[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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