[Senate Hearing 106-] [From the U.S. Government Publishing Office] GUIDELINES FOR THE RELOCATION, CLOSING, CONSOLIDATION OR CONSTRUCTION OF POST OFFICES ======================================================================= HEARING before the INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES SUBCOMMITTEE of the COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED SIXTH CONGRESS FIRST SESSION __________ OCTOBER 7, 1999 __________ Printed for the use of the Committee on Governmental Affairs U.S. GOVERNMENT PRINTING OFFICE 61-701 cc WASHINGTON : 2000 _______________________________________________________________________ For sale by the Superintendent of Documents, Congressional Sales Office U.S. Government Printing Office, Washington, DC 20402 COMMITTEE ON GOVERNMENTAL AFFAIRS FRED THOMPSON, Tennessee, Chairman WILLIAM V. ROTH, Jr., Delaware JOSEPH I. LIEBERMAN, Connecticut TED STEVENS, Alaska CARL LEVIN, Michigan SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii GEORGE V. VOINOVICH, Ohio RICHARD J. DURBIN, Illinois PETE V. DOMENICI, New Mexico ROBERT G. TORRICELLI, New Jersey THAD COCHRAN, Mississippi MAX CLELAND, Georgia ARLEN SPECTER, Pennsylvania JOHN EDWARDS, North Carolina JUDD GREGG, New Hampshire Hannah S. Sistare, Staff Director and Counsel Joyce A. Rechtschaffen, Minority Staff Director and Counsel Darla D. Cassell, Administrive Clerk ------ INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES SUBCOMMITTEE THAD COCHRAN, Mississippi, Chairman TED STEVENS, Alaska DANIEL K. AKAKA, Hawaii SUSAN M. COLLINS, Maine CARL LEVIN, Michigan PETE V. DOMENICI, New Mexico ROBERT G. TORRICELLI, New Jersey ARLEN SPECTER, Pennsylvania MAX CLELAND, Georgia JUDD GREGG, New Hampshire JOHN EDWARDS, North Carolina Mitchel B. Kugler, Staff Director Richard J. Kessler, Minority Staff Director Julie A. Sander, Chief Clerk C O N T E N T S ------ Opening statements: Page Senator Cochran.............................................. 1 Senator Stevens.............................................. 2 Senator Akaka................................................ 4 WITNESSES Thursday, October 7, 1999 Hon. James M. Jeffords, a U.S. Senator from the State of Vermont. 6 Hon. Max Baucus, a U.S. Senator from the State of Montana........ 8 Howard Foust, President, National Association of Postmasters of the United States, Retired..................................... 11 Richard Moe, President, National Trust for Historic Preservation. 13 Hon. Edward J. Derwinski, Legislative Consultant, National League of Postmasters................................................. 15 Rudolph K. Umscheid, Vice President, Facilities, U.S. Postal Services, accompanied by Fred Hintenach, Manager, Retail Operations Support, U.S. Postal Services....................... 17 Alphabetical List of Witnesses Baucus, Hon. Max: Testimony.................................................... 8 Prepared statement........................................... 50 Derwinski, Hon. Edward J.: Testimony.................................................... 15 Prepared statement........................................... 70 Foust, Howard: Testimony.................................................... 11 Prepared statement with list attached........................ 52 Jeffords, Hon. James M.: Testimony.................................................... 6 Prepared statement with additional statements................ 35 Moe, Richard: Testimony.................................................... 13 Prepared statement........................................... 64 Umscheid, Rudolph K.: Testimony.................................................... 17 Prepared statement with list attached........................ 72 APPENDIX Follow-up questions and answers for Mr. Umscheid from Senator Edwards........................................................ 33 Copy of bill S. 556.............................................. 88 Copy of Amendment to U.S. Title 39 CFR Part 241, adopted by the Postal Service................................................. 97 Letter from Postmaster General William J. Henderson, dated October 6, 1999, with attachments.............................. 100 Senator Levin, prepared statement................................ 105 Senator Richard C. Shelby, a U.S. Senator from the State of Alabama, prepared statement.................................... 107 Letter from Vincent Palladino, President of the National Association of Postal Supervisors, dated October 7, 1999....... 108 GUIDELINES FOR THE RELOCATION, CLOSING, CONSOLIDATION OR CONSTRUCTION OF POST OFFICES ---------- THURSDAY, OCTOBER 7, 1999 U.S. Senate Subcommittee on International Security, Proliferation and Federal Services of the Committee on Governmental Affairs Washington, DC. The Subcommittee met, pursuant to notice, at 2 p.m. in room 608, Senate Dirksen Building, Hon. Thad Cochran (Chairman of the Subcommittee) presiding. Present: Senators Cochran, Akaka, and Stevens OPENING STATEMENT OF SENATOR COCHRAN Senator Cochran. The Subcommittee will please come to order. Today our Subcommittee meets to conduct a hearing on the subject of relocation, closing, consolidation or construction of post offices. We had promised Senators Baucus and Jeffords we would have a hearing that would also consider legislation they had introduced, S. 556, the Post Office Community Partnership Act of 1999.\1\ They will appear and be our first witnesses. --------------------------------------------------------------------------- \1\ Copy of the bill, S. 556, appears in the Appendix on page 88. --------------------------------------------------------------------------- We have another panel of witnesses, including Howard Foust, who is President of the National Association of Postmasters of the United States, Retired; Richard Moe, President of the National Trust for Historic Preservation; Hon. Edward J. Derwinski, who is Legislative Consultant to the National League of Postmasters; and Rudolph Umscheid, Vice President of Facilities for the U.S. Postal Service, who is accompanied by Fred Hintenach, Manager, Retail Operations Support, U.S. Postal Services. We are pleased to have here the distinguished Senator from Hawaii, Ranking Member of our Subcommittee, and the former Chairman of this Subcommittee for many years, Senator Ted Stevens of Alaska. I will be happy to yield to Senators for any comments or opening statements they might have at this point. Senator Akaka. Senator Akaka. Nothing right now, Mr. Chairman. Senator Cochran. Senator Stevens. OPENING STATEMENT OF SENATOR STEVENS Senator Stevens. Thank you very much, Mr. Chairman, and Senator Akaka. I am pleased you are holding these hearings, and I hope it will give us a chance to review the proposals that are before us. I ask that my statement appear in the record in full, if that can be done. Senator Cochran. Without objection, so ordered. [The prepared statement of Senator Stevens follows:] PREPARED STATEMENT OF SENATOR STEVENS Thank you Mr. Chairman. I am pleased that we are holding hearings on the issue of post office closing and relocation. The last time this issue arose it was offered as an amendment to the FY99 Treasury, Postal and General Government Appropriations Bill in July 1998. As you will recall, the provision was later removed in conference. I voted to table the amendment when it was offered on the floor and I am still concerned about the impact that the measure would have on the operations of the Postal Service. The proposal in the House, H.R. 670, and the proposed Senate bill, S. 556, would dramatically impair the ability of the Postal Service to expand and renovate postal facilities across the United States. In my State alone the Postal Service has identified and scheduled 32 facilities for replacement. According to a September Postal Service memo, all but one of the proposed Alaska facilities has been approved for funding, and of the 32 facilities slated for construction, 29 have identified sites in each of the communities. In all of the communities, sites were selected with the input and agreement of community leaders. I have some examples of how the Postal Service has sought to accommodate the desires of local communities: Bethel--A division in the opinions of local community members led the Postal Service to arrange several community meetings, including meetings with the Chamber of Commerce, the City Council and the Senior Citizens Group. In this case, the Postal Service is still working with the community to finalize the site selection process; Akiachak--The Postal Service signed a lease on an existing building, the design for the building was completed and solicitation for the construction was finalized. The village then decided they would rather have the building put to another use. The Postal Service agreed to cancel the lease on the building and is currently looking at an alternate site for the Post Office; Tununak--The Postal Service is currently working on the fourth site recommended by the community because of ownership and flooding problems with the first three sites. In addition to meeting with community leaders on each of the site selections, the Postal Service must go through several agency reviews to make certain that they are in compliance with all of the local, regional and State requirements. In Alaska, the Postal Service meets with: the State Department of Environmental Conservation for an Alaska Coastal Zone Management review; the U.S.Army Corps of Engineers for wetlands designations and permits to construct in wetlands; the State Historical Preservation Office; the State Fire Marshall and local municipal offices, in addition to having local archaeological investigations and reviews. Trying to organize these meetings and reviews is complicated by the fact that our construction season in Alaska is only 4 months long. If the Postal Service is not able to proceed in a timely manner, projects could get pushed back an entire year. The language of S. 556 does not take into account the short construction season in Alaska. S. 556 provides ``any person served by the Post Office'' 30 days to offer alternatives for relocation, closing, consolidation, or construction. The bill then would provide the Postal Rate Commission an additional 120 days to make a determination on the relocation, closing, consolidation or construction. That means a construction of a Post Office can be delayed at a minimum by 150 days, or 5 months, from the beginning of the process to the end. After all the conversations with community leaders and legislative bodies, a single person served by a Post Office in Alaska could halt the construction or relocation of a new facility during the shortened construction season, costing the Postal Service and the residents of that community another year in getting a new or improved Post Office. The proposed legislation also requires the Postal Service to ``respond to all of the alternative proposals'' of individuals served by the Post Office in a single report. With approximately 40,000 Post Offices nationwide, requiring the Postal Service to respond to all alternative proposals could dramatically impede the Postal Service's effort to operate an efficient mail delivery system. There are stories of past efforts by the Postal Service to close or refurbish facilities against the wishes of the local community. However, I am advised that the Postal Service has adopted regulations to fix the problems. The community relations regulations published in May 1999 contain provisions stating that it is the policy of the Postal Service to comply with local planning and zoning requirements and to have community involvement in the decision making process. In some cases, the Postal Service may have acted in a manner that some individuals did not appreciate. However, legislation that dramatically slows the Postal Service's ability to expand and maintain its operations may be heavy-handed in light of recent internal policy and regulatory changes. Remember, the Postal Service is not an entity supported by taxpayers--it is supported by rate payers. If Congress wants to reinstitute the oppressive interferences with postal operations that existed before the Postal Reform Act of 1970, this bill is a good place to start. It's costly, inefficient, and allows one or more people to dictate to a national entity that rate payers support. S. 556 starts from the premise that further regulation of the Postal Service is required. That is a false premise. Senator Stevens. The proposal that is before the House, House bill, H.R. 670, and the Senate bill, S. 556, would dramatically impair the ability of Postal Services to expand and renovate the postal facilities across the country, in my judgment. In my State alone, the Postal Service has identified and scheduled 32 facilities for replacement. According to a September postal memo from the Postal Service, that is, all but one of the proposed Alaska facilities has been approved for funding, and of the 32 facilities slated for construction, 29 have identified sites in each of the communities involved. In all of the communities, sites were selected with the input and agreement of community leaders. I have some examples of how the Postal Service has sought to accommodate the desires of those local communities, and my statement goes in depth into the activities of the Postal Service in Bethel, Allakaket, and Tuntutuliak. In each one of these very remote areas, it is essential that the feelings of the local people be listened to and that they be sought out and that agreement is reached. Primarily because they know the circumstances, they know where the flooding is, they know where the paths the people take, the older people take. And in each of the communities where the site selection took place, the Postal Service has gone through several different agencies to make sure they are in compliance with local, regional and State requirements. In Alaska, the Postal Service meets with the State Department of Environmental Conservation for the Alaska Coastal Zone Management Review, the U.S. Corps of Engineers for wetlands designations and the permits for construction in wetlands, the State historical preservation office, the State fire marshall and the local municipal offices, in addition to having local archaeological investigations review. And they meet with the tribal leaders in areas where there are native people. Trying to organize these meetings and reviews is complicated by the fact that our construction season in Alaska is only 4 months long. If the Postal Service is not able to proceed in a timely manner, projects get pushed back an entire year. The language of S. 556 does not take into account the short construction season in States like mine. It provides any person served by the Post Office 30 days to offer alternatives for relocation, closing, consolidation or construction. The bill then provides for the Postal Rate Commission 120 days to make a determination on the relocation, closing, consolidation or construction. That means a minimum delay of 150 days. Again, I say, in a State like ours, one-fifth the size of the United States, totally dependent upon climate for construction seasons, that is just too long. I do believe that the requirement of this legislation that the Postal Service respond to all other alternative proposals of individuals served by the Post Office in a single report is just extremely burdensome. There are approximately 40,000 post offices nationwide. Requiring the Postal Service to respond to all alternative proposals could really impeded the Postal Service's operation of an efficient mail service. There are other reasons that I state here in my prepared statement, Mr. Chairman. But I want to say, I think we all know that at times, because of personalities and other circumstances, the Postal Service may act in a manner that some individuals in an area might disagree with. It is a difficult thing for them to deal with. The Postal Service, we have got to remember, is not an entity supported any longer by the taxpayers. It is supported by the ratepayers. If Congress wants to reinstitute the oppressive interferences with postal operations that existed before the Postal Reform Act of 1970, this bill is a good place to start, in my opinion. It is costly, inefficient, allows one or more people to dictate to a national entity that the ratepayers support, contrary to the agreements with local people made after proper consultation. I think that S. 556 starts from the premise that further regulation of the Postal Service is required by the Congress. To me, that is a false premise. Thank you very much. Senator Cochran. Thank you, Mr. Chairman. Senator Akaka. OPENING STATEMENT OF SENATOR AKAKA Senator Akaka. Thank you very much, Mr. Chairman. I want to thank you for having this hearing. I also want to welcome our witnesses that will appear before this Subcommittee. Mr. Chairman, approximately seven million customers a day transact business at post offices. We expect timely delivery of the mail 6 days a week. And the Postal Service has not disappointed us. That is saying a lot about the Postal Service. Given the regularity of delivery and the millions of daily post office visits, it is no wonder that we view our local post office as a cornerstone of our communities. Many small towns, like their larger counterparts, developed around a post office where the postmaster served as the town's only link to the Federal Government. However, there are a number of small post offices where annual revenue is lower than annual operating costs, impacting overall revenue within the Postal Service. In order to protect small post offices, The Postal Reorganization Act of 1970 prohibited closing a small facility solely for operating at a deficit. I hope today's hearing will shed light on how decisions are made to close a post office, what guidelines the Service must follow in carrying out the determination, and what rights communities have in the decision making process. I am interested to learn how S. 556 will assist downtown post offices, preserve the historical buildings and what differences there are between that bill and the year-old regulations issued by the Postal Service. As the Service meets the challenges of the 21st Century, it must not lose sight of the needs of all its communities. The Postal Service should be proud of its accomplishments, including its new 94 percent delivery record. However, we must not forget small town America, which has given so much to our country. I look forward to hearing from our panelists, who I hope will assist us in finding a balanced and fair resolution to these issues. Senator Levin is testifying before the Foreign Relations Committee, Mr. Chairman, this afternoon, and may not be able to join us. I also ask that my full statement be made a part of the record as well as a resolution by the National League of Cities in support of S. 556. Senator Cochran. Without objection, so ordered. [The prepared statement of Senator Akaka and the referenced resolution follow:] PREPARED STATEMENT OF SENATOR AKAKA I am pleased that we are holding today's hearing in order to provide our colleagues, the senior Senators from Montana and Vermont, the Postal Service, and other interested parties an opportunity to discuss S. 556, the Post Office and Community Partnership Act of 1999. We are all familiar with the legislative history of this bill, which is nearly identical to an amendment included in the Senate's fiscal year 1999 Treasury/Postal Appropriations bill. That amendment, like S. 556, would establish guidelines for the relocation, closing, or consolidation of post offices. Although the amendment was not included in the final appropriations legislation, there was overwhelming support for its inclusion. The Postal Service estimates that seven million customers a day transact business at post offices. Moreover, we expect timely delivery of the mail 6 days a week--and the Postal Service does not disappoint us. Given the regularity of mail delivery and the number of Americans visiting post offices daily, it is no wonder that we have come to view our local post office as a touchstone of our community. Like their larger counterparts, many small towns developed around a post office where the postmaster served as the town's only link to the Federal Government. Throughout the country, there are a number of small post offices where annual postal revenue is lower than annual operating costs. This imbalance impacts overall revenue within the Postal Service. However, in order to protect small post offices, the Postal Reorganization Act of 1970 prohibited closing a small facility solely for operating at a deficit. Congress further amended the Act in 1976 by placing a temporary moratorium on additional closings and prohibited closing facilities serving 35 or more families. Although the moratorium was temporary, the amendments established specific guidelines by which the Postal Service must review the impact a closing would have on a community, the employees of the facility, and economic savings realized from a closure. Added to these guidelines are the new 1998 regulations, which we will discuss today that establish procedures by which the Service notifies local citizens and public officials of facilities projects and solicits and considers community concerns before making final decision relating to expansion, relocation, or new construction. It is my hope that today's hearing will shed light on how the Postal Service decides to close a post office, what guidelines the Service must follow in carrying out that determination, and what rights do communities have in the decision-making process. I will also want to review how contract stations are impacted by these regulations. I am interested to learn how S. 556 would assist downtown post offices and preserve historical buildings and what differences there are between that bill and the year-old regulations issued by the Postal Service. I am pleased that we have with us today in addition to Senator Baucus and Senator Jeffords, the president of the National Association of Postmasters, Postmasters Retired, the president of the National Trust for Historic Preservation, and my former colleague Congressman Derwinski, representing the National League of Postmasters. As the Postal Service meets the challenges of the 21st Century, it must not lose sight of the its responsibility to the needs of all customers--especially those living in small towns and rural communities. The Postal Service should be proud of its accomplishments, but I do not want the Service to forget small town America that has given so much to our country. I look forward to working with you all to find a fair resolution to the issues we will discuss today. __________ NATIONAL LEAGUE OF CITIES RESOLUTION SUPPORTING THE ``POST OFFICE COMMUNITY PARTNERSHIP ACT OF 1999'' WHEREAS, Lthe United States Postal Service (USPS) is not required to abide by local zoning codes; and WHEREAS, Lthe USPS is not always required to consult with a community regarding public concerns about any proposals to renovate, relocate, close or consolidate its physical facilities; and WHEREAS, Lpost office closings and relocations are occurring in several small and rural communities across the United States without valuable input and comments from the residents of those communities; and WHEREAS, Lthis disregard of community laws and values can result in the physical decline of an area within a community, as well as increase community economic and social costs both directly and indirectly,; and WHEREAS, Lpost offices which remain located in downtowns can be critical elements in the restoration, revitalization and continued vibrancy of these areas; and WHEREAS, Ldowntown communities must have the opportunity to influence their futures, and must have the necessary input into USPS decisions that affect their communities. NOW, THERELFORE, BE IT RESOLVED that the National League of Cities supports congressional action on the Post Office Community Partnership Act of 1999, which would require the U.S. Postal Service to cooperate with local governments when planning to restore, replace, close or relocate a postal facility. BE IT FURTHLER RESOLVED that the National League of Cities supports the goals of this legislation, which include: (1) allowing communities the opportunity to offer alternatives to Postal Service plans to restore, replace, close or relocate postal facilities; (2) creating an atmosphere of cooperation between communities and the Postal Service to enhance the best interests of all involved in these decisions; and (3) strengthening the federal-local ties of the Postal Service and helping to preserve the downtowns of this Nation's communities. Senator Cochran. Thank you very much. Let me welcome our distinguished colleagues, Senator Baucus and Senator Jeffords. We appreciate your being here and serving as our lead-off panel for this hearing. The Senators are authors of legislation which is the subject of today's hearing, S. 556, the Post Office Community Partnership Act of 1999. We appreciate your being here, and ask you to please proceed. TESTIMONY OF HON. JAMES M. JEFFORDS,\1\ A U.S. SENATOR FROM THE STATE OF VERMONT Senator Jeffords. Mr. Chairman, first let me begin by thanking you for agreeing to this hearing. We appreciated it when you agreed to hold the hearing and appreciate it even more now that we are here. --------------------------------------------------------------------------- \1\ The prepared statement of Senator Jeffords with additional statements submitted for the record appears in the Appendix on page 35. --------------------------------------------------------------------------- I also appreciate your Subcommittee's interest in the subject, and look forward to listening to the witnesses. There is much talk in the news today about revitalizing our downtowns and encouraging smart growth. Local post offices are important tenants in any vibrant downtown. A recent article in USA Today cited a 1993 study that found 80 percent of people who shopped downtown planned their trip around a visit to the post office. About 2 years ago, there was an obvious increase in construction activity on the part of the Postal Service in Vermont. Decisions were being made by officials that were having profound effects on Vermont's villages and downtowns, with little or no input from the people living in those communities as to whether what the Postal Service was planning to do was a good idea. In response to this activity, and similar stories from around the country, Senator Baucus and I began examining this issue. S. 556, the Post Office and Community Partnership Act of 1999, is a result of our efforts, and the input of postmasters and historic preservationists and many other local officials. Our bill would enable communities to have a say when the Postal Service decides that their local post office will be closed, relocated, or consolidated. Members of the Subcommittee may ask why legislation is necessary. A few years ago, the General Store on the Green at Perkinsville, Vermont, went bankrupt, and the adjacent post office wanted to leave the small village center for a new building outside of town. By the time the community was aware of the relocation, plans were so far along that there was no time to fully investigate alternatives. In fairness to the Postal Service, since the issuance of their new rules in 1998, they have worked very closely with a number of Vermont communities on postal location issues. What I think the Postal Service has learned in Vermont is the one-size-fits-all approach to community needs just doesn't work. While Vermonters recognize that the Postal Service has to be convenient, safe and efficient, the building and site standards of the Postal Service are sometimes at odds with the goal of strengthening downtowns. Specifications for ceiling heights, flooring materials, loading docks, parking spaces and so on have all been standardized. The standard model prescribed by the Postal Service is essentially a ``suburban'' model. The easiest way to meet the specifications is to build a new building. These specifications are often very difficult or impossible to meet either in existing buildings or newly constructed facilities within Vermont's villages and downtowns. For example, in one Vermont community, the Postal Service is proposing to rehabilitate an historic building and construct a large addition. An admirable idea. But the preliminary site plan also shows the demolition of a number of the neighboring buildings in order to create the parking truck access required by the Postal Service's specifications. Although the Postal Service has followed its new community notification process in Vermont, and it has kept State officials and legislators up to date on current projects, it is still critical that the process be enacted into Federal law and an appeals process, which is not currently in the Postal Service rules, be mandated. Mr. Chairman, I hope to work with you to enact S. 556 or similar legislation, which will require the Postal Service to abide by local zoning laws, Federal rules for historic preservation and the wishes of local communities concerning the relocation, closing, consolidation of construction of new post offices. Mr. Chairman, thank you again for giving me this opportunity to share my views with the Subcommittee. I ask that my full statement be made a part of the record. Senator Cochran. Without objection, it is so ordered. Thank you, Senator Jeffords. Senator Jeffords. Thank you. Senator Cochran. Senator Baucus. TESTIMONY OF HON. MAX BAUCUS,\1\ A U.S. SENATOR FROM THE STATE OF MONTANA Senator Baucus. Thank you, Mr. Chairman. I ask that my full statement be included in the record, and I will be brief. --------------------------------------------------------------------------- \1\ The prepared statement of Senator Baucus appears in the Appendix on page 50. --------------------------------------------------------------------------- Senator Cochran. Without objection, so ordered. Senator Baucus. Mr. Chairman, this is a no-brainer. All we are saying is that whenever the Postal Service wants to build, remodel, reconstruct a post office, that at least the local folks have a chance to say what the remodeling, what the reconstruction, and where the replacement might be. That is purely and simply what this is. And I stumbled across this, Mr. Chairman, because in my State, and I think this is true in a lot of other States, what I described is just not the case. That is, as Senator Jeffords mentioned, it seems that the Postal Service kind of has its cookie cutter, one-size-fits-all, particularly in small towns, the Postal Service, in their interest of efficiency, says, well, there's a downtown post office, maybe it needs renovation, whatever, let's close it, and we'll build a new modern facility on the outskirts, on the edge of town, outside of town. And without consulting people of their plans, they just, lo and behold--after property is purchased and maybe construction begun--the local folks start hearing about it after the fact. Then it is usually too late, and they have to create a big fuss, a big storm in order to have themselves heard. These are people who obviously want to have efficient delivery of mail. We all do. They just like the downtown post office, because it is a community center, it's a community hub. It's part of the culture of their communities. They are not averse to remodeling it or maybe relocating the post office in a way that makes sense both to the community spirit and for the efficiency of the Postal Services. It's just that they don't like, correctly, being stiffed, being just told, this is the way it is, lock, stock and barrel. I can give you an example. In Livingston, Montana, we were having this problem. The Postal Service was going to close down the downtown post office, an historic building, it's a wonderful old building, lots of culture and feel and great architectural history to it. The people just didn't want it closed. That's where lots of people gathered in downtown Livingston, go to the post office, and check their mail. It's like the old commons in New England days. But the post office said, no, we're just going to close it down, and we're going to build a new post office on the edge of town, which is very hard, nobody can walk to it, very few could, it was efficient because then the postal trucks could come in and out. Well, I just happened to be in Livingston 1 day and was talking to various people. And it dawned on me, gee, Max, why don't you go over to the post office and just find out what this big controversy is all about. Just because it's part of your job, to figure these things out. I walked over to the post office, in a very congenial, friendly way, and asked if I could look inside the post office, back behind the boxes, to see what it's like and how decrepit it is or isn't, and just get a sense of things. ``Oh, no, you can't come in. You can't come in our post office,'' I was told. I said, ``Well, I just want to look, that's all.'' ``No, you can't come in.'' So I said very politely, in a very friendly way, ``Gee, I'd like to see inside the post office.'' He said, ``Well, we're going to have to check with our headquarters.'' So for 45 minutes I stood outside the post office, and people started to gather, ``Max, what's going on here.'' The press started to come. I said, ``I'm just trying to walk inside and see what the post office is all about.'' Well, finally, 45 minutes later, I got the word that I could walk in, with only one staff person, we could go inside the post office. I said, ``Well, OK, I designate so and so to be my staff person.'' It was a local reporter. So we went in and looked around. It was no big deal. We saw the loading docks, it was a little bit crowded. The long and the short of it is that the community and the Postal Service reached an accommodation where some of the postal services were moved to a new location. But this is just one example in my State. There are many other examples in my State. One is Red Lodge, Montana. Same thing. Lo and behold, the folks find that the property was purchased by the Postal Service at the edge of town to build a new post office. Well, that raised a big stink about it, and finally were able to put the kibosh on that one. Another example is in Whitefish, Montana, and Augusta, Montana. I have a letter I can read to you, Mr. Chairman, which basically is a business person in Augusta, Montana, saying the downtown has just changed, it's not what it was, because they moved the post office away from downtown, built a new one on the edge of town. And they didn't have to do that, they didn't tell us in advance. We didn't know anything about it until it was done. So I just want to emphasize the main point that the Senator from Alaska made. People should be involved in the determination of remodeling and location of their post offices. They shouldn't have the final say, they shouldn't have the total say, and they don't want the final say or the total say. They just want to be considered, to be able to have significant say in the future of their downtown. Now, we all know that sometimes there is tax policy which adversely affects downtown America. Sometimes it's other actions that affect downtown America. Well, we certainly shouldn't have a Postal Service adversely affecting downtown America. Because a lot of communities, as you well know, Mr. Chairman, are fighting to keep their local business district, their shopping centers there. And I am not saying that the local business district should always win as opposed to the mall people. I am just saying that the community itself ought to have a say in what the determination is. We brought this bill up, Mr. Chairman, on the Treasury Postal Service, post office appropriations bill. And on a tabling motion, the tabling motion to delete this provision, lost 21 to 76. There is strong, overwhelming support for this provision. It is therefore in the conference, but the conferees took it out, against the wishes of two-thirds, three-quarters, virtually, of members of the Senate. There may be some ways to work with this bill, tweak it a little bit here and there, and Senator Stevens raised a point about delay. We are more than willing to work with the Subcommittee to try to find a way to deal with his concerns. But the main point I make is, it's a no-brainer. Local folks should have the ability to have a legitimate say in their downtowns. And certainly a local post office is part of that. The relocation or remodeling of a post office is part of that determination Senator Cochran. Thank you very much, Senator. Senator Akaka, do you have any questions of these witnesses? Senator Akaka. No. Senator Cochran. Let me thank you for suggesting that the hearing be held. At the time we agreed to have the hearing, we decided we would make the subject of the hearing not only the legislation which you have introduced, but the guidelines that have been promulgated by the Postal Service. Last year the Postal Service began to implement new regulations on this subject. Today we have a panel of witnesses to explain those regulations, how they are being followed, and what the effect of this legislation would be on the regulations and the communities where post offices are located. We appreciate your input and your presence here. Thank you very much. Senator Baucus. If I might, Mr. Chairman, I think I can speak for my good friend from Vermont here and say that the regulations, it's good to have regulations, but they can always be changed. I just think that people have a right by law to have some reasonable say. Not total, not absolute, not unnecessarily delay the process, but by law, have the right to determine reasonably their downtowns. Senator Cochran. Thank you very much. Senator Baucus. Thank you. Senator Jeffords. Thank you. Senator Cochran. If our panel of witnesses that I announced at the beginning of the hearing would please come forward, we will start with Howard Foust, who is President of the National Association of Postmasters of the United States, Retired. Then we will hear from Richard Moe, President of the National Trust for Historic Preservation. Then the Hon. Edward J. Derwinski, who is Legislative Consultant to the National League of Postmasters. And then Rudolph Umscheid, Vice President of Facilities for the U.S. Postal Service. He is accompanied by Fred Hintenach, Manager, Retail Operations Support, U.S. Postal Services. Welcome, and we ask you, Mr. Foust, to please proceed. TESTIMONY OF HOWARD FOUST,\1\ PRESIDENT, NATIONAL ASSOCIATION OF POSTMASTERS OF THE UNITED STATES, RETIRED Mr. Foust. Thank you, Mr. Chairman, and Senator Akaka. I appreciate being here today. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Foust, with a list of closed or suspended post offices, appears in the Appendix on page 52. --------------------------------------------------------------------------- I am Howard Foust, President of the National Association of Postmasters of the United States, Postmasters Retired, NAPUS. Prior to retiring, I served as postmaster of Plain City, Ohio, for 28 years. NAPUS represents more than 43,000 active and retired postmasters throughout the Nation. Thank you for giving us the opportunity to share our views regarding postal closures. Furthermore, postmasters want to thank you for highlighting S. 556, the Post Office Community Partnership Act. The measures introduced by Senator Baucus and Senator Jeffords would help to address a serious threat to the future of small and rural communities throughout the United States. It is important to recall that last year, the Senate passed by voice vote a provision similar to S. 556. Mr. Chairman, while postmasters recognize that demographic changes often necessitate operational modification for certain communities, NAPUS opposes the arbitrary, closing, consolidating and suspension of post offices. To investigate the soundness of such action, NAPUS created the Committee for the Preservation of a Historic Universal Postal Service. It is a delegation composed of knowledgeable retired postmasters. The committee monitors the action of the Postal Service managers to make sure that the proper procedures are followed regarding post office closings, including suspension and consolidation. At the conclusion of its investigation, the group reports its findings to the NAPUS national office and shares the results with the Postal Service. While this unofficial procedure is helpful, NAPUS believes that the most effective way to curtain unwarranted suspensions is through enactment of S. 556. Mr. Chairman, approximately 500 post offices are presently under temporary emergency suspension. Two hundred and twenty of these post offices have been temporarily suspended for more than 5 years. That does not sound like temporary to me. NAPUS believes that the Postal Service has no intention of ever reopening most of these facilities. Citizens and businesses and local officials of the communities affected by suspension have concluded that the Postal Service has elected to circumvent the Postal Reorganization Act procedure for closing a post office by using the suspension ploy. The Postal Service should have followed the Postal Reorganization Act stipulated procedure regarding closures. I would like to focus on a provision of S. 556 that would help to safeguard postal services throughout the Nation by putting the brake on misuse of suspensions. That is, section 2(b)(12) of the bill would ensure that if a post office is closed, it is closed for the right reason, and that proper procedures are followed. In sum, S. 556 would prevent the Postal Service from misusing the right to suspend postal services, limit such action to real emergencies and guarantee that such actions are temporary. Let me explain what is supposed to occur when the Postal Service must temporarily suspend a postal operation at a particular office. The Postal Service must first declare that an emergency exists and that it is a threat to the health and welfare and safety of postal employees or customers or security of the mail. Such situations include natural disasters or lease termination. Then the district manager is required to notify the postal headquarters of the suspension and must notify customers of the reason of the suspension, as well as an alternative location to receive postal services. Within 6 months, the district manager must decide whether to reopen the post office or begin a study to decide whether to permanently close it. However, postal regulations do not establish a time limit for the completion of such a study. As a consequence, the Postal Service may institute a temporary suspension of postal service without a time limit. S. 556 helps to protect small communities from the misguided decisions by postal officials from initiating so-called temporary emergency suspension of post office operations. By limiting the temporary suspension to 180 days, this would help guarantee that the temporary suspensions are truly temporary, and are a result of an emergency situation. As I stated earlier, the current law provides a specific procedure through the Postal Rate Commission should the Postal Service decide to close a specific post office. Yet no such procedure is required to invoke a temporary emergency suspension. As a result, the Postal Service has found that it is much easier to suspend an office rather than close it. S. 556 helps to remedy the misuse of Postal Service suspension power. The expiration of a post office lease and the retirement of a local postmaster is a predictable event. Six months is enough time to locate a suitable site to replace the former one. Furthermore, the decision of the Postal Service to disregard the maintenance of older post offices and leaving the physical plant in disrepair should not be misused as a basis for suspension. In rural and suburban communities around the Nation, postmasters serve a vital link between the Federal Government and citizens and small businesses. The suspension of full service postal operations disrupts the vital link and interferes with the communication and commerce within these much overlooked areas of the country. In conclusion, a 1997 General Accounting Office report established that post offices under emergency temporary suspension affect customers in much the same way as post offices that are officially closed, and that the service from those offices are also no longer available. NAPUS believes that the law should reorganize these back. Thank you, Mr. Chairman. I have a list of all the offices that have been closed back from 1982, and I would like to submit them for part of the record, sir. Senator Cochran. Thank you very much for that information. We will make that list a part of the record. We appreciate your being here. I know you were postmaster of Plain City, Ohio in 1966, when you were appointed. You have served as an officer in your association for a good number of years. And we appreciate your being here. Mr. Foust. Thank you. Senator Cochran. Mr. Moe is representing the National Trust for Historic Preservation. I know you have a fairly lengthy statement, and I would encourage you to make summary comments from that. We will print the entire statement in the record. We are glad you are here. It is good to see you. You may proceed. TESTIMONY OF RICHARD MOE,\1\ PRESIDENT, NATIONAL TRUST FOR HISTORIC PRESERVATION Mr. Moe. Thank you, Mr. Chairman and thank you very much for holding this hearing on this very important issue. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Moe appears in the Appendix on page 64. --------------------------------------------------------------------------- Let me just say that we at the National Trust have a very high regard for the Postal Service for many reasons. Among them, they are the stewards of more than 850 historic structures. They have more historic structures in their inventory than any other Federal entity, except the Interior Department. And for the most part, they are very good stewards of those structures. This is a complicated issue. I don't think there is a simple solution to it. But I would like to comment on several aspects of it. I would like to make two very simple points, Mr. Chairman. One, the importance of downtowns to communities and the role that post offices play in strengthening downtowns, and two, the distinction that's been made at the Postal Service between closings and relocations. Because I think that really gets to the heart of this matter. The National Trust has been involved in trying to sustain the viability of downtowns for a long time through our Main Street Program, which you may be familiar with. Over 20 years, we have been involved in 1,500 communities all over the country, working with businessmen and businesswomen to strengthen the viability and the economic strength of downtowns. We have learned a lot about downtowns in that process, what makes them work and what hurts them. One of the things that really is essential to a strong and viable downtown, we've found, is a post office. Because a post office is more than just a simple economic facility. It is also a social gathering place in many cases, it's the glue that holds a community together. Small businessmen rely on it very heavily. Senator Jeffords made a reference to a study we did in Iowa a few years ago, which did show that 80 percent of the people coming downtown did so in large part to visit the post office. It's really a magnet that brings people to the downtown and that holds people together. So we feel very strongly that downtowns cannot survive, first of all, communities cannot survive without strong downtowns, and downtowns cannot survive without a post office. It is unlike any other institution or entity that you will find in a downtown. It plays a unique role in every community. I think that is manifested by the very large number of calls and letters that you are getting and that we are getting and that really brought this issue to the fore. When a post office leaves the downtown, economic deterioration almost inevitably follows. In many cases, you can mark the beginning of the deterioration of a downtown from the time that the post office closed and left. Let me just comment briefly, if I may, on the distinction that's been made in the practice of the Postal Service between closings and relocations. The 1976 Act deals with closings and consolidations, and I think does so in a pretty thoughtful way. There are procedures and safeguards and consultative requirements built into that 1976 Act that I think have worked pretty well for the most part. But that only applies to instances in which post offices are being closed. The Postal Service chosen not to apply those same procedures and safeguards to instances where they want to relocate the post office from the downtown to an outlying area, even though the impact on the downtown is the same--the post office is gone. My very simple point here is that the safeguards and procedures that are now applied to closings should be applied at least to relocations, because they have the same devastating impact on downtown. And as the two Senators mentioned, the community has a huge stake in these decisions. And the community ought to have a chance to participate in these decisions. It was only after this issue became public and after there were a number of articles printed on it and television stories broadcast that the Postal Service started to address it. It was only after the legislation, S. 556, was introduced in the last Congress that the Postal Service issued guidelines and promulgated regulations. That's a step in the right direction, and I commend them for it. But it doesn't go anywhere near as far as it should. And it doesn't go as far as the Congress went in 1976 in dealing with the closings. We would strongly urge that you take steps to remedy the gap that now exists in the law between closings and relocations. What happens here is that the Postal Service often makes these decisions about relocations in private. And even now, under the new regulations, they only give the community 7 days to react, it is my understanding. A very short period of time, but it's a fait accompli. It's very hard for communities, many of whom want to offer free land or offer whatever help they can to keep the post offices downtown, to do so in that constrained time period. So I would again urge that you take a look at this and try to use the framework of the legislation that's been introduced and which is supported, I should say, by the National Association of Governors, by the U.S. Conference of Mayors, and by the U.S. League of Cities, virtually everybody who is focused on the viability of communities which are suffering from a lot of threats these days to try to keep communities strong. Everybody who's looked at it knows that the role of a post office is essential. Thank you, Mr. Chairman. Senator Cochran. Thank you, Mr. Moe. We appreciate your testimony. Our next witness is the Hon. Edward Derwinski. I am pleased to be able to welcome my friend Ed Derwinski to the Subcommittee. When I was elected to Congress in 1972, he was serving as a member of Congress from Illinois, and was a prominent member of the committee that had jurisdiction over the Postal Service and the workings of the delivery of the mail. I came to know him and appreciate him and respect him from the beginning. He has continued to do well in public life, serving as a member of the Cabinet, as Secretary of Veterans Affairs. We appreciate your taking time to come be with us today. Welcome. TESTIMONY OF HON. EDWARD J. DERWINSKI,\1\ LEGISLATIVE CONSULTANT, NATIONAL LEAGUE OF POSTMASTERS Mr. Derwinski. Thank you, Mr. Chairman. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Derwinski appears in the Appendix on page 70. --------------------------------------------------------------------------- I have a very brief statement which I would ask to be inserted into the record on the position of the National League of Postmasters. Senator Cochran. Without objection, it will be. Mr. Derwinski. I might add, Mr. Chairman, that I remember when you and Senator Akaka arrived in the House of Representatives as youngsters. I have witnessed in both cases a remarkable career you've had. You can imagine the feeling of awe I have appearing before you this afternoon. [Laughter.] I will be brief and just make one or two points. First, the National League of Postmasters supports the efforts of the Postal Service to solve these problems within their current jurisdiction and regulations. We believe that they can do it. We believe that, as the gentleman to my right noted, that they became much more concerned with this problem when this legislation was introduced. I think it is possible for Senator Baucus and Congressman Blumenauer in the House to take the same position that Senator Aiken took at the time during the Vietnam War, when he suggested to President Johnson that we just declare that we had won and we're coming home. By making the Post Office more aware of the concern of the Congress because of questions raised by constituents in communities, the Post Office has responded. And we in the National League of Postmasters want to cooperate with their positive efforts. Mr. Umscheid has a very impressive testimony for you, and I would highly commend it to you. We're always concerned, representing as we do the postmasters, that consolidations and closings reach the heart of the Postal Service. Their mission is to serve every American, universal mail service. That's a dedication, and that's a dedication that's shown, I believe, in the adjustments they have properly made. I would also point out, Mr. Chairman, I have to again admit my age, but prior to you and Senator Akaka arriving in the House, we passed the monumental Postal Reform Act of 1969, the basic law was known at the time as the Udall-Derwinski amendment. Our late colleague, Mo Udall, and I sponsored that bill. The basic intent of that bill was to remove the dead hand of politics from the Postal Service. We did so, I think, effectively. Thirty years later, that is still the case. But the dead hand of politics I refer to included direct involvement of the Congress in site selection and post office locations. I think as a young Congressman, here you are, you have a new community, they are building, they want a new post office, you are pleased to help. Then you get caught in a battle between two aldermen and the board, both of whom happen to be realtors and both happen to have different locations. It was a lose-lose situation. The same at that point, if you also would recall, postmasters were appointed by Congressmen. You had a dozen or so applicants. You made one friend when you finally made your choice, and a dozen enemies. A lose-lose situation. And we recognized at the time, Postmaster General Blunt was the man that took the bull by the horns and said, let's get out of politics. I'll leave the Cabinet and let the Post Office serve the public in the best administrative manner possible, without this unfortunate interference, this historic interference from Congress. In fact, at the time, postal workers led the drive for the periodic wage increases of Federal employees. Congress subsequently set up the procedure where now cost of living figures are used to give the annual pay adjustments. Much better system than we had when it was politicized. So I have to tell you quite honestly, when I look at this bill, I think it starts that dangerous road down to eventual Congressional involvement in site selection of postal facilities. And that was really abused. It was a terrible system. That's why I would recommend that we congratulate Senator Baucus and Congressman Blumenauer, they have achieved their purposes, they have scared the living bejesus out of the Postal Service. [Laughter.] Mr. Derwinski. Mr. Umscheid has lost his hair. [Laughter.] He is the responsible officer. And I think that they should keep their Post Office feet to the fire, hold this bill ready and if they are unhappy with the services rendered by the Post Office, they can come and present it to you. But I think they've won the battle. And in winning the battle, they make it unnecessary to tamper with the very effective U.S. Postal Service that our citizens enjoy. Senator Cochran. Thank you very much, Mr. Derwinski, for your always enjoyable presentations, no matter what the subject. You are certainly a person who has the experience and the credentials to speak on this subject. As you were talking about the challenge of naming postmasters, I recalled what former Congressman John Bell Williams, who was a predecessor, he had the seat in Congress that I held, told me. He said it was one of the best pieces of legislation that he remembered the Congress passing. Because his experience had been that of the 12 candidates for postmaster, you would get 11 enemies and 1 ingrate. So he changed it a little bit from what you said. [Laughter.] Rudolph Umscheid is Vice President of Facilities, U.S. Postal Service. You may proceed. TESTIMONY OF RUDOLPH K. UMSCHEID,\1\ VICE PRESIDENT, FACILITIES, U.S. POSTAL SERVICE, ACCOMPANIED BY FRED HINTENACH, MANAGER, RETAIL OPERATIONS SUPPORT, U.S. POSTAL SERVICES Mr. Umscheid. Mr. Chairman, thank you very much for this opportunity to appear before the Subcommittee. I clearly recognize that this is an extremely important issue. It's important to the Postal Service, it's important to its employees. It's particularly important to the employees who have to live and work in our infrastructure. I know that it is also extremely important to the citizens of this great country. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Umscheid, with a list of closed or suspended post offices, appears in the Appendix on page 72. --------------------------------------------------------------------------- While I understand the concerns that gave rise to the proposed legislation, I would like to share with the Subcommittee why the Postal Service feels that it will be detrimental to the Postal Service and to the communities we serve and will greatly curtail our ability to provide the necessary infrastructure. The Postal Service is one of the Nation's largest owners and managers of real estate, with over 37,000 buildings containing 310 million square feet of space. Our facilities handle 630 million pieces of mail every day. Mail volume has doubled in 20 years. In fact, for the first time in history, we will handle over 200 billion pieces of mail this year. This volume growth, coupled with the population growth, strains the capacity of our facilities. Even in areas of little or no growth, we must address issues relating to deteriorating conditions from decades of use, as well as the need to upgrade offices when employee safety and accessibility and other problems are identified. In an attempt to keep pace with this need, we have an annual construction budget of $1.5 billion to $2 billion, which is a significant investment in the communities throughout the Nation. We complete more than 20,000 repair and alteration projects, conclude some 8,000 lease transactions and deliver some 800 new or replacement facilities each year. The Postal Service recognizes the pivotal role our postal facilities play in towns and cities across the country, and we understand why our customers feel that their local post office is an integral part of their community. We are very sensitive to these concerns and want to ensure that those served by a postal facility have input into the decisions that could affect their community. We believe that we have improved our performance in this area during the past 2 years. First, with the revised policy in 1997 and then with formal regulations, which were published in the Federal Register and took effect in 1998. Do we have a perfect record? No, we do not. I think as Senator Baucus pointed out, Livingston was clearly a black eye in the process. But unfortunately, it occurred. But I think our record overall is a good one, one that is better than the isolated press clippings or anecdotal stories might indicate. Our regulations require that we meet with local officials and hold a public meeting at the start of our process before any decision has been made. We explain how our process works, including the time frame of comments, decisions and appeals, using the community regulations handbook during discussions. With our local officials there is a convenient brochure which discusses our partnering concept to hand out at all public hearings, so that our customers understand how they can participate. Our first priority is to remain in existing locations. In fact, since September 1997, we have completed over 200 projects in which we have either expanded the existing post office or moved the carrier operation to another location, thus keeping the retail in its existing location. We have 250 similar projects in progress, and over 150 are in the initial planning phase. If it is not feasible to expand an existing facility, our second alternative is to remain in the same vicinity. If no buildings or sites are available, only then will we seek alternatives that may be out of the downtown area. We also keep this community informed at every step of the process, and anyone not satisfied with the process can appeal to me. In the years since these regulations have been in effect, I have received fewer than 30 appeals. I get personally involved in these cases, and take my responsibilities very seriously. I believe I understand the balance of serving our community yet trying to preserve our operational capabilities. Some involve a disappointed owner of a site not selected. Some involve a wide difference in opinion within the community as to the best location. Even with our preference for keeping the facilities in or near their existing locations, there are some members of the community who simply want the post office to be near their homes where they shop on a daily basis, so that they can combine trips. In several appeals, I have been able to work with the local community to find a suitable solution acceptable to everybody. Such solutions are not easy, nor are they fast. In one particular situation, working with the mayor of Ashboro, North Carolina, we eventually were able to identify and assemble a site consisting of eight separate parcels. In brief, we successfully partnered with the community to achieve the right solution. And in sum, I have upheld the original decision the Postal Service had made as being the right decision, because nothing else would resolve the facility problem. There are instances where we have worked for 20 years to find a site, and have yet to implement a badly needed facility. We also are working on a number of efforts to improve how we work with the communities and how we can remain in the downtown area. We have developed a training program for our real estate specialists, only 105 across the entire country, to improve their skills at public meetings. We want to be better listeners, provide complete information, answer questions in a forthright manner, engage the citizens in a positive manner. We have prepared and issued samples of all notices and correspondence relating to this process, so that our real estate professionals follow the policy. In an effort to improve the likelihood that we can find alternative space in the general vicinity of existing offices, we have relaxed our requirements for parking in downtown areas. We can sometimes reduce our interior space requirements in those communities that we are not expected to experience high growth. We work with the communities on those exterior designs of the facility, so that it blends in with the character of the community and with the State historic preservation office suggestions. And when we renovate or expand older facilities, there is no such thing as a cookie cutter design. My office also follows up on press clippings that may indicate that there is a problem or controversy brewing. With that background, I'd like to turn to the proposed legislation. While it is well intended in that it certainly emphasizes input from those served by a postal facility, we believe that it does not serve the public or our employees. First, in S. 556, post office relocation or new construction, which are replacements of the existing office, are treated in the same manner as a post office closing or consolidations, where there will be a postal facility in a zip code area. The very deliberate and lengthy process used when we consider closing a postal facility takes on average 2 years from the time we begin the process until a final decision is made. And sometimes longer if the Postal Rate Commission sends it back for additional data. The legislation proposes a process for a relocation or new construction that would take up to 18 months or longer for a decision before a site could even be purchased or any construction could begin. This is unacceptable when we are unable to continue leasing the current facility or when an existing facility is in poor condition, which can pose serious safety concerns to our employees and customers. It also poses a problem when a severe space shortage exists, which can cause safety and other service problems or prevent the installation of modern equipment. In addition, it is unlikely that we will be able to control a proposed site for a relocated post office or new construction for that period of time. Thus, even after gaining approval, we might have to start all over again to try and find a new site. Second, we do not feel that it is prudent to legislate processes requiring judgment decisions. In many cases, we deal with communities that cannot reach a consensus on where a facility should be located. The legislation requires that consideration be given to the community input, but does not allow us to go with the majority input. The legislation states that all reasonable alternatives must be fully evaluated, yet reasonable means different things to different people. In effect, the legislation is simply inviting controversy and a lengthy review, not by the communities served, but by the Postal Rate Commission. Third, our regulations provide for more input and discussions with the community, and it takes place at the start of the process. Conversely, the legislation proposes that we get public comments after we announce our decision and hold a community meeting only if asked. This does not foster the partnership we are trying to create. Fourth, anyone can appeal our decision to the Postal Rate Commission, even competitors who reside in the community. It does not matter if local officials in 99.9 percent of the community endorse our decision, an appeal can go forward, delaying a much-needed project for an extended period. In brief, the process will lend itself to abuse. Fifth, over the past decade, we have modified our community relations policies, strengthening the requirements each time, but also making changes as we gained experience and saw what worked best, providing notification cards to all customers or holding community meetings, deciding when to hold a public hearing, establishing a period of time between actions in the process and providing appeal rights. A legislative process will not allow these types of evolving improvements to be easily incorporated into our procedures. Finally, the bill would require the Postal Service to comply with all local zoning and building codes. In the past year or so, we have increased our efforts to work with local zoning boards and city offices. We now voluntarily comply with zoning with few isolated exceptions. In addition, we have a longstanding requirement to construct our facilities to the more stringent of local and national codes. However, some building codes, such as those requiring public bathrooms in public lobbies, fire sprinklers and handicapped accessibility to our inspection service lookout galleries, pose undue hardships to the Postal Service. In fact, some code requirements could increase our space needs, such as added parking, to an extent that we could not locate in a downtown area. We need the flexibility to resolve issues with the local community. In summary, we have made great strides in working with these communities on our facility decisions, and I believe our recent record is a very positive one, with few exceptions. The proposed legislation will cause us undue delays, resolving facility issues which add costs to the process, significant costs, I might add. In addition, it will delay projects to such an extent that we will not be able to make the same level of investments in these facilities each year. This in turn will affect the communities and hundreds of small businesses that perform hundreds of millions of dollars of construction work for us. It will also allow safety problems to linger. The Postal Service feels very strongly, and I cannot emphasize this enough, that the legislation would have a devastating impact on our ability to provide much-needed facilities to everyone we serve, everywhere, every day, at a reasonable price. This concludes my testimony, Mr. Chairman. I thank you for your patience. Senator Cochran. Thank you very much, Mr. Umscheid, for your testimony and also for your explanation of the new regulations that have been implemented by the Postal Service. I have a copy of what appears to be a second edition. Is this the latest edition issued May 1999? \1\ --------------------------------------------------------------------------- \1\ The latest version of the amendment of the bill appears in the Appendix on page 97. --------------------------------------------------------------------------- Mr. Umscheid. Yes, sir, it is. Senator Cochran. And the first was issued back in October, I believe, of 1998? Mr. Umscheid. Yes, sir. Senator Cochran. The impact of these regulations must have by now been assessed by you and your office. How would you rate the regulations in terms of improving community relations for the U.S. Postal Service? Has this had any noticeable impact on how the relationships are now defined between the Postal Service and local towns and cities? Mr. Umscheid. Absolutely, from my direct participation, this has significantly enhanced our ability to communicate and allow the citizens of a community to participate in the decision-making process. I have been involved in projects all over the country, have gone to small-town America and participated with the mayors. Yes, it has taken us more time. It used to be that on average it would take us 6 to 8 months to identify sites in communities to acquire for new facilities. Now it takes longer, possibly 2 or 3 months longer. But at the end of the process, we feel that we have generally secured a consensus. Not always. Sometimes we simply have to walk away and say, there isn't a solution, and we can't force feed a solution. We need to move on, because we need new facilities. Senator Cochran. What about the suggestion that some have made that you have a tendency now to close the downtown post offices and buy property out on the outskirts of town? Is this commonplace, or is there an effort by the Postal Service to preserve downtown facilities where you can? I know there's an executive order that applies to other Federal agencies which states that when appropriate and prudent, you should consider locating facilities in downtown or historic districts before considering other locations. Mr. Umscheid. As I had mentioned, it is our first priority to locate a facility downtown. We are very sensitive to the issues of trying to preserve historic buildings, whether it be our new postal museum in Georgetown or investing $30 million in the main post office in the Bronx. It is absolutely essential that we remain downtown. Now, again, sometimes we encounter great difficulty in trying to find the appropriate site. Sometimes we are willing to pay premiums to secure the downtown location. In other instances, when those premiums get to be three and four times the fair market value of the property, we have to defer a decision. But contrary to what might have been the preference of our operating folks who would prefer a location more accessible to highways and transportation, the emphasis today is to remain downtown. Senator Cochran. Mr. Moe, I know that the emphasis in your organization is to preserve historic properties. Do you think these regulations provide some new opportunities for meaningful community input and input from organizations such as yours into decisions about the location and relocation of post offices? Mr. Moe. Mr. Chairman, I think they are definitely a step in the right direction. And I was very pleased to hear Mr. Umscheid outline the priorities of the Postal Service in this area. The problem is that the regulations are applied very unevenly across the board. Maybe that's because they're new. In many cases, it's the first instinct of the Postal Service to leave the downtown and not to look for an alternative site or even to look to see whether a remodeling or an addition would work. We have a very recent example of this in the town of Demopoulous, Alabama, which you may be familiar with, a town of about 7,500, a very historic town. They have a 1912 post office, a beautiful building. The Postal Service announced in early September that they were going to move outside of town, close the post office and build a new facility on U.S. 80. They held a hearing. Hundreds of people turned out at the hearing, over 1,000 people signed a petition. The town of Demopoulous is absolutely united that they should keep the postal facility downtown. And they are now eagerly awaiting the decision of the Postal Service on that question. But it is a very short time frame. There was almost no time for the community to react and to come up with alternative suggestions. That's the problem with the regulations. As I said earlier, what I think is needed here is a process at least as good as that which the Congress provided in the 1976 Act for closings. That process should be applied also to relocations, in my view. Senator Cochran. I notice that in our notes here it says the National Historic Preservation Act requires Federal agencies to consider the impact of actions on structures included in the National Register. Does this apply to the Postal Service? Mr. Moe. Unfortunately it does not. And under S. 556, it would. And we think it should, for the very same reason that the Congress determined that it should apply to other Federal facilities. Senator Cochran. Have you had any experience working with the Postal Service in terms of assessing the impact of public comment such as the one you described in Demopoulous? That has not yet been decided, as I understand. Mr. Moe. That has not yet been decided as far as I know. Senator Cochran. Do you know of any other instances where you've had people come to a public meeting under these regulations and where they've had an impact on a decision by the Postal Service? Mr. Moe. Yes, and I think it's been a very mixed record, very uneven. The example that Senator Baucus referred to in Livingston, Montana, several years ago, I think that was resolved by leaving the retail facility downtown and moving the distribution and sorting facility outside of town, which is sometimes an appropriate decision. There's not a one-size-fits- all solution to these things. It depends upon the community, obviously. But I think in many instances, the Postal Service has tried to be accommodating to local concerns. But they don't have the tools to do it, and they don't really have the guidance to do it fully yet. Senator Cochran. My understanding, too, is that there is a difference in the law, Mr. Umscheid, between closing a post office and relocating or expanding a post office. Is it true that under the new regulations, local customers who want to be heard on the subject of an expansion or relocation can appeal to your office, to postal headquarters in Washington? If there is a closing, however, under law, there's a right to appeal to the Postal Rate Commission? Mr. Umscheid. That is correct. The closing is a very protracted process requiring many operational considerations and impact on the community. Mr. Hintenach, who is our manager of retail and who ultimately has the responsibility for that, can better articulate how that is dealt with very differently from what I do on the implementation of replacement facilities. Senator Cochran. Mr. Hintenach, would you like to respond and explain the differences between a relocation and a closing? How do you determine which is which? Mr. Hintenach. The regulations are very specific, and I think as Mr. Umscheid mentioned in his remarks, that a post office closing--we are not leaving service, we are still providing service to the community. But we no longer have a physical presence. It's a much different situation. And the law was enacted, I believe it was in 1976, that provided a series of events that started with a study, community meetings, posting to the community that a decision has been made to close the post office, then certain appeal rights to the Postal Rate Commission. Quite frankly, I think that's a very good process for that purpose, because that is when the Postal Service is looking at no longer having a physical presence in the community. It takes a very long time, and if you look at some of the GAO studies that were done in 1997, it took about 4 years average to review, which was too long, and we've cut that back to about 2 years. I'd also like to add at this point that in March 1998, we placed a moratorium on post office closings. That was a result of a number of things, and I'd just like to give you a real quick history here. In 1992, we started to have a very large number of retirements of small postmasters. It was a time when early benefits were offered if people retired, and we had a lot of retirements. We started to computerize our systems at the same time, and also found that we had a large number of offices that had not followed the process. And we started to implement that. And as a result, we had a number of closings; the number actually jumped up significantly. We started to clean those up and they started to jump even a little more. Then when GAO did their study in 1997, which said we were doing a very good job of following the process, but in fact we weren't being timely enough. That's when it was taking quite a bit of time to go through these. Thus we picked up the pace again and the numbers went up further. And all of a sudden, everybody was saying, boy, look, we're closing a large number of post offices in this country. Believe me, the post offices are very important to us, we have a wonderful group of postmasters who do an excellent job of serving the company. We stood back, we were starting to get questions from this legislative side of the House, we were getting questions from our postmaster organizations, and the Postmaster General decided, let's put a moratorium on. As recently as this morning, we met with the postmaster organizations and agreed that we were very confident we could come up with a process, and even looked at improving the involvement of the postmaster organizations in looking at post office closings. So we are taking this very seriously on the impact on the community and the impact of the service provided and on our postmasters. But it's a much different process, I believe, when you leave a community physically than if you relocate or want to do a remodeling. Senator Cochran. We just came across the other day in our office a situation where a Mississippi delta post office that we thought had been closed had actually not been closed. It had been put under what was called an emergency suspension. I had never heard of that, because I'm not an expert. I am learning a little bit more about these terms now. But we found out that it's been under emergency suspension since November 1996. And a suspicion arises, that this is classified in a way that prevents, in effect, anybody from appealing to the Postal Rate Commission? If you closed it, you would have had to go through this step by step procedure under law. But if you just suspend its operation on the basis of an emergency or call it that, you don't have to go through that. Who's to know whether it's really been closed or is really just suspended? Mr. Hintenach. Well, the process is such that, an emergency suspension you should not have existing for years and years and years. And we found some of that, and that was one of the things in the mid-1990's that we started to clean up. The 1996 emergency suspension you are probably talking about is now being looked at, in regard to the post office moratorium, we are taking a look at that to see the validity. But the key thing is, there is a process by law that we must follow and we will follow it in every case. Even if we missed one from 1982, we will go back and follow that process to make sure we follow the process of the law. An emergency suspension occurs while we are doing the study, and the study can often take 18, 24, or 36 months, depending on community involvement, the discussions you have, the alternatives you look at, and possible appeal to the Postal Rate Commission. Senator Cochran. Just for the record, I hope you will supply for us, for the hearing record, how many post offices are currently in emergency suspension status and how many have been in this status for more than a year. Mr. Hintenach. I would be glad to provide that. In fact, that's the same list that Mr. Foust is referring to,\1\ because we have shared it with them. So we will get you that. --------------------------------------------------------------------------- \1\ List referred to appears in the Appendix on page 77. --------------------------------------------------------------------------- Senator Cochran. OK, thank you very much. Senator Akaka. Senator Akaka. Thank you very much, Mr. Chairman. Mr. Foust, you have a proud background with the Postal Service. You proudly served the Village of Plain City, Ohio, as its postmaster for three decades. In your experience as a small town postmaster, would you share with us what it was like to serve a community with approximately 2,500 people? Mr. Foust. Yes, sir, I would be glad to. You serve with pride every day. Absolutely. You put that flag up and you take the flag down, you come in on Christmas morning and sort the packages out and call the people and say, hey, this looks like it might have a package for Christmas. Those are the kinds of things you do in a small community yet. See, I was born and raised there. I knew everybody. That's maybe one of the things, we have that fault with the Postal Service now, we have people that live a good many miles away and they are not really involved in their community. But I sure was involved with my community, and I take exception to the fact that we may have taken out the politics, but we still may have politics, a little different kind of politics, maybe kind of cronyism, which is even worse. Before you know, if your gang was in, you were in, if you weren't, you were out. But now you don't know exactly who you are supposed to catering to. I would like to elaborate a little bit if I could, talk about the meeting we had this morning. I really believe that this Blumenauer bill and this S. 556 has kind of got somebody's attention. Not ours. We sent a list back in May 1998 and the Postmasters Retired took this over, because we had the time to go to see these offices and knock on the doors and know the older postmasters that were there and get their input. And we did that, all over the country. We've got a committee of 10 retired postmasters that are all in the different areas of the Postal Service, and they've got people that report to them, that go out to these offices. We got this list in 1994. Now all of a sudden, we're just now beginning to get something done. The reports were sent back in early July 1998, to get something done. It would just kind of stall. My biggest problem, I think, with the whole procedure is over possibly 500 post offices on suspension, is there is a process in the Postal Reorganization Act that says what you will do with the thing. And it seemed to me like what they may be doing is if you just put it in temporary suspension, the people that are fussing with the Postal Service, if you wait long enough, they'll forget about it and then maybe we can go ahead and close it. And that's not the way to do business. Just because we only have 2,500 people in Plain City doesn't mean we shouldn't have the same respect that Columbus, Ohio, does. And that's my comments, Senator. If that answers your question, maybe more than you wanted to know. Senator Akaka. I wanted to hear from a person like you, and you must know that what you just said will be included in the record. Certainly it will be helpful. Mr. Foust, how does the Committee for the Preservation of an Historic Universal Postal Service function? Mr. Foust. It is a committee of retired postmasters of the International Association of Postmasters of the United States. And really, postmasters retired that still have post office in our blood. You just don't stop it today. I don't know why I'm still doing it. But things just aren't like they ought to be, and somebody has to stand up and say something. You have these meetings with communities, and most people won't say anything. But the way we started this committee is so we could have people available to go out and inspect the facilities and see what is available or not available. And many times probably 80 percent of it we've said, these post offices probably ought to be closed, and sent that information to the Postal Service. But sometimes we find that if they wait long enough, people just forget about it, and maybe just close all of them. Senator Akaka. Was NAPUS involved in the drafting of new regulations, do you know? Mr. Foust. Well, they are working on it now. Like I said, this is what was in the meeting this morning, in trying to come up with some regulations. One of the things they were concerned about was that the retired postmasters really shouldn't have any input. I really think we're citizens, at least we could tell them what we see. Possibly the postal employees don't have the time, and yet they are overlooked by somebody that's got a vested interest. Senator Akaka. Mr. Derwinski, was your group involved in that? Mr. Derwinski. Oh, yes, our president was there all morning. I think, Senator, if you'll let me make an oversimplified comment, naturally, you hear about all the defects of the Postal Service. You don't hear about the effectiveness day after day, the millions and millions of pieces of mail that are handled. The U.S. Postal Service, with all of its headaches and the arrows that it takes, is the finest example of postal service in the world. And we take the position at the National League of Postmasters that we're part of a team. And we want to improve it. We don't operate from an adversarial relationship, we operate from a positive teamwork relationship. And we have found the postal officials, when we break through their bureaucracy and their little clusters, they want to help. Sometime a few months ago, there was a, I don't recall, maybe it was a Gallup poll, they took a poll that showed that the Federal entity with the highest rating of public approval was the U.S. Postal Service. And that's just a fact. But what you hear are the necessary gripes. You don't hear about the daily effectiveness. Senator Cochran. Senator, we just have received word, we have a vote on the Floor, 4 minutes are remaining for us to record our vote, so we'd better go over there. We have a couple more questions, if you wouldn't mind staying. We will be back in about 10 minutes. Thank you. We will stand in recess. [Recess.] Senator Cochran. The Subcommittee will please come to order. When we recessed to go vote, Senator Akaka was engaged in asking questions of the panel. I think we shall continue with Senator Akaka's questions. Senator Akaka. Senator Akaka. Thank you very much, Mr. Chairman. I would like to say that Senator Edwards wanted to come to this hearing, Mr. Chairman, to discuss a matter of importance to North Carolina. That was the closing of a remote coding center in Lumberton. He is concerned about the loss of jobs associated with the closing and the effect that this will have on the community. Unfortunately, he is unable to attend this hearing, but the Postal Service can expect written follow-up questions to be posed by Senator Edwards.\1\ --------------------------------------------------------------------------- \1\ Questions and answers submitted by Senator Edwards appears in the Appendix on page 33. --------------------------------------------------------------------------- I would also like to ask that a letter from Representative Blumenauer \2\ supporting S. 556, the companion bill to his legislation, be included in the record, along with Senator Levin's statement.\3\ --------------------------------------------------------------------------- \2\ The letter from Representative Blumenauer is included with the Senator Jefford's prepared statement that appears in the Appendix on page 43. \3\ The prepared statement of Senator Levin appears in the Appendix on page 105. --------------------------------------------------------------------------- Senator Cochran. Without objection, that will be included in the record. Senator Akaka. Thank you, Mr. Chairman. Mr. Umscheid, the regulations issued in 1998 providing community input into the decision making process are just that, regulations that may be changed at any time. How do we ensure that there is a permanent process in place without legislating these guarantees to the public? Mr. Umscheid. Interesting question. I'm not so sure I quite know how do we guarantee that we will continue to adhere to the process. I think the best way is that we continue to be terribly responsive to public opinion. Clearly, as issues are in effect brought forward to you and to Congressional folks and to our attention, then we respond. I think that clearly, the Postal Service has become a very customer-focused organization. And it certainly is not in our best interests to alienate anybody in the community, because they are our customers. And clearly, there are some delicate tradeoffs about trying to find the best location versus meeting our operating capabilities, our preferences. I want to comment just briefly on the Demopoulous, Alabama situation that Mr. Moe made reference to. I saw it in his prepared statement. I think that is the classic example wherein the anecdotal story is placing us in a very unfavorable light. We conducted a community process. And contrary to Mr. Moe's statement, there is no time limit. We are not obligated at the end of 7 days that we are going to immediately conduct a public meeting and make a decision. A meeting was held there. There was no reference made that we would move outside of the downtown area. In fact, ultimately, I suspected a decision will be made that we will stay there and we will have a split operation. A split operation means that we will have the retail, full service capabilities in the downtown. We will simply relocate our carriers to a location out of the core district, obviously in a building that's a more industrial type building that allows for trucks and our delivery vehicles and our mail processing equipment. Even when we adhere to a process, we have a situation, and I believe Mr. Moe's statements were very misleading. There will be controversy. And in many instances, if there is more than one meeting required, we hold those meetings. We want to reach a consensus to the very best of our ability. Unfortunately, we have a few instances like this. Bear in mind, I ask you to consider, we are delivering 1,000 facilities. One or 10 or 20 or 30, yes, get to be very controversial. But it's still a very, very small percentage. And others, yes, they may be difficult. But any that are referred to either Congressional delegation or directly to my attention, the Postmaster General, believe me, when they go to the Postmaster General, I hear about them immediately, and I respond. But I respond to all of them. They are terribly important. I was terribly concerned about Mr. Moe's statement that in fact we were deviating from the process. We are not. Senator Akaka. Since he talked about Alabama, let me talk about Hawaii. My State of Hawaii is served in some areas by contract service stations. Are customers notified when there is a switch from full service to contract service, and if so, how is this carried out? Mr. Hintenach. Senator, let me try one little clarification here. There are contract stations and there are contract post offices. Often times a contract post office is put in to replace a post office that is no longer in the community. Contract stations, which is an internal term, are part of an existing post office. But in order to provide the community with better access, we might establish a contract station underneath an existing contract--and I'm not sure, Senator, which you have. You may have both. Senator Akaka. I think we have both. My question was, whether they were notified in case there is a switch in these services. Mr. Hintenach. The community, if we would substitute a community post office for a post office, the community is notified, because we have to follow the law and the procedures of the law to close a post office. It might be replaced with a community post office. We don't do very many of those. Senator Akaka. And is there a special way that you carry this out? Mr. Hintenach. We follow the same process of the post office closing, with doing a study. We determine the needs, we'll make a decision to eliminate the post office and we would tell the customers that their service is being replaced by a community post office, and they would also have appeal rights to the Postal Rate Commission. Senator Akaka. Mr. Umscheid, Hurricane Floyd recently devastated parts of North Carolina, including many rural areas, much like Hurricane Iniki that occurred on the island of Kauai nearly 10 years ago now. What happens to post offices during a time of natural disaster? Mr. Umscheid. We did lose several post offices. I think in certain instances we also had vehicles that were containing mail that were underwater. We do use modular units that we are able to ship in. We continue to find ways to deliver the mail, and I'm sure both of these gentlemen know this much better than I do, the unusual and extraordinary measures that they go through to continue to deliver the mail. But we then go back in, as soon as conditions permit, and we replace them. If there is emergency funding, when the hurricane came through, even prior to it having passed through the area, we have already made provisions with contracting organizations who are prepared to go in at the earliest possible moment to replace what is absolutely necessary to get us back providing the service that's important. We don't close any as a result of that. It causes a terrible hardship on a lot of folks, but hopefully in the end, we even have a better facility. Senator Akaka. Mr. Derwinski, your involvement in reshaping the Postal Service is well known. I know you've worked in the area of postal service while you were in the House as well. I think the modern Postal Service reflects, thinking about you, your commitment to take politics out of the mix. I appreciated your comments today and heard your cautions. Given your support of the new regulations, would you add anything to these new rules? Mr. Derwinski. Yes. I'm sure that further prodding by not just the postmaster groups but, for example, the unions, letter carriers, supervisors unions, all the interested employees as well as customer groups, could further convince the Postal Service to streamline, somewhat streamline and say, be a bit more consistent. I think they were a little reluctant to get where they are. But now that they're there, we're convinced they are going to do a much better job. Call it proper the same function you serve when you maintain legislative oversight over any entity. We hope to have that kind of positive pressure and presence felt by the Postal Service. Senator Akaka. I always cherish your wisdom in many of these things. As I say, Ed, I look upon you as one that has really reshaped the Postal Service over these many years. Mr. Moe, I appreciate your being here today, and I applaud the Trust for leading the way for over 50 years in helping to preserve our national heritage. In your testimony, you make a strong case for ensuring that downtown communities, many with historic buildings, be preserved. I can see from your testimony that the Postal Service has a key role in maintaining a town's vitality. S. 556 would bring the Postal Service under local zoning laws. I know that you believe the Postal Service's exemption from local zoning and planning laws has harmed communities. Would you give us an example of this? Mr. Moe. Senator Akaka, I don't have specific examples. But I was pleased to hear the Postal Service representatives say that they do comply with local zoning requirements in the vast majority of instances. I am not expert in this area, so I don't know the precise exceptions that they make. But let me make another point, if I may. They made the distinction earlier between closings and relocations, and I understand the distinction they are making. But the impact on the historic resources that are left downtown when a post office leaves downtown is exactly the same. And it's usually devastating. Mr. Umscheid. Senator, if I might, could I comment on the zoning issue? Senator Akaka. Mr. Umscheid. Mr. Umscheid. I will give you an example where we did not comply with zoning, or the intent of the zoning. We had a situation where we were in a leased facility next to Lincoln Center in New York City. It's called Ansonia Station. It serves tens of thousands of people. We parlayed our leased interest in the building and sold it to a developer who built a new building, very expensive high-rise. Out of that, we had to move for an extended period of time, 4 or 5 years, while they were going through the process. We moved out, and then we moved back in to a brand new facility that served our long-term needs. When the developer built the building, it was always understood clearly by everybody that we would move back. When it came time to move back and to put our facility in, certain neighbors in very expensive condominiums objected to our presence. Now, I would say it was maybe less than prudent for the deputy mayor and other folks to say, we approve it from a zoning standpoint. They encouraged us that they would support us if we would exert our Federal prerogative to proceed and say that we were exempt from zoning to go back. Because it was just for the expediency. In my 5 years, I can tell you that there is--I can't think of another example where we have deviated from zoning. Bear in mind that most of our facilities are leased, of that 35,000 or so, 29,000 are leased, smaller post offices. And the owners of those leased facilities have to go through zoning. Stonybrook, Long Island is a very controversial one. It's in a leased facility. The owner is going through the process to secure the zoning rights to expand the post office, then we still have a decision to make, because the community still would prefer to have us preserve the green area. So do we consider split operations? Those are the kinds of dilemmas that we're sort of thrust in. Frankly, I would look for ways to get some wisdom to find solutions to those problems. But zoning, from my perspective and my 5 years of experience, is not a problem. Senator Akaka. Mr. Chairman, you have given me so much time. I have other questions, but I'll put them into the record. Senator Cochran. Thank you very much, Senator. I have a couple of items to raise that are related to facilities in my State that I want to bring to your attention. One has to do with the contract postal unit in a mall, called Metro Center Mall in Jackson, Mississippi. It is supervised by a post office, Westman Plaza Post Office, in Jackson. Some constituents called the office the other day complaining about the closing of the contract postal unit, although I don't know they knew what it was, it was just a post office facility. We checked into the thing to find out what was going on, and learned that whoever had the contract had abandoned the contract or had ceased operation. The postal officials had not been able to find anybody else who wanted to do it, or who could carry out the responsibilities of that unit. What applies there? It occurs to me this is something to raise here, because if we adopted this legislation, for example, what would you have to go through with a contract postal unit? Does that fit within the terms of S. 556? If not, how do your regulations apply to a contract postal facility? What do we tell the people down there who are disturbed about the fact that that post office is closed? Mr. Hintenach. I don't think that the bill applies to the contract postal units, the way I read the bill. Oftentimes what we do with a contract postal unit, we try to find someone immediately to take over that contract, especially if it's providing a lot of service to people. Sometimes you can't find an operator. The local postmaster or the local district will work to try to find somebody to the best of their ability to do that. Most of the time we're successful, Senator. Because a lot of businesses like to have a contract postal unit, because it also helps them draw some traffic in while they are doing postal business. The process would be that for the customers to let the post office know that this is something they desperately need for their support. Usually we find other operators. In this case, it sounds like there's been some difficulty. I'll be glad to look into that for you. Senator Cochran. Yes. That would be great to know. Also another example, at Mississippi State University, I'm told they are trying to develop a project which includes the construction of a new student union facility. They have two postal facilities on the university campus, I'm told. What they would like to do is combine them at the university in this one facility, an expanded post office facility to be located in the student union building. The project obviously would be a very important and needed improvement on the university campus, and local postal officials are reviewing the proposal and exploring the options with the university. I'm curious to know how your community regulations apply to this project? Are you involved in following the regulations here? If you don't know, would you check to be sure that they are followed? Mr. Hintenach. I'll be glad to look into it. Because it depends on the circumstances. We have contract locations on campuses, we have our own operations on campuses. In this case, it sounds like we have our own operation in some part of that campus. And oftentimes what we find is the local university will work very closely with the local postal officials and find a solution. I will be glad to look into this for you, also, Senator. Senator Cochran. It's called Mississippi State University. [Laughter.] Mr. Hintenach. Thank you. Alumnus? Senator Cochran. No, but my grandfather was. I went to another university. We've also had letters and statement submitted to the Subcommittee on the subject of today's hearing--a letter from Postmaster General William Henderson, a statement from Senator Richard Shelby, and a letter from Vincent Palladino, President of the National Association of Postal Supervisors.\1\ Without objection, these comments will all be made a part of the record. --------------------------------------------------------------------------- \1\ A letter from Postmaster Henderson with attachments, prepared statement from Senator Shelby, and a letter from Vincent Palladino, submitted for the record appear in the Appendix on pages 100, 107, and 108, respectively. --------------------------------------------------------------------------- I am also aware that Senators Baucus and Jeffords may have additional materials to submit for the record, and that Senators who are Members of this Subcommittee may have statements or questions to submit for the hearing record. We hope that if questions are received, you will be able to respond to them within a reasonable time. And we will keep the record open for all statements and questions to be submitted, and the responses to questions for the record. Let me thank all of you for being here today. This has been an excellent hearing, we've learned a lot. We appreciate your assistance in our effort to understand better the new regulations and the proposals for legislation on this subject. The Subcommittee will stand in recess. [Whereupon, at 4:40 p.m., the Subcommittee was adjourned, to reconvene at the call of the Chair.] A P P E N D I X ---------- FOLLOW-UP QUESTIONS AND ANSWERS FOR MR. UMSCHEID FROM SENATOR EDWARDS Question 1: The USPS Remote Encoding Center (REC) in Lumberton, North Carolina is slated to close in July 2000. This means that 193 people in Lumberton will lose their jobs. The unemployment rate in Robeson County is more than double the average rate for the entire State. It is my understanding that Lumberton was selected to be a REC location partially because of the region's economic hardship. Why then was the Lumberton facility selected to close in one of the first couple of rounds? Please describe the specific factors that were considered by USPS in making this decision. Answer: Lumberton was initially selected as a REC location in 1992 when RECs were operated by private contractors. When the Lumberton REC was converted to a Postal run operation in July 1995, the Postal Service decided that leaving the REC site in Lumberton was a good business decision and a good decision for the Lumberton community. In fact, it was decided to expand the operation from what existed during the contractor operated phase. The decision to close Lumberton in July 2000 was a business decision based on several factors. The Lumberton REC does not have the capacity to support absorbing workload from other RECs which is a prime consideration for selecting RECs to remain open. Further, the operating costs in Lumberton rank among the highest of all RECs in the country. Question 2: Please describe the specific steps USPS took to inform the Lumberton community that the REC was temporary and could close at any time prior to the expiration of the 10 year lease. Answer: The issue of the Lumberton REC being temporary in nature was discussed with the Lumberton community during negotiations for the building lease. As was the case in all other REC locations, discussions concerning lease negotiations were the first discussions with the local community regarding our intentions. Question 3: Was an incentive package agreed to by USPS and local government officials to encourage construction of the REC in Lumberton? If so, what were the terms that were agreed to? Answer: Yes, an incentive package was agreed upon between the Postal Service and the Community of Lumberton. Incentives offered from the city and county included $350,000 to supplement the rental rate,$30,000 for employees training, and a 10 percent reduction to the electricity usage for 24 months. It should be noted that incentives similar to those in Lumberton were negotiated in 24 other REC communities. Question 4: I understand that 87 of the individuals who will be laid off as ``career'' Postal employees. Will USPS guarantee that they will be offered other positions within USPS? And if so, is it possible that the employees may have to relocate? I also understand that approximately 106 individuals are transitional employees. What steps will USPS take to help these employees obtain alternative employment? Answer: The career employees at the Lumberton REC will be offered other positions in the Postal Service. It is likely that some of these career employees will have to relocate. The Postal Service will work closely with local employment agencies to assist the transitional employees in finding non Postal employment. The Postal Service will establish an Out-Placement Center at the REC to assist these employees. Question 5: Has a decision been made to close other RECs within North Carolina? If so, when will these facilities be closed? Answer: The Postal Service has announced the closing of 28 Remote Encoding Centers nationally. No other North Carolina sites are included in these 28. Question 6: Is USPS planning on locating any other postal facilities in the Lumberton area? Answer: At this time the Postal Service is not planning on locating any other Postal facilities in the Lumberton, NC area. Question 7: Has USPS made any attempt to encourage other businesses to utilize the facility once USPS leaves? Answer: Yes, the Postal Service is working with the local community leaders in Lumberton. We have agreed to leave a significant amount of office equipment on site in Lumberton as an enticement for other businesses to utilize the facility after we leave. 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