first -class mail volume, competition from other private mail and parcel delivery firms, and the requirement to pre -pay retiree health benefits and pension funds, the USPS initiated the "Mail Processing Network Rationalization Initiative" to create a more streamlined processing and distribution network that is intended to use fewer facilities to handle an existing and projected decline in national mail volumes. An important component in the USPS projected downsizing is the sale of excess post offices and related building types. According to the USPS, it initiates the process by looking at optimizing its facilities network with "node studies" of geographic areas throughout the nation. This computer modeling tool looks at various information, including the following: • size of the existing facilities; • excess space in the facilities; • optimal size required for operations; • lease costs of the existing sites (if leased) and alternative sites; • estimated net sale revenue of owned facilities, if sold after consolidation or relocation; • construction costs for moving or consolidating operations to an alternate location; • transportation costs associated with moving the carriers; and • operating costs at the existing facilities. The USPS indicates that it has conducted node studies first in areas of the country with the most vibrant real estate markets, so that if a property is ultimately sold, the USPS will receive the highest values for its assets in the shortest time period. A node study may also be initiated in response to a lease termination or changing operational needs. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 121 • • At the conclusion of a node study, USPS management reviews the analysis and conclusions and if the study's recommendations are approved, then the USPS Implementation Team begins to implement the recommended plan of action, subject to compliance with Section 106 and other regulatory requirements. Although the USPS may begin marketing a property while certain regulatory requirements are still underway, it indicates that the USPS will not sell a property until it has fully complied with all applicable regulatory requirements. Properties identified for disposal are first offered to GSA in accordance with the agreement between GSA and the USPS covering real and personal property relationships and associated services ( July 1985) and the accompanying letter of understanding (February 1985). If that agency does not have a use for the property, the USPS next offers the space to prospective lessors or buyers in the following order: • Other federal agencies • State government agencies • County government agencies • Municipal government agencies • Private sector » SOMERVILLE, MASSACHUSETTS CLASSICAL REVIVAL, 1936 Credit: Evan Kalish Upon selection of a transfer partner, the USPS negotiates the terms and conditions of the sale or lease with the prospective owner or tenant. The USPS indicates that the contracts include clauses that protect historic building elements from removal, alteration, or destruction, and are designed to protect the building's most significant architectural elements. The contracts also require that the USPS continue ownership of New Deal Arts Collection items after the property transfer. The USPS acknowledges the requirements of Sections 110 and 106 of the NHPA are intended to maintain and reuse its historic real estate, and, when the need to transfer a property to a new owner arises, to ensure the property's legal protection in the future. It indicates that the USPS Federal Preservation Officer (FPO) works in conjunction with the USPS Facilities and Real Estate departments to help identify historic properties for which redevelopment is the most problematic, either because of the nature of the property itself or its surrounding neighborhood or community, and to support Section 106 consultation efforts to avoid, minimize, or mitigate adverse effects that arise from the transfer. » PHILADELPHIA, PENNSYLVANIA NEOCLASSICAL, 1935 Credit: J. Brough Schamp (Bohlin Cywinski Jackson) PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 22 » BURLINGAME, CALIFORNIA SPANISH ECLECTIC AND SPANISH COLONIAL REVIVAL, 1941 Credit: USPS When selecting a buyer or developer for a historic property, the USPS reports that it seeks an entity that can afford to redevelop the property, has a redevelopment plan that retains the important historic characteristics of the property, and is willing to accept legal restrictions for the long -term preservation of the property. The USPS asserts that it strives to find a balance between historic preservation and property disposal goals when making property sale decisions. Further, the USPS states that it is often in the best interest of the USPS to retain ownership of a vacant or underutilized property until the surrounding neighborhood can support the sale and redevelopment of large buildings. In some cases, it can take several years for a neighborhood to become economically viable enough to support a sale. According to the USPS, in the case of historic properties, the agency's preference is to retain ownership for as long as it deems necessary in order to ensure the building's preservation and to protect the USPS's property interests. SCOPE OF THE DISPOSAL PROGRAM To support development of this report, the USPS provided a table listing all historic post offices sold since 2012 (below). In all but one of these instances, the Section 106 process was concluded by a finding of "no adverse effect," Under the Section 106 regulations, when a federal agency makes a finding of "no adverse effect" and neither the SHPO nor any of the consulting parties objects to that finding, the agency is not required to notify the ACHP about the finding, and the process concludes without the need for an MOA or PA. The USPS made a finding of "no adverse effect" in 13 of the 14 cases listed below based on the use of a preservation covenant that it deemed would ensure the long -term preservation of the property's historic significance. These preservation covenants are held either by the SHPO, a CLG, one or more private preservation organizations, or by a city approved by the applicable SHPO to hold a preservation covenant. In the last case where a covenant was not attached to the property (Annapolis, Maryland), the Maryland SHPO and consulting parties concurred with the USPS's finding of "no adverse effect" based upon the requirements of state law that obligated the purchaser, the State of Maryland, to consult with the SHPO to determine whether subsequent plans would adversely affect the historic property and then consult to `determine whether a practicable plan exists to avoid, mitigate, or satisfactorily reduce a significant adverse effect: Failure to agree on such measures would result in further consultation but, like Section 106, the project would be able to proceed without any such measures. HISTORIC POST OFFICES SOLD SINCE 2012 ID NUMBER PROPERTY NAME 106 PROCESS CONCLUSION CALENDAR YEAR 2012 046408 -G01 058022 -G01 058106 -GO1 082550 -GOl 251830 -GOl 366040 -GO1 317280 -GO1 054182 -G07 105000 -G02 North Little Rock Main Street Station, Little Rock, AR Ukiah, CA MPO Venice, CA MPO Fairfield, CT MPO Chelsea, MI MPO Pinehurst Village Station, Pinehurst, NC Reno, NV DTS No Adverse Effect - Covenant Recorded No Adverse Effect - Covenant Recorded No Adverse Effect - Covenant Recorded No Adverse Effect - Covenant Recorded No Adverse Effect - Covenant Recorded No Adverse Effect - Covenant Recorded No Adverse Effect - Covenant Recorded CALENDAR YEAR 2013 Santa Monica, CA MPO Georgetown Station, Washington, DC 230216 -GOl Annapolis, MD MPO 268361 -GO1 419492 -G01 474704 -GO1 St. Paul, MN MPO and Customs House York, PA MPO La Follette, TN MPO No Adverse Effect - Covenant Recorded No Adverse Effect - Covenant Recorded No Adverse Effect - Transferred to state; Maryland Historical Trust Act of 1985, as Amended (State Finance and Procurement Article § 5A -325 of the Annotated Code of Maryland) No Adverse Effect - Covenant Recorded No Adverse Effect - Covenant Recorded No Adverse Effect - Covenant Recorded CALENDAR YEAR 2014 469810 -G01 IYankton, SD MPO INo Adverse Effect - Covenant Recorded The USPS also provided a table of historic post offices currently on the market for sale (below). In these cases, the USPS initiated the Section 106 compliance process once a decision had been tentatively made to dispose of a historic post office. The USPS must satisfy a number of regulatory requirements before making a final decision to sell a retail post office, whether or not it is historic. Until those requirements are completed, the USPS indicates that it does not make a final decision to sell. After making a final decision to sell, if operational needs change or the USPS is unable to find an alternative location to provide service, then the sale process stops, as well as any compliance processes underway (including Section 106). PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 24 HISTORIC POST OFFICES CURRENTLY FOR SALE ADDRESS 2000 Allston Way, Berkeley CA 220 Park Rd, Burlingame CA 380 Hamilton Ave, Palo Alto CA 74 Olivia St, Derby CT 106 STATUS COVENANT HOLDER ONGOING To Be Determined COMPLETE City of Burlingame COMPLETE City of Palo Alto COMPLETE CT SHPO 27 Masonic St, New London CT COMPLETE CT SHPO 421 Atlantic Street, Stamford CT COMPLETE CT SHPO* 321 E Kenilworth Ave, Villa Park IL COMPLETE IL SHPO 237 Washington St, Somerville MA ONGOING MA SHPO 860 Penniman Ave, Plymouth MI COMPLETE MI SHPO 2421 13th Street, Gulfport MS COMPLETE MS SHPO 20 Palmer Square, Princeton NJ ONGOING NJ SHPO New York City Landmarks ONGOING Preservation Commission & New York Landmarks Conservancy 435 Wyoming Avenue, Kingston PA COMPLETE PA SHPO 401 Franklin Street, Houston TX ONGOING MOA ** 440 NE 5th Ave, Camas WA COMPLETE MOA * ** 558 Grand Concourse, Bronx, New York NY * Stamford originally involved an MOA drafted in 2007. However, the USPS made a finding of "no adverse effect" in 2011, despite indication by the developer purchasing the post office of their intent to demolish a 1939 addition and build two high -rise residential buildings immediately behind the post office. Litigation challenging the project under the NHPA and NEPA remains pending. ** USPS reports that the Section 106 consultation for the Downtown Main Post Office in. Houston, Texas, will be concluded with an MOA, but that the consultation is ongoing. The ACHP has not yet been notified of this consultation and development of the MOA, as required by 36 CFR § 800.6. * ** USPS reports that the Section 106 consultation for the Camas, Washington, Post Office was concluded with an MOA in 2010. However, the ACHP has no record of being notified of this consultation and development of the MOA, as required by 36 CFR § 800.6. According to the USPS, the facility has not yet been sold as of the date of this report. The USPS anticipates continuing to review its facilities network across the United States, but due to the large number of post offices, this review will take a number of years to complete. As noted above, the USPS reports that it is first focusing on those real estate markets that would yield the most revenue in the least amount of time for properties that are sold. The USPS reports that several areas are currently under study but did not disclose the location of those areas. Further, it indicates that because the results of those studies are not yet available, the USPS cannot identify the number or location of future disposals. The USPS does not have a numeric goal for future disposals. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 125 • • USPS COMPLIANCE WITH SECTION 106 At the request of the ACHP in order to facilitate preparation of this report, the USPS provided the description of its program to comply with Section 106. USPS compliance is guided by internal agency policies regarding historic properties and compliance procedures. These policies apply to more than the disposal of historic properties; they govern the manner in which USPS conducts Section 106 review for all activities potentially affecting historic properties in its stewardship, including maintenance, repair, new construction, and demolition. While issues regarding disposals have risen to the forefront in recent years, USPS's record of compliance with Section 106 for all types of activities has been inconsistent. As such, the policies and guidance available to USPS personnel are of a broader concern and would benefit from updating and improvement. Policies concerning historic properties and related USPS responsibilities are outlined in the USPS guidance documents "Handbook RE -1, Realty Acquisition and Management" (updated June 2008) and "RE -6, Facilities Environmental Handbook :'These documents describe USPS procedures regarding cultural resources, including Section 106 compliance, identification and evaluation of historic properties, preparation of National Register nominations, and disposition of items from the New Deal Arts Collection. These guidance documents are provided to USPS facilities employees via hardcopy and /or online via the USPS internal network. II ICI II41141P la' 1111111 » WESTPORT, CONNECTICUT CLASSICAL REVIVAL, 1935 Credit: Evan Kalish The following is the description provided by the USPS of its disposal procedures: "With respect specifically to Section 106 procedures for a property tentatively designated for disposal, as you are aware, the Postal Service first determines whether the property is historic, as defined in the Section 106 regulations. The Postal Service makes this determination using internal Postal Services resources as well as outside resources, such as the National Register of Historic Places and the National Archives. Although not required by the regulations, for some properties, the Postal Service hires a qualified contractor to conduct further investigation to assist with that determination. If the Postal Service determines the property is historic, then the Postal Service begins consultation with the requisite consulting parties it has identified, including those parties identified in consultation with the applicable SHPO. The Postal Service provides the SHPO and other consulting parties with a letter detailing information about the property, the findings of the Postal Service and other requisite information to commence the consultative process. Additionally, the Postal Service notifies the public and considers all public comments and input that it receives. The USPS then engages in further communications with the SHPO and applicable consulting parties with respect to its finding, and if applicable, proposed PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 2,. - » NORTHFIELD, MINNESOTA COLLEGIATE GOTHIC, 1936 Top Credit: John Twohig ©2012 Bottom Credit: Construction of the post office /Northfield Historical Society actions to avoid, minimize, or mitigate any adverse effect(s). Consultation continues until the Section 106 process concludes. With respect to a historic property that is ultimately determined to be sold, the Postal Service implements the agreed upon plan for the property, such as a preservation covenant, preservation easement or MOA, at such time as the property sale closes." (Correspondence from Daniel Delahaye, USPS to Reid Nelson, Director, Office of Federal Agency Programs, ACHP, February 20, 2014) The USPS asserts that it involves community stakeholders through its Community Relations Program (CRP) during the planning phase of projects that include the sale or transfer of properties to new owners. While the USPS indicates that other stakeholders, including leasing or purchasing parties and regulatory agencies, are also consulted, historic preservation advocacy groups have advised the ACHP that their requests for consulting party status have routinely been ;ignored, sometimes for months or even years. The USPS indicates that its process includes public hearings in the community to provide local stakeholders with an opportunity to express concerns about the proposed project. It recognizes that suspending service and selling USPS property, especially properties that represent the historic character of a community, are often contentious. The USPS states that it is committed to evaluating the needs of the community at large while balancing agency responsibilities with its mission as it makes decisions about property disposition. The USPS indicates that if a property is proposed for transfer to a party that is not a federal agency and the property is listed in or eligible for listing in the NRHP, the USPS carries out Section 106 consultation as required. On those rare occasions when the USPS determines that the transfer will result in an adverse effect, the USPS will enter into an MOA with the SHPO and other appropriate consulting parties. The MOA will require that protective covenants or a property easement is included as a legal requirement of the sale or transfer to ensure protection of the property after it is transferred. The USPS states that the ACHP is notified of a property transfer by the USPS to another party if an MOA is developed under Section 106 of the NHPA. However, it is important to note that the Section 106 regulations actually require a federal agency to notify the ACHP of an adverse effect finding before starting to negotiate an MOA. This is to provide the ACHP an opportunity to join the consultation if it believes such engagement is warranted. The LISPS indicates that it will not lease or exchange a historic property to any party if the LISPS determines that the proposed lease or exchange will not adequately ensure the preservation of the historic property. However, the USPS provided no information on what constitutes adequate assurance of preservation for its agency. The procedures described above by the USPS may appear reasonable to meet the requirements of Section 106. But in practice, numerous flaws have become evident as individual disposals have been undertaken. The following section discusses these issues. • • ISSUES IN THE SECTION 106 REVIEW OF DISPOSAL OF HISTORIC POSTAL FACILITIES The ACHP has found a number of issues related to USPS compliance with Section 106 for the disposal of historic postal facilities. These issues have been identified through the ACHP's own interaction with the USPS, both programmatically and on a number of specific disposal cases, and through input from stakeholders solicited for this report. TRANSPARENCY In both project specific consultations and programmatic assessment of the USPS Section 106 compliance for the disposal program, the ACHP has observed significant issues with regard to the transparency and timeliness of the USPS information sharing and decision - making process. This has been reinforced by written comments and testimony provided at the March 11, 2014, meeting in Oakland by stakeholders involved in numerous disposal undertakings. This is especially troubling in light of the finding by the Government Accountability Office (GAO) in 2007 regarding communication by the USPS when implementing "mail processing realignment ". GAO found that while the LISPS had made improvements to its communication practices, it continued "to have gaps related to engaging stakeholders and the public in the realignment process and effectively communicating decisions." GAO further found that the process did not "provide adequate notification to stakeholders, lacked transparency into how public input is considered" and that the USPS provided only "limited information to the public after decisions are made." Similar concerns were expressed by the USPS OIG some six years later in its March 27, 2013, report entitled "Lessons Learned from Mail Processing Network Rationalization Initiatives ". In that report, the USPS OIG recommended that "management improve communications with stakeholders by ensuring they share accurate and consistent information on consolidation impacts." This pattern of shortfalls in USPS communication practices and procedures continues to the present with regard to decision making in the Section 106 process. It particularly affects Section 106 compliance since the foundation of the process is consultation, defined as the "process of seeking, discussing, and considering the views of other participants, and, where feasible, seeking agreement with them regarding matters arising in the section 106 process" (36 CFR § 800.16). In a description of the Section 106 compliance process for disposal of historic post offices provided to the ACHP, the USPS indicates that "public hearings are held in the community to provide local stakeholders with an opportunity to express concerns about the proposed project." The USPS further indicates that it notifies "the public and considers all public comments and input..." (Correspondence from Daniel Delahaye, USPS to Reid Nelson, Director, Office of Federal Agency Programs, ACHP, February 20, 2014) However, the opportunity to "express concerns" and the collection of "public comments and input" are not synonymous with the consultation process required by Section 106. ATORR POST s G EN; A REPORT TO CONGRESS 128 » BRONX, NEW YORK COLONIAL REVIVAL, 1936 Credit: USPS Reasonably foreseeable effects, for example, include transferring a historic post office building out of federal ownership as a consequence of deciding to relocate the post office function. In addition, when discussing the nationwide disposal program with the ACHP and others, the LISPS has been unwilling or unable to share information with regard to the future scope and duration of the program. In an attempt to assist the USPS to establish a more effective and efficient compliance process, the ACHP, SHPOs, and the NTHP have repeatedly requested information from the USPS to aid in understanding how many more historic postal facilities may be subject to disposal, how long the program may continue, and the geographic distribution or concentration of future disposals. Whether this information is lacking due to poor planning or purposefully withheld, the result is the same: the USPS cannot or will not accept overtures of assistance from the ACHP and others who could improve the process, establish efficiencies in process and personnel, and develop partnerships that would strengthen relationships and communication channels with stakeholders. TIMELINESS The Section 106 regulations define adverse effects to include "reasonably foreseeable effects caused by the undertaking that may occur later in time, be farther removed in distance, or be cumulative." (36 CFR § 800.5(a)(1)). Reasonably foreseeable effects, for example, include transferring a historic post office building out of federal ownership as a consequence of deciding to relocate the post office function. They also include plans of a private developer when such plans have been disclosed to the USPS in advance of the sale of the historic property. These reasonably foreseeable and cumulative effects must be assessed by the USPS before making a decision to relocate functions and cannot be delayed until later when deciding how exactly to dispose of the no longer needed property. In correspondence regarding several post office dispositions, the USPS has dismissed the notion that it should comply with Section 106 at the time of its decision to cease or relocate postal services by stating that it would comply with Section 106 at some time in the future if the LISPS decides to sell the building. These two decisions, however, are inextricably linked, not two separate, unrelated actions. This was especially evident in the final determination letter regarding the Bronx Post Office. In this case, the USPS announced its "determination to proceed with the relocation of retail services" from the Bronx Post Office, and confirmed in the next sentence that the "plans also include marketing the sale of the property." (Correspondence from, Joseph J. Mulvey, Real Estate Specialist, USPS, to Ruben Diaz, Jr., Bronx Borough President, March 14, 2013) The LISPS position that the cessation or relocation of services and the sale of buildings are not interrelated and that compliance with Section 106 is not necessary prior to USPS's final decision to relocate post office functions is unfounded as its actions and words clearly illustrate that these decisions are directly related. In addition, postponing initiation of Section 106 PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 29 • • » TERRE HAUTE, INDIANA NEO- CLASSICAL, 1934 Credit: USPS • consultation risks the possibility that the Section 106 process will be "blamed" for delaying the sale of the building, when, in fact, implementation of the process by USPS is at fault. In such cases, the Section 106 process may be rushed or truncated to accommodate project timelines, rather than allowing full, meaningful consultation with all parties. INCLUSIVENESS The ACHP and stakeholders in numerous disposal cases have observed significant flaws in the USPS consultation practices. This includes the exclusion of potential consulting parties from the Section 106 consultation process, without reasonable explanation. In a number of cases, the USPS declined to provide consulting party status to organizations that had a clear interest in the process. The ACHP understands from some consulting parties and preservation advocates that in recent months USPS has shown more willingness to engage with constituents and consulting parties, facilitating the Section 106 process. This is an encouraging development that, if adopted as a widespread agency practice, will reflect positive change. The USPS has a legal obligation in accordance with the Section 106 regulations to identify and invite certain consulting parties (SHPOs, tribes, Native Hawaiian organizations, applicants, and local governments) into the Section 106 consultation and consider requests from other potential consulting parties for individual undertakings. In addition, the USPS would benefit from proactive and consistent outreach to preservation stakeholders regarding the overall post office disposal program, not just for specific cases. Such outreach would facilitate a consultative process that builds relationships and results in a more transparent and effective compliance process. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 30 In the case of USPS disposal of historic post offices, disputed findings of effect have become commonplace. COVENANTS The ACHP and preservation stakeholders continue to have a number of concerns regarding the use of preservation covenants as a mechanism to make a finding of no adverse effect. Specifically, the ACHP shares the concerns of others that the language in a number of proposed covenants may not be sufficient to ensure long -term preservation of the historic property, as required by the Section 106 regulations for a finding of no adverse effect. For example, a number of covenants have been proposed and enacted that broadly allow for the termination of the covenant "for good cause ". This ability to remove the long -term protection of the property (in many cases with little recourse for the public or preservation community) undermines the effectiveness of the covenant and therefore cannot ensure the long -term preservation of the historic property. In addition, the USPS relies on a model or template covenant in nearly every Section 106 consultation that contains significant flaws. Reliance on this flawed document has resulted in considerable conflict in a number of cases. While some more recent covenants have seen improvement with regard to these issues, many covenants previously enacted remain in force, potentially placing those historic properties at risk despite the fact that the USPS placed a covenant upon them. An additional concern is that the USPS provides no financial assistance to potential covenant holders for the enforcement of the covenant. The acceptance of a covenant imposes an affirmative responsibility on the holder, both procedural and fiscal. Enforcing a covenant requires routine monitoring of the building, review of plans or alterations that may be proposed by the owner, and the ability to legally force compliance with the terms of the covenant if necessary. This requires the holder to make a commitment of human and financial resources. As such, it is a common preservation practice to create covenants with a lump sum payment paid by the conveyor of the property to the holder of the covenant or a commitment by the new building owner to pay a monitoring fee. To date, the USPS has been unwilling to commit any funds to covenant holders, instead asking those accepting the covenants to bear the entire financial burden. While the USPS's financial constraints are well known, they could pass along the financial responsibility to the new building owner. The majority of potential covenant holders are non - profit organizations, many small, operating within fiscal limitations. As a result of this issue, a number of potential, technically well - qualified covenant holders have declined to accept covenants on historic post offices, being unable to bear the financial burden without compensation. When an agency proposes a finding of "no adverse effect" based on a covenant, it requires the concurrence of the SHPO. If a SHPO disagrees with that finding due to the sufficiency of the covenant provisions, and the SHPO and the federal agency are unable to resolve their differing opinions, then the dispute is referred by the agency to the ACHP for comment. This scenario is known as a"disputed finding of effect" (36 CFR Part 800.5(c)(2)). The ACHP provides its opinion to the agency, which is required to consider the ACHP's views but can reach its own final determination as to adverse effect. While the Section 106 regulations make provision for disputed findings of effect, they are rare in the overall universe of Section 106 cases. In the case of USPS disposal of historic post offices, disputed findings of effect have become commonplace. This pattern indicates a basic problem with the USPS approach to meeting its Section 106 obligations. Further, in those cases where the USPS has referred a disputed finding of effect to the ACHP in accordance with the Section 106 regulations, in all cases the ACHP has provided an opinion consistent with the SHPO; that is, the ACHP has advised the USPS that the finding of no adverse effect was not appropriate and recommended changes to the proposed covenant that • • • would ensure protection of the historic property. In all cases however, the USPS has indicated that while it took the ACHP opinion into account, it disagreed with that opinion and proceeded with its initial finding without further consideration for the concerns of consulting parties. Despite the ACHP's consistent recommendation to change its practices regarding covenants to avoid future disputes, the USPS has not done so. Although USPS has been able to work through some of the questions on the use of covenants for particular disposals, these issues have resulted in a number of consultations stalling or concluding without clearly successful preservation outcomes. ALTERNATIVES TO COVENANTS If a covenant is not feasible but the postal facilities are located within municipalities that have been designated as CLGs in accordance with the NHPA, adverse effects could be mitigated by utilizing the CLG review process as an alternative to the attachment of a covenant, provided that the SHPO concurs with this approach. While the USPS would need to ensure that local review processes did apply to the subject property, this arrangement could effectively provide for ongoing oversight of the historic property. In some cases, the USPS or the new developer/ owner may need to work with the CLG to designate the property under the local ordinance. Since local review ordinances typically do not mandate preservation in the way that a covenant would, agreeing on such a process may not support a no adverse effect finding since the long- term protection of the property could not be guaranteed. However, the Section 106 agreement could refer to that process as part of the resolution of adverse effects. » PINEHURST, NORTH CAROLINA COLONIAL REVIVAL, 1935 Credit: The Pilot, March 20, 2014 COMMUNITY IMPACTS In the USPS's 2008 report to the ACHP under EO 13287, it acknowledged that most historic post offices that remain in federal ownership are located in small town centers or dense urban cores. The importance of these downtown post offices was reflected in their design, often ranking them among the finest buildings in a community. As such, these post offices have occupied key roles in community identity and remain prominent buildings within their communities. The specter of the vacancy of a key resource in a historic district raises concerns of community viability and vitality. In addition, the potential disappearance of a federal presence in communities is often viewed as a significant loss for the community. The ACHP is aware that several communities have expressed interest in acquiring their community's historic post office. During the visit to Oakland in preparation for this report, as well as through written comments provided, the ACHP was informed that local governments offering to purchase the post office at fair market value (and potentially lease back space for the USPS to continue retail operations) have been rebuffed by the USPS. The USPS has provided no explanation for this apparent unwillingness to entertain local government overtures. Recognizing that communities often have a strong interest in maintaining historic post offices ,.,...,. CONGREV 1 12 It is not the prerogative of a federal agency to choose which entity within a state will fulfill the responsibilities of the SHPO. for community use, eliminating them as a potential recipient excludes them from being an effective partner in the long -term preservation of historic post offices. Unfortunately, it also puts some of these communities in an adversarial role with the USPS. MISINTERPRETING THE ROLE OF CERTIFIED LOCAL GOVERNMENTS The 1980 amendments to the NHPA established the CLG program to "encourage the direct participation of local governments in the identification, evaluation, registration, and preservation of historic properties within their jurisdictions." They also established a set of requirements and standards for CLGs, assuring some degree of consistency and further defining the process for local involvement and review. These include the duty to: • enforce appropriate state and local laws and regulations for the designation and protection of historic properties; • establish a historic preservation review commission by local ordinance; • maintain a system for the survey and inventory of historic properties; • provide for public participation in the local preservation program; and • satisfactorily perform responsibilities delegated to it by the state. The USPS has incorrectly interpreted the role of CLGs in the Section 106 process. Based upon the foregoing criteria, the USPS determined in several cases that the CLG "shall act as the agent" of the SHPO. However, these criteria are unrelated to the Section 106 process. Rather they are federally delegated functions tailored to state and local historic designation, survey, and protection. While a CLG can act as the agent of the SHPO in certain circumstances, such delegation is by mutual agreement between the SHPO and the CLG and does not automatically forfeit the former's responsibilities in favor of the latter. It is not the prerogative of a federal agency to choose which entity within a state will fulfill the responsibilities of the SHPO. The Section 106 regulations do mandate that a CLG be invited to the table (36 CFR§ 800.2(c) (3)), where it can participate in the process and contribute significantly to seeking resolution to issues. But the CLG cannot act in lieu of the SHPO in the Section 106 process absent a formal delegation of such responsibilities through a Programmatic Agreement developed in accordance with 36 CFR§ 800.14(b). CONSIDERATION OF ALTERNATIVES Nationwide, the USPS gives no special consideration in the disposal decision - making process to the historic significance of a post office when determining if the facility is a viable candidate for relocation or cessation of services and disposal. This is a critical concern as it is far preferable to have buildings that were historically designed for public uses remain publically accessible. Such consideration is supported by federal policy reflected in two key Executive Orders, which the USPS has committed to comply with in Board Resolution 82 -7: Executive Order 12072 states that "Federal space shall conserve existing urban resources." (Section 1 -101). Further, it indicates that "procedures for meeting space needs in urban areas shall give serious consideration to the impact a site selection will have on improving the social, economic, environmental, and cultural conditions of the communities in the urban area." (Section 1 -102). In conducting processes to meet federal space needs agencies must consider the "utilization of human, natural, cultural, and community resources." (Section 1- 104(c)). PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 33 • • A Programmatic Agreement could also establish standard practices for the use of covenants and set in place agreements with other organizations on holding covenants. The agency is required to consider "utilization of buildings of historic, architectural, or cultural significance" and "opportunities for locating cultural, educational, recreational, or commercial activities within the proposed facility." (Section 1- 105(b),(e)). Executive Order 13006, issued in 1996, directs federal agencies not only to locate their operations in established downtowns, but also to give first consideration to locating in historic properties within historic districts. The order requires the federal government to "utilize and maintain, wherever operationally appropriate and economically prudent, historic properties and districts, especially those located in central business areas." It also directs federal agencies to give "first consideration" to historic buildings when "operationally appropriate and economically prudent:' The substance of the Executive Order was codified into law as an amendment to the NHPA in 2000. (16 U.S.C. § 470h- 2(a)(1)). In addition, prior to making a formal decision on the sale of a historic post office, the USPS must take seriously its legal obligations to consider options to lease the facility rather than sell it outright. Section 111 of the NHPA requires that any federal agency "... shall, to the extent practicable, establish and implement alternatives for historic properties, including adaptive use, that are not needed for current or projected agency purposes, and may lease a historic property owned by the agency to any person or organization..." In 2010, a federal district court in Washington found that the Federal Reserve Bank of San Francisco failed to comply with Section 111 of the NHPA by authorizing the sale of a historic federal building without considering adaptive use, lease, or exchange. The court stated that "[t] he congressional directive to at least consider, if not implement, adaptive use or lease strategies to protect historic properties is clear ... and the failure to do so would constitute a violation of NHPA : (Comm. for Preservation of the Seattle Fed. Reserve Bank Bldg. v. Fed. Reserve Bank of San Francisco, 2010 U.S. Dist. LEXIS 26084 at 19 (W.D. Wash. Mar. 19, 2010)). The USPS must consider its legal obligations prior to proceeding down a path that would commit it to transferring a historic property out of federal control. ALTERNATIVE APPROACHES TO SECTION 106 COMPLIANCE Since 2012, the ACHP has consistently encouraged the USPS to consider programmatic approaches to Section 106 compliance for the disposal program as an effective mechanism to uniformly address consideration of alternatives and establish procedures for consultation with the public. A PA could govern a number of disposals within a geographic area; such an area could be defined as a single state, a region, or nationwide. This approach would allow the USPS to front load consultation on disposal undertakings, resulting in efficiencies in the Section 106 process and the identification of mitigation measures that could be applied regionally or nationally. A PA could also establish standard practices for the use of covenants and set in place agreements with other organizations on holding covenants. In addition, consultation for development of a PA could include all the parties who would likely have an interest in each individual undertaking, thereby identifying issues and concerns of consulting parties early on and enlisting all the parties in problem solving. Such a programmatic approach would allow the USPS to conclude Section 106 responsibilities for all undertakings covered in the PA, focusing agency resources elsewhere. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 134 Absent clear mandates and guidance to USPS personnel, implementation of the Section 106 regulations will remain inadequate. USPS STAFF CAPABILITIES In June 2012, the USPS FPO indicated that he was involved in more than 70 separate Section 106 undertakings nationwide. Clearly, current reduced USPS staffing levels cannot fully meet the needs required to adequately carry out this responsibility. USPS cultural resource responsibilities were previously carried out by staff at both the national level by the FPO and at the USPS Facility Service Offices by Historic Preservation Coordinators. Through reorganization, all responsibilities are now consolidated into 1h positions at the national level. According to the USPS, until recently, none of the staff assigned cultural resource duties met the Secretary's Professional Qualification Standards (48 FR 22716). It is a positive step that the incoming USPS FPO does meet these Standards. However, the overall manpower assigned to manage USPS compliance responsibilities for its historic properties is inadequate to meet the need for community interaction and meaningful consultation required under Section 106. In addition, in information provided by the USPS to the ACHP for preparation of this report, the USPS characterizes the conduct of public hearings and request for public comment as the core of its Section 106 consultation process. As previously noted, these efforts are inadequate for purposes of Section 106 and represent a fundamental misunderstanding of the requirements of Section 106 and the meaning of consultation. It further demonstrates the need for additional qualified staff that is well versed in the intent and requirements of the Section 106 process. Finally, the USPS FPO position is organizationally located within Facilities Implementation (Design and Construction). Previously, this position was located in Realty Assets (Asset Management). As a result of this change, the FPO position has no input into disposal analyses. USPS POLICY AND PROCEDURES In its 2008 report to the ACHP under EO 13287, the USPS indicated that it had completed the update of its procedural handbooks and manuals to correlate current federal laws with existing USPS procedures and regulations. These revised handbooks address current regulations for protecting historic resources and their correlation with USPS policies. The revised documents are reportedly available to all USPS employees on the internal Postal Blue network and include the following: • F -6, General Investment Policies and Procedures • FE -1, Realty Acquisition and Management • RE -1, Facilities Guide to Real Property Acquisitions and Related Services • RE -5, Building and Site Security Requirements • RE -6, Facilities Environmental Guide • RE -12, Repair and Alteration Surveys • RE -13, Repair and Alteration of Real Property Facilities • RE -14, Design and Construction Handbook Review of Handbook RE -6 indicates inaccurate interpretation of the Section 106 regulations and inadequate guidance on their implementation. Absent clear mandates and guidance to USPS personnel, implementation of the Section 106 regulations will remain inadequate. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 135 • » BRONX, NEW YORK "RESOURCES OF AMERICA" MURAL BEN SHAHN AND BERNARDA BRYSON, 1938 -39 Credit: USPS PROTECTION OF AND ACCESS TO MURALS AND OTHER ARTWORK Images on the walls of 1930s post offices have captured the American scene and transformed the post office into a truly democratic art gallery. During the Great Depression, Americans searched for images that could serve as beacons of hope during a time of economic and emotional despair. Many of the post offices constructed during the 1930s were adorned with murals or other forms of artwork commissioned by the federal government. Placement of the commissioned murals and sculptures in public buildings resulted from the desire to make original, quality art accessible to those who otherwise had little or no opportunity to see it. Today, these works of art remain prized community resources, often housed within historic post offices. While the USPS indicates its intent to retain ownership of artwork following disposal of historic buildings, the long- term care and public access often remains in question. During the Oakland meeting, testimony was presented that asserted the deterioration of artwork, removal of murals from post offices, and little or no access afforded to the public following disposal of the historic buildings. COMPLIANCE WITH THE NATIONAL ENVIRONMENTAL POLICY ACT A number of organizations have expressed concern with regard to the USPS process for complying with the NEPA. While the ACHP has no jurisdiction over an agency's compliance with NEPA (NEPA assigns CEQ the task of ensuring that federal agencies meet its requirements), issues raised regarding NEPA are of concern, as NEPA requires consideration of cultural resources. The concepts of'coordination" PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 136 and "integration" are found in both the CEQ NEPA regulations and Section 106 regulations, because they provide efficiencies, improve public understanding, and lead to more informed decisions. The ACHP and CEQ recently jointly published a handbook encouraging such coordination: "NEPA and NHPA: A Handbook for Integrating NEPA and Section 106" (available at http : / /www.achp.gov /nepa106.html). Effective NEPA review is expected to integrate other planning and environmental reviews, including impacts to historic properties. NEPA and Section 106 have independent statutory requirements, and compliance with NEPA does not in itself satisfy an agency's obligations under Section 106. If the proposed action is the type of undertaking with the potential to affect historic properties, the agency must initiate the Section 106 consultation process, and the findings of the Section 106 process are often reported in the NEPA review. A categorical exclusion" (CATEX) is the least intensive form of NEPA compliance and is defined in NEPA as "a category of actions which do not individually or cumulatively have a significant effect on the human environment." A CATEX is concluded with the determination that a proposed action falls within the category of actions and there are no extraordinary circumstances that indicate environmental concerns merit further environmental review (40 CFR § 1508.4). Potential impacts to historic properties may constitute an extraordinary circumstance that renders the use of a CATEX inappropriate for NEPA purposes. The USPS NEPA procedures state that "To be categorically excluded, it must be determined that a proposed action fits within a class listed and there are no extraordinary circumstances that may affect the significance of the proposal" (39 CFR § 775.6(a)). When there are no clear opportunities to avoid or mitigate impacts to historic properties, the potential impact would be considered an extraordinary circumstance. An effective process for complying with Section 106 of the NHPA is therefore essential for proper compliance with NEPA. In January 2014, the USPS published an Interim Final Rule substantially revising its criteria for use of a CATEX for disposition of facilities ( http: / /www.gpo.gov /fdsys /pkg /FR -2014- 01- 13 /html /2014- 00324.htm). Prior to the interim final rule making, the USPS CATEX for dispositions of facilities provided for a CATEX in the following circumstance: Acquisition and disposal through sale, lease, transfer, or exchange of real property that does not involve an increase in volumes, concentrations, or discharge rates of wastes, air emissions, or water effluents, and that under reasonably foreseeable uses, have generally similar environmental impacts as compared to those before the acquisition or disposal. A determination that the proposed action is categorically excluded can be based upon previous "reference actions" documented under § 775.6(b)(17).6." Under this CATEX, the agency would focus on the property proposed for disposition, examine the development plans of its potential buyers, and make specific determinations that the environment would not be harmed by its action. However, under the interim final CATEX, the USPS could bear a substantially lighter burden to consider how the environment would be affected by the disposal. The interim final CATEX could be used, absent extraordinary circumstances, in the following circumstance: Disposal of properties where the size, area, topography, and zoning are similar to existing surrounding properties and /or where current and reasonable anticipated uses are or would be similar to current surrounding uses (e.g., commercial store in a commercial strip, warehouse in an urban complex, office building in downtown area, row house or vacant lot in an urban area). PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 137 The USPS however, stops short of reproducing GSA's best practices regarding the management of historic buildings, a critical factor in GSA's overall approach to NEPA and Section 106 obligations. This would seemingly divert the analysis from the property itself and whether its disposal would cause an environmental impact, to focus instead on surrounding development that has already occurred. The USPS uses as its principal rationale for its amended CATEX procedure that it seeks to be consistent with other agencies, such as GSA, which implemented a similar rule change in 2000. In the Interim Final Rule, the USPS finds GSAs experience and consideration to be a useful guide in how it manages its own NEPA process. The USPS however, stops short of reproducing GSAs best practices regarding the management of historic buildings, a critical factor in GSAs overall approach to NEPA and Section 106 obligations. In addition to its much more thorough analysis of extraordinary circumstances, GSA has a detailed process for consideration of alternatives prior to disposal of federal property, as required by the NHPA. Its Federal Management Regulations contain specific provisions for historic properties that have not been comparably adopted by the USPS. For this reason, the USPS must be distinguished from GSA, which has policies in place to ensure that a full range of alternatives are considered before historic buildings are offered for sale. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 138 FINDINGS AND RECOMMENDATIONS FOR USPS PROGRAM IMPROVEMENTS This section contains the ACHP's findings regarding USPS compliance with Section 106 of the NHPA for its relocation of services and disposal of historic postal facilities. These findings and their accompanying recommendations highlight the most significant issues related to the USPS disposal program and offer new strategies for going forward. It is important to note that, while the Congress has asked the ACHP for steps it can take to ensure USPS compliance with Section 106, neither the NHPA nor the Section 106 regulations authorize the ACHP to directly control or dictate the actions of the USPS. Legal enforcement of Section 106 occurs through civil litigation filed by members of the public. Recognizing this, the recommendations do include steps the ACHP can and will take to address the issues. More importantly, the ACHP, under its statutory authority to advise the President and the Congress and to "review the policies and programs of federal agencies and recommend to such agencies methods to improve the effectiveness, coordination, and consistency of those policies and programs with the policies and programs carried out under this Act" (16 U.S.C. § 470j), is providing recommendations for action by the Congress and the USPS itself. FINDING NO. I The responsibility of the USPS to comply with the requirements of Section 106, as a matter of law rather than discretionary policy, is supported by persuasive case law but is not clearly established. USPS acknowledges through resolution of its Board of Governors that, as a matter of policy, it will abide by the general policies and requirements for historic preservation applicable to the federal government, specifically Sections 106, 110, and 111 of the National Historic Preservation Act and their implementing regulations. This spirit of "voluntary" compliance put forth by the USPS results in a Section 106 compliance process that is perceived by stakeholders as reluctant, minimal, and only going through the motions." Further, this "voluntary" policy enables the USPS to select when and how they chose to comply with Section 106. While case law is clear that the USPS exemptions do not extend to NEPA (a statute very similar in nature to the NHPA), such case law has not directly addressed the issue with regard to the NHPA. RECOMMENDATION The Congress should clarify that the NHPA and its implementing regulations apply to all programs of the USPS, in order to remove any doubt that the USPS is legally obligated to comply with Sections 106, 110, and 111 of the NHPA and to conduct a strong and transparent consultation process with stakeholders as required by the implementing regulations. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 139 • • FINDING NO. 2 The continuation of USPS relocation and disposal actions for historic postal facilities without significant corrective steps can harm these historic properties of importance to communities. This report contains a series of recommendations for implementation by Congress and the USPS and for actions that will be undertaken by the ACHP. These recommendations and actions, implemented collectively, will result in a Section 106 compliance process for the disposal of historic postal facilities that fully considers the views of consulting parties and examines alternatives that can ensure the long term protection of historic properties. Until such time as these reforms are implemented however, continuing decision making and actions to relocate services from these historic facilities or disposing of the facilities perpetuates the inadequacies of the USPS Section 106 compliance process and puts the protection of historic properties at risk. RECOMMENDATION The USPS should suspend any further actions to relocate services out of historic postal facilities and dispose of those historic facilities until such time as it fully implements the recommendations of this report. If the USPS fails to suspend such actions, the ACHP recommends that Congress direct the USPS to suspend all relocation of service decisions and disposal actions for postal facilities that are listed or eligible for listing on the National Register of Historic Places until such time as the USPS fully implements the recommendations of this report directed to it. FINDING NO. 3 The USPS defines the undertaking subject to Section 106 review too narrowly to enable consideration of alternatives and meaningful consultation with stakeholders. The USPS has repeatedly expressed its interpretation of the Section 106 regulations that the initiation of compliance with Section 106 is necessary only when the USPS decides to initiate disposal of a historic post office. The ACHP disagrees with this interpretation. The decision to cease or relocate postal services and operations is inextricably linked to the decision to dispose of the building. They are not separate, unrelated actions: but for the relocation of postal operations, the disposal of the building would not occur. RECOMMENDATION The USPS should define the undertaking for Section 106 purposes as both the proposal to cease /relocate postal services and operations and the subsequent proposal to dispose of the historic property. FINDING NO. 4 The failure of the USPS to identify and consider alternatives to relocation of services and disposal of historic postal facilities does not meet the requirements of Section 106. The Section 106 regulations state that "[t]he agency official shall ensure that the section 106 process is initiated early in the undertaking's planning so that a broad range of alternatives PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 140 may be considered during the planning process for the undertaking." (36 CFR 800.1(c)). The ACHP has no evidence that the USPS has explored, under Section 106, any alternatives to disposal of any of the historic post offices to date. Rather, by the time it initiates its Section 106 process, it has already declared that sale is the only option, despite considerable objection in most cases from community leaders and preservation advocates. RECOMMENDATION The USPS should initiate Section 106 consultation at the time relocation or cessation of services at a historic postal facility is considered, rather than waiting until disposal is proposed, in order to fully identify, evaluate, and consult upon a range of alternatives that could avoid or minimize effects. FINDING NO. 5 Covenants being used by the USPS in the disposal of historic postal facilities are often insufficient to ensure long -term protection of historic properties. The ACHP and preservation stakeholders continue to have a number of concerns regarding the use of preservation covenants as a mechanism to make a finding of no adverse effect. Specifically, the language in a number of proposed covenants may not be sufficient to adequately ensure long -term preservation of the historic property, as required by the Section 106 regulations to justify a finding of no adverse effect. For example, some covenants allow for the covenant to be terminated due to"good cause" or may not be in effect in perpetuity. In addition, the lack of financial resources being provided to potential covenant holders for the enforcement of the covenant, the role of CLGs in the Section 106 process and as covenant holders, and the lack of willing and able preservation organizations that have the capacity to enforce a covenant have been of concern. RECOMMENDATION The ACHP will work with the USPS, NCSHPO, the NTHP, and other stakeholders to develop a model covenant to serve as the basis for all future covenants used for historic post office disposals. Further, the ACHP will assist the USPS to identify preservation partners (nationwide, state, and local) and facilitate collaboration to establish partnerships for holding and enforcing covenants. FINDING NO. 6 Sale of historic postal facilities to non - federal owners may result in an adverse effect under Section 106. Many post offices were constructed and have operated for decades as the civic core of the community, serving as community meeting places and providing the federal presence in the community. The effect of this loss of traditional use on the significance of the historic property should be determined through evaluation of the property's significance in accordance with the National Register criteria. That is, if a post office is listed or eligible for the NRHP based solely on its architecture or design (National Register Criterion C), then a change of use would not constitute an adverse effect. However, if the significance is also tied to historical events (National Register Criterion A), such as the traditional function of providing retail mail service to the community, then changing the use of the property may constitute an adverse effect. (36 CFR § 800.5(a)(2)(iv)) PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 141 • • In addition, while the use of covenants to reach a no adverse effect finding may be preferable to the USPS in the majority of cases, if efforts to identify a covenant holder and /or the attachment of a legally enforceable covenant are not feasible, then a finding of adverse effect is appropriate. The finding of no adverse effect is appropriate only when the covenant adequately provides for long -term preservation of the property's historic significance (which may include characteristics beyond its architectural features). Rather than insisting on the "one size fits all" approach of a no adverse effect finding and use of a preservation covenant, it is appropriate for the USPS to acknowledge that, at times, an adverse effect finding is the procedurally correct course of action, leading to consultation with stakeholders to find ways to minimize or mitigate the adverse effects. RECOMMENDATION The USPS must correctly apply all of the Criteria of Adverse Effect found in the Section 106 regulations (36 CFR 800.5) to determine when a finding of no adverse effect or adverse effect is warranted. FINDING NO. 7 Local preservation ordinances administered by Certified Local Governments can be used in appropriate cases to resolve the adverse effects resulting from the disposal of a historic post office. Where postal facilities are located within municipalities that have been designated as CLGs, the CLG review process embodied in a local historic preservation ordinance has potential to serve as an alternative to a covenant. RECOMMENDATION The USPS should explore partnerships with CLGs to facilitate the use of local ordinances as mitigation for adverse effects when the SHPO concurs. FINDING NO. 8 Alternative property disposal systems that effectively deal with historic property transfers are available to the USPS. The Federal Property and Administrative Services Act of 1949 was designed, in part, to increase the efficiency and economy of federal government operations with regard to the procurement, utilization, and disposal of property. To fulfill this mandate, GSAs Office of Real Property Disposal offers comprehensive services to federal agencies, including the USPS, in the marketing and sale of federal real estate at a cost lower than commercial vendors. GSA offers all services related to disposal of federal property, including compliance with Section 106, and has a proven track record of efficient, cost - effective, competent service to federal agencies. RECOMMENDATION The USPS should evaluate the benefits of utilizing GSA's Office of Real Property Disposal to conduct disposal activities, including Section 106 compliance. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 142 FINDING NO. 9 Alternative disposal authorities exist to allow historic postal facilities to remain in public ownership. The Historic Surplus Property Program provides a cost - effective mechanism for iconic community resources to transfer to non - federal governmental entities, keeping important historic properties in the public domain and ensuring their long -term preservation. Authorized under the Federal Property and Administrative Services Act of 1949, the Historic Surplus Property Program (administered cooperatively by GSA and the National Park Service) authorizes cost -free conveyances of suitable surplus historic properties to states, counties, municipalities, and other governmental entities for use as a "historic monument;' which includes properties listed or eligible for listing on the NRHP. Transferred properties may be used for a wide variety of public facilities or revenue - producing activities. While private and not - for -profit organizations cannot acquire property under this program, they may enter into long -term leases with recipients of historic surplus properties, and private developers with a long -term lease may be eligible to take advantage of federal historic preservation tax incentives. While disposal of historic property through this program would not generate revenue equivalent to selling the property to a private purchaser, it would achieve cost avoidance for the USPS through elimination of the ongoing overhead and maintenance costs associated with retaining ownership of the property and, more importantly, ensure protection of significant historic assets. RECOMMENDATION The USPS should consider use of the Historic Surplus Property Program, including seeking the appropriate authority to do so if necessary, for select historic properties where protection of the property is paramount and the state or local government is interested in acquiring the property. FINDING NO. 10 Program Alternatives are available to help USPS improve compliance with Section 106. To meet challenges like those faced by the USPS, the Section 106 regulations allow for development of "program alternatives" to stand in place of the default Section 106 process. The regulations list five types of program alternatives, including a) alternate procedures, which can be adopted by an agency in lieu of the Section 106 regulations; b) Programmatic Agreements; c) exempted categories of activities; d) standard treatments for certain types of resources and impacts; and e) program comments. A program alternative could be negotiated to govern a number of disposals within a geographic area; such an area could be defined as a single state, a region, or nationwide. This approach may be especially helpful in states such as California due to the high number of disposals concentrated there. In addition, it would allow USPS to front load the consultation for disposals, resulting in efficiencies in the Section 106 process and the identification of mitigation measures that could be applied regionally or nationally. Consultation for development of a program alternative could include all the parties who would likely have an interest in each individual undertaking, thereby identifying issues and concerns of consulting parties early on and enlisting all the parties in problem - solving. This approach would allow the USPS to conclude Section 106 responsibilities for all undertakings covered in the program alternative, focusing agency resources elsewhere. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 143 • • • RECOMMENDATION The ACHP should continue to work with the USPS, NCSHPO, and other stakeholders to identify a program alternative appropriate to the scope and duration of the disposal program and work with the parties to develop such an approach. FINDING NO. I I The existing USPS historic preservation program lacks resources and proper influence to adequately ensure compliance with Sections 106 and 110 of the NHPA. A number of deficiencies in the USPS disposal program and compliance procedures noted in this report result from insufficient expertise, manpower, and training. This collective lack of resources has created a compliance program that is failing to implement proper consultation, conduct proactive project planning, and ensure meaningful, good faith stewardship of the historic properties entrusted to the USPS. In addition, it is important that the USPS work with SHPOs on development of statewide historic contexts and actively inventory and identify historic properties in accordance with Section 110 of the NHPA. A commitment is also needed from the USPS to maintain and improve the data contained within the USPS property database, eFMS, to ensure USPS personnel have access to accurate information on regional and statewide historic trends to effectively manage and maintain its historic buildings. Further, the USPS FPO position is located within Facilities Implementation (Design and Construction) and accordingly has no input into disposal analyses and decisions. In order to ensure the expertise of the FPO is utilized to inform disposal program planning and decision making, the FPO position should be part of the USPS Planning Group. As an alternative, this position could report directly to the Vice President for Facilities to ensure historic property considerations are factored in early in the planning process and Section 106 compliance and consultation are fully and properly implemented. RECOMMENDATION The USPS should expand its historic preservation program to provide adequate resources for regular historic property inventory, database management and maintenance, and increased numbers of qualified staff to conduct individual Section 106 reviews and consultations. In addition, the FPO position should be relocated within the USPS organizational structure to enable full participation in disposal planning and decision making. FINDING NO. 12 USPS personnel lack adequate guidance on the disposal of historic postal facilities and special consideration associated with the disposal of these properties. Existing policy and guidance available to USPS personnel are dated, and in some cases, inaccurate in their description of the statutory and regulatory obligations of the USPS with regard to historic properties. USPS personnel need information on how the historic status of the property may influence disposal decision making, incorporating information on the significance of the facility in marketing materials (including the availability of historic preservation tax credits) and best practices for timing, communication, and decision making for historic property disposals. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 44 RECOMMENDATION The USPS, in cooperation with the ACHP, should work with NCSHPO and other stakeholders to develop guidance and training for USPS employees on the process, procedures, and special considerations of disposal of historic post offices, including the implementation of the Section 106 process and consultation with stakeholders. FINDING NO. 13 Potential purchasers /developers of historic post offices often lack knowledge of both the responsibilities associated with owning a property with a historic preservation covenant as well as the potential incentives available to them due to the property's historic significance. While many developers are knowledgeable about the considerations and opportunities offered when redeveloping historic properties, some certainly are not. Information should be made available to potential developers before they consider the purchase and redevelopment of an important part of a community's historic heritage. Because there are purchasers of historic buildings with covenants that would subject them to requirements of the Secretary of the Interior's Standards for Rehabilitation and therefore may make redevelopment projects eligible for historic preservation tax credits, the goal would be to place more specific information in the hands of developers prior to the execution of sale of historic properties, so that they recognize the benefit of the buildings' historic status as manifested in significant tax savings rather than see protective measures as a hindrance to their reuse. This effort would involve preparing materials on the federal investment tax credit and gathering information on other similar state or local -level incentive programs for historic building rehabilitation. RECOMMENDATION The USPS, in cooperation with the ACHP, should work with NCSHPO and other preservation partners (such as the National Park Service who administers the federal investment tax credit program) to develop guidance for developers on covenants and historic property stewardship, including information on federal and state tax incentive programs, and how assuming the cost of managing a covenant could be offset by the corresponding decrease in the local tax valuation of the property. FINDING NO. 14 The USPS has not used Section 111 of the NHPA to lease historic properties no longer needed for its agency's purposes. As noted, Section 111 requires federal agencies to give serious consideration to alternative uses for historic properties and authorizes leases of such properties to non - federal entities. Leasing can provide an income stream to maintain a historic post office while retaining the building in public ownership. This approach could offer an effective tool for dealing with excess capacity while allowing the continued use of the post office for retail operations in a small portion of the building. RECOMMENDATION The USPS should evaluate the viability of leasing historic post offices, or portions thereof, in accordance with Section 111 of NHPA as an alternative to disposal. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 145 • • • FINDING NO. 15 The USPS may be placing the murals and artwork in historic post offices at risk when disposing of the buildings that house them. While the USPS indicates its intent to retain ownership of artwork following disposal of historic buildings, the long -term care and public access often remains in question. The murals and artwork within historic post offices are undoubtedly a component of the importance of the building and hold significant value for the community. The USPS has a responsibility as steward of historic properties to maintain those features that contribute to the building's significance. Through diminishing financial resources and planned disposals, USPS is putting publically funded murals and other works of art in historic post offices at risk for deterioration and loss. Further, despite promises made to communities for continued public access, these promises have, in some cases, not been realized. RECOMMENDATION The USPS should develop language for inclusion in covenants attached to historic properties or other legally binding mechanisms that makes an effective commitment for the USPS and a binding obligation for the new owner to ensure proper maintenance and public access to significant murals and other artwork located within historic post offices. CONCLUSION Historic post offices in cities and towns across the United States are more than providers of mailing services. They are important, often pivotal components of the civic landscape, imbued with a long tradition of use and community pride and identity. As the USPS addresses its challenges in managing these special resources and seeks realistic solutions to its financial needs, it should be mindful of their importance and attempt to see them as the local residents do. By fully implementing the Section 106 process and its consultation requirements, the USPS can benefit from the assistance of local communities and other stakeholders to plan for the future operational needs of the agency and seek sound historic preservation outcomes. It should work collaboratively with the ACHP, the major national preservation organizations, and local stakeholders to fashion an approach to its historic preservation responsibilities that ensures the long -term vitality of its unique historic assets. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 46 SOURCES Agreement Between the General Services Administration and the United States Postal Service Covering Real and Personal Property Relationships and Associated Services, July 1985 and Letter of Understanding, February 2005. A Local Official's Guide to Developing Better Community Post Offices: A project of the Vermont League of Cities and Towns, the Preservation Trust of Vermont, and the Vermont Division for Historic Preservation. June 2001. Comm. for Preservation of the Seattle Fed. Reserve Bank Bldg. v. Fed. Reserve Bank of San Francisco, 2010 U.S. Dist. LEXIS 26084 at 19 (W.D. Wash. Mar. 19, 2010) Consolidated Appropriations Act, 2014. Division G. Explanatory Statement. Department of Interior, National Park Service. National Register Bulletin: How to Apply the National Register Criteria to Post Offices. Washington, D.C.: 1984. Revised 1994. Federal Property and Administrative Services Act of 1949, As Amended (Pub. L. 152, Ch. 288, 63 Stat 377). Government Accountability Office. Report to Congressional Requesters: U.S. Postal Service, Mail Processing Realignment Efforts Under Way Need Better Integration and Explanation, Washington, DC: June 2007. House Resolution 466: Supporting a moratorium on the sale of historic post office buildings. January 29, 2014. Inspector General United States Postal Service. 21st Century Post Office: Opportunities to Share Excess Resources. Washington, DC: February 9, 2012. Inspector General United States Postal Service. Accuracy of the Electronic Facilities Management System: Audit Report. Washington, DC: September 28, 2012. Inspector General United States Postal Service. Lessons Learned from Mail Processing Network Rationalization Initiatives: Management Advisory Report. Washington, DC: March 27, 2013. National Park Service. National Register Bulletin 13: How to Apply the National Register Criteria to Post Offices. Washington, DC: 1984. Revised 1994. National Park Service. National Register Bulletin 15: How to Apply the National Register Criteria for Evaluation. Washington, DC: 1990. Revised 1991, 1995, 1997. Revised for Internet 1995, 2001, 2002. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 147 • National Trust Easement Policy, National Trust for Historic Preservation. Washington, DC: January 13, 1976, Amended December 7, 1982 and May 22, 1995. Postal Regulatory Commission. Rationalization Service Changes, 2012: Advisory Opinion on Mail Processing Network Rationalization Service Changes. Washington, DC: September 28, 2012. U.S. Postal Service. History of the U.S. Postal Service, 1775 -1980. Publications 100, Washington, DC: April 1981. U.S. Postal Service. Executive Order 13287: Preserve America, Report to the Advisory Council on Historic Preservation. Washington, DC: September 2008. U.S. Postal Service. Guide to Real Property Acquisitions and Related Services (Handbook RE -1). Washington, DC: August 1996. Updated June 2008. U.S. Postal Service. Handbook RE -6, Facilities Environmental Handbook. Washington, DC: November 2004. U.S. Postal Service. USPS Nationwide Historic Context Study: Postal Facilities Constructed or Occupied Between 1940 and 1971. Washington, DC: October 2012. REGULATIONS Community Relations Regulations (39 CFR 241.4). Postal Service Relocation Regulations (39 CFR 777, Relocation Assistance and Real Property Acquisition). CORRESPONDENCE Correspondence from Reid Nelson, Director, Office of Federal Agency Programs, ACHP to Sharon Freiman, Attorney, Procurement and Property Law, USPS, January 10, 2013. Correspondence from Paul Edmondson, Chief Legal Officer, National Trust for Historic Preservation to Sharon Freiman, Attorney, Procurement and Property Law, USPS, February 5, 2013. Correspondence from Joseph J. Mulvey, Real Estate Specialist, USPS, to Ruben Diaz, Jr., Bronx Borough President, March 14, 2013. Correspondence from the National Trust for Historic Preservation, the National Post Office Collaborate, the City of Berkeley, the California Preservation Foundation, the La Jolla Historical Society, and the Los Angeles Conservancy to Angie Mitchell, USPS, February 11, 2014. Correspondence from Reid Nelson, Director, Office of Federal Agency Programs, ACHP to Sharon Freiman, Chief Counsel, Procurement and Property Law, USPS, February 14, 2014. Correspondence from Daniel Delahaye, USPS to Reid Nelson, Director, Office of Federal Agency Programs, ACHP, February 20, 2014. PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 48 TESTIMONY PROVIDED ON MARCH 11, 2014, OAKLAND, CA Alameda County Parks, Recreation and Historical Commission, Al Minard Berkeley Architectural Heritage Association, Daniella Thompson Berkeley Design Associates, Jay Claiborne California Office of Historic Preservation, Carol Roland -Nawi, State Historic Preservation Officer California Preservation Foundation, Cindy Heitzman, Executive Director Citizens to Save the Berkeley Post Office, Mike Lonergan City of Berkeley, Tom Bates, Mayor Living New Deal, Gray Brechin Los Angeles Conservancy, Adrian Fine, Director of Advocacy National New Deal Preservation Association, Harvey Smith, Board President National Post Office Collaborate, Jacqueline McCormack National Trust for Historic Preservation, Christine Morris, Senior Field Officer Office of Congresswoman Barbara Lee, Jonathan Gast Save the La Jolla Post Office Task Force, Diane Kane WRITTEN COMMENTS SUBMITTED TO THE ACHP Berkeley Architectural Heritage Association, Berkeley, CA, (Susan D. Cerny, Corporate Secretary) Berkeley Design Associates, Berkeley, CA (Anthony Bruzzone, President) Charleston, Illinois Historic Preservation Commission (Elisa S. Roberts) Citizens to Save the Berkeley Post Office, Berkeley, CA (Moni T. Law) Citizens to Save the Berkeley Post Office, Berkeley, CA (Mike Lonergan) Citizens to Save the Berkeley Post Office, Berkeley, CA (Charlene M. Woodcock) City of Berkeley, CA (Tom Bates, Mayor) Historic Neighborhood Preservation Program, Stamford CT Indiana Department of Natural Resources, Division of Historic Preservation and Archaeology (SHPO)(Cathy Draeger - Williams, Archaeologist) PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 149 • • • Kansas Historical Society (SHPO) (Kim Gant, Review and Compliance Coordinator) Living New Deal, University of California, Berkeley (Gray Brechin) Los Angeles Conservancy, Los Angeles, CA (Adrian Scott Fine, Director of Advocacy) National New Deal Preservation Association, Berkeley, CA (Harvey Smith, Board President) National Post Office Collaborate, Berkeley, CA ( Jacqueline McCormack) NY State Parks, Recreation & Historic Preservation, Division of Historic Preservation (SHPO) (Beth Cumming, Supervisor, Technical Assistance and Compliance Unit) Northfield Downtown Development Corporation, Northfield, MN (Ross A. Currier, Executive Director) Northfield Historical Society, Northfield, MN (Hayes Scriven, Executive Director) Restore Oregon (Peggy Moretti, Executive Director) Save the La Jolla Post Office Task Force, La Jolla, CA (Diane Kane) Washington State Department of Archaeology and Historic Preservation (SHPO) (Gregory Griffith, Deputy State Historic Preservation Officer) Donald Adams, Kansas City, MO Ms. Marcia Caine Edelen, Berkeley, CA Ms. Simona Miller, Berkeley, CA Dr. Steve Hutkins, Associate Professor, New York University (Save the Post Office Founder - Editor) Michael B. Schwartz, Tucson, AZ A Roy Smith, West Chester, PA Ruth Claire Weintraub, Huntington Station, NY PRESERVING HISTORIC POST OFFICES: A REPORT TO CONGRESS 1 50 .‘" A 4 ' „in 00; St4 15 1 4 it...11331.4§.11110.4afetatt-Winitalikweii,""Fazratm*:■ Advisory Council on Historic Preservation 1100 Pennsylvania Avenue, NW, Suite 803, Washington, DC 20004 Phone: 202-606-8503 • Fax: 202-606-8647 www.achp.gov I www.preservearnerica.gov tripadvisor Converted from the old post office - Picture of The Arnold Machin, Newcastle -under -Lyme JOIN LOG IN i© USD Newcastle -u. •• Hotels Flights Vacation Rentals Restaurants Things to Do Best of 2015 Your Fliends f More Mite a Re leo, �p • 9 Newcastle- under -Lyme, Staffordshire, En... CL What are you looking for? Search ope > United Kingdom (UK) > England Staffordshire > Newcastle- under -Lyme > Newcastle- under -Lyme Restaurants > The Arnold Machin Pictures QTQ We check over 200 sites for the The Arnold Machin Photo: Converted from the old post office 37 Ironmarket, Newcastle -under -Lyme ST5 1 PB, England Ranked #90 of 122 Restaurants in Newcastle -under -Lyme 58 reviews Not impressed" 08/29/2015 "Horendous" 08/26/2015 • Report as inappropriate Converted from the old post office (Trevaldo, Sep 2011) Good beer. Decent food. 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Taxes, fees not included for deals content. • oD rectLmk- y191)810 -d". 734432- i3...id Machin - Newcastle under Lyme Staffordshire England.hlml #35758332 9/7115, 6:18 PM Page 1 of 1 National Trust for Historic Preservation Gri.e the ptsr. Fnneh :fie furore' Register 1 Log:n HO WE ARE MEMBERSHIPS INFO CENTER RESOURCES PRESERVATIONNATION.ORG Right- Sizing the Mail: Advocating to Retain or Reuse Historic Post Offices By Elaine Stiles I From Forum Bulletin I August 15, 2011 I Looking for more articles, information, and discussions of cutting -edge issues in historic preservation? Join the National Trust Forum, the National Trust membership program for professional and volunteer preservation leaders. You will become part of a national network of committed and experienced preservationists and have access to valuable print and online resources and other benefits. To learn more about the perks of Forum membership, visit preservationnation.org/forum/joinforumnow.html. In Modesto, Calif., the city's 1933 New Deal -era Beaux Arts main post office — complete with 1937 murals by Treasury Relief Arts Project artist Ray Boynton-4s currently being offered for sale at a government auction. In Northfield, Minn., the 1936 Gothic Revival main post office branch in the heart of the Downtown National Register District is slated for closure and sale. In Lakewood, N.J., the 1938 post office, with Its delicate Grecian relief window surrounds, is facing a similar future, as are historic post offices in Norwich, Corn.; Reno, Nev.; York, Pa.; Fort Worth, Tex.; Eugene, Ore.; and hundreds of other communities across the nation. These historic poet offices are among the thousands of postal facilities the US Postal Service (USPS) is planning to close, SEARCH Modesto, Calif.'s New Deal rain post office, with notable interior murals, is among thousands of postal facilities across the country the US Postal Service plans to close. The building will be auctioned. Credit: ANis Hendley Noehill patronage, since 2009 the LISPS has been consolidating its retail locations in larger post office locations and contracting out more of its services to outside retailers, now termed "Village Post Offices.' On July 26, the USPS released a list of more than 3,700 post offices nationwide that it plans to study for closure. This list does not appear to include the hundreds of postal facilities studied and proposed for closure since 2009, and it is possible that more waves of closures will follow. Recently, the Postmaster General referred to plans to dose roughly half of the existing 32,000 postal facilities in the US in the next six to seven years. The range of properties the USPS is slating for closure is diverse, encompassing large main post offices in downtown areas; smaller sites' in urban, suburban, and rural areas; and facilities of all periods of construction. As historic postal properties slated for sale and/or closure conclude their period of use as postal facilities, communities are responding in myriad ways, from engaging in legislative advocacy to preserve postal service at the site or in the downtown area to identifying preservation - friendly buyers or new public uses for the buildings. This work has not been easy, as until recently the USPS process for closing postal fadlties was difficult to navigate, with limited pudic notice and participation and different processes for different facility designations. As public and congressional concern over the effects of post office closures mounted during 2010, the USPS revised its pudic notice and involvement processes and provided more information to the public about the extent of proposed closures. This article provides details on the US Postal Service discontinuance and retail optimization process for historic postal facilities, and how preservation interests can get Involved to advocate for preserving postal services or to facilitate positive outcomes for discontinued historic postal properties. tt is important to note that the USPS discontinuance process will likely evolve and change in the corning months. The USPS has requested an advisory opinion on its plans from the Postal Regulatory Commission, which is required by law before the USPS embarks on any program that coukl have a significant impact on postal service to the nation. This process will take several months. Those interested in this should consult the resources cited at the end of this article for the most uptodate information. s the USPS closing or selling so many retail postal facilities? Since a major reorganization of the USPS in 1970, the service has been responsible for supporting itself and receives ro federal r,, ,sirgh';- sizing- the-maif htrnl1.Ve8BPUr3arU 918115, 11:41 AM Page 1 of 4 appropriations for operations. The Postal Service has been operating with annual budget deficits of up to $8.5 billion since 2000 due to steeply declining mail volumes, increased delivery costs, and fundamental changes in how the world communicates. iochallenges spurred the LISPS to rethink its service model, 2010 the agency released Ensuring a Viable Postal Service for America: An Action Ran for the Future, which outlines ways to save $123 billion by 2020. Its proposals include expanding access to postal services where customers already shop, partnering with other retailers, and creating more automated services. M this shift occurs, the USPS plans to reduce existing postal facilities by dosing locations, and in cases where the USPS owns the post office building, selling the property. (It is important to note that the USPS owns only about 13 percent of its facilities, meaning that most of these closures would be lease terminations versus building sales.) In limited cases, the USPS is selling properties and leasing back retail space from new owners to reduce operating costs. Northfield, Mina's main post office branch (1933) in the heart of the city's historic downtown Is slated for closure and sale. How can 1 find out if postal facilities in my community are slated for closure or sale? On July 26, the USPS released a list of more than 3,700 facilities it is studying for closure, but up to 1,400 additional offices currently under study for closure may not be reflected here. Typically a community will learn a local facility is under consideration for closure when the USPS initiates a feasibility study. Beginning July 14, 2011, the USPS will mail to those in the affected zip code a written notice of the preparation of a feasibility study for discontinuance of a facility and a customer questionnaire, will notify the key pudic official in the associated community, and will consult with the local postmaster. (For more detailed information on this process, see 39 CFR 241, Post Office Organization and Administration: Establishment, Classification, and Discontinuance.) Unfortunately, the new regulations only apply to closure studies initiated after July 14, 2011. What is the LISPS process for deciding whether to close a postal facility? Recently amended USPS regulations on discontinuance of a postal facility (36 CFR 241.3) outline the decision-making process. Acoording to the regulations, the discontinuation study process begins with selection for a feasibility study process based on criteria such as insufficient customer demand, insufficient womdoad for existing employees, availability of reasonable alternate service access, and .ditty. Federal law and LISPS regulations prohibit the LISPS from dosing postal facilities solely because a branch is operating at a The feasibility study must consider a standard set of factors including °the effect on the community served; the effect on employees of the USPS - operated retail facility; compliance with government policy established by law that the Postal Service must provide a maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not set- sustaining; the economic savings to the Postal Service; and any other factors the Postal Service determines necessary.' (39 CFR 241.3(a) 3) The USPS must provide notice of the feasibility study and a questionnaire on closure impacts to the pudic served in the associated zip code by mail and at the postal facility. Norwich, Conn.'s historic post office Is also on the closure Credit: Jimmy Wayne close a postal facility? ff the USPS decides, based on the feasibility study, to propose closure of the postal facility, the agency issues a formal written proposal assessing the effect of the action on community postal needs, the overall effect on the community, effect on employees, and cost savings. The notice of the proposal is only posted in local postal facilities. The pudic has 60 days to comment on the proposed action before the USPS issues a determination, and the LISPS is required to hold a public meeting to solicit input (a new requirement). Amer the USPS issues its final determination, which is posted in local postal facilities, the public may appeal the decision to the Postal Regulatory Commission within 30 days. The commission can refer the matter back to the USPS for further consideration within 120 days, but cannot modify the determination. Is sale the only option when the USPS decides to Federal law gives the USPS sole discretion to sell or otherwise dispose of a property or property interest as it deems necessary. However, in cases, the USPS has negotiated with new owners of postal facilities to lease from them a portion of previously existing retail space I service use. Whether lease-back is feasible depends on service demands; the willingness of the new owners io enter a lease nt; the compatibility of the new owners' use of the building with a secure, separate postal space; and lease pricing considerations. What protections are afforded historic post office buildings after closure and sale? e erva ').-i stior n ';_)rr,nn/Gbraryrpritnic :r rtic!euinghtsi<i ig- the -matt htrrij.Ve8BPUr3erU 9/8/15, 11:41 AM Page 2 of 4 Sale of post office facilities is subject to review under Section 106 of the National Historic Preservation Act. Currently there is no programmatic agreement between the USPS and the Advisory Council on Historic Preservation that outlines standard procedures for resolving adverse effects to historic properties being sold under this effort. Adroit programmatic agreement Is under review with the Advisory Council. the USPS has resolved adverse effects to historic properties going out of federal ownership by placing protective covenant's on the rties before sale, to be monitored by state historic preservation offices (SHPOs). These covenants typically require preservation and maintenance of the interior and exterior of the facility in accordance with the Secretary of the Interior's Standards for Rehabilitation of Historic Properties and require SHPO review and approval of new construction at alteration of, or remodeling of the facility. What happens to significant artworks in post office buildings slated for sale? Artworks in postal facilities are not sold with the postal facility. Many of these works were commissioned by the US Treasury's Section of Fine Arts in the 1930s and 1940s and, based on their program requirements, must remain in USPS ownership and reasonably accessible to the public. When a facility with significant artwork is sold to a private buyer, the USPS tries to negotiate an art loan agreement with the buyer that includes responsibility for care of the artwork and a commitment that the artwork be reasonably accessible to the public. If this cannot be negotiated, the USPS must remove the artwork and put it in another postal facility or house the art on loan with a responsible steward. What can preservation advocates and supporters do to advocate for keeping a post office in use or helping to facilitate good outcomes for sold postal facilities? Participate in the USPS discontinuance process and National Historic Preservation Act Section 106 review process. Make sure the USPS, your elected officials, and your state historic preservation office know your community's concerns about the historic importance and future of your postal facility as early as possible. The USPS typically initiates Section 106 review under NHPA after the agency has made its decision to close a facility and put it up for sale, so participation in the feasibility study process is paramount Know the process: Use the information provided above and familiarize yourself with the LISPS regulations on discontinuance of postal facilities explained in CFR 38 241.3. Assist in identifying preservation-minded buyers, promote incentives available for historic buildings, and seek out other pudic uses for the postal facilities. You may not be able to prevent the closure and sale of a local postal facility, but you can help ensure that the historic post office continues to be a presence in your community. One the biggest challenges the USPS faces in selling historic property is tinrtng preservation - minded buyers who are savvy about adaptive use and understand how historic preservation covenants and incentives work Do all you can to publicize the availability of a historic postal 111 your local preservation networks and educate the public on local, state, and federal incentives for rehabilitating historic es. Engage local, state, and federal elected officials. The news is full of stories about communities fighting the closure of their post office branch, and many of these communities have benefited from the support of their local leadership and congressional delegation. Regardless of party affiliation, access to postal service is an issue that resonates with polftical leaders and voters. Learn about successful examples of adaptive reuse of post offices. Handle with Care: Saving Washington, Missouri's Old Main Post Office Franklin Post Office, Franklin, Tennessee Learn more about the Village Post Office program. f your community is concerned with keeping postal services in the downtown area or other neighborhood, one option is the USPS mode'. The USPS introduced the Village Post Office as a potential replacement option for communities affected by post office osures in 2011. According to the USPS, 'Village Post Offices would be operated by local businesses, such as pharmacies, grocery stores nd other appropriate retailers, and would fifer popular postal products and services such as stamps and flat -rate packaging.' These acilities can also offer post office boxes. More information on this program and how to open a Village Post Office Is available here. Important Resources al Regulatory Commission: An independent agency with regulatory oversight over the Postal Service under the Postal gardzation Act of 1970. ISPS Office of Strategic Planning: The executive and support team responsible for managing the ongoing strategic planning function of the Postal Service and ensuring its long -term viability. ire e,rua i o:nntion.orgiforurniiibraryi ut>lic articles right- sizing the rnaii.htrn( .Ve8i3PUr3arU 9/8/15, 11:41 AM Page 3 of 4 USPS Expanded Access and Retail Optimization Fact Sheet USPS Expanded Access News Room Post & Parcel Retail News: Online news outlet for the global mail community; an excellent source of up-to -date news coverage on USPS operations. ve the Post Office: An often irreverent but informative blog on the USPS thscontinuance effort, including information on historic post ices slated for closure around the country. Elaine Stiles, former program officer in the National Trusts Westem Orrice, is entering a Ph. D. program in architecture at the University of California at Berkeley. About Us Learn More Get In Touch What is Preservation Blog Contact Us Who We Are National Treasures Press Center What We Do Historic Real Estate Partner With Us Donate Become a Member Lit 0 ill HOME I CONTACT US! RSS 1 PRESS CENTER 1 UPDATE MY PROFILE i ADVERTISE t DONATE 1 SIGN UP INTERNATIONAL NATIONALTRUSTS '44 ORGANISATION ,w w. presrsrvaiir euo ycrxxr Ir n The National Trust for Historic Preservation, a privately funded nonprofit organization, works to save America's historic places. 2600 Virginia Avenue NW, Suite 1100, Washington, DC 20037 P 202.588.6000 T 800.944.6847 F 202.588.6038 TERMS OF USE 1 PRIVACY ® 2015 National Trust for Historic Preservation. All Rights Reserved. The National Trust for Historic Preservation is a private 501(c)(3) nonprofit organization. The National Trust's federal tax identification number is 53-0210807. Register I Login View mobile site :„/Convlo• many/ public- articleslrighr- sizing- tha.- mail.htmhY.VeBBPUr3arU 9 /8/15, 11:41 AM Pare 4 of 4 Architectural Review & Historic Preservation • The Historic Preservation Commission (HPC) recommends historic districts and individual landmarks for designation. • The Architectural Review I Commission (ARC) oversees the individual landmarks and three historic districts: • Hyde Park, ♦ Tampa Heights, • Seminole Heights. • The Barrio Latino Commission (BLC) oversees the Ybor City 'i Historic District. Tampa Ad pt e Use in the Mot C Gemwa- American Club Adaptive reuse is defined as the process of modifying an old structure for a new purpose. Buildings often outlive their original use. When that original use changes or is no longer necessary, as is the case with many industrial - era buildings in Ybor City, there is the opportunity to modify the primary function but retain the original architectural form and detailing that makes the building unique and a contributing factor to the historic integrity of the neighborhood's built environment. A building that is successfully adapted for reuse can remain a keystone to the architectural continuity of the community. Historic District Additionally, adaptive reuse is a prime factor in urban development and land conservation that can effectively reduce urban sprawl. The Federal Historic Preservation Tax Incentive Program may be applied to buildings undergoing adaptive reuse if the project meets the criteria according to the Secretary of the Interior's Standards for Rehabilitation. Many of the historic buildings of Ybor City are especially attuned to the adaptive reuse process. Large buildings in Ybor City, such as cigar factories and former manufacturing sites, have been successfully reused for a variety of purposes including offices, live /work space and luxury and loft condominiums. Smaller buildings, often former residences, are now successfully operating as retail shops, small office spaces and restaurants. These buildings, once rehabilitated to fit a new purpose, continue to contribute to the history and traditions of the local culture and architecture. The German- American Club was constructed as one of Ybor City's social clubs. The continues to serve the community today as offices for the City of Tampa. Listing in th0 National Register of Historic Places Unlike local designation, which is designed to protect historic properties, listing in the National Register of Historic Places (NRHP) is largely an honorific designation. However, it also provides the property with consideration in planning for Federal, Federally licensed, and Federally assisted projects through the Section 106 process; provides eligibility for certain tax provisions, such as the 20% investment tax credit; provides consideration of historic values in the decision to issue surface mining permits where coal is located; and qualifies properties for Federal funding for historic preservation where such funds are available. Owners of private property listed in the National Register are free to maintain, manage, or dispose of their property as they choose provided that no Federal monies are involved. Architectural Review & Historic Preservation 1400 N. Boulevard, 2N Tampa, FL 33607 Phone: 813- 274 -3100, Option 3 Dennis Fernandez — Manager 813- 274 -7706 dennis.fernandez@tampagov.net Ron Vila — ifstodc Preservation Specialist 813 - 274 -8236 ron.vilo@tampagov.net Elaine Lund — firistodc Preservafioa Specialist 813- 274 -3313 elaineJund©tampagov.net 9(storrc Preservation Traditions Tampa's first organized volunteer fire department was founded in1884. Seven "bucket brigades" were organized to serve the city. On May 10, 1895, the city council passed ordinance #307 authorizing Ybor City fire, 1908 Babe Zaharias Goff Course The 1926 Babe Zaharias Golf '1 Course was part of the original development by B.L. Hamner that included a Tudor- designed yt clubhouse and cottage homes. } While never fully realized due to i the end of the 1920s real estate boom, the course regained significance when it was purchased by George and Babe $; Zaharias in 1949. Together, they ;I operated the course and lived on ii - around athlete, won two gold medals and one silver medal for site until 1955. George was a professional wrestler. Babe, an all Tampa's first professional fire deportment. The 22 paid firefighters worked in the stations for ten to twelve days at a time. Most of the firefighters lived near their duty stations and were permitted to go home for meals, provided they could return within one hour. Their salary was equivalent to that of police patrol officers, about $600 a year. The bucket brigades were slowly replaced by hand operated pumpers pulled to the scene by the firefighters. Fire hydrants and steam engines were introduced to do the work of pumping water to firefighter's hoses. With the introduction of steam engines came the requirement of horses to pull the extremely heavy apparatus. As It track and field at the 1932 Olympics. While Babe was voted ? "Outstanding Woman Athlete of the Year" for six consecutive y } (1949 -1954) and "Female Athl it of the Century," she was best `' known for her success in golf and was instrumental in the founding of the Ladies Professional Golf Association. The Babe Zaharias Golf Course was listed as a local Landmark in 2005. Babe Di ikson Zaharias the horseless carriage gained popularity, gasoline powered engines became accepted, and Tampa's fire department followed national trends and replaced the steam engine with state of the art pumpers. The largest fire in Tampa's history occurred on March 1, 1908. An alarm was received from 1914 12th Avenue in the section of Tampa called Ybor City. Upon arrival the hose wagon found a two story wood -frame boarding house that was involved. The fire originated in the wood shingled roof. The sparks quiddy ignited nearby structures. In the aftermath, over 17 city blocks were consumed. Read more at tampagov.net/fire-rescue. • T. idea*, Preserve, ad preemie historically sigricost bull ings, sites, objects, and districts for the educaBonal, cuitvd, aid economic beneif of the ccmmiedr. Old Buildings - New Uses "Everything flows, nothing stands still" (Plato) Th est way to preserve a building is to find a use for it, and then to satisfy so w needs dictated by that use that there will never be any further need to make any further changes in the building (Eugene Emmanuel Viollet- le -Duc 1814- 187 9) Preservation is not the enemy of modernity but actually one of its inventions (Rem Koolhaas) "This old building is not good because its old but it is old because it is good'. (Rodney Little, MHT, MD) Adaptive re -use, a sustainability measure Reuse of old buildings is an age -old practice. Adaptive re -use as a significant component of sustainability is a newer argument. The EPA has noted that building construction debris constitutes around a third of all waste generated in this country, and has projected that over 27% of existing buildings will be replaced between 2000 and 2030. To have more buildings re -used is a considerable challenge. One could argue that one of the most creative cases of a recycled structure nat Iiy would be the conversion of old grain silos into luxury condominiums in L Point, Baltimore, the project. So it was an apt place for preservation and development experts to convene at Silo Point to discuss "adaptive re- use ". But there was a certain irony in the fact that the meeting started with a hand -out titled " ". Who would think of the city of angels when it comes to historic buildings? Against common perceptions, though LA has to offer quite an impressive ensemble of historic downtown buildings, so much so that is often used as backdrop for period films, Like many cities, LA has a pioneer developer blazing a trail in adaptive re -use. Tom Gilmore, trained as an architect, was the first to use LA's 1999 and has revived many buildings since. "baroque" movie palace on Broadway, LA now serves as an event space (photo: ArchPian) ULI and National Trust Partnership for Building Reuse To answer this question , Planning Director at the National Trust for Historic Preservation in Denver and leading a new between the Urban Land Institute and NTHP for adaptive reuse had come to Baltimore along with Michael Powe, Research Manager for the NTHP and based in Seattle and Jeana Wiser, Project Coordinator at NTHP based in Los Angeles (see all three in this ). Los Angeles, it was explained, was just the beginning of a joint project in collaboration with the Urban Land Institute (ULI) of making the case for adaptive reuse. Research and examples will be broadened by adding other cities such as Baltimore and Philadelphia. A popular statement promoting the recycling of building states that " is the one that doesn't have to be built ". Adaptive reuse of factories that became obsolete or have been was converted into the mixed use restaurant and shopping complex known as . The idea has since been replicated many tunes around the world, from New York's Soho to the London Docklands, to in Durham and the in Baltimore. The pr ationist wrote in� a landmark book about the "Economics of Preservation" and argued these core points: Silo Point Lobby, Baltimore (photo: Henrietta) abandoned, dates back as far as 1962, when an old San Francisco chocolate fa. 1. Sustainable development is crucial for economic competitiveness. 2. Sustainable development has more elements than just environmental responsibility. 3. '`Green buildings" and sustainable development are not synonyms. 4. Historic preservation is, in and of itself, sustainable development. 5. Development without a historic preservation component is not sustainable. In 2013 we still find ourselves in a place, where the case for adaptive reuse needs to be made no matter how strong the sustainability, economic development and cultural resources arguments for preservation may be. Although there are plenty of success stories for adaptive reuse, obstacles are still numerous and create sufficient roadblocks that prevent adaptive re -use to be the obvious "default" choice. Cost is a major roadblock. Development in green fields is cheaper than development in existing communities and adaptive reuse is often more expensive than new construction even after the International Building Code was adjusted to allow flexibility for existing structures. As a result we still see way too much development in the "green fields" and much too much demolition of old buildings un ° the guise of "'obsolescence ". un The L I /NTHP collaboration is intended to become a nationally important step in overcoming the roadblocks, especially by showcasing best practice examples of adaptive re -use along with practical guidance for how obstacles can be overcome. Although the project is still in its initial stage, some creative new ways of making the case can be expected, including an extensive data collection and mapping strategy in which data about property values, new construction, demolition, vacancies and markets will be examined. Most data are now typically openly available as part of the "open data movement in which many cities participate. Baltimore re -use examples Baltimore is rich in experience for adaptive re -use and I will try to use some of my own projects as examples for the obstacles and the ways how they were overcome. was my first project in the Baltimore area and in 1986 it was also one of the early Baltimore adaptive reuse project right on the heels of the conversion of a tin factory. Both projects were designed by Cho Benn Holback, where I was project architect at the time and developed by the same development team that would become the flagship developer for adaptive re -use, Struever Brothers, Eccles and Rouse, presented a real motherload of issues: The can factory building was not very pretty or suitable and its best feature was its location right at the harbor's edge. It needed partial demolition to reduce the expanse of its floor plate for daylight, and to make it worthwhile it needed additional floors to create a sufficient number of units. With demolition, re -use, new construction, integrated indoor parking, decks and balconies for almost every unit and huge windows it presented plenty of detailing and design challenges. In the end this luxury condo project survived the 89 recession and became a premier destination marking the eastern frontier of residential development along the formerly industrial waterfront. The project was strictly market rate, no historic tax credits and no low income tax credits. The project received an AIA award for design excellence. Armed with the experience of the complicated waterfront project I engaged my own firm in a very different adaptive re -use project: The conversion of a large vacant residence and an adjacent chapel that was last used as a funeral home into a community resource center with daycare, adult education classrooms, offices and meeting spaces: . Since the building is located in a historic district and was considered historically "contributing" this project could utilize state, federal and local historic tax credits. Like for Canton Cove, all new stairways and egress routes had to be inserted to make the project conform with what was at the time (1996) still the BOCA building code. The extra height of the chapel was used by inserting a mezzanine that floated in the space and still allowed the chapel to be perceived as one room while providing the smaller scale appropriate for a daycare center. Aside form the lack of proper egress, the old bones of the building were used but needed a lot of intensive care: Exterior brick was repainted, wood floors designed for residential loads were reinforced, elevators and HVAC ducts were shoe - horned into the historic structure. A contemporary insertion between chapel and main building became the main stairway. This project received a preservation award from • With the Professional Building, we tackled preservation and adaptive reuse on Baltimore's premier Charles Street by converting a historic 1904 "class B office building" into 24 market rate apartments in 2006. Thanks to its well known original architects, Baldwin and P i tnngR n and the Beaux-Ana style in the form •,)f • mo krn Drench ranaissanca " this project also utilized historic tax credits. Here we didn't have to worry about floor loads but we had to provide two means of egress and there was only one open stair. Luckily the fire marshal worked with us after we reduced the risk dramatically by installing sprinklers everywhere. A exterior fire stair was accepted once it had a roof protecting it from snow accumulation and the grand stair could remain open after we cut off the hallways via fire doors. Routing water and sewer lines through the existing ground floor stores while they stayed in operation throughout the construction required several compromises on the ideal residential layouts above. This project, too, utilized syndicated historic tax credits, a key element to bring the conversion cost down. Maybe the most complicated case of conversion that my firm did is . the adaptive reuse of three former industrial buildings and a historic tfire se into market rate and moderate income housing. This project utilized historic its and low income housing tax credits. All four buildings stood initially alone, each had a different age and style and our biggest challenge was to connect them in such a manner as to being historically compatible while creating a pathway that looped through the complex and provided two exit choices at each location throughout the complex. The project won a . Designed with many of the architectural elements that can be described as "industrial chic" it was very successful and rented out almost instantly. This was in no way predictable since at the time (2006) there was little affordable housing in the "loft style" available. • Printers Square, Baltimore (photo: ArchPlan) A project with a very special set of challenges was the conversion of two vacant Baltimore rowhouses into the non- profit adjacent to the historic Hollins Market in Baltimore. To achieve a suitable performance space and the required support spaces for making puppets and the like the two rowhouses both needed to lose their sidewall which is, of course, the bearing wall. The load was reduced by taking the second floor out over the performance space but tthe whole feat still required major structural intervention on a very low budget. There are so many adaptive reuse projects in Baltimore, for an expanded list I enlisted the help of my Facebook friends to make sure l don't leave off the most important ones from this still very incomplete list: • clothing factory now a middle and high school) • The already noted luxury apartments) (formerly a ( a former grain silo, now • • Baltimore Design School • (the conversion of a former railroad warehouse into the backdrop office building of the famous ballpark) • , the conversion of a former Procter & Gamble soap plant into a office park, (now headquarter of Under Armour) • conversion of an 1840 Fells Point warehouse to the Frederick Douglas museum • (affordable teacher housing, non profit offices and a lovely coffee shop) • (a mill on the banks of the Falls River converted to housing and offices. Just completed) • to art house movie) (a former cable car barn Chares Theatre and Tapas Tearro. Bair ,. ((photo Ar chPian) bottle cap factory to spontaneous artist housing) • (former conversion to a Shakespeare Theater (still under construction), similarly two historic bank buildings were converted to auxiliary structures for the restore Hippodrome Theater • The American Visionary Art Museum Jim • , conversion of the former department store's distribution warehouse into a green office complex • The into the Humanim headquarters Humanim Headquarters in the old American Brewery building, Baltimore Class 8 office to apartments - a money loser? There is also a slew of former office buildings finding a new lease on life as downtown apartments: The biggest, the conversion of the former Maryland National Bank 34 story high rise headquarter (Baltimore's Empire State Building) into 447 apartments is still under construction. The Munsey Building, Baltimore's first major downtown conversion has struggled from day one (in 2002) and the massive conversion of the former Baltimore Gas and Electric building into apartments is a according to owner David Hillman of Southern Management which has also converted the former downtown Hechts Department store into the S. rd Oil and then government office building Into and a former Even though the conversions and some new construction turned downtown into Baltimore's fastest growing neighborhood (census tract )r the complaints of developers how they lose money has not remained unheard: Since April of this year, the conversion of office buildings to apartments downtown and in select target areas is helped by a Baltimore City 15 year property tax incentive bill which grants 100% tax relief for years 1 and 2, then diminishes the credit from 80% to 20% from years 3 through 15 for those conversions provided a project has at least 50 apartments and is LEED silver or better. Combined with Empowerment Zone tax credits or historic tax credits those buildings may well pay no property taxes way beyond the first two years. In reality, though, the new city tax credit barely makes up for the shrinkage of the Maryland State historic tax credits which with now only $7 million annually are a mere shadow of what they once were. (The recipients of this year's competitive round will be announced next week. They include the in Station North, more a restauration project than adaptive reuse). lig as local, regional and statewide planning allows easy access to new development areas outside cities, towns and villages, adaptive reuse will remain the more expensive option compared to green field development, but only if we neglect the Tong -term societal costs of sprawl. In the meantime, re- investment inside our historic communities through adaptive re -use needs incentives, such as historic tax credits or Baltimore's redevelopment tax breaks. Adaptive re -use, part of what makes cities a rich experience The listed projects each present a very different set of challenges in terms of uses (before and after), scale and available funds. They show that adaptive re -use is not limited to glitzy high end projects for yuppies but can also work for non- profits in dis- invested areas. And they prove another thing: With no amount of effort could these projects have had that much character as they have as recycled and re- purposed historic buildings. No creative design could have credibly created the same conditions in n Bonstruction. That not only makes these projects special but also enriches ore as a city. Each of these buildings carries embedded in the re- purposed structure a chunk of Baltimore's history which surviving inside the building can be a part of the layers of change, the palimpsest of city, precisely what makes cities great. Oh, and before I forget, my office is located in a twice re- purposed building. It was built in 1881 as a dental school, became a furniture store and is now retail with offices. Baltimore has, indeed, such a rich treasure trove of new uses in old buildings that I can only say "move over, LA ". Klaus Philipsen, FAIA The title of this article freely adopted from Sherban Cantacuzino's 1976 book "New Uses for Old Buildings". updated: 1 2/22/1 3 Sources and Resources: National Historic Trust: Preservation Nation: Brookings: Baltimore SUN: Baltimore Brew: BBJ: Posted 20th December 2013 by Add a comment (GoogIe Account • Your source for Large Column -Free Air and Frame Supported Buildings!