oversight

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)

                                   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