What a waste of a building this would be if we couldnt find something to buy it.
Local Fed branch expected to close, Atlanta office says
Thursday, June 09, 2005
SHERRI C. GOODMAN
News staff writer
Officials with the Federal Reserve Bank of Atlanta notified employees of the likely shutdown of the Birmingham branch of the Fed in April, according to a transcript of an internal meeting.
Jack Guynn, president of the Federal Reserve Bank of Atlanta, and Pat Barron, chief operating officer, told Fed 6th District employees during a quarterly question-and-answer session that continuing to operate the $40 million branch in Liberty Park doesn't make good business sense.
The Fed could save $2 million a year by shifting Birmingham's cash operations to Atlanta and essentially shutting down the Birmingham branch, Barron said.
"Even though Birmingham is a new building with an unbelievable vault, we simply have so much capacity there that we're just barely utilizing the minimum space," Barron said during the meeting. He added that the cash vault in Atlanta's Fed will have enough capacity for at least the next 25 years, even if the Birmingham branch shuts down.
"That is not good news if you're an employee of the Birmingham branch and we understand that," Barron said.
Needs board approval:
He told the workers: "I understand your anger, your sadness, et cetera. But the reality of it is that Jack and his colleagues and my colleagues and I all recognize that we have to do the right thing for business going forward."
The transcript provides details about why Fed official are considering closing the facility, which opened five years ago after moving from downtown, where it operated for decades.
Last week, employees of the 6th District, which includes Alabama, received a memo saying the Fed's Conference of Presidents had recommended closing Birmingham's cash operations. The Atlanta Fed's board and the Fed's board of governors must approve the shutdown.
"We expect an announcement sometime in the early part of the summer," Pierce Nelson, a Fed spokesman in Atlanta, said Wednesday.
Birmingham's cash operation employs about 20 people. Another 50 or so employees in support, educational or community outreach positions also could be affected.
`Jack and Pat Chat':
Earlier this year the Fed, citing the declining use of paper checks, shut down the check processing division of the Birmingham branch, eliminating about 70 jobs. It was one of several check processing sites closed nationwide by the Fed in reaction to a shift in consumer payment preferences.
During the April Q-and-A session, known internally as the "Jack and Pat Chat," Guynn and Barron discussed events that may lead to the closing of the Birmingham branch.
After the Sept. 11 terrorist attacks, the Fed studied its cash operations and determined it should stash cash at several commercial banks in the case of a national emergency.
"As you might well imagine, that immediately enabled us to reduce the amount of volume that we have in a lot of the vaults throughout the Federal Reserve System," Barron said.
The Fed also changed some of its cash services policies and as a result, cash growth has dropped off, the transcript said.
In sites where check processing was discontinued, revenue from cash operations alone did not justify continued expenses such as security and human resources.
For these reasons, the Fed closed some cash operations and replaced them with cash depots.
In at least two instances where the Fed has closed both check and cash processing sites, it left in place a staff of about 10 to handle community outreach and a board of directors to provide insight into the economy.
The transcript does not say what would happen in Birmingham, or whether the Fed would hold onto the building.
"Our desire is to keep it in the inventory," Barron said, adding that an armored carrier company may be interested in leasing it.
"Maybe they want to buy the building. We'll look at all those options," he said.
If the Fed sells the building, however, it expects to take a hit, Barron said.
"We probably won't get face value because of the cost of the vault and the fact that the vault is likely not needed by most private sector firms other than maybe a few individuals unnamed, like the guy who runs `The Apprentice,'" he said during the meeting. "The environment changes. It's changed in checks and it's changed in cash. And we have to deal with that and go forward."