U.S. Postal Service: Information on Post Office Closures, Appeals, and
Affected Communities (Briefing Report, 03/11/97, GAO/GGD-97-38BR).

Pursuant to a congressional request, GAO provided information on the
Postal Service's post office closures, focusing on the: (1) Postal
Service process for closing post offices; (2) number of post offices
closed since 1970; (3) number of proposed post office closures appealed
to the independent Postal Rate Commission (PRC) and the disposition of
those appeals; and (4) selected attributes of affected communities for
fiscal years (FY) 1995 and 1996.

GAO noted that: (1) the Postal Service has a detailed process for
deciding whether to close a post office and for effecting the closure;
(2) the process is to include obtaining and evaluating post office
operational and community demographic information, postal service
delivery options, and comments from customers who would be affected by
the closure of a post office; (3) the Service has closed 3,924 post
offices since 1970; (4) PRC received the first appeal of a proposed post
office closure in 1978; (5) since the 1976 amendments to the Postal
Reorganization Act, there have been 2,614 post office closures and 296,
11 percent, of these closures were appealed to PRC from 1978 through
1996; (6) PRC affirmed the Service's proposals on 170, 57 percent, of
these appeals, determined that it lacked jurisdiction for 31, 10
percent, of these appeals, which allowed the Service to proceed as
originally intended, and remanded 58, 20 percent, of these appeals to
the Service, usually due to incomplete data; (7) selected attributes
varied in communities where post offices were either closed or were
proposed to be closed but were appealed in FY 1995 and 1996; (8)
attributes of affected communities included population and number of
businesses, and attributes of post offices within these communities
included level of postal service, postmaster salaries, post office
revenues, and annual operating costs; and (9) in most cases, the annual
operating costs of the closed post offices and those proposed to be
closed exceeded their postal revenues.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-97-38BR
     TITLE:  U.S. Postal Service: Information on Post Office Closures, 
             Appeals, and Affected Communities
      DATE:  03/11/97
   SUBJECT:  Postal service
             Postal facilities
             Postal law
             Population statistics
             Customer service
             Privatization
             Federal downsizing

             
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Cover
================================================================ COVER


Briefing Report to the Chairman
Subcommittee on the Postal Service
Committee on Government Reform
and Oversight
House of Representatives

March 1997

U.S.  POSTAL SERVICE - INFORMATION
ON POST OFFICE CLOSURES, APPEALS,
AND AFFECTED COMMUNITIES

GAO/GGD-97-38BR

Post Office Closures

(240244)


Abbreviations
=============================================================== ABBREV

  COD - Collect on delivery
  CPO - Community post office
  FY - Fiscal year
  HCR - Highway contract route
  IPO - Independent post office
  PO - Post office (same as IPO)
  PRC - Postal Rate Commission

Letter
=============================================================== LETTER


B-275119

March 11, 1997

The Honorable John M.  McHugh
Chairman, Subcommittee on the Postal Service
Committee on Government Reform
 and Oversight
House of Representatives

Dear Mr.  Chairman: 

This briefing report responds to your request for information on the
Postal Service's closure of post offices.\1 Local post offices have
long been a part of American culture and business, but they have
become increasingly expensive for the Postal Service to maintain.\2
Nevertheless, the Postal Reorganization Act of 1970 provides that no
small post office can be closed for economic reasons alone.  In 1976,
Congress added provisions to the 1970 act to govern whether and how
the Service is to close post offices.  This report provides
information on (1) the Postal Service process for closing post
offices, (2) the number of post offices closed since 1970, (3) the
number of proposed post office closures appealed to the independent
Postal Rate Commission (PRC) and the disposition of those appeals,
and (4) selected attributes of affected communities for fiscal years
1995 and 1996. 

On February 28, 1997, we briefed the Subcommittee on the results of
our work.  As requested, this report summarizes the information we
presented at that briefing. 


--------------------
\1 A post office closure is when the Service permanently discontinues
the operations of an independent post office (IPO), eliminates its
concomitant postmaster position, and provides the affected customers
with alternative postal services, such as rural route services,
community post offices, or highway contract routes (HCR). 

\2 We recently reported (Postal Service Reform:  Issues Relevant To
Changing Restrictions on Private Letter Delivery, (GAO/GGD-96-129B,
Sept.  12, 1996)) that of 39,149 post offices, stations, branches,
and other outlets, 17,702 (about 45 percent) reported total annual
revenues that were about $1.1 billion lower than their total expenses
in fiscal year 1995.  Of these total outlets, about 28,000 were post
offices headed by a postmaster and, according to the Postal Service,
are subject to the statutory closing restrictions discussed in this
report. 


   BACKGROUND
------------------------------------------------------------ Letter :1

The 1970 act states that "No small post office shall be closed solely
for operating at a deficit.  .  .  ." (39 U.S.C.101(b)).  For several
years after the act was passed, Congress appropriated funds to
reimburse the Postal Service for "public service costs" incurred in
providing postal services in communities where post offices were not
self-sustaining.  The act provides for reductions in these
appropriations over subsequent years.  In 1976, Congress amended the
act to place a temporary moratorium on further service reductions and
specifically prohibited closing post offices that served 35 or more
families.  While those specific provisions were only temporary, other
provisions included in the 1976 amendments remain in effect today,
and these affect the Service's decisions to close or consolidate post
offices.\3 These provisions state that before closing a post office,
the Service must (1) consider the effects on the community served,
the postal employees affected by the closure, and the government
policy to provide effective and regular postal services to all areas
of the country, as well as any economic savings to the Service
resulting from the closure, and (2) provide customers with adequate
notice at least 60 days before the proposed date for the closure and
provide them with a written proposal to close the post office and the
findings that led to the closure decision.  The provisions
established PRC as the appeals examiner for post office closures. 
Specifically, the provisions state that any person served by the post
office may, within 30 days after the written notice of the proposed
closure is provided, appeal the proposal to PRC.  PRC may affirm the
proposal or remand the entire matter to the Service for further
consideration.  Upon remand, the proposed closure is suspended until
the Service has completed its reconsideration.  The Service is not
required to notify PRC of the outcome of its reconsideration.  The
act requires PRC to rule on the appeal no later than 120 days after
receiving it. 


--------------------
\3 A consolidation is the replacement of a post office with a
station, branch, or contractor-operated community post office (CPO). 
Because the amendment's provisions on post office closures and
related appeals equally apply to post office consolidations, for
purposes of this report, all references to a post office closure may
refer to a closure or to a consolidation of a post office. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

The Postal Service has a detailed process for deciding whether to
close a post office and for effecting the closure.  The process is to
include obtaining and evaluating post office operational and
community demographic information, postal service delivery options,
and comments from customers who would be affected by the closure of a
post office.  The Service has closed 3,924 post offices since 1970. 
PRC received the first appeal of a proposed post office closure in
1978.  Since the 1976 amendments, there have been 2,614 post office
closures and 296 (11 percent) of these closures were appealed to PRC
from 1978 through 1996.  PRC affirmed the Service's proposals on 170
(57 percent) of these appeals; determined that it lacked jurisdiction
for 31 (10 percent) of these appeals, which allowed the Service to
proceed as originally intended; and remanded 58 (20 percent) of these
appeals to the Service, usually due to incomplete data.  Selected
attributes varied in communities where post offices were either
closed or were proposed to be closed but were appealed in fiscal
years 1995 and 1996.  Attributes of affected communities included
population and number of businesses, and attributes of post offices
within these communities included level of postal service, postmaster
salaries, post office revenues, and annual operating costs.  In most
cases, the annual operating costs of the closed post offices and
those proposed to be closed exceeded their postal revenues. 


   THE POST OFFICE CLOSING PROCESS
------------------------------------------------------------ Letter :3

The Postal Service has a detailed process for closing post offices. 
To assist its managers in deciding whether to close a post office,
the Service developed and issued the Post Office Discontinuance Guide
(Handbook PO-101), dated January 1, 1994, which provided policy
guidance regarding the appropriate procedures for closing a post
office.  The guide states that three circumstances may prompt the
Service to initiate a feasibility study to determine whether to close
a post office:  (1) a postmaster vacancy; (2) the emergency
suspension of the operations of a post office; or (3) special
circumstances, such as the incorporation of two communities into one. 

According to the guide, under any of these circumstances, postal
managers may conduct a study to evaluate the post office workload and
the service needs of the community.  In addition, postal managers are
to

  -- consult with county or city officials for information on
     population, area or post office building historical
     significance, and growth trends within the community;

  -- consult with managers of the post office under consideration for
     closure and nearby offices that may provide alternative service;

  -- analyze and rank alternative postal services in order of
     practicality, costs, and the maintenance of effective and
     regular service to the community;

  -- hold public meetings, poll affected customers using
     questionnaires, and propose alternative postal services at less
     cost; and

  -- give customers written notice of Service proposals, decisions,
     and appeal rights.  (See br.  section I.)


   THE NUMBER OF POST OFFICES
   CLOSED
------------------------------------------------------------ Letter :4

According to Service records, since fiscal year 1970, the Service has
closed 3,924 post offices, leaving 28,189 post offices open at the
end of fiscal year 1996.  These closures averaged 218 per year during
the 6-year period (fiscal years 1970-75) before the 1976 amendments,
while closures averaged 124 per year for the 21-year period (fiscal
years 1976-96) after the amendments.  In fiscal year 1995, the
Service closed 239 post offices--the highest number of closures since
the early 1970s, when 385 post offices were closed in fiscal year
1974.  Service officials identified two conditions that led to the
large number of closures in fiscal year 1995.  The first condition
was the Service's 1992 early-out retirement incentive, which was
offered to most of its employees, including postmasters.  The second
condition was the Service's decision to address the accumulation of
post offices whose operations had been suspended due to various
emergency situations.  Because of a backlog of potential closures
stemming from postmaster retirements and emergency suspensions of
post offices, there was a delay in closing many of these post offices
until fiscal year 1995.  Post office closures diminished to 161 in
fiscal year 1996. 

We reviewed Postal Service and PRC records for 93 post offices that
were either closed or whose proposed closures were appealed in fiscal
years 1995 and 1996.  Of the 93 post offices, 50 were closed without
appeal and 43 were proposed to be closed but were appealed to PRC.\4
The records showed that the closure process for 91 of the post
offices was prompted by postmaster vacancies--retirement, transfer,
promotion, or death.  For the remaining two post offices, the records
showed that the closure process for one was prompted by the post
office building's lease expiring and the other was prompted by the
post office building burning.  (See br.  section II.)


--------------------
\4 These 43 proposed post office closures resulted in 44 appeals
because one proposed closure was appealed twice.  Initially, the
proposed post office closure was appealed.  PRC remanded the first
appeal to the Service.  Next, the Service proposed to close the post
office again.  Finally, a second appeal was filed, and PRC affirmed
the Service's decision to close the post office. 


   THE NUMBER OF APPEALS AND THEIR
   DISPOSITIONS
------------------------------------------------------------ Letter :5

PRC received the first appeal of a Service proposal to close a post
office in fiscal year 1978.  Since the 1976 amendments, there have
been 2,614 post office closures and 296 (11 percent) of these
closures were appealed to PRC in fiscal years 1978 through 1996.  Of
these appeals, PRC affirmed the Service's proposals in 170 cases (57
percent) and determined that it lacked jurisdiction in 31 cases (10
percent), which allowed the Service to proceed as originally
intended.  PRC determined that it lacked jurisdiction in these 31
cases because 19 cases were not filed within the 30 days required by
law, and 12 cases dealt with issues outside its jurisdiction, such as
the relocation of a post office within the same community.  PRC
remanded 58 cases (20 percent) to the Service, usually because of
incomplete Service-provided records or other data deficiencies. 
Postal Service records did not allow us to readily determine the
status of the 58 remanded cases.  Of the remaining 37 cases (13
percent), the Service withdrew its proposals to close 36 post offices
before PRC had ruled on the appeals, and the appellant withdrew the
other appeal. 

The act requires that PRC use the Service-prepared administrative
records to review appeals of Service proposals to close post offices. 
According to PRC officials, they also used written arguments
submitted by the appellants and the Service.  Also, we reviewed 44
appeals and found that PRC had made its decision in each of these
cases within the 120 days required by law.  (See br.  section III.)


   SELECTED ATTRIBUTES OF AFFECTED
   COMMUNITIES
------------------------------------------------------------ Letter :6

When information was available from Service records on post office
closures and proposed closures that we reviewed, we obtained selected
information on postal services provided to and demographic data for
the communities affected by these closures or proposed closures. 
These communities had populations ranging from 30 to 2,143, with an
average and median population of 206 and 80, respectively; and
businesses ranging in number from 1 to 39, with an average and median
of 6 and 5, respectively.  At the involved post offices, the
communities received from 10 to 44 hours of window service per week,
with a weekly average of 28 hours of service.  The postmaster
salaries for these post offices ranged from $5,773 to $31,664 per
year, an average of $13,664 per year.  Except for post offices in
four communities, the annual operating costs of the post offices
exceeded their postal revenues.  Also, for each community affected by
a closure or proposed closure, records indicated that the Service was
to provide it with less costly alternative postal services, such as
establishing a contract CPO.  (See br.  section IV.)


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

We interviewed Service headquarters and PRC officials responsible for
evaluating post office closures and appeals, and we reviewed laws,
regulations, policies, and procedures relating to closing post
offices.  We obtained statistics on the number of post offices, the
number closed, and the number of appeals filed with PRC.  We did not
obtain statistics on the number of closed classified stations,
branches, and community post offices because these postal facilities
were not covered by the statutory provisions for post office
closures.\5 We reviewed Service and PRC documents on all 43 proposed
post office closures that were appealed--1 proposed closure was
appealed twice, resulting in a total of 44 appeals--in fiscal years
1995 and 1996.  In addition to these 44 appealed closures, we
randomly selected and reviewed documents related to 50 post offices
that were closed without appeal in fiscal years 1995 and 1996.  We
reviewed Service and PRC decision documents and, when available,
obtained selected information on postal services and demographic data
for 93 of the affected communities, and financial data for the
affected post offices.  We also obtained information on the time
taken for Service and PRC actions.  We did not verify the accuracy of
Service and PRC records. 

We did our work in Washington D.C., from August through December 1996
in accordance with generally accepted government auditing standards. 


--------------------
\5 The statistics we present in this report on post office closures
do not agree with those the Postal Service publicly reported prior to
fiscal year 1995 because the Service's statistics on post office
closures included not only the total number of closed post offices
but also classified stations, branches, and community post offices. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

We requested comments on a draft of this report from the U.S.  Postal
Service and the Postal Rate Commission.  We received written comments
from the Vice President and Controller of the U.S.  Postal Service
dated March 6, 1997, and from the Chairman of the Postal Rate
Commission on February 27, 1997, which are reprinted in appendixes
III and IV, respectively.  Both officials generally agreed with the
facts presented in the report.  Their staffs also provided oral
technical comments to clarify, correct, and update some of the
information in the report.  We have incorporated these comments into
the report where appropriate. 


---------------------------------------------------------- Letter :8.1

We are sending copies of this briefing report to the Ranking Minority
Member of your Subcommittee, the Chairman and Ranking Minority Member
of the Senate Committee on Governmental Affairs, the U.S.  Postal
Service, and other interested parties.  We will also make copies
available to others on request. 

The major contributors to this report are listed in appendix V.  If
you have any questions about this report, please call me on (202)
512-8387. 

Sincerely yours,

Michael E.  Motley
Acting Director, Government Business
 Operations Issues


Briefing Section I BACKGROUND
============================================================== Letter 



   (See figure in printed
   edition.)


   BRIEFING OBJECTIVES
------------------------------------------------------------ Letter :9



      BRIEFING OBJECTIVES
---------------------------------------------------------- Letter :9.1

Our objectives were to obtain information on (1) the Postal Service
process for closing post offices, (2) the number of post offices
closed since 1970, (3) the number of proposed post office closures
appealed to the Postal Rate Commission (PRC), and the disposition of
those appeals, and (4) selected attributes of the affected
communities for fiscal years 1995 and 1996., e.g., information on
postal services and demographic data.\6




   (See figure in printed
   edition.)


--------------------
\6 A post office closure is when the Service permanently discontinues
the operations of an independent post office(IPO), eliminates its
concomitant postmaster position, and provides the affected customers
with alternative postal services. 


   STATUTORY PROVISIONS FOR POST
   OFFICE CLOSURES
----------------------------------------------------------- Letter :10



      STATUTORY PROVISIONS FOR
      POST OFFICE CLOSURES
--------------------------------------------------------- Letter :10.1

The Postal Reorganization Act of 1970 (39 U.S.C.  101(b)) states that
"No small post office shall be closed solely for operating at a
deficit.  .  .  ." In 1976, Congress amended the act to place a
temporary moratorium on further service reductions and specifically
prohibited closing post offices that served 35 or more families. 
While these specific provisions were only temporary, other provisions
included in the 1976 amendments, which remain in effect today, affect
the Service's decisions to close or consolidate post offices.\7

Under the 1970 act as amended, when considering whether to close a
post office, the Service must assess the impact on the community
served, the postal employees, and the postal services as well as any
economic savings to the Postal Service that would result from the
closure.  The Service must notify affected customers at least 60 days
before the proposed date for the closure and provide them with its
written proposal and findings.  Any person served by the post office
involved may file an appeal with the independent Postal Rate
Commission (PRC) within 30 days after the Postal Service provides
written notice that it proposes to close the post office. 




   (See figure in printed
   edition.)


--------------------
\7 A consolidation is the replacement of a post office with a
station, branch, or contractor-operated community post office (CPO). 
Because the amendment's provisions on post office closures and
related appeals equally apply to post office consolidations, for
purposes of this report, all references to a post office closure may
refer to the closure or the consolidation of a post office. 


   STATUTORY PROVISIONS FOR
   APPEALS OF POST OFFICE CLOSURES
----------------------------------------------------------- Letter :11



      STATUTORY PROVISIONS FOR
      APPEALS OF POST OFFICE
      CLOSURES
--------------------------------------------------------- Letter :11.1

The 1976 amendments established PRC as the appeals examiner for the
closure of a post office.  These amendments provided that PRC may
affirm the proposal or remand the entire matter to the Service for
further consideration.  In doing so, PRC must use the information in
the Postal Service's prepared administrative record, which contains
the analyses, comments, and other justification for each proposed
post office closure.  PRC is required to rule on the appeal within
120 days from the date the appeal is filed with PRC. 




   (See figure in printed
   edition.)


   SERVICE GUIDANCE ON WHEN A POST
   OFFICE MAY BE CONSIDERED FOR
   CLOSURE
----------------------------------------------------------- Letter :12



      SERVICE GUIDANCE ON WHEN A
      POST OFFICE MAY BE
      CONSIDERED FOR CLOSURE
--------------------------------------------------------- Letter :12.1

The Post Office Discontinuance Guide (Handbook PO-101) specifies
three circumstances that may prompt Service officials to initiate a
study to determine whether a post office should be closed.  These
circumstances are (1) a vacancy in a postmaster position arises due
to promotion, transfer, retirement, or death; (2) an emergency
suspension of a post office's operations occurs due to circumstances
such as a natural disaster, sudden loss of the post office building
lease when no suitable alternative quarters are available, or severe
damage to or destruction of the post office building; or (3) special
circumstances, such as the incorporation of two communities into one. 




   (See figure in printed
   edition.)


   POSTAL SERVICE PROCESS FOR
   CLOSING POST OFFICES
----------------------------------------------------------- Letter :13



      POSTAL SERVICE PROCESS FOR
      CLOSING POST OFFICES
--------------------------------------------------------- Letter :13.1

In January 1994, the Service issued its Post Office Discontinuance
Guide.  According to Service officials, the guide is to help ensure
that Service procedures are followed, uniform processes are used, and
consistent documentation is prepared for each post office closure. 
The guide is also to be used as a training tool and to assist postal
field personnel responsible for reviewing the status of post offices
in their districts. 

The guide covers the closure of IPOs.  It provides policy guidance on
the appropriate (1) procedures for investigations to be undertaken,
public meetings to be held to inform customers of the Service's
plans, and customer feedback to be obtained; (2) requirements for
public notification of Service proposals and decisions; (3) the
Service's process for reaching decisions to close post offices; and
(4) the appeal process and how the Service is to respond to an
appeal.  The guide also provides samples of necessary forms and
reports that need to be prepared.  The entire Service documentation
for each proposed post office closure is to become the administrative
record that PRC is required to use, as well as written arguments
submitted by appellants and the Service, when ruling on an appealed
proposed closure. 


Briefing Section II NUMBER OF POST
OFFICES CLOSED
============================================================== Letter 



   (See figure in printed
   edition.)


   NUMBER OF POST OFFICE CLOSURES,
   FISCAL YEARS 1970-96
----------------------------------------------------------- Letter :14

   Source:  Postal Service data.

   (See figure in printed
   edition.)



      NUMBER OF POST OFFICE
      CLOSURES, FISCAL YEARS
      1970-1996
--------------------------------------------------------- Letter :14.1

Through fiscal year 1996, the Service had closed 3,924 post offices,
leaving 28,189 post offices open at the end of the fiscal year. 
Since 1970, the Service has closed an average of 145 post offices
each year.  The number of post offices closed during the 6-year
period (fiscal years 1970-1975) before the 1976 amendments averaged
218 per year, while closures for the 21-year period (fiscal years
1976-1996) after the amendments averaged 124 per year. 

In fiscal year 1995, the Service closed 239 post offices--the highest
number of closures since the 1970s, when 385 post offices were closed
in fiscal year 1974.  Service officials identified two conditions
that led to the large number of closures in fiscal year 1995.  The
first condition was the Service's 1992 early-out retirement
incentive, which was offered to most of its employees, including
postmasters.  The second condition was the Service's decision to
address the accumulation of post offices whose operations had been
suspended due to various emergency situations.  These postmaster
retirements and emergency suspensions of post offices had caused a
backlog in the post office closing process.  As a result, many of the
affected post offices were not closed until fiscal year 1995.  In
fiscal year 1996, post office closures declined to 161. 



   (See figure in printed
   edition.)


   EVENTS PROMPTING THE SERVICE TO
   INITIATE ITS CLOSING PROCESS,
   FISCAL YEARS 1995-96
----------------------------------------------------------- Letter :15

   Source:  Postal Service and PRC
   data.

   (See figure in printed
   edition.)



      EVENTS PROMPTING THE SERVICE
      TO INITIATE ITS CLOSING
      PROCESS, FISCAL YEARS
      1995-96
--------------------------------------------------------- Letter :15.1

We reviewed Service and PRC records for 93 post offices that were
either closed or whose proposed closures were appealed in fiscal
years 1995 and 1996.  The records indicated the Service initiated its
closing process after the following events: 

  -- Postmaster vacancies:  vacancies included 59 retirements, 22
     promotions, 5 transfers, 3 resignations, and 2 deaths; and

  -- Emergency suspensions:  suspensions included one post office
     building with a terminated lease and another post office
     building severely damaged by fire. 

Postmasters may apply for other positions within the Service,
including other postmaster positions created by vacancies. 
Postmasters at small post offices, such as the ones we reviewed, can
apply for promotions to larger post offices. 




   (See figure in printed
   edition.)


   AVERAGE TIME THE SERVICE TOOK
   TO CLOSE POST OFFICES, FISCAL
   YEARS 1995-96
----------------------------------------------------------- Letter :16

   Source:  Postal Service and PRC
   data.

   (See figure in printed
   edition.)



      AVERAGE TIME THE SERVICE
      TOOK TO CLOSE POST OFFICES,
      FISCAL YEARS 1995-96
--------------------------------------------------------- Letter :16.1

Of the 44 Service proposed closures that were appealed in fiscal
years 1995 and 1996, 19 had been closed at the time of our review. 
Data available for 18 of the 19 closures indicated that the process
had taken an average of 4.1 years, ranging from 2.7 years to 9.8
years.  For the 50 post office closures we reviewed for the same
period that were not appealed, the closing process had taken an
average of 4.4 years, ranging from 1.2 years to 13.6 years.  These
times measure the closing process from when a postmaster vacancy
occurred or an emergency suspension of a post office took effect to
when the Service publicly announced the closure in the Postal
Bulletin. 

A detailed analysis of the time taken by the Service to close post
offices was not within the scope of our review.  However, we noted
that the Service's procedures required numerous steps to be completed
before a post office was closed.  Postal managers were to conduct a
feasibility study to determine whether to close a post office, which
was to include an evaluation of the post office workload and the
service needs of the community.  Postal managers were also to consult
with county or city officials for information about population, area
or post office building historical significance, and growth trends
within the community; consult with managers of the post office under
consideration for closure and with nearby offices that may provide
alternative service; analyze and rank alternative services in order
of practicality, costs, and the need to maintain effective and
regular service to the community; hold public meetings; poll affected
customers using questionnaires; propose alternative postal services;
and give written notice of Service proposals, decisions, and appeal
rights. 


Briefing Section III PROPOSED POST
OFFICE CLOSURES THAT WERE APPEALED
============================================================== Letter 



   (See figure in printed
   edition.)


   PROPOSED CLOSURES APPEALED TO
   PRC IN FISCAL YEARS 1978-96
----------------------------------------------------------- Letter :17

   Source:  PRC data.

   (See figure in printed
   edition.)



      PROPOSED CLOSURES APPEALED
      TO PRC IN FISCAL YEARS
      1978-96
--------------------------------------------------------- Letter :17.1

The first appeal of a Postal Service proposal to close a post office
was filed in fiscal year 1978.  Since the 1976 amendments, there have
been 2,614 post office closures, and 296 (11 percent) of these
closures were appealed to PRC from fiscal years 1978 through 1996. 
When considering appeals, the 1970 act, as amended, requires that PRC
use the Service-prepared administrative record.  PRC officials told
us that they also use written arguments submitted by the appellant
and the Service when ruling on an appeal. 




   (See figure in printed
   edition.)


   APPEALS OF PROPOSED CLOSURES
   AND DISPOSITION OF APPEALS, FYS
   1978-96
----------------------------------------------------------- Letter :18

   Source:  PRC data.

   (See figure in printed
   edition.)



      APPEALS OF PROPOSED CLOSURES
      AND DISPOSITIONS OF APPEALS,
      FYS 1978-96
--------------------------------------------------------- Letter :18.1

PRC's dispositions of the 296 appeals filed through fiscal year 1996
are as follows: 

Affirmed:  PRC did not take exception with the Postal Service on 170,
or 57 percent, of the appealed closure proposals.  PRC ruled that the
Service complied with the requirements of the law and could proceed
with the proposed closures. 

Lacked jurisdiction:  PRC determined that it lacked jurisdiction for
31, or 10 percent, of the appealed proposed closures.  PRC found that
19 of these appeals were not filed within the 30 days required by
law.  PRC also found that the remaining 12 appeals dealt with issues
outside its jurisdiction, such as a Service decision to relocate a
post office within the same community, a suspension of service, or a
study of the feasibility of closing a post office.  PRC's lack of
jurisdiction regarding these appeals allowed the Service to proceed
as originally intended. 

Remanded:  PRC took exception with the Postal Service on 58, or 20
percent, of the appealed proposed closures.  PRC ruled that the
Service did not comply with the requirements and suspended the
proposed closure.  Postal Service records did not allow us to readily
determine the status of these remanded cases. 

In remanded cases, the Postal Service may decide to withdraw a
proposed closure and not close the post office or correct the
PRC-noted deficiency in the record and proceed with closing actions. 
The Postal Service is not required to go back to PRC and show that it
corrected the deficiency before closing the post office.  (See app. 
I for a case study of a closure that was appealed twice.)

Withdrawn:  PRC did not rule on 37, or 13 percent, of the appealed
proposed closures because the Service withdrew its proposals to close
36, and the appellant withdrew the other appeal. 


Briefing Section IV SELECTED
ATTRIBUTES OF AFFECTED
COMMUNITIES, FISCAL YEARS 1995 AND
1996
============================================================== Letter 



   (See figure in printed
   edition.)


   COMMUNITY DEMOGRAPHICS, FISCAL
   YEARS 1995-96
----------------------------------------------------------- Letter :19

   Source:  Postal Service and PRC
   data.

   (See figure in printed
   edition.)



      COMMUNITY DEMOGRAPHICS,
      FISCAL YEARS 1995-96
--------------------------------------------------------- Letter :19.1

We reviewed Service and PRC records for 93 communities where post
offices were either closed or whose proposed closures were appealed
to PRC in fiscal years 1995 and 1996.  According to data available
for 23 of these communities, resident population size ranged from 30
to 2,143, and averaged 206.  The median population size was 80.  Data
available for 77 communities showed that the number of businesses
ranged from 1 to 39, and averaged 6.  The median number of businesses
was 5. 




   (See figure in printed
   edition.)


   POSTAL SERVICES PROVIDED TO THE
   COMMUNITIES, FISCAL YEARS
   1995-96
----------------------------------------------------------- Letter :20

   Source:  Postal Service and PRC
   data.

   (See figure in printed
   edition.)



      POSTAL SERVICES PROVIDED TO
      THE COMMUNITIES, FISCAL
      YEARS 1995-96
--------------------------------------------------------- Letter :20.1

The hours of window service provided to the communities by the 93
post offices that were either closed or proposed for closure and
subsequently appealed in fiscal years 1995 and 1996 ranged from 10 to
44 hours per week, with an average of 28 hours per week.  Retail
services provided during window service hours included the sale of
stamps and money orders; special services, such as registered,
certified, insured, collect-on-delivery (COD) and Express Mail; the
acceptance and dispatch of all classes of mail; and services to
permit mailers and postage meter customers. 

Postal transaction data were available for 84 post offices.  The
number of transactions per day for the post offices ranged from 1 to
157, with an average of 13 transactions per day.  The number of
general delivery customers for 56 post offices ranged from 1 to 52,
and averaged 13. 




   (See figure in printed
   edition.)


   POST OFFICE FINANCIAL DATA,
   FISCAL YEARS 1995-96
----------------------------------------------------------- Letter :21

   Source:  Postal Service and PRC
   data.

   (See figure in printed
   edition.)



      POST OFFICE FINANCIAL DATA,
      FISCAL YEARS 1995-96
--------------------------------------------------------- Letter :21.1

We found complete revenue and operating costs\8 for 92 of the 93 post
offices in the affected communities.  The postmaster salaries for
these 92 post offices ranged from $5,773 to $31,664 per year, an
average of $13,644 per year.  Postmasters' salaries were determined
by the service level at the post office they were in charge of
operating. 

Except for post offices in four communities, the annual operating
costs of the post offices exceeded their postal revenues.  The
revenue for the 92 post offices ranged from $420 to $58,891 per year,
an average of $8,827 per year.  Revenue included receipts from the
sale of postage stamps and other services.  Operating costs, which
included the postmaster's salary, fringe benefits, and rental fees,
ranged from $7,706 to $47,731 per year, an average of $19,656 per
year.  The total yearly loss to the Service for operating these 92
post offices was $996,314--an average loss of $10,829 per post
office. 




   (See figure in printed
   edition.)


--------------------
\8 Operating costs included postmaster salaries. 


   ALTERNATIVE POSTAL SERVICES TO
   BE PROVIDED, FISCAL YEARS
   1995-96
----------------------------------------------------------- Letter :22

   Source:  Postal Service data

   (See figure in printed
   edition.)

The Service proposed to provide less costly alternative postal
service to all 93 communities with post offices that were either
closed or whose proposed closures were appealed that we reviewed. 
According to Service and PRC records, 46 communities were to receive
rural route service or rural route service with a cluster box unit. 
Twenty-two communities were to receive service via a highway contract
route (HCR).  Twenty-one communities were to receive community post
offices (CPO).  Four communities were to receive other forms of
service, including classified stations, and a combination of HCR
delivery and CPOs. 

A rural route provides delivery and retail services to customers in
rural areas.  Service is usually provided to roadside mailboxes
installed by customers on the mail carrier's line of travel.  The
carrier provides retail services normally provided at post offices. 
Most transactions do not require the customer to meet the carrier at
the mailbox.  Stamps by Mail and Money Order application forms are
available from the carrier for customer convenience.  Carriers will
accept packages at the mailbox without a customer being present,
provided the postage is fully prepaid.  Special services such as
certified, COD, and Express Mail may be obtained from the carrier by
leaving a note in the mailbox, along with appropriate payment.  Some
rural routes provide service to neighborhood delivery and collection
box units\9 rather than roadside mailboxes. 

A CPO is a postal operation within a small community that is
established on a contractual basis where an IPO has been closed.  A
CPO provides the same services as an IPO (a post office operated by a
postmaster) except that a CPO does not accept permit mail or set
postage meters.  The CPO bears its community's name and ZIP Code as
part of a recognized mail address. 

An HCR is similar to a rural route except that service is provided by
a contract employee rather than a career postal employee.  A
classified station or branch is operated by a career postal employee,
not a postmaster, and provides the same services as an IPO, including
accepting permit mail and setting postage meters. 


--------------------
\9 Neighborhood delivery and collection box units are secure, free
standing units of individually locked mail compartments installed and
maintained by the Service at no cost to the customer. 


TWO CASE STUDIES INVOLVING
APPEALED AND NONAPPEALED PROPOSALS
TO CLOSE POST OFFICES
=========================================================== Appendix I

The following case studies include an appealed decision to close a
post office in Idaho after the postmaster had been promoted, and a
nonappealed decision to close a post office in Nebraska after the
death of the postmaster. 


   CASE STUDY 1:  AN APPEALED
   DECISION TO CLOSE THE POST
   OFFICE IN CLARKIA, ID
--------------------------------------------------------- Appendix I:1

In April 1993, the Postal Service promoted the postmaster at Clarkia,
ID, a community of approximately 60 residents, to another position. 
The postmaster vacancy triggered a review of Clarkia's postal needs
by the Service.  After holding a community meeting and polling
customers by questionnaire, the Service made its decision, known as a
Final Determination, to close the Clarkia post office.  The Service
posted its Final Determination at the Clarkia and three nearby post
offices on March 6, 1995. 

The Service was to provide less costly alternative service in Clarkia
via a contractor-operated community post office (CPO).  The CPO would
offer the same retail services as the post office, except that it
would not accept permit mail or set postage meters.  The number of
service hours would remain the same--24 per week.  By closing the
post office and establishing a CPO, the Service estimated that it
would save $8,299 annually. 

On April 3, 1995, Clarkia residents appealed the Service proposal to
close the Clarkia post office to PRC.  PRC remanded the proposal to
the Service because it found that the administrative record was
incomplete and failed to adequately address all of the residents'
concerns.  Specifically, the administrative record did not include
copies of the initial questionnaire sent to customers and an analysis
of the responses. 

On October 28, 1995, the Service issued a revised Final Determination
for Clarkia and posted it at the post office from October 28 to
November 27, 1995.  Residents again appealed that determination to
PRC on November 24, 1995.  On March 21, 1996, PRC affirmed the
Service's decision.  The Service officially closed the post office by
publishing a notice to that effect in the Postal Bulletin of
September 12, 1996. 


   CASE STUDY 2:  A NONAPPEALED
   DECISION TO CLOSE THE POST
   OFFICE IN OCTAVIA, NE
--------------------------------------------------------- Appendix I:2

The postmaster at Octavia, NE, a community of 132, died on November
16, 1994.  Pending a review of the postal needs of the community, the
Postal Service continued to provide postal service at the post office
by using a temporary clerk from another post office.  After holding a
community meeting and polling customers by questionnaire, the Service
posted its Final Determination, proposing to close the post office on
December 28, 1995. 

The Service proposed to provide delivery and retail services to
Octavia via rural route administered from a nearby post office.  By
closing the post office and providing the alternative rural route
service, the Service estimated that it would save $13,019 annually. 

No one appealed the Service's decision to close the post office
during the 30-day appeal period following the Service's posting of
the proposal.  Subsequently, the Service officially closed the
Octavia post office by publishing notice to that effect in the Postal
Bulletin of September 12, 1996. 


POST OFFICE CLOSURES AND PROPOSED
CLOSURES APPEALED, FISCAL YEARS
1995-96
========================================================== Appendix II

The following table shows the post office closures--appealed and
nonappealed--that we reviewed for fiscal years 1995-1996.  At the
time of our review, all 50 of the proposed closures that were not
appealed had been closed, along with 19 of the appealed closures. 

Post office      Closed      Appealed    Post office      Closed      Appealed
---------------  ----------  ----------  ---------------  ----------  ----------
Alcock, KY       x                       Moriah, NY                   x

Austinville, IA  x                       Morrill, KY      x

Benedict, MN     x           x           Morrison, IA                 x

Bingham, NM      x                       New Almelo, KS   x

Boggs, WV        x                       Numa, IA         x           x

Bovina Center,   x                       Oak, NE          x           x
NY

Bruington, VA                x           Octavia, NE      x

Burkhart, KY     x                       Oil Center, NM   x

Burr, NE         x           x           Oquossoc, ME                 x

Cauthornville,V  x                       Oven Fork, KY    x
A

Clarkia, ID\a    x           x           Pearson, WI      x

Colburn, IN      x                       Plank, KY        x

Cotesfield, NE   x           x           Prosser, NE      x           x

Cottle, KY       x                       Regina, VA       x

Culver, MN       x                       Rodman, IA       x           x

Cundiff, KY      x                       Roscoe, MN       x

DeGraff, MN      x           x           Rowletts, KY     x           x

Eagle Harbor,                x           Salem, NE                    x
NY

Eckhart Mines,               x           Sargentville,                x
MD                                       ME

Erwin, SD        x           x           Saum, MN         x

Estill, KY       x                       Sedan, MN                    x

Filer City, MI               x           Shade, OH        x           x

Forest Grove,                x           Shiloh, VA                   x
MT

Frazer, KY       x                       Silver Star, MT  x

Garrattsville,   x                       So. Westerlo,    x           x
NY                                       NY

Gypsy, KY        x                       Sodus Center,    x
                                         NY

Harlan, KS       x                       Spring Lick, KY  x

Haynesville, ME  x                       St. Joseph, KY   x

Hazelgreen, WV   x                       Strang, NE       x           x

Hetland, SD                  x           Taintor, IA      x           x

Hightown, VA     x                       Tanner, WV       x

Hubbell, NE      x                       Tapoco, NC       x

Huntley, NE                  x           Thousand Island  x
                                         Park, NY

Kemp, OK                     x           Toronto, IA      x           x

Kinross, IA                  x           Trevett, ME                  x

Lakeview, CA     x                       Trio, SC         x

Lamb, KY         x                       Twin Brooks, SD              x

Lamero, KY       x                       Valley Home, CA  x           x

Leith, ND        x                       Walnut Grove,    x
                                         KY

Lewiston, NE                 x           Walters, MN                  x

Lynch, MD        x           x           Welty, OK        x

Macon, VA                    x           West Rushville,              x
                                         OH

Manchester, WI   x           x           Westervelt, IL   x

Maryneal, TX                 x           Weston, MI                   x

Max, MN          x                       Whitfield, MS    x

Millbrook, MI    x                       Wind Cave, KY    x

Mira, LA         x
--------------------------------------------------------------------------------
\a This proposed closure was appealed twice. 

Source:  Postal Service and PRC data. 




(See figure in printed edition.)Appendix III
COMMENTS FROM THE UNITED STATES
POSTAL SERVICE
========================================================== Appendix II




(See figure in printed edition.)Appendix IV
COMMENTS FROM THE POSTAL RATE
COMMISSION
========================================================== Appendix II


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V

GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C. 

Gerald P.  Barnes, Assistant Director
James T.  Campbell, Assistant Director (retired)

DALLAS REGIONAL OFFICE

Sherrill Johnson, Assistant Director
Raimondo Occhipinti, Senior Evaluator
David Bennett, Evaluator

*** End of document. ***