By Pat Sherman
Addressing more than 400 people at the Cuvier Club April 26, Ken Boyd, manager of customer and industry contact for the United States Postal Service, delivered the sobering news: “The U.S. Postal Service is broke.”
As an independent agency of the U.S. government, Boyd said, the postal service “needs to run like a business.”
That business, which employs more than 574,000 workers and is obliged to deliver mail to every address in the United States, has seen a dramatic decrease in the volume of mail delivered — particularly pieces posted with its highest-profit generator, the first-class stamp. Sales of first-class stamps have decreased by 40 percent in recent years and are “never going to come back,” he said.
Boyd said tax day is a good barometer of how USPS business has waned during the past decade. Cars headed toward the Midway Drive post office to drop of returns by the filing deadline were once backed up to Interstate 8.
“That doesn’t exist anymore,” he said.
The ease and popularity of electronic communications, online tax-filing and bill-paying options and competition from FedEx, UPS and other parcel delivery services has decreased USPS profits and forced the agency to consider relocating or discontinuing operations at facilities across the country. These include La Jolla’s 77-year-old Wall Street post office and the recently announced closures of post offices in Beverly Hills and Santa Monica.
The USPS would save $30,268 annually in utilities and cleaning costs by discontinuing services at the Wall Street post office. USPS only uses about 6,000 square feet of the approximately 14,000-square-foot building.
“We’re out of money and we have a building that takes a lot of maintenance and that we don’t even use half of,” Boyd said. “That brings me standing here before you today.”
Not all the news was dire during USPS’s only scheduled meeting with the community to discuss the pending relocation of its post office. Though tempers were expected to flare, the crowd largely remained calm and respectful. USPS representatives offered some hope, repeatedly assuring the community that the relocation of its post office was not inevitable.
“There are two very important contingencies that have to happen,” said USPS regional property manager, Diana Alvarado. “We have to have an acceptable buyer and we have to have acceptable relocation space. If either one of those things doesn’t happen, this does not happen.”
In regard to protecting the historic character of the Wall Street building, Alvarado said that USPS was currently undergoing a 90-day, phase-one site study, for which it has hired a historical consultant.
“That becomes very important should the building be for sale, because they will help us define the covenants and restrictions that would have to go onto the deed,” Alvarado said. “If we were to market or sell the building, it is advertised with the restrictions on there, so any buyer will know that there are going to be restrictions on the building to maintain the building’s historical characteristics. This will require that substantial portions of the building remain in the current configuration.”
Alvarado showed slides of former post offices that have been sold and repurposed as everything from law offices to a bed and breakfast, all while retaining the historic character of the buildings.
Dave Evans, a 60-year La Jolla resident, spoke on behalf of himself and longtime La Jolla attorney Karl ZoBell, who is in possession of post office box No. 1.
Evans noted sheets of paper placed on attendees’ chairs that outlined the deleterious effects of the Postal Accountability and Enhancement Act, which was passed by Congress in 2006. The legislation requires the USPS to prefund its future retiree healthcare benefits for the next 75 years within the next 10 years, putting aside billions for the benefits of employees who haven’t even been hired yet. To meet this obligation, the postal service has to scrape up $5.5 billion by September 30 of each year.
“No other business, no government agency, no other entity known to man has ever had that requirement,” Evans said. “That just seems ludicrous.”
USPS regional communications specialist Eva Jackson noted that 80 percent of USPS’s overhead is in labor.
“Limited flexibility in labor contracts and retiree pre-funding impact our finances,” Jackson said. “Our pricing for stamps and products are capped by inflation and our customers really can’t afford the impact of a large price increase.
“Not only are we looking at selling properties and relocating offices, we are looking at rightsizing our network for processing and delivery,” she said.
Rightsizing involves relocating to a smaller space or reducing a space to its optimal operating size.
Evoking cheers from the crowd, Alvarado said, “In communities where it may be very challenging to get relocation space, such as La Jolla — and the Postal Service does recognize that — we are looking to also possibly rightsize in place.”
Prior to the meeting, 2,334 people had signed a petition urging the USPS to keep postal operations in the Wall Street building. At the conclusion of USPS’s presentation, members of the Save Our La Jolla Task Force and the public offered suggestions on how to do that, as well as other considerations and expressions of attachment to the post office.
Congressman and San Diego mayoral candidate Bob Filner, who also was in attendance, questioned USPS on the cost of its current site study — and whether it wouldn’t be more cost effective to keep the post office where it is.
Filner said the task force might consider a public buyer, such as a city, county, state or federal agency that could potentially use the portion of the building not needed by the USPS for government operations.
“We’re here to do our best to stop this,” Filner said. “We’re involved in some efforts to put some more money into the postal service so that we can continue Saturday (service), so that we don’t have to sell off these important community assets.”
Filner also said Congress is looking into a way of rescinding the Postal Accountability and Enhancement Act.
In response to a suggestion that some processing at USPS’s Silver Street annex could be relocated to the basement of the Wall Street facility, Boyd said the basement was “operationally dysfunctional.”
“We don’t want a basement,” he said.
La Jolla Village Merchants Association President Phil Coller asked why USPS would even go to the expense of relocating the Wall Street post office.
“Moving is pointless,” Coller said. “You’re going to be worse off, not better off. … The merchants association and the villagers, we can buy it. This community is so attached to its post office, that if you talk to us, we can find the buyers.
“We would like to start a dialogue with you,” Coller added. “We as a community will come to you with proposals and work with you to help you save the money you need to save — and we will keep our post office. You don’t need to do much; you could let us do it for you.”
Alvarado responded, “I would think the postal service would definitely take that into consideration,” further suggesting that the task force send its proposal in a letter of intent to the USPS’s assets manager.
Erika Torri, executive director of the Athenaeum Music & Arts Library, said the post office building could be remodeled as a cultural center, serving in conjunction with the Athenaeum as a “cultural corridor” along Wall Street.
“I don’t think we would have any shortage of ideas for what could be done with the rest of the building if we still had the post office in the front,” Torri said.
Another member of the task force proposed entering into an agreement with the city and a private nonprofit to buy the building, approaching Congress to secure a federal loan guarantee for the purchase. The 6,000 square feet needed to run the post office could then be leased back to the post office.
Addressing the myriad suggestions, USPS’s Ken Boyd said, “If it were me I would have a very vibrant business plan that outlines exactly what benefits the postal service sees in the remedies you provide. So, it’s not, ‘sell the building come hell or high water.’ (We’re) here listening to different options and I think there have been some very good options (put forward).”
USPS announced that the deadline for people to mail written comments on the proposed relocation has been extended to May 26.
“Do we need to send it first class?” Coller joked.
“That would be greatly appreciated,” Boyd said.
Comments should be mailed to Diana Alvarado, USPS, Pacific Facilities Service Office, 1300 Evans Avenue, Suite 200, San Francisco, Calif., 94188-8200.
If USPS decides to relocate its services, mail delivery would not be affected and people would not lose their already assigned post office boxes.
A site search for an alternate location would not begin until the property is on the market and a potential buyer has been found.
“If we were to relocate, we don’t want to leave the building empty,” she said.