May 2016

Fellow Members:

 

On May 5^th, 2016, the AUSPL board of directors elected me to succeed Morgan Wolaver as AUSPL’s next president. I have been privileged to serve with Morgan as Vice President for the past several years and am grateful to Morgan for his many accomplishments in advancing AUSPL’s agenda. And he is not quite finished yet. Morgan will remain on the board of directors and has agreed to continue as “director of legislative affairs”. This ensures complete continuity in AUSPL’s effort to influence congress on comprehensive postal reform legislation. Thank you Morgan for your leadership as AUSPL’s president; and for your willingness to continue to serve on AUSPL’s board and as its advocate in Washington.

 

I would also like to thank all of the members, presenters, and exhibitors that joined us in Atlanta May 6^th through 8^th for AUSPL’s annual conference and 35^th birthday party. The two-day agenda was packed with informative speakers, educational workshops, one-on-one consulting sessions, and social events for fun and networking. Many members attended the conference for the very first time, and we look forward to seeing them at future conferences. For those who have not attended a conference, I encourage you to do so, as this annual event is always beneficial whether you own one or many post office buildings. The conference moves back to Las Vegas for 2017 with early registration starting in September. We can’t wait to see you there!

Our success as post office lessors will ultimately depend upon the financial stability of the United States Postal Service, and presenters at the conference confirmed that USPS continues to struggle financially. First class mail volumes are still declining while the total number of delivery points increases. More delivery points increase costs and reduced mail volume per stop decreases revenue to cover those costs. One bright spot is continued double digit revenue growth in the parcel business, but this growth alone will not put USPS on a solid financial footing. Comprehensive reform legislation will be required, and AUSPL will continue to press for language supportive of rural post offices and the private sector solution offered by our lessors.

For the short run, we will face pressure to keep rents low and CBRE will stay in the picture, asking for high commissions which they often do nothing to earn. Our post offices will deteriorate as USPS management continues the policy of spending maintenance funds only on the “three S’s” (safety, security, serviceability). And the Postal Service has proposed introduction of a new lease form which, unless modified, will substantially increase lessor maintenance and insurance other costs.
In response, AUSPL will step up the effort to find an alternative to the current lease renewal process, and provide lessors with more tools for documenting and enforcing USPS maintenance obligations. With regard to the new lease, we have formed a lease committee to work with our director of operations, Mark Karolczyk. The committee has retained special counsel and is actively working with Karen LaFave’s office to incorporate changes to make the lease fair to lessors. For now, the USPS has agreed to delay introducing the document until reviewing AUSPL comments and suggested revisions, but until the committee endorses a new lease, be cautious about signing unless you fully understand the changes.
Although we face short term challenges, our partnership with the United States Postal Service has been very successful and profitable over the years. All of AUSPL’s officers, staff and directors are committed to helping members build on this past success.
It is our mission to be sure that every congressman and postal service executive knows that our network of buildings is critical to affordable, universal service to all Americans. You can help by; writing to or visiting your Congressman, contributing to the AUSPL PAC, and attending AUSPL Hill Day events in Washington.

Respectfully,

Gary Phillips