Postal Service to Begin Closing Plants; Reno Not in Danger

By: AP Email
By: AP Email
The nearly bankrupt U.S. Postal Service is moving ahead with plans to close dozens of mail processing centers, saying on Thursday it can no longer wait as Congress remains deadlocked over how to help.

Reno's Main Post Office and Regional Distribution Center

RENO NOTE: The US Postal Service tells KOLO 8 News Now the Reno processing center on Vassar is still off the list of closures and will stay off the list, and therefore is not in danger of closing or moving. The plant in Elko, however, will likely close, displacing eight employees.

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WASHINGTON (AP) - The nearly bankrupt U.S. Postal Service is
moving ahead with plans to close dozens of mail processing centers,
saying on Thursday it can no longer wait as Congress remains
deadlocked over how to help.

At a news briefing, Postmaster General Patrick Donahoe said the
agency's mail processing network had simply become too big, given
declining mail volume and its mounting debt. It will now
consolidate nearly 250 plants as originally planned, including 48
this summer, but will stretch out the remainder over a longer time
frame in 2013 and 2014.

Earlier this month, nearly half the Senate had written letters
to Donahoe asking that he hold off on closing any mail facility
until Congress could pass final postal overhaul legislation. The
Senate last month passed a bill that would halt many of the
closings. The House remains stalled over a measure allowing for
more aggressive cuts.

"To return to long-term profitability and financial stability
while keeping mail affordable, we must match our network to the
anticipated workload," Donahoe said. Failure to do so, he
stressed, would "create a fiscal hole that the Postal Service will
not be able to climb out of."

Under the modified approach, up to 140 processing centers will
be consolidated by next February - roughly 48 in August and about
90 next January and February. Closings would be suspended during
the Postal Service's busy election and holiday mail season. Another
89 closings would occur in 2014.

The consolidations are expected to reduce postal staff by 13,000
and save the struggling mail agency roughly $1.2 billion annually
once they are fully implemented.

The latest postal move comes after vociferous protests from
communities across the U.S., particularly those in rural areas,
over the mail agency's initial multibillion dollar cost-cutting
plan to close up to 3,700 post offices and 252 mail processing
centers. The Postal Service last week backed off the closing of
post offices, saying it would cut costs instead by reducing
operating hours.

Thursday's announcement seeks to allay some rural concerns about
immediate, broad-scale cuts to mail processing centers that would
have slowed first-class mail delivery of prescription drugs,
newspapers and other services beginning this summer and would have virtually eliminated the chance for a stamped letter to arrive the
next day.

Under the new plan, about 80 percent of the U.S. areas that
currently enjoy overnight first-class mail delivery will continue
to do so through the end of next year. After that, barring
congressional action, the Postal Service will proceed with
additional steps that could slow first-class mail and reduce
overnight delivery even further, said Megan Brennan, chief
operating officer of the Postal Service.

The Postal Service has been grappling with losses as first-class
mail volume declines and more people switch to the Internet to
communicate and pay bills. The agency has forecast a record $14.1
billion loss by the end of this year. Without changes, it said,
annual losses would exceed $21 billion by 2016.

Donahoe stressed that even with its latest moves, the agency
still faces mounting losses without congressional action that would
give it more leeway to eliminate Saturday mail delivery and reduce
health and labor costs.

If the House fails to act soon, postal officials say they will
face a cash crunch in August and September, when the agency must
pay more than $11 billion to the Treasury for future retiree health
benefits. Already $13 billion in debt, the health payment
obligation will force the agency to run up against its $15 billion
debt ceiling, causing it to default on the payments.

In many sprawling rural areas like Hope, Alaska, residents say
they would have to drive nearly 100 miles for mail services in
Anchorage if their local post office couldn't stay open long
enough. Timely delivery from mail processing centers is also
particularly valued in the winter months, when hazardous road
conditions can make travel to a store or pharmacy difficult if not
impossible.

"My wife's medical plan is basically that prescription drugs
are mailed to her," said Doug Pope, a semi-retired lawyer who
lives near Hope, an old gold rush town where the post office faces
reduced hours. "There's a lot of people who will be here for
months without going to Anchorage."

Pope says he's willing to accept moderate postal cuts,
explaining that he's not sure what else can be done and whether
politicians in Washington will do anything about it.

"I do think it's a sign of a larger, more worrisome trend to me
that instead of trying to focus on our larger issues in our
society, what we're trying to do is nickel and dime people on sort
of the downstream end of everything," he said. "But that's a
political issue."


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