Post Offices Could Close, Talks this Week

While the U.S. Postal Service waits for Congress to act on legislation to help the agency rein in its debt, local officials will host a pair of public information sessions on the potential fates of two local post offices.

The Morristown post office on and post office in Morris Township are two of 50 New Jersey facilities that could be shuttered after May 15.

In Morristown and Morris Township, . At 6:30 p.m. on Wednesday, the Convent Station post office will be discussed, with discussion turning to the Morristown location on Thursday. Both sessions will be held at the Ridgedale Avenue post office, at 150 Ridgedale Ave. 

The Postal Service is a self-financing federal entity that generates its revenue from the sale of postal products and services, but it can seek financial assistance from the federal government when its costs exceed revenues. In its five-year plan issued in February, Postal Service officials said unless steps are taken to change operations, the U.S. Postal Service stands to lose $19 billion in 2016.

The Postal Service has offered a plan that could include the closure of about 3,700 post offices nationwide, more than 200 regional mail processing centers and the loss of 35,000 jobs, as well as the possible loss of Saturday delivery service.

George Flood, Postal Service Northeast Area spokesman, said the consolidation plans are driven by a loss of business. Mail volume has declined by 43.1 billion pieces, customer visits have declined by 200 million and retail transactions have declined by $2 billion.

Locally, he said, projected the 10-year savings for consolidating the Convent Station branch is $1,395,665, and the projected 10-year savings for consolidating the Morristown location is $948,482.

Flood said the Morris Street facility, which is owned by the postal service, has 759 post office boxes, 448 of which are rented. 

Revenues between 2007 and 2010 show a steady decline. In 2007, that facility generated $771,376; in 2008, $760,615; 2009, $677,580; and in 2010, $615,590.

The Convent Station location, a rented facility, has 560 post office boxes, 245 of which are rented.

Between 2007 to 2010, it also showed declining revenue, Flood said. In 2007, the office generated $761,146; in 2008, there was an increase to $793,373; in 2009, a decline to $646,261; and in 2010, a drop to $505,769.

In announcing the changes, Postmaster General Patrick Donahue said, “The plan we have developed requires a combination of aggressive cost reduction, rethinking the way we manage our healthcare costs and comprehensive legislation to reform the business model of the Postal Service.

"If provided the flexibility to quickly implement this plan, we can return to profitability and better serve the American public," Donahue said. "If not, we risk becoming a significant burden to the American taxpayer."

The February postal service analysis showed that in 2006, the agency generated a $3.1 billion profit from operations, but a Congressional requirement that the service pre-pay 75 percent of its retirees health benefits obligation–in 2006, a $8.4 billion payment–turned that profit into a $5.1 billion loss.

While that payment is a significant budgetary drain, the February report also shows that income will continue to decline until by 2016 when it hits $61.6 billion, while the service’s costs rise to $81.6 billion that year, creating a $19 billion loss.

The loss of first class mail has been a key factor, Donahue said. With the rapid rise of Internet use for bill payments and statements, email invitations, electronic filing of tax returns, email use for everyday correspondence and even the electronic payment of government benefits, the postal service has seen a steep drop in first class mail.

At the same time, Donohue said, non-post office sites have been developed for the purchase of services once the exclusive retail domain of the Postal Service. Even the Postal Service now sells stamps online.

"Today, more than 35 percent of the Postal Service’s retail revenue comes from expanded access locations such as grocery stores, drug stores, office supply stores, retail chains, self-service kiosks, ATMs and usps.com, open 24/7," Donahue said. "Our customer’s habits have made it clear that they no longer require a physical post office to conduct most of their postal business."

Flood said there are multiple venues within a short distance of both the Morris Street and Convent Station post offices where customers can purchase stamps. There are 13 alternate sites close to the Morris Street facility, and another 13 close to the Convent Station facility, he said.

The Postal Service needs congressional approval to implement theses changes. It delayed the potential closings until May 15 to allow Congress to act. Federal legislation has not moved, but more than 100 members of Congress signed a letter on Feb. 13 asking Donahue to review the potential closure of rural post offices. The letter was signed by, among others, Reps. Steve Rothman, William Pascrell and Rush Holt, all Democrats who represent Central and Northeast Jersey. Local Republican Congressmen Rodney Frelinghuysen and Scott Garrett did not sign the letter.

Donahue in February said the postal service has developed the “Village Post Office” concept, which would be operated by local businesses, such as pharmacies, grocery stores and other appropriate retailers, and would offer popular postal products and services such as stamps and flat-rate packaging, he said.

President Barack Obama's budget calls for a restructuring of the retiree health benefit pre-funding order, a two-year $10.9 billion credit for payments made to the federal retirement system, giving the postal service the authority to reduce delivery from six days to five; the authority to work more closely with state and local governments, and the ability to raise the price of a first-class stamp, possibly to 50 cents.

Public comment will be accepted until March 18. Written comments may be sent to the U.S. Postal Service Manager of Consumer Industries, 494 Broad St., Newark, NJ 07102.