AUSPL CONFERENCE 2013
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1 AUSPL CONFERENCE 2013 Tom Samra Vice President, USPS Facilities April 2013
2 AGENDA POStPLAN USPS FACILITIES REORGANIZATION EMCOR REAL ESTATE TAX ABATEMENT PROGRAM AUSPL/USPS COOPERATIVE OPPORTUNITIES 2
3 POStPlan Post Office Structure Plan (POStPlan), consists of maintaining the existing Post Office, staffed by a postal employee, with a reduction in retail hours (2, 4, or 6 hours) to match customer usage. This new operating alternative complements existing alternatives that include: Establishing mail delivery service to residents and businesses in the affected community by either rural carrier or highway contract route; Contracting with a local establishment and creating a Village Post Office (VPO) (To-date 190 VPOs have been established, most are supplementing Post Offices); and Providing service from a nearby Post Office. Prior to implementation of POStPlan surveys are sent to the impacted community. To-date, 3.5 millions surveys have been sent out. Of those returned, approximately 86.8% have selected 'keep my post office open for reduced hours' vs. the other 3 paths. 3
4 POStPlan Thirty days after the survey return date a community meeting is held. There are 13,182 offices that are impacted by the POStPlan. 3,275 have been officially implemented. The remaining offices will be implemented by September The POStPlan is projected to save over $500 million per year, when fully implemented. Current savings have been realized by matching work hours to workload in the community. 4
5 Facilities Reorganization On October 1, 2012, U.S. Postal Service Facilities Department restructured. Converted a decentralized FSO structure to a centralized product line structure: Planning Implementation Repair & Alteration Asset Management Leasing Program Support 5
6 Facilities Reorganization Benefits: Centralized management: Ability to manage the entire portfolio Uniform processes and policies No longer varying processes and interpretations depending on the office Resource management Flexibility to reach out to the entire department and adjust resources as the workload shifts 6
7 Facilities Reorganization Leasing Structure Current lease under $50k Current lease over $50k 7
8 Facilities Reorganization Facility Contract Technician Structure 8
9 Facilities Reorganization What this means for our Landlords Lease Administration including tax & CAM payments, change of ownership, rent checks, etc. Lease Interpretations and general questions Facility contract technician by area USPS real estate specialist All renewal option negotiations under $25K All renewal option negotiations over $25K All new lease negotiations USPS real estate specialist CBRE CBRE 9
10 Facilities Reorganization Facilities Restructure: October 20, 2012 Full-Time USPS Program Manager for Landlord Maintenance under the Repair & Alteration Group Amanda Freeman Dedicated Contracting Officer More Program Visibility In-house contract staff replaced with EMCOR Customer Solutions Center as designated sub-contractor under CB Richard Ellis Real Estate Services Contract Increased focus on timely notification of needed repairs and emergency enforcements Centralized staff following Standard Operating Procedures and using Best Practices Phoenix location provides longer business hours coverage 10
11 EMCOR Results 14,000 problems completed since beginning of program 82% completed in less than 30 days Previous KPI was 80% in less than 60 days Increased focus on prompt resolution of identified problems 187 problems sent to enforcement and 235 in collection status Focus on accelerating reimbursements on Postal expenditures Improved performance tracking and reporting Cycle time by emergency, urgent and routine projects Increased visibility on problem properties Single source reporting allows more consistent and accurate data 11
12 EMCOR Challenges Cleaning up and/or deleting old projects Considerable backlog left from previous contract staff Revising standard operating procedures to address new processes Training provided to EMCOR staff Communication greatly improved with single points of contact Common understanding of USPS leases EMCOR improving with experience Quality of assignments and determination of responsibility is improving Annual Budget Savings - $300K+ Annually Economy of scale with centralized staff Lower overhead costs for USPS 12
13 REAL ESTATE TAX ABATEMENT PROGRAM Real Estate Tax Abatement In 2005, USPS implemented a successful Real Estate Tax Abatement Program to evaluate its portfolio of single tenant net leased properties to reduce its overall real property tax liability USPS entered into agreement with 5 consulting firms throughout the country specializing in property tax appeals USPS in conjunction with the consulting firms review approximately 10,000 net leases per year FY12: 3% success rate resulting in $2.3M in savings to USPS This process is allowed by the Lease Rider which doesn t necessarily require participation from the Lessor On a case-by-case basis, when needed, cooperation from the Lessor to obtain specific information and/or provide signature on required form would be helpful 13
14 AUSPL/USPS Cooperative Opportunities USPS and AUSPL Collaboration Landlords are reminded to contact USPS when they are preparing to sell their buildings so a Change of Ownership package can be sent out in advance and returned timely. We also need notification when a party to the lease is deceased so that records and contact information can be updated. Landlords are advised to prepare in advance of a storm. Make contact with local Postmasters ahead of a major storm or weather-related event to provide current contact information (cell phone/alternate contact numbers) in case we need to reach them during or after the storm. Recommend Landlord s perform an annual property inspection to identify and proactively correct maintenance issues. Continue to encourage Lessors to buy into the program of CBRE representing USPS. Collaboration of real estate tax savings, allowing for reimbursement up to 20% of the savings achieved by the Lessor Quicker response times from both sides (USPS and Lessors) to enable negotiations to be finalized further in advance of the expiration date 14
15 AUSPL/USPS Cooperative Opportunities AUSPL Suggestions: Lessor managed repairs that are responsibility of USPS These types of projects require a willing and qualified/capable landlord and or landlord's contractors. Landlord would still have to pay Davis Bacon wage rates, so significant cost savings are unlikely. USPS will keep maintenance responsibility and discuss transfer to lessor responsibility at lease renewal. Lessor finance repairs and amortize payment over one - two year period. Postal Service would pay more in the long run due to interest paid on amortization. Could potentially be ruled in conflict with our debt ceiling. USPS Suggestion: Development of a Green Partnership Program Pilot. Form AUSPL/USPS committee to evaluate possible energy saving initiatives and tax credits. 15
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