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Postal Service’s money troubles to spread Las Vegas-style delivery

By Karoun Demirjian

WASHINGTON — Time is running out to save the U.S. Postal Service from insolvency. Unless Congress can come up with a plan in the next three weeks, the postmaster general will likely begin shutting rural stations and slashing delivery, jeopardizing the future of carriers and the letters they deliver.

In an effort to avoid that scenario, the Senate is considering a bill this week to reform the agency’s finances and change the way the country receives its mail. If all goes according to plan, it would push the nation toward a model that’s been used in Southern Nevada for years — the community mailbox.

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“Nevada has a very high efficiency,” postal service spokesman David Rupert said. “The way we deliver mail in Las Vegas — the rest of the country could look much like that.”

The history of mail in Nevada dates back to the Pony Express, but modern postal service has been shaped by rampant growth of the past 20 to 30 years in Las Vegas.

“There was a time when we had a new delivery route every week, at the height of it,” Rupert said. “And the only way to manage that kind of growth was to manage our deliveries” using community mailboxes.

“In the older suburban communities, you find more old-fashioned mailboxes,” said Michael Green, historian and professor at the College of Southern Nevada. “But it’s more efficient to have one mailbox in the newer developments.”

The postal service officially calls them Neighborhood Delivery Collection Box Units, the freestanding groups of aluminum lockboxes found on most suburban streets.

That common feature in Southern Nevada neighborhoods is an anomaly nationwide, however, where mail carriers walk their routes making door-to-door deliveries.

Consider a comparison between metropolitan Las Vegas and metropolitan Milwaukee, a city of comparable size in terms of mail deliveries. Of Las Vegas’ approximately 600,000 addresses, 443,000 are served by community mailboxes. Just 27,000 of Milwaukee’s approximately 660,000 delivery addresses are centralized boxes.

The bill being debated in the Senate would make more cities like Las Vegas. By the end of fiscal 2015, the bill gives the postmaster general the authority to convert almost all door deliveries to either curbside boxes or centralized neighborhood units — changes they believe will save money by allowing mail carriers to make more deliveries without having to exit their vehicles.

In Las Vegas, there are 886 mail routes. In Milwaukee, there are almost 1,200, because carriers can’t deliver to as many addresses. (Milwaukee is smaller in area than Las Vegas.)

Fewer routes means fewer mail carriers, and fewer mail carriers means less cost to the postal service: According to a 2011 Inspector General’s report, the changeover could save $4.5 billion to $9.6 billion a year.

But that’s also why the National Association of Letter Carriers and several lawmakers from eastern states — argue the change would cost the postal service too many jobs.

“Doing away with the delivery aspect would hurt us no matter what kind of mail delivery that you had,” said John Beaumont, a union president in California, the region of the association with jurisdiction over Nevada.

“It’s possible it would impact us a little less because we wouldn’t be consolidating as many routes, but it would still affect us,” said Glenn Norton, president of the union’s Branch 2502, which represents 1,500 letter carriers in Las Vegas, North Las Vegas, Henderson and Boulder City. “This is one of the last middle-class jobs in the United States, and we’re trying to save it for future generations.”

The end of door-to-door deliveries isn’t the only change in the Senate bill that would jeopardize postal service jobs. So would the elimination of six-days-a-week delivery.

Although the original bill puts a two-year moratorium on eliminating Saturday delivery, it doesn’t take it off the table. After two years, the postmaster general would have the authority to eliminate Saturday delivery if he thought it would help the postal service become profitable by fiscal 2015.

“That’s the beginning of the end to me,” Norton said. “When you’re trying to make a business survive, you don’t cut service.”

But if the postal service is going to avoid cutting service, it’s got to strike a political deal on the part of its finances related to pensions and health plans.

In 2006 — right before the recession, when postal deliveries were at their all-time high — Congress passed a law making it incumbent on the postal service to pay the pension funds of future retirees, projected for the next 75 years.

That fund is now overfunded. Even if one considers the retirees’ pension plans in conjunction with retiree health plans, funding is at 91 percent of their projected need — a cushion that’s almost three times the level for future veterans or any other class of federal government employee.

It’s money that postal workers say could offset up to $5.5 billion of their debt a year, but it would take an act of Congress to make the change.

That’s significant, considering the debt the postal service added to its underwater books in fiscal 2011 was about $5 billion — meaning without the obligation to fund the retiree plans, the postal service would have been in surplus last year.

But convincing members of Congress has been difficult. Without a requirement to fund itself, many lawmakers fear the postal service will turn the government for bailouts.

Conversion of retiree plans is the biggest change in the Senate bill, but the preferred version being considered in the House doesn’t feature anything like it. But without some significant financial shifts, there’s only one option: cuts, large and small.

Rural postmasters aren’t sure at this point which to fear more: A slate of closures and cuts determined by Congress, or one determined by the postmaster general after May 15, when the current moratorium on shuttering offices expires.

There are 15 rural communities potentially on the chopping block in Nevada — some without a school or even a grocery store.

“Once they lose that post office and that sense of community, they lose other things too,” said Barbara Lewis, president of Nevada Sierra Postmasters, the local chapter of the National League of Postmasters, who runs the post office in Overton.

Towns such as Overton, which is not on the list of Nevada towns facing closure, are experts on how to function on a lean budget: There’s no mail delivery, only post office boxes; they do without luxuries such as one-day express mail; and they keep after lawmakers to let them offer more non-postal services to bring in money (another proposal up for consideration in the Senate bill). Closing postal stations is expected to save the postal service less than 1 percent of its total budget — savings that Lewis thinks just aren’t worth the cost.

“For them to close these rural offices, we feel that it takes their identity away,” she said.

The Senate starts considering the postal bill — and up to 40 amendments to it — today.


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