PRC says post office closing plan falls short

February 1, 2012

By Max Heath

The U.S. Postal Service proposal for closing post offices lacks proper analysis, fails to consider community input properly, and has not followed good principles of openness to either news media or affected residents, said the Postal Regulatory Commission, Dec. 23.
The National Newspaper Association testified in writing before the PRC in this case, and your columnist underwent oral cross-examination before the commissioners last year.
The commission agreed with several of NNA’s recommendations relative to newspapers. Although not legally required to follow the advisory opinion, mandated when service is affected, USPS is likely to be influenced to make changes as a result.
Notably, PRC Chair Ruth Goldway, in a separate opinion, warned that USPS risks violating the law requiring “universal service” if it proceeds as planned.

The decision is likely to slow the closing of many post offices. USPS has agreed to delay closings of any post offices or processing plants until May 15 to give Congress time to come up with legislation to return monies mailers agree USPS is due, and allow changes to employee benefit programs to save expenses. However, closing studies and hearings will proceed.
The PRC found that the “Retail Access Optimization Initiative was not designed to optimize the network.” Goldway said the Postal Service’s plan “did not and could not, because of lack of data and analysis, determine the facilities most likely to serve the greatest number, reduce the greatest costs, or enhance the potential for growth or stability in the system.”
NNA had argued that the revenue estimates given for closing guidelines were erroneous as USPS only counted front-office, or retail revenue, from the sale of stamps and packages, etc. when evaluating whether a post office’s revenues justify closing. (Although the law prohibits USPS from closing a post office merely because it loses money, the operating deficits do clearly play into decisions to close.) The PRC agreed, saying “alternate revenue transactions such as business mail” entered via the back door, or Business Mail Entry (like newspapers and shoppers) should be counted in the total revenue of the post office being considered for closure.
The PRC considers appeals from local communities of post office closing decisions under current law, and many of the 160 appeals so far have been granted.
“In each case, we have seen how concerned local communities have been with losing access,” said Goldway.
NNA sought to influence future rounds of closings by getting concerns of its members and their communities on the table. No other mailing association intervened in this case to question the Postal Service’s policies and procedures.
None of the 3,652 very small offices initially proposed were the subject of concern by newspapers or state press associations reporting to NNA, but that doesn’t mean the communities themselves didn’t care.
Other witnesses also agreed with NNA that the use of only walk-in revenue “almost guarantees that such facilities are unprofitable.” One pointed out that “the impact on the community business district” should be included in any closing studies.”
Another pointed out that USPS used geographic (as the crow flies) instead of actual driving distances to determine the distance between retail locations. That meant that nearly 30 percent of proposed office closures are 10 miles or more from the nearest neighboring offices as opposed to 11 percent as USPS claimed in its testimony.

NNA testified that some small post offices could be kept open via use of a “circuit-rider” postmaster who worked two or more offices in a day, with different hours for each. The PRC agreed, and made that one of its suggestions to USPS.
NNA also argued that community meetings should be held for every closure, and USPS should do a better job notifying residents of potential closings. USPS has already changed its procedure to mail a closing hearing notice to every resident. NNA also argued for press releases, public notices in newspapers, and radio announcements.
Meetings should be scheduled on evenings or weekends, and those who attend public hearings should be notified when a final decision is made, said NNA. The PRC also said USPS should “ensure community input received during the discontinuance review is given appropriate consideration and weight” and also “suggests that more direction is needed to develop information on local community conditions,” such as “census data, local government data, school board and chamber of commerce information.“

Based on testimony of NNA and direct inquiries to USPS, the USPS has issued a policy statement clarifying that all public hearings are open to the public and media, and photos can be made so long as the process is not intrusive. Problems reported in Missouri and elsewhere made this push by NNA for proper transparency necessary.
Testimony also showed that many of the “alternate access” sites used by the Postal Service “do not offer a complete range of postal services.”

The commission found that “the Postal Service should develop alternatives that are better tailored for customers in rural or remote areas.” Many retail businesses handling postage only sell stamps on consignment. Some are approved shippers, like UPS stores. Households and businesses on rural routes can buy stamps and money orders and have packages up to 13 ounces picked up by the carrier.
Village Post Offices are a new concept still taking shape to serve areas with discontinued facilities. Some may have post office boxes serviced by postal employees, but VPOs sell only stamps and Priority Mail Flat Rate boxes, as proposed so far. USPS has already let it be known that its ambitions for many VPOs may not play out. It had imagined locating them at “general stores” in small towns, and was surprised to learn how few general stores exist.
Contract Postal Units have existed for some time, and are a better answer to replace a closed post office. A CPU is usually a privately-owned and operated retail business, under contract to USPS, and allows a wider range of postal services than VPOs and approved shippers. CPU operators accept mail on behalf of USPS, and some CPUs house post office box units.
NNA argued strongly that any CPUs or VPOs with post office boxes inside the facility should be allowed to take newspapers dropped via Exceptional Dispatch for timely delivery to subscribers. USPS, under the pressure of this PRC case, has indicated it will seek to comply with our request.
The commission found that “all mail matter” is part of the Postal Service’s universal service obligation by law, and said USPS should offer a wider range of services at alternate access channels. The PRC also found that “in many instances alternative access channels cannot replace actual postal facilities,” adding much weight to those who want to keep small, local post offices open.
The commission said the “Village Post Office concept deserves specific discussion.” It reminded USPS that, “Alternative access is at the heart of this case.” It’s not good enough for USPS to close post offices with a promise of alternative facilities in the future, the PRC concluded. Alternatives “must be considered before, and simultaneously with, discontinuance studies.”
Specific concerns were voiced for alternative access in rural and remote areas, noting that “rural carriers are not viable alternative options for many rural residents.”
MAX HEATH, NNA Postal Chair, is a postal consultant for Publishing Group of America (American Profile, Relish, Spry) and Landmark Community Newspapers LLC. Email

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