I just have a quick comment or three.
First, isn't it ironic that the USPS found out that it can't afford government either?
Second, If this location can consolidate with the other location and have only a "...blip in service," then what was the purpose of having the office at all?
Third, it isn't true that "unlike the GSA, the USPS receives no cut of the federal budget." The USPS has a $12.1 billion loan from the US treasury. That sounds like a pretty big cut of the federal budget to me. And if it had to default on a $5.5 billion pension payment, do you suppose that there might be an impact on the federal budget at some point?
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By LAURA LUNDQUIST
Chronicle Staff Writer Financial times are tough when one government agency gets no mercy from another.
During the next few weeks, the U.S. Postal Service will move some departments from its downtown Bozeman location in order to reduce the rent it has to pay to the U.S. General Services Administration, which owns the Babcock Street building.
All the mail carriers and some package handling tasks will be relocated to the Baxter Lane office, which is owned by the USPS, said Rick Newsome, downtown post office manager.
Bozeman postmaster Joel Bachofer said the changes are mostly internal and few customers will notice any difference.
Customers who put vacation holds on their mail will be aware because they’ll have to go to the Baxter location to get the held mail. Other services and the post office boxes will remain in the downtown office.
The changes mean the USPS can vacate 90 percent of the almost 26,000 square feet it’s renting in the Babcock Street building, which should make a big dent in the rent bill.
Bachofer said the GSA had increased the rent too much over the past decade.
The GSA adjusts rental rates for space every five years based upon property appraisals. It also charges operating costs that are adjusted annually.
From 2002 to 2006, the GSA charged the USPS around $320,000 a year, even though property values were soaring.
After a new GSA appraisal in 2007, the USPS rent jumped an additional $26,000 a year, at a time when mail volume was beginning to drop. Operating costs continued to increase.
Bachofer tried to compensate by downsizing the Babcock post office.
In January 2011, he gave up around 1,000 square feet and surrendered another 1,500 square feet in January 2012.
This year’s appraisal belatedly accounted for the drop in property values that started in 2008. As a result, the rent dropped to less than $275,000.
But it was too little, too late.
The USPS has made numerous cuts and changes over the past decade as its income has plummeted, thanks to the use of email, online bill payments and increasing pressure from competitors like UPS Inc. and FedEx.
Unlike the GSA, the USPS receives no cut of the federal budget. But since it’s not allowed to set its own rates or hours – Congress does that - it’s had few options but to shut down smaller branch offices.
Last year, the USPS reported losses of more than $5 billion. This summer, it had to default on a $5.5 billion payment into a health fund for future retirees, as required by Congress. So Bachofer is trying to find places to trim his costs and a $245,000 annual rent reduction will help. “Customers will see only that one little blip in service, but it will save us a bunch of money,” Bachofer said.
By LAURA LUNDQUIST
Chronicle Staff Writer Financial times are tough when one government agency gets no mercy from another.
During the next few weeks, the U.S. Postal Service will move some departments from its downtown Bozeman location in order to reduce the rent it has to pay to the U.S. General Services Administration, which owns the Babcock Street building.
All the mail carriers and some package handling tasks will be relocated to the Baxter Lane office, which is owned by the USPS, said Rick Newsome, downtown post office manager.
Bozeman postmaster Joel Bachofer said the changes are mostly internal and few customers will notice any difference.
Customers who put vacation holds on their mail will be aware because they’ll have to go to the Baxter location to get the held mail. Other services and the post office boxes will remain in the downtown office.
The changes mean the USPS can vacate 90 percent of the almost 26,000 square feet it’s renting in the Babcock Street building, which should make a big dent in the rent bill.
Bachofer said the GSA had increased the rent too much over the past decade.
The GSA adjusts rental rates for space every five years based upon property appraisals. It also charges operating costs that are adjusted annually.
From 2002 to 2006, the GSA charged the USPS around $320,000 a year, even though property values were soaring.
After a new GSA appraisal in 2007, the USPS rent jumped an additional $26,000 a year, at a time when mail volume was beginning to drop. Operating costs continued to increase.
Bachofer tried to compensate by downsizing the Babcock post office.
In January 2011, he gave up around 1,000 square feet and surrendered another 1,500 square feet in January 2012.
This year’s appraisal belatedly accounted for the drop in property values that started in 2008. As a result, the rent dropped to less than $275,000.
But it was too little, too late.
The USPS has made numerous cuts and changes over the past decade as its income has plummeted, thanks to the use of email, online bill payments and increasing pressure from competitors like UPS Inc. and FedEx.
Unlike the GSA, the USPS receives no cut of the federal budget. But since it’s not allowed to set its own rates or hours – Congress does that - it’s had few options but to shut down smaller branch offices.
Last year, the USPS reported losses of more than $5 billion. This summer, it had to default on a $5.5 billion payment into a health fund for future retirees, as required by Congress. So Bachofer is trying to find places to trim his costs and a $245,000 annual rent reduction will help. “Customers will see only that one little blip in service, but it will save us a bunch of money,” Bachofer said.
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