Not long after the U.S. Postal Service announced last summer that it was considering closing nearly 3,700 post offices across the country, including four in Northern Virginia, Elaine Mittleman made her regular walk to the Pimmit Hills branch, just east of Tysons Corner. There, she learned from one of the longtime postal clerks that her station wasn’t just being considered for closure, it was definitely shutting down.
Mittleman, a lawyer with an MBA but no experience dealing with the postal bureaucracy, dug in deep trying to find out how the closest post office to Tysons — soon to explode in population with three new Metro stations and vast development planned — could be shuttered with seemingly no public notice.
The Pimmit Hills station, she learned, netted $400,000 to $600,000 a year in profit, but that no profit analysis had been performed before the decision to close it, according to post office documents. She also found that closing all 3,700 locations is estimated to save $200 million, the USPS has said, but that the service has an $8 billion operating shortfall. Former postmaster general William Henderson called that “not even a drop in the bucket.The bucket won’t ripple.”
The USPS receives no tax money or congressional appropriation; its funding comes entirely from its revenue from customers, both individuals and businesses. But Mittleman, who lives in Falls Church, also found that Congress requires the USPS to make an annual $5.6 billion payment into its employees’ health-care retirement fund, a requirement no other agency — and virtually no private company — must meet.
“The costs of operating post offices are not causing their losses,” Mittleman, 63, said. “If you were running a business, you wouldn’t close parts of it down without knowing if they were profitable.”
When the Pimmit Hills station closed Nov. 10, its customers were directed to a station two miles away. The same fate could also befall other Washington area post offices that were on the list flagged for closing, which include locations in downtown Leesburg (15 E. Market St.), Sterling (150 S. Sterling Blvd.), at the Virginia Theological Seminary (3737 Seminary Rd.) and in Del Ray (1908 Mount Vernon Ave.) in Alexandria. In December, after a congressional protest, the agency announced a moratorium on closings. It ends in May.
Rep. Gerald E. Connolly (D-Va.), a member of the U.S. House subcommittee that oversees the USPS, has criticized the agency’s approach to reducing its massive deficit.
“The lack of analytical work at the top of the Postal Service makes you weep,” Connolly said. “No corporation would be managed this way.”
Connolly, who wants to repeal the $5.6 billion health-care payment, and Rep. Don Young (R-Alaska) wrote a letter to congressional leaders this month saying the USPS can improve cost effectiveness and competitiveness without shuttering 3,700 post offices. The closings, Connolly said, would “inconvenience suburban and urban residents, and radically alter the quality of life in rural areas.”
Postal officials agree that closing about 11 percent of its branches wouldn’t take a huge chunk out of their deficit, but “every little bit helps,” agency spokeswoman Sue Brennan said.“We have to right-size our network.” In the past 10 years, stamped mail use has dropped more than 50 percent. She said many customers prefer using USPS.com or buying stamps at grocery stores or with a mobile phone app rather than using a branch.
Dave Partenheimer, another spokesman, said the retiree health payment is “a major contributor to our financial crisis.” But changing changing that requirement is up to Congress, and it alone wouldn’t close the entire funding gap, he said.
Partenheimer defended the USPS’s analysis of possible closures. “We have a very extensive process that we go through” before selecting individual branches, he said, saying that the service has a “road map for long-term stability,” which includes ceasing Saturday delivery and closing hundreds of processing plants.
Meanwhile, Mittleman — still fighting the Pimmit Hills closure — has begun advising other groups around the country on how to obtain documents and challenge rulings before their post office in Iowa or Louisiana or West Virginia closes.
An internal document released to Mittleman in her legal battle showed the annual cost savings from closing the Pimmit station would be $117,743. Its two full-time employees were not laid off. But in fiscal 2007, the station brought in $821,543 in revenue; in fiscal 2008, $844,764. In fiscal 2009, when hours were reduced, revenue was $687,149. The annual profits were in the hundreds of thousands, Mittleman figured, when the cost of running the station (including employee salaries) is subtracted from its revenue.
“I call it ‘postal math,’ ” said Steve Hutkins, a New York University professor and author of the widely read Save the Post Office blog. He said the post office doesn’t look at profits or losses when deciding which business moves to make, and that Pimmit Hills was a prime example.
“It has to do with the fact they don’t want brick-and-mortar post offices,” Hutkins said. “It has nothing to do with the Internet,” which the USPS has cited as a cause of its decline.
Hutkins said one concept the post office doesn’t consider is that closing branches might hurt revenue. Calculations optimistically assume customers will simply go to a different branch, he said. They might go to FedEx or not rent another P.O. box.
When the post office did perform a revenue analysis, the results weren’t good. In a study released to Congress that analyzed the effect of closing processing plants, the reduced mail volume could cause a loss in revenue of $1.3 billion, the study found. When you are already $8 billion short, losing another $1.3 billion is moving in the wrong direction. The study was originally confidential, but Connolly successfully pushed for its release.
After spending months researching and fighting the closing of Pimmit Hills, Mittleman concluded that the USPS “fails to use fundamental business practices, such as listening to customers and encouraging innovation from its employees. A creative business plan should take advantage of the extensive network of convenient facilities and loyal customers to increase revenue. . . . The Postal Service is doing the opposite by closing post offices, angering customers and limiting access to its products and services.”
The Postal Service and Congress, she said, should “save the local post offices, not destroy them.”