DOCUc38 NT - / / 7 4G 38 - B3054298 (fristrc-f ? fThe Status of Urban Post Offices in the Nation's ive Largest Cities1. GGD-78-7; B-114874. October 21, 1977. 1 pp. + 2 ehlclosures (11 p. ) . Repcrt to Sen. Charlen H. Percy; by ictor . lowe, Director, General Government Div. Issue Area: Facilities and aterial anagement: Buildinj, Buyinq, or Leasing Pedral Facilities and guipan:t (706) Ccrktact: General Government Div. Sudqet unction: Commerce and Transpcrtation: Postal Service (402); General Governsent: Other Generel Government (806). Orqanizatirn Concerned: Postal Service. Ccnqressional Relevance: Sen. Chsrles B. Percy. A review was conducted of the recrganizaticn, closure, and transfer of urban post offices tc the suburbs and the effect sucn actions nave on te general profile of urban azeas. Information was also cbtained on the Pcatal Servicis proposed relocation of the Chicago South Suburban Secticnal Center Facility to the Village of orest Park. Findings/Conclusicns: Transfers of postal operations from the Nation's f largest cities to the suburbs have not been sxtenaive. The .;~tal functions transterred primarily involved tulk maii m,jrations. The nuaber of employment pcsitions eliminated in the five cities as a result of these oves was about 7,342. Service officials maintained that no employee. lost their jobs as a result of relocations to the suburbs. The Service enerally did not have records showinq the cost savings resulting from these cves. Durinq the period from June 1973 to Sertenbez 1977, total pcstal esployment in the five cities declined from 106,517 to 63,960 or about 21.2%; possible reasons for the decline include mechanization and decliniing sail volumes. Except for ew York City, Service officials expect eploysent levels in the five larqest citie to remain fairly staOle for the foreseeable future. It appears unlikely that the South Suburban facility will be moved to Forest Park because of opposition by city officials, postal unions, and postal employees. Fros an economic standpoint, the decision tc relocate the facility to Forest Park appeared justified. (SW) CSTRICTIED - N6t to be roleaed outs'do the AGneral Accounting Office except on the basis of specific approval IYis(xffi 1!8 -N OFFICE Fi / - WASHINGTON, DC. 2048 GeNmAL GOVENNMT 9,M 0B-1I48i; /i OCT 2 1977 The Honorable Itharles H. Percy United States Senate Dear Senator Percy: Your July 26, 1977 letter expressed concern about the reorganiza- tion, closure, and transfer of urban post offices to the suburbs and the effect such U.S. Postal Service actions are having on the general profile of urban areas. You asked that we compile the following information for the Nation's five largest citie.s: --How many post offices, branch offices or other postal facilities .31ring each of the past 5 years ha.. been eithe- closed, merged, or transferred to outside each city? . --How many employment positions have been either eliminated or transferred as a result of the above mentioned actions? --What cost savings have resulted from these actions? Your office also requested us to examine the Service's economic justi- fication for the proposed relocation of the Chicago South Suburban Sectional Center Facility to the Village of Forest Park, a suburb of Chicago. The result ever work were provided to your office on October 11, 197 -e of the material presented are eclosed. As arranged with . unless you publicly announce its contents earlier, . this information available to interested parties upo,. 7 days after the date of this letter. Sincerely yours, Victor L. Lowe Di rector Enclosures - 2 GGD-78-7 (22482) ENCLOSURE I ENCLOSURE I CHICAGO SOUT SBURBAN I. Purpose of GAO review A. Obtain information on the Postal ervice's roosed relocation of the Chicago South Suburban Sectional Center Facility to the Village of Forest Park. B. Analyze the economic justification supporting the move. II. Summary A.. From an economic standpoint, the Service's decision to relocate the South Suburban Sectional Center Facility to Forest Park apoeared justified. B. Because of the opposition to the proposed move, the Service has bequn considerinq other potential locations for the facility. C. It appears unlikely that the Service will move the South Suburban facility to ocrest ParK. D. The Service has not yet determined when or where the South Suburban facility will be relocated. III. Background A. The Service moved into the leased facility at South Suburban in 1961. Initially, it was used as an annex to he Chicaao General Post Office. In 1964, the facility became a sectional center serving 98 post offices for the western and southern suburbs of Chicagc. B. The facility is located within the city limits of Chicago but serves suburban communities. The geographical separation is a unicue situation for the Nation's five largest cities. C. The present lease expires in August 1979, but contains a 5-year renewal otion. Under the optDLion, the Service can cancel the lease with 60 days written notice. ENCLOSURE I ENCLOSURE I IV. Why the Service wants' to relocate the South Suburban facility. A. The building contains numerous deficiencies, including the lighting, heating, ir conditioning and ventilation systems which make eoloyee working conditions sub- standard. B. The facility is not near major highways which causes inefficient ransportation and adversely affects the Service's ability to meet mail delivery standards. C. There are problems in gettino the lessor to satisfac- torily perform mintenance and repair work. 0. The facility would require extensive upgrading of electrical and mechanical systems for the planned installation of mechanized mail processing equipment. V. The Service's approach tor selecting alternative locations for detailed economic analysis was da. follows. A. In August 1973, a transportation study was completed which identified the preferred geographical area for a new facility. This preferred area was the Willow Springs suburb located about 15 miles southwest of Forest Park. B. In April 1974, Service real estate specialists began looking for available ites in the preferred area and identified four otential sites. C. In addition to these four sites, the Service identified six other potential alternatives. D. The 10 alternative solutions identified were: 1. Purchase vacant land at Hinsdale Airport (in preferred area) and build a facility. 2. Purchase vacant land at West 79th Street and I-55 (in preferred area) and build a facility. 3. Purchase vacant land at 100th Place and arlem Avenue (in preferred area) and build a new facility. 4. Purchase vacant land at City of Chicaqo Correc- Linal Farm (in preferred area) and build a new fa.ility. ENCIOSURE I ENCLOSURE I 5. Build a tacility on wned property across the street from the South Suburban acility. 6. Renovate an owned facility at Forest Park. 7. Renovate an owned facility at the Chicago General Post Offic. 8. Purchase a site at Midway A.rpOrt and build a facility. 9. Have lessor renovate the existing South Suburban facility. 10. United States Postal Service renovate the existing South Suburban facility. E. The Service awarded a contract to a rivate firm to determine the most economical solution. The criteria used to narrow the alternatives for detailed economic analysis were: 1. Accessibility to major highways. 2. Availability of utilities, 3. Zoning restrictions. 4. Adequacy of site topography. S. Time necessary to obtain the site. 6. Availability of public transportation. 7. Ability to expand beyond existing needs. 8. Disruption to existinq oerations. 9. Potential housing and commuting problems. 10. Estimated cost. F. The contractor for the Service screened the alternatives and selected the ton three for a detailed economic analysis. The three alternatives were: 1. Penovate owned facility at Forest Park. 2. Have lessor renovate the existing South Suburban facility. 3e ENCLOSURE I ENCLOSURE I 3 Purchase a site at Rinsdale AirPort and build a facility. VI. The Service's economic analysis evaluated, in detail, the top three alternatives as compared to the existina unmechanized operations at the South Suburban facility. A. The Service's economic analysis indicated that the alternative to renovate the Forest Park facility was the best economical solution. 1. Relocating the facility in Forest Park would save the Service about $15 million (in 1975 dollars) over a 14-year period. 2. The other two alternatives would cost the Service either $1.4 million or $1.9 million (in 1975 dollars) over a 14--year eriod. 2. The Forest Park alternative provided the highest rate of return on investment--12 percent. B. Our limited review of the Service's economic analysis and supporting documentation did not disclose any major problems, errors, or inconsistencies which would have affected the Service's selection of the Forest Park alternative. VII. Objections raised to the proposed relocation to Forest Park. A. The Village of Forest Park objects to the proposed relocation on the following grounds. 1. The relocation would result in increased intensity of land use and population density in Forest Park. 2. The relocation would increase the existing traffic congestivt and transportation problems. 3. The relocation would havi a negative impact on the Village's tax base and would result in reduced property values in the vicinity. 4. The illage could not render mun'c. , services such as police and fire protection o the site without curtailing services to the Villace tax- payers or raisinq their taxes to provide more personnel and equipment. ENCLOSURE I ENCLOSURE I 5. The relocation would be in diametric opposition to the Village's comprehensive land use planning objectives which would have used the site for recreational purposes. 6. The Village feels thac the Postal Service was uncooperative and did not inform the Village of the plans at an erly stage of development. B. The city of Chicago objects to the proposed relocation because it may result in the lots of about 1,000 jobs in the city and thus contribute to economic decay. C. The postal unions want to move from the present sub- standard facility but would prefer staving within the Chicago city limits at a location near the oresent site. D. The postal employees, most of whom commute by automobile, would have increased commutino costs due to the reater distance. A study showed over 90 percent of the employees would he a :eater commuting distance. VIII. Status of the relocation, as of October 2, 1977. A. The Service pre. nted the Village Council with a formal written option to sell the subject property to the Village of Forest Park at an October 11, 1977, council meeting. The option period with extensions would be for 3 months. The otion was signed by Village officials on October 18. B. According t. officials of the Service and the Village of Forest Park, resolution of the proposed sale of the Forest Park roperty is expected within 3 to 6 months. The property as beer, appraised at about $1.4 million. C. The Service is currently performing preliminary site in estigations on a new list of 25 alternatives--excluding Forest Park. The list includes sites in the city and suburbs. D. The Service would like to vacate the South Suburban facility by the expiration of the present lease (Auaust 1979). But since the Service has an option to extend the South Suburban lease and only has to give 60 days notice to terminate the leaset, it has not seL any deadlines or target dates for selecting another site. 5 ENCLOSURE II ENCLOSURE II U.S. POSTAL SERVICE TANSFERS OOPEPATIONS I. Purpose of GAO audit A. Determine the number of postal facilities that were closed, merged, o tr-nsferred outside the cities. B. Determine how many employment positions were elimi- nated or transferred outside the cities. C. Determine the cost avinqs resulting from these closings, mergers, or transfers. II. Summary A. The transfers of postal operations from the Nation's five largest cities to the suburbs have not been extensive. The pstal functions transferred primarily involved bulk mai operations. B. The number of employment ositions eliminated in the cities as a result of these moves was about 7,342. When Postal Service operations were transferred o the suburbs, ostal Personnel could voluntarily transfer to the new location or other ostal facilities If they elected not to transfer, management attempted to locate them in other postal jobs in the cities. Service officials maintained no (full-time or osart-time) employees lost their jobs as a result of relocations to the suburbs. C. The Service generally did not have records shovino the cost savings resulting from these moves. D. During the eriod from June 1973 to September 1977, total postal employment in the five cities has declined from 106,517 to 83,960 or about 21.2 ercent. Service officials cite a number of reasons for the decline in postal employment including mechanization, declining mail volumes, and various cost reduction efforts. E. Exceot for New York City, Service officials expect employment levels in the Nation's five largest cities to remain fairly stable for the foreseeable future. ENCLOSURE II ENCLOSUR II I!I. Summary of postal relocations from the cities to the suburbs during the last 5 years A. USPS facilities/operations closed, merged or trans- ferred to the suburbs have not been extensive. Total City FaTTt ies _ _Facilities/Operations Pelocated City to -w"TELt Suburb Total Suburb the city a/ to city/ Chicago 111 12 6 5 1 Detroit 41 7 2 4 1 Los Anaeles 63 7 - 7 New York c/ 241 29 4 25 Philadelphia 61 3 - 3 - Total 517 58 12 44 2 a/These involve relocations/mergers of post office stations, air mail facilities, and a bulk mail facility. b/These were actions in which some mail processing functions were transferred from suburban facilities to the city post offices. :n Chicago, 12 full-time employees transferred to the South Suburban facility. While in Detroit the action resulted in the creation of about 20 part-time positions in the Main Post Office. c/Does not include Staten Island. B. The transfer of postal oerations to the suburbs has caused emoloyment positions to be eliminated, but according to data provided by the Service, most employees fill other postal jobs in the city. 7 ENCLOSURE II ENCLOSURE II a/ */ Chicago DetroiL Los Anqeles New York Philadelohia Total Number of positions eliminated b/ Full-time 2,082 419 - 3,664 - 6,165 part-time 719 141 - 317 1177 Total 2,801 560 - 981 7 342 Personnel transferred to suburban facilities Full-time 589 419 - 677 - 1,685 Part-time 71 141 - - - 212 Total 660 560 677 1,89 Personnel remainino in other postal jobs in the city Full-time 1,487 - - 2,987 c/ - 4,474 Part-time 640 - - 317 - 957 Total 2,127 - 3,304 - 5,431 Personnel who left the Service Full-Time 6 - - - - 6 Part-Time 8 - - - - 8 Total 14 - - - - 14 a/When actual prsonrl figures were not available estimates or work hur eouivalens were used. b/Service officials stated that the transfer of oerations were usually known well in advance and occurred over a eriod of time. During these Periods, ostal vcancies were filled with temporarv emolovees in anticioation of tr moves. When the moves occurred, the excessed regular emoloye . e olaced n the Positions which tenwporL ies had been occupyi .0o reqular (full-time or oart-Lime) employees were found Lo leav f Service as a result of the moves. c/S-rvice officials said this figure included 96 eoole who could have - ransferred to either the suburbs or other city Doital jobs. ENCLOSURE II ENCLOSURE II C. The Service did not have savings data readily available for most of the moves made from the cities to the suburbs. IV. Postal employment '1 the Nation's five largest cities A. Employment in the cities has declined over the last 4 years. Employmer.. Ending Net Percent City rY77 DFY73 Decrease Deczease (ncrease) Chicago: Full-time 19,615 15,576 '4,039 20.6 Part-time 3,187 2,286 901 28.3 Other 1,388 306 1,082 78.0 Total 24,190 18,168 6,022 24.9 Detroit: Full-time 6,753 5,525 1,228 18.2 Part-time 606 971 (365) (60.2) Other 425 157 268 63.1 Total 7,704 6,653 1,131 14.5 Los Angeles: Full-time 10,756 8,962 1,794 16.7 Part-time 38 91 (53) (139.5) Other 2,311 1,119 1,192 51.6 Total 13,105 10,172 2,933 22.1 9 ENCLOUPRE II ENCLOSURE II New York: a/ Full-time 46,374 37,902 8,472 18.3 Part-time 4,426 2,257 2,169 49.0 Other 405 _ 213 192 47.4 Total 51,205 40,372 10,833 2..2 Philadelphia: Full-time 8,970 7,519 1,451 16.2 Part-time 1,206 977 229 19.0 Other 57 99 (42) (73.7) Total 10,233 9,595 1,638 16.0 Total 106,517 83,960 22,557 21.2 B. Service officials cited a number of reasons for the decline of postal employment including: --Transfer of bulk mail operations to the suburbs; --Mechani7ation of mail orccessin operations and other productivity improvement rograms; --Decline in mail vo mes; --Hirinq freeze during which attrition losses were not replaced one for one; and --Budet reductions. a/Does not include Staten Island 10 ENCLOSURE II ENCLOSURE II C. Except for New York.City, Service officials maintain that total employment positions in the five cities are expected to remain fairly stable in the future. The only moves officials told us were planned at this time which could impact on employment levels are: --The potential transfer of the Chicago South Suburban facility which would eliminate about 1,000 city jobs; and --The transfer of some suburban Detroit mail processing operations to Detroit which could increase city jobs by about 60. 11
The Status of Urban Post Offices in the Nation's Five Largest Cities
Published by the Government Accountability Office on 1977-10-21.
Below is a raw (and likely hideous) rendition of the original report. (PDF)